Newspaper notes for UPSC 06-07-18

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Allow gambling in sports but regulate it, says law panel

  • The Law Commission of India submitted a report to the government, saying that since it is impossible to stop illegal gambling, the only viable option left is to “regulate” gambling in sports.
  • The commission, headed by former Supreme Court judge, Justice B.S. Chauhan, recommended “cashless” gambling in sports as a means to increase revenue and deal a blow to unlawful gambling.
  • The money generated can be used for public welfare activities, it said. For that the revenue from gambling should be taxable under laws like Income Tax Act, the Goods and Services Tax Act.Transactions between gamblers and operators should be linked to their Aadhaar and PAN cards so that the government could keep an eye on them, the panel said.
  • The commission recommended a classification of ‘proper gambling’ and ‘small gambling.’ Proper gambling would be for the rich who play for high stakes, while small gambling would be for the low-income groups.
  • The panel wanted the government to introduce a cap on the number of gambling transactions for each individual, that is, monthly, half-yearly and annual. Restrictions on amount should be prescribed while using electronic money facilities like credit cards, debit cards, and net-banking.
  • Regulations need to protect vulnerable groups, minors and those below poverty line, those who draw their sustenance from social welfare measures, government subsidies and Jan Dhan account holders from exploitation through gambling. Foreign Exchange Management and Foreign Direct Investment laws and policies should be amended to encourage investment in the casino/online gaming industry. This would propel tourism and employment.


  • However, one of the members, Prof. S. Sivakumar, expressed strong dissent in a separate note filed with the government. He said the Law Commission report was not “comprehensive.” A country as poor as India should not allow ‘legalised gambling’ on its soil.
  • He criticised the commission for exceeding the brief given to it by the Supreme Court in 2016. The court had merely asked the commission to look into the narrow question of legalising betting in cricket and not sports as a whole.
  • “Socio-economic and cultural circumstances of the country are not pragmatic to accept legalised gambling activities as it is still treated as a social stigma… The policy of the government in general is to disallow betting and gambling.

Allow visitors of all faiths to offer prayers, SC tells Puri temple

  • In a major order ahead of the annual Rath Yatra in Puri in mid-July, the Supreme Court directed the Jagannath temple management to consider allowing every visitor, irrespective of his or her faith, to offer prayers to the deity.
  • The apex court, however, said that allowing of every visitor will be subject to regulatory measures regarding dress code and giving an appropriate declaration.
  • A Bench of Justices , while referring to an earlier verdict of the court, said: “Hinduism does not eliminate any other belief. It reflects eternal faith and wisdom and inspiration of centuries.”
  • The court said not only the State, but even the Centre could look into the aspect of difficulties faced by the visitors, deficiencies in the management, maintenance of hygiene, appropriate utilisation of offerings and protection of assets with regard to shrines, irrespective of religion.
  • Context: The court was hearing a petition highlighting difficulties faced by devotees at the Jagannath Temple and their harassment or exploitation by the sevaks (staff) of the temple.

This aborted mission is a success

  • The Indian Space Research Organisation (ISRO) inched a small step closer to its ambition of sending Indians to space by conducting the first ‘pad abort’ test.
  • The test proves that the agency can bail out future astronauts with their capsule in case of an early danger to them at the launch pad.
  • A 1,260-kg crew module lifted off propelled by seven complex rockets built unconventionally around it. In a pre-programmed, automatic sequence, it reached a height of 2.7 km and curved down into the Bay of Bengal on parachutes.
  • The Pad Abort Test [PAT] demonstrated the safe recovery of the crew module in case of any exigency at the launch pad.
  • ISRO described PAT as a major technology demonstrator and the first in a series of tests to qualify a larger Crew Escape System of the future. The U.S., Russia and China which have sent human missions have developed their own systems.
  • During the test, teams from various centres tried out at least five new technologies — such as those related to wireless satellite communication, navigation, Ka-band altimeter and telemetry.
  • Nearly 300 sensors recorded various functional aspects. More technology trials related to astronaut safety would be taken up later.

