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10 September 2022

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DAILY CURRENT AFFAIRS ANALYSIS

. No. Topic Name Prelims/Mains
1.  Minimum Support Price Prelims & Mains
2.  Cryptocurrency in India Prelims & Mains
3.  Abortion Laws in India Prelims & Mains
4.  Line of Control Prelims Specific Topic

1 – Minimum Support Price: GS III – Agriculture related issues

About:

  • The MSP, which is based on a computation of at least 1.5 times the farmers’ production costs, is the rate at which the government purchases crops from farmers.
  • A “minimum price” (MSP) is set for any crop the government deems to be profitable for farmers and so deserving of “support.”
  • MSP-recommended crops include sugarcane and 22 other mandatory crops, according to the Commission for Agricultural Costs & Prices (CACP).
  • A department within the Ministry of Agriculture and Farmers Welfare is known as CACP.
  • 14 kharif season crops, 6 rabi season crops, and 2 more commercial crops make up the list of required crops.
  • Additionally, toria and de-husked coconut MSPs are set based on the MSPs of rapeseed/mustard and copra, respectively.
  • Criteria for Suggesting the MSP: The CACP takes into account a number of factors, including the cost of cultivation, when recommending the MSP for a commodity.
  • It considers the commodity’s supply and demand dynamics, domestic and international market price trends, parity with respect to other crops, repercussions for consumers (inflation), the environment (soil and water consumption), and trade agreements between the agricultural and non-agricultural sectors.

Three Different Types of Production Cost:

  • The CACP estimates three different types of production costs for each crop, both at state- and India-wide average levels.
  • ‘A2’: Pays for all direct expenditures made by the farmer for things like seeds, fertiliser, pesticides, hired labour, leased land, fuel, irrigation, and so forth.
  • A2 plus an imputed value for unpaid family labour is included in the phrase “A2+FL.”
  • “C2”: It is a more comprehensive cost that, in addition to A2+FL, takes into account rentals, interest forgone on owned land, and fixed capital assets.
  • When advising MSP, CACP takes into account both A2+FL and C2 expenses.
  • CACP estimates simply A2+FL as the return cost.
  • C2 costs, however, are largely utilised by CACP as benchmark reference expenses (opportunity costs) to determine whether the MSPs they suggest at least cover these costs in some of the key producing States.
  • The Union government’s Cabinet Committee on Economic Affairs (CCEA) makes a final determination regarding the MSP level and other suggestions given by CACP.

Why is MSP Required?

  • Since 2014, farmers have been forced to endure falling commodity prices due to the twin droughts of 2014 and 2015.
  • Demonetization and the introduction of the GST, two simultaneous shocks, damaged the rural economy, particularly the non-farm sector but also agriculture.
  • The majority of farmers continue to be in a precarious condition as a result of the epidemic, the slowdown in the economy following 2016–17, and other factors.
  • Increased costs for diesel, energy, and fertilisers have only made the situation worse.

What Problems Are Related to India’s MSP Regime?

  • Confined extent only two commodities—rice and wheat—are purchased despite the official announcement of MSPs for 23 different crops because they are allocated through NFSA (National Food Security Act). The remainder is mainly incidental and irrelevant.
  • Ineffectively Implemented: Only 6% of the MSP could be obtained by farmers, according to the Shanta Kumar Committee’s assessment from 2015. This immediately translates to 94 percent of farmers in the nation not receiving the benefit of the MSP.
  • Prices in the domestic market have no relationship to the existing MSP regime. Its main purpose is to satisfy NFSA criteria, therefore rather than being an MSP, it functions as a procurement price.
  • The overproduction of rice and wheat caused by the skewed MSP system inhibits farmers from growing other crops and horticultural products, which have higher demand and may, therefore, boost farmers’ income.
  • Middlemen-Dependent: The MSP-based procurement system also relies on intermediaries, commission agents, and APMC representatives, all of whom are difficult for smaller farmers to access.

Way ahead:

  • True MSPs call for government intervention anytime market prices drop below a certain threshold, primarily in situations of excess production and oversupply or a price collapse brought on by external sources.
  • For many of the crops that are desirable for nutritional security, such as coarse cereals, as well as for pulses and edible oils for which India is reliant on imports, MSP can also be a motivating price.
  • The path to wisdom is to spend more money on more nutrient-dense produce like fruits and vegetables as well as fisheries and animal husbandry.
  • The ideal method to invest is to provide financial incentives for businesses to create effective value chains based on a cluster strategy.
  • Government must develop a transitional plan for agricultural pricing, whereby some agricultural pricing should be supported by the government and some should be determined by the market.
  • A shortfall payment plan modelled after Madhya Pradesh’s Bhavantar Bhugtan Yojana (BBY) could be one approach to do this.

Source The Press Information Bureau

2 – Cryptocurrency in India: GS III – Economy-related issues

Cryptocurrency: What is it?

  • Any kind of money that exists digitally or virtually and uses cryptography to safeguard transactions is known as cryptocurrency, also referred to as crypto-currency or crypto.
  • Cryptocurrencies employ a decentralised mechanism to track transactions and create new units rather than a central body to issue or regulate them.
  • The blockchain, a decentralised peer-to-peer network, underpins it.

What are the Rewards of Using Cryptocurrency?

  • Quick and affordable transactions: Due to the fact that there are fewer intermediaries involved, using cryptocurrencies to carry out international transactions is significantly more cost-effective.
  • Investing Location: Cryptocurrencies have a finite quantity, somewhat like gold. Additionally, during the past several years, the price of cryptocurrencies has increased more quickly than the price of traditional financial assets.
  • As a result, investing in cryptocurrencies may become popular.
  • Anti-inflationary Currency: Because there is so tremendous demand for cryptocurrencies, their prices have mostly continued to rise. In this situation, people are more likely to hold cryptocurrencies than to use it.
  • The currency will experience deflation as a result of this.
  • Why are nations like the CAR adopting cryptocurrencies as a legal form of payment?
  • Strong and Inclusive Growth: If implemented, the proposal will allow for “strong and inclusive growth” and put the African nation on the “map of the most brave and forward-thinking nations in the world.”
  • CAR, which has a population of 5 million, is one of the world’s poorest and most economically precarious nations.
  • According to projections from the World Bank made in July 2021, 71% of its people were living below the federal poverty threshold of $1.90 per day.
  • Positive Growth: Inflation and nations that allow the usage of cryptocurrencies may be directly correlated.
  • Cryptocurrencies have the ability to turn the decrease of legal tender due to inflation into growth.
  • This perhaps direct connection would be important to CRA. The IMF predicts that the country’s inflation rate would increase to 4% in 2022 as a result of rising food and fuel costs.

The relevance of this to geopolitics:

Continuity with the Other Country:

  • The two nations that accepted Bitcoin as legal tender do not have their own currencies.
  • 14 African countries share the CAR franc as their common currency, while El Salvador uses the US dollar.
  • The “Franc Zone” is made up of these nations, the majority of which were historically French colonies.
  • Avoid the Embargo and Sanctions Imposition: As a result of the blockade imposed by the U.S., nations like Cuba are cut off from international financial systems and are unable to get financial instruments like debit or credit cards. As a result, they struggle to travel abroad and purchase goods and services from other countries.

What Cons are there?

  • Extremely Volatile:Cryptocurrencies are highly volatile assets that have gained appeal due to their lack of regulation. The risk of volatility has raised questions about the possible influence on a nation’s macroeconomic stability, particularly those with weak socio-economic fundamentals.
  • Recently, numerous nations—especially those with poorly designed monetary systems and protracted inflation—have pondered passing laws that would control the usage of cryptocurrencies.
  • Uncontrolled Nature:Additionally, the International Monetary Fund (IMF) had recommended El Salvador to restrict the use of unregulated assets due to the significant dangers that Bitcoin use poses to consumer protection, financial stability, and integrity, as well as the accompanying fiscal contingent liabilities.
  • Paying Taxes in Cryptocurrencies:For nations like CRA, the hazards of paying taxes in cryptocurrencies would be exposed if tax payments were made using crypto assets but that local currency was still used for expenditures.
  • For instance, if the government uses cryptocurrency to collect $100 in taxes, a decline in the value of the asset releases $40 for spending.
  • Not a Clearly Defined Mechanism: Since cryptocurrencies are speculative assets and not tied to any specific mechanism like stocks or currencies are, central banks would have no way to determine the appropriate interest rates for their domestic needs.
  • Blockchains may be used counterproductively to track transactions but not the persons involved. As a result, it might be applied to money laundering, financing of terrorism, or other illicit acts.

Source The Reserve Bank of India Website

3 – Abortion Laws in India: GS II – Government Policies and Interventions

India’s abortion laws date back to:

  • Following a spike in the incidence of induced abortions in the 1960s, the Union government mandated the formation of the Shantilal Shah Committee to consider the country’s abortion legalisation.
  • The Medical Termination of Pregnancy (MTP) Act was put into effect in 1971 with the goal of lowering maternal mortality caused by unsafe abortions.
  • This law establishes the guidelines for how and when a medical abortion may be performed. It is an exemption to the Indian Penal Code (IPC) provisions of 312 and 313.
  • A person who “voluntarily induces a woman with child to miscarry” is subject to punishment under Section 312 of the IPC, which carries a maximum three-year prison sentence, a fine, or both, unless it was done in good faith with the intention to preserve the pregnant woman’s life.
  • In India, this clause effectively outlaws all forms of abortion.
  • According to Section 313 of the IPC, a person who induces a miscarriage without the pregnant woman’s agreement, regardless of whether she is far along in her pregnancy, will be subject to a fine, life in prison, or a prison sentence that could last up to 10 years.

