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03 March, 2020

16 Min Read

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Paper Topics Subject
GS-II State Funding of Elections
Call drops need an infra fix
New business model for Railways
Institutions of Eminence (IoEs) Scheme
GS-III Long-term Repo Operations (LTRO) Economic Issues
KrOOk vulnerability Miscellaneous
GS-II :
State Funding of Elections

Syllabus subtopic: Salient Features of the Representation of People’s Act.

 

Prelims and Mains focus: about the issue and various committees related to it

 

News: The Election Commission has informed the Government that it is not in favour of state funding of elections.

 

Why?

  • The Election commission is of the view that it would not be able to prohibit or check candidates’ expenditure over and above the state’s provision.

 

Background

  • The state funding of polls was recommended by the Indrajit Gupta Committee in 1998.

 

  • The committee had suggested that state funding would ensure a level playing field for poorer political parties and argued that such a move would be in public interest.

 

  • The committee had recommended some limitations, saying that state funds should only be given to recognised national and State parties and that funding should be given in kind, including free facilities provided to these parties and their candidates. The panel admitted that the economic situation of the country only suited partial and not full state funding of elections

 

About the issue

State funding of elections has been suggested in the past in response to the high cost of elections. A few government reports have looked at state funding of elections in the past, including:

 

  1. Indrajit Gupta Committee on State Funding of Elections (1998)
  2. Law Commission Report on Reform of the Electoral Laws (1999)
  3. National Commission to Review the Working of the Constitution (2001)
  4. Second Administrative Reforms Commission (2008)

 

  • The Indrajit Gupta Committee (1998) endorsed state funding of elections.

 

  • The 1999 Law Commission of India report concluded that total state funding of elections is “desirable” so long as political parties are prohibited from taking funds from other sources. The Commission concurred with the Indrajit Gupta Committee that only partial state funding was possible given the economic conditions of the country at that time. Additionally, it strongly recommended that the appropriate regulatory framework be put in place with regard to political parties (provisions ensuring internal  democracy,  internal structures and maintenance of accounts, their auditing and submission to Election Commission) before state funding of elections is attempted.

 

  • “Ethics in Governance”, a report of the Second Administrative Reforms Commission (2008) also recommended partial state funding of elections for the purpose of reducing “illegitimate and unnecessary funding” of elections expenses.

 

  • The National Commission to Review the Working of the Constitution, 2001, did not endorse state funding of elections but concurred with the 1999 Law Commission report that the appropriate framework for regulation of political parties would need to be implemented before state funding is considered.
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GS-II :
Call drops need an infra fix

Syllabus subtopic: Statutory, Regulatory and various Quasi-judicial Bodies.

 

Prelims and Mains focus: about the issue of call drops and its remedy; about TRAI

 

News: Telecom Regulatory Authority of India (TRAI) chairman has rubbished telecom operators’ claim that free voice calls are to blame for the poor quality of voice calls.

 

What is a call drop and why does it occur?

  • In any mobile network, the capacity of each tower and, therefore, the network is limited by the availability of spectrum that can be used to carry traffic. Moreover, the customer usage pattern in terms of location and time of use is not static.

 

  • The gap between the spectrum resources available and the spectrum resources required leads to overloading, which results in call drops. The lack of mobile towers across locations causes “coverage holes", where the absence of radio signals results in the inability to make calls or in calls getting dropped when users are in such areas.

 

Has the problem become worse?

Four years ago, Reliance Jio entered the telecom sector with rock-bottom data tariffs and free voice calls. This exploded consumption on mobile networks, both for voice and data. It also led to a lot of voice traffic originating from Jio, but terminating at rival networks. The drastic cut in tariffs shrunk the revenue streams of operators, thereby reducing their appetite to invest in upgrading networks. Financial stress on the balance sheets of operators is a significant factor for poor quality networks. India has three private operators—Reliance Jio, Vodafone Idea and Bharti Airtel. Of these, only Jio is profitable.

 

 

Who is responsible for improving call quality?

  • Call quality comes under Telecom Regulatory Authority of India (TRAI), which issues regulations covering subjects including tariff, interconnection and quality of service.

 

  • In 2017, Trai moved to assessing dropped call rates at the mobile tower level instead of at the telecom circle level. In 2018, it tightened rules to check instances of call muting over VoLTE (voice over long-term evolution) networks.

 

 

What do operators say about this menace?

Operators say that in order to offer seamless network coverage without call drops they need to take their network closer to customers. This is possible only if hurdles are not created in the installation of towers, they say. Telcos complain that states and municipalities have not devised bylaws and right-of-way guidelines that could address the problem. They argue that mobile tariffs in India are among the world’s lowest. Lower tariffs imply more consumption per user and also less resources for telcos to invest.

 

What is the way to resolve this issue?

