Revision Schedule for Prelims 2017

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Type: oped-snap


Foreign Policy Watch: India-SAARC Nations India & Neighbours

[op-ed snap] No full stops: On Bhutan’s exit from the ‘BBIN’ agreement

Context:

  1. Bhutan announced that it is unable to proceed with the Motor Vehicles Agreement with Bangladesh, India and Nepal
  2. It is a road block for the regional sub-grouping India had planned for ease of access among the four countries

MVA:

  1. The sub-grouping, BBIN was an alternative mooted by the government after Pakistan rejected the MVA at the SAARC summit in Kathmandu in 2014
  2. It seeks to allow trucks and other commercial vehicles to ply on one another’s highways to facilitate trade

Road ahead:

  1. Of the other SAARC members, Sri Lanka and the Maldives are not connected by land, and Afghanistan could only be connected if Pakistan was on board
  2. Down to just three countries now after Thimphu’s decision, India, Nepal and Bangladesh will have to decide whether to wait for Bhutan to reconsider or to press ahead with a truncated ‘BIN’ arrangement
  3. The first option will not be easy

Why is Bhutan reluctant?

  1. The main concern expressed by Bhutanese citizen groups and politicians is over increased vehicular and air pollution in a country that prides itself on ecological consciousness
  2. The upper house of parliament has refused to ratify the MVA that was originally signed by all four BBIN countries in 2015
  3. The official announcement indicates that Thimphu will not push the agreement ahead of elections in 2018

Analyzing the situation:

  1. To begin with, Bhutan’s objections are environmental, not political, and its government may well change its mind as time goes by
  2. Dry runs have been conducted along the routes, and officials estimate the road links could end up circumventing circuitous shipping routes by up to 1,000 km
  3. Second, Bhutan’s concerns may be assuaged if India considers the inclusion of waterways and riverine channels as a less environmentally damaging substitute
  4. Bhutan’s objections may even spur an overhaul of emission standards for trucks currently plying in India, Nepal and Bangladesh

Increasing connectivity:

  1. The BBIN pact denotes a “can-do” attitude on India’s part, as it shows a willingness to broaden its connectivity canvas with all countries willing to go ahead at present, leaving the door open for those that may opt to join in the future
  2. A similar initiative for the Asian Highway project under the BCIM (Bangladesh-China-India-Myanmar) corridor got a boost this week as the countries moved to upgrade the dialogue to the governmental level
  3. India has refused to attend China’s Belt and Road summit on May 14-15, objecting to projects in Pakistan-occupied Kashmir, the BCIM will remain a way of joining the network when India’s concerns are met

Note4Students:

Connectivity is the new global currency for growth and prosperity as it secures both trade and energy lines for countries en route, and India must make the most of its geographic advantages.

Prevention of Corruption – POC Act, CBI, Lokpal Act, etc. Governance

[op-ed snap] Adieu, Lokpal?

Context:

  1. Six years ago, in April 2011, Anna Hazare began a hunger strike to establish a strong Jan Lokpal Bill to fight all-pervasive corruption
  2. Thereafter, for more than two years until the 2013 elections, the India Against Corruption (IAC) movement of Team Anna, riding the wave of popular discontent and anger against the governing class, brought a weak government to its knees and governance to a standstill

Lokpal Act 2013:

  1. Caving in to enormous public pressure, Parliament passed the Lokpal Act in 2013
  2. This act is perhaps the only one enacted post-Independence due to direct “people power”
  3. The Act, however, stagnates in the statute books, ignored by the civil society that earlier vigorously rooted for its implementation

Amendment in the Act:

  1. The act, even in its present moribund state, is being whittled down with amendments, such as one in 2016
  2. It eliminates the earlier statutory requirement for public servants to disclose the assets of their spouses and dependent children
  3. Though it is well-known that illegally acquired assets are usually in the names of family members
  4. Similarly, the government proposed amendment to the Prevention of Corruption Act (PCA)
  5. This requires the Lokpal to seek government sanction not only for prosecuting public servants but even retired public officials – is clearly designed to weaken the Lokpal

Extinguishing public interest in the Lokpal:

  1. The singular factor is the prime minister who, post-demonetisation, has assumed the mantle of the nation’s anti-corruption messiah
  2. Deified by a large section of his countrymen, he is perceived as the only hope in the Herculean fight against corruption
  3. So powerful and clean is his public image that Anna Hazare’s recent threat to agitate against the government for not appointing the Lokpal has been contemptuously ignored
  4. And so has the SC’s reprimand over the delay in appointing the Lokpal
  5. No individual or institution today dares to confront the PM on corruption

Why is the PM, silent on Lokpal?

  1. The ostensible reason the government has given is that there is no Leader of Opposition for constituting the selection committee for appointing the Lokpal
  2. Although the same statutory limitation for the appointment of the CBI director was overcome through a suitable amendment in the law

SC’s ruling:

  1. The Supreme Court ruled this week that the Lokpal could be appointed without a Leader of Opposition
  2. It is not difficult to fathom that the real reason for the government’s reluctance on the Lokpal is on account of its implications for the CBI
  3. The Lokpal Act has invested the inquiry and prosecution wings of the Lokpal with the powers presently exercised by the CBI, the last thing that the political executive would concede willingly
  4. The CBI today is an outfit with an unmistakeable aura of menace, with everyone in the hierarchy from ministers downward holding the agency in fearful awe
  5. No government would want an investigating agency functioning under an unaccountable entity to monitor not only government servants but also MPs and the top political executive including the PM

Case in Romania:

  1. Countrywide anti-corruption protests in Romania in February this year, forced the government to withdraw an ordinance designed to weaken Romania’s anti-corruption authority, the DNA
  2. The ordinance that outraged the nation sought to decriminalise abuse in office by officials if the sums involved were less than $48,500
  3. The ruling party, the PSD, has alleged that the anti-corruption ombudsman, the DNA, is politically biased, indicting more of their officials than of other parties
  4. Significantly, in the first eight months of 2016, the DNA had indicted 777 individuals including judges, parliamentarians and ministers
  5. While the people have applauded the DNA, it has been accused by politicians of being draconian and biased

Note4Students:

What’s happening in Romania has important lessons for India. How does one ensure the impartiality and fairness of a Lokpal armed with a police investigative agency that functions free of political regulation? A good read from Mains PoV.

