Author: CD Staff

This year’s Union budget was accompanied by the unveiling of the Fifteenth Finance Commission’s report for the period 2021-22 to 2025-26. This report outlines some crucial recommendations for state governments, covering tax devolution, grants from the Centre, and the guidelines for the borrowings that they are permitted to incur over the medium-term.

Context

• The Finance Commission is a constitutional body formed by the President of India to give suggestions on centre-state financial relations.
• The 15th Finance Commission was required to submit two reports. The commission’s chairman is N. K. Singh, with its full-time members being Ajay Narayan Jha, Ashok Lahiri and Anoop Singh.
• The first report, consisting of recommendations for the financial year 2020-21, was tabled in Parliament on February 1, 2020.

Background

What is the Finance Commission?

• The Finance Commission (FC) was established by the President of India in 1951 under Article 280 of the Indian Constitution.
• It was formed to define the financial relations between the central government of India and the individual state governments.
• The Finance Commission (Miscellaneous Provisions) Act, 1951 additionally defines the terms of qualification, appointment and disqualification, the term, eligibility and powers of the Finance Commission.
• As per the Constitution, the FC is appointed every five years and consists of a chairman and four other members.
• Since the institution of the First FC, stark changes in the macroeconomic situation of the Indian economy have led to major changes in the FC’s recommendations over the years.

Constitutional Provisions

Several provisions to bridge the fiscal gap between the Centre and the States were already enshrined in the Constitution of India, including Article 268, which facilitates levy of duties by the Centre but equips the States to collect and retain the same.

Article 280 of the Indian Constitution defines the scope of the commission:

1. The President will constitute a finance commission within two years from the commencement of the Constitution and thereafter at the end of every fifth year or earlier, as the deemed necessary by him/her, which shall include a chairman and four other members.
2. Parliament may by law determine the requisite qualifications for appointment as members of the commission and the procedure of selection.
3. The commission is constituted to make recommendations to the president about the distribution of the net proceeds of taxes between the Union and States and also the allocation of the same among the States themselves. It is also under the ambit of the finance commission to define the financial relations between the Union and the States. They also deal with the devolution of unplanned revenue resources.

Important functions

• Distribution of net proceeds of taxes between Center and the States, to be divided as per their respective contributions to the taxes.
• Determine factors governing Grants-in-Aid to the states and the magnitude of the same.
• To make recommendations to the president as to the measures needed to augment the Fund of a State to supplement the resources of the panchayats and municipalities in the state on the basis of the recommendations made by the finance commission of the state.
• Any other matter related to it by the president in the interest of sound finance.

Members of the Finance Commission

• The Finance Commission (Miscellaneous Provisions) Act, 1951 was passed to give a structured format to the finance commission and to bring it to par with world standards.
• It laid down rules for the qualification and disqualification of members of the commission, and for their appointment, term, eligibility and powers.
• The Chairman of a finance commission is selected from people with experience of public affairs. The other four members are selected from people who:

1. Are, or have been, or are qualified, as judges of a high court,
2. Have knowledge of government finances or accounts, or
3. Have had experience in administration and financial expertise; or
4. Have special knowledge of economics

Major Highlights of the Report 2021-26

The final report with recommendations for the 2021-26 period was tabled in Parliament on February 1, 2021.  Key recommendations in the report for 2021-26 include:

[A] Share of states in central taxes

• Vertical devolution: The share of states in the central taxes for the 2021-26 period is recommended to be 41%, same as that for 2020-21. 
• This is less than the 42% share recommended by the 14^th Finance Commission for 2015-20 periods. 
• The adjustment of 1% is to provide for the newly formed union territories of Jammu and Kashmir, and Ladakh from the resources of the centre. 

[B] Criteria for devolution

• Table below shows the criteria used by the Commission to determine each state’s share in central taxes, and the weight assigned to each criterion. 
• The criteria for distribution of central taxes among states for 2021-26 period is same as that for 2020-21. 
• However, the reference period for computing income distance and tax efforts are different (2015-18 for 2020-21 and 2016-19 for 2021-26), hence, the individual share of states may still change. 

Table : Criteria for Horizontal Devolution

Criteria	14th FC 2015-20	15th FC 2020-21	15th FC 2021-26
Income Distance	50.0	45.0	45.0
Area	15.0	15.0	15.0
Population (1971)	17.5	–	–
Population (2011)#	10.0	15.0	15.0
Demographic Performance	–	12.5	12.5
Forest Cover	7.5	–	–
Forest and Ecology	–	10.0	10.0
Tax and fiscal efforts*	–	2.5	2.5
Total	100	100	100

• Income distance: Income distance is the distance of a state’s income from the state with the highest income. 
• Demographic performance: The Commission was required to use the population data of 2011 while making recommendations.  The demographic performance criterion has been used to reward efforts made by states in controlling their population.  States with a lower fertility ratio will be scored higher on this criterion. 
• Forest and ecology: This criterion has been arrived at by calculating the share of the dense forest of each state in the total dense forest of all the states.
• Tax and fiscal efforts: This criterion has been used to reward states with higher tax collection efficiency.  It is measured as the ratio of the average per capita own tax revenue and the average per capita state GDP during the three years between 2016-17 and 2018-19.