Taiwan protests against use of ‘Chinese Taipei’

  • The resident trade representative of Taiwan on Thursday expressed deep disappointment with the Air India changing ‘Taiwan’ into ‘Chinese Taipei’ on its website.
  • This move taken by Air India, a state-owned airline, can be seen as a gesture of succumbing to the unreasonable and absurd pressure from China.
  • The Ministry of External Affairs defended Air India’s decision to change the name of Taiwan on its website. The decision of Air India is consistent with international norms and our own position on Taiwan since 1949.
  • India and Taiwan do not have full-fledged diplomatic ties. Both sides maintain trade representatives in each other’s capitals.

What’s in a name: Why China insists on Chinese Taipei rather than Taiwan

  • According to the “One China” policy, Beijing considers Taiwan a province of China, although Taiwan calls itself a democratic, self-ruled country.
  • Although the two participate separately in international events, China has repeatedly insisted that Taiwan should be called “Chinese Taipei”, reflecting a deep anxiety to prevent international recognition of Taiwan as a country.
  • Background: After the surrender of Japan during World War II, the island of Taiwan was put under Chinese control. Towards the end of the Chinese Civil War in 1949, and before the post-war treaties were to be signed, members of the Kuomintang party (KMT) were driven out of the mainland by the Communists, who would later establish the People’s Republic of China (PRC). The KMT retreated to Taiwan, becoming a government in exile. For some time, it was internationally recognised as the government of the Republic of China (RoC).
  • The turf war over the name began in the 1970s, with increased official recognition for the PRC in international event. In 1979, China agreed to participate in International Olympic Committee (IOC) activities if the RoC was referred to as “Chinese Taipei”.
  • In Nagoya, Japan, the IOC and later all other international sports federations adopted a resolution under which the National Olympic Committee of the RoC would be recognised as the Chinese Taipei Olympic Committee, and its athletes would compete under the name Chinese Taipei.
  • Not allowed to use its flag and national anthem in the subsequent Summer and Winter Games, the RoC Olympic Committee boycotted the subsequent Summer and Winter Games in protest.
  • In 1981, however, the government of the RoC formally accepted the name Chinese Taipei.
  • With Chinese Taipei as the name for Taiwan designated in the Nagoya Resolution, the RoC and the PRC recognise each other at various events — the Olympic Games, Paralympic Games, Asian Games, Asian Para Games, FIFA events, World Health Organization (as an invited member) programmes, as well as beauty pageants.

Chinese Pressure :

  • In recent decades, under Chinese pressure, both the International Monetary Fund and the World Bank have been using the name Chinese Taipei. “Taiwan” does not appear on the member countries list of either organisation.
  • Earlier this year, the hotel chain Marriott was forced to shut down the Chinese version of its website for a week while fast-fashion retailer Zara was ordered to complete a “self-inspection” and turn in a rectification report for listing certain areas as countries. China’s Civil Aviation Administration demanded an apology from Delta Airlines for listing both Taiwan and Tibet as countries on its website. The airline responded by saying it had made a “grave mistake”.

India & China

  • Since 1949, India has accepted the “One China” policy that accepts Taiwan and Tibet as part of China.
  • However, since 2010, when Beijing was issuing stapled visas to Indian nationals from Jammu and Kashmir and Arunachal Pradesh, India has not been explicitly mentioning “One China policy” in bilateral joint statements.
  • Delhi has often used the issue to make a diplomatic point. For example, before Chinese President Xi Jinping’s visit to India in 2014, External Affairs Minister Sushma Swaraj had recalled her conversation with Chinese Foreign minister Wang Yi where she had said that if India believes in “One China” policy, China should also believe in a “One India” policy.
  • Now, the government has maintained that Air India’s decision is consistent with international norms and India’s position since 1949. Taiwan has lodged a protest, while Beijing has welcomed the Air-India decision. The renaming is possibly yet another reflection of India’s effort to reset ties with China.
  • Delhi has often used the issue to make a diplomatic point. For example, before Chinese President Xi Jinping’s visit to India in 2014, External Affairs Minister  had recalled her conversation with Chinese Foreign minister  where she had said that if India believes in “One China” policy, China should also believe in a “One India” policy.
  • Now, the government has maintained that Air India’s decision is consistent with international norms and India’s position since 1949. Taiwan has lodged a protest, while Beijing has welcomed the Air-India decision. The renaming is possibly yet another reflection of India’s effort to reset ties with China.

SC seeks plan to eradicate leprosy

  • The Supreme Court directed the Centre to file a comprehensive action plan to ensure eradication of leprosy, saying the ‘curable’ disease cannot be allowed to affect people.
  • The Bench, while reserving its verdict, asked the parties to file written submissions by July 9 on a PIL plea filed by advocate Pankaj Sinha alleging that the government was not taking adequate steps to eradicate the disease.
  • The Bench was informed that Delhi, Andhra Pradesh and Chhattisgarh were leprosy-endemic States and efforts were needed to eradicate the disease from these States.
  • The court had earlier rapped the authorities for their “apathy” towards eradicating leprosy from the country, saying despite it being ‘curable’, the disease still remained a stigma.
  • The petition said: leprosy affects over 1.25 lakh people annually in the country.“Despite an effective cure, namely Multi-Drug Therapy, which has been available since 1981, that can completely cure 99% of leprosy bacteria, due to apathy of the Government of India and the State governments, people are still suffering from the said disease, which is treated as a social stigma.

Check lynchings, MHA tells States

  • The Home Ministry  asked the States and Union Territories (UTs) to check incidents of mob lynching fuelled by rumours of child-lifting on social media.
  • More than 20 people have been lynched over the last two months on suspicion of child-lifting.
  • In an advisory, the Ministry has urged the States and UTs to “keep a watch for early detection of rumours of child-lifting and initiate effective measures to counter them.”
  • The States and UTs have been asked to direct district administrations to identify vulnerable areas and conduct community outreach programmes for creating awareness and building confidence.
  • They have also been directed to properly investigate the complaints of child abduction or kidnapping to instil confidence among the affected people.

India, U.S. set to mend trade ties

  • The ongoing negotiations between India and the U.S. on multiple trade tussles are progressing smoothly and a deal could be announced when an Indian delegation visits America in mid-July.
  • The deal is likely to involve bringing down the duty on high-end Harley-Davidson motorcycles to zero, addressing an issue that President Donald Trump continues to raise publicly and privately about trade relations with India.
  • As part of a package deal, America is likely to maintain the Generalised System Preferences (GSP) for India, which allows many exporters to enjoy lower tariffs on specific exports to the U.S. India is likely to change the price restrictions imposed on medical devices imported from America to trade margin rationalisation, a more acceptable global practice being demanded by American manufactures.
  • The U.S. had invoked Section 232 (b) of the U.S. Trade Expansion Act of 1962 to impose 25% duties on steel and aluminium from India. India had taken the issue to the World Trade Organisation (WTO). The U.S. is also challenging India at the WTO for its export subsidy programmes.
  • Other market access issues are also on the table. American companies are also protesting data localisation requirements that India has announced.

Rupee sinks to record closing low

  • The rupee slumped to its lowest-ever close as it weakened further against the dollar to end at 95. The Indian rupee’s previous closing low was the 68.83 a dollar level it fell to on August 28, 2013, when the currency was in free fall as foreign investors pulled out from emerging markets in what came to be known as the ‘taper tantrum’.
  • The rupee has come under intense pressure once again this year as a surge in international oil prices has increased demand for the U.S. currency among the country’s refiners, who import a bulk of their crude requirement from overseas.
  • The U.S. Federal Reserve’s hawkish stance is also prompting foreign investors to pull out from emerging markets.
  • The rupee’s slide past the 69 mark is likely to have prompted state-run banks to sell dollars on behalf of the central bank. The RBI has been intervening in the foreign exchange market to curb volatility.

Test-tube embryos may save rhinos

  • Months after the death of Sudan, the world’s last male northern white rhino (NWR), scientists have grown embryos containing DNA of his kind, hoping to save the subspecies from extinction.
  • With only two northern white rhinos known to be alive today — both infertile females — the team hopes their novel technique will lead to the re-establishment of a viable breeding population.
  • Using a recently-patented, two-metre egg extraction device, resulted in the first-ever test tube-produced rhino embryos. Now frozen, these have a very high chance to establish a pregnancy once implanted into a surrogate mother.
  • The hybrid embryos were created with frozen sperm from dead NWR males and the eggs of southern white rhino (SWR) females, of which there are thousands left on Earth.
  • ART (assisted reproduction techniques) could be a viable strategy to rescue genes from the iconic, almost extinct, northern white rhinoceros.
  • The government panel, which recommended minimum support prices for kharif crops that were approved by the Cabinet , has also recommended that the Centre bring out a legislation which would give that announcement some legal teeth by giving farmers the right to sell their produce at those prices.
  • The Commission for Agricultural Costs and Prices is a statutory panel under the Ministry of Agriculture which makes the recommendations for MSPs for 23 kharif and rabi crops. Its suggestions are not binding on the government.
  • In its report titled ‘Price Policy for Kharif Crops for the Marketing Season 2018-19,’ the CACP notes that the procurement mechanism is broken for most crops and for most farmers.
  • It has been observed that often farmers of remote areas do not have sufficient access to APMCs [Agricultural Produce Market Committees] and their potential market is local ‘haats’ where their produce is sold below MSP,” says the report.
  • “Strong procurement operations need to be expanded to neglected regions, particularly eastern and north eastern regions.”

Editorials and Opinions:

Why we need Governors

  • Chief Ministers and Prime Ministers head the government. Governors and Presidents head the state. Governments govern, states sustain. And in a democratic republic, the people power both. They do so, wanting the Chief Minister to act conscientiously and the Governor to act constitutionally, to ensure self-government is good government, swa-raj is also su-raj.
  • The country has to congratulate the Delhi Chief Minister ,for having elicited from the Supreme Court a benchmark ruling. But it can do more. It can reflect on how, as a Chief Minister actuates a popular mandate, the Governor exercises that “all-pervasive moral influence”, both together providing the people in their jurisdiction the assurance that they are in secure and mutually composed, not conflicted, hands.

Allies, interrupted

  • There are enough signs that relations between India and the United States have suffered and their interests are diverging.
  • From the U.S. side, policy decisions by President Donald Trump to walk out of the multilateral nuclear deal with Iran, and the U.S. Congress’s CAATSA law sanctioning Iran and Russia have set up an inevitable conflict. Mr. Trump’s insistence on tough sanctions against all those continuing to engage with Iran and Russia limits India’s options on energy security and defence procurement.
  • Added to this confrontation is the U.S.’s tough policy on trade tariffs, applied to ally and adversary alike, including India.
  • For its part, the Modi government has taken a policy turn away from four years of a pro-U.S. tilt. Mr. Modi’s speech at the Shangri-La Dialogue last month, in which he invoked the long-lapsed phrase “strategic autonomy”, set at rest any doubt that there is a reset in his foreign policy.
  • Since January, he has personally reached out to the Chinese and Russian Presidents in informal summits, and invited the Iranian President to Delhi. At variance with the U.S. position on limiting engagement with these very countries.
  • India promised to raise oil imports from Iran this year, committed to far greater engagement on the Chabahar port project and oilfields in Iran, while negotiating a $5.5 billion deal with Russia for the S-400 Triumf missile systems. These will trigger U.S. sanctions unless the two countries reach a compromise.
  • India must now decide how best to deal with the ultimatums, with U.S. sanctions kicking in by November.

Is India’s foreign policy adrift?


  • The first principle of Indian foreign policy, which is finessing the ‘big powers’ dynamic. This means that equilibrium must be maintained with the U.S., China, Russia, the European Union and members of the ASEAN.
  • While the first three carry geostrategic heft, with the U.S. still being the number one outside power balancer in almost every region of the world, the last two are economic powerhouses.
  • India needs all of them, not one at the cost of the other.
  • India has lost its eminent position in South Asia as a consequence of reckless adventurism in its neighbourhood. Today, the neighbourhood is bending towards China.
  • India has lost its pre-eminent position in the developing world as a consequence of its wilful abandonment of the leadership of the Non-Aligned Movement (NAM) and other such institutions of the postcolonial world order.
  • The present government’s denseness has ended up antagonising both Russia and China. Nothing typified this more than Russia holding antiterror exercises with Pakistan in DRUZBA-2017. Similarly, rather than taking a nuanced position, the ill-conceived boycott of the Belt and Road Forum in Beijing in 2017 invited the wrath of China via the Doklam standoff.
  • The worst casualty has, however, been India’s neighbourhood. In the past four years, the government has swung from the sublime to the ridiculous on Pakistan, blockaded Nepal for not declaring itself as a Hindu Rashtra, lost Sri Lanka to the Chinese, been belittled by the Maldives and even Seychelles. Europe, Africa, Latin and South America have fallen off the map.


