Current Affairs October 13, 2021

Pandora papers and challenge for government

  • The Pandora Papers investigation is “the world’s largest-ever journalistic collaboration, involving more than 600 journalists from 150 media outlets in 117 countries”.
  • Tax havens enable the rich to hide the true ownership of assets by using: trusts, shell companies and the process of ‘layering’. Financial firms offer their services to work this out for the rich.
  • They provide ready-made shell companies with directors, create trusts and ‘layer’ the movement of funds
  • The process of layering involves moving funds from one shell-company in one tax haven to another in another tax haven and liquidating the previous company. This way, money is moved through several tax havens to the ultimate destination.
  • Not all the activity being exposed by the Pandora Papers may be illegal due to tax evasion or the hiding of proceeds of crime.
  • The authorities will have to prove if the law of the land has been violated.
  • Each country will have to conduct its investigations and prove what part of the activity broke any of their laws.
  • In the United Kingdom, the laws regarding financial dealings are very favourable to the rich and their manipulations
  • The Government’s focus on the unorganised sector as the source of black income generation is also misplaced since data indicate that it is the organised sector that has been the real culprit and also spirits out a part of its black incomes.
  • An interesting recent development (October 8) has been the agreement among almost 140 countries to levy a 15% minimum tax rate on corporates.
  • Though it is a long shot, this may dent the international financial architecture.
  • Other steps needed to tackle the curse of illicit financial flows are ending banking secrecy and a Tobin tax on transactions.

Economic terms

  • Tobin Tax
  • A Tobin tax, which was suggested by the Nobel Memorial Prize in Economic Sciences Laureate economist James Tobin, was originally defined as a tax on all spot conversions of one currency into another.
  • The initial concept of the tax put a penalty on short-term financial ventures into another currency. Rather than the consumers paying a tax, the Tobin tax would be paid by market players as a method for controlling the stability of a country’s currency.
  • The idea behind the Tobin Tax was to develop a way to manage the exchange rate volatility. James Tobin came up with two solutions for this issue:
  • Move towards a common currency, monetary and fiscal policy coupled with economic integration.
  • Make efforts towards greater financial segmentation between nations, permitting greater autonomy for central banks and governments in financial policies.




  • Silicosis is part of the pneumoconiosis family of diseases, described by the policy as “occupational diseases due to dust exposure… are incurable, cause permanent disability and are ‘totally preventable by available control measures and technology’ (emphasis added)”
  • Silicosis is a long-term lung disease caused by inhaling large amounts of crystalline silica dust, usually over many years. Silica is a substance naturally found in certain types of stone, rock, sand and clay. Working with these materials can create a very fine dust that can be easily inhaled.
  • Dilution of labour code (Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020)
  • Section 6 of the Code makes it mandatory for all employers to provide annual health checks free of cost “to such employees of such age or such class of employees of establishments or such class of establishments, as may be prescribed by the appropriate Government”.
  • Section 20 gives powers to the Directorate General of Mines Safety (DGMS) to conduct health and occupational surveys in mines. Positive as they sound, these sections are severely diluted from the earlier Mines Act provisions, which in turn, were simply never implemented.
  • The draft Central rule 6 corresponding to Section 6 of the Code fixes an age floor of 45 years for workers in all establishments (including mines) to be eligible for these health checks, though Rules 92 to 102 provide for initial and periodic examinations of all mine workers from their time of joining which is an anomaly.
  • Two, Section 20 places no obligation on the mine owner to provide any form of rehabilitation in terms of alternative employment in the mine, or payment of a disability allowance/lump sum compensation for a worker found medically unfit.

Steps needed

  • The State rules under the OSHWC Code must take care to ensure the health checks are provided to all workers in all establishments, irrespective of age.
  • The State Advisory Board (Section 17 of the Code), along with technical committees, must be quickly constituted, with workers and their representatives having a say in them.
  • Two, local manufacturers must be incentivised to innovate and develop low-cost dust-suppressant and wet-drilling mechanisms that could either be subsidised or provided free of cost to the mine owners. Existing prototypes must be tested and scaled up.
  • Three, District Mineral Foundation Trust (DMFT) funds funds are both underutilised and spent in an entirely ad hoc manner.



District Mineral Foundation (DMF)

  • District Mineral Foundation (DMF) is a trust set up as a non-profit body, in those districts affected by the mining works, to work for the interest and benefit of persons and areas affected by mining related operations
  • As per the Mine and Minerals Development Regulation (Amendment) Act, 2015,
  • DMFT Funds: Mining companies contribute 10-30% on the royalty amount that they pay to the government to DMF Trust in the district they are operating in.



Free power

  • With elections around the corner in many States, political parties are competing with one another in promising free power.
  • Promises are for free power up to 300 units/month for households, free electricity for farmers and waivers of pending bills.
  • Since nearly three-fourth of the agriculture connections in the country are unmetered, consumption estimates are often inflated by distribution companies to increase subsidy demand and project low distribution losses.
  • Any metering effort faces resistance as it is perceived as the first step towards levying charges
  • Free power provision along with issues of metering make implementation of Direct Benefit Transfer difficult.
  • All this leaves farmers, distribution companies and State governments frustrated.
  • Providing subsidised low tariff for small consumers is necessary, considering the rising costs of electricity supply
  • Roof-top solar and energy efficiency are good environment-friendly options for homes but providing free power to well-off households will discourage them from taking these up.
  • Good power supply and service are necessary to improve quality of life and encourage productive activities.
  • This in turn requires financially stable distribution companies and accountability measures for quality service for all, especially small and rural consumers.


