Type: op-ed snap


Pulses production – Subramanian Committee, Eco Survey, etc. Agriculture

[op-ed snap] The return of kisan politics

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Note4Students:

Op-ed discusses reasons behind farmer agitations across country and prevalent rural urban divide. Points can come in handy in mains answers related to this topic.

From UPSC perspective, following things are important:

Prelims level: National Sample Survey reports, MGNREGA, Minimum Support Prices

Mains level: Rural urban divide, issues with MSP and solutions to this issue


News:

Context:

  1. The recent mobilisation of peasants is a fall-out of socio-economic trends related to India’s post-1991 growth pattern
  2. Urban India was the main winner of the post-1991 growth pattern, and rural India lagged behind
  3. The best data documenting these trajectories can be found in the National Sample Survey reports

What has caused this Mobilization?

(a) Widening Disparity:

  1. In 1993-1994, the monthly per capita expenditure (MPCE) in rural India was Rs 281, while the MPCE in urban India was Rs 458 (No need to remember exact data, you can quote it in mains as Urban MPCE was twice as rural)
  2. By 2007-2008: By that year, the average MPCE in rural India was Rs 772 (a 174 per cent increase over 1993-1994) while that of urban India had increased to Rs 1,472 (The gap still existed)
  3. The gap diminished somewhat between 2007-2008 and 2011-2012, with rural MPCE touching Rs 1,430 and the urban MPCE rising to 2,630 (But this was only marginal cover up)

Reasons for this disparity:

  1. This disparity is partly due to the slow growth of agriculture over the last decade
  2. Also due to government’s lack of interest in agriculture— declining investments in irrigation, diminishing fertilizer subsidies

(b) Role of MGNREGA:

  1. The MGNREGA is primarily meant for poor farmers
  2. The farmers who are not the scheme’s main beneficiaries have suffered from two years of drought

(c) Demonetisation effect:

  1. Peasants desperate for cash had to sell their produce at very low prices to traders
  2. They also ran into heavy debts with moneylenders charging an interest rate of more than 20 per cent; many were forced to sell their lands

What could have been done?

  1. Government should have maintained the Minimum Support Prices (MSPs) at a good level
  2. Especially the MSPs of pulses, in which poor farmers specialized.
Foreign Policy Watch: India-United States India Beyond its Neighbours

[op-ed snap] India, US and a five-point plan

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Note4students

Mains Paper 2: IR | Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

From UPSC perspective, following things are important:

Prelims level: Not Much

Mains level: Article talks about Future goals of India-US diplomacy.

News

Context

  1. The Article is about the upcoming meet of Modi and Trump
  2. In this, writer is suggesting a five-point plan for future Indo-US Relations

 

Why India and US needs to engage with each other?

Geo-politics: The evolution of global geopolitics has led to an unprecedented convergence between the US and India.

Commercial advantage:The commercial imperative for closer ties is clear for American companies seeking to do business in the fastest growing large economy in the world. On the flipside, India’s strength in the services sector provides US companies with a deep competitive edge.

Strategic reasons: The strategic imperative for a deeper cooperation between the two countries is indisputable: China’s military build-up and its assertive posture in the Indo-Pacific, the need to address regional security threats in South Asia, and increasing cyber security challenges.

 

five commercial and strategic priorities that will continue to be the pillars of the US-India partnership which both governments should consider.

1.Building a forward-looking trade agenda

  1. The two countries will need to work on issues such as India’s IP standards and the immigration executive orders affecting high-skilled workers in the US
  2. “America First” and “Make in India” should not become matters of conflict

 

2.US-India defence partnership 

  1.  In 2016, the Government of India finalised the Logistics Exchange Memorandum of Agreement (LEMOA)
  2. And. the US government recognised India as “Major Defense Partner”
  3. India is undergoing a process of military modernisation and could choose to procure defence equipment produced in the US.
  4. Further defence equipment sales to India could help reduce the US-India trade deficit and improve the US’s defence-industrial manufacturing base.

3.Reinvigorate a US-India agriculture dialogue

  1. The aim of a high-level agriculture dialogue would be to reduce barriers and can be part of a streamlined US-India Strategic and Commercial Dialogue or combined with the US-India Trade Policy Forum.
  2. The US and India could create parliamentary exchanges among representatives from high agriculture production areas, establish scientific exchanges, and share best practices in food safety and nutrition.

