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India and China carried out verification to confirm withdrawal of troops from Patrolling Point (PP) 15 in the Gogra-Hot Springs area of Eastern Ladakh, marking the completion of the disengagement here.
Both sides have completed disengagement at PP15 in a phased, coordinated and verified manner, resulting in the return of the troops of both sides to their respective areas. Verification was carried out to ensure compliance including aerial surveillance, another source added.
However, details and modalities of the disengagement were not available. In the past, buffer zones were created at the friction points as per the understanding at the Corps Commanders level with no patrolling to be undertaken by either side till overall disengagement and de-escalation is achieved, after which the two sides are to work out new patrolling norms.
The two countries announced that their armies had begun to disengage from PP15 in Gogra-Hot Springs, marking a step forward to end the standoff ongoing since May 2020.
Ministry of External Affairs (MEA) had said that the two countries will take up remaining issues along the LAC once the ongoing disengagement at PP15 is complete.
However, while India maintains that friction points at Demchok and Depsang remain, China has refused to accept them as legacy issues pre-dating the 2020 standoff.
Demchok is one of the two mutually agreed disputed areas in Eastern Ladakh, while Depsang is one of the eight friction points in the area.
In Demchok, while there are varying claims in the Charding La area, China has set up tents on this side of Chardingnala.
Beijing had welcomed the disengagement at PP15 as “a positive development”, but reiterated that it would not accept India’s demand for restoration of status quo ante prior to the standoff saying that “the status quo of April 2020…was created by India’s illegal crossing of the LAC”.
As reported earlier, since the beginning of the standoff there has been heavy Chinese presence in the Depsang plains, at a crucial area called the Bulge and PLA troops have also been blocking Indian Army patrols from reaching the PPs 10, 11, 11A, 12 and 13, located on the Limit of Patrolling which lies much before the LAC.
Election Commission delists 86 parties, declares 253 inactive (Page no. 1)
(GS Paper 2, Polity and Governance)
The Election Commission on Tuesday ordered the delisting of 86 registered unrecognised political parties it found to be “non-existent” and declared 253 others “inactive”.
The commission, comprising Chief Election Commissioner Rajiv Kumar and Election Commissioner Anup Chandra Pandey, acted against the 253 parties based on reports by Chief Electoral Officers of Bihar, Delhi, Karnataka, Maharashtra, Tamil Nadu, Telangana and Uttar Pradesh.
These 253 [parties] have been declared inactive, as they have not responded to the letter/notice delivered to them and have not contested a single election either to the General Assembly of a State or the Parliament Election 2014 and 2019,” the EC said.
Among these were at least 14 from Tamil Nadu, 34 from Uttar Pradesh, 33 from Delhi, nine from Telangana and six from Karnataka.
The 86 parties that were deleted from the list of registered parties were found to be non-existent after a physical check by the respective CEOs or based on report of undelivered letters or notices.
The 253 parties declared inactive had not complied with the statutory requirements “of more than 16 compliance steps since 2015 and are continuing to default.
The parties that have been declared inactive would not be eligible to avail benefits under the Election Symbols (Reservation and Allotment) Order, 1968, which allows parties to apply for a common symbol for its candidates.
Sixty six of the 253 parties had applied for a common symbol for its candidates, but did not contest the respective elections.
It is pertinent to note that privilege of a common symbol is given to registered unrecognised political parties (RUPP) based on an undertaking to put up at least five per cent of the total candidates with regard to said Legislative Assembly election of a State.
Possibility of such parties occupying the available pre-election political space by taking benefits of admissible entitlements without contesting elections cannot be ruled out.
This also tends to crowd out the political parties actually contesting elections and also creating confusing situation for the voters.
Editorial
For India, the buzzword now is ‘all-alignment’ (Page no. 6)
(GS Paper 2, International Relation)
In his book The India Way, External Affairs Minister S. Jaishankar offers a critique of India’s traditional policy of “non-alignment” where he distinguishes between the “optimistic non-alignment” of the past, which he feels has failed, that must give way to more realistic “multiple engagements of the future”.
