Weekly Current Affairs (15th to 21st June 2023) Part - 2 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

CBIC Releases National Time Release Study (NTRS) 2023 Report

Context: Recently, the Central Board of Indirect Taxes and Customs (CBIC) has released the National Time Release Study (NTRS) 2023 report, which measures the cargo release time at various ports in India.

• The report aims to assess the progress made towards the National Trade Facilitation Action Plan (NTFAP) targets, identify the impact of various trade facilitation initiatives, and identify the challenges to more expeditious reduction in release time.
• The study was conducted based on a sample period of January 1-7, 2023, comparing the performance with the corresponding periods of 2021 and 2022.
• The ports included in the study represent seaports, air cargo complexes (ACCs), inland container depots (ICDs), and integrated check posts (ICPs). These account for approximately 80% of bills of entry and 70% of shipping bills filed in the country.

What is the Cargo Release Time?

• Cargo release time is defined as the time taken from the arrival of the cargo at the Customs station to its out-of-charge for domestic clearance in case of imports and arrival of the cargo at the Customs station to the eventual departure of the carrier in case of exports.
• Cargo release time is a key indicator of trade efficiency and ease of doing business, as it reflects the effectiveness of customs procedures and other regulatory processes involved in cross-border trade.
• Cargo release time is measured using Time Release Study (TRS), a performance measurement tool recommended by the World Customs Organization (WCO).

What are the Key Highlights of NTRS 2023?

Import Release Time Improvements:

• The average import release time has shown improvements compared to previous years.
• There was a 20% reduction in release time for ICDs, an 11% reduction for ACCs, and a 9% reduction for seaports in 2023 over 2022.
• In absolute terms, the import release time for seaports is 85 hours and 42 minutes, for ICDs is 71 hours and 46 minutes, for ACCs is 44 hours and 16 minutes, and for ICPs is 31 hours and 47 minutes.
• The lower measure of standard deviation indicates a greater certainty of expeditious release of imported cargo.

Reaffirmation of 'Path to Promptness':

• The findings of NTRS 2023 reaffirm the importance of the three-fold 'Path to Promptness' strategy.
• This strategy includes advance filing of import documents for pre-arrival processing, risk-based facilitation of cargo, and the benefits of the trusted client program - Authorised Economic Operators.
• Cargoes that combine all three features under the 'Path to Promptness' achieve the National Trade Facilitation Action Plan (NTFAP) release time target across all port categories.

Focus on Export Release Time:

• NTRS 2023 has placed a greater focus on measuring the release time for exports.
• The study recognizes the distinction between regulatory clearance (customs release) and physical clearance.
• Regulatory clearance is completed with the grant of Let Export Order (LEO), while physical clearance occurs upon the completion of logistics processes and the departure of th e carrier with the goods.

What are the Sources of Information for NTRS 2023?

• NTRS 2023 is based on data collected from various sources, such as ICEGATE portal, port authorities, customs brokers and participating government agencies (PGAs).
• NTRS 2023 also incorporates feedback from various stakeholders, such as exporters, importers, trade associations and chambers of commerce.
• NTRS 2023 is aligned with the WCO TRS methodology and follows international best practices.

What are the Benefits of NTRS 2023?

• NTRS 2023 provides a comprehensive and objective assessment of the cargo release time performance at various ports in India.
• NTRS 2023 helps to identify the areas of improvement and benchmarking against global standards.
• NTRS 2023 supports evidence-based policy making and implementation of trade facilitation measures that enhance trade efficiency and competitiveness.
• NTRS 2023 contributes to achieving the NTFAP targets and fulfilling India's commitments under the WTO Trade Facilitation Agreement.

National Trade Facilitation Action Plan (NTFAP)

• NTFAP aims to implement the provisions of the WTO's Trade Facilitation Agreement (TFA) in India.
• TFA focuses on simplifying customs procedures and norms for cross-border trade.
• NTFAP was prepared by the National Committee on Trade Facilitation (NCTF) chaired by the Cabinet Secretary.
• It includes over 90 specific activities with timelines for implementation, aligned with India's policy objectives.
• NTFAP covers areas like advance import document filing, risk-based cargo facilitation, trusted client program, infrastructure upgrades, legislative issues, outreach programs, and agency coordination.
• NTFAP reduces trade costs, enhances efficiency, supports evidence-based policy making, and fulfills India's TFA commitments.

What are the Initiatives Related to Logistics?