4.Create an energy trade and technology initiative

  1. The purpose of this initiative would be to underscore the importance of growing US energy exports to meet India’s high demand.
  2. The initiative would also increase industry participation in bilateral dialogues for energy collaboration
  3. The Indian government should also implement a commercial mining framework to enable US companies to invest in the sector.

5.Building cooperation on health security:

  1. Both India and the US should reaffirm their commitment to global health security with emphasis on sharing best practices and technology, and a recognition of the role the private sector can play.
  2. They should work together on improving India’s implementation of its IPR policy and addressing specific areas of contention such as Section 3(d) under the Patent Act.

[op-ed snap] Realizing the India-US trade potential

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Note4students

Mains Paper 2: IR | Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

From UPSC perspective, following things are important:

Prelims level: Not Much

Mains level: The article talks about expectations that India and the US have from each other.

News

Context

  1. India’s concerns regarding US trade policies will need to be addressed to improve the possibility of mutually beneficial access to India’s markets

India Demands from US on Trade front

  1. India demands for improved access to the US market for its workers
  2. Access to more H-1B visas
  3. To effectively engage in mutually beneficial talks, the US needs to recognize and address India’s concerns about American trade policy

Key US concerns with India’s trade environment

  1. Bilateral trade deficit between the two countries
  2. Enforcement of intellectual property rights
  3. Trump’s primary focus is demonstrating improved market access for US exporters

Expectations from the upcoming Modi-Trump Meet

  1. US should aim to loosen the standards and technical barriers it applies to Indian exports in precisely the manner it demands of India’s similar practices

The US needs to keep following aspects in mind when discussing trade policy issues with India

  1. India is reforming and simplifying its policy regime, particularly its inside-the-border trade measures
  2. India’s tariff regime on average is less restrictive than commonly presumed
  3. The demand from India’s growing middle class is slated to become the second-largest in the world within 10 years. This increase would create significant opportunity for US trade and employment
  4. India’s concerns regarding US trade policies will need to be addressed to improve the possibility of mutually beneficial access to India’s markets
Animal Husbandry, Dairy & Fisheries Sector – Pashudhan Sanjivani, E- Pashudhan Haat, etc Agriculture

[op-ed snap] Debunking myths about the cattle rules

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Note4students

Mains Paper 3: Agriculture | Economics of animal-rearing

From UPSC perspective, following things are important:

Prelims level: Particulars of the PCA Act

Mains level: We have seen many articles criticizing recent cattle rules. It is a good counter article on cattle ban issue.It is very important to write balanced answers(covering both sides of the coin) in UPSC mains.

News

Context

  1. The Article is about the provisions of The Prevention of Cruelty to Animals (Regulation of Livestock Market) Rules, 2017
  2. It talks about why there is no need to worry about these provisions

Why were these provisions criticized by the opposition?

  1. First, Opposition alleged that they are the product of government’s divisive agenda that is trying to push the creed and beliefs of the majority
  2. Second, the provisions of the Prevention of Cruelty to Animals Act, 1960 (PCA) have been used as a convenient method to implement above agenda

Origin of these new rules

  1. In July, 2016, the Supreme Court by the way of a final order directed the Union government to frame rules under Section 38 of the PCA
  2. Why: SC had constituted a committee to suggest solutions to stop cruelties from being perpetrated on animals
  3.  It was found that it is in the market that cruel practices like hot branding, cold branding, shearing, bishoping of horses, ear cutting in buffaloes, sealing teats of udder with adhesives, etc. actually happen
  4. So, the Animal Welfare Board of India prepared the draft rules incorporating all the suggestions made by the Supreme Court

Why is this criticism not necessary?

  1. These rules do not prevent anyone from eating beef
  2. They only regulate the sale and slaughter of cattle and certain other animals
  3. Therefore the purpose of these rules was not some sinister plot to push through a communal agenda but merely to comply with directions of the Supreme Court(as mentioned in the ‘Origin’ above.
Financial Inclusion in India and Its Challenges Finance and Banking

[op-ed snap] Are farm loan waivers really so bad?

source:

Note4Students:

Op-ed discusses issue of farm loan waivers from economic as well as moral perspective. Can be asked in Paper IV-Ethics. Read and make notes.

From UPSC perspective, following things are important:

Prelims level: Government bonds, crowding out of investment, Agricultural Insurance Company of India, Subsistence agriculture

Mains level: Economic and moral aspects related to farm loan waivers, what led to this situation and how problem can be tackled.


