Content

1. Black and grey
2. Quality gigs, a solution to urban unemployment
3. Embracing energy efficiency

Editorial: Black and grey

Context:

• Pakistan’s actions against terrorists keep up appearances, but do not inspire confidence.

Relevance:

• GS Paper 3: Linkages between Development & spread of Extremism; Linkages of Organized crime and Terrorism

Mains Questions:

1. Pakistan’s actions against terrorists keep up appearances, but do not inspire confidence. In this context, discuss the role of FATF in countering terrorist financing. 15 Marks
2. The scourge of terrorism is a grave challenge to national security. What solutions do you suggest to curb this growing menace? What are the major sources of terrorist funding? 15 Marks

Dimensions of the Article:

• What is terror financing?
• Sources of terror financing
• Strategy to counter terror financing
• Measures taken by the Government to counter to terror financing
• Way Forward

What is terror financing?

Terrorism activities take place in many different forms ranging from isolated acts to planned activities of organised groups. The forms of financing of terrorism therefore vary accordingly. It comprises not only the financing of the terrorist acts as such, but also any support to the criminal network. Terrorist organisations require significant funding, both for the actual undertaking of terrorist acts, but also to other issues :

• to maintain the functioning of the organisation,
• to provide for its basic technical necessities, as well as to cover costs related to spreading related ideologies.

Sources of terror financing:

Terrorist activities in most cases require substantial financial support. In fact, Terrorism finance (TF) can be termed as the life blood of terrorism, one of the most important factors sustaining its continuing threat, both from within and without. They use the following methods to raise funding for terrorists’ activities:

• Terrorists gets funds by involving in illegal operations
• Funding could also be sourced even from the proceeds of lawful activities. Supporters of a militant ideology could well make financial contributions to terrorist organizations from their known sources of income. Such contributions could also be made to some non-profit or charitable institutions acting as a front for terrorist organizations, knowingly or un-knowingly.
• By resorting to or working in concert with cartels involved in drug trafficking, narcotics trade etc. – without having to resort to money-laundering per se.
• Funding could also involve counterfeiting of currency, currency smuggling etc.
• International organized crime makes use of a wide range of methods and networking to transfer funds with a view to launder the proceeds of crime.
• Terrorist organizations also take recourse to bulk cash smuggling and use of informal channels of transfer of money (like hawala).
• Defrauding financial institutions and the public at large.

Strategy to counter terror financing:

In dealing with financing of terrorist activities, the emphasis has to be more on obstructing such activities while in progress. The main planks of a strategy to deal with the financial aspects of terrorist activities should involve:

• Asset recovery and obstruction powers.
• Legal penalties against persons/organizations involved in financing terrorism.
• Adoption of diligent customer identification programmes and standard record keeping procedures by financial institutions/agencies.
• Reporting of suspicious financial activity by individuals and institutions.
• Anti-money laundering measures.
• Capacity building and coordination mechanisms between agencies involved.
• International cooperation.

Measures taken by the Government to counter to terror financing:

• Making terrorist finance an offence: Under TADA and POTA holding property derived or obtained from any terrorist activity or acquiring them through terrorist funds was an offence
• Financial Intelligence Unit: The regulations include maintenance of record of prescribed transactions, furnishing information to FIU-IND in the prescribed format, and verification of clients in the prescribed manner
• Demonetisation – Through this government targeted the fake currency notes in circulation, an important source of terror financing. As per the study Rs. 70 crore fake notes were pumped into the economy every year.
• Improved Safety features in currency – The new notes will be difficult to be faked as they have advanced safety features.
• Strengthening of PMLA in 2013 by incorporating the provisions relating to removing the monetary threshold for schedule offences, strengthening confiscation and provisional attachment powers with regard to money laundering investigation, covering new financial institutions and designated non-financial business and professions within the scope of PMLA.
• A special Combating Financing of Terrorism (CFT) Cell has been created in the Ministry of Home Affairs in 2011, to coordinate with the Central Intelligence/Enforcement Agencies and the State Law Enforcement Agencies for an integrated approach to tackle the problem of terror funding.

Way Forward

Terror funding provides blood to terrorist activities. To counter terrorism, the best strategy is to control the sources of terror financing. It requires global efforts and all the countries must work together to counter it.

Editorial: Quality gigs, a solution to urban unemployment

Context:

• In several Indian cities however, shuttered businesses have meant that millions of workers have either had to leave or have had to take up new forms of work, with some finding the burgeoning gig economy to be their only source of employment.