Services sector & developments Industries

[op-ed snap] Facing up to IT: On visa rules posing challenge to Indian IT companies

India’s IT Sector:

  1. A globalising world enabled the spectacular rise of India’s IT industry over the last couple of decades
  2. The IT sector not only pulled up the GDP but also came to symbolise young India’s aspirations

Challenge it faces:

  1. With the world now bending towards protectionism, it faces a challenge to its talent-centric, software export model
  2. In recent weeks, a slew of countries, which are estimated to account for three-fourths of the industry’s revenues, have placed stricter rules on their companies getting talent from overseas
  3. There are visa rule changes for Indian tech personnel after Brexit and Donald Trump’s victory in the U.S. after promises to put the brakes on outsourcing

Protectionism:

  1. President Trump signed the ‘Buy American, Hire American’ executive order last week
  2. He was seeking to raise the bar for the award of H-1B visas, an important route for Indian companies, so that they are given to the “most-skilled or highest-paid” beneficiaries
  3. Earlier this month, the U.K. scrapped a category of short-term visas that have been used extensively by Indian companies to get their IT professionals on-site
  4. The Australian equivalent of this is the recent junking of what are called the ‘457 visa’ rules
  5. Singapore has reportedly kept approvals for work permits on hold for a while now

The way forward:

  1. It is still too early to gauge the exact impact on IT companies, because much depends on their ability to rework their operational models to do less on-site
  2. It is a challenging time for the industry – with slowing business growth, strengthening rupee and difficult transition from a traditional model to one that is cloud-based
  3. Indian IT companies are getting the lion’s share of H-1B visas for Indian nationals
  4. The government, which has reportedly sought a World Trade Organisation-backed framework to facilitate trade in services in the light of rule-tightening by the developed countries, is naturally concerned
  5. The industry, which employs over 3.5 million people and earns over $100 billion in export revenues, is now navigating a world with walls

Note4Students:

Read the op-ed to understand the changing global scenario.

NITI Aayog : The New Development Agenda Indian Polity

[op-ed snap] The long road to a high-growth future

Context:

  1. NITI Aayog is preparing a 15-year vision and a seven-year strategy document, and has circulated a three-year action agenda
  2. The goal of transforming India and attaining the desired level of economic and social outcomes will require higher and sustainable growth in coming years
  3. Higher economic growth will create employment, generate higher revenue and will help increase government spending without disturbing the budgetary balance

High growth:

  1. The vice-chairman of NITI Aayog, Arvind Panagariya, showed a compound annual growth of about 8%
  2. Higher growth is the best way of lifting standards of living, as has been demonstrated by China
  3. Attaining and sustaining this level of growth is feasible, but will need policy action on various fronts

Growth rate:

  1. India’s potential growth slipped to about 7% during 2009-15 compared with 8% during 2003-08
  2. The Indian economy is estimated to have expanded by 7.1% in the last fiscal

Focus of work: Strengthen macroeconomic fundamentals

  1. Firstly, focus on strengthening macroeconomic fundamentals
  2. A sound macroeconomic environment is a prerequisite for sustained higher growth
  3. The N.K. Singh committee has proposed a new fiscal architecture that will reduce the level of total debt stock with steady reduction in fiscal deficit
  4. On the monetary policy side, the RBI’s rate-setting committee is targeting 4% inflation on a durable basis
  5. Reason for softer growth: a decline in savings rate
  6. Higher growth in the last decade was backed by higher savings
  7. India’s savings rate is estimated to have declined from the level of about 37% of the gross domestic product in 2007-08 to under 30% in 2016-17
  8. India will need higher savings to sustain higher growth

Focus of work: banking sector

  1. Secondly, fix the banking sector
  2. It is now well accepted that high levels of NPAs—particularly in public sector banks—are a drag on investments and growth
  3. The sector needs a fresh road map to address the current problems and also to provide the necessary checks and balances
  4. NITI Aayog’s action agenda has suggested auctioning assets to private asset reconstruction companies
  5. For a durable solution, the government should reconsider its role in the sector
  6. A significant reduction in government holding in banks will augur well for the economy
  7. India needs a lively corporate bond market as it will provide an alternative source of financing and reduce pressure on banking sector
  8. A vibrant, competitive and stable financial sector will help push investment and growth in the near future

Focus of work: land and labour markets

  1. Thirdly, improve conditions in land and labour markets
  2. In order to sustain higher growth, the government will need to make it easier for businesses to acquire land and hire labour
  3. The small and informal nature of business enterprises in India affects productivity and is an impediment to growth
  4. One of the reasons for having too many small enterprises is rigid labour laws
  5. The government should work on creating a flexible labour market, which will allow businesses to take advantage of economies of scale
  6. The government also needs to make it easier for businesses to acquire land
  7. A number of projects are stuck because of land acquisition problems
  8. Reforms in these markets would require greater coordination between the Centre and states

Focus of work: review government functioning

  1. The government needs to review its own functioning and change in a way that allows the market to attain its full potential
  2. For instance, it will need to withdraw from commercial activities through privatization and focus on strengthening regulatory capabilities
  3. The recent decision of the Narendra Modi government to impose price caps on coronary stents is an example of exactly what the government should not be doing
  4. Price caps inevitably result in shortages with adverse consequences. The government should always avoid such decisions

Note4Students:

The policymakers need to constantly work on multiple levels in order to create enabling conditions that will allow the Indian economy to develop at a rapid pace and achieve long-term goals.

Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc. Health

[op-ed snap] India’s population story

Context:

  1. Evidence from India’s last Census in 2011 shows that fertility in India is fast approaching replacement levels
  2. This means that couples will have children who will essentially replace their number, to stabilise population growth
  3. The NFHS-4 shows that in the past decade, the average number of children per family has come down from 2.7 to 2.2
  4. With replacement fertility being 2.1 children per woman, this is good news for the land and the people

Population growth:

  1. Even after fertility rates drop to replacement levels, the total population will still grow, and is likely to reach 1.7 billion by 2050
  2. The thrust of this growth will come from the youth bulge, with 365 million (10-24 years old) already in, or soon to enter, their reproductive ages
  3. Even if they have children only in numbers that replace themselves, the resultant growth due to such a large base of young people will drive the growth momentum for population
  4. For India as a whole, 75% of population growth in the coming decade will be due to this momentum

State-wise:

  1. In States like Assam, Gujarat and Haryana, which are about to reach replacement levels, it would be more effective to adopt policies for delaying childbearing rather than limiting births
  2. Fertility reduction, where it still needs to take place, must come from increased availability and use of quality family planning services

Demand-supply of working population:

  1. When States are clustered in terms of fertility levels, one foresees a predominantly youthful north and an ageing south
  2. Most of the current and future demographic potential is locked in the northern States and largely located in Bihar, Jharkhand, Madhya Pradesh, Odisha, Rajasthan, and Uttar Pradesh
  3. In the south, there will be a dearth of young working people to keep up and expand the level of economic development
  4. Investing in young people in the north to realise the demographic dividend will be a win-win situation for all India

Policy:

  1. The National Health Policy 2017 emphasises quality of care and commitment to sustainable development, and positions improved access, education and empowerment as the basis for population stabilization
  2. It is now for States to align their own health and population policies to the national ones

Note4Students:

Read carefully for writing Mains answer.

Back2Basics:

Replacement level: Total fertility rate (TFR) that (if sustained) leads to each new generation being less populous than the older, previous one in a given area.

Agricultural Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc. Agriculture

[op-ed snap] Farming structure, too, needs reform

Context:

  1. The government has been quick to scotch any speculation that it proposes any change in the status quo on taxing income from agriculture
  2. However, the idea merits wider debate, after having been aired by the Niti Aayog

Tax on agricultural income:

  1. Technically speaking, agricultural income is not quite exempt from taxation
  2. It falls among the taxes the Constitution assigns to the states, that is all
  3. States do collect tax on agricultural income from plantations
  4. The Centre also has policies that an economist would say tax agricultural income
  5. If a marketing restriction, foreign or domestic, represses the price of an agricultural commodity below its optimal level, it amounts to an implicit tax

Centre’s tax:

  1. The Centre, too, levies some tax on agricultural income clubbed with non-agricultural income
  2. If a person has non-farm income above Rs 2.5 lakh and also declares farm income, she is allowed to club agricultural income (without any ceiling) to determine the rate of tax applicable to non-agricultural income
  3. Clubbing for rate purposes was introduced in the assessment year 1974-75 (financial year 1973-74), and enables a taxpayer to lower her overall tax liability
  4. Her tax outgo would be higher had agricultural income been fully charged to tax

Misuse:

  1. The beneficial rule, meant to protect farmers, has been rampantly misused
  2. The practice, of non-farmers declaring agriculture as their source of income to evade income tax, must end

Reforms needed:

  1. It is not just taxation that has to change in agriculture — so must its organization
  2. Corporate farming should be allowed, and leasing in of land given legal protection
  3. Some activities call for vertical integration — for example, of growing sugar cane and crushing it, for optimal efficiency
  4. That would put paid to the saga of cane arrears and contested cane prices
  5. High cane prices would lower sugar profits and low prices would boost sugar profits
  6. But since cane prices and profits would both accrue to the same farmers, the focus would be on improving the efficiency of the combined operation

Note4Students:

An important op-ed for Mains and Prelims both

International Monetary Fund and India Global Groupings

[op-ed snap] The world is still flat

Context:

  1. The IMF sees world economic growth accelerating from 3.1% in 2016 to 3.5% in 2017, and 3.6% in 2018
  2. Both advanced and emerging economies are poised to do better
  3. Growth in advanced economies is projected to rise from 1.7% in 2016 to 2% in 2017 and 2018
  4. Emerging markets will grow at 4.5% in 2017, and 4.8% in 2018, compared with growth of 4.1% in 2016
  5. China will see growth decelerating from 6.7% in 2016 to 6.6% and 6.2% in 2017 and 2018, respectively
  6. India’s growth, in contrast, will accelerate from 6.8% in 2016 to 7.2% and 7.7% over the next two years

Years of secular stagnation:

  1. In 1999-2008, the world economy grew at 4.2%, with emerging markets firing away at 6.2%
  2. But the IMF’s projections do hold out the hope that the world economy may emerge from the prolonged slump it has seen consequent to the financial crisis of 2007
  3. Many economists believe that the world economy was in the grip of ‘secular stagnation’, an expression coined by the economist Alvin Hansen in the 1930s
  4. Hansen argued that where savings substantially exceed investment, the real interest rate tends to drop to a very low level
  5. Conventional monetary policy operates by reducing nominal interest rates in order to stimulate growth
  6. Where the nominal interest rate is already close to zero, there isn’t much scope for cutting interest rates
  7. In conditions of ‘secular stagnation’, conventional monetary policy is doomed to be ineffective
  8. The burden of reviving growth in such a situation falls on fiscal policy
  9. This means running up large government deficits and increasing public debt
  10. But markets will finance government borrowings only up to a point, and there is also resistance among policymakers to increased government spending

Description of the world economy in recent years:

  1. Economists underlined that the real interest rate had indeed been falling for several years
  2. This was because savings were rising and investment was falling
  3. Higher savings flowed from factors such as greater inequality (the rich can spend only so much), and greater life expectancy and reduced post-retirement benefits (which means people have to save more to provide for retirement)
  4. Investment had fallen because capital goods had become cheaper, the new economy did not require a great deal of capital and population growth had slowed (which meant lower demand for goods down the road)
  5. With decreased spending, inflation rates also fell in the advanced world

Winds of recovery?

