 Good evening aspirants, welcome to the Hindu News Analysis by Shankarayas Academy for the date 20th of August 2022. Displayed here are the list of news articles we will be going through today. Now let us start our discussion. Look at this news article. The news article reports about another mine mishap in Mahalaya. This incident has resulted in death of a person. The incident is due to one of the illegal coal mining practice called rat hole mining. So in this discussion we are going to understand what is rat hole mining. Before that let us revise some facts about coal mining. See coal is an energy mineral or a fuel mineral. It occurs in the beds or layers of sedimentary rocks. So it is also a sedimentary mineral. It is formed due to the compression of plant materials over millions of years. Long periods of great heat and pressure play a role in the formation of coal. When we talk about extraction of mineral like coal, it is a known fact that permission from the government is required for extraction. But this scenario changes when such mineral are concentrated in hilly areas where the tribes dominate. This is mainly true for north east India where in most of the tribal areas the minerals are owned by individuals or communities. Why? This is because of the complex land holding system and exclusive rights of land owners on land resources which is guaranteed under the 6th schedule of Indian constitution. So the mining is carried out under customary rights and are not covered by the mines acts or rules. One of such notable areas is mehalaya where we can find large deposits of coal, iron ore, limestone and dolomite. Mainly the coal mining is predominant in the towns of mehalaya like Jovai, Dharangiri, Moulang, Langrin and Shirapunji. An additional fact for you is in the north eastern states of mehalaya, Assam, Arunachal Pradesh and Nagaland we find the tertiary coals. Here the term tertiary refers to the geological age of the rock sequence where the coal deposit is found. It is about 55 million years old. The other kind depending on the geological age is the gondwana deposits which are over 200 million years in age. Also know that as per the coal inventory of India the estimated coal resources in mehalaya as of April 2021 is 576.48 million tons. Just know that coal inventory of India is published by the Geological Survey of India. Now as I said in hilly areas dominated by tribes the minerals are owned by individuals or communities. In the similar way coal mining in mehalaya is done by communities and family members and they are the ones who practice rat hole mining. What is this mining? See it is a primitive mining method. Basically a long narrow tunnel is used for mining. Let me explain how this happens. Follow this representation as I speak. See first the side edge of the hill slopes is chosen because they enable to reach the coal seam. After choosing the land is cleared by cutting and removing the ground vegetation. Then pits are dug out. These pits are dug vertically into the ground to reach the coal seam. The size of such pits ranges from 5 to 100 meters square. After this horizontal tunnels are made into the seam. That is tunnels are made sideways as you can see in this image. This helps in the extraction of coal. After the extraction of coal it is brought manually into the pit by using conical baskets or a wheelbarrow. Here shafts or tunnels are so small. It is said to be approximately 2 meters in diameter. It is so small just like a rat hole but for humans. So you can understand the relevance of the name here. This means miners have to squeeze in and crawl out on their knees to extract coal. Note that women and children also work as miners. Now since the shaft is small they also cannot use large equipments. So they end up using small implements to extract the coal. Implements such as pickaxe are used here. You can see how long it will take to extract coal using such a small equipment. Now once the coal is taken out of the pit it is dumped on the nearby unmined area. From here the coal is carried to the larger dumping place for its trade and transportation. So this is how rat hole mining is done. Now I think you can understand that this type of mining is unscientific and unsafe. It is also not regulated by any rules. So generally many hazards are associated with coal mining process which increases the threat to miners. It includes the risk of collapsing mine roofs, inundation and even fires in coal mines are a constant threat. Additionally in rat hole mining threat is caused by other issues also like the non usage of safety equipments while crawling into the rat holes. Then collapsing of shafts is also a regular incident. All these leads to death of miners who either die immediately due to the inundation or shaft collapsing or they die after they get stuck in those pits. The miners risk their life for as little as few hundred rupees a day. This has been prevalent since the 1980s in Mahalaya. Not from this rat hole mining has been causing severe air, water and environmental pollution in Mahalaya. So overall rat hole mining violates mining laws, environmental laws and labor safety laws. But the state government was not concerned with rat hole mining at all. This is because of the profitability of the industry. So considering the threat the national green tribunal had to intervene. In April 2014 it banned rat hole mining in Mahalaya. And then illegal rat holes have been dug out and mining is continuing in Mahalaya. But the state government's claim is that there is no illegal rat hole coal mining in Mahalaya. Looking at the denial of the state government and its inaction the national green tribunal intervened again. In 2019 it slapped 100 crore rupees as fine on the Mahalaya government for its failure to curb illegal coal mining. Supreme court also did not stay quiet. It upheld national green tribunal's order and also imposed restriction. It allowed only transportation of coal from states which were extracted till the ban came into effect. After this, Mahalaya high court also ensured the implementation of supreme courts and national green tribunal's order. It also directed the state government to set up a committee under the retired judge BP Katake. The Katake committee will probe the issue, will implement the ban and also recommend measures to be taken in this regard. So the conclusion is considering the grave nature of this mining practice the ban should be implemented universally. That's all regarding this discussion. In this discussion we saw about rat hole mining and the issues associated with it. Now let