Current Affairs 28th June 2023 for UPSC Prelims Exam

GI Tag

Context: The Geographical Indications Registry has given tags to seven different products from Uttar Pradesh.

About GI Tag

Definition: Geographical Indications of Goods are defined as that aspect of industrial property which refer to the geographical indication referring to a country or to a place situated as being the country or place of origin of that product.
- Typically, such a name conveys an assurance of quality and distinctiveness which is essentially attributable to the fact of its origin in that defined geographical locality, region or country.
GI Tag in India: The Geographical Indications of Goods (Registration and Protection) Act seeks to provide for the registration and protection of Geographical Indications relating to goods in India.
Governed By: Under Articles 1 (2) and 10 of the Paris Convention for the Protection of Industrial Property, geographical indications are covered as an element of IPRs.
- It is also covered under the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement of WTO.
Validity: This tag is valid for a period of 10 years following which it can be renewed.
Significance: The Geographical Indication registration confers the following benefits:
- Legal protection to the products.
- Prevents unauthorized use of GI tag products by others.
- It helps consumers to get quality products of desired traits and is assured of authenticity.
- Promotes the economic prosperity of producers of GI tag goods by enhancing their demand in national and international markets.
Recent GI Tag: The Geographical Indications Registry in Chennai has given tags to seven different products from Uttar Pradesh:

GI Tags

Amroha Dholak: The Amroha Dholak is a musical instrument made of natural wood.

Mango, jackfruit and teakwood is preferred for making the dholak.
Wood from mango and sheesham trees are used to carve the multiple sized and shaped hollow blocks, which are later fitted with animal skin, mostly goatskin, to create the instrument.

Mahoba Gaura Patthar Hastashlip: It is a stone craft.

It is a very unique and soft stone with scientific name, the ‘Pyro Flight Stone’.
Gaura stone craft is made of radiant white-coloured stone that is predominantly found in this region.
It is used for making craft items.

Mainpuri Tarkashi: Tarkashi, a popular art form from Mainpuri, is primarily brass wire inlay work on wood.

It was mainly used for khadaous (wooden sandals), a necessity for every household, since leather was considered unclean.

Sambhal Horn Craft: The horn-bone handicraft products made in Sambhal are immensely popular.

The raw material used for making these craft items is procured from dead animals that makes this industry environment friendly.
Sambhal offers a wide range of decorative horn-bone handicrafts that are available indifferent attractive looks, designs and patterns.

Baghpat Home Furnishings: Baghpat and Meerut are famous for their exclusive handloom home furnishing product and running fabrics in cotton yarn since generations, and only cotton yarn is used in the handloom weaving process.

Barabanki Handloom Product: Barabanki is known for fabric knitting through handloom.

Owing to the high demand of cotton clothing, there is also a huge demand for handloom products prepared using traditional technology.
Weaving is done in urban as well as rural areas of the district.
There are around 50,000 weavers and 20,000 looms at Barabanki and adjoining area.

Kalpi Handmade Paper: Kalpi is a small town located between Kanpur and Jhansi.

The craft of making handmade paper from wastepaper and cloth strings is prominent in Kalpi.
This paper in used to make a variety of products such as office files, carry bags, absorption papers, visiting cards and more.

Current Affairs 27th June 2023 for UPSC Prelims Exam

Autonomous District Councils

Context: The Nagaland government has scheduled a consultative meeting to discuss the Centre’s proposal for the creation of an autonomous council comprising six districts in the eastern part of the State.

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Kiphire, Longleng, Mon, Noklak, Shamator, and Tuensang districts have been deprived of development by successive governments.
Consequently, the organizations of seven dominant Naga communities; Chang, Khiamnuingan, Konyak, Phom, Sangtam, Tikhir, and Yimkhiung across these 6 districts have been demanding a separate State called Frontier Nagaland since 2010.