  • Since Narendra Modi became Prime Minister, India’s foreign policy has been on an upward trajectory.
  • Once a perennial disappointment that was not fulfilling expectations of greatness, India is now widely acknowledged as an actor living up to its true potential.
  • Two areas where Indian foreign policy has leapfrogged under Mr. Modi are cultural and commercial diplomacy.
  • Well-thought-out policy reforms and emotional engagements with the Indian diaspora have added a force multiplier to our soft power. By tapping into the transnational Hindu and Buddhist civilisational linkages and harnessing them for strategic benefits in our extended neighbourhood, Mr. Modi has reified India’s image as a repository of ancient wisdom that generates global public goods.
  • Record levels of inward FDI flows and improvements in a range of global ranking indices bear testament to Mr. Modi’s success in selling the India story abroad and linking his economic diplomacy with domestic reforms. Fuelling economic development is a core purpose of Indian foreign policy.
  • In geopolitics, he has made decisive choices. He has broken free of taboos that restrained India from capitalising on closer defence and strategic cooperation with the S., Japan and Israel. Casting aside the obsolete concept of non-alignment and entering into deeper circumstantial partnerships.
  • India is working its way to becoming a third power centre in the world alongside the U.S. and China.

It’s Complicated:

  • India is facing a unique combination of diplomatic, security and strategic challenges today.
  • The growing economic, defence and strategic partnership with the U.S. is being questioned.
  • India’s hitherto reliable and largest defence partner, Russia, is becoming increasingly enmeshed with China. Unlike in the past, Russia has now supplied military helicopters to Pakistan.
  • China now has a GDP that is five times that of India’s and military expenditure that is three times larger than ours. It has a growing global and regional economic and strategic footprint.
  • India’s neighbours, including the Maldives, Nepal and Sri Lanka, are exploiting new opportunities to leverage their possibilities with China vis-à-vis India.
  • Pakistan, while continuing to be perceived globally as problematic because of its sponsorship of several terrorist groups, remains useful to the U.S. for its efforts in Afghanistan, and to China in its regional and global strategies.
  • Some of India’s efforts, such as membership of the Nuclear Suppliers Group and a facility in Seychelles, have been stymied. Debate continues endlessly on expansion of the UN Security Council.
  • Although this particular combination of circumstances is unique, Indian foreign policy has faced seminal challenges before.
  • India also has successes to its credit. There is a broad bipartisan consensus in the U.S. on the value of the India relationship.The U.S. has also supported India’s growing role in Afghanistan.
  • Europe, unnerved by the Trump administration, is attaching importance to its values and economic opportunity-based partnership with India.
  • The Indian Prime Minister was welcomed by the French President and German Chancellor soon after their inauguration.
  • In the Indo-Pacific, relations with Japan and ASEAN countries continue to strengthen.
  • A renewed thrust has been made in the Gulf, especially with the UAE and Saudi Arabia, keeping in mind the interests of our eight-million-strong diaspora, around $50 billion of remittances, energy security, and sovereign wealth fund investments in India.
  • Relations with Israel, a major defence and technology partner, have been taken a notch higher, even as Chabahar port is being developed in Iran to enhance connectivity to Afghanistan and Central Asia.
  • The picture is complicated. There are strong sui generis challenges and headwinds, requiring course modulation and adaptation. But foreign policymaking always faces challenges in an evolving world. Along with nimble footedness, India will also need to strengthen itself further economically and in its defence capacity, including in technology and production. It will also need to improve its capacity for implementation of agreed upon cooperation projects.

Evolving safety protocols for dams

  • The Dam Safety Bill of 2018 addresses the concerns raised about the safety of over 5,200 large dams in India and about 450 which are under construction.
  • A lack of legal and institutional architecture for dam safety raises fears about unsafe dams, and the possibility of consequent disasters and loss of life and property.
  • The Bill, approved by the Union Cabinet last month, proposes uniform dam safety procedures. It provides for surveillance, inspection, operation and maintenance of specified dams and the constitution of a National Committee on Dam Safety to evolve safety policies and recommend necessary regulations.
  • Also envisaged is the establishment of a National Dam Safety Authority as a regulatory body to implement the policy, guidelines and standards for dam safety. The Bill proposes the constitution of State-level committees on dam safety.
  • The legislation addresses procedures concerning dam safety, including regular inspection of dams, emergency action plan, comprehensive dam safety review, adequate repair and maintenance funds for dam safety, instrumentation and safety manuals. In fact, it lays the onus of dam safety on the dam owner and provides for penal provisions.
  • The National Dam Safety Authority is to liaison with the State Dam Safety Organisations and the owners of dams for standardisation of safety-related data and practices.
  • This authority shall provide technical and managerial assistance to the States and State Dam Safety Organisations, and maintain a national level database of dams and the records of major dam failures. It shall examine the cause of any major dam failure and publish and update the standard guidelines and check-lists for the routine inspection and detailed investigations of dams and appurtenances.
  • The National Authority is empowered to examine unresolved points of issue between the State Dam Safety Organisations of two States, or between the State Dam Safety Organisation of a State and the owner of a dam in that State.
  • At the level of the States, State Committees on Dam Safety will ensure proper surveillance, inspection, operation and maintenance of all specified dams in that State and ensure their safe functioning.
  • These State Dam Safety Organisations are to be manned by officers from the field, preferably with expertise in dam-designs, hydro-mechanical engineering, hydrology, geo-technical investigation, instrumentation and dam rehabilitation.

How the 1.5-times formula works out MSP

How does the government fix MSPs of crops before every planting season?

  • The Commission for Agricultural Costs & Prices (CACP) in the Ministry of Agriculture recommends MSPs for 23 crops. These include 14 grown during the kharif/post-monsoon season and six in rabi/winter (wheat, barley, chana, masur, mustard and safflower), apart from sugarcane, jute and copra.
  • The CACP is supposed to consider various factors while recommending the MSP for a commodity, including cost of cultivation.
  • It also takes into account the supply and demand situation for the commodity; market price trends (domestic and global) and parity vis-à-vis other crops; and implications for consumers (inflation), environment (soil and water use) and terms of trade between agriculture and non-agriculture sectors.
  • The Budget for 2018-19 announced that MSPs would henceforth be fixed at 1½ times of the production costs for crops as a “pre-determined principle”. Simply put, the CACP’s job will be only to estimate production costs for a season and recommend the MSPs by applying the 1.5-times formula.
  • How is this production cost arrived at?  The CACP does not do any field-based cost estimates itself. It merely makes projections using state-wise, crop-specific production cost estimates provided by the Directorate of Economics & Statistics in the Agriculture Ministry. The latter are, however, generally available with a three-year lag.
  • The CACP further projects three kinds of production cost for every crop, both at state and all-India average levels. ‘A2’ covers all paid-out costs directly incurred by the farmer — in cash and kind — on seeds, fertilisers, pesticides, hired labour, leased-in land, fuel, irrigation, etc. ‘A2+FL’ includes A2 plus an imputed value of unpaid family labour. ‘C2’ is a more comprehensive cost that factors in rentals and interest forgone on owned land and fixed capital assets, on top of A2+FL.
  • The CACP’s ‘Price Policy for Kharif Crops: The Marketing Season 2018-19’ report states that its MSP recommendation is based on 1.5 times the A2+FL costs.
  • Farm activists, however, say that the 1.5-times MSP formula — originally recommended by the National Commission for Farmers headed by agricultural scientist M S Swaminathan and promised in the BJP’s 2014 Lok Sabha election manifesto — should have been applied on the C2 costs. Had that been done, the MSP for common paddy alone (on a C2 cost of Rs 1,560) would have been Rs 2,340 per quintal, and not Rs 1,750 as announced.