By announcing his visit to the Shanghai Cooperation Organisation (SCO) summit in Samarkand, Uzbekistan this week (September 15 and 16), Prime Minister Narendra Modi has certainly spoken with his feet, as have the other leaders attending the event, at a time when lingering strains of the COVID-19 pandemic, the Russian war in Ukraine, the upcoming Chinese Party Congress (in October), and floods in Pakistan could well have given them reason to hold the summit virtually — as they have for the past two years.
Instead, the Uzbekistan SCO summit will host a full house: 15 leaders including eight member states from four Central Asian States, China, India, Pakistan and Russia, the observer states: Belarus, Mongolia and Iran (which will become member this year) — Afghanistan is not invited — and leaders of guest countries Armenia, Azerbaijan, Turkey and Turkmenistan.
Even before the summit begins, Mr. Modi, by his plans to attend, is sending the world a number of messages. To begin with, the visit reinforces his commitment to an Indian foreign policy that balances various blocs — pitting India’s membership of the SCO and BRICS (Brazil, Russia, India, China and South Africa) against its membership of the Quad (Australia, India, Japan, the U.S.), groups such as the I2U2 ( India-Israel-U.S.-UAE), and the Indo-Pacific Economic Framework (IPEF).
This was highlighted more recently with India joining the Russian-led ‘Vostok’ Army Exercises along with China, and plans to host SCO-RATS (or the Regional Anti-Terrorist Structure of the Shanghai Cooperation Organization) counterterror exercises while the Indian Air Force took part in the Australian ‘Pitch Black’ exercises, and the Indian Army is planning exercises with the U.S. (YudhAbhyas) next month close to the Line of Actual Control (LAC). In a Venn diagram, India is the only country that would form the intersection, a part of all of those groupings.
Another juxtaposition is that of values over interests, or that of the western brand of a “coalition of democracies”, against a more Eurasian brand of a “coalition of common goals”.
It is worth noting that the SCO membership is not premised on India’s traditional non-aligned posture. While Mr. Modi has skipped all the Non-Aligned Movement summits in his tenure (the only Indian Prime Minister to do so, apart from caretaker Prime Minister Charan Singh in 1979), he chose to lead India into the SCO in 2017.
Connecting the dots to boost the patent ecosystem (Page no. 6)
(GS Paper 3, Intellectual Property Right)
The recent report of the Economic Advisory Council to the Prime Minister (EAC-PM), Why India Needs to Urgently Invest in its Patent Ecosystem?, highlights the significance of a robust patent system for a knowledge economy and for the promotion of technological innovations.
It highlights the rising share of residents in the total number of patent applications filed in India, which has more than doubled during the last decade.
And, for the first time, the number of patent applications by residents has surpassed that of foreign applications during the last quarter of the financial year 2021-22.
The Economic Survey 2022-23, for instance, highlighted the rising share of Indian residents in patent applications.
A major concern expressed in the EAC-PM report is the long pendency of processing patent applications in India.
Therefore, it has recommended several measures to reduce this. Increasing the efficiency of processing patent applications will certainly improve the patent ecosystem in the country.
At the same time, we need to investigate the patent ecosystem more closely to connect the dots so that appropriate measures are adopted to improve the patent ecosystem, keeping in view the national innovation ecosystem.
The total number of patent applications to the Indian patent office has increased by 48% between 2010-11 and 2020-21, largely driven by applications by residents. Interestingly, the number of abandoned patent applications also increased at an astonishing rate during this period.
The latest Annual Report (2019-20) of the Office of the Controller General of Patents, Designs, Trademarks and Geographical Indications (CGPDTM) shows that the number of abandoned patent applications, on account of not meeting the requirements under Sections 9(1) and 21(1) of the Patents Act, grew from 5,186 in 2010-11 to 23,291 in 2019-20, an increase by almost 350%. The share of such abandoned patents in the total number of patent applications soared from 13.6% in 2010-11 to 48% in 2019-20.
Section 9(1) of the Patents Act provides that those applications accompanied by provisional specifications be supported by complete specifications within one year.