Installation of in-building solutions can offer customers some relief from the disruption caused by call drops. Last-mile telecom infrastructure needs to be erected to ensure people get faster connectivity in their high-rise complexes. Unlike developed nations, in India there is heavy dependence on wireless networks. India must invest in creating a robust optical fibre network to carry more traffic. A few operators have also launched voice-over-WiFi calling that users can activate on high-end smartphones.

 

About Telecom Regulatory Authority of India (TRAI)

  • TRAI is a statutory body set up by the Government of India under section 3 of the Telecom Regulatory Authority of India Act, 1997.

 

  • It is the regulator of the telecommunications sector in India.

 

  • It consists of a Chairperson and not more than two full-time members and not more than two part-time members.

 

  • The TRAI Act was amended by an ordinance, effective from 24 January 2000, establishing a Telecom Disputes Settlement and Appellate Tribunal (TDSAT) to take over the adjudicatory and disputes functions from TRAI.
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GS-II :
New business model for Railways

Syllabus subtopic:

  • Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation
  • Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

 

Prelims and Mains focus: about the move and its significance; reforms in the railways sector

 

News: The government has decided to delink the cost of energy consumed by the private trains from the overall haulage charges payable to Railways.

 

Aim of the move : To make the business of running trains more viable for private operators in the future.

 

A new business model for the Railways

The government is on course to bring in private sector into the business of running passenger trains. The idea is that when Dedicated Freight Corridors take away at least 70 per cent of freight trains, a lot of capacity will open up in the conventional network. To meet the huge demand for more trains without spending on investments, the idea is to get private sector to share some of that burden. More routes will eventually be opened, The current exercise is to try and present a lucrative business proposition for the private players to enter the segment and invest for the long term.

 

Details of the move

  • It has been decided that if the private players – who will be running 150 trains on 100 identified routes – bring in modern trains that are in vogue across the world that display the actual amount of energy consumed – a feature not reliably available in Indian train systems – the haulage charge will come down to around Rs 512 per km, much below the Rs 668 per km that has been set for the private companies. The Rs-668 per km figure includes the energy cost as well.

 

  • However, policymakers have decided that delinking energy cost leaves a leeway for the private player to bring in energy-efficient train sets. And it could be different for each player depending on the type of rolling stock being used.

 

  • In addition, the Empowered Group of Secretaries under NITI Aayog CEO has decided to “define” item-wise what non-fare revenue would include for the private players.

 

What are haulage charges?

Haulage charge is the money private players will have to pay to Railways, on a per-km basis, for using its infrastructure in operating the trains – track, signaling, associated manpower and the like.

 

Significance of the move

  • This makes the business model even more lucrative for private players due to enter the new business traditionally held by Railways as a monopoly.

 

  • This is because in the new business model being developed, private players will be bidding based on how much of their gross revenue they are willing to share with Railways – over and above the haulage charge payable to operate the trains.

 

  • As per the latest round of discussions, everything that the private train operator can make money from — seat preference, luggage space, parcel, branding of all kinds, onboard facilities like wifi and entertainment — will be part of the gross revenue the operator will have to share with Railways. This is in addition to the money made from ticket sales.

 

  • Since revenue share in this shape and form does not have a pre-existing model in India and is being tried for the first time in the rail sector, policymakers want to make the contract watertight from the point of view of Railways. The private consultant advising the Railways on this project has been asked to draw up the nitty-gritty of the inclusions of non-fare revenue to be made part of the Request for Qualification (RFQ) document.

 

  • The effort is on to issue the RFQ before the end of this financial year. As per the timeline, the winning bidders will get about two years to roll out the first set of trains after trials on Indian track conditions.

 

So far, big names from industry like Tata Realty, Adani Ports and SEZ, the Essel Group and others, and PSU IRCTC have shown interest in bidding for the routes.

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GS-II :
Institutions of Eminence (IoEs) Scheme

Syllabus subtopic: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

 

Prelims and Mains focus: about the scheme: features; eligibility criteria and significance

 

News: A least two private higher education institutes, Kalinga Institute of Industrial Technology (KIIT) in Odisha and Vellore Institute of Technology (VIT) in Tamil Nadu, which were declared ‘Institutions of Eminence’ (IoEs) on August 2, 2019, are ineligible for the coveted status. It was found that the two institutes do not meet the eligibility criterion on the net worth of the sponsoring organisation members.

 

What is the eligibility criteria to get IoE status?

  • According to the University Grants Commission’s regulations on the IoE scheme, the sponsoring organisation is a “charitable or a not-for-profit Society or a public Trust or a Company incorporated under Section 8 of the Companies Act, 2013” applying to upgrade an existing private institution or a new one to an IoE.

 

  • The eligibility criterion states the collective net worth of the members of the sponsoring organisation should be Rs 3,000 crore for existing institutions and Rs 5,000 crore for new ones.