The price is right

  • Since the beginning of the economic reforms in the early 1990s, the focus of agricultural policy has shifted towards prices. Farmers are losing faith in the market and seeking direct intervention by the government, mainly at the Centre.
  • India started the system of MSPs in the mid-1960s for wheat and gradually brought all major cereals, oilseeds, pulses, cotton, jute and sugarcane into its ambit. In reality, the MSP remained effective only for rice, wheat and cotton, where public agencies procure the produce when mandi prices fall below the MSP.
  • To address the issue effectively and comprehensively, the Union government made two significant announcements in the 2018-19 budget. It decided to keep MSPs at least 50 per cent above the sum of cost of production (A2) and imputed wages for the time spent by the farmer and his/her family (FL) in crop production. A2 is a comprehensive cost and includes paid or imputed costs of all purchased or own inputs like seed, fertiliser, manure, bullock labour and machine labour, interest on working capital, irrigation expenses, depreciation, rent paid for the leased-in land, costs of repair and miscellaneous expenses.
  • Some economists have persistently criticised the government for not adopting the principle of keeping MSP at 50 at per cent above cost C2.
  • Cost C2 is arrived at by adding the rental value of owned land and interest on fixed capital to cost A2 plus FL. On average, around 40 per cent of Cost C2 (imputed rent for own land and imputed value of family labour used in crop production) is not a cost but income to the farmer. Thus, if MSP is just equal to cost C2, it includes 40 per cent as net return for the farmers.
  • However, as own land has an opportunity cost (represented by rent), this must be covered by the MSP. It is important to mention that the MSPs approved by the Union Cabinet, based on the new criterion of 1.5 times A2+FL, have a margin over cost C2 varying from 10 per cent to 53 per cent. This clearly shows that the new criteria ensures more than 50 per cent net return to farmers over cost C2, when rent on own land and wages for family labour are treated as a return to the farmer, which indeed they are. The new MSPs announced by the government for kharif crops meet the spirit the Swaminathan Committee recommendation of 50 per cent net return over Cost C2.
  • Keeping MSP at 50 per cent above cost C2 involves an increase in the current MSP by 27-89 per cent for kharif and up to 45 per cent for rabi crops. Such a price entails a 50-100 per cent increase in the existing farm-level prices of some crops at one go. Demand-side factors at present do not support such a sharp increase in prices.
  • MSP fixed to 50 per cent above C2 will leave little incentive for efficiency and diversification in the crop sector.
  • A deeper analysis of crop costs reveals that keeping MSP 50 per cent above Cost A2 plus FL is adequate to ensure remunerative prices for farm produce with a reasonable margin. There is no logic and justification for raising MSP 50 per cent above cost C2 if this is not supported by demand and supply. Such a move involves keeping prices artificially high and cannot be sustained fiscally.
  • While it is desirable to intervene in the markets when they fail to deliver remunerative prices to producers, excessive intervention in prices can have serious implications for the functioning of market, fiscal resources and imports and exports. The best prices for farm produce can be realised from a competitive market. This requires regulatory reforms, institutional changes, and the development of appropriate infrastructure to promote evolution of agricultural market system.
  • There is a particular need to put pressure on the states to undertake the required reforms to make agricultural markets more efficient, competitive and responsive to the needs of producers and consumers.

India must act against public violence

  • A few days ago, the Government of Tripura denied all its citizens access to the net following one of the episodes of lynching that have unfortunately become commonplace in India.
  • Clearly, there is something seriously wrong with the environment that we have created and it needs urgent fixing. The response of the government has been to go after WhatsApp, the messaging service.
  • How America responded ?  They have also had lynchings in their past. But they have responded to this by strengthening the state. More policing, better law enforcement and more investment in the justice system.
  • We are asking WhatsApp to solve the problem for us. Is the issue really that of the medium? Technology will continue to evolve and there will always be another, faster and more efficient manner of communication within groups and communities. Banning news on radio, internet blackouts and stern letters to WhatsApp have solved nothing. We should stop looking at the medium because even newspapers can be a problem in India.
  • In 2002, the Editors Guild of India commissioned a report on the conduct of the media during the Gujarat riots. What we found on our visit to Ahmedabad, Godhra and Baroda was outrageous. Many Gujarati newspapers, even some of the most popular ones, had become poisonous pamphlets that pushed communal poison. The same factors causing the lynchings now — the demonisation of communities, whether Muslims or tribals or “outsiders” and the spreading of rumour — were present then.
  • Was the answer to ban newspapers or to have the government oversee them? Of course not. The only solutions to countering riots, lynchings and other acts of public violence are to prosecute and punish the perpetrators. And for the leadership to continually push for social harmony, encouraging respect for individuals and weaning us away from group identity.
  • The state has failed us historically on the former and some political parties continue to fail us on the latter.
Download the PDF Notes : Newspaper notes for UPSC of 06-07-18

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