 A very good evening aspirants, welcome to Hindi newspaper analysis brought to you by Shankarae's Academy for the date 26th of August 2022. Before seeing the list of articles, I have an announcement for you. See the pre-storming test series batch 1 is going to start at Shankarae's Academy's Ananagar branch. See the test series consists of a total number of 6 to 6 tests. It includes GS paper, CSAT paper and mock test papers. And this batch 1 is going to start on 12th September 2022. See all the tests of set 1 will be conducted in offline mode on the scheduled dates from 2pm to 4pm and it will be followed by discussion from 4.30pm to 7.30pm. And those students who missed the offline test can take the test after 2 days in online but only recorded discussion will be provided for the students who take the online test. And note that the online mode test availability is until our mock test before the prelims 2023 exam. So aspirants make use of it. Now with this information, let us see the list of articles that we are going to discuss today. And these are the list of important articles that we are going to discuss in today's discussion. Without any delay, let's get into the article discussion. We are going to start our discussion with this friend page news article. It talks about the uncertainty in the continuation of Heymanth as Jalkin Chief Minister. See this uncertainty is because of an office of profit complaint against him and also the enforcement direct rate found two AK-47 series of rifles and 60 cartridges from the premises of Prem Prakash who is an alleged close aide of the CM. And this is the crux of the news article given here. So in this context, we are going to learn about two important articles in Indian constitution. See here, two articles becomes relevant. One is article 191 and the other one is article 192. Firstly let us see about article 191. See it talks about the disqualification of a person who is a member of state legislative assembly or state legislative council. And the article also provides certain conditions for the disqualification. The first condition is that he or she should hold any office of profit under government of India or government of any state. The second condition is that he or she should be of unsound mind and it should be declared by a competent court. The third condition is that he or she should be an undischarged insolvent. And the fourth condition is he or she should not be a citizen of India or should have voluntarily acquired the citizenship of a foreign state. In some cases, if they are under any acknowledgement of allegiance or adherence to any foreign state, then also they are disqualified. And the fifth condition is that he or she should be disqualified by or under any law made by the parliament. So these are the conditions for disqualification of a member of the state legislative assembly or state legislative council. See here, note that if a person is disqualified under 10th schedule which is nothing but the anti-defection law, then the member is disqualified from being a member of state legislative assembly and state legislative council. Now having these basic information in mind, you have to ask yourself another question. Who will decide upon the questions relating to disqualification mentioned under article 191? See the answer for this question is given in article 192. See article 192 confers the decision making power to governor and his decision shall be final in this disqualification matter. And note that before taking any decision regarding this matter, the governor shall obtain the opinion of election commission of India and he or she should act according to such opinion. Now with this basic information, let us see what's given in the news article. See there is an uncertainty in Jharkhand CM continuation because of an office of profit complaint against him. And what is this? This is one of the conditions for disqualification mentioned under article 191. And who has the power to decide regarding this disqualification? Governor has the power to decide upon the disqualification of Jharkhand CM. And this is what is mentioned in article 192. The governor should ask for the opinion of election commission also before making any decisions. So that's all about this news article. With these points in mind, let us move on to the next article discussion. See this article here, it is an editorial article. It is written in the context of reason debates around freebies. See according to the author of the editorial, the market fundamentalist have always been critical of subsidies provided by the government. Here market fundamentalist, they are people who strongly believe in the capitalistic ideals of free market and non-government intervention. See fundamentalist, they label all the support provided by the government as wasteful spending and this results in the suboptimal output from the economy. Through this article, the author counters the argument proposed by the market fundamentalist. He also highlights the hypocrisy in their argument. He criticizes them for selectively ignoring the tax support provided to industries and only attacking the support provided to agriculture and social welfare. And this is the essence of the editorial given here. In this context, we'll see the difference between subsidies and freebies given in the economy and we'll also see the need for subsidies in India. But before that, the syllabus relevant to the article is highlighted here for your reference. Please go through it. First of all, let us see the basic definition of subsidy. See subsidies include any form of income support or price support provided by the government. This is an all-inclusive definition. It means it includes everything. This is because based on this definition, subsidies include not only direct transfer payments by the government but also the revenue forgotten by the government that is the taxes and charges that are not collected by the government. So it includes the support given by the government and the revenue not collected by the government. So under this definition, both LPG subsidy provided by the government and the tax breaks provided to the corporates or classified as subsidies. Now having understood the basic meaning of subsidies, let us see the difference between a welfare measure and a freebie. But before seeing the difference, we have to see why welfare measures are needed. See have an understanding that basic issue or the basic problem that we try to address in the field of economics is how to meet the unlimited needs of people with limited resources. So for a developing country like India, which is having severe resource constraints, how we prioritize the spending of our limited resources is the issue. Why am I saying this now? See if we had unlimited resources, there is no need for the classification between freebies and welfare schemes. And it is because of India's lack of resources, we need to prioritize our spending and how we spend our resources is important. And only if we spend it in the correct areas, can our country get long term results. And this is where the welfare schemes becomes relevant. I'll give you an example of a welfare scheme here. See welfare schemes have a positive impact on society in the long run. For example, former Chief Minister of Tamil Nadu, Mr. Kamaraj, invested heavily on education and provided midday meal scheme to attract children to school. And this is a welfare scheme. What we saw before, we saw that welfare schemes have a positive impact on society in the long run. So we saw that what former CM of Tamil Nadu did was a welfare scheme. And I'm going to give you a data that proves that it is a welfare scheme. According to the 1951 census, Tamil Nadu had a literacy rate of around 13%. But by the year 1971, the literacy rate increased to 45%. See this is a 300% increase and it is due to the welfare scheme introduced by Mr. Kamaraj. On the other hand, freebies have only short term gains. See freebies do not have long term positive impacts. Another important characteristic of freebies is they are market distorting. Here for example, take the free electricity subsidy for agriculture provided by Tamil Nadu. This subsidy is grossly misused and the free electricity is diverted for other uses also. And due to this reason, TANJETCO, which is the government-owned diskom of Tamil Nadu, is one of the highest loss-making diskom in India. In addition to this, due to free electricity, there is excessive exploitation of groundwater using bore wells. And this is an example of freebie. Like as we saw earlier, it do not have long term positive impacts. So basically, based on the end result, subsidies were classified into welfare schemes and freebies. Now having seen the difference between the welfare schemes and freebies, let us see the need for subsidies in India. The first reason is to induce industrial development and employment generation. Simply to attract foreign investment, the government offers the MNC a lot of tax breaks. And in addition to this, they are also provided free access to land and water. And this effort of the government brings big businesses to India. And once a big MNC comes to a place, various axillary support industries develop around it. And this helps in the creation of employment opportunities for people in the long run. The second need is to boost the exports. Here take the establishment of special economic zones for example. These are low tax jurisdictions established within Indian territory. And this helps make Indian exports competitive in the global market. In turn, this measure helps boost exports from India. And the third need is to establish equality and social justice. See we all know India is one of the highly unequal countries in the world. To address this inequality, subsidies are required. An equal society is a just society. Also the term socialist is also mentioned in the preamble. So to achieve the ideals of social equality, subsidy is required. And the last important need for subsidy is to break the vicious cycle of poverty. Look at this flow chart here. Without any help from the government, a child who grew up in poverty will not be able to get a good education. And in addition to this, there is a high probability that the child will be undernourished. And this results in the child not getting the required skill to enter into a high paying job. And they will probably end up as an unskilled labour. See this results in the future generation of child living in poverty again. And the cycle continues. To break this cycle, government intervention like free and quality education, good food and nutrition, skill development have to be provided. And this can be provided only through subsidies. So these are the needs for subsidy. Now having seen the need for subsidies, let us see how the author of the editorial counters the criticism leveled against subsidy. See like I already mentioned, the people who are against subsidy, they only criticize the subsidy provided to the socially disadvantaged section. And they ignore the subsidy provided to the MNC in the form of tax breaks. See they argue that the tax break and the reduction in the corporate tax will attract investment. And in turn, this will generate employment. As more people get employed, the government's tax collection via income tax and other indirect tax will increase. And this increase in the tax collection will compensate the revenue lost by the government by the way of reduction of corporate tax. And this is the argument put forth by market fundamentalist. But the author in the editorial provides some data how in reality this is not happening. See according to a CAG report in the year 2019-20, the revenue foregone by the government was 22% of direct tax. See in general, as compared to individuals, corporations have been enjoying a larger share of tax preference. Now let's take a quick detour here and understand what is tax preference. See tax preference means an exemption, exclusion or detection from the base tax state. See currently the corporate tax rate in India is 25%. Now let us say that our government announces that greenfield investment in the semiconductor sector will attract no corporate tax for the first four years. And the government is doing this to attract investment in the semiconductor sector. See this preferential tax policy to attract investment is called as tax preference. And know that this is different from reducing the corporate tax. See our government has provided both tax preference for industries and in addition to this they have also reduced the corporate tax. Now here comes the golden question. Has this measure attracted investment? In reality it is a big no. See all these government initiatives like tax preference, tax cuts and other incentives they have not brought an investment. Now here the author is asking several questions. Since the stated objective of the government measure is not achieved, can these measures be considered freebies? He also asked the question will the government stop giving incentives to big corporations? See this is the question raised by the author of the editorial. And through this the author highlights the hypocrisy in the argument of market fundamentalist. See according to author the government spending for agriculture, education and health is very low. In the case of agriculture in 2000s the gross government spending was around 10% of GDP. But now this has reduced to around 5%. In education also the government has not made enough investment. See successive governments have failed to achieve the 6% of GDP expenditure for education. In the case of health public expenditure has struggled to cross 1.5% of GDP. See all these rates they are significantly low. See investing in social sectors like agriculture, education and health they will yield fruitful benefits in the long run. But instead market fundamentalist they are arguing about these social welfare schemes. So the author in conclusion says that a proper differentiation must be made between freebies and welfare measures and the expenditure on welfare should be increased to reach the sustainable development goals by the year 2030. So that's all about this article discussion. With these key points in mind let us move on to the next article discussion. Have a look at this news article. This news article talks about the arrest of two accused persons in a heroin seashore case. See they were arrested by national investigation agency and among the two persons one persons muggled drugs on the Indian side and then sold them to the domestic traffickers. And then he rooted the proceeds to the kingpin in Afghanistan. And both the accused persons they smuggled the heroin from Afghanistan using the maritime route. And this is the crux of the news article given here. In this context let us briefly learn about golden triangle and golden crescent. And also we will discuss about the impacts of drug trafficking in India. See drug protection impacts Indian Ocean states in two main regions. One is the golden crescent. And this golden crescent comprises of illicit opium production areas in Iran, Afghanistan and Pakistan. See the heroin produced in the golden crescent is trafficked through the southern route. And what is the southern route? See the opium produced in the Central Asian nations they are loaded and transported through Arabian sea towards the west and the east and this is known as southern route. And this is about the golden crescent. And the second one is the golden triangle. See it is the second largest opium production region in the world. And this region covers Myanmar, Thailand and Laos. See in this region the drug production has shifted to methamphetamines and yaba. Here yaba is nothing but a highly addictive pill that combines methamphetamines and caffeine. See these drugs they are smuggled into South and the South Asian countries. And know that drugs from the golden triangle region reaches