us conclude this discussion and take up the next news article. See this news article here. According to this news article, one of the Monetary Policy Committee members has stated that August 5th resolution is confusing. This is about the news article. In this context, today we are going to revise about the Monetary Policy Committee. As you know, the Reserve Bank of India was interested with the responsibility of conducting monetary policy in India. RBA's primary objective is to maintain price stability while keeping in mind the objective of economic growth. In 2016, the Reserve Bank of India Act 1934 was amended. After the amendment, inflation control in India is done by RBA through the Monetary Policy Committee meetings. See, the Monetary Policy Committee is constituted by the central government under section 47 ZB of the amended RBA Act 1934 and the RBA through the Monetary Policy Committee meetings determine the policy interest rate required to achieve the inflation target in India. RBA's Monetary Policy Department assists the Monetary Policy Committee in formulating the monetary policy. As you know, price stability is a necessary precondition to sustainable growth. The main objective of Monetary Policy Committee is to maintain price stability while keeping in mind the objective of growth. Apart from this, the Monetary Policy Committee determines the policy report required to achieve the inflation target. See, Monetary Policy Committee is a six-member body. The committee has to be constituted by the central government by notification in the official guzzet. So, the government as of now through the official guzzet of October 5, 2020 designated the following as the members of the committee. Of the six members, three are internal, including the RBA governor who chairs the committee. Then there is the RBA deputy governor who is the second internal member. The third member is one RBA official who is nominated by the central board. Usually, it is the executive director in charge of Monetary Policy. So, these are the three internal members of the Monetary Policy Committee. Apart from them, there are also three external members who are appointed for four years by the central government. Each member of the Monetary Policy Committee has one vote. And in the event of equality of votes, the governor has the second or casting of vote. While voting, each member of the Monetary Policy Committee writes a statement specifying the reason for voting in favor or against the proposed resolution. Now coming to the committee rules. The Monetary Policy Committee is required to meet at least four times in a year. The quorum for meeting Monetary Policy Committee is four members. So, these are the main points about the Monetary Policy Committee. With this, let us conclude this discussion and take up the next news article. Have a look at this editorial article. This editorial article talks about freebies. See, the issue of freebies has been in the limelight of the news for the past few weeks. Recently also, the Supreme Court recommended an expert committee comprising representatives of the beneficiaries, union and state government, finance commission, Nithya Yog and the reserve back of India to study the issue of freebies. See this article mainly criticizes the stand taken by the central government and Supreme Court against freebies. It argues for the need for freebies and it also talks about the advantages of freebies like how freebies help in addressing the inequality in our country. It gives some evidence to support its argument. So, this is the crux of the editorial given here. In this context, let us learn what are freebies, then the need for freebies, then the issues behind freebies and lastly, we will end our discussion by seeing some way forward. The syllabus regarding this discussion is highlighted here for your reference. You can go through it. First of all, what are freebies? See there is no precise definition of freebies. It is something given or provided free of charge. Provision of free electricity, free water, free public transportation, waiver of utility bills and farm loan waivers are often regarded as freebies. In general, freebies are provided before election to influence the voter behavior. Now take the example like public distribution system or employment guarantee schemes. They are also a kind of freebies. See, they are provided for overall welfare of the society. Okay? Now a question arises, are all freebies rational or all freebies providing welfare to the society as a whole? For this, we need to know why we need freebies. Firstly, freebies had laid the foundation for a welfare society. Let know we saw the example of public distribution system, right? It is a freebie that the government provides to meet its constitutional obligation towards citizens such as the directive principles of state policy. Here you can even take the example of other welfare schemes which first began as a freebie like the Mahatma Gandhi National Rural Employment Guarantee Scheme or you can take the midday meal scheme. Remember, the midday meal scheme was first introduced in 1956 by the then Tamil Nadu Chief Minister Mr. K. Kamaraj and later it was adopted as a national program. Then take N. T. Ramaroff's promise to give rise at Rs. 2 per kg in Andhra Pradesh. It is the original avatar of the current day national food security program. Then you can also take the example of Riyat Bandhu of Telangana and Kalya of Odisha which were the forerunners of what is known as Kisan Samanidhi. Note that this Kisan Samanidhi is a central sector scheme with 100% funding from the government of India. Under the scheme and income support of 6000 per year in three equal installments will be provided to all land holding farmer families. Here the fund will be directly transferred to the bank accounts of the beneficiaries. Secondly, it is needed that is the freebies are needed to help ensure upward social mobility. Here take the data given by the world inequality report 2022. The report says that top 1% of India held 22% of the total national income as of 2021 and the top 10% owned 57% of the income. So you can understand that India is one of the most economically and socially stratified country in the world. Now let us discuss with an example how freebies help in the upward social mobility. Here take Tamil Nadu government's free bus pass for women. It has saved countless number of families, fuel cost and transportation cost. Then it has also encouraged more women to join the workforce. This in turn leads to economically stable families and women empowerment. Here you can also take various state government's free laptop scheme. By providing laptop the governments have helped to address the digital divide between the rich and the poor. So this is how freebies ensure upward social mobility. The third is region specific social welfare measures. For example in the desert regions of Rajasthan freebies could be in the form of free drinking water connection. And in case of Kerala freebies could be in the form of fiscal incentives to encourage entrepreneurs to boost industrial growth. So freebies provided by the state legislature or executive is focused on the region specific issues. It will help address the region specific issues and also help address the regional disparity that is currently in India. So these are some of the advantages associated with freebies. But freebies also has some issues with it. Now let us see the issues. Firstly it drains the public X checker. See most of the time freebies ultimately lead to an excessive and unnecessary drain on public funds. It also adds economic burden on states as most Indian states suffer from a poor fiscal condition and they also have access to limited revenue resources. Okay. Secondly freebies announced for the welfare of one section of the population becomes disaster for the other. How? Here let us take the example of railways. In railways passenger fares are kept low by increasing the freight charge. Here government is keeping the price of passenger fare low keeping the election in its mind. This is affecting freight movement and industrial growth. Subsequently it also affects the competitiveness of our industries which results in slower industrial growth. Slower industrial growth results in reduced employment generation which finally affects the common people. So this is how freebies announced for one section of the population becomes disaster for the other and finally disaster for our entire nation as a whole. Okay. Thirdly it increases the fiscal deficit. Increased fiscal deficit leads to increased interest payment. Here you have to take note that increasing fiscal deficit also makes government borrowing costlier. This is because as fiscal deficit increases people's trust on the government decreases. So they will ask for more interest while lending to the government. This is how increased fiscal deficits makes government borrowing costlier. And we saw that increasing fiscal deficit is due to excessive freebies announced by the government. This is the third issue associated with freebies. Fourthly the fourth one is the problem of irrational freebies. This is done specifically during election campaigns. This often creates bias in the minds of the voters and the voters are easily swayed by freebies and impact the informed decision making to choose their representatives. See these are the four major issues associated with freebies. Now let us see what we can do to address these issues. Firstly freebies must have a economical and social sense. For example before giving the subsidy government should argument its revenue resources only then the government can provide social security schemes and also keep the fiscal deficit in check. This will ensure sustainable economic condition for the government. It also helps to keep the states and centers economic health in check. Secondly the freebies or the irrational freebies announced during election campaign can be addressed by enforcing model code of conduct of the Election Commission of India. Strictly and carefully designed model code of conduct by the Election Commission of India can address the issue of irrational freebies and this also will help curb the political parties mandate of manipulating the voter behavior. Lastly government policies and schemes must have a right balance between subsidies or social securities as well as skill development. Here there is a popular saying if you give a man a fish you feed him for a day but if you teach a man how to fish you will feed him for a lifetime. But think about this if the man is very weak and he is at the verge of dying at that time instead of feeding the man by giving him fish if you are teaching him fishing means what happens is before catching his first fish he will eventually die. So what the government must do is first to increase the human capital and the health of the man the government must give free fish to the man once his health and the capital is increased then the government can help the man by teaching him how to fish and in turn increases skill. So both freebies and skill development must go hand in hand. So these are the three main suggestions that help address the issue of freebies in our country. So finally we can conclude by saying that if the political parties go for effective economic policies where the welfare schemes have good reach to the targeted population then infrastructure and development will take care of itself and people will not require such kinds of freebies after some time. So that's all regarding this discussion in this discussion we saw what are freebies the need for freebies then we saw the issues associated with freebies and finally we saw some points how to address the issues associated with freebies with this let us conclude this discussion and take up the next news article. Look at this article this article talks about central board of indirect taxes and customs see recent E through four different announcement the central board of indirect taxes has altered the enforcement process for tax evaders in both customs as well as goods and service tax matters see these changes that is brought about by the central board of indirect tax and customs is not relevant for our examination but this topic that is the central board of indirect tax and customs is relevant for our prelims examination. So let us focus on that in this discussion first let us see the background before 1964 there was only one body called the central board of revenue that dealt with both direct taxes and indirect taxes in 1964 the central board of revenue was split into central board of direct taxes and the central board of excise and customs later after the implementation of GST the central board of excise and customs was renamed to central board of indirect tax and customs in 2018 this is the brief background of the evolution of the central board of indirect tax and customs okay see basically CBIC is a statutory body established under the central board of revenue act 1963 CBEC was renamed in 2018 and it was reorganized into CBIC for the sake of implementation of provisions of GST remember it is a part of the department of revenue which is under ministry of finance it is responsible for formulation of policies relating to levy and collection of indirect taxes like customs duty central excise duty CGST and IGST as well they also exercise overall supervision over customs and central GST field units located across the country also remember the board is the administrative authority for its subordinate organizations including custom houses central excise and central GST commissionerate and the central revenue control laboratory okay now let us move on to the organizational structure of the CBIC see CBIC is headed by a chairman and it has six members in addition to the chairman the CBIC chairman is the senior most Indian revenue service officer in India apart from being the cadre controlling authority for IRS he or she is also the ex of his show special secretary to the government of India the chairperson is appointed by the appointments committee of the cabinet see apart from the chairperson there are six other members for investigation customs information technology legal and compliance verification administration and vigilance and finally tax policy for GST this is the administrative or organizational setup of CBIC now let us see some of the functions of CBIC as I already said CBIC administers indirect taxes in India such as goods and service tax and customs mainly they regulate formulation of policies to levy and collection of GST and previously it dealt with excise duty and service tax okay the CBIC also takes care of collection of customs duty on land customs station inland container departs and container freight stations okay then the body also deals with custom duty on international airports seaports custom houses international air cargo stations and international ICDS as well apart from these they work towards prevention of smuggling on international airports and seaports and they also work for the prevention of smuggling through land custom station and border checkpoints so basically its function is enforcing the collection of customs in the border areas and also preventing smuggling okay so these are some of the important points you have to make note of regarding the central board of indirect tax and customs in this discussion we saw about its evolution its organizational setup and its function so with this let us conclude the news article discussion and take up the practice prelims questions let us take up the first question this is a previous question it appeared in the 2017 prelims paper let me read out the question which of the following statements is or are correct regarding the monetary policy committee three statements are given we have to find the correct statement let us take up the first statement it decides rba's benchmark interest rate see this statement is correct we saw in our discussion that after the 2016 amendment of the rba act 1934 the monetary policy committee of the rba decides on the benchmark interest rate rate report okay now let us take up the second statement it is a 12 member body including the governor of rba and is reconstituted every year see this statement is wrong first is it is a six member body and the second one is only three members that is the three outside members are constituted every four years so the second statement is incorrect now let us take up the third statement it functions under the chairmanship of the union finance minister this statement is also wrong we saw that the monetary policy committee functions under the chairmanship of the rba governor so statement one is correct statement two is incorrect and statement three is also incorrect so the correct answer here is option a one only moving on to the second question this question is based on the central board of direct access okay three statements are given here also we have to find the correct statement first statement it is a statutory body see this statement is correct it is a statutory body and it is established as per the central board of revenue act 1963 now let us take up the second statement it functions under the ministry of finance see this statement is also correct it is administered by the department of revenue under ministry of finance now let us take up the third statement the board consists of a chairman and six members in addition to a chairman see this statement is also correct the central board of direct taxes consists of a chairman and six members that deal with the following the members include income tax and revenue administration legislation audit and judicial investigation and system the main function of the central board of direct tax is to provide essential inputs for public policy and planning of direct taxes in India and at the same time it is also responsible for the administration of direct tax laws through the income tax department see in our discussion we saw about the central board of indirect tax and customs here we saw about central board of direct tax so as a part of today's discussion we covered both the bodies related to taxes in India now coming back to the question see in this question all the three statements are correct so the correct answer is option c one two one three only now let us take up the last question see this is a quiz question for you this is based on the rat hole mining we saw in our discussion today okay just go through the question and post the answers in the comment section moving on to the main question we have two main questions today let me read out the first question freebie culture focuses on short-term gains instead of focusing on long-term solutions comment see here the keyword is comment so what the question basically asks is it is asking for your opinion you can either support the freebie culture or you can oppose the freebie culture but the main point is you have to substantiate it with data okay this is about this question now let us take up the second question rat hole mining poses a threat to the safety of the workers and environment analyze its impacts and discuss the measures taken to curb this mining see this is a very simple question we have discussed everything in our discussion you have to write about rat hole mining and the impacts of rat hole mining finally you have to write about the measures that we have taken to address this activity so interested aspirants write the answers and post it in the comment section with this we have come to the end of the discussion if you like today's discussion like comment and share it with your friends for more updates regarding UPSC preparation subscribe to Shankar AIS academy youtube channel thank you for listening