MTP development between 1971 and 2021:

  • The MTP Act underwent its most recent modification in 2021.
  • Prior to that, new regulations were introduced in 2003 to permit the use of misoprostol, an abortion drug that had just been discovered, to end a pregnancy up to seven weeks into it.
  • Abortion is legal following a doctor’s recommendation under certain conditions, according to the Medical Termination of Pregnancy (Amendment) Act of 2021.
  • The 2021 Act expanded the maximum gestational period to which a woman may obtain a medical abortion from the 20 weeks allowed by the 1971 Act to 24 weeks.
  • This updated upper limit is only applicable in certain circumstances.
  • Up to 20 weeks of gestation, MTP might now be accessible based on the recommendation of a single licenced medical professional.
  • Two licenced medical professionals’ opinions are needed between 20 and 24 weeks.
  • A medical abortion up to 12 weeks of pregnancy required the approval of one registered doctor under the previous version of the Act, while abortions up to 20 weeks required the approval of two doctors.
  • Additionally, if a pregnancy must be terminated beyond 24 weeks of gestation, only a four-member Medical Board, established in each State under the Act, may do so on the basis of foetal abnormalities.
  • Despite any of the aforementioned restrictions, the legislation also stipulates that an abortion may be performed whenever necessary by a single licenced medical professional in order to preserve the pregnant woman’s life.
  • Because the 2021 Act does not include the need for spousal consent, unmarried women may also seek abortion under the aforementioned conditions. However, a guardian’s approval is necessary if the woman is a minor.

Judicial interventions taken in incidents involving abortions:

  • The decision by a pregnant person to continue a pregnancy or not is part of that person’s right to privacy as well as their right to life and personal liberty under Article 21 of the Constitution, the Supreme Court held in the landmark Right to Privacy judgement in the 2017 case Justice K.S. Puttaswamy v. Union of India and others. Despite the fact that the country’s current laws do not permit unconditional abortions,
  • In February 2022, the Calcutta High Court granted a 37-year-old woman’s request for a medical abortion at 34 weeks of pregnancy because the foetus had been identified as having an intractable spinal disorder.
  • After the State Medical Board denied the woman’s request for MTP, the Court approved this.
  • This decision authorised abortion up to the current point in the pregnancy in the nation.

Arguments against the abortion law include:

  • A 2018 report published in the Lancet estimates that as of 2015, India saw 15.6 million abortions annually.
  • The latest National Family Health Survey 2019–2021 found that 27% of abortions were performed at home by the mother herself.
  • Around 8 women perish every day in India as a result of unsafe abortions, according to the State of the World Population Report 2022 by the United Nations Population Fund (UNFPA).
  • According to the MTP Act, only gynaecologists or obstetricians are permitted to perform abortions.
  • However, the 2019–20 Rural Health Statistics report from the Ministry of Health and Family Welfare shows that there is a 70% lack of obstetrician–gynecologists in rural India.
  • Critics claim that because the law prohibits abortions performed at any time, it forces women to acquire unsafe, illegal abortions.
  • According to statistics, 8,00,000 unsafe and illegal abortions are carried out annually in India, many of which result in maternal death.
  • As “woman” is used in the legislation, pregnant transgender and non-binary people who are biologically able to have children are excluded.
  • They are compelled to ignore their gender identification and identify as one of the gender-binary.
  • Affordability and social stigma that encourage unsafe abortions are other major problems.
  • Private medical facilities with abortion services are pricy and only accessible to those with sufficient funds.

Conclusion:

  • India’s condition is far from ideal, so now is the time to consider global progressive practises and learn from them.
  • We should work toward reproductive equity, total physical autonomy, and inclusivity.
  • We shouldn’t start governing by gauging our progress by the rate of regression.
  • Legal, medical, and societal considerations must be taken into account while evaluating bodily autonomy and reproductive rights.
  • One cannot say that India is paving the way for the West until women and non-binary pregnant people have complete authority over their own bodies according to these standards.

Source The Hindu

4 – Line of Control: Prelims Specific Topic

Details of the LoC:

  • Following the Simla Agreement, which was signed on July 3, 1972, the “Line of Control,” formerly known as the “Cease-fire Line,” was given a new name.
  • The state of Jammu and Kashmir is the name of the region of Jammu that is governed by India. Gilgit-Baltistan and Azad Jammu & Kashmir are separated under Pakistani authority. NJ9842 is the designation for the Line of Control’s northernmost point.
  • Jammu and Kashmir, a state under Indian administration, and Aksai Chin, a region under Chinese rule, are divided by yet another ceasefire line.
  • Kashmir was split in two by the Line of Control, which also blocked access to the Jehlum valley.

Trade along the LoC:

  • The purpose of LoC trade in Jammu & Kashmir is to make it easier for local communities to interchange commodities that are used often.
  • Two Trade Facilitation Centers, one each at Salamabad, Uri, District Baramulla and Chakkan-da-Bagh, District Poonch, permit trade.
  • Four days a week are designated for the trade.
  • The trade is conducted on a barter system with no duties.

Source The Indian Express

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