DAILY NEWS ANALYSIS

Monthly DNA

13 Jan, 2023

22 Min Read

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Paper	Topics	Subject
GS-II	Conflict over Control of Services	Governance
GS-II	Survival of the Richest Report: The Indian Story	Important reports
GS-III	India’s Trade with China	Economic Issues
PT Pointer	Prithvi-II Missile	S&T

Conflict over Control of Services

GS-II : Governance Federal issues

Conflict over Control of Services between the Delhi Government and the Centre

A recent disagreement over service control between the Delhi government and the Centre is being heard by a five-judge Supreme Court Constitution Bench.

Details about the news:

The Supreme Court is now hearing a case involving disagreements between the Union and the Delhi government about the management of transfers and the general operation of administrative services in Delhi's National Capital Territory (NCT).

What is the conflict?

Few believe that the Delhi government has any control whatsoever over administrative services.
While other sources claim that the Lieutenant Governor can make transfers and postings of Secretaries, Heads of Department, and other Government of India officers in the scale of Joint Secretary and above and that for other levels, including DANICS (Delhi, Andaman, and Nicobar Islands Civil Service) officers, the files can be routed through the Chief Minister to LG.
Opinion of the Centre: The Centre requested a referral to a larger Bench, claiming that because Delhi is the nation's capital and "face of the nation," it needs the authority to transfer and post personnel there.
According to the Delhi government, a government cannot function if it does not have control over services since doing so will nullify governance and make officials unaccountable to the public.

Importance of a five-judge court:

The court agreed that, in accordance with Article 145(3) of the Constitution, a Constitution Bench would need to issue an authoritative ruling with regard to the specific question of the scope of the legislative and executive powers of the Centre and the NCT of Delhi with regard to the term "services."
A Constitution Bench made up of at least five judges must be established in accordance with Article 145(3) "for the purpose of deciding any issue presenting a serious question of law as to the interpretation" of the Constitution.

The dual government in Delhi:

Delhi has a special place in India's administrative structure as both a Union Territory (UT) and a National Capital Territory (NCT).
It is administered under the Government of National Capital Territory of Delhi Act of 1991 because it is a Union territory, and it calls for the appointment of L-G by the Union Home Ministry in addition to an elected parliament.
The Government of National Capital Territory (GNCT) of Delhi (Amendment) Act, 2021 was passed in order to amend it.
The dynamics of the relationship between the elected Council of Ministers in Delhi and the Central Government were severely strained by the status of Delhi as a UT under Schedule 1 of the Constitution and the "National Capital Territory" under Article 239AA, engrafted by the Constitution (Sixty-ninth Amendment) Act, 2014.
Status: In 1991, a constitutional reform gave Delhi a responsible administration and a fully elected legislative assembly.
Delhi has been a UT since 1991 and has an assembly with "limited legislative powers."

Article 239 AA and Delhi's Special Status:

The 69th Amendment Act of 1991 added Article 239 AA to the Constitution, which granted Delhi Special Status in accordance with the S Balakrishnan Committee's recommendations.
To investigate Delhi's requests for statehood, a committee was formed in 1987.
This clause states that the NCT of Delhi shall have a Legislative Assembly and an Administrator.
The Legislative Assembly "shall have the power to make laws for the whole or any part of the NCT with respect to any of the matters in the State List or Concurrent List in so far as any such matter is applicable to Union territories," subject to the provisions of the Constitution, with the exception of the laws governing land, public order, and police.

Source: The Indian Express

Survival of the Richest Report: The Indian Story

GS-II : Important reports Important reports

Survival of the Richest Report: The India Story

The Oxfam India report "Survival of the Richest: The India Supplement" reveals the growing disparity between the rich and the poor.
The report also discusses how progressive taxation can help India combat inequality.
According to Oxfam India's latest report "Survival of the Richest: The India Story," only five percent (5%) of Indians own more than 60 percent (60%) of the country's wealth, while the bottom 50 percent (50%) own only three percent (3%).
India's richest man has seen his wealth soar by 46 percent in 2022.