About Autonomous District Councils (ADCs)

Definition: The Sixth Schedule under Article 244 provides for the formation of autonomous administrative divisions; Autonomous District Councils (ADCs) that have some legislative, judicial, and administrative autonomy within a state.
- The acts of Parliament or the state legislature do not apply to autonomous districts or apply with specified modifications and exceptions.
Areas: The Sixth Schedule applies to the Northeastern states of Assam, Meghalaya, Mizoram (three Councils each), and Tripura (one Council).
Composition: Each Autonomous District shall have a District Council consisting of not more than 30 members, out of which 4 are nominated by the Governor while the rest are elected based on adult franchise.
- Bodoland Territorial Council in Assam is an exception with more than 40 members and the right to make laws on 39 issues.
Powers: The Sixth Schedule has conferred certain Executive, Legislative and Judicial powers on the ADCs so that they have autonomy:
- Legislative Functions: With the prior approval of the Governor, the District Council can make rules in:
  - Lands an management of forest (other than the Reserved Forest)
  - Use of canal or watercourse for agriculture
  - Regulation of jhum and other forms of shifting cultivation
  - Establishment and administration of village or town committees
  - Appointment or succession of Chiefs or Headmen
  - Inheritance of property
  - Marriage and divorce and social practice.
- Executive Powers: The District Councils are given the power to establish, construct or manage primary schools, dispensaries, markets, cattle ponds, fisheries, roads, road transport and waterways in the districts.
  - The Councils are also authorized to prescribe the language and manner of instruction in the primary schools.
- Judicial Powers: The District Councils are also empowered to constitute Village and District Council Courts for trial of suits and cases where all parties to the dispute belong to Scheduled Tribes within the district.
  - And no other courts except the High Courts and the Supreme Court have the jurisdiction over such suits or cases of the Council Courts.
  - However, these Council Courts are not given the power to decide cases involving offences punishable by death or imprisonment for five or more years.
- Financial Powers: ADCs are empowered to:
  - Assess and collect land revenue.
  - Impose taxes on professions, trades, animals, vehicles,
  - Impose taxes on entry of goods into the market for sale,
  - Impose toll on passengers and goods carried in ferries,
  - Impose taxes for the maintenance of schools, dispensaries or roads within their respective jurisdiction.
  - Grant licenses or leases for extraction of minerals within their jurisdiction.
Importance: The administration of the tribal areas has always been a matter of great concern.
- The forest and hills provided a natural barrier and isolated the hill tribes from the people living in the plains.
- Prior to independence, the British government’s policy of isolation and noninterference in the affairs of tribal population in different parts of the country has gradually pushed them back into the forest and hills.
  - The British colonial government enacted many acts and regulations such as the Inner Line Regulation of 1873, the Scheduled District Act, 1874, the Government of India Act, 1919 and 1935 for tribal areas.
- Due to this isolation, these tribes remained uneducated, poor and underdeveloped.
- The ‘land’ and ‘forest’ are the two basic resources of tribal livelihood system as it gives them equality of status, dignity and means to economic and social empowerment.
- Recognising the constraints imposed by these peculiar social, cultural and ecological environments, the framers of the Constitution considered it necessary to introduce some mechanism to protect their cultural identity, protect them from exploitation and promoted their development.
- The provision of ADCs in Sixth Schedules aims to protect the aspirations of the people of the areas and simultaneously assimilate them into the mainstream of the country.

National Company Law Appellate Tribunal (NCLAT)

Context: The National Company Law Appellate Tribunal (NCLAT) has upheld the penalty of Rs 1,338 crore imposed by the Competition Commission of India (CCI) on Google for its anti-competitive conduct in the Android ecosystem.

About the National Company Law Appellate Tribunal (NCLAT)

NCLAT is a quasi-judicial body in India that was established under the Companies Act, 2013.
Functions of NCLAT: It acts as the Appellate Tribunal for hearing appeals against the orders of
- National Company Law Tribunal (NCLT),
- Insolvency and Bankruptcy Board of India (IBBI),
- Competition Commission of India (CCI), and
- National Financial Reporting Authority (NFRA).
Composition: The NCLAT includes a Chairperson, 3 judicial members, and 2 technical members appointed by the Central Government. It consists of a total of not more than eleven members.