News:

Context:

  1. There has been a rising trend of farm loan waivers in country in recent times and after UP, Maharashtra and Punjab, Karnataka has also announced waivers for few categories of farmers.

What do farm loan waivers lead upto?

  1. Farm loan waiver undermines an honest credit culture, it impacts credit discipline, it blunts incentives for future borrowers to repay
  2. Waivers engender moral hazard.
  3. It also entails at the end of the day, transfer from taxpayers to borrowers
  4. On account of this, overall government borrowing goes up and yields on government bonds also are impacted
  5. It can also lead to the crowding out of private borrowers as higher government borrowing can lead to an increase in cost of borrowing for others

Present demands and reasons behind them:

  1. The present demands are an outcome of the fact that the government is willing to provide for “acts of God”, not for “acts of state”
  2. The policy framework for farm loans has a provision that when the Centre declares a drought, farm loans in officially designated “affected districts” are rolled over, initially for a year, up to a maximum of three years
  3. Farmers’ problems in 2016-17 are almost entirely the outcome of demonetisation: there was no clear geographical demarcation, and there has been no rolling over of loans

If loans are not waived?

  1. Agricultural loans by banks in India are compulsorily insured by the Agricultural Insurance Company of India (AIC)
  2. Its liabilities are back-stopped by the Centre through budgetary support
  3. Even if loans aren’t waived, there is no loss to banks
  4. In situations of widespread and acute farmer distress leading to substantial defaults, the Centre will have to step in and provide funds
  5. The difference is that waivers are borne by states, and defaults are borne by the Centre

How this all started?

  1. To improve farmer livelihoods and check food inflation, our agricultural strategy has been based upon persuading farmers to move away from traditional subsistence agriculture towards more commercial operations
  2. This entails farmers investing much more and taking higher risks

Economic consequences:

  1. Traditional farm finance sources like moneylenders can neither provide the requisite volume of funds nor do they allow enough margins to make risk-taking worthwhile
  2. Forcing farmers back to moneylenders will retard diversification, thereby increasing the risk of accelerating food inflation

The ‘sub-sovereign’ dilemma:

  1. At the heart of this problem are constitutional provisions
  2. Health of the banks is the Centre’s concern while the health of the farmers is that of the states (Center, state and concurrent lists)
  3. This division of responsibility is asymmetric in that if states protect the interest of farmers, they also protect banks; while the Centre can protect banks without concern for farmers

Possible solutions:

  1. The Centre and states need to work together to evolve a farm loan model which protects both farmers and banks without bringing politics into it
  2. This is the essence of “cooperative federalism
Solar Energy – JNNSM, Solar Cities, Solar Pumps, etc. Energy

[op-ed snap] India’s increasing green growth

source:

Note4students

Mains Paper 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

From UPSC perspective, following things are important:

Prelims level: Data of India’s energy consumption needs

Mains level: The article touches an important topic of Mains paper. It discusses problems associated with energy sector in India and shows the position of India in comparison of the world.

News

Context

  1. In the Article, Writer is discussing ‘how India has performed on green growth and energy efficiency’

India’s declining energy(non-green) dependency

  1. India’s energy intensity of gross domestic product (GDP) has declined from 1.09kg unit of oil equivalent (koe) in the 1980s to 0.66 in recent times
  2. China’s energy intensity is roughly 1.5 times that of India

Energy efficiency: Urban vs. Rural

  1. Energy efficiency has improved in urban areas
  2. Why: As urban settings have reduced the cost of electricity use per output level due to denser customer bases and more efficient plant sizes for local energy producers
  3. Energy efficiency has not improved in rural regions when compared with urban regions
  4. But large manufacturing enterprises are now de-urbanizing and moving into rural areas in search of lower land costs

Performance of Energy intensive Industries on Energy Efficiency front

  1. The energy-intensive industries such as iron and steel, fertilizer, petroleum refining, cement, aluminum, and pulp and paper; account for the bulk of the energy consumed
  2. They have recorded greater energy efficiency improvement
  3. But many industries still remain inefficient by both national and international standards
  4. There is substantial potential for energy savings in energy-intensive industries

Comparison among Indian States

  1. The usage of electricity per unit output is remarkably high in states such as Madhya Pradesh and Odisha, and in some cases twice the level of India as a whole
  2. But in states like Delhi and Haryana, electricity consumption levels are lower than the national average

How to reduce Greenhouse gas emissions?