Section 21(1) requires patent applicants to re-file documents if the patent examiner finds them not meeting the requirements.
A plausible reason could be that the applicants are not confident about their applications passing scrutiny and, therefore, do not pursue their applications.
It may also be possible, especially in the case of innovations with short-life spans, that the long pendency discourages applicants from following up on their applications. But certainly, this is an aspect of the patent ecosystem where we need more information to connect the dots.
OPED
An improved Bill, but still contentious (Page no. 7)
(GS Paper 2, Polity and Governance)
The Indian Ports Act of 1908 is obsolete in many respects and needs a complete overhaul. Pre-legislative consultation of a draft Bill with stakeholders is good practice, and the Union Ministry of Ports, Shipping and Waterways needs to be commended for holding four rounds of consultations on the draft Indian Ports Bill that will replace the 1908 Act.
The 2022 draft of the Bill is an improvement over the 2021 draft, but it has only tinkered at the margins without resolving the main issue of disagreement between the Centre and the maritime States.
India has 12 major ports and 212 non-major ports. Most of the non-major ports are small fishing harbours and only a few of them cater to international shipping.
Major ports figure in the Union List and come under the jurisdiction of the Central government. Non-major ports are in the Concurrent List and come under the respective State governments, but the Centre has overriding legislative and executive powers.
In 1997, a Maritime State Development Council (MSDC) was created by an executive order, with the Union Minister of Shipping as chairperson and the Ministers in charge of ports of the maritime States/Union Territories (UTs) as members.
The MSDC serves as an apex advisory body for the coordinated development of major ports and non-major ports. It has met only 18 times in the last 25 years.
The Union Ministry of Shipping provides secretarial services for the MSDC’s meetings. What made the 2021 draft of the Indian Ports Bill controversial were the provisions of Chapters II and III which sought to give statutory status along with wide-ranging powers and functions to the MSDC and make it a permanent body with its own office, staff, accounts and audit.
A body like the MSDC is necessary, but the nature and quantum of its work do not call for either statutory status or a permanent body. It may be recalled that even the Union Planning Commission (now NITI Aayog) was created only by an executive order.
Maritime States suspect that the real aim of a statutory-cum-permanent MSDC is to curtail their powers to develop and manage non-major ports; it is less about efficient allocation of resources and more about control by the Centre.
The 2021 draft contained several provisions that were a replay of the Socialist-era follies of Central planning and Inspector Raj.
It sought to empower the MSDC to formulate a national plan, to be notified in the official gazette, for the development of major and non-major ports; to monitor the development of non-major ports and ensure their integrated development with major ports and the national plan; and to order an appropriate inquiry if any port contravenes the national plan.
An opportunity for India Inc(Page no. 7)
(GS Paper 3, Economy)
We live in an age when businessmen command considerable influence in society. Ratan Tata, MukeshAmbani, and Azim Premjiare seen not as wealth creators but as nation builders.
A good deal of business news today captures the imagination of the average citizen. A public issue, a trade agreement, the rise of a new corporate brand, a start-up, a collaboration is big news today.
The guilt complex associated with making money has long since disappeared from the nation’s conscience. India’s stock markets are now in an explosive phase of growth and start-ups are reaping huge funds without any credible record of performance, largely on the trust of retail investors.
Corporate India receives a reservoir of trust, goodwill and confidence from the nation and must return it in equal measure. Has India Inc lived up to those expectations? How much does an inclusive India figure in its vision?
Corporate India dreams big today. Brand power, digital technology, talent pools, scales of operations, and global connectivity are all part of its agenda.
Yet, how much does the magnitude of India’s jobless growth overwhelm the big business? Mahatma Gandhi’s insight that “what we need is not mass production, but production by the masses” must be an enlightened vision of Indian business.
Yet, the response of corporate India to the country’s job crisis has been more symbolic than substantial. The reality is that much of India’s blue-collar employment is generated in Small and Medium Enterprises (SMEs) and in its sprawling gig economy.
