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DAILY NEWS ANALYSIS

Monthly DNA

05 Feb, 2020

21 Min Read

Customs Act, 1962

GS-II :

Syllabus subtopic: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Prelims and Mains focus: about the move: need, objective and significance; case of dumping solar equipment and measures taken to curb it; about DGTR; BIS

News: The government has proposed to amend the Customs Act, 1962.

Background

  • In May 2019, India merged two separate bodies handling anti-dumping and import safeguards to form the Directorate General of Trade Remedies, similar to the US International Trade Commission, to create a trade defence mechanism that can respond to developments in a comprehensive and timely manner.

  • The government has recently initiated more than 130 anti-dumping/countervailing duty/safeguard cases to deal with rising incidence of unfair trade practices.

Present Scenario

So far, the government had powers to only ban imports and exports of gold and silver under the Customs Act, 1962.

Need for the amendment

The steps come amid a global rise in protectionist policies to shield home-grown companies amid slowing economic growth.

Objective of the amendment

  • Once approved, the amendment, through the Finance Bill, will expand the government’s power to ban imports or exports of all goods that may hurt the local economy,

  • According to the govt., this power will be exercised only in exceptional circumstances

  • The measures are aimed at narrowing the trade deficit with China, which has flooded the Indian market with items such as toys, firecrackers and solar power equipment. The steps come amid a global rise in protectionist policies to shield home-grown companies amid slowing economic growth.

  • The new powers to protect the economy may provide a lever to the government to foster consumption of local products and boost manufacturing.

Other reforms proposed

The government also proposes to amend the Customs Tariff Act of 1975 to strengthen the mechanism to prevent dumping of cheap goods in the domestic market.

Case of Solar Equipments and measures taken by the govt.

  • The domestic market for solar components, for instance, is dominated by Chinese companies due to their competitive pricing. The surge in imports led the Modi administration in its previous term to impose a safeguard duty from 30 July 2018 on solar cells and modules imported from China and Malaysia. This will end in July this year.

  • The Union budget also approved an enabling mechanism to raise tariffs on imports of green energy equipment such as solar cells and modules.

  • Once a separate notification is issued, a new duty structure enabling a basic customs duty (BCD) of 20% on cells and modules will come into effect. There is no BCD levied on such equipment now.

  • India currently has a domestic manufacturing capacity of 3 gigawatts (GW) for solar cells and imported $2.16 billion worth of solar photovoltaic (PV) cells, panels, and modules in 2018-19.

  • The budget move comes against the backdrop of a non-tariff barrier that involves a certification requisite for all solar power generation equipment makers who want to do business in the world’s largest green energy market.

  • The step is aimed at boosting domestic manufacturing and shielding domestic companies from cheap and sub-standard imports.

  • Only manufacturers and solar modules that are approved by the Bureau of Indian Standards and the ministry of new and renewable energy, and are on the approved list of modules and manufacturers will be eligible for government supported schemes, including projects from where electricity distribution companies procure solar power for supplying to their consumers.

About Directorate General of Trade Remedies (DGTR)

  • Earlier known as Directorate General of Anti-dumping and Allied Duties (DGAD).

  • Named in May 2018 as an integrated single window agency for providing comprehensive and swift trade defence mechanism in India.

  • Earlier, the DGAD dealt with anti-dumping and countervailing duties (CVD) cases, Directorate General of Safeguards (DGS) dealt with safeguard measures and Directorate General of Foreign Trade (DGFT) dealt with quantitative restriction (QR) safeguards.

  • The DGTR brings DGAD, DGS and Safeguards (QR) functions of DGFT into its fold by merging them into one single national entity.

  • DGTR now deals with Anti-dumping, CVD and Safeguard measures. It also provides trade defence support to our domestic industry and exporters in dealing with increasing instances of trade remedy investigations instituted against them by other countries.

  • DGTR provides a level playing field to the domestic industry against the adverse impact of the unfair trade practices like dumping and actionable subsidies from any exporting country, by using Trade Remedial methods under relevant framework of WTO arrangements, Customs Tariff Act & Rules and other relevant laws and International agreements, in a transparent and time bound manner.

