Daily Prelims Notes 8 November 2022

Daily Prelims Notes

8 November 2022

Table of Contents

1. Tax: GDP and Revenue foregone
2. WTO AND ENVIRONMENT
3. End of lock-in period
4. A peek into India’s Toshakhana
5. How bond yield in US affect India
6. Early Warning System for the entire world in the next five years
7. COP27: Agriculture finally on table; beware of greenwashing though, warn experts
8. ‘Beaver blood moon’ offers world’s last total lunar eclipse until 2025
9. Quota for general poor gets court seal
10. Government say need to update NPR across country
11. Office of Profit Case
12. What is the Black Sea Grain Initiative?
13. Matera Declaration

1. Tax: GDP and Revenue foregone

Subject: Economy

Context:

Bibek Debroy has suggested that given the huge resource gap, Citizens should be willing to pay higher taxes or settle for reduced delivery of public goods and services.

Details:

Bibek Debroy highlighted that the total tax GDP ratio comes to 15 per cent even as the demands for government spending on physical and social infrastructure is estimated at 23 percent of GDP.

Debroy suggested that India must at some point agree to move to a completely exemption less tax system, noting that exemptions are making the system complex. The revenue foregone by the government because of exemptions is currently 5.5 Percent of GDP

Concepts:

Tax: GDP

• It  is a gauge of a nation’s tax revenue relative to the size of its economy as measured by gross domestic product (GDP). 
• Tax-to-GDP ratio is calculated by dividing the tax revenue of a specific time period by the GDP.
• The ratio provides a useful look at a country’s tax revenue because it reveals potential taxation relative to the economy.
• It also enables a view of the overall direction of a nation’s tax policy, as well as international comparisons between the tax revenues of different countries.
• Developed nations typically have higher tax-to-GDP ratios than developing nations.
• A tax-to-GDP ratio of 15% or higher ensures economic growth and, thus, poverty reduction in the long-term, according to the World Bank.

Tax Base

The tax base is the total amount of assets or revenue that a government can charge tax on. For example, the assessed value is the tax base for property taxes and taxable income is the tax base for income tax. It can also be defined as the total of taxable income, taxable assets, and the assessed value of property within the government tax jurisdiction.

Tax Base in India

The tax base is different for direct tax and indirect tax. Direct taxes include income tax and property tax, whereas indirect taxes include GST, excise duty, and customs duty.

The Income Tax Act under direct tax laws lays down the regulations of income tax. For example, an individual and HUF assessees with income more than Rs.2.5 lakh has to pay tax under the income tax. But there is no such income limit for other assessees like companies, partnership firms. The total of taxable income from all taxpayers constitutes the tax base.

The Goods & Services Tax Act decides the GST base under indirect tax laws. For example, a registered person whose turnover is above Rs.40 lakh has to pay GST. The turnover of all taxpayers will constitute the tax base.

To arrive at the tax liability, we should multiply the tax base with the respective tax rate.

The size and growth (increase or decrease) of the tax base is crucial to the planning of local, state, or central government. The tax base size influences the taxable revenues which are available to a government. There is a direct correlation between the economic condition of the country and the budget of the government. The government has to always consider how their decisions will affect their tax base.

Revenue Foregone

• The revenue forgone is also referred to as tax expenditure or indirect subsidy to taxpayers.
• The tax policy provides specific tax incentives which give rise to tax preferences. Such preferences have a definite revenue impact
• The Indian government started publishing the Statement of Revenue Foregone in 2006. This estimate of revenue foregone is intended to indicate the potential revenue gains if all tax incentives (exemptions, deductions and similar measures) were rationalized.

2. WTO AND ENVIRONMENT

Subject: Economy

Context:

The WTO may serve as an appropriate forum for discussions on opening up trade in environmental goods and services according to the World Trade Report 2022: Climate Change and International Trade.

Details:

• The Elimination of tariffs and reduction in Non-tariff measures on a specific subset of environmental goods would reduce carbon emissions while contributing to increase in exports and GDP in all regions.
• India and several other developing countries are not in favour:
  • It could lead to tariff reduction for dual use goods-used also for non environmental purposes thus detrimental to the domestic industry
  • Majority of environmental goods production takes place in developed countries.

WTO and Environment:

• The WTO also provides trade related technical assistance and capacity building to developing countries and LDCs, which can help to build climate resilient trade capacity
  • Example-Aid for Trade, the Enhanced Integrated Framework and the Standards and Trade Development Facility (STDE)

About the World Trade Report

• It is published annually by the WTO.
• It aims to deepen understanding about the trends in trade, issues, and policies.
• The 2022 World Trade Report explores the complex interlinkages between climate change and international trade and how international trade and trade rules can contribute to addressing climate change.