About the National Company Law Tribunal (NCLT)

About: It is a quasi-judicial body in India that adjudicates issues relating to Indian companies. NCLT has been given the same powers and procedures as a court of law.
Establishment: The tribunal was established under the Companies Act 2013 based on the recommendation of the Balakrishna Eradi committee.
Composition: The bench of NCLT consists of a President and such number of other Judicial and Technical Members as may be prescribed.
- The President of the Tribunal shall be appointed by the Central Government after consultation with Chief Justice of India.
- The Members are to be appointed by the Central Government on the recommendation of a Selection Committee.
- A person who is or has been judge of a High Court for five years is eligible to be appointed as president of National Company Law Tribunal.
Role and responsibilities:
- All the proceedings of a company related to arbitration, arrangements, compromise, reconstruction, and winding up will be only be disposed of by the Tribunal.
- The tribunal is also vested with power to dispose of case related to insolvency under the Insolvency and Bankruptcy Code of 2016.
- (Note: For the above matters civil courts will have no jurisdiction.)
- All the cases that were pending before the Board for Industrial and Financial Reconstruction (BIFR) and Sick Industrial Companies (Special Provisions) Act of 1985, will only be disposed of by the tribunal.
- The tribunal will also take up cases related to the oppression and mismanagement of the company.

About the Commission of India (CCI)

It is a statutory body of the Government of India responsible for enforcing the Competition Act, 2002,
Establishment: CCI was established in 2009 based on the recommendations of the Raghavan committee.
Composition: The Commission consists of one Chairperson and six Members who shall be appointed by the Central Government.
Role and responsibilities:
- To make the markets work for the benefit and welfare of consumers.
- To ensure fair and healthy competition in economic activities in the country for inclusive growth and development of the economy.
- To implement competition policies to ensure the most efficient utilization of economic resources.
- To develop and nurture effective relations and interactions with sectoral regulators to ensure alignment of sectoral regulatory laws with the competition law.

About the Insolvency and Bankruptcy Board of India (IBBI)

IBBI was established in 2016 under the Insolvency and Bankruptcy Code, 2016 (IBC).
Objective: It is a key pillar of the ecosystem responsible for implementation of the IBC.
- IBC provides a consolidated framework that governs insolvency and bankruptcy proceedings for companies, partnership firms, and individuals.
Headquarters: New Delhi
Composition: The IBBI Governing Board is headed by the Chairperson.
- The other members of the IBBI Board include: Three whole time members, a member from the Reserve Bank of India (RBI), and five members nominated by the Union Government of which three members function as full-time members.
Role and responsibilities:
- It has regulatory oversight over the Insolvency Professionals, Insolvency Professional Agencies, Insolvency Professional Entities and Information Utilities.
- It writes and enforces rules for processes, namely, corporate insolvency resolution, corporate liquidation, individual insolvency resolution and individual bankruptcy under the Code.
- It has also been designated as the ‘Authority’ under the Companies (Registered Valuers and Valuation Rules), 2017 for regulation and development of the profession of valuers in the country.

About the National Financial Reporting Authority (NFRA)

Establishment: NFRA was constituted in 2018 by the Government of India under section 132 (1) of the Companies Act, 2013. It is an audit regulator.
Composition: It consists of a chairperson, who shall be a person of eminence and having expertise in accountancy, auditing, finance or law, appointed by the Central Government and such other members not exceeding 15.
Role and responsibilities:
- Recommends accounting and auditing policies and standards to be adopted by companies for approval by the Central Government.
- Monitor and enforce compliance with accounting standards and auditing standards.
- Oversee the quality of service of the professions associated with ensuring compliance with such standards and suggest measures for improvement in the quality of service.
- Protect the public interest.

Greedflation

Context: There is a growing consensus across the world that corporate greed is a significant factor behind the current global inflationary pressures.

What is Greedflation?

Greedflation refers to a situation where corporate greed plays a significant role in fueling inflation in the economy.
It occurs when companies take advantage of the inflationary environment by increasing prices beyond what is necessary to cover their increased costs.
This excessive price increase leads to higher profit margins for the companies, which in turn further contributes to inflation.
The concept of greedflation suggests that instead of the traditional wage-price spiral, where rising wages lead to higher prices, it is the profit-price spiral that drives the inflation.