  • DGTR functions as an attached office of Department of Commerce, Ministry of Commerce and Industry. It is a professionally integrated organisation with multi-spectrum skill sets emanating from officers drawn from different services and specialisations.

About Bureau of Indian Standards (BIS)

  • BIS is the National Standard Body of India established under the BIS Act 2016 for the harmonious development of the activities of standardization, marking and quality certification of goods and for matters connected therewith or incidental thereto.

  • BIS has been providing traceability and tangibility benefits to the national economy in a number of ways – providing safe reliable quality goods; minimizing health hazards to consumers; promoting exports and imports substitute; control over proliferation of varieties etc. through standardization, certification and testing.

  • BIS has its Headquarters at New Delhi and its 05 Regional Offices (ROs) are at Kolkata (Eastern), Chennai (Southern), Mumbai (Western), Chandigarh (Northern) and Delhi (Central).

Keeping in view, the interest of consumers as well as the industry, BIS is involved in various activities as given below:

  • Standards Formulation
  • Product Certification Scheme
  • Compulsory Registration Scheme
  • Foreign Manufacturers Certification Scheme
  • Hall Marking Scheme
  • Laboratory Services
  • Laboratory Recognition Scheme
  • Sale of Indian Standards
  • Consumer Affairs Activities
  • Promotional Activities
  • Training Services, National & International level
  • Information Services

Source: Livemint

Bhutan ends free entry for Indian tourists

GS-II : International Relations South Asia

Bhutan ends free entry for Indian tourists

Syllabus subtopic: India and its Neighborhood- Relations.

Prelims and Mains focus: on the move of Bhutan’s govt and its implications on Bhutan-India relations;

News: The National Assembly of Bhutan has passed legislation named ‘Tourism Levy and Exemption Bill of Bhutan’, 2020.

What is it about?

  • Ending decades of free entry to Indian tourists visiting Bhutan, the government in Thimphu has decided to levy a daily Rs.1,200 ($17) fee for “regional tourists” from India, the Maldives and Bangladesh, beginning July 2020.

  • Children from India, Maldives and Bangladesh under the age of 5 will not have to pay the levy and those between 6 and 12 years will be required to pay only Rs.600.

Reason

  • The fee, called a Sustainable Development Fee (SDF), is meant to help the government deal with burgeoning numbers in tourist traffic, which it is seeking to regulate through a new tourism policy.

  • According to the govt., the levy of SDF to regional tourists will help in ensuring an exclusive experience for all tourists which is the intent of Bhutan’s tourism policy of high value, low volume,

  • The SDF is considerably lower than the $65 charged to other foreign tourists, who are also charged a compulsory flat “cover charge” of $250 per day.

  • Indians mainly travel to the more developed western region of Bhutan. In a move to promote tourism in Bhutan’s eastern region as well, the government has decided to drop SDF charges for tourists visiting 11 of 20 total districts that fall in the east from Trongsa to Trashigang.

Concerns raised against the move

  • The regional tour operators, especially from West Bengal have expressed concerns that the SDF will have a dampening effect on numbers, and impact the heavy rush during the October “Puja season”.

  • The Ministry of External Affairs (MEA) said the fee was “nominal” and had been discussed with the Bhutanese government in the last few months. However, the government has asked the Bhutanese government to make an effort to publicise the new rules in India before they come into effect in July 2020, as is anticipated. If there is confusion about the provisions, it will cause problems to both sides.

  • New Delhi’s hesitation comes as the new SDF, while a seemingly small amount compared to the fees charged to other nationalities, could be seen as a way of making Indian tourists feel unwelcome.

Regional Tourists’ in Bhutan

  • In 2018, of the 2,74,000 tourists visiting Bhutan, it is estimated that about 2,00,000 were from the region, of which about 1,80,000 were from India.

  • In contrast to other international tourists, who pay $250 (Approx. Rs.18,000) as a minimum charge per day per person, which includes a $65 a day “Sustainable Development Fee”, as well as a $40 visa charge, tourists from India, Bangladesh and the Maldives had so far paid no fees, and were able to cross over without visas, something that is now set to change.