The WTO-led Aid-for-Trade Initiative 

• It encourages developing country governments and donors to recognize the role that trade can play in development. In particular, the initiative seeks to mobilize resources to address the trade-related constraints identified by developing and least-developed countries.
• Aid for Trade relates to the provision of a comprehensive trade package that aims to help developing countries, particularly least-developed countries, develop the trade-related skills and infrastructure for implementing the WTO agreement thereby benefiting from enhanced market access.

The Standards and Trade Development Facility (STDF)

• It  is a global partnership which works to strengthen food safety, animal and plant health capacity in developing countries by encouraging the use of good practices – including through digital technologies – to facilitate safe trade worldwide.
• The STDF supports developing countries to comply with international sanitary and phytosanitary (SPS) requirements, as outlined in the WTO’s SPS Agreement. 
• The goal is to build long-lasting SPS capacity in developing countries, contributing to sustainable economic growth, poverty reduction and food security. The STDF works to achieve this goal in two main ways:
  • funding collaborative, innovative SPS capacity building projects at the national, regional and global levels
  • identifying and promoting the use of good practices to develop SPS capacity.

STDF founding partners are the Food and Agriculture Organization (FAO) of the United Nations, which also houses the Codex and IPPC Secretariats, the World Organisation for Animal Health (WOAH), the World Bank Group, the World Health Organization (WHO) and the WTO.

3. End of lock-in period

Subject: Economy

Context:

The share price of India’s 11 new-age tech companies, including Nykaa, Paytm is likely to be under pressure as $14 billion worth of locked-in shares in these companies will be available to be sold in the market.

Details:

Leading investors who had made pre-IPO bets are expected to exit or sell part of their holdings as they have lost appeal among investors  due to the Fed interest rate tightening.

Lock-in period

• Lock in period or lock up period refers to that period for which investments cannot be sold or redeemed.
• Lock-in periods are commonly used for hedge funds, IPOs of private equity, start-ups and few mutual funds.
• A lock in period does not define the tenure of investment.
• It is not just a restriction on investment but also an opportunity for new investors to grow.
• Lock in periods for different investment
  • Hedge Funds are usually kept for 30 to 90 days.
  • Public Provident Funds are kept for 15 years.
  • ELSS mutual funds are usually kept for 3 years.
  • Tax saving Fixed Deposits are locked in for 5 years.
  • 8% Government of India bonds are locked up for 6 years.

Importance of Lock In Period

• It will help the investors stick to the investment for some time and reap the benefits of long-term investing.
• Mutual funds have lock-in periods to induce stability in the mutual fund while preserving liquidity.
• Lock in periods can also come handy when one wishes to claim deductions in the income from these investments from income tax.
• For hedge funds, the lock up period gives the hedge fund manager time to exit investments that may be illiquid or otherwise unbalance their portfolio of investments too rapidly.
• For start-ups or companies issuing an IPO, the lock in period helps the company build a business model on a solid footing and show market resilience. The lock-up period post IPO prevents stock from being sold immediately when the share prices may be artificially high and susceptible to extreme price volatility.
• Having a lock in period for goal-based investment is good.

Lock-in period and pre-IPO investment

• Rules in India required a 1-year lock-in period for pre-IPO investors when these companies got listed.
•  SEBI (DIP) Guidelines have stipulated lock-in requirements on shares of promoters mainly to ensure that the promoters or main persons who are controlling the company, shall continue to hold some minimum percentage in the company after the public issue.

Initial Public Offering (IPO) is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves way for listing and trading of the issuer’s securities.

4. A peek into India’s Toshakhana

Subject: Economy

Context:

In the last few years, the number of items that Toshakhana received has been going down.

Details:

As per the Ministry of External Affairs-between January 2019 and April 2022, Toshakhana received 2,036 items, that cumulatively have a value of ₹7.76 crore.

The repository received around 768 items in 2018 which came down to 127 in 2021.