 

Background

  • The above eligibility clause was at the source of a lot of heartburn among many private higher education institutions as it had left them out of the application process. This issue was also raised at a workshop organised by the HRD Ministry on October 27, 2017, for “sensitising potential applicants under private sector” for the IoE scheme.

 

  • In a clarification issued by the ministry on November 17, 2017, on the request made by private institutions to reduce the eligibility net worth of Rs 3,000 crore, among other things, the government wrote, “The reduction in eligibility net worth cannot be considered.”

 

About IoE scheme

  • The IoE scheme, a pet project of the Prime Minister’s Office launched under the NDA-II government, is aimed at creating an enabling architecture for 10 public and 10 private institutions to emerge as world-class institutions.

 

  • The IoEs are proposed to have greater autonomy, including on deciding the fee, and course duration and structure. Their academic collaboration with foreign institutions will also be exempt from approvals. The 10 government institutions, in addition to autonomy, will get Rs 1,000 crore each from the HRD Ministry.

 

  • Implemented under the Union human resource development (HRD) ministry.

 

  • Aims to project Indian institutes to global recognition.

 

  • The selected institutes will enjoy complete academic and administrative autonomy. They will receive special funding.

 

  • The selection shall be made through challenge method mode by the Empowered Expert Committee constituted for the purpose.

 

  • Eligibility: Only higher education institutions currently placed in the top 500 of global rankings or top 50 of the National Institutional Ranking Framework (NIRF) are eligible to apply for the eminence tag.

 

  • The private Institutions of Eminence can also come up as greenfield ventures provided the sponsoring organisation submits a convincing perspective plan for 15 years.

 

  • Under the scheme, Public Institutions of Eminence are eligible for a grant of Rs.1,000 crore from the government and no funds will be given to Private Institutions of Eminence.

 

Other benefits include the freedom to:

  1. to recruit faculty from outside India (limit of 25% of its faculty strength for public institution).
  2. to enter into academic collaborations with other Institutions within the country.
  3. to admit additionally foreign students on merit subject to a maximum of 30% of the strength of admitted domestic students.
  4. to fix and charge fees from foreign students without restriction.
  5. To fix curriculum and syllabus, with no UGC mandated curriculum structure.
  6. to offer online courses as part of their programmes with a restriction that not more than 20% of the programme should be in online mode.
  7. UGC Inspection shall not apply to Institutions of Eminence

 

 

Controversy with the scheme

The scheme first ran into controversy in July 2018, with the selection of Reliance Foundation’s non-existent Jio Institute among India’s first six IoEs (three public and three private). The announcement of the second and final tranche of IoEs was in August last year, in which seven private and seven public institutions were awarded the status. VIT, KIIT, Amrita Vishwa Vidyapeetham in Bangalore, Jamia Hamdard in New Delhi, OP Jindal University in Haryana, Shiv Nadar Universty and Satya Bharti Foundation’s proposed institute were among the seven private IoEs announced last year.

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GS-III : Economic Issues
Long-term Repo Operations (LTRO)

Syllabus subtopic: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

 

Prelims and Mains focus: about LTRO: features and significance

 

News: The Reserve Bank of India had received Rs.1.71 lakh crore in the third long-term repo operation (LTRO) conducted for an amount of Rs.25,000 crore. The central bank received 66 bids in the three-year tenor LTRO, which has reversal date on March 1, 2023.

 

Background

  • It has already conducted two LTROs for Rs.25,000 crore each on February 17 and February 24.

 

  • In the February 17 LTRO for the three-year tenor, it received bids amounting to Rs.1.944 lakh crore.

 

What is long-term repo operation (LTRO)?

  • The LTRO is a tool under which the central bank provides one-year to three-year money to banks at the prevailing repo rate, accepting government securities with matching or higher tenure as the collateral.

 

  • While the RBI’s current windows of liquidity adjustment facility (LAF) and marginal standing facility (MSF) offer banks money for their immediate needs ranging from 1-28 days, the LTRO supplies them with liquidity for their 1- to 3-year needs.

 

  • LTRO operations are intended to prevent short-term interest rates in the market from drifting a long way away from the policy rate, which is the repo rate.

 

Why is it important?

  • Ever since the economic slowdown hit India and the IL&FS fiasco triggered a spike in borrowing costs, the RBI has been trying to stimulate the economy through easy-money policies. Since January 2019, the repo rate (the rate at which banks borrows quick money from RBI) has been cut by 139 basis points. But only a part of these rate cuts have as yet been passed on to borrowers by banks and other lenders.

 

  • When charged with this slow transmission of rate cuts, bankers complained that repo loans constituted only a miniscule portion of their overall funds, making it difficult for them to cut lending rates. Under the LAF, banks could only bid up to a maximum of 0.75 per cent of their net demand and time liabilities.

