6 July 2024

• Polity: Debate on whether education should return from the Concurrent List to the State List. The 42nd Amendment had moved it in 1976.
• International: India-Myanmar relations strained by the post-coup crisis. India suspended the Free Movement Regime along the shared border.
• Agriculture: National Policy on Farmer Producer Organisations targets 50,000 FPOs benefiting 2.5 crore farmers.
• Economy: Government finalising a Producer Price Index to replace the Wholesale Price Index.

GS area: Polity, Federalism

A debate on shifting education from the Concurrent List back to the State List gained attention this week. Before the 42nd Constitutional Amendment of 1976, education was exclusively a State List subject.

• 42nd Amendment (1976): Moved education from the State List (Entry 26 of the State List) to the Concurrent List during the Emergency period. States fund around 85 per cent of total education expenditure, which makes the constitutional position a point of friction.
• Arguments for returning it to states: States have better contextual understanding of local languages, cultures, and needs. The current arrangement produces tension when central curricula or teacher eligibility tests override state preferences. Federalism in education suits India's diversity.
• Arguments for keeping it Concurrent: The Concurrent List allows Parliament to set minimum national standards and ensure equity across states. ASER 2023 data shows over 25 per cent of rural children aged 14 to 18 cannot read basic text, pointing to failures in state-level governance of primary education.
• Way forward: Scholars advocate a "Collaborative Federalism" model where Parliament sets minimum learning outcome standards but leaves curriculum, language of instruction, and school management to states.

The tension between national standards and state autonomy in education is a live constitutional debate with practical consequences for teacher recruitment, textbook content, and examination systems.

Static linkage: Seventh Schedule (Polity), federalism, education policy.

GS area: International Relations, Internal Security

The military coup in Myanmar on 1 February 2021 created a humanitarian and security crisis that directly affects India's North-Eastern states.

• Coup background: The military (Tatmadaw) detained elected leader Aung San Suu Kyi and dissolved Parliament. The elected National Unity Government operates in exile.
• Humanitarian impact: Hundreds of thousands of refugees have crossed into Manipur and Mizoram. Several Chin and Kuki-Zo ethnic groups share kinship across the border.
• Free Movement Regime suspension: India suspended the FMR, which previously allowed communities within 16 km of the border to cross without visas. The suspension was cited as necessary to control illegal entry, drug trafficking, and insurgent movement.
• India's strategic stakes: Myanmar is India's fifth largest trading partner. The India-Myanmar-Thailand Trilateral Highway and Kaladan Multi-Modal Transit Transport Project pass through Myanmar. Disruption of these corridors affects connectivity to ASEAN.
• Security concern: Indian insurgent groups from the North-East use Myanmar's border areas as sanctuaries. Conflict between the Tatmadaw and ethnic armed organisations has weakened border control.
• India's position: India has been careful not to publicly condemn the coup, balancing its Act East connectivity interests with humanitarian concerns and its democratic values.

Static linkage: India-Myanmar relations (IR), North-East security (Internal Security).

GS area: Agriculture, Economy

The National Policy on Farmer Producer Organisations aims to create 50,000 FPOs benefiting 2.5 crore farmers. Currently around 5,000 FPOs are registered.

• What an FPO is: A producer company registered under the Companies Act 2013 or a cooperative society registered under state cooperative laws. It aggregates small farmers to achieve scale in buying inputs, selling produce, and accessing credit.
• Eligibility: Minimum 300 members in plains regions, 100 in North-Eastern and hilly areas.
• Benefits: Bulk purchasing of seeds and fertilisers at lower cost; collective negotiation with buyers; technology access; credit facilitation through Nabard and SIDBI; elimination of middlemen.
• Government support: Equity Grant Fund (government matches equity raised by the FPO); Credit Guarantee Fund Scheme; 100 per cent tax deduction for FPOs with turnover up to 100 crore rupees.
• AMUL model: India's most successful cooperative follows a three-tier structure: village dairy cooperative, district union, and state federation. FPO policy draws on this but adapts it to a company structure.

Static linkage: Agricultural cooperatives (Economy), farm sector reforms.

GS area: Economy

The Department for Promotion of Industry and Internal Trade is finalising a Producer Price Index to replace the Wholesale Price Index.

• WPI limitations: Double-counts goods that appear at multiple production stages. Excludes exports and imports. Covers only goods and ignores the service sector, which contributes about 55 per cent of India's GDP.
• PPI advantage: Measures prices at the first point of sale for goods and services. Used by G20 economies and recommended by the IMF. Captures input price pressures more accurately.
• Current inflation trio: India has three price indices: WPI (goods at wholesale), CPI (retail prices for consumers), and GDP deflator (overall economy). PPI would replace WPI in the official series.

Static linkage: Price indices (Economy), monetary policy.

GS area: Economy, Science and Technology

The debate on stablecoin regulation intensified after the TerraUSD (UST) collapse demonstrated systemic risks from algorithmic stablecoins.

• Definition: Digital currencies pegged to a fiat currency, commodity, or other asset to minimise price volatility.
• Types: Fiat-collateralized (Tether, backed by dollar reserves); Asset-backed (Digix Gold, backed by physical gold); Crypto-collateralized (Dai, backed by Ethereum); Algorithmic (Basis, no collateral, uses algorithms to control supply).
• TerraUSD collapse: The algorithmic stablecoin lost its dollar peg in May 2022, wiping out roughly 40 billion dollars in value. The collapse spread contagion to other crypto assets.
• Regulatory concern: Stablecoins used for large-scale payments could create systemic risk if their reserves are mismanaged. Transparency of reserves is the central regulatory demand.

Static linkage: Digital currency (Economy/S&T), cryptocurrency regulation.

• 3D hologram technology in currency: Japan introduced hologram-equipped yen banknotes to prevent counterfeiting. Holograms use laser interference and diffraction to create images that appear three-dimensional and are nearly impossible to replicate with ordinary printing.
• Money mule problem: A money mule is an individual whose bank account is used to transfer criminal proceeds. Recruitment happens through fake job advertisements. The RBI and banks are discussing tighter monitoring of accounts opened in the past year.
• Global Conclave on Plastic Recycling: Held at Bharat Mandapam, Pragati Maidan. Organised by the All-India Plastics Manufacturers Association. Focus on Extended Producer Responsibility compliance and the government's Single-Use Plastic elimination programme.