  • In the past year, Bhutanese newspapers have often complained about Indian tourists who don’t pay heed to local customs and picnickers who litter the country’s pristine environment.

Note: to read about India-Bhutan relations in detail, click on the link below.

http://www.southasiaathudson.org/blog/2018/3/6/india-bhutan-relations-past-present-and-future

Source: The Hindu

UNESCO certificate for Jaipur

GS-II :

Syllabus subtopic: Important International Institutions, agencies and fora - their Structure, Mandate.

Prelims and Mains focus: about the certificate; about Intangible Heritage Promotion Project

News: Rajasthan Chief Minister will dedicate the United Nations Educational, Scientific and Cultural Organisation (UNESCO) world heritage site certificate for Jaipur to the people. A brochure on “intangible heritage promotion project” would also be released at the function.

Background

  • The UNESCO declared the Walled City, famous for its grid plan-based architecture and buildings constructed with the pink facade, as a world heritage site in July 2019.

  • The International Council on Monuments and Sites had earlier inspected the city in 2018 after its nomination. The council took into account the architecture of streets with colonnades, which intersect the centre, creating large public squares called chaupars. The uniform facades of markets, residences and temples in the main streets had also impressed the council.

About Intangible Heritage Promotion Project

  • The project, signed between the Tourism Department of Rajasthan and UNESCO, aims at developing 10 new cultural tourism destinations in the State, for which the tourists could extend their stay by at least one extra day.

  • The project would be implemented during the next three years at a cost of Rs.7.50 crore.

  • It will directly benefit about 1,500 artists in the districts such as Jodhpur, Barmer, Jaisalmer and Bikaner, known for folk music and traditional handicrafts.

About Jaipur: capital of Rajasthan

  • The capital city of Jaipur, included in the list of world heritage sites, was founded in 1727 by the then Kachwaha Rajput ruler of Amber, Sawai Jai Singh II.

  • The city was established on the plains and built according to a grid plan interpreted in the light of Vedic architecture.

Source: The Hindu

GST lottery offers

GS-II :

Syllabus subtopic: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Prelims and Mains focus: about the move and its significance; about GST and GST Council

News: The government is planning to introduce lottery offers between Rs 10 lakh and Rs 1 crore under the GST to encourage customers to take bills while making purchases.

About the move

  • Every bill under the goods and services tax (GST) regime will provide a chance to the customers to win a lottery and that would act as an incentive for them to pay the tax.

  • As per the plan, the purchase bill would be uploaded on a portal and a draw would be held automatically and the winners would be informed.

  • The GST Council, chaired by Finance Minister and comprising state counterparts, would vet the proposed lottery scheme.

  • The Council would also decide on the minimum threshold for bills that would be included in the lottery. As per the plan, the money for the lottery would come from the consumer welfare fund, where the proceeds of anti-profiteering are transferred.

About GST

  • Under the four-tier GST, goods and services are taxed at 5, 12, 18 and 28 per cent. Besides, cess is levied on luxury, sin and demerit goods on top of the highest tax rate.

Other measures to be taken

  • To plug leakages in GST revenue, the government is considering various options in business-to-consumer deals, including lotteries and incentivising QR Code-based transactions.

  • The government has constituted a committee of officers to suggest measures to augment GST revenue collections.

  • The panel has been tasked to suggest systemic changes in GST, including checks and balances, to prevent misuse and measures to improve voluntary compliance.

  • Also, it has been tasked to give inputs on measures for the expansion of the tax base.

  • The committee, which made presentation before the GST Council on December 18, suggested pruning of exempt list for raising resources.

Source: Indian Express

Declining Savings Rate

GS-III : Economic Issues Terminology

Declining Savings Rate

Syllabus subtopic: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment

Prelims and Mains focus: on the declining savings rate in India and its causes

Context: India has been witnessing a slowdown in consumption as well as savings for a while now, raising questions over the growth of real income in the economy.

Why are savings so important?

  • People can use their money for either consumption or savings. Savings are an important tool to help people smoothen out consumption. That is, they can use the savings for a rainy day. However, savings are also important for the overall economy, as they help in financing investments—whether they are public or private.