Concept:

Toshkhana

• Toshakhana-the treasure trove of the government, is governed by various ‘gift acceptance policies’ and also by the Central Civil Services Conduct Rules.
• It is a repository of articles or gifts received by ministers, diplomats and heads of armed forces while discharging their official duties, from foreign sources.
• As per a June 1978 gazette notification, every gift received by a person during an official visit should be deposited in the Toshakhana within 30 days of his return.
  • The Toshakhana officials are then required to assess the worth of the gift in the Indian market. 
  • Recipients are allowed to keep items that are valued less than ₹5,000. If it exceeds the limit, they can retain it by paying extra.
  • Presents which are not purchased by recipients will remain at the disposal of the government.
• What can be done to the gifts left unpurchased?
  • The MEA may donate artifacts of cultural value to public museums in the country.
  • Articles from the Toshakhana are also used in Rashtrapati Bhawan, Rashtrapati Niwas (Simla), the prime minister’s official residence, Indian embassies abroad and various government departments.
  • Some articles, like jewellery or items that are not likely to be required for presentation are auctioned off by the government.
    •  The last auction of items in the toshakhana was held in 1983 only central government officials posted in Delhi were allowed to bid.
    • The auction was a closed-door affair and many articles were sold well below their assessed value.
  • Gold coins or government mintage are made over to the treasury.
  • Animals presented are sent to the nearest army service corps for early sale or handed over to zoological gardens.

5. How bond yield in US affect India

Subject: Economy

Context:

With the US Federal Reserve increasing interest rates aggressively to curb inflationary pressures, the yield on US 10-year bonds surged to 4.163%.

Concept:

What is yield in the context of a bond?

• Yields are the returns from investing in a bond.
• A bond’s yield is based on the bond’s coupon payments divided by its market price; as bond prices increase, bond yields fall.
  • Example-Let’s say you have a $1,000 bond that has an annual coupon payment of $100, and it’s selling near par, for $1,010. Its yield is 9.9% ($100 / 1010). Now, let’s say the bond’s price jumps to $1,210. Its yield falls to 8.3% (100 / 1210).
• Government bond yields are indicative of a country’s inflation and interest rate expectations.
  • During periods of high inflation, newer debt issuances are compelled to offer higher yields-Rising inflation pushes bond prices down, thereby pushing yields higher.
    •  As inflation rises, central banks will increase short-term interest rates in an effort to cool down the economy. Additionally, rising inflation expectations lead to an increase in long-term rates, which are largely determined by market activity. The inverse relationship between interest rates and bond prices means that higher rates equal lower bond prices
  • As interest rates rise, bond yields rise– When the risk-free rate of return rises, money moves from financial assets to the safety of guaranteed returns i.e., if the interest rate rises from 2% to 4%, a bond yielding 5% would become less attractive. The extra yield would not be worth taking on the risk. Demand for the bond would decline given supply. Thus, bond price falls and the yield would rise until supply and demand reached a new equilibrium.

What is fuelling the rise in US bond yields?

• Quantitative tightening–Inflation in the US has been on a steady rise– to counter this, the US Federal Reserve has been raising interest rates aggressively has resulted in the bond

Impact on India?

• Capital outflows -The comparative improvements in the US capital markets lead to foreign portfolio investors (FPIs) withdrawing from the Indian capital markets. Higher bond yields reduce the attractiveness of equity markets as against fixed income securities.
• Currency depreciation-The net outflow of dollars leads to the rupee depreciation.
• Imported inflation-Rupee depreciation has also led to landed costs of crucial imports rising and leading to cost-push inflation in the country.
• Rise in domestic bond yield-Given the capital outflows demand for the bond would decline given supply. Thus, bond price falls and the yield would rise until supply and demand reached a new equilibrium.

What is the way out of this situation?

• To limit rupee depreciation, the RBI continues selling dollars in the foreign exchange market.

6. Early Warning System for the entire world in the next five years

Subject: Environment

Context-

• Taking forward the initiative of the India-backed Coalition for Disaster Resilient Infrastructure (CDRI) at last year’s climate meeting, the World Meteorological Organisation unveiled a five-year programme to set up early warning systems across the world to save lives and minimise destruction from a growing number of climate disasters.

What is an Early Warning System (EWS)-

• An EWS is an adaptive measure for climate change, using integrated communication systems to help communities prepare for hazardous climate-related events.
• A successful EWS saves lives and jobs, land and infrastructures and supports long-term sustainability.
• Early warning systems will assist public officials and administrators in their planning, saving money in the long run and protecting economies.
• The UN, working in diverse partnerships, has introduced a number of innovative early warning systems initiatives in vulnerable areas around the world.
• The five-year programme, launched by UN Secretary-General Antonio Guterres, envisages an investment of $ 3.1 billion between now and 2027 to create the infrastructure and build capacities in early warning systems.