  1. Policymakers need to move on three fronts to reduce greenhouse gas emissions.
  2. (1) increase energy efficiency
  3. (2) improve access to technology
  4. (3) promote renewable fuel

Where India stands on Energy Consumption?

  1. India’s power system is the fifth-largest system in the world (after China, the US, Japan, and Russia) but it is still insufficient to meet India’s rapidly increasing demand
  2. Electricity consumption in India is only around 566 KWh per capita, compared to the world average of 2,782 KWh per capita

The Way forward

  1. Electricity shortages are frequent in India and are estimated to cost the country around 7% of GDP
  2. India is still home to more than 250 million people who have no access to electricity
  3. India’s green growth agenda should be extended beyond urban areas and also include rural areas
  4. Policymakers need to review the incentives and regulations that govern self-production of electricity

 

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

[op-ed snap] The high cost of ageing

source

Note4students

Mains Paper 2: Governance | Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

From UPSC perspective, following things are important:

Prelims level: What are non-communicable diseases (NCDs)?

Mains level: This is a very important topic. UPSC has asked questions on ‘problems associated with old age people due to globalization'(in past). It is a similar kind of topic.

News

Context

  1. Evidence shows that health systems must be recast to accommodate the needs of chronic disease prevention
  2. Little has been done about the rapid rise in the share of the old i.e. 60 years or more and associated morbidities, especially sharply rising non-communicable diseases (NCDs) and disabilities

Level of effects of non-communicable diseases (NCDs) on World

  1. According to the World Economic Forum, the NCDs may cost as much as $4.3 trillion in productivity losses and health-care expenditure between 2012 and 2030, twice India’s annual GDP

Future Ageing level in India

  1. Projections of the United Nations Population Division (UN 2011) show that India’s population, ages 60 and older, will climb from 8% in 2010 to 19% in 2050
  2. By mid-century, their number is expected to be 323 million

Increase in prevalance of NCD among old-age people

  1. The prevalence of high blood pressure among the old almost doubled over the period 2005-12
  2. Heart disease rose 1.7 times
  3. The prevalence of cancer rose 1.2 times
  4. Diabetes more than doubled, as also that of asthma
  5. Other NCDs rose more rapidly (i.e. by two and a half times)
  6. Also, co-occurrence of disability and NCDs poses a higher risk of mortality(for Old age people)

Why rise in prevalance of NCD a serious concern?

  1. It is the co-occurrence of NCDs and disabilities that is more likely to be fatal for old population
  2. Study finds that in most cases there was an increase.
  3. Heart disease and disabilities (1-4) rose 1.3 times.
  4. Blood pressure and disabilities in this range rose 1.2 times, as also diabetes and disabilities.
  5. Blood pressure and heart disease and disabilities increased 1.4 times.

The Way forward

  1. In brief, that the curse of old age has become worse is undeniable
  2. Careful attention must be given to reorient health systems to accommodate (1) the needs of chronic disease prevention and (2) equipping health-care facilities to provide services related to health promotion, risk detection, and risk reduction
Indian Economy – Growth Estimates Finance and Banking

[op-ed snap] Signs of stability on external front

source:

Note4Students:

Op-ed discusses present situation of India’s CAD, factors that affect it and might affect in near future and other related aspects. Important. Read B2B for knowing about highlighted terms.

From UPSC perspective, following things are important:

Prelims level: Current Account Deficit (CAD), Gross Domestic Product (GDP), hot money, exchange rate, Foreign direct investments (FDI), trade deficit, fiscal deficit, balance of payments

Mains level: Risks to India’s CAD and BoP by various national and international factors, current trends and other related issues.


News:

Context:

  1. Over the past few years, one of the prominent features of India’s improving macroeconomic fundamentals has been the reduction in its Current Account Deficit (CAD)
  2. CAD has declined successively, reaching 0.7% of GDP in fiscal 2017
  3. It had surged to 4.8% of Gross Domestic Product (GDP) following the taper tantrum of 2013

Positive Developments in external front in last few years

  1. CAD’s financing has also become more robust
  2. Prior to fiscal 2014, financing depended a lot on foreign portfolio inflows
  3. A chunk of that is “hot money” that exits quickly, leading to volatility in the exchange rate
  4. Foreign direct investments (FDI), which are way more durable and stable, have surpassed foreign portfolio inflows in the past two years
  5. Since fiscal 2015, FDI inflows alone have been sufficient to finance India’s CAD

Benefits of FDI:

  • Increased employment opportunities
  • Greater technological know-how

Risks that India is facing on external front:

  1. Rising commodity prices: These increase India’s trade deficit because we import way more than we export
  2. Rising protectionism: Even as global demand improves, there are increased instances of rising protectionism in advanced economies
  3. Increasing manifestation of this trend will impair India’s external position
  4. US and Europe constitute the biggest chunks of India’s merchandise exports
  5. Immigration restrictions negatively affect the earnings of Indian workers abroad, which would reduce inward remittances
  6. As much as 80% of the remittances to India are personal transfers, and 60% by workers

Fiscal health of the Centre and the states:

  1. There is a trend reversal
  2.  The Centre’s fiscal deficit has fallen from 5.8% of GDP in fiscal 2012 to 3.5% in 2017
  3. And that of states has risen
  4. The situation could worsen further for states, leading to a higher combined deficit

Twin Deficits Hypothesis: The Effect of Fiscal Consolidation on the Current Account

  1. Theoretically: A standard implication of many theoretical models is that a fiscal contraction leads to a depreciation of the real exchange rate and an accompanying fall in the current account deficit
  2. Practically: Empirical research suggests that such a rise in consolidated fiscal deficit may not automatically lead to expansion of CAD

Conclusion:

  1. India’s balance of payments account is expected to remain healthy over the near term with CAD at moderate levels and adequately financed

Back2Basics:

Read about fiscal deficits here (click2read)

Read about BoP and CAD here (click2read)

Know about FDI here (click2read)

Hot Money

Hot money is currency that moves regularly, and quickly, between financial markets so investors ensure they are getting the highest short-term interest rates available.

 

Renewable Energy : Wind, Nuclear, etc. Energy

[op-ed snap] Renewable Energy: Here comes the sun

source:

Note4students

Mains Paper 3: Economy | Growth

From UPSC perspective, following things are important:

Prelims level: Basics of Science behind solar power generation

Mains level: The article elaborates both positive and negative side of the story of Solar Power Generation in India

News

Context

  1. 5,000 trillion kWh per year energy incident over India’s land area makes solar a very lucrative option
  2. However, factors like absence of manufacturing facility for silicon wafers, viability of projects due to progressively lower tariffs and looming grid management issues could create roadblocks

Good Performance of nontraditional States in Solar Energy market 

  1. Recently,  Andhra Pradesh has emerged on top in terms of cumulative solar project capacity, surpassing the traditional solar leaders such as Rajasthan and Gujarat
  2. Andhra Pradesh reports the highest installed solar generation capacity till March 2017

India’s submission infront of the world

  1. Solar power is at the heart of the Centre’s agenda
  2. In line with its submission to the United Nations Framework Convention on Climate Change on Intended Nationally Determined Contribution (INDC)
  3. According to INDC(which India has accepted), India is to achieve 40 per cent cumulative electric power capacity from non-fossil fuel based energy resources by 2030

Future plans of the Indian Government

  1. The Indian government has approved the enhancement of capacity from 20 Giga watt to 40 GW of the Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects
  2. These solar parks entails the setting up of at least 50 solar parks by 2019-20
  3. Centre will provide Financial Assistance of Rs 8,100 crore for these projects

Record low tariffs

  1.  In a recent bidding in Rajasthan, record low tariffs of Rs 2.44 per unit were quoted in an auction carried out by Solar Energy Corporation of India
  2. These tariffs are less than half the CERC’s(Central Electricity Regulatory Commission) benchmark tariffs

Things that go against Indian Solar energy sector

  1. Despite the scale of the capacity addition plan(of solar projects), there is no manufacturing facility for silicon wafers in India
  2. Indian Solar Cell Manufacturers import silicon wafers from global sources, with the bulk of it coming from China

What the CARE ratings says

  1. According to CARE Ratings, discoms finances are under strain due to the commitments made under the UDAY scheme (of taking over discoms losses)
  2. Due to this, the implementation of renewable projects could be impacted.
Genetically Modified (GM) crops – cotton, mustards, etc. Agriculture

[op-ed snap] Bringing GM to the table

source:

Note4students

From UPSC perspective, following things are important:

Prelims level: Read the attached story

Mains level: The article explains the problems associated with the GM crops and they can be tackled. Important for Mains Paper 3

News

Context

  1. The article is about the Genetic Engineering Appraisal Committee (GEAC) which had recently cleared GM mustard for commercial production
  2. Writer discusses about the relevance of GM Crops in Indian context

Reasons behind the opposition of GM Crops
First

  1. One of the principal reasons for opposition to GM crops is the potential for serious, irreversible damage to human health and the environment
  2.  This is especially relevant in the context of crops such as Bt brinjal which involve direct consumption by humans, unlike Bt cotton

Second

  1. The precautionary principle for regulatory decision-making and a lack of trust in government and industry that promotes and benefits from GM technologies.