  1. In recent months, inflation is trending upwards
  2. The IMF expects the inflation rate in the U.S. to rise from 1.3% in 2016 to 2.7% in 2017
  3. In the Euro area, it sees inflation rising from 0.2% to 1.7%
  4. The spectre of a deflationary spiral has thus been dispelled
  5. The stock markets have soared consequent to the election of Donald Trump as U.S. President, and household debt is once again rising in the advanced world
  6. We cannot be certain, therefore, that the projected acceleration in growth in the medium term is based on a solid recovery
  7. The IMF warns that high income inequality is likely to persist. This means that an important cause of ‘secular stagnation’ will remain unaddressed

All eyes on the U.S.:

  1. Much boost to market sentiment has to do with expectations that the U.S. will see a strong fiscal stimulus through the combination of tax cuts and massive infrastructure spending that Mr. Trump promised during his election campaign
  2. The IMF suggests that the U.S. policy agenda could unfold in ways that could derail its forecasts
  3. A wider fiscal deficit could have either of two outcomes: It could cause output to rise while leading to a moderate rise in interest rates
  4. Or it could cause a sharp rise in interest rates without any significant increase in output
  5. The world economy would benefit in the first scenario but not in the second

Dip for emerging economies:

  1. The IMF warns that emerging markets, including India, will find the external conditions for growth less supportive than in the post-2000 period thus far
  2. Slower growth in the developed world means lesser demand for emerging market goods and services
  3. Tightening monetary conditions in the advanced world spell lower capital flows
  4. Subdued commodity prices mean that terms of trade improvements will be limited
  5. Emerging markets accounted for 70% of global growth in purchasing power parity terms in 2000-08, nearly double their contribution in the 1980s
  6. With external conditions now turning adverse, the IMF sees the contribution of emerging markets and developing economies (EMDEs) to global growth in 2016-21 falling
  7. The fall is quite small but it may mark the reversal of a benign trend

Global scenario:

  1. China faces the problem of a large expansion in credit which has sustained growth in recent years
  2. India is wrestling with a huge debt overhang
  3. Excessive debt in many parts of the world could undermine the IMF’s upbeat forecasts
  4. The threat of protectionism and anti-globalisation sentiments in the U.S. and Europe pose bigger risks than many of the factors mentioned above
  5. Finally, there are rising geopolitical tensions. U.S.-Russia relations have touched a new low
  6. There is a real prospect of confrontation between the U.S. and Russia over the conflict in Syria
  7. Tensions over North Korea have reached a flashpoint
  8. The U.S. and China are at loggerheads over maritime rights in the South China Sea

Note4Students:

Read the op-ed to develop understanding of the changing world economic scenario and IMF’s forecast on the economic perspective.

Foreign Policy Watch: India-Iran India Beyond its Neighbours

[op-ed snap] Navigating between friends

Context:

  1. Changes in the United States’ attitude to Iran could be very serious for India
  2. Among the issues involved are:
  • India’s access to Iranian oil supplies and other resources,
  • Progressively more cordial relations between New Delhi and Washington, and
  • India’s deepening defence relationship with Israel

Upping the ante:

  1. The Trump administration is openly and consistently confrontational towards Iran
  2. S. Secretary of State Rex Tillerson wrote that Iran continues to comply with the deal, but also called Iran “a leading state sponsor of terror”
  3. Secretary of Defense, James Mattis, who has long been very hostile to Iran, accused it of attempting to “destabilise yet another country”, meaning Yemen
  4. Two months earlier, Mr. Mattis had responded to Iran’s late-January test of a ballistic missile by calling it the world’s “single biggest state sponsor of terrorism”

U.S. Allies:

  1. Washington’s major regional allies, Israel and Saudi Arabia, have been no less hostile
  2. Israeli Prime Minister Benjamin Netanyahu has said Iran’s “aggression must not go unanswered”
  3. Following exchanges with Riyadh, the White House has said the U.S. and Saudi Arabia have agreed to address what the U.S. Treasury’s Office of Foreign Assets Control calls Iran’s “destabilising activities” in the region

India’s Iran relationship:

  1. In October 2016, Iran was India’s largest supplier of crude oil, with its exports to India exceeding the overall largest supplier Saudi Arabia’s exports by over 10%
  2. As the U.S. federal body Energy Information Administration notes, India is also funnelling Iranian oil into its expanding strategic petroleum reserves (SPR), with a view to holding 90 days’ supply against contingencies
  3. Crucially, Tehran has consistently offered New Delhi very favourable terms, including non-dollar oil sales and other commercial attractions
  4. Oil is of course only one commodity in a long-standing Indo-Iranian trade relationship
  5. Iran buys basmati rice and sugar from India, as well as various agrochemicals and petroleum products
  6. The Indian government has taken steps to reassure Indian insurers in the public and private sectors, as well as banks, over the risks they might take in handling Iranian money while the U.S. sanctions regime remains in force
  7. In addition, India and Iran have reached agreement on the expansion of several industrial facilities at the port of Chabahar; the work is to be undertaken mainly by Indian entities
  8. Another substantial deal is the one under preparation for India to have operating rights in the Farzad B gas field, which lies within Iranian waters in the Persian Gulf

Consequences:

  1. The prospect of a more aggressive U.S. attitude on Iran will almost certainly make the Government of India very uncomfortable
  2. It may help India that within the U.S. and Israel, moderating factors — both commercial and military — obtain
  3. In 2012, the then Chairman of the U.S. Joint Chiefs of Staff, General Martin Dempsey, stated that attacking Iran would only delay Iran’s development of a nuclear weapon and not stop it
  4. Former head of Israel’s intelligence service Mossad, Meir Dagan then said that a pre-emptive attack on Iran was “the stupidest idea” he had ever heard
  5. Commercial agreements have followed the Iran nuclear deal like the Joint Comprehensive Plan of Action between Iran, the five permanent members of the United Nations Security Council and the European Union
  6. Another important deal is a 10-year, $16.6-billion contract for the aerospace giant Boeing to supply Iran Air with 80 passenger aircraft
  7. Quite apart from Boeing’s competition with the EU manufacturer Airbus, any attack on Iran could put about 1,00,000 U.S. jobs at risk

Note4Students:

For India, a further point is that while previous U.S. administrations exempted India from certain sanctions over India’s continuing oil deal with Iran, the Trump administration may see the matter differently. Read how imposing sanctions on Iran will effect India carefully from Mains PoV.

Minority issues – Dalits, OBC, Reservations, etc. Human Resource Development

[op-ed snap] A solution in search of a problem

Context:

  1. In seven decades, the nation has failed to answer the question that who are the backward class of citizens
  2. This failure is at the core of demands by several rich, powerful and dominant castes to be included as backward classes (BCs) to obtain the benefits of reservations

The new NCBC:

  1. On April 10, Lok Sabha passed the 123rd amendment to the Constitution which will, when it becomes law, bring into being a ‘constitutional’ National Commission for Backward Classes (NCBC)
  2. The current NCBC was created under an Act of Parliament in 1993
  3. The new insertion into the Constitution (Article 338B) is identical to the Articles 338 and 338A that respectively created the national commission for SCs and another for STs
  4. The amendment also brings about changes to Articles 342 and 366

The Amendment:

  1. 123rd amendment amounts to that the Union government has in one stroke brought BCs in league with the SC/STs as victims of discrimination, exclusion and violence
  2. It not only is illogical and lacks historical justification, but is fraught with several challenges to the way India runs its welfare system

New NCBC is a solution in search of the problem:

  1. The new NCBC is bound to create more problems than it is capable of solving
  2. One, on the task of identifying backward classes, the new entity will not even be expected to do the job. Hereafter Parliament will determine who is a BC for the ‘Central’ List
  3. Two, since it has no responsibility to define backwardness, it cannot address the current challenge of well-off castes’ demands to be included as BCs

Delinking Article 340:

  1. Article 340 deals with the need to, inter alia, identify those “socially and educationally backward classes”, understand the conditions of their backwardness, and make recommendations to remove the difficulties they face
  2. The Article stipulates appointment of a commission to give effect to its provisions
  3. This was the context for the appointment of two commissions (one headed by Kaka Kalelkar in the 1950s and the other by B.P. Mandal in the 1970s)
  4. Even the 1993 NCBC Act was based on this article
  5. The 123rd amendment delinks the whole folio of backward classes from Article 340 and brings it closer to provisions related to SC/STs

Shortcoming of the current NCBC:

  1. The main shortcoming of the current NCBC, according to the Union government, is that it has no power “to hear the grievances” of the BCs
  2. The SC commission has become the gold standard for those demanding the new NCBC
  3. If the new body is as incompetent as its role model, the nation will be spared of a lot of avoidable problems
  4. The government initially proposed to set up the “National Commission for Socially and Educationally Backward Classes” which is — in nomenclature, at least — closer to Article 340
  5. By retaining the old generic name of NCBC and delinking the body from its soul (Article 340), the government set the stage for the whole scheme of special protections under the Constitution to crumble

Article 340:

  1. The article reflects the Constituent Assembly’s understanding on the matter which is relevant even today: there are classes, not castes, which suffer from social and educational backwardness, and the state has the burden of allocating adequate funds to ameliorate their conditions
  2. It stretches one’s credulity to accept that the article stipulates quotas and representation be extended to BCs

New untouchables?

  1. Though Article 338B keeps the socially and educationally backward classes as its subject matter, in practice the proposed system will treat the developmental issues related to BCs on a par with caste discrimination and untouchability suffered by SCs and even by STs
  2. The new NCBC will hear grievances, inquire into complaints, summon officials given its powers as a civil court, issue directions and have the right to be consulted by both Union and the States on policy matters related to BCs
  3. One is right to assume that BCs do face discrimination and exclusion and they deserve state support
  4. The whole business of inquiries into complaints, safeguards, recording evidence, etc. will result in the need to enact laws similar to the ones in existence for the protection of SC/STs
  5. Consider a possibility: in case of an atrocity against SCs, the National Commission for Scheduled Castes intervenes as a guardian of their rights
  6. It is not rare that in most atrocities SCs are pitted against Sudras (be they upper or lower)
  7. It is irrelevant whether it is an atrocity or a group clash, once an incident flares up two ‘constitutional’ national commissions will clash, each defending its wards

Note4Students:

Important for prelims and mains. Mains 2016 had a question on constitutional provisions for tribals. Similarly, note these provisions for BCs. Important for prelims too.

Urban Transformation – Smart Cities, AMRUT, etc. Infrastructure

[op-ed snap] Cities at crossroads: Starving the municipality

Context:

  1. The current sources of revenue of municipalities in India are grossly inadequate for discharging the constitutional mandate of delivering public services
  2. The most recent threat to municipal finances came in the just concluded municipal elections in Delhi
  3. The Delhi Chief Minister announced that if the AAP came to power in municipal corporations, the Delhi state government would waive house tax for all residential properties — big or small, rich or poor
  4. However, he can fulfill this promise only if the Government of India (GoI) approves this move

Property tax:

  1. Property tax is the single most important source of revenue for municipal corporations and municipalities
  2. It accounts for 30% of “own” municipal revenues in India
  3. While property tax is levied and collected by the urban local bodies, the state government has the power to design the property tax regime including the tax rates, exemptions and rebates, the tax base, and the basis for the valuation of properties as well as their revaluation every few years to account for rising prices
  4. This means that the political parties vying for power in the state can be tempted to promise a waiver or reduction in the property tax or grant of exemptions in order to win support during election time
  5. The largest source of revenue for the urban local bodies, therefore, tends to get caught in the wheels of the election cycle
  6. The resulting collapse of municipal services hurts voters, but they do not realise how it is directly linked to the populist decision to cut property tax or house tax as it is commonly called when levied on residential properties

In various states:

  1. Rajasthan abolished property tax in February 2007 after the BJP formed the government in the state, delivering on its poll promise of 2003
  2. However, the tax was brought back within six months in a new incarnation as “urban development tax” to recoup the loss of revenue resulting from the property tax abolition, and also to retain access to Jawaharlal Nehru National Urban Renewal Mission (JNNURM) funds for urban infrastructure
  3. In Punjab, house tax on self-occupied residential houses, which form the bulk of the properties covered under the tax, was abolished in the late 1990s by the Akali Dal government
  4. In 2006, attracted by the desire to access JNNURM funds to build infrastructure in Amritsar and Ludhiana, the Congress government in Punjab entered into an agreement with the GoI to put in place a reformed property tax regime in these cities but was not able to implement the agreement
  5. The Akali-BJP government was elected in Punjab in 2007 and again in 2012
  6. Property tax was finally introduced in 2013, although following the familiar pattern, property tax rates were cut by almost half and many categories were exempted during the campaign for the general elections in 2014
  7. Haryana and Himachal Pradesh have also each had a bash at blowing the budgets of their municipalities by giving major exemptions in their property tax regimes

Under-exploited tax:

  1. Property tax is grossly under-exploited in India, even though it remains the largest source of revenue for urban local bodies
  2. There is need to set up a property tax board in each state which could set out better and more transparent methods of assessment, valuation and collection of the tax, using GIS and other IT tools
  3. There is need to add a municipal finance list in the Constitution which should specify taxes that are exclusively in the domain of the local government
  4. Above all, there is need to heed the advice of the 14th Finance Commission: “The state government should not provide exemptions to any entity from the tax and non-tax levies that are in the jurisdiction of local bodies. In cases where the grant of such an exemption becomes necessary, the local bodies should be compensated for the loss”

From Constitution:

  1. It is 25 years since the 74th Constitutional Amendment mandated that state governments transfer to urban local bodies the responsibility for functions such as urban planning including town planning, regulation of land-use and construction of buildings, roads and bridges, provision of water, sanitation, public health, urban amenities such as public parks, gardens and playgrounds, slum improvement and upgradation, etc.
  2. A number of these functions have been devolved by the state governments over the past 25 years
  3. Once transferred, town planning can be used as a major instrument to unlock land value so that the cities can go about the business of land zoning and developing urban infrastructure with the finances raised in the process

State Finance Commissions:

  1. Devolution to urban local bodies is supposed to be based on the recommendations of state finance commissions (SFCs) set up by the state governments
  2. SFCs are supposed to spell out the principles for sharing/devolving a part of the revenue of the state governments to municipal bodies, but they have not been able to challenge the state-level political resistance to devolve funds to the urban local bodies

Note4Students:

If Indian cities are to deliver a better quality of life and improved investment climate, they need to have business models which are financially and environmentally sustainable.

Intellectual Property Rights Regime – TRIPS, IPR Policy, etc. Industries

[op-ed snap] The expanding universe of IP

Context:

  1. April 26 is World Intellectual Property (IP) day
  2. Over the years, global IP standards have steadily expanded beyond WTO requirements
  3. This is because of free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) which India is currently negotiating with its trading partners

Expanding IP:

  1. Data exclusivity is exclusivity over clinical trial data submitted by drug companies to the regulatory authorities for market approval, the grant of which could severely undermine access to medicines
  2. The propensity to expand the universe of IP is not new
  3. Businesses have demanded patent protection for the way they do business
  4. Motorcycle manufacturers have got into dispute over the trademark on the exhaust sound of motorcycles
  5. Animal activists have fought for copyright in a selfie taken by a monkey
  6. IP in the modern world defies definition, transcends boundaries and has become synonymous with ascribing value to things that we don’t fully understand

Why data exclusivity?

  1. The issue of whether India should offer data exclusivity — one of the key issues discussed in the RCEP — is tied to our understanding of what amounts to IP and whether we are obliged to protect it
  2. Data exclusivity prevents drug regulators from referring to or relying on data submitted by an originator company relating to a drug’s safety and efficacy while approving bioequivalent versions of the same drug, i.e. therapeutically equivalent generics and biosimilars for a fixed period of time
  3. A drug that comes to the market for the first time undergoes extensive preclinical and clinical trials on animals initially and human beings later before it is introduced for public use — a time-consuming and expensive process
  4. Developed countries, on behalf of their pharmaceutical lobbies, seek data exclusivity in developing countries arguing that this is necessary to recognise and incentivise the efforts put in to bring a new drug to the market along with recovering the research and development costs incurred
  5. However, such exclusivity would prevent market entry of generic versions of the drug, which could be detrimental to the larger public interest

Pharma companies:

  1. Pharmaceutical companies have been pushing for data exclusivity to prolong already existing monopoly and delay competition from generics even after the expiry of the 20-year patent term or to gain exclusivity on non-patented drugs
  2. In India, such a system may negate the impact of Section 3(d) of the Patents Act, which disallows evergreening patents
  3. With data exclusivity, a company could nevertheless gain exclusive rights over such drugs even though they are not patented

Benefits of exclusivity:

  1. During the period of exclusivity, regulators are barred from using the originators’ data to grant marketing approval to generics
  2. Generic companies would then be required to repeat the entire cycle of clinical trials already conducted instead of merely establishing bioequivalence to prove efficacy
  3. As seen in countries where data exclusivity is granted, generic companies do not undertake such clinical trials and their versions of the drug accordingly stay off the market as long as the period of data exclusivity lasts
  4. With restricted market entry of generics, artificially high drug prices remain which puts medicines beyond public reach
  5. Unlike in the West, India does not offer data exclusivity and allows bioequivalent generics to be registered based on, among other things, trial data available in the public domain

Test data as a public good:

  1. The argument that clinical trial data needs exclusivity in the light of the money expended is an untenable one
  2. Automotive companies spend millions of dollars on data generated in car crash tests to ensure passenger and pedestrian safety
  3. Automotive companies have not made any proprietary claim on the data generated
  4. Unlike automotive companies which use crash test dummies, pharmaceutical companies that test their drugs on human subjects have a greater obligation to make the data public and IP-free
  5. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) does not mandate data exclusivity
  6. Providing data exclusivity is a TRIPS-plus measure

IP-like protection to data exclusivity is not advisable:

  1. First, it is an absolute protection granted without any institutional check such as opposition and revocation as available in other forms of IP and ends up as an irrevocable exclusivity to the originator
  2. Second, the U.S. Supreme Court in Mayo v. Prometheus, 132 S. Ct. 1289 (2012) has excluded patent protection to biological correlations, terming it as an extension of natural laws
  3. Extending IP-like protection to clinical observations will open a window to claim exclusivity in a subject matter traditionally excluded under patent law
  4. Third, offering IP-like exclusivity solely on the basis of money spent in regulatory testing will set a bad precedent for other industries that may now claim an IP when there is none

