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27th July Current Affairs

Freebies culture

(GS-II: Government policies)

In News:

SC has a direct union government to consult the finance commission on whether it is possible to regulate the distribution of freebies by political parties using public money.

Details:

Stand of  ECI on freebies: It said it has no power to regulate the same or take action against parties making such poll promises.

ECI cannot regulate policy decisions: “offering/distribution of any freebies either before or after the election is a policy decision of the party concerned.

The ‘revdi’ culture:

Freebies like free power and a monthly stipend to women are among promises made by parties and this is common in elections in state after state. Earlier this month, the PM said it’s time to stop this practice and called it the ‘revdi’ culture hurting the country, its development and well-being.

Impact of such freebies on state budgets:

Expenditure side:

Huge drain on state resources: farm loan waiver in Maharashtra resulted in an outgo of Rs 45,000-51,000 crore during the financial year 2020-21.

Lack of specific outcome targets: No responsibility for the money spent. Telangana has committed 35% of revenue receipts, almost 63% of the state’s own tax revenue, to finance populist schemes which are cantered on freebies.

Revenue side:

Negative impact on state-owned enterprises: leading loss-making PSU’s.

March report from ICRA, subsidy payments by governments were estimated to comprise 16% of Discom revenues at an all -India level in 2021-22.

Low tax collections: due to Free electricity, free water, free rides etc., there is no realization of tax on these.

Political:

Competitive manifestos, sometimes seem impractical and illogical and unimplementable. It leads to the degeneration of the political agenda. This can even lead to the wastage of resources on frivolous promises without any real results to show.

Issues with Freebies culture:

Huge debt burden: The debt-to-GDP ratio of Punjab reached 53.3% in 2021-22 due to the high-subsidy burden.

Creates a never-ending cycle of freebies: as populist schemes are countered with more populist measures.

Social inequalities: With the Rajasthan government’s decision to revert to the old pension scheme for its employees, just 6% of the population captures benefits as high as 56% of the pension and salary expenditure.

More expenditure towards servicing just interest costs: Andhra Pradesh spent roughly 13% of its budget of 22,000 crores on interest payments.

Measures to mitigate the negative impacts:

Role of Finance Commission: Finance Commission (an independent body) when it makes allocations to various states, can take into account the debt of the state and in the context of that find out whether the state’s economy will be sustainable over the years in the context of the freebies.

Strengthening Election Commission: bringing freebies under MCC and regulating manifestos by ECI.

Demand-based freebies: with priority to DPSPs based or merit goods such as PDS system, education, health etc. for greater prosperity.

Improving transparency: to ensure it reaches real beneficiaries. E.g., a farm loan waiver reaches only actual farmers.

Revising FRBM act: placing a limit on expenditure on loan waivers, free electricity and water.

Outcome-based budgeting: makes the departments accountable for their work, as done on Jharkhand recently fixes responsibility on debts.

Educating the public: On effects of such freebies and need for fiscal discipline. E.g. demanding the source of funds for such freebies through citizen groups.

Finance commission Chief N.K Singh recently pointed out that political competition over such sops is a “quick passport to fiscal disaster”. Hence, there is a need to avoid those before they become the norm.

Parliamentary Standing Committee Report on E-commerce

(GS-III: Liberalisation after 1991)

In News:

Recent report of the committee “Promotion and Regulation of E-commerce in India”

Issues highlighted by the report:

  • Few platforms control a large part of the e-commerce market (which may lead to monopoly)
  • Lack of platform neutrality, i.e., providing preferential treatment to selected sellers
  • Deep discounting,e., discounts of preferred sellers are selectively funded by the platform
  • Non-transparent search rankings
  • Misuse of data

Recommendations:

Formulate a policy which clearly defines marketplace and inventory-based models of e-commerce.

It recommended that marketplace-commerce entities should:

  • not sell goods that it owns or controls
  • not have any direct or indirect relationship with sellers who sell on the platform
  • be prohibited from licensing their brand to third-party sellers on the platform

Gatekeeper entities: Certain e-commerce platforms need greater scrutiny (as is applicable in other countries): It recommends India should select “gatekeeper” platforms of a specific scale that require more stringent supervision.

Mandatory registration of e-commerce companies with DPIIT

Create Digital Market Division to overcome regulatory gaps

Implement the Personal Data protection bill (2019)

DPIIT should address issues such as maintaining a level playing field between small businesses and e-commerce giants and provide technical support to small and local businesses.

Obligations put on e-commerce entities through Consumer Protection (E-Commerce) Rules, 2020(such as the appointment of the chief compliance officer, and setting up a grievance redressal mechanism) should be applicable to those entities above a certain threshold.

It puts a compliance burden on new e-commerce entities.

Use of technology to make efficient auto vehicles

(GS-III: Science and Technology)

In News:

Nudged by tough BS6 emission norms, automakers are offering mild and strong hybrid options in their vehicles and using technology to make vehicles efficient

Diesel’s Engine:

Working: In a compression-ignited system, the diesel fuel is injected into the combustion chamber of the engine and ignited by the high temperatures achieved when the gas is compressed by the engine piston.

Because they use compressed air with no spark plug for the ignition process, diesel engines use 15%-20% per cent less fuel compared to a petrol engine vehicle.

Higher cost: Diesel engines entailed higher upfront costs, and their servicing and maintenance costs tended to be more.

It produces much more toxic gases and so shifts towards petrol variants.

Petrol tech innovations:

TWO FUEL INJECTORS PER CYLINDER:In Maruti Suzuki’s new DualJet technology, two injectors are placed close to the engine inlet valves, which enables finer atomisation of fuel, resulting in more complete combustion and higher efficiency.

GASOLINE DIRECT INJECTION:GDI is a sophisticated engine that injects fuel precisely and at very high pressure directly into the combustion chamber of the engine. This leads to higher fuel efficiency, higher power output, and significantly lower emissions.

TURBOCHARGED PETROL ENGINES: Turbocharger — a turbine that is powered by the engine’s exhaust fuel to subsequently power that additional compressed air into the combustion chamber, resulting in extra combustion of the air-fuel mix. The result: these smaller turbocharged engines produce more energy than a bigger engine while guzzling less petrol.

STRONG HYBRID TECH:A hybrid system sometimes includes a petrol engine that’s paired with an electric motor and a Lithium-ion or Nickel-metal Hydride (NiMH) battery pack that allows the automobile to be pushed in a purely electrical mode for short distances. The battery pack is recharged by the engine, or by way of regenerative braking.

White Onion gets GI tags

In News:

Alibagh (Maharastra) is known for growing white onion using the traditional method and utilizing geo-climatic conditions for a unique taste, flavour and shape.

About:

A GI is primarily an agricultural, natural or manufactured product (handicrafts and industrial goods) originating from a definite geographical territory.

Typically, such a name conveys an assurance of quality and distinctiveness, which is essentially attributable to the place of its origin.

How long is the registration of Geographical Indication is valid?

The registration of a geographical indication is valid for a period of 10 years.

It can be renewed from time to time for a further period of 10 years each.

In India, Geographical Indications registration is administered by the Geographical Indications of Goods (Registration and Protection) Act, 1999 which came into force with effect in September 2003. The first product in India to be accorded with GI tag was Darjeeling tea in the year 2004-05.