Some 45% of India’s manufacturing takes place in the sweat shops of garments units, hazardous chemical factories and in unsafe engineering workshops. The jobs thus created are sub-optimal with low wages and unstable working conditions.
India’s SME sector needs to modernise itself with the help of digital technology, professional management and better scale of operations.
This is the ‘new economy’ and India’s corporate sector can extend a helping hand across the aisle to help the SMEs achieve this transformation. That act must not be seen as large-heartedness but market-driven and backed by a strong value proposition.
The Indian SME sector has many hidden treasures waiting for this makeover. Take the case of Indian food, which is popular worldwide.
Explainer
The fall in natural rubber prices in India (Page no. 8)
(GS Paper 3, Economy)
After a moderate post-pandemic revival, the price of natural rubber (NR) has crashed to a 16-month low of ₹150 per kg (RSS grade 4) in the Indian market.
The price of latex, which soared during the pandemic due to huge demand from glove makers, took a more severe drubbing with its prices rolling down below ₹120.
With the impact of the falling prices beginning to reflect in their daily lives as well as the local economy, the growers are up in arms against the authorities for their perceived delay in checking the slide.
Under the aegis of the National Consortium of Regional Federations of Rubber Producer Societies India, an umbrella organisation for rubber growers, a day-long sit-in protest was staged in front of the Rubber Board headquarters in Kottayam, Kerala, last week.
The current fall in prices is attributed primarily to a weak Chinese demand and the European energy crisis, along with high inflation and an import glut, among other things.
While the unremitting zero COVID strategy in China, which consumes about 42% of the global volume, has cost the industry dearly, analysts have also flagged the acceleration of imports.
The domestic tyre industry, according to them, is sitting pretty on an ample inventory, especially in the form of block rubber from the Ivory Coast and compounded rubber from the Far East.
India is currently the world’s fifth largest producer of natural rubber while it also remains the second biggest consumer of the material globally. (About 40% of India’s total natural rubber consumption is currently met through imports)
A latest report by the Rubber Board has projected the natural rubber production and consumption in India during 2022-23 as 8,50,000tonnes and 12,90,000 tonnes respectively.
The production of the material improved by 8.4%, to 7,75,000tonnes, during 2021-22 compared to 7,15,000 tonnes in the previous year. An increase in yield, tappable area and area tapped during the year contributed to the rise in production.
On the demand side, the domestic consumption rose by 12.9%, to 12,38,000tonnes in 2021-22 from 10,96,410 tonnes in the previous year.
The auto-tyre manufacturing sector accounted for 73.1% of the total quantity of natural rubber consumption. Import of the material, meanwhile, increased to 5,46,369tonnes from 4,10,478 tonnes.
Understanding windfall tax(Page no. 8)
(GS Paper 3, Economy)
Finance Minister Nirmala Sitharaman, defended the windfall tax imposed by the Centre on domestic crude oil producers, saying that it was not an ad hoc move but was done after full consultation with the industry.
The Central government on July 1, introduced a windfall profit tax of ₹23,250 per tonne on domestic crude oil production, which was subsequently revised fortnightly four times so far.
The latest revision was on August 31, when it was hiked to ₹13,300 per tonne from ₹13,000. Ms. Sithraman explained the introduction of the windfall tax as a way to rein in the “phenomenal profits” made by some oil refiners who chose to export fuel to reap the benefits of skyrocketing global prices while affecting domestic supplies.
Besides India, a wave of countries including the United Kingdom, Italy, and Germany have either already imposed a windfall profit tax on super normal profits of energy companies or are contemplating doing so.
Windfall taxes are designed to tax the profits a company derives from an external, sometimes unprecedented event— for instance, the energy price-rise as a result of the Russia-Ukraine conflict.
These are profits that cannot be attributed to something the firm actively did, like an investment strategy or an expansion of business.
The United States Congressional Research Service (CRS) defines a windfall as an “unearned, unanticipated gain in income through no additional effort or expense”.
Governments typically levy a one-off tax retrospectively over and above the normal rates of tax on such profits, called windfall tax.
One area where such taxes have routinely been discussed is oil markets, where price fluctuation leads to volatile or erratic profits for the industry.