 

International Monetary Fund and India Global Groupings

[op-ed snap] A call for reform: On IMF’s quota system

Context:

  1. Finance Minister Arun Jaitley has demanded reforms to the International Monetary Fund’s controversial quota system, shedding light on the problems facing the Bretton Woods institution in today’s global economy

Quotas:

  1. Quotas determine the size of contingency funds at the disposal of the IMF to lend to countries in need of help
  2. It also determines the power of individual countries to influence lending decisions and tap into the funds themselves
  3. Though developing countries hold less than half the overall quota at the moment, with their rapidly increasing economic heft they have demanded a greater share — with limited success

General Review of Quotas:

  1. Speaking at the spring meetings of the IMF, Mr. Jaitley reiterated the need to reform the quota system further
  2. Else, he warned, the legitimacy and credibility of the IMF could be eroded
  3. 15th General Review of Quotas (GRQ), the most recent attempt to revise the size and composition of the system, was to be completed by October 2017, but the deadline has now been extended to 2019
  4. The delay was not unexpected, given the poor precedent set by the long delay in adoption in 2016 of the previous GRQ
  5. With the rise of competing global institutions ready to meet the capital needs of the developing world, the patience of countries such as India may be tested more easily

Stakes:

  1. At stake is the potency of the IMF in keeping up with the changed fundamental needs of developing economies
  2. The developing world is looking beyond the short-term crisis management tools that the IMF, as the sole international lender of last resort, has traditionally offered them for decades now
  3. China, for instance, with its steadily rising influence on the global economy, has grown to be the focal point for economies seeking alternative sources of capital to fund their long-term growth needs
  4. This month, Mr. Jaitley announced that India is seeking $2 billion from the New Development Bank, set up by the BRICS countries in 2015 with a more equitable power structure, to fund infrastructure projects
  5. The Asian Infrastructure Investment Bank, launched in 2014, could be an even bigger threat to the IMF’s influence given its larger membership, lending capacity and international reach

Conclusion:

  1. In this environment of competition, the IMF will have to do more than just superficially tinker with its asymmetric power structure and outdated quota system
  2. Else, it could be slowly but steadily pushed into irrelevance

 

Minority issues – Dalits, OBC, Reservations, etc. Human Resource Development

[op-ed snap] The appeasement of none

Context:

  1. Communal politics, which ironically passes for secularism in this country, has been the bane of Indian politics
  2. It can be traced back to the British policy of ‘divide and rule’, the result of which was Partition
  3. The Constitution was a repudiation of these ideas and the politics that perpetuated them
  4. It rejected the suggestions for a separate electorate for the minorities and the proportional representation system

Trends in current times:

  1. The recent PIL filed by a Jammu-based advocate alleges that rights of religious and linguistic minorities in the State are being “siphoned off illegally and arbitrarily”

Defining minority:

  1. Articles 29 and 30 of the Constitution guarantee certain rights to minorities for protection of their culture, script, and languages
  2. The Constitution has not defined or identified religious and linguistic minorities
  3. The question of who will determine which group is a minority was settled only in TMA Pai Foundation v. State of Karnataka
  4. Here it was held that the unit for the purpose of determining the definition of minority would be the State, not the whole of India

Minorities Commission:

  1. The Minorities Commission was set in 1978 to ensure that minorities are able to enjoy the safeguards provided for them in the Constitution and various Central and State laws
  2. National Commission for Minorities Act was passed in 1992 to give a statutory backing to the Commission
  3. According to Section 1 (ii) of the Act, it extends to the whole of India except Jammu and Kashmir
  4. As per Section 2 (iii), ‘minority’ means a community notified as such by the Central government
  5. Using this power, the Central government through a gazette notification notified Muslims, Christians, Sikhs, Buddhists and Zoroastrians (Parsis) as ‘minorities’ for the purpose of this Act
  6. Jains were declared as a minority later

Who is a minority?

  1. According to the 2011 Census, out of 28 States and seven Union Territories, Hindus are a religious minority in seven States (Arunachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Punjab) and in one UT (Lakshadweep)
  2. In J&K, Hindus have been at the receiving end of majoritarian wrath, and the constitutional guarantee of liberty of thought, expression, belief, faith and worship is being violated there
  3. The status of West Pakistan refugees, who had migrated there at the time of Partition, is also relevant
  4. Reports suggest that there are about 2.5 lakh Hindus. They are not recognised as state subjects and are denied the most basic human rights
  5. In Punjab, Hindus are only 38.4% of the population, but they have not been notified as a minority in the Punjab State Commission for Minorities Act, 2012

Furthering vote-bank politics:

  1. The SC in Bal Patil v. Union of India had said the National and State Minorities Commissions should direct their activities to maintain the unity and integrity of India by gradually eliminating the minority and majority classes
  2. The Minority Commission should act in a manner so as to prevent generating feelings of aversion towards multiculturalism in various sections of India
  3. But rejecting all this, for vote-bank politics, the then United Progressive Alliance government declared Jains as a minority community in 2014, just before the elections

Note4Students:

We need to move beyond this minority-majority binary. The governments should be committed to the philosophy of ‘Antyodaya’, i.e. working for the benefit of the last person in the queue. They should not look at citizens through the prism of caste, religion, language, or sect. There should be equal opportunities for all and the appeasement of none. Carefully note the constitutional aspects and various cases in this issue. This gives an objective and unbiased tone to your answers on such issues.

Foreign Policy Watch: India-China India & Neighbours

[op-ed snap] A strategic encirclement

Context:

  1. China’s state-owned Global Times newspaper reported last month that the People’s Liberation Army Navy’s (PLAN’s) second aircraft carrier, referred to as “Type 001A” is nearing completion
  2. Another carrier, dubbed “Type 002”, is also under construction
  3. The Type 002 represents a much bigger class of ship but will incorporate modern design and operational features, including a catapult and early-warning aircraft

China’s grand strategy:

  1. China has built runways and fortified seven artificial islands created in the Spratly group in the South China Sea (SCS)
  2. India is encircled by a growing ring of Chinese power and influence
  3. To the north, garrisons, airfields and missile sites linked by modern road-rail networks underpin China’s dominant posture on the Tibetan plateau
  4. Xining-Lhasa rail link is progressing towards Nepal, where China has made significant political inroads
  5. To our east, China’s Yunan province will gain access to the Bay of Bengal via rail, highway and pipeline, linking it to the deep-water port being built by China at Kyaukpyu in Myanmar
  6. On India’s western flank, the China-Pakistan Economic Corridor (CPEC) will create access to the Arabian Sea from Xinjiang to the Pakistani port of Gwadar via Gilgit-Baltistan
  7. Further west, China has set up its first overseas military base at Djibouti on the Bab el-Mandeb
  8. To our south, China has built a new harbour in Hambantota and modernised Colombo port for Sri Lanka
  9. All three ports could provide bases or sanctuaries to PLAN ships and submarines deployed in the Indian Ocean
  10. PLAN intends to deploy its expanded marine corps to Djibouti and Gwadar
  11. The recent Chinese sale of eight diesel submarines to Pakistan and two to Bangladesh provides conclusive evidence of India’s “strategic encirclement”

What Chinese say:

  1. China’s sympathisers scoff at the “encirclement” thesis
  2. They maintain that China neither wants war, nor seeks further territorial gains
  3. It only wants economic engagement and tangible proof of friendship
  4. India has consistently failed to provide this friendship by playing the Dalai Lama card, cosying up to the US and withholding cooperation on the “Belt and Road” initiative

What China thinks about us?

  1. China looms large in India’s security perspectives, the former does not regard India as a threat – or even a competitor
  2. For Chinese strategists, asymmetry is inherent in such relations
  3. They bluntly advise that rather than obsessing with futile dreams of parity, India must reconcile itself to a subaltern status vis-à-vis China
  4. There is firm conviction in China that the root causes of the 1962 conflict were India’s “forward policy” and its putative ambition to seize Tibet

China’s aim:

  1. Hegemony in Asia, acquisition of nuclear weapons and the incorporation of Tibet into the People’s Republic
  2. The growth of PLAN and the creation of the SCS island-fortresses can be used to forward-deploy ships, aircraft and missiles to threaten US or other naval forces
  3. Such deployments could extend the operational range of PLAN surface and air forces by as much as 600-900 miles
  4. While Port Blair is 900 miles from Chennai, it happens to be 1,900 miles from the Fiery Cross reef, via the Malacca Strait
  5. When PLAN is the world’s second most powerful navy, it may feel confident enough to contemplate a re-enactment of 1962 in the Bay of Bengal to cut India down to size again

Note4Students:

How prepared would our political leadership and the armed forces be to react against a PLAN amphibious assault, on the Andamans, supported by one or more aircraft carriers? This is a daunting question. Read the op-ed carefully for Mains.

Foreign Policy Watch: India-Sri Lanka India & Neighbours

[op-ed snap] Three decades of mistrust

Context:

  1. Delhi and Colombo intensify their high-level political engagement
  2. However, new opportunities for elevating the partnership are coloured by enduring suspicions in Sri Lanka
  3. The country’s prime minister, Ranil Wickremesinghe, is travelling to India this week and Prime Minister Narendra Modi will head to Sri Lanka next month to join the special international celebrations of the Buddha Jayanti in Colombo

For India:

  1. For Modi, it will be the second visit to Sri Lanka in barely two years
  2. This reflects his determination to overcome the unfortunate legacy of three difficult decades that saw a cruel civil war, India’s failed intervention and the accumulated distrust of Delhi in Colombo
  3. Media reports from Sri Lanka suggest that Wickremesinghe is bringing proposals for the development of the Trincomalee area as a regional hydrocarbon hub in the Bay of Bengal and the eastern Indian Ocean
  4. These proposals include the construction of a new LNG terminal and the renewal of the Second World War-era oil tank farms in Trincomalee in partnership with India

Protests in Sri Lanka:

  1. There is resistance in Sri Lanka to economic cooperation with India
  2. Protesting the modernisation of the Trincomalee oil tank farms, the workers of the Ceylon Petroleum Corporation have announced a strike
  3. Deep political reservations in Sri Lanka, held up the implementation of a 2003 agreement with India on the development of tank farms

Learning from neighbours:

  1. Twists and turns in this story are part of a familiar but unfortunate South Asian pattern — the politicisation of economic projects
  2. Our neighbours in East Asia, have learnt to separate political differences from mutually beneficial economic engagement
  3. China and Taiwan don’t even recognise each other’s political legitimacy, but that has not stopped them from productive commercial cooperation
  4. The idea of an all-encompassing Sino-Indian rivalry for regional influence has further created negativity in the region

China’s role:

  1. Since Sri Lanka has given port projects in Colombo and Hambantota to China, the story goes, it is now trying to compensate an unhappy India with infrastructure projects elsewhere in the emerald island
  2. China is a major economic partner for Colombo and other regional capitals can’t be a surprise, after all, China is now the world’s second largest economy
  3. Beijing has encouraged its companies to embark on a “go out” strategy and has infrastructure projects underway all across the world.

Question on India:

  1. How come Delhi, despite its size and proximity, has to “compete with Beijing” in the Subcontinent?
  2. India should have been the preferred economic partner to all of its neighbours, but it is not
  3. One part of the damning answer is that India had checked out of the business of regional integration after Independence
  4. Delhi deliberately chose to discard economic regionalism — in the name of self-reliance
  5. In the reform era that began at the turn of the 1990s, Delhi has surely tried to undo the damage
  6. But the effort was too weak to overcome the political burdens that weighed down India’s neighbourhood policy
  7. Unfortunately for India, it also coincided with China’s rise and the dramatic expansion of its regional commercial influence

“Neighbourhood First” policy:

  1. It is in essence about promoting regional economic integration
  2. Sustained diplomacy has begun to pay off with Bangladesh
  3. Delhi might need lots of patience, much hard work and a bit of luck to produce similar economic advances with Colombo

Note4Students:

An important op-ed for Mains.

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