Findings of the report:

The richest 1% of Indians today control more than 40% of the nation's total wealth, while the bottom half of the population will collectively hold just 3% of it between 2012 and 2021.
On the first day of the World Economic Forum Annual Meeting in Davos, Oxfam International published the India supplement to its annual inequality report.
According to the analysis, taxing India's ten wealthiest people at 5% might raise enough money to send kids back to school.
According to the study, a one-time 20% tax on the unrealized gains of this millionaire from 2017 to 2021 may perhaps earn INR 1.8 lakh crores.
This would provide more than five million primary school teachers in the nation with a full year of employment.
In the next Union Budget, Oxfam India demands that the Union Finance Minister put an end to this outrageous inequality and enact progressive tax policies like a wealth tax.
India's billionaires are doing incredibly well for themselves even though the nation is experiencing numerous crises like hunger, unemployment, inflation, and health tragedies.
India's impoverished, in contrast, are unable to buy even the most basic essentials for survival.
From 190 million in 2018, there were 350 million hungry Indians in 2022.
The survey also emphasised the gender pay gap in India, stating that women only made 63 paise for every rupee earned by the men.
Scheduled Castes and rural labourers are in a worse situation, as they earned respectively 55% and 50% of what the privileged socioeconomic groups did between 2018 and 2019.
According to Oxfam India, in a system that puts the survival of the wealthiest people first, marginalised groups including Dalits, Adivasis, Muslims, women, and workers in the informal sector continue to suffer.
When compared to the wealthy, India's impoverished pay disproportionately more taxes and spend more money on necessities.

Suggestion to tackle the inequality by Oxfam:

To stop crisis profiteering, enact one-time windfall and solidarity wealth taxes.
Taxes on the wealthiest 1% should be raised consistently. In particular, the finance minister has to increase taxes on capital gains, which are taxed at lower rates than other types of income. Implement net wealth taxes as well as inheritance, property, and land taxes.
As outlined in the National Health Policy, increase the budgetary allocation for the health sector to 2.5% of GDP by 2025 in order to revitalise the public healthcare system, cut OOP spending, and promote health preventive and promotion.
As promised in the National Education Policy, increase the budgetary allocation for education to the international standard of 6% of GDP. To reach the 6% level, the government must create a financial roadmap broken down by year.
Spending more on initiatives (such Pre- and Post-Matric Scholarships) aimed at enhancing the educational level of kids from underprivileged groups (SC/ST/Girls) can help to reduce the existing educational imbalance.
Ensure that employees in both the formal and informal sectors receive the bare minimum pay. In order to live a life with dignity, the minimum wage needs to be equal to living earnings.

About Oxfam International:

Oxfam International is a grouping of 21 autonomous nonprofit organisations that collaborate with local communities and partners in more than 90 different countries.
To eradicate the inequities that lead to poverty is its goal.
Oxfam seeks out doable, creative solutions to help people escape poverty and prosper.
When a disaster occurs, they help save lives and restore livelihoods.
They advocate for the poor's voices to be heard in local and international decisions that have an impact on them.

What is a windfall tax?

Windfall taxes are levied on unanticipated or exceptional earnings, such as those generated during periods of economic hardship, conflict, or natural catastrophes.
Governments often impose a windfall tax, sometimes known as a one-time tax, retroactively in addition to the regular rates of tax on such earnings.
Oil markets, where price volatility results in unpredictable or volatile profits for the business, are one area where such levies have frequently been suggested.

Source: The Indian Express

GS-III : Economic Issues Import / Export

India’s Trade with China

In 2022, China's imports to India reached a record high, while the trade gap increased to more than $100 billion.

Major Points

Iron ore, cotton, and other commodities based on raw materials were India's largest exports to China in recent years. China's demand for these commodities recovered last year (2021).
India's exports to China: From $28.1 billion to $17.48 billion, India's exports to China decreased.
From $69.4 billion in 2021, the trade imbalance increased by 45% to $101.02 billion in 2022.
India's imports from China are $118.5 billion, an increase from $97.5 billion.
Over 21% more Chinese items were imported into India last year.
Largest Chinese imports into India: India has imported a lot of electrical and mechanical equipment, Active Pharmaceutical Ingredients (APIs), auto components, and, over the past two years, a range of medical supplies from oxygen concentrators to Personal Protective Equipments (PPEs).

Trade overall:

In 2022, India and China's bilateral trade hit a record $135.98 billion.

China and other countries and Organizations:

China's largest commercial partner, ASEAN, saw a growth in trade of 11.2% to $975.34 billion.
EU: The EU was China's second-largest commercial partner, with trade increasing by 2.4% to $847.32 billion.
U.S. trade increased by 0.6% to $759.42 billion.

The deficit in trade with China:

In 2021, India's trade deficit increased to USD 69.38 billion.
For more than ten years, India has emphasized its concerns about the expanding trade deficit with China and urged China to open its markets to Indian IT and medicinal companies.