There have been varying rationales for governments worldwide to introduce windfall taxes, from redistribution of unexpected gains when high prices benefit producers at the expense of consumers, to funding social welfare schemes, and as a supplementary revenue stream for the government.
For instance, in 1980, then United States President Jimmy Carter introduced a crude oil windfall profit tax on the country’s oil industry.
This was because the U.S. government between 1979 and 1981 started releasing controls on oil prices and anticipated that this decontrol would lead to oil companies making huge profits.
This meant that prices, capped till then by the government, would rise to world market levels; the U.S. government’s Joint Committee on Taxation had estimated that the decontrol would increase profits for the oil industry by over $400 billion.
News
‘103rd amendment was a fraud on Constitution’ (Page no. 10)
(GS Paper 2, Polity and Governance)
Reservation cannot be implemented as a "poverty alleviation programme" for the socially and educationally forward classes, which is what the economically weaker sections (quota) does, petitioners opened their challenge before a Constitution Bench led by Chief Justice of India U.U. Lalit.
Reservation addresses structural inequality and is not a means to become financially well-off. The purpose of reservation is to provide representation or empowerment to classes of people who were historically denied access to education and employment. Benefits of reservation cannot be given solely on the basis of economic criterion, they argued.
Poverty in the forward classes can also be due to “poor personal wealth management”. Reservation on the basis of economic criterion creates a “moral hazard” - a gambler who lost all his money cannot be made eligible for reservation.
Parliament knew well that it has no power to provide reservations for socially and educationally forward classes. That it has no power to provide reservation to any class except backward classes as held in the Indira Sawhney judgment.
Yet, because of political considerations, it did so deliberately and falsely projecting the Amendment as economic reservation for the benefit of economically weaker sections.
To judge anyone as poor on the basis of self-declaration and only on the basis of one previous year's income makes the implementation of the whole scheme full of loopholes.
No one can be termed as poor by having one year's income as less than ₹8 lakh. In a country where less than 5% file income tax returns, and that too is open to manipulations, any such scheme is practically not implementable.
To make such unreal, arbitrary and impractical scheme a part of the Constitution is disrespectful to the Constitution makers and shows lack of thinking on the part of the Union of India.
Dr. Gopal argued that those earning a gross annual family income of at or below ₹ 66,666 a month or ₹ 8 lakh annually were eligible for the EWS quota.
These numbers should be compared against the 2021 estimate of Pew Research, the renowned global fact-tank, once helmed by Dr. M.S. Swaminathan, that 93.7% of the people of India have a family income of less than ₹25,000 per month per family of four.
The EWS criteria will therefore give eligibility not only to Forward Classes amongst this 93.7% but also to those who earn between ₹25,000 and ₹66,000 per month per family of four, who fall amongst an elite 6% of the country that earn above ₹25,000 per family per month.
India to hold G20 summit in 2023(Page no. 10)
(GS Paper 2, Polity and Governance)
India will hold over 200 G20-related meetings across the country during its presidency of the grouping that will begin on December 1, 2022 and continue till November 30, 2023.
The G20 Leaders’ Summit will be held in New Delhi on September 9 and 10 in 2023, and Bangladesh, Egypt, Mauritius, Netherlands, Nigeria, Oman, Singapore, Spain and the UAE will be the “guest countries” at the event, the Ministry of External Affairs (MEA) announced on September 13.
India is currently part of the G20 Troika [current, previous and incoming G20 Presidencies] comprising Indonesia, Italy and India. During our Presidency, India, Indonesia and Brazil would form the troika.
This would be the first time when the troika would consist of three developing countries and emerging economies, providing them a greater voice.
The announcement said the priorities of the upcoming summit are being “firmed up” and said discussion among all the member countries will include issues related to “women’s empowerment, digital public infrastructure, health, agriculture, education, culture, tourism, climate financing, circular economy, global food security, energy security, green hydrogen, disaster risk reduction and resilience, fight against economic crime and multilateral reforms”.