  • Therefore, higher savings would ideally reduce the cost of borrowing for private investments. Reduction in government savings, deleveraging by companies and slower growth of household savings are driving the fall in the savings rate.

What has been the trend in the savings rate?

India is not alone when it comes to a declining savings rate. Brazil, China and South Africa too witnessed a substantial decline in gross savings as a percentage of gross domestic product (GDP) since 2011. The decline came amid the slowest growth in world trade. In India, the savings rate as a percentage of GDP declined by nearly 5% between 2011 and 2018.

Why cut exemptions amid falling savings?

  • A complicated tax structure creates inefficiency in income allocation. Savings exemptions aim to promote certain instruments when one could use better financial instruments to save. For now, the government has left the option open for individuals to choose the existing system or to opt for the lower tax regime.

  • Besides, incentivizing savings through tax breaks is not the best approach to encourage savings. The impact of the proposed taxation system, however, has to be evaluated.

Why is India’s savings rate going down?

  • The fact that income has grown over the last couple of years (albeit at a slower rate) makes it difficult to identify the reason for this fall. Even consumption growth has slowed down, which should ideally translate to higher savings.

  • One reason could be the shift towards services consumption such as health and education, which have become costlier. A bigger concern is the rise in household debt. The easy availability of no-cost EMIs on durables could be a big reason.

Source: Livemint

Quantum computing

GS-III :

Syllabus subtopic: Awareness in the fields of IT, Space, Computers, Robotics, Nano-technology, Bio-technology and issues relating to Intellectual Property Rights.

Prelims and Mains focus: about the move and its significance; about quantum computing and its applications

News: The Union Budget 2020-21 proposal to earmark Rs.8,000 crore for quantum computing over the next five years can boost critical areas of the Indian economy, including space research and defence capabilities.

About the move

  • The quantum of money proposed for the sector is almost on a par with the amount invested by the US to develop the technology.

  • However, the success of the initiative will depend on careful planning and implementation. Moreover, considering that there are no private companies in India working on quantum computing, the initiative, by and large, will have to be led by state-run institutions.

Need

The announcement is significant as the scale of investments necessary to make headway in quantum computing is not possible without the support of the government or large corporations. It should boost attempts of domestic technology providers, who have been keen to enter this field, but did not have the necessary scale or resources.

Significance of Quantum computing for India

  • Quantum computers will open up enormous opportunities for India, particularly in the field of defence, space research, weather forecasting, and healthcare by crunching large amounts of data and solving problems infinitely faster than existing supercomputers.

  • The quantum science and technology initiative in India has been broadly defined around computing, communications, and measurements. Of these, quantum computing is expected to provide the ability to solve hitherto intractable problems in resource optimisation, machine learning, and data security, and also help to design new materials with futuristic applications.

Quantum Computing: Global scenario

  • The recent advancements in the field of quantum computing, including IBM’s unveiling of the world’s first quantum computing system for scientific and commercial use, Google’s quantum supremacy, and Microsoft taking quantum computing to the cloud, have made the world realise the possibilities it can offer. Google’s 54-bit quantum computer took merely 200 seconds for an experimental computation that a supercomputer would have taken 10,000 years to solve.

  • Governments the world over are starting to grasp the potential of the technology. China already has a national strategy on quantum computing, having spent $400 million on a national quantum lab and filing twice as many patents as the US on quantum technology.

  • The US government had also announced a National Quantum Initiative in 2019 with an outlay of $1.2 billion ( Rs.8,500 crore).

What is quantum computing?

  • Quantum computing is essentially harnessing and exploiting the amazing laws of quantum mechanics to process information.

  • A traditional computer uses long strings of “bits,” which encode either a zero or a one. A quantum computer, on the other hand, uses quantum bits, or qubits.

What's the difference?

  • Well a qubit is a quantum system that encodes the zero and the one into two distinguishable quantum states. But, because qubits behave quantumly, we can capitalize on the phenomena of "superposition" and "entanglement."

  • Superposition is essentially the ability of a quantum system to be in multiple states at the same time — that is, something can be “here” and “there,” or “up” and “down” at the same time.