 

  • The LTRO bidding system, taken with the removal of the 0.75 per cent limit on LAF borrowings, is expected to remove these constraints. The RBI believes that offering banks durable longer-term liquidity at the repo rate (5.15 per cent), can help them lower the rates they charge on retail and industrial loans, while maintaining their margins. The encouraging response to the first auction indicates the banks’ high appetite for cheap funds — bids were received for more than 7.7 times the amount auctioned (Rs.25,000 crore). The LTRO will also help bring down the yields for shorter-term securities (in the 1-3-year tenor) in the bond market.

 

Features of Long-Term Repo Operations (LTRO)

  • Maturity period (tenor): One-year and three-year tenors

 

  • Total funds to be injected: Up to Rs 1,00,000 crores

 

  • Interest rate: at the prevailing policy rate (Repo rate).

 

  • Method of fund injection: CBS (E-KUBER) platform. The operations would be conducted at a fixed rate.

 

  • Banks would be required to place their requests for the amount sought under LTRO during the window timing at the prevailing policy repo rate. Bids below or above policy rate will be rejected.

 

  • If there is over-subscription of the notified amount, the allotment will be done on pro-rata basis. RBI will, however, reserve the right to inject marginally higher amount than the notified amount due to rounding effects.

 

  • The minimum bid amount would be Rs. 1 crore and multiples thereof. There will be no restriction on the maximum amount of bidding by individual bidders.

 

  • The eligible collateral and the applicable haircuts for LTRO will remain the same as applicable for LAF.

 

  • All other terms and conditions as applicable to LAF operations for the LTRO.
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GS-III : Miscellaneous
KrOOk vulnerability

Syllabus subtopic: Basics of Cyber Security

 

Prelims and Mains focus: about KrOOk and its threat

 

News: At the RSA 2020 security conference in San Francisco, security researchers from Slovak antivirus company ESET will present details about a new vulnerability that impacts WiFi communications.

 

What is it?

  • Named Kr00k, this bug can be exploited by an attacker to intercept and decrypt some type of WiFi network traffic (relying on WPA2 connections).

 

  • According to ESET, Kr00k affects all WiFi-capable devices running on Broadcom and Cypress Wi-Fi chips. These are two of the world's most popular WiFi chipsets, and they are included in almost everything, from laptops to smartphones, and from access points to smart speakers and other IoT devices.

 

  • ESET researchers said they personally tested and confirmed that Kr00k impacts devices from Amazon (Echo, Kindle), Apple (iPhone, iPad, MacBook), Google (Nexus), Samsung (Galaxy), Raspberry (Pi 3) and Xiaomi (Redmi), but also access points from Asus and Huawei.

 

  • ESET said it believes that more than a billion devices are vulnerable to Kr00k, and they consider this number "a conservative estimate."

 

What’s Kr00K and how does it work?

  • At the technical level, Kr00k is just a bug, like many other bugs that are being discovered on a daily basis in the software that we all use.

 

  • The difference is that Kr00k impacts the encryption used to secure data packets sent over a WiFi connection.

 

  • Typically, these packets are encrypted with a unique key that depends on the user's WiFi password. However, ESET researchers say that for Broadcom and Cypress Wi-Fi chips, this key gets reset to an all-zero value during a process called "disassociation."

 

  • Disassociation is something that occurs naturally in a WiFi connection. It refers to a temporary disconnection that usually happens due to a low WiFi signal.

 

  • WiFi devices enter into disassociated states many times a day, and they're automatically configured to re-connect to the previously used network when this happens.

 

  • ESET researchers say that attackers can force devices into a prolonged disassociated state, receive WiFi packets meant for the attacked device, and then use the Kr00k bug to decrypt WiFi traffic using the all-zero key.

 

  • This attack scenario allows hackers to actively intercept and decrypt WiFi packets, normally considered to be secure.

 

  • The good news is that the Kr00k bug only impacts WiFi connections that use WPA2-Personal or WPA2-Enterprise WiFi security protocols, with AES-CCMP encryption.

 

  • This means that if you use a device with a Broadcom or Cypress WiFi chipset, you can protect yourself against attacks by using the newer WPA3 WiFi authentication protocol.

 

Not as bad as KRACK

  • All in all, the Kr00k vulnerability should be easier to protect against than KRACK -- a major vulnerability that impacted the WPA2 WiFi protocol and forced most device vendors to switch to using WPA3 by default.

 

  • A new KRACK attack, named Dragonblood, was later discovered to impact even some newer WPA3 connections, but this newer attack didn't impact the entire WiFi ecosystem as the original KRACK attack did.

 

  • ESET researchers said they discovered Kr00k while looking into the devastating effects of the KRACK attack; however, the two -- KRACK and Kr00K -- should not be considered the same.

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