Third

  1. All the safety tests for regulatory approvals are typically conducted by the same party that applies for commercialisation of GM crops
  2. For Example, Mahyco on Bt brinjal or Delhi University on GM mustard

Fourth

  1. Conflict of interest was made worse by the refusal of GEAC to publicly release the safety testing data submitted for regulatory approval
  2.  This tendency to operate in secrecy has not only created a serious distrust of the government and the promoters of GM crops but is also fuelling the conflict

The Way forward

  1. Extensive research on GM crops will identify trust in regulatory agencies and industry as being a critical factor in public willingness to accept GM technology
  2. The government should adopt a participatory approach to bring together all stakeholders to develop regulatory protocols that restore trust in the process
  3. The burden of proof(that GM crops are not harmful) lies with the promoters of GM technology to persuade consumers, farmers and activists that among various alternatives available for sustainable food production
Banking Sector Reforms Industries

[op-ed snap] Charting the Indian banking sector’s future

source:

Note4Students:

Op-ed discusses issue of bank consolidation in light of recent SBI consolidation. Mains worthy.

From UPSC perspective, following things are important:

Prelims level: NPA, provisioning, bank consolidation

Mains level: Pros and cons of bank consolidation, problems being faced by PSBs and other related issues.


News:

Present situation:

  1. slump in credit growth and increase in stressed assets has affected the profitability of all banks, and threatens the very survival of some of them
  2. State-owned banks account for more than three-fourths of the stressed asset load, which is now far higher than their net worth
  3. Provision levels are inadequate, as the banks hold only 28% of gross non-performing assets and restructured assets, as provisions
  4. There is a $110 billion gap between the stressed assets in the system and the provisions made.

Challenges Faced by our PSB:

  1. The core challenge is that many of the public sector banks (PSBs) are undifferentiated, sub-scale, and with limited capabilities to be full universal banks
  2. About 80% of them own only 25% of the assets
  3. No specialization: They also operate in virtually every market segment with very limited sector or vertical-focused specialization
  4. No differential focus: They focus on the same customer segments, offer similar products, and very often compete only on price
  5. Social obligations: They have to shoulder a disproportionate share of social and nation-building obligations
  6. Less autonomy: Policies on compensation and human resources reduce management autonomy, and inhibit their ability to attract and manage talent

Lessons from across the world:

  1. Empirical evidence from bad-loan crises in other parts of the world suggests that resolution often coincides with a consolidation of the banks
  2. It is probably inevitable in India

PSB reforms required:

  1. Offer the banks more freedom with capital and talent
  2. Innovation from existing and new players need to be encouraged to serve the large and diverse needs of the country
  3. A far more effective but disruptive option, would be to create mega-PSBs by consolidating entities into three or four players
  4. A hybrid approach, creating one or two global banks and two to three large national banks through mergers can also be adopted
  5. These large banks would offer a full-range of commercial banking services to corporate, small and medium enterprises (SMEs), retail, mass banking and international customers
  6. The remaining banks could specialize, with focus on select products or geographies, largely for retail and SME customers avoiding loans to large corporates

Consolidation procedure that can be adopted:

  1. The top three or four high-performing PSBs with sizeable scale (including international presence), better balance sheets, progressive management and global aspirations, could be the anchors
  2. National-scale players could be anchored by PSBs with strong national or regional brands, a multi-state presence and stronger balance sheets than regional counterparts
  3. Some regionally focused banks could be grown through mergers to bring them to national stature
  4. Aligning the sequencing of the consolidation is essential for success
  5. It would depend largely on the capital requirement, level of digitization and technological-commonality among the banks

Consolidation not a solution by itself:

  1. The merged entities will need more oxygen to survive and thrive. This includes:
  • Capital infusion to address stressed assets challenges
  • Building a motivated and capable leadership team to ensure successful integration
  • Forging strategic partnerships to build new capabilities.