The Concept of Wage-Price Spiral

The wage-price spiral refers to a self-reinforcing cycle between wages and prices that can contribute to inflationary pressures in an economy.
It is a concept that describes the interaction between workers’ wages and the prices of goods and services.
It suggests that rising wages lead to higher costs for businesses, which, in turn, results in higher prices for goods and services. These higher prices then lead workers to demand even higher wages to maintain their purchasing power, restarting the cycle.

Policy Implications for Greedflation

Price controls and regulation: One approach could involve implementing price controls or regulatory measures to limit excessive price increases by companies.
Windfall profit taxes: Governments may consider imposing temporary windfall profit taxes on companies that are deemed to be excessively profiting from inflation.
- A windfall tax is a type of tax that is imposed on unexpected or unusually high profits or gains made by individuals, businesses, or industries.
- These profits are typically the result of external factors, such as changes in government policy, fluctuations in commodity prices, or unexpected demand for a particular product or service.
Competition and antitrust measures: Strengthening competition and antitrust policies can help ensure that market dynamics remain competitive, discouraging companies from exploiting inflation to manipulate prices.

Current Account Deficit (CAD)

Context: Data by RBI shows that India’s current account deficit (CAD) has decreased to $1.3 billion (0.2% of GDP) in the fourth quarter of FY23, from $16.8 billion (2%of GDP) in the preceding three-month period.

About Current Account Deficit (CAD)

Balance of Payments: The balance of payments (BoP) records the transactions in goods, services and assets between residents of a country with the rest of the world for a specified time typically a year.
- There are two main accounts in the BoP – the current account and the capital account.
Current Account: The current account measures the flow of goods, services and investments into and out of the country.
- The current account includes net income, including interest and dividends, and transfers, like foreign aid.
Trade Deficit & Surplus: When exports exceed imports, there is a trade surplus and when imports exceed exports there is a trade deficit.
Trade Balance: The balance of exports and imports of goods is referred to as the trade balance.
Current Account Deficit: When the value of the goods and services that a country imports exceeds the value of the products it exports, it is called the current account deficit.
Factors Responsible Recent Decline in India’s CAD:
- India witnessed increase in net services receipts due to a rise in net earnings from computer services.
- Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to $28.6 billion, up by 20.8% from their level a year ago.
- Net outgo on the primary income account, largely reflecting net income payments on foreign investment, increased on a year-on-year basis, while showing a marginal decline.
- India’s net foreign direct investment (FDI) rose to $6.4 billion in Q4 FY23 which was higher than $2 billion in Q3 of FY23.
- In Q4, there was gradual increase the foreign exchange reserves (on a BoP basis) to $5.6 billion, as against a depletion of $16 billion in Q4 of FY22.
Impact of CAD: CAD has an impact on the economy, stock markets, and investments.
- Lower CAD:
  - A lower CAD can improve investor confidence and make the country’s currency more appealing to investors.
  - A surplus in the current account can increase foreign exchange reserves and the value of the local currency.
- High CAD:
  - When a country’s imports exceed its exports, it results in a net outflow of money, which can lead to a decrease in demand for the country’s currency. This decrease in demand for the currency can cause its value to weaken or depreciate.
  - A weaker currency can make imports more expensive, leading to higher inflation and a reduction in the purchasing power of the country’s citizens.
  - A current account deficit can also lead to debt accumulation. If a country is unable to finance its current account deficit with foreign investment, it may need to borrow to cover the gap which can lead to an increase in debt levels, which can further harm the economy.
Measures to Improve CAD:
- The government can encourage exports by providing incentives for export-oriented industries, streamlining export procedures and regulations, and negotiating better trade agreements with other countries.
  - This can help boost country’s foreign exchange earnings and reduce the trade deficit.
- The country can promote import substitution by encouraging domestic production of goods that are currently being imported.
  - This can be achieved through incentives for domestic manufacturers and imposing tariffs or import duties on certain goods.
- The country should improve the productivity and competitiveness of the domestic economy by investing in infrastructure, technology, and education.
- These measures can increase exports and reduce the trade deficit, helping to moderate the current account deficit.