Need for Early warning system (EWS)-

• Nearly half the countries in the world, most of them least developed and small island states, do not have any early warning systems.
• Early warnings save lives and provide vast economic benefits.
• Just 24 hours notice of an impending hazardous event can cut the ensuing damage by 30 per cent.
• The Global Commission on Adaptation had found that spending about $ 800 million on early warning systems could avoid losses of up to $ 3-16 billion every year.

Steps taken to establish EWS globally-

• UNDP’s Signature Programme, “Strengthening Climate Information and Early Warning Systems for Climate Resilient Development and adaptation to climate change” is a comprehensive programme operating across Africa, Asia and the Pacific.
• Systems in place at the sub-regional and regional levels ensure preparedness and rapid response to natural disasters, using a model that integrates the components of risk knowledge, monitoring and predicting, dissemination of information and response to warnings.
• In Southeast Asia, a four-year program implemented by UNDP with the Government and other partners entailed installing and re-activating existing Automatic Weather and Agrometeorological Stations and Automatic Hydrological Stations across the country. Farmers now can access climate bulletins for detailed and carry out substantial planning to avoid costly consequences, both in money and lives.
• Last year, CDRI, an international organization formed three years ago with India’s backing, had come up with a similar plan, focused mainly on the small island states.
• That programme, called IRIS, or Infrastructure for Resilient Island States, was not meant only for early warning systems, but most of the initial interest it had received from the small island states was regarding help in setting up these systems.

Infrastructure for Resilient Island States or IRIS-

• This initiative has been launched by India for developing the infrastructure of small island nations vulnerable to climate change.
• The new initiative is the result of cooperation between India, the U.K. and Australia and included the participation of leaders of small island nations such as Fiji, Jamaica and Mauritius.
• Implementation:
  • The IRIS initiative is a part of the Coalition for Disaster Resilient Infrastructure (CDRI) that would focus on building capacity, having pilot projects, especially in small island developing states.

What is Coalition for Disaster Resilient Infrastructure (CDRI)?

• CDRI is a global partnership of national governments, United Nations agencies and programmes, multilateral development banks and financing mechanisms, the private sector, and academic and research institutions.
• It aims to increase the resilience of infrastructure systems to climate and disaster risks, thereby ensuring sustainable development.
• It was launched in 2019, at the United Nations Climate Action Summit in New York.
• It is the Government of India’s second major global initiative after the International Solar Alliance, and it demonstrates India’s leadership in climate change and disaster resilience issues.

Members:

• Since its inception, 31 countries, 6 international organisations and 2 private sector organisations have joined CDRI as members.
• 6 International Organisations: Asian Development Bank (ADB), World Bank Group, United Nations Development Programme (UNDP), United Nations Office for Disaster Risk Reduction (UNDRR), European Union, European Investment Bank.
• 2 Private Sector Organisations: The Private Sector Alliance for Disaster Resilient Societies and Coalition for Climate Resilient Investment.
• CDRI has steadily increased its membership by attracting a diverse range of economically advanced, developing, and vulnerable countries to climate change and disasters.
• Coalition for Disaster Resilient Infrastructure (CDRI) is working towards developing applications of climate forecast and early warning for reducing infrastructure losses and disruption in basic services.

7. COP27: Agriculture finally on table; beware of greenwashing though, warn experts

Subject: Environment

Context-

• Food systems and agriculture are finally on the table of a Conference of Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC).

About the Food and Agriculture Pavilion at the COP-27-

• The Pavilion is hosted by the United Nation’s Food and Agriculture Organization, CGIAR and The Rockefeller Foundation at the climate conference.
  • CGIAR (formerly the Consultative Group for International Agricultural Research) is a global partnership that unites international organizations engaged in research about food security.
• There will be dedicated discussions on food and agriculture at the first official Food and Agriculture Pavilion at the 27th COP that began November 6, 2022 at Sharm El-Sheikh, Egypt.
• The Food and Agriculture Pavilion will put the transformation of agrifood systems at the heart of the COP agenda for the first time as an important part of the solution to the climate crisis.

Agenda of the Pavilion-

• The array of discussions include adaption for resilient agriculture in Africa, climate security for drylands, vulnerability of food systems to global food crisis, conflicts and trade shocks, and low emission climate resilient development strategies. This comes at a crucial time.
• The unprecedented drought situation in Europe, the United States and Africa, the heatwave that impacted India’s wheat crop and floods and droughts in Pakistan and China are all stark evidence of how food production is at risk from extreme weather events.