Bangladesh through Naaf river. And it is a river that borders with Myanmar. So far we have seen about the two main regions where the drugs are produced and the routes through which they are smuggled to different regions. Having seen about this information now let us see the impacts created by drug trafficking in India. See the problem is India is wedged between the world's two largest areas of illicit opium production that is it is placed between golden crescent and golden triangle. See this proximity to the world's largest illicit opium production areas has traditionally been viewed as a source of vulnerability for India. Why is this? This is because India has made to be a destination and a transit route for smuggling these drugs. See India being a destination and transit route affects the Indian youth and other stakeholders in various ways and this is the first impact of drug trafficking. Now secondly we are going to take the case of HIV and AIDS. Now you may wonder how drug trafficking is related to HIV and AIDS. See there are many ways of using drugs and one of them is injecting drug inside your body with a needle. So because of this there is a rising concern that HIV transmission through needles will increase significantly. See as we all know India is home to one of the largest HIV or AIDS epidemics in the world. If injecting drugs increases the HIV transmission it will be a burden to the India's health infrastructure. And this is the second impact. Thirdly these drug trafficking leads to illicit pharmaceutical diversion. See illicit is nothing but the opposite of illicit. Illicit is against the law, illicit is according to the law. See using medicines is not against the law right? Since India has become a destination and transit route for the illicit drugs this leads to the abuse of legitimate pharmaceuticals that is medicines. See India is a large manufacturer of pharmaceuticals. The law regulates their production and sale. But the problem here is that there is no monitoring of compliance with the law and this contributes to increase in the abuse of pharmaceutical drugs. See there has been several cases where pharmaceutical drugs from India are smuggled. The drugs that are smuggled include codyne-based cough syrups and dextro-propoxyfine and it has become a major concern for India as well as its neighbors particularly Bangladesh, Nepal and Sri Lanka. And some other pharmaceutical drugs that are commonly diverted for abuse include diacipam and nitrozapam. And this is the third impact which is illicit pharmaceutical diversion to illicit drugs. And fourthly there is this illicit cultivation. See India is the only country currently producing illicit opium for domestic medical scientific and as well as export purposes under the terms of 1961 single convention. So India is legally producing opium. But however an unknown portion of India's legal opium crop is diverted into illegal channels. And then they are converted to heroin and smuggled and this also impacts India in a significant manner. Now apart from this the other impacts of drug trafficking include money laundering, crimes against women, human trafficking, corruption etc. So what does this mean? This means that drug trafficking is a primary crime that leads to a lot of secondary crimes in India. So what should be done here? Steps should be taken to control drug trafficking along the border areas because India is placed between the two main opium production areas which is Golden Crescent and Golden Triangle. Now that's all for this article discussion. With these points in mind let us move on to the next article discussion. See this news article here it is regarding India Credit Spotlight 2022 webinar. In this webinar the SNP director mentioned that India has a strong external balance sheet and limited external debt and he said that this aids in India's debt servicing. Now what is debt servicing here? See debt servicing is just a fancy way of saying repayment of loan. So basically India will not have any trouble repaying its loan because India is having a favorable balance sheet and limited external debt. He also said that India has built up ample forex reserves of about $570.74 billion which will help India to overcome the issues caused by the cyclical changes in the global economy. See the only key concern for India is the inflation that it is currently experiencing. And this is about the news article given here. In this context we are going to see about cyclical and structural factors that causes economic slowdown. First of all let us take cyclical economic slowdown. See cyclical economic slowdown occurs in a capitalistic or market based economy. See every economy in a globalised world goes through peak phase, recession phase, trough phase and the recovery phase. And this is a cyclical process and all economies go through this. So the period of slow growth that occurs periodically is called cyclical slowdown. But why does this happen periodically? See initially in an economy when the demand is high the producers will increase the production to meet the demand. What is happening here? The producers are expecting the demand to continuously increase and that is why they are increasing the production to produce excess products. But due to excess production the demand will fall. As the demand falls the producers will fire their employees as there is no demand for their product. And this measure pulls down the demand curve further down. Because employees they won't have money in their hands to purchase anything, right? And this is called as economic slowdown or recession. When there is recession the government will increase the spending to increase the demand in the economy. Once the demand increases the economy starts growing and the production starts increasing to meet the demand. And this phase is called as recovery phase. And after this the cycle happens again. So for every cycle there is a slowdown in the economy. And hence it is called as cyclical slowdown. Now coming to Indian scenario the slowdown that India is experiencing is cyclical. Due to Covid and the associated job losses the demand in the economy is low. See traditionally RBI will increase access to cheap credit by lowering the report rate to increase the demand in the economy. But right now due to the external factors like Russia-Ukraine war, the associated global oil price rise and the associated global oil price rise inflation is also increasing in India. So RBI is not able to follow the cheap money policy. But the government on its part decided to address this through the Atman-Irbar Bharat 2.0 and other capital infusion programs. But even after this the demand in the economy has not reached the pre-Covid level. And this is the reason for the slowdown in India now. And this is an example of cyclical economic slowdown. Because it happens due to the demand and supply factor. Now moving on to the structural economic slowdown. See structural economic slowdown is more deep rooted. It does not occur periodically like the cyclical slowdown. Here structural slowdown occurs when there is innovation, behavioural changes and other external changes also. Now let us see an example here. Take Saudi Arabia. See Saudi Arabia does not have a diversified economy. Why is it? Because it is primarily dependent on oil exports. See in the next few years if there is an innovation that helps to store electricity more efficiently then everyone will shift to electric mobility. When this happens the importance of oil will decrease and due to this Saudi Arabia's export will slow down and its economy will contract. And this type of economic slowdown is called as structural economic slowdown. See in this economy this slowdown is not cyclical but rather it is due to the excessive dependence of Saudi Arabia on its oil exports. I hope you understand the difference. With this we have come to the end of this discussion. With these points in mind let us move on to the next article discussion. Have a look at this news article. This news article talks about the ban imposed by stock market watchdog Securities and Exchange Board of India and it is shortly referred as SEBI. See SEBI had restricted the NDTV from accessing the securities market. And this is the crux of the news article given here. In this context let us discuss about SEBI, its composition and its functions. First of all let us see who SEBI is. See the Securities and Exchange Board of India or SEBI was constituted as a non-statutory body. This was based on a resolution in the year 1988 by the Government of India. And then the SEBI was established as a statutory body in the year 1992. Note that the SEBI was established as a statutory body based on the provisions of Securities and Exchange Board of India Act 1992. See this statutory body SEBI it monitors and regulates the Indian capital and securities market. Now having said this the basic functions of SEBI are to protect the interest of investors in securities to promote the development of securities market and to regulate the securities market by formulating rules, regulations and guidelines. See these are the major functions of SEBI. I have given here other functions of SEBI for your reference pause the video and go through it one by one. Other than this SEBI has the power to act as a quasi-judicial body it is because it has the authority to deliver judgements related to fraud and securities market and it also has the power to act as a quasi-executive body this is because it is empowered to implement the regulations and judgements and it is empowered to take legal action against the violators. Now thirdly it has the power to act as a quasi-legislative body this is because SEBI reserves the right to frame rules and regulations to protect the interest of investors and some of its regulation consist of insider trading regulations, listing obligations and disclosure requirements. So these are the powers and functions of SEBI. Now coming to the hierarchical structure of SEBI it consists of chairman and eight members. See the chairman and five members are nominated by Union Government of India and two members come from the Union Finance Ministry and one member will be appointed from Reserve Bank of India. So this is about the membership of SEBI. Additionally here we are going to discuss about securities appellate tribunal. See it is also a statutory body it is established under the provisions of section 15K of the SEBI Act 1992 and what is the purpose of this appellate tribunal? See it purposes include to hear and dispose of appeals against orders passed by SEBI. Secondly to hear and dispose of appeals against orders