Reason for Increasing imports:

Increased imports of intermediate goods, new product categories including medical supplies, and recovering Indian demand are the causes of the growth in imports.
Active pharmaceutical ingredients (APIs), chemicals, electrical and mechanical machinery, auto parts, and medical supplies were among India's top imports from China in the previous two years.

Steps taken to Counter Dependence on China:

Chinese apps have been banned as a countermeasure to dependence on China.
Increasing scrutiny of Chinese investments across various industries and the choice to exclude Chinese firms from 5G trials.
To prevent "opportunistic takeovers" of domestic enterprises, the government has also made its prior clearance necessary for foreign investments from nations that border India on land. This decision will limit FDI from China.
The government in March 2020 approved a package consisting of four schemes with a total investment of Rs. 13,760 crores to increase domestic production of bulk medications and medical devices in the nation as well as their exports in order to reduce import dependency on China for APIs (Active Pharmaceutical Ingredients).

About Trade Deficit:

When a nation's imports surpass its exports during a specific time frame, a trade deficit results.
It is also known as a negative trade balance (BOT).

Positive aspects of trade deficits:

It permits a nation to consume more than it generates. Short-term trade deficits can assist countries in avoiding product shortages and other economic issues.
Under a system of floating exchange rates, puts downward pressure on a nation's currency. The country's exports become less expensive and more competitive in overseas markets as a result of the domestic currency's devaluation.

Disadvantages of Trade Deficits:

Trade deficit drawbacks include the potential for economic colonialism.
When a nation consistently has a trade deficit, residents from other nations raise money to invest in that country's capital.
That can entail making fresh investments that boost output and generate employment.
However, it might simply just entail purchasing already-existing companies, resources, and other assets.
Foreign investors will soon acquire almost everything in the nation if this buying trend keeps up.
With fixed exchange rates, trade deficits are often far more harmful.
A fixed exchange rate system makes currency devaluation unfeasible, trade deficits more likely to persist, and major increases in unemployment possible.

Conclusion

Growing Indian imports from China are both a cause for concern given the country's continuous reliance on China for a number of essential items and a sign that the Indian economy is importing more intermediate goods.

Source: The Hindu

GS-III : S&T Missile system

Prithvi-II Missile

From a test range off the coast of Odisha, India recently conducted a successful test launch of the tactical ballistic missile Prithvi-II.

Regarding the Prithvi-II Missile:

The Prithvi-II surface-to-surface missile short-range ballistic missile has a striking range of 350 kilometers, which is outstanding.
It has light propulsion twin engines and can transport warheads weighing between 500 and 1,000 kg.
It was incorporated into the arsenal of the Indian armed forces in 2003.
It is a single-stage, nine-meter-tall liquid-fueled missile.
The cutting-edge missile uses a sophisticated inertial guidance system and a manoeuvring trajectory to hit its target.
The missile is a tried-and-true device that can hit targets with a high degree of accuracy.

About Prithvi Missile System:

Different tactical Surface-to-Surface Short-Range Ballistic Missiles (SRBM) make up the Prithvi missile system.
It was the country of India's first homegrown ballistic missile, and development on it started in 1983.
Its maiden test firing took place in Sriharikota in 1988.
Its range is between 150 and 300 km.
The Prithvi I and Prithvi III class missiles' naval variant is known by the codename Dhanush.
The SA-2 Soviet surface-to-air missile was most likely the basis for the propulsion system.
The Soviet SA-2 surface-to-air missile, which was created in the middle of the 1950s, was the country's first successful surface-to-air weapon.
It was created as a missile for the battlefield and, in its capacity as a tactical nuclear weapon, could transport a nuclear warhead.
Since 1994, the Indian Army has been using Prithvi I missiles.
According to reports, Prithvi I missiles are taking the place of Prahar missiles.
Since 1996, Prithvi II missiles have been in use.
In 2004, Prithvi III, which has a 350 km longer range, was successfully test-fired.

About Integrated Guided Missile Development Program information (IGMDP)

Dr. A P J Abdul Kalam, a prominent scientist, created the Integrated Guided Missile Development Programme (IGMDP), in 1983 to help India become self-sufficient in the field of missile technology

The missiles under the program were:

Surface-to-surface ballistic missile with a short-range Prithvi
Surface-to-surface ballistic missile with a medium-range Agni
Low-level, short-range surface-to-air missile Trishul
Surface-to-air missile with a medium-range Akash
Nag third-generation anti-tank weapon

Source: The Indian express

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