Relevance:

• GS Paper 3: Indian Economy (issues re: planning, mobilisation of resources, growth, development, employment); Inclusive growth and issues therein.

Mains Questions:

1. With no urban equivalent to the NREGA as yet, there must be a focus on supporting new forms of employment. Discuss. 15 Marks
2. While we found India’s demographic dividend, we ignore the dropping rates of employability. What are we missing while doing so? Where will the jobs that India desperately needs come from? Explain. 15 Marks

Dimensions of the Article:

• What is Gig Economy?
• Advantages of Gig economy.
• Challenges related to Gig economy
• Measures to address the issues related to Gig economy
• Way Forward

What is Gig Economy?

Gig economy involves a temporary contractual job or short-term contract or freelance work that a person may take, on a project-to-project basis, for which the payment is made once the task is completed. The gig economy gets its name from each piece of work being akin to an individual ‘gig’. A gig economy encompasses all platforms that hire independent contractors, consultants and workers in different sectors, such as

• information technology,
• content creation,
• social media marketing and communications,
• food and beverages,
• creative fields such as art and design.

A gig economy, hence, means an existence of temporary or part-time workforce instead of a conventional workforce.

Advantages of gig economy:

• Cater to immediate demand: Gig economy can benefit workers, businesses, and consumers by making work more adaptable to the needs of the moment and demand for flexible lifestyles.
• Cheaper and more efficient: Most times, employers cannot afford to hire full-time employees. In a gig economy, large numbers of people work part-time or in temporary positions. The result is cheaper, more efficient services, such as Uber or Airbnb, for those willing to use them.
• Wider choice to employers: Technology and connectivity through the internet don’t require the freelancer to come into the office for work. Hence, employers have a wider range of applicants to choose from as they don’t have to hire someone based on their proximity.
• Offers specific expertise: Professional services firms are hiring gig workers to add deep domain expertise to client-impact teams. Majority of professional services contact workers have years of domain-specific knowledge, like consultants.
• The wider choice to employees: People often find they need to move around or take multiple positions to afford the lifestyle they want. These days, people also tend to change careers many times throughout their lives; the gig economy is a reflection of this rising trend.
• Youth economic productivity: India has a high share of young population which is only expected to grow. According to economists at IMF, youth inactivity in India is at 30%, the highest amongst developing countries.
  • Gig economy offers the perfect platform for engagement of youth in productive employment activities.
  • It is also estimated that the gig economy offers a relatively high gender-parity in the workforce, as compared to traditional employment.

Challenges related to Gig Economy:

• Erosion of traditional economic relationships: Gig economy can have downsides due to the erosion of traditional economic relationships between workers, businesses, and clients. This can eliminate the benefits that flow from building long-term trust, customary practice, and familiarity with clients and employers.
  • It could also discourage investment in relationship-specific assets that would otherwise be profitable to pursue since no party has an incentive to invest significantly in a relationship that only lasts until the next gig comes along.
• Crowding out traditional workers: Workers who prefer a traditional career path, stability and security that come with it are being crowded out in some industries.
  • The gig economy makes it harder for full-time employees to develop fully in their careers since temporary employees are often cheaper to hire and offer more flexibility in their availability.
• Disrupted work-life balance for gig workers: Flexibility in a gig economy often means that workers have to make themselves available at any time the gig comes up, regardless of their other needs, and they must always be on the hunt for the next gig.
  • Hence, for some workers, the flexibility of working gigs can disrupt the work-life balance, sleep patterns, and activities of daily life.
• No employment-related rights: Unlike traditional employment, workers in the gig economy are usually ineligible for any social benefits such as insurance, medical benefits, employees’ provident fund, bonus or gratuity.

Measures to address the issues related to gig workers:

• Evaluating scale of Gig economy: As of now there exists no authoritative estimate on the total number of gig workers in India, though the centralised nature of the platforms, and the larger platform labour market should make the collating of this data relatively straightforward for the Labour Ministry.
• Making regulations related to Gig economy: A more viable strategy then would involve conditional government partnerships with platforms under some of its flagship schemes. Here, the successful pilot of Swiggy’s Street Food Vendors programme under the PM SVANidhi, or PM Street Vendor’s Atma Nirbhar Nidhi scheme, may prove to be an illustrative example.

Way Forward:

Limited fiscal space and a growing need to fuel the country’s consumption base, must push the government to build symbiotic relationships with new partners. With Industry 4.0 platforms absorbing increasing numbers of the urban workforce, evaluation, collaboration, and regulation must be the government mantra. As the pandemic forces India to define its own understanding of the future of work, it falls upon the state to ensure that this future is defined not only by the quantity of jobs it creates but also by the quality of livelihoods they provide for .