Earlier efforts to address food and agriculture system in COPs-

• Agriculture is a victim of climate change. But it is also responsible for more than a third of all greenhouse gas emissions.
• Food systems have not been addressed comprehensively at any climate COP and most countries’ climate plans do not include plans to take action on food systems.
• The only programme under UNFCCC that focuses on agriculture and food security was the Koronivia Joint Work on Agriculture (KJWA), which was established in 2017 at COP23 in Bonn, Germany.
  • The Koronivia decision addresses six interrelated topics on soils, nutrient use, water, livestock, methods for assessing adaptation, and the socio-economic and food security dimensions of climate change across the agricultural sectors.
  • The decision resonates with FAO’s core mandate to eliminate hunger, food insecurity and malnutrition, reduce rural poverty, and make agriculture, forestry and fisheries more productive and sustainable.
• The KJWA has since been considered the formal mechanism for discussing food at COP.
• It did organise a few events at COP26 in Glasgow, but as usual, its voice and visibility was subdued.

Who all are responsible for failing food security-

• Experts blame the bulk of the emissions from the sector on industrial agriculture and highlight a dire need to make a shift to agroecology.
• In terms of production systems, industrial models of agriculture that are reliant on agrichemicals and monoculture cropping are failing people and the climate.
• This is because they have failed to end hunger, are depleting natural resources, exacerbating climate change and are highly vulnerable to shocks, be they from supply chains or from climate extremes.
• Small-scale traditional and biologically diverse forms of agriculture have comparatively minimal input to greenhouse gas emissions but the small-scale farmers are disproportionately impacted by climate change even though they have done little to cause the crisis.

What could be the probable solutions-

• Working with nature and local communities to support food security, livelihoods, biodiversity and help to buffer temperature extremes and sequester carbon.
• We must completely transform the way we eat, farm and distribute food.
• We need to build resilient, diverse food and farming systems based on agroecology.
• This underscored the need for urgent climate justice action and transforming food systems away from industrial agriculture.

UN warns of Greenwashing industrial agriculture-

• A growing number of green buzzwords are being used to obstruct food system reform at the climate COP.
  • The act of giving the impression that a company’s products are ecologically friendly is known as “greenwashing.”
  • Greenwashing is the practice of making unfounded claims that lead consumers to believe that a company’s products are more environmentally friendly or have a bigger positive influence on the environment than they actually do.
• One particular term, ‘nature-based solutions’, is rapidly gaining traction at international summits, but it lacks an agreed definition, a transformative vision and is being used to maintain agribusiness as usual.
• A report called Smokes & Mirror, released by IPES-Food October 27, analysed narratives at the 2021 United Nations Food Summits, COP26.
  • It found that agrifood corporations, international philanthropic organisations, and some governments are using the term ‘nature-based solutions’ to “hijack the food system sustainability agenda”, bundling it with unproven carbon offsetting schemes that are risky for land competition, the climate and entrench big agribusiness power.
• Under the guise of ‘nature-based’ or ‘climate smart’ solutions, they are perpetuating the centralised, polluting, vulnerable system of industrial monoculture farming.
• For instance, the United States and United Arab Emirates-led Agriculture Innovation Mission for Climate (AIM4C) has been criticised by favouring big businesses and promoting uncertain techno-fixes.
  • The mission was launched at COP26
  • Part of the promotion of climate-smart agriculture which AIM4C is doing is unproven techno fixes like feed additives and other things like more efficient use of agrochemicals, fertilisers, pesticides.
  • These are all practices that we know are not leading to produce differently but are polluting land and water.

8. ‘Beaver blood moon’ offers world’s last total lunar eclipse until 2025

Subject: Science and Technology

Context-

• Nighttimeskywatchers from East Asia to North America will be treated to the rare spectacle of a “Beaver blood moon” on Tuesday, weather permitting, as the Earth, moon and sun align to produce a total lunar eclipse for the last time until 2025.

What’s happening?

• A total lunar eclipse occurs when the Earth casts its shadow completely over a full moon, blocking reflection of all direct sunlight from the lunar orb and dimming the color of the moon to a reddish hue, hence the term “blood moon.”
• This is only possible when the orbits of the Earth, moon and sun align so that the moon is directly behind Earth relative to the sun.
• Otherwise, the moon passes above or below Earth’s shadow because its orbit around Earth is usually tilted relative to Earth’s orbit about the sun.

Why red (Blood moon)?

• The reddish appearance of the lunar surface – the moon does not entirely disappear from view – is caused by rays of sunlight around the outer edge of the eclipse shadow, or umbra, being filtered and refracted as it passes through Earth’s atmosphere, bathing the moon indirectly in a dim copper glow.
• The degree of redness depends on atmospheric conditions that vary with levels of air pollution, dust storms, wildfire smoke and even volcanic ash.