 

Pharma Sector – Drug Pricing, NPPA, FDC, Generics, etc. Health

[op-ed snap] Bad for health

source:

Note4Students:

Op-ed discusses issue of vegetarianism vs Non-vegetarianism in the context of medicines.

From UPSC perspective, following things are important:

Prelims level: Cellulose, gelatin, Drug Controller General of India, Drug Technical Advisory Board.

Mains level: Will push for vegetarianism be helpful or harmful for India in long run, its impact on various stakeholders and other related issues.


News:

Context:

  1. A notice issued by a health ministry expert committee in the first week of June signals the government’s intention to usher major change in India’s pharmaceutical sector
  2. It invites comments from stakeholders about replacing widely-used animal parts-based gelatin capsules with those derived from cellulose
  3. In 2015, the scientific committee which advises the Drug Controller General of India (DGCI) gave an in-principle approval to the shift to cellulose-based capsules

Current situation:

  1. Currently, 98 per cent of the Indian pharmaceutical industry uses animal parts-based capsules

What government wants?

  1. Government has been pitching for “vegetarian capsules” for the past two years
  2. But there is little medical or commercial reasoning behind this proposal

What this could lead to?

  1. A switch over to cellulose-based capsules could jeopardise the government’s recent initiatives to make medicines accessible to all.

Difference in opinions:

  1. In an e-mail last year to the joint secretary, health ministry, the DGCI pitched for “vegetable capsules for vegetarian society”
  2. The DGCI’s vegetarian fetish found support from the Women and Child Development Minister Maneka Gandhi
  3. She argued, “In a country where there are millions of people, this hurts religious sentiments and many people avoid medicines that are in a capsule form”
  4. The Drug Technical Advisory Board, health ministry’s premier advisory agency, had dismissed Gandhi’s representation on the grounds that: “Unlike food, drugs are not taken as choice but are prescribed by doctors to save lives and marking them as vegetarian or non-vegetarian is not desirable”
  5. The health ministry has overruled this reasoning

Concerns/opinions of industry:

  1. They have argued that the gelatin capsules have been in use all over the world for more than 180 years
  2. They also questioned viability of cellulose-based capsules
  3. Various industry associations cited the huge economic cost of the switch, which may also impact accessibility of medicines
  4. The cost of raw material required to make cellulose capsules is approximately four times that of gelatin and the manufacturing cost of cellulose-based capsules approximately three times the cost of gelatin capsules
Foreign Policy Watch: India-United States India Beyond its Neighbours

[op-ed] Raja Mandala: India, US, and an East-of-Suez moment

source:

Note4students

Mains Paper 2: IR | Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

From UPSC perspective, following things are important:

Prelims level: Not Much

Mains level: Article gives an idea of future aspects of Indo-US relationship.

News

Context

  1. The Article is about Indo-US relations
  2. And upcoming (first)face to face meet of Narendra Modi and Donald Trump

Issues that can be discussed by the two leaders

  1. America’s view of supporting a larger Indian role in securing the Subcontinent and the Indian Ocean
  2. The shared interest of India and US in an Eurasian balance of power

India’s Concerns

  1. America looked at partnering India to sustain US primacy in the Indo-Pacific
  2. Delhi acknowledged American primacy, but was afraid of becoming a “junior” partner
  3. India is concerned that US strategic indulgence towards Pakistan and China may make US an unreliable partner(of India)
  4. As a result, the hype about India-US security cooperation never really lived upto its potential

Trump’s Views on Security

  1. Trump thinks the US is doing too much(while Modi thinks India could do a lot more) on the security front
  2. Trump does not think that America is forever obliged to defend its friendy nations at any cost(like Japan and Germany).
  3. He wants the allies to spend more on building their own national defence capabilities or financially compensate America for its heavy lifting.

India’s History of Providing security to the world

  1. Until now, India has been hesitant to take on a regional security role beyond the Subcontinent
  2. After independence, there was the opportunity of India working with Britain for a regional order under the rubric of the Commonwealth(under ‘east of the Suez’)
  3. But Nehru was unwilling to back a Commonwealth military framework
  4. Two decades later, when Britain ended its security commitments “east of the Suez”, India didn’t have the political will or material resources to consider regional security leadership
  5. The US, which replaced Britain as the dominant power in the Indian Ocean in the 1970s, may now be headed to its own “east of Suez” moment
Labour and Employment – Harmonization of labour laws, gender gap, unemployment, etc. Industries

[op-ed snap] Ideas and ivory towers

 

Note4Students:

The op-ed tries to establish linkages between present and past in order to solve the challenges currently faced by India. Contains many important terms which can be asked in Prelims. Bookmark it.