• National Logistics Policy (NLP)
• Multimodal Transportation of Goods Act, 1993.
• PM Gati Shakti Scheme
• Multi Modal Logistics Parks
• LEADS Report
• Dedicated Freight Corridor
• Sagarmala Projects
• Bharatmala Project

Central Board of Indirect Taxes and Customs

• It is a part of the Department of Revenue under the Ministry of Finance.
• The Central Board of Excise and Customs (CBEC) was renamed as the CBIC in 2018 after the roll out of the GST.
• It deals with the tasks of formulation of policy concerning levy and collection of customs, central excise duties, Central GST (CGST) and Integrated GST (IGST).
  • GST Law comprising (i) Central Goods and Services Tax Act, 2017 (ii) State Goods and Services Tax Act, 2017 (iii) Union Territory Goods and Services Tax Act, 2017, (iv) Integrated Goods and Services Tax Act, 2017 (v) Goods and Services Tax (Compensation to States) Act, 2017.

Subsidies and Climate Change

Context: A new World Bank report highlights the negative consequences of inefficiently subsidizing agriculture, fishing, and fossil fuel sectors, both implicitly and explicitly, by spending trillions of dollars, exacerbating climate change.

• In total, the report calculated that subsidy in the three areas exceeded USD 7 trillion, equivalent to 8% of the global gross domestic product.

What are the Major Highlights of the Report?

Fossil Fuel Subsidies and Climate Change:

• The report acknowledges the limited effectiveness of reducing incentives for polluting fuels, as energy demand is not highly responsive to price changes.
• In 2021, countries spent USD 577 billion on subsidies aimed at lowering the prices of polluting fuels like oil, gas, and coal.
• These measures incentivize the overuse of fossil fuels and contribute to air pollution, particularly in industrializing middle-income countries with a high health burden.
• The report highlights the disproportionate allocation of funds, as most countries spend six times more on subsidizing fossil fuel consumption than on commitments made under the 2015 Paris Agreement.

Inefficient Agricultural Subsidies:

• Explicit subsidies in the agricultural sector amount to approximately USD 635 billion annually in countries with accessible data, while global estimates exceed USD 1 trillion.
• These subsidies target farmers for purchasing specific inputs or cultivating particular crops.
• Research published in the report indicates that subsidies tend to favor wealthier farmers, even when programs are designed to target the poor.
• Inefficient subsidy usage has resulted in up to 17% of all nitrogen pollution in water over the past 30 years, leading to health impacts and reducing labor productivity by up to 3.5%.

Damaging Subsidies in the Fisheries Sector:

• The fisheries sector receives an estimated USD 35.4 billion per year in subsidies, of which approximately USD 22.2 billion contributes to overfishing.
• Subsidies play a significant role in driving excess fishing capacity, depleting fish stocks, and reducing fishing rents.
• When fisheries are not managed sustainably and already severely depleted, the negative impacts of subsidies are even more pronounced.
• Repurposing subsidies without incentivizing increased fishing capacity is crucial for safeguarding remaining fish stocks.

What are the Positive Impacts of Subsidies?

Agriculture:

• Income Support: Subsidies can provide income support to farmers, helping them cope with price fluctuations, market uncertainties, and production risks.
  • For instance, the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme launched in 2019 provides direct income support to small and marginal farmers.
• Increased Production: Subsidies on inputs like fertilizers, seeds, and irrigation can promote increased agricultural production.
  • The Indian government's support for fertilizers through the Nutrient-Based Subsidy (NBS) scheme ensures the availability of fertilizers at affordable prices to farmers.

Fishery:

• Modernization and Infrastructure Development: Subsidies in the fishery sector can aid in the modernization of fishing practices and the development of infrastructure.
  • This can lead to increased productivity, improved safety measures, and better storage facilities.
  • The Pradhan Mantri Matsya Sampada Yojana (PMMSY) aims to enhance fish production and fishermen's welfare through various interventions, including infrastructure development..
• Livelihood Support: Subsidies can provide livelihood support to fishermen, especially during lean seasons and adverse climatic conditions.
  • Schemes like the National Scheme of Welfare of Fishermen provide assistance to fishermen for the construction and repair of boats, supply of safety equipment, and training programs.

Fossil Fuel:

• Energy Access and Affordability: Subsidies on fossil fuels, such as LPG (liquefied petroleum gas) and kerosene, can ensure energy access and affordability for vulnerable sections of society.
  • The Indian government launched the Pradhan Mantri Ujjwala Yojana (PMUY) to increase LPG usage and reduce air pollution, deforestation, and health disorders

What are the Challenges Related to Subsidies?

• Fiscal Burden: Subsidies often impose a significant fiscal burden on the government.
  • The cost of subsidies can strain the government's finances and impact its ability to allocate resources to other critical sectors such as healthcare, education, and infrastructure development.
  • Balancing the need for subsidies with fiscal sustainability is a constant challenge.
• Inefficient Targeting: One of the major challenges is ensuring that subsidies reach the intended beneficiaries effectively.
  • There is a risk of subsidies being misdirected or captured by ineligible individuals or entities.
  • Proper identification and targeting mechanisms are essential to avoid leakages and ensure that subsidies benefit the intended recipients.
• Market Distortions: Subsidies can distort market dynamics and create inefficiencies. They may lead to overproduction or overconsumption of certain commodities, leading to market imbalances and price distortions.
  • These distortions can affect the competitiveness of the sector and hinder the development of a sustainable and market-oriented agricultural, fishery, or energy sector.
• Environmental Implications: Subsidies on fossil fuels can discourage the transition to cleaner and more sustainable energy sources.
  • They can perpetuate the reliance on fossil fuels, contributing to environmental degradation, air pollution, and climate change.

Way Forward

• Targeted Subsidy Reforms: Implement targeted subsidy reforms to ensure that subsidies reach the intended beneficiaries effectively.
  • This can be achieved through the use of technology, such as Aadhaar-linked identification systems, to improve targeting accuracy and reduce leakages.
• Gradual Reduction and Rationalization: Gradually reduce and rationalize subsidies to ensure fiscal sustainability and minimize market distortions.
  • Instead of across-the-board subsidy cuts, a phased approach can be adopted, focusing on reducing subsidies for the affluent and gradually redirecting funds towards investments in infrastructure, research and development, and capacity building in the respective sectors.
• Promote Sustainable Practices: Encourage the adoption of sustainable practices in agriculture, fishery, and energy sectors through subsidies.
  • This can include providing incentives for the use of organic farming techniques, efficient irrigation systems, eco-friendly fishing practices, and renewable energy technologies.
  • Subsidies should be designed to incentivize innovation, productivity improvements, and environmental conservation.

U.S.-India initiative on Critical and Emerging Technology

Context: Recently, India and the United States have taken a significant step towards strengthening their strategic partnership and driving technology and defense cooperation. Under the Initiative on Critical and Emerging Technologies (iCET), the two nations have unveiled a roadmap for enhanced collaboration in high-technology areas.

• The initiative focuses on addressing regulatory barriers, aligning export controls, and fostering deeper cooperation in critical and emerging fields.

What is the iCET?

About:

• The iCET was announced by India and the US in May 2022 and was officially launched in January 2023 and is being run by the National Security Council of both countries.
• Under iCET, both countries have identified six areas of cooperation which would include co-development and co-production, that would gradually be expanded to QUAD, then to NATO, followed by Europe and the rest of the world.
• Under iCET, India is ready to share its core technologies with the US and expects Washington to do the same.
• It aims to promote collaboration in critical and emerging technology areas, including AI, quantum computing, semiconductors, and wireless telecommunication.

Focus Areas of the Initiative:

• AI research agency partnership.
• Defense industrial cooperation, defense technological cooperation, and defense startups.
• Innovation Ecosystems.
• Semiconductor ecosystem development.
• Cooperation on human spaceflight.
• Advancement in 5G and 6G technologies, and adoption of OpenRAN network technology in India.

Progress Made So Far:

• Key achievements include the Quantum Coordination Mechanism, public-private dialogue on telecommunication, important exchanges on AI and space, MoU on establishing a semiconductor supply chain, and conclusion of a roadmap for defense industrial cooperation.
• The two countries are close to finalizing a mega jet engine deal, and a new initiative called the India-U.S. Defence Acceleration Ecosystem (INDUS-X) is set to be launched.
• Strategic Trade Dialogue has been established to address regulatory barriers and review export control norms.

How have been India’s Relations with the US?

Economic Relations:

• The U.S. has emerged as India's biggest trading partner in 2022-23 on account of increasing economic ties between the two countries.
• The bilateral trade between India and the U.S. has increased by 7.65% to USD 128.55 in 2022-23 as against USD 119.5 billion in 2021-22.
• Exports to the U.S. rose by 2.81% to USD 78.31 billion in 2022-23 as against USD 76.18 billion in 2021-22, while imports grew by about 16% to USD 50.24 billion.

International Cooperations:

• India and the United States cooperate closely at multilateral organizations, including the United Nations, G-20, Association of Southeast Asian Nations (ASEAN) Regional Forum, International Monetary Fund, World Bank, and World Trade Organization.
• The United States welcomed India joining the UN Security Council in 2021 for a two-year term and supports a reformed UN Security Council that includes India as a permanent member.
• Together with Australia and Japan, the United States and India convene as the Quad to promote a free and open Indo-Pacific and provide tangible benefits to the region.
• India is also one of twelve countries partnering with the United States on the Indo-Pacific Economic Framework for Prosperity (IPEF).
• India is a member of the Indian Ocean Rim Association (IORA), at which the United States is a dialogue partner.
• In 2021, the United States joined the International Solar Alliance headquartered in India, and in 2022 the United States Agency for International Development (USAID).

What is OpenRAN Network Technology?

About:

• It is a non-proprietary version of the Radio Access Network (RAN) system.
• A RAN is a major component of a wireless telecommunications system that connects individual devices to other parts of a network through a radio link.
• Allows interoperability between cellular network equipment from different vendors.

Advantages of OpenRAN Network Technology:

• Creates a more open and flexible RAN architecture.
• Based on open interfaces and virtualization.
• Supported by industry-wide standards.
• Cost reduction.
• Increased competition.
• Faster innovation.

Applications of OpenRAN Network Technology:

• Supporting 5G and 6G networks.
• Enhancing network performance and security.
• Enabling new services and capabilities.
• Bridging the digital divide.

Remittance Inflow

Context: According to the World Bank’s latest Migration and Development Brief, India, which saw a record-high of USD 111 billion in remittances in 2022, is expected to experience minimal growth of just 0.2% in remittance inflows in 2023.

• The main reasons for this are the slower growth in OECD economies, especially in the high-tech sector, and the lower demand for migrants in the GCC countries.
• Overall, remittance growth is projected to be slower globally, with Latin America and the Caribbean showing the highest growth while South Asia lags behind.

What are Remittances?

• Remittances are money transfers that migrants send to their families and friends in their home countries.
• They are an important source of income and foreign exchange for many developing countries, especially those in South Asia.
• Remittances can help reduce poverty, improve living standards, support education and health care, and stimulate economic activity.

What are the Remittance Trends Across the Globe?

• The top five recipient countries for remittances in 2022 were India, Mexico, China, the Philippines, and Pakistan.
• Remittance flows to low- and middle-income countries (LMICs) are projected to moderate to 1.4% in 2023, with total inflows estimated at USD 656 billion.
• East Asia and the Pacific region may witness a decline in remittance growth due to tight monetary stances, limited fiscal buffers, and global uncertainty surrounding geopolitical events.
• Remittances to Europe and Central Asia are anticipated to grow by 1%, influenced by a high base effect, weakened flows to Ukraine and Russia, and a depreciating Russian ruble.
• Remittances in the Middle East and North Africa may recover with declining oil prices, particularly for countries like Egypt.
• Remittance growth rates for East Asia and Pacific, as well as Sub-Saharan Africa, are projected to be around 1% in 2023.
• Remittance inflows played a vital role in funding current account and fiscal shortfalls in countries like Tajikistan, Tonga, Lebanon, Samoa, and the Kyrgyz Republic.

What are the Factors Affecting Remittance Flows to India?

Top Sources of Remittances for India

• Approximately 36% of India's remittances originate from high-skilled Indian migrants in three high-income destinations: the US, United Kingdom, and Singapore.
• The post-pandemic recovery led to a tight labor market in these regions, resulting in wage hikes that boosted remittances.
• Other high-income destinations for Indian migrants, such as the Gulf Cooperation Council (GCC) countries, experienced favorable economic conditions, including high energy prices and curbed food price inflation, which increased remittance inflows.

Factors Affecting Remittance Flows to India:

• Slower Growth in OECD economies: The Organisation for Economic Co-operation and Development (OECD) is a grouping of 38 high-income democratic countries. These countries are major destinations for high-skilled and high-tech Indian migrants, who account for almost 36% of India’s remittances.
• The World Bank expects that the growth of these economies will moderate from 3.1% in 2022 to 2.1% in 2023 and 2.4% in 2024.
• This could affect the demand for IT workers and lead to a diversion of formal remittances toward informal money transfer channels.
• Lower Demand for Migrants in GCC countries: GCC is a political and economic alliance of six Middle Eastern countries—Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman.
• These countries are the single largest destination for less-skilled South Asian migrants, who account for about 28% of India’s remittances.
• The World Bank expects that the growth of these countries will slow from 5.3% in 2022 to 3% in 2023 and 2.9% in 2024.
• This is mainly due to the declining oil prices, which have dented their fiscal revenues and public spending.

What are the Ways to Enhance Remittance Inflow in India?

• Unified Payment Interface: UPI can enable real-time fund transfers, allowing remittances to be sent and received instantly. This eliminates the need for lengthy processing times associated with traditional remittance methods, providing recipients with quicker access to funds.
• In January 2023, The National Payments Corporation of India (NPCI) allowed NRIs living in 10 countries to use UPI using their international mobile numbers.
• The ten countries include Singapore, Australia, Canada, Hong Kong, Oman, Qatar, USA, Saudi Arabia, United Arab Emirates, and the United Kingdom.
• Artificial Intelligence (AI)-Driven Risk Assessment: India can utilize AI algorithms to analyze transaction patterns, detect potential fraud, and assess risk factors associated with remittance transfers.
• This approach can enhance security and help prevent illegal activities, ensuring compliance with regulations.
• Integration with E-commerce Platforms: India can collaborate with e-commerce platforms to integrate remittance services directly into their platforms.
• This enables recipients to utilize remittance funds for online purchases or bill payments, enhancing financial inclusion and expanding the scope of remittance utilization.