A major challenge of the G20 session in India will involve the ongoing crisis in Ukraine which has vitiated relation between Russia and the industrialised nations of the West most of which are members of the G20 which represents 85% of global GDP and 75% of international trade.
G20 includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, U.K., U.S.A. and the European Union (EU).
384 drugs on essential medicines list(Page no. 12)
(GS Paper 2, Health)
Twenty-six drugs, including the common gastrointestinal medicines ranitidine and sucralfate, have been deleted from the revised National List of Essential Medicines (NLEM) 2022.
Three hundred and eighty-four drugs find place in the NLEM, 2022 with the addition of 34 drugs, while 26 from the previous list have been dropped. The medicines have been categorised into 27 therapeutic categories.
The National List of Essential Medicines was first compiled in 1996 and it was revised thrice earlier in 2003, 2011, and 2015.
According to a Health Ministry official, drugs deleted from the NLEM include medicines banned in India and those having reports of concerns on the safety profile.
Drugs also go off the list if medicine with better efficacy or favourable safety profile and better cost-effectiveness become available.
Also if the disease burden for which a medicine is indicated is no longer a national health concern, it is deleted from the NLEM. He added that in case of antimicrobials, if the resistance pattern has rendered them ineffective, the drugs are taken off the list.
The new list also includes four drugs that are still under patent — bedaquiline and delamind used in the treatment of multiple drug-resistant tuberculosis, dolutegravir used to treat human immunodeficiency virus (HIV) infection, and daclatasvir used in treating viral infections such as Hepatitis C.
It added that no drugs used specifically for the treatment of COVID-19 have been made part of the list as the committee in charge of the list was of the view that the clinical trials to check the efficacy of the drugs were not yet conclusive.
Also, several antibiotics, vaccines and anti-cancer drugs are set to become more affordable with their addition to the list. Ivermectin, mupirocin and nicotine replacement therapy have been added.
Endocrine medicines and contraceptives fludrocortisone, ormeloxifene, insulin glargine and teneligliptin have been added to the list. Montelukast, which acts on the respiratory tract, and ophthalmological drug latanoprost figure in the list.
Cardiovascular medicines dabigatran and tenecteplase also find place in the list, as also medicines used in palliative care. The drugs in the NLEM are included in the Schedule category and their price is regulated by the National Pharmaceutical Pricing Authority.
Economy
GST Council is a fledgling but vibrant institution, says FM (Page no. 14)
(GS Paper 3, Economy)
The Goods and Services Tax Council is still a fledgling five-year-old institution that has yet to become well-settled, but acts as a vibrant forum for intense interactions between the Centre and the States.
GST (Council) is just born, it’s a five-year old and I don’t know if it has completely accomplished on very many things which are committed. It’s happening, rapidly happening and there’s a lot of vibrancy in the Council.
Ms. Sitharaman was reacting to a ‘powerful case’ made by Fifteenth Finance Commission chief N.K. Singh to set up a Fiscal Council with the Centre and States, and another such body to act as a bridge between the GST Council and the Finance Commission.
She was speaking at a discussion on a book Mr. Singh has co-authored with P.K. Mishra, the principal secretary to the Prime Minister, titled ‘Recalibrate: Changing Paradigms’.
Interestingly, we have not had the GST Council having a full-fledged, well-developed, ‘it is all settled and it’s running’ kind of a situation yet,” emphasising that Centre-State interactions were ‘continuously happening’ at the Council or through the Finance Commission itself when it visits States to assess their views vis-à-vis their terms of reference.
The GST Council that happens once in three months ideally, and sometimes, of course, gets extended to the fourth or fifth month… are all intense interactions between the Centre and the States in the capacity of the Council.
When we are seated there, we are seated as equal members. There are no artificial lines between the Centre and the States in the Council.
The Finance Minister also agreed with Mr. Singh’s call for a greater debate on freebies, acknowledging his remark that the politics of freebies trump the norms of more responsible behaviour.
Mr. Singh said that it was important that governments ‘transparently provide’ for all subsidies and sops to citizens in their Budgets rather than adopt strategies like cross-subsidisation.