Why Beaver moon?

• Nov. 8 event will coincide with the “Beaver moon,” a moniker for November’s full moon adopted by the Old Farmer’s Almanac supposedly from Algonquian languages once spoken by Native Americans in the New England territory.
• When combined with the phenomena of a total lunar eclipse, it is widely referred to as a “Beaver blood moon” in the United States.

How rare is it-

• Total lunar eclipses occur, on average, about once every year and a half, according to NASA.
• But the interval varies. Nov. 8 event will mark the second blood moon this year, following one in mid-May.
• The next one is not expected until March 14, 2025.

Where is it visible-

• Nov 8’s eclipse will be visible across eastern Asia, Australia, the Pacific and North America.

How long it lasts

• The entire eclipse will unfold over a period of nearly six hours as the moon gradually edges into the Earth’s paler, outer shadow, its “penumbra,” then enters the Earth’s darker, inner shadow, or “umbra,” before reaching totality and eventually emerging from the other side.
• On the West Coast of the United States, the whole display will run from 12:01 a.m. PST until just before 6 a.m., with the total eclipse phase lasting about 90 minutes, peaking at 3 a.m.

What is a supermoon?

• A supermoon occurs when the Moon’s orbit is closest to the Earth at the same time that the Moon is full.
• In a typical year, there may be two to four full supermoons and two to four new supermoons in a row.

9. Quota for general poor gets court seal

Subject: Polity

Context:

• A five-judge constitution bench of the Supreme Court, by a 3-2 majority, upheld the validity of 103rd Constitutional Amendment Act, 2019.

What were the major issues in front of the apex court:

• There were three main issues in the case:

1. Whether the 103rd Constitution Amendment is violative of basic structure for providing reservation solely on the basis of economic criteria.
2. Whether the amendment is violative of basic structure for excluding the poor among the SC/ST/OBC categories from EWS Quota.
3. Whether the amendment is violative of the basic structure for breaching the 50% ceiling limit.

What is EWS Reservation:

• Reservation for Economically Weaker Sections (EWS) of the society was granted based on the recommendations of a commission headed by Major General (retd) S R Sinho.
• The Commission was constituted by the then Union government in 2005, and submitted its report in 2010.
• The 103rd Constitutional Amendment Act, 2019 added Clause (6) to Article 15 of the Constitution to give the government the authority to make special provisions for the EWS among citizens who are not already eligible for reservation.
• It was enacted to promote the welfare of the poor not covered by the 50% reservation policy for Scheduled Castes (SCs), Scheduled Tribes (STs) and Other Backward Classes (OBCs).
• The Act allows up to 10 per cent reservation in public and private educational institutions, whether aided or unaided, with the exception of minority-run institutions.
• The Act also added Clause (6) to Article 16 of the Constitution to make employment reservations easier.
  • Article 16 of the Indian Constitution guarantees equal opportunity to all citizens in matters related to employment in the public sector.

What is the eligibility criteria for EWS reservation:

• Candidate’s annual family income must be less than Rs. 8 lakhs per annum,
• Their family must not own more than 5 acres of agriculture land,
• The residential flat area should be below 1000 sq. ft.,
• The residential plot’s area should be below 100 square yards if in a notified municipality sector,
• The residential plot’s area should be below 200 square yards if in a non-notified municipality sector.

What is Supreme court judgement:

• By a majority of 3:2, a five-judge Bench of the Supreme Court has upheld the validity of the 103rd Constitution Amendment.
• The amendment was challenged, based on the argument that the 103rd amendment violated the “basic structure” of the Constitution.
• Three judges, Justices Dinesh Maheshwari, Bela Trivedi, and S B Pardiwala, have upheld the validity of the 103rd amendment.
• Justice Dinesh Maheshwari has ruled that reservation based only on economic criteria does not violate the basic structure of the Constitution. He also added that the exclusion of classes covered in Article 15(4) and 16(4) that is OBCs and SC/STs in the 103rd amendment does not damage the basic structure.
• Justice Bela Trivedi ruled that treating EWS as a separate class would be a reasonable classification, and that treating unequal equally would violate the principle of equality under the Constitution.75 years after independence, it was time to revisit the system of reservation in the larger interest of society.
• Justice S B Pardiwala observed that “Reservation is not an end, it is means, it should not be allowed to become a vested interest”.
• The dissenting judgement has come from Justice S Ravindra Bhat and Chief Justice of India U U Lalit.
• Justice Bhat has ruled that while reservation on economic criteria is per se not violative of the Constitution,excluding SC/ST/OBC from the purview of EWS is violative of basic structure andhas struck down Articles 15(6) and 16(6) for being discriminatory and violative of the equality code.
• CJI U U Lalit said he concurs entirely with the judgment of Justice Bhat.