  • Entanglement is an extremely strong correlation that exists between quantum particles — so strong, in fact, that two or more quantum particles can be inextricably linked in perfect unison, even if separated by great distances. The particles are so intrinsically connected, they can be said to “dance” in instantaneous, perfect unison, even when placed at opposite ends of the universe. This seemingly impossible connection inspired Einstein to describe entanglement as “spooky action at a distance.”

Why do these quantum effects matter?

  • First of all, they’re fascinating. Even better, they’ll be extremely useful to the future of computing and communications technology.

  • Thanks to superposition and entanglement, a quantum computer can process a vast number of calculations simultaneously. Think of it this way: whereas a classical computer works with ones and zeros, a quantum computer will have the advantage of using ones, zeros and “superpositions” of ones and zeros. Certain difficult tasks that have long been thought impossible (or “intractable”) for classical computers will be achieved quickly and efficiently by a quantum computer.

Applications

  1. Cybersecurity
  2. Drug Development
  3. Financial Modeling
  4. Better Batteries
  5. Cleaner Fertilization
  6. Traffic Optimization
  7. Weather Forecasting and Climate Change
  8. Artificial Intelligence
  9. Solar Capture
  10. Electronic Materials Discovery

Source: Livemint

Global Medical Data Leak

GS-III :

Syllabus subtopic: Basics of Cyber Security

Prelims and Mains focus: about the report: its findings and concerns associated; about PACS

News: Greenbone Sustainable Resilience, a German cybersecurity firm recently published an updated report on medical data leaks.

About the report

  • The first report was published in October last year, in which Greenbone revealed a widespread data leak of a massive number of records, including images of CT scans, X-rays, MRIs and even pictures of the patients.

  • The follow-up report, which was published in November, classifies countries in the “good”, “bad” and “ugly” categories based on the action taken by their governments after the first report was made public.

  • India ranks second in the “ugly” category, after the U.S.

Key findings of the report

  • Medical details of over 120 million Indian patients have been leaked and made freely available on the Internet.

  • What is even more worrying is that the number of data troves containing this sensitive data went up by a significant number in the Indian context a month after Greenbone’s initial report was published.

  • Maharashtra ranks the highest in terms of the number of data troves available online, with 3,08,451 troves offering access to 6,97,89,685 images. The next is Karnataka, with 1,82,865 data troves giving access to 1,37,31,001 images.

  • The report says that in 60 days after the first report was put out, the number of data troves bearing the patients’ information went up from 6,27,000 to 1.01 million, and that the images of patients’ details rose from 105 million to 121 million.

  • It is a notable fact for the systems located in India, that almost 100% of the studies (data troves) allow full access to related images.

Why is it a concern?

  • The leak is worrying because the affected patients can include anyone from the common working man to politicians and celebrities. In image-driven fields like politics or entertainment, knowledge about certain ailments faced by people from these fields could deal a huge blow to their image.

  • The other concern is of fake identities being created using the details, which can be misused in any possible number of ways.

How was the data leaked?

  • Greenbone’s original report says the leak was facilitated by the fact that the Picture Archiving and Communications Systems (PACS) servers, where these details are stored, are not secure and linked to the public Internet without any protection, making them easily accessible to malicious elements.

  • The fact that PACS servers are vulnerable to attack or are accessible is not new information, and there have been a number of reports on this topic in the past. No report, however, has dealt with the breadth and depth of the problem associated with unsecured PACS servers.

About PACS

  • A picture archiving and communication system (PACS) is a medical imaging technology which provides economical storage and convenient access to images from multiple modalities (source machine types).

  • Electronic images and reports are transmitted digitally via PACS; this eliminates the need to manually file, retrieve, or transport film jackets, the folders used to store and protect X-ray film.

  • A PACS consists of four major components:
  1. The imaging modalities such as X-ray plain film (PF), computed tomography (CT) and magnetic resonance imaging (MRI)
  2. a secured network for the transmission of patient information
  3. workstations for interpreting and reviewing images, and
  4. archives for the storage and retrieval of images and reports.

  • Combined with available and emerging web technology, PACS has the ability to deliver timely and efficient access to images, interpretations, and related data. PACS reduces the physical and time barriers associated with traditional film-based image retrieval, distribution, and display.

Source: The Hindu

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