  • A fixed rebate of up to ₹200/ month for residential consumers can be provided in the electricity bill. The impact on small consumers will be significant, compared to big.
  • As the rebate is delinked from consumption, distribution companies won’t have an incentive to inflate consumption.
  • A similar rebate can be extended to homebased enterprises, which in most States pay high tariff.
  • There can be additional rebates for adopting energy-efficient appliances like refrigerators, combined with State-level bulk procurement programmes to reduce the cost.
  • The atmosphere of mutual mistrust between small consumers and distribution companies has to change.
  • There should be quick resolution of arrears and one-time offers for settlement.



Technology and tourism

  • The Indian tourism and hospitality sector were adversely affected by the COVID-19 pandemic and saw substantial job loss
  • The Government of India recently announced financial support for more than 11,000 registered tourist guides/travel and tourism stakeholders.
  • It also said once international travel resumes, the first five lakh tourists will be issued visas free of charge.
  • In the pre-pandemic period too, many initiatives were adopted to promote the tourism sector, such as providing e-visas under various categories for people from particular countries, Global Media Campaigns, the Heritage Trail and the Paryatan Parv celebration.

Steps needed to boost Tourism

  • The Start-up India initiative has boosted entrepreneurship.
  • However, the travel and tourism start-ups need a bigger push. Innovative start-ups should be encouraged.
  • Support from the government for ideation and access to finance are required.
  • The tourism sector, unlike many other sectors, can grow with smaller capital investments and that too without any industrial gestation period.
  • There is need to train the workforce in India, so that workers can develop the skills to perform jobs in the travel and tourism sector.
  • The India Skill Report, 2019, estimates the Indian workforce to increase to about 600 million by 2022 from the current 473 million in view of the fourth industrial revolution.
  • The tourism sector will have a major role to play in providing employment opportunities.
  • India improved its competitiveness in travel and tourism, from occupying the 65th position in 2013 and then the 40th position in 2017 and then the 34th position in 2019, as per the Travel and Tourism Competitiveness Report of 2019.
  • But international arrivals have remained comparatively low, at around 9 to 10 million.
  • Thus, there is a need to highlight the significance of public-private partnership to improve infrastructure and tackle the problem of end connectivity, which negatively affect the experiences of international travellers.
  • The travel and tourism industry in India is also fragmented, hindering the ability of the sector to achieve its potential.


Use of Block chain technology

  • Block chain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. A block chain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the block chain.
  • There are examples worldwide on block chain-based money solutions to kick-start local tourism industries, for instance.
  • Block chain enables the tracking of items through complex supply chains.
  • Indian start-ups could also explore strategies along these lines. Block chain ledger coupled with IOT devices for healthcare could have a positive impact on medical tourism.



Plastic waste recycling rules

  • The Environment Ministry has issued draft rules that mandate producers of plastic packaging material to collect all of their produce by 2024 and ensure that a minimum percentage of it be recycled as well as used in subsequent supply.
  • It has also specified a system whereby makers and users of plastic packaging could collect certificates called Extended Producer Responsibility (EPR) certificates and trade in them.
  • The notification was expected to come into force by December 6 and, as of now, was open to public feedback.
  • Only a fraction of plastic that cannot be recycled such as multi-layered multi material plastics would be eligible to be sent for end-of life disposal such as road construction, waste to energy, and waste to oil and cement kilns.
  • Only methods prescribed by the Central Pollution Control Board (CPCB) would be permitted for their disposal. Plastic packaging, as per the rules made public on October 6, fall into three categories.
  • The first is “rigid” plastic;
  • Category 2 is “flexible plastic packaging of single layer or multilayer (more than one layer with different types of plastic), plastic sheets and covers made of plastic sheet, carry bags (including carry bags made of compostable plastics), plastic sachet or pouches; and the third category is called multi-layered plastic packaging, which has at least one layer of plastic and at least one layer of material other than plastic.
  • Producers of plastic would be obliged to declare to the government, via a centralised website, how much plastic they produce annually.
  • Companies would have to collect at least 35% of the target in 2021-22, 70% by 2022- 23 and 100% by 2024. In 2024, a minimum 50% of their rigid plastic (category 1) would have to be recycled as would 30% of their category 2 and 3 plastic.
  • Every year would see progressively higher targets and after 2026-27, 80% of their category 1 and 60% of the other two categories would need to be recycled.
  • If entities cannot fulfil their obligations, they would on a “case by case basis” be permitted to buy certificates making up for their shortfall from organisations that have used recycled content in excess of their obligation.
  • The CPCB would develop a “mechanism” for such exchanges on an online portal. Noncompliance would not invite a traditional fine.
  • Instead an “environmental compensation” would be levied, though the rules do not specify how much this compensation would be.