Editorial: Embracing energy efficiency

Context:

• Embracing energy efficiency can be a win-win solution as this can bring down household energy bills and reduce discoms’ financial stress.

Relevance:

• GS Paper 3: Environmental conservation; Environmental pollution and degradation; Environmental Impact Assessment.

Mains Questions:

1. The government’s UJALA scheme transformed the market for LED bulbs, while also helping India reduce its annual carbon emissions by nearly 82 million tonnes. Discuss. 15 Marks

Dimensions of the Article:

• What is energy efficiency?
• Areas of Energy Efficiency in India:
• Significance of Energy Efficiency:
• Way Forward:

What is energy efficiency?

Energy efficiency simply means using less energy to perform the same task – that is, eliminating energy waste. Energy efficiency brings a variety of benefits: reducing greenhouse gas emissions, reducing demand for energy imports, and lowering our costs on a household and economy-wide level. Energy Consumption Scenario in India:

• With a total energy consumption of 553.9 Million Tonnes of Oil Equivalent (Mtoe)1 in 2017-18, India stood the third largest energy consumer in the world after United States of America and China.
• India also ranks highest in terms of growth rate of energy consumption in the world.
• India’s energy consumption is expected to grow fastest among global economies and account for 11% of global energy demand by 2040.

Areas of Energy Efficiency in India:

• Buildings: Building designers are looking to optimize building efficiency and then incorporate renewable energy technologies, leading to the creation of zero-energy buildings. Changes in existing buildings can also be made to reduce energy usage and costs.
• Energy Generation and Distribution: Combined heat and power systems capture the “waste” heat from power plants and use it to provide heating, cooling, and/or hot water to nearby buildings and facilities. This increases the energy efficiency of power generation from approximately 33 percent to up to 80 percent. The smart grid is another system that will improve the efficiency of electric generation, distribution, and consumption.
• Community Design: Neighbourhoods that are designed with mixed use developments and safe, accessible options for walking, biking, and public transportation are key to reducing the need for personal vehicle travel.
• Vehicles: More energy efficient vehicles require less fuel to cover a given distance. This generates fewer emissions, and makes them significantly less expensive to operate. Plug-in hybrids and fully electric vehicles are particularly fuel efficient.
• Freight: Freight can be moved more efficiently by improving the efficiency of rail and truck transportation and by shifting long-distance freight transport from trucks to rail.

Significance of Energy Efficiency:

• Adoption of energy efficiency schemes/ programmes have led to overall electricity savings to the tune of 9.39% of the net electricity consumption.
• Energy savings (electrical + thermal), achieved in the energy consuming sectors (i.e. Demand Side sectors) is to the tune of 2.84% of the net total energy consumption (581.60 Mtoe) in 2018-19.
• The total energy savings achieved is 2.69% of the total primary energy supply (879.23 Mtoe) during 2018-19. This includes both Supply Side and Demand Side sectors of the economy.
• PAT scheme contributed to 57.72% of the total energy savings, while S&L and UJALA accounted for 36.26% of the total energy saving from all major interventions carried out during the FY18-19.
• Overall, various energy efficiency measures have translated into savings worth INR 89,122 crores (approximately) and contributed in reducing 151.74 Million Tonnes of CO2 emission.

Way Forward:

• First, we need to improve the availability and affordability of energy-efficient appliances. For instance, despite a voluntary labelling scheme since 2009, less than 5% of ceiling fans produced in India are star-rated. While the Bureau of Energy Efficiency (BEE) plans to bring ceiling fans under mandatory labelling from 2022, the high upfront cost will be another barrier.
  • At present, the most efficient fans cost more than double the price of conventional models.
  • We need innovative business models that can attract manufacturers to produce efficient technology at scale and bring it within purchasing capacity.
• Second, India needs a nationwide consumer awareness campaign on energy efficiency. Only a fourth of Indian households are currently aware of BEE’s star labels. While awareness levels are high among residents of metros and tier-1 cities, the majority in small towns and rural areas remain unaware.
  • To bridge this divide, we need a decentralised and consumer-centric engagement strategy.
  • State governments, discoms and retailers need to be at the forefront of our renewed efforts to create mass awareness about energy efficiency.
• Finally, we need to monitor supply quality and changing consumption pattern on a real-time basis. As discoms in India deploy smart meters, these must be used to measure actual savings and demonstrate the benefits of energy-efficient devices to build consumer confidence. The smart metering network would also be crucial for enforcing consumer rights rules.