From UPSC perspective, following things are important:

Prelims level: Robotics and artificial intelligence, knowledge based economy, 3D printing, Nalanda, Takhshila, Vallabhi, Vikramshila, Wootz steel, rapalgai, Mimansa school of philosophy.

Mains level: Applying traditional knowledge and modern technology to solve present day problems, dealing with ill effects of technology and other related topics.


News:

Context:

  1. The Indian readymade garments industry has been a vital enabler of our export trade
  2. Trade analysts, in the recent past, have been quite enthusiastic about this sector’s prospects

Asian advantage:

  1. It is availability of cheap labour
  2. Countries like India, China and others in the region derive this strength that adds so much value to their economies

Looming danger due to Robotics:

  1. A former professor of robotics at the Georgia Institute of Technology has helped create a robotic tailor that can stitch a perfect circle
  2. This means any complicated sewing task can be performed by robots which till now could only be undertaken by skilled and experienced hands
  3. The only seemingly viable option for the garments industry in the Asian region is to seek to import such machines
  4. There goes a part of our plan to keep unemployment figures down

Lessons for India:

  1. Knowledge based economy: The success of this robotic stitching device provides us with a near-perfect example of the power of a knowledge-based economy- Department of Defense of the United States supported the research through a contractual grant
  2. High tech areas: The areas of high-end technology have a rapid rate of convergence. Nike has been experimenting with the use of 3D printers to manufacture shoes and this could affect our shoe manufacturing industry
  3. Dependence on brawn as opposed to brains: While Indian companies focus on employing more and more people, other multinational companies (Google etc.) employ less people and focus on quality and have connections to top institutes like Stanford
  4. Our great and ancient heritage: Nalanda, Takhshila, Vallabhi, Vikramshila and many other great institutions were not the outcomes of some grand central strategy laid down in great detail to micromanage these institutions

What needs to be done?

  1. Policy: It must nurture and encourage initiative and out-of-the-box thinking and should be, to an extent, ready to accommodate risk taking and have room for failure
  2. Non Traditional approach: Institutions have to move out of traditional modes of thinking and must recognise that knowledge can exist in all realms, not just in formal systems around academia
  3. Focus on societal needs: In ancient India, much before Christ and the Greeks, some outstanding mathematics was discovered and driven by societal needs
  4. Knowledge systems in India invented cataract surgery and plastic surgery much before Christ
  5. The invention of the so-called Wootz steel allowed us to export the knowledge and the steel implements of surgery
  6. The invention and use of the rapalgai — a rope-based device also called kamal — enabled our merchant ships to calculate positions at sea at a time when Europe was clueless
  7. We need to induce young minds to grapple with the challenges of the nation and society
  8. Knowledge without action is meaningless, as stated by the Mimansa school of philosophy long ago
Agricultural Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc. Agriculture

[op-ed snap] From Plate to plough: Why bumper harvests spell doom

source:

Note4students

Mains Paper 3: Agriculture | Issues related to direct and indirect farm subsidies and minimum support prices

From UPSC perspective, following things are important:

Prelims level: Not Much

Mains level: Article provides good solutions for current problems being faced by Agricultural sector.

News

Context

  1. The Article is about the current agriculture sector problems

Reasons behind the current protest in MP

  1. There is a fair possibility that current protest in MP was triggered by the crash in onion prices, but it also drew strength from the news of loan waivers in Uttar Pradesh (UP) and Maharashtra

Consequences of frequent loan waivers

  1. Frequent loan waivers could lead to a demand for similar waivers in other states like Haryana, Punjab, Karnataka and Tamil Nadu
  2. It can cost  Rs 2,00,000 crore in the months to come

What data says about net margins (the MSP minus cost) of different crops?

  1. Net margins in most agricultural commodities like paddy, maize, cotton, gram, sugarcane have declined in last 2 years

Solution of Low Prices in Agriculture sector

  1. (1) Abolish all export bans, (2) private stocking limits and (3) restrictions on futures trading in all agri-commodities
  2. This is more desirable in commodities whose imports are open at low or zero duties
  3. For perishables like onions, potatoes and tomatoes, we need storage facilities, linkages with processing firms, contract farming, opening land lease markets, etc
  4. We need to develop efficient, equitable value chains just like the AMUL model in dairy.
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