passed by an adjudicating officer under the Act and thirdly after a government notification the securities appellate tribunal obtained the power to hear and dispose of appeals against orders passed by Pension Fund Regulatory and Development Authority of India that is PFRDA and this authority is established under the Pension Fund Regulatory and Development Authority Act 2030 and fourthly after another government notification the securities appellate tribunal obtained the power to hear and dispose of appeals against orders passed by Insurance Regulatory Development Authority of India and this is about the securities appellate tribunal and with this we have come to the end of this discussion and with these points in mind let us move on to the next part of the discussion that is the practice prelims question discussion. Today we have four prelims questions I will solve three of them and one of them is a quiz question for you. Now let us take this first question consider the following statements. President requires the election commission's opinion for the disqualification of a member of parliament. This statement is correct. See according to article 103 the president should obtain the opinion of election commission before taking any decision and he should act according to the opinion of the election commission. You all know what article 103 is about right? See it is about the decision on questions as to disqualification of members of parliament. So here the statement one is correct. Now coming to statement two president can disqualify a member of the parliament if he or she holds an office of profit under any state government. See this statement is also correct. Here we have to remember article 102. See article 102 deals with the disqualification of members of the parliament. Like article 191 they also have the same sets of conditions for the disqualification of member of parliament. In our discussion itself we saw that if a member holds an office of profit under any state government then he will be disqualified right. So the statement two is correct and the correct answer here is option C both one and two. See after solving this question go and read about article 102 and article 103. It will be like a revision for you. Now moving on to the next question consider the following statements about Narcotics Control Bureau shortly referred as NCB. Statement one NCB is a constitutional body and an apex coordinating an enforcement agency for the prevention of illicit traffic in narcotic drugs and psychotropic substances. See we have to split this statement into two. First of all let us see whether the first part is right or not. NCB is a constitutional body. This is wrong. See NCB is a statutory body. It was constituted based on the provisions of narcotic drugs and psychotropic substances act 1985. So the first part is incorrect. Now coming to the second part NCB is an apex coordinating an enforcement agency for the prevention of illicit traffic in narcotic drugs and psychotropic substances. This part is correct. But since the first part is incorrect the whole statement is incorrect. Now coming to the second statement NCB is governed by the Ministry of Home Affairs. This statement is correct. See currently the Home Ministry governs the Narcotics Control Bureau and also know that the Department of Revenue and the Finance Ministry it administers the Narcotic Drugs and Psychotropic Substances Act of 1985 and the prevention of illicit traffic in narcotic drugs and psychotropic substances act of 1988. So from this we know that second statement is correct. So what is the correct answer here? The correct answer is option B, 2 only. Now moving on to the third question which among the following are the steps taken to address cyclical slowdown, expansionary fiscal policy, cheap money policy, recapitalization of banks, diversification of economy. Read the question carefully it is asked about the steps taken to address the cyclical slowdown. See expansionary fiscal policy, cheap money policy, recapitalization of banks, they all will help increase the money supply in the economy. We saw in our discussion that reduction in demand is the main reason for cyclical slowdown. So increasing money supply will help increase the demand in the economy and it will help address the cyclical economic slowdown. But the fourth statement which is the diversification of economy it will help address the structural economic slowdown. As we saw during the discussion if Saudi Arabia diversifies its economy now it will not face any structural slowdown in the future. So if we eliminate statement 4 we can easily arrive at the right answer which is option A, 1, 2 and 3 only. Now moving on to the final question consider the following statements regarding securities and exchange board of India, SEBI. Read the statements carefully, think about it and post your answer in the comments section. Here I have displayed a main question for you to practice. So interested aspirants write it and post it in the comments section and if you have any queries related to the articles that we discussed today post that also in the comments section and with this we have come to the end. If you find the video useful like share and comment and do subscribe to Shankar Iyer's Academy's YouTube channel for further updates. Thank you.