10. Government say need to update NPR across country

Subject: Polity

Context:

• MHA annual report underlines need to update National Population Register across country

What is the issue:

• Recently, the MHA annual report underlines the need to update the National Population Register across the country to incorporate the changes due to birth, death, and migration for which demographic and other particulars of each family and individual are to be collected.

What the report say:

• The ministry’s annual report for 2021-22 said due to the outbreak of Covid-19 pandemic, the work of NPR updation and other related field activities got
• The report also said that the Central government has delegated its powers to grant Indian citizenship by registration or naturalisation with respect to members of Hindu, Sikh, Jain, Buddhist, Christian or Parsi communities from Pakistan, Bangladesh and Afghanistan to Collectors of 29 districts and Home Secretaries of nine states. 

What is National Population Register(NPR):

• NPR is a Register of usual residents of the country.
• It is being prepared at the local, sub-District, District, State and National level under provisions of the Citizenship Act 1955 and the Citizenship (Registration of Citizens and Issue of National Identity Cards) Rules, 2003.
• NPR was first done in 2010 and was later updated in 2015 when it was linked with Aadhar.
• It is mandatory for every usual resident of India to register in the NPR.A usual resident is defined for the purposes of NPR as a person who has resided in a local area for the past 6 months or more or a person who intends to reside in that area for the next 6 months or more.
• The Registrar General India shall act as the “National Registration Authority”.

What is the difference between NPR and NRC:

• The National Population Register is a database of people living in India including foreign citizens, but the National Register of Citizens is a database of Indian citizens.
• The NRC process demands proof of citizenship from the respondents. Those who are found without the proof may face deportation or detention in the long run. However, in NPR, there is no need to provide any documentation

11. Office of Profit Case

Subject: Polity

Context:

• The Election Commission on Monday told Jharkhand Chief Minister Hemant Soren that the state’s Governor, Ramesh Bais, had not sought a second opinion from the poll panel in the office of profit charge against him.

What is office of profit:

• The office of profit is interpreted as a position that brings to the office-holder some financial gain, remuneration or benefit. The amount of such profit is immaterial.
• The concept of Office of Profit forbids members of the legislature from accepting an office of profit under the executive so as to maintain the autonomy of the legislature and preserve the separation of powers.

What constitute office of profit:

• The constitution does not explicitly define the phrase.
• However, it has evolved over decades with subsequent judicial pronouncements.
• In 1964, the Supreme Court ruled that the test for determining whether a person holds an office of profit is the test of appointment.
• The certain factors while considering ‘office of profit’:
  • Whether the government is the appointing authority
  • Whether the government has the power to terminate the appointment
  • Whether the government determines the remuneration
  • What is the source of remuneration
  • The power that comes with the position.

What are the  Constitutional provisions regarding ‘Office of Profit’:

• Article 102 (1): A person shall be disqualified for being chosen as a member of either House of Parliament if he holds any office of profit under the Government of India or the Government of any State, other than an office declared by Parliament by law not to disqualify its holder.
• Article 191 (1): A person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State if he holds any office of profit under the Government of India or the Government of any State specified in the First Schedule, other than an office declared by the Legislature of the State by law not to disqualify its holder.
• Provisions of Articles 102(1)(e) and 191(1)(e) also protect a legislator occupying a government position if the office in question has been made immune to disqualification by law.

What is the statutory provisions related to Office of Profit:

• Parliament has also enacted the Parliament (Prevention of Disqualification) Act, 1959.
• Clause 9A of the RPA Act 1951 states that a person shall be disqualified if there is a contract involving him in the course of his trade or business with the appropriate Government for the supply of goods to or for the execution of any works undertaken by that Government.
• Certain state legislatures have enacted laws in their respective states exempting certain offices from the purview of office of profit.

What are certain judgments of the Supreme Court related to office of profit:

• A constitution bench of the Supreme Court in 1964 in the case of CVK Rao vs DentuBhaskara Rao has held that a mining lease does not amount to a contract of supply of goods.

In 2001, a three-judge bench of the apex court in the case of Kartar Singh Bhadana vs Hari Singh Nalwa & others also made it clear that a mining lease does not amount to execution of a work undertaken by the government. Even if the CM is disqualified by any authority, he can challenge it in the high court and in that case and as per a Supreme Court order, the adjudication has to be completed within four months.

12. What is the Black Sea Grain Initiative?

Subject: International relations

Context:

Since Russia’s invasion of Ukraine began, exports of grain from Ukraine, as well as food and fertilizers from Russia, have been significantly hit. The disruption in supplies pushed soaring prices even higher and contributed to a global food crisis.

The Black Sea Grain Initiative, brokered by the United Nations and Turkey, was set up to reintroduce vital food and fertilizer exports from Ukraine to the rest of the world. Here are some key points to understand.

 A deal to get vital supplies moving again

Ukraine, one of the world’s largest grain exporters( also called as breadbasket), normally supplies around 45 million tonnes of grain to the global market every year but, following Russia’s invasion of the country, in late February 2022, mountains of grains built up in silos, with ships unable to secure safe passage to and from Ukrainian ports, and land routes unable to compensate.

This contributed to a jump in the price of staple foods around the world. Combined with increases in the cost of energy, developing countries were pushed to the brink of debt default and increasing numbers of people found themselves on the brink of famine.

On 22 July, the UN, the Russian Federation, Turkey and Ukraine agreed the Black Sea Grain Initiative, at a signing ceremony in Turkey’s largest city, Istanbul.

The deal allowed exports from Ukraine of grain, other foodstuffs, and fertilizer, including ammonia, to resume through a safe maritime humanitarian corridor from three key Ukrainian ports: Chornomorsk, Odesa, and Yuzhny/Pivdennyi, to the rest of the world.

To implement the deal, a Joint Coordination Centre (JCC) was established in Istanbul, comprising senior representatives from the Russian Federation, Turkey, Ukraine, and the United Nations.

Supplies to World –

• About 44% of the shipments, which include corn, wheat, rapeseed, and sunflower oil among others, reached high-income countries (including Spain, Netherlands and Italy among others),
• 28% reached low and middle-income countries (Egypt, Iran, Sudan and Kenya among others) and
• 27% reached upper-middle income countries (Turkey, China and Bulgaria among others).

Prelims Facts –

1. Ukraine is among the largest exporters of wheat, maize, rapeseed, sunflower seeds and sunflower oil, globally.
2. The UN Food and Agricultural Organisation’s (FAO)’s Food Price Index, assesses the monthly change in international prices of a basket of food commodities.

International Food Policy and Research Institute (IFPRI) –

The International Food Policy Research Institute (IFPRI) is an international agricultural research center founded in the early 1970s to improve the understanding of national agricultural and food policies to promote the adoption of innovations in agricultural technology.

• The Global Food Policy Report is one of IFPRI’s flagship publications.
• In 1993 IFPRI introduced the 2020 Vision Initiative, which aims at coordinating and supporting a debate among national governments, nongovernmental organizations, the private sector, international development institutions, and other elements of civil society to reach food security for all by 2020.
• IFPRI produces the Global Hunger Index (GHI) yearly measuring the progress and failure of individual countries and regions in the fight against hunger. The GHI is a collaboration of IFPRI, the Welthungerhilfe, and Concern Worldwide.
• IFPRI has produced the related Hunger Index for the States of India (ISHI) (2008) and the Sub-National Hunger Index for Ethiopia (2009)

Imp Map for Prelims –

13. Matera Declaration

Subject: International relations

In the Matera Declaration, the G20 ministers recognised that poverty alleviation, food security and sustainable food systems, are key to ending hunger.

On June 29 2021, the G20 foreign affairs and development ministers signed the Matera Declaration (named for the town in southern Italy where they met), which outlines an agenda for addressing global food insecurity and putting the world back on track to end hunger within the decade.

What is PM-GKAY? – Pradhan Mantri Garib Kalyan Anna Yojana

PMGKAY is a part of the Pradhan Mantri Garib Kalyan Package (PMGKP) to help the poor fight the battle against Covid-19.

• The scheme aimed at providing each person who is covered under the National Food Security Act 2013 with an additional 5 kg grains (wheat or rice) for free, in addition to the 5 kg of subsidised foodgrain already provided through the Public Distribution System (PDS).
• It was initially announced for a three-month period (April, May and June 2020), covering 80 crore ration cardholders. Later it was extended till September 2022.
• Its nodal Ministry is the Ministry of Finance.
• The benefit of the free ration can be availed through portability by any migrant labour or beneficiary under the One Nation One Ration Card (ONORC) plan from nearly 5 lakh ration shops across the country.