[C] Grants

Over the 2021-26 periods, the following grants will be provided from the centre’s resources:

(1) Sector-specific grants

• Sector-specific grants of Rs 1.3 lakh crore will be given to states for eight sectors. A portion of these grants will be performance-linked.
• He sectors are: (i) health, (ii) school education, (iii) higher education, (iv) implementation of agricultural reforms, (v) maintenance of PMGSY roads, (vi) judiciary, (vii) statistics, and (viii) aspirational districts and blocks. 

(2) State-specific grants

• The Commission recommended state-specific grants of Rs 49,599 crore. 
• These will be given in the areas of: (i) social needs, (ii) administrative governance and infrastructure, (iii) water and sanitation, (iv) preservation of culture and historical monuments, (v) high-cost physical infrastructure, and (vi) tourism

(3) Grants to local bodies

• Grants to local bodies (other than health grants) will be distributed among states based on population and area, with 90% and 10% weightage, respectively. 
• No grants will be released to local bodies of a state after March 2024 if the state does not constitute State Finance Commission and act upon its recommendations by then.

(4) Disaster risk management

• The Commission recommended retaining the existing cost-sharing patterns between the centre and states for disaster management funds. 
• The cost-sharing pattern between centre and states is: (i) 90:10 for north-eastern and Himalayan states, and (ii) 75:25 for all other states. 
• State disaster management funds will have a corpus of Rs 1.6 lakh crore (centre’s share is Rs 1.2 lakh crore).

[D] Fiscal roadmap

(1) Fiscal deficit and debt levels

• The Commission suggested that the centre bring down fiscal deficit to 4% of GDP by 2025-26. 
• For states, it recommended the fiscal deficit limit (as % of GSDP) of: (i) 4% in 2021-22, (ii) 3.5% in 2022-23, and (iii) 3% during 2023-26. 
• It recommended forming a high-powered inter-governmental group to: (i) review the Fiscal Responsibility and Budget Management Act (FRBM), (ii) recommend a new FRBM framework for centre as well as states, and oversee its implementation.

(2) Revenue mobilization

• Income and asset-based taxation should be strengthened, recommended the commission. 
• To reduce excessive dependence on income tax on salaried incomes, the coverage of provisions related to tax deduction and collection at source (TDS/TCS) should be expanded. 
• Stamp duty and registration fees at the state level have large untapped potential. 

(3) GST

• Revenue neutrality of GST rate should be restored which has been compromised by multiple rate structure and several downward adjustments. 
• Rate structure should be rationalized by merging the rates of 12% and 18%. 
• States need to step up field efforts for expanding the GST base and for ensuring compliance.

(4) Financial management practices

• A comprehensive framework for public financial management should be developed. 
• An independent Fiscal Council should be established with powers to assess records from the centre as well as states.
• The Council will only have an advisory role.

[E] Other recommendations

(1) Health

• States should increase spending on health to more than 8% of their budget by 2022. 
• Primary healthcare expenditure should be two-thirds of the total health expenditure by 2022. 
• All India Medical and Health Service should be established.

(2) Defence and internal security

• A dedicated non-lapsable fund called the Modernization Fund for Defence and Internal Security (MFDIS) should be established.
• It will primarily bridge the gap between budgetary requirements and allocation for capital outlay in defence and internal security. 
• The fund will have an estimated corpus of Rs 2.4 lakh crore over the five years (2021-26).   Of this, Rs 1.5 lakh crore will be transferred from the Consolidated Fund of India. 
• Rest of the amount will be generated from measures such as disinvestment of defence public sector enterprises, and monetisation of defence lands.

(3) Centrally sponsored schemes (CSS)

• A threshold should be fixed for annual allocation to CSS below which the funding for a CSS should be stopped (to phase out CSS which outlived its utility or has insignificant outlay). 
• Third-party evaluation of all CSS should be completed within a stipulated timeframe. 
• Funding pattern should be fixed upfront in a transparent manner and be kept stable.

Criticisms of the report

(1) 2011 census population as criteria

• The commission’s proposal to use the 2011 Census figures as the basis to allocated union tax revenues will adversely affect the ability of Tamil Nadu and Kerala to provide an effective welfare state for their residents.
• The basis for this claim is that southern states have (through a combination of improved health and education) reduced birth rates and total fertility rates far more than the northern states,.
• Thus allocation union tax revenues on the basis of population will “punish” the southern states for following sensible policies.

(2) Creating a regional divide

• In spite of this balancing act, however, the South has lost out. This yet again creates a North-South divide.
• Karnataka was the biggest loser, with its share being slashed from 4.71% to 3.65%.
• Of the five biggest losers, four are the southern states of Kerala, Karnataka, Andhra Pradesh and Telangana.

Significance of FC recommendations

• As a federal nation, India suffers from both vertical and horizontal fiscal imbalances.
• Vertical imbalances between the central and state governments result from states incurring expenditures disproportionate to their sources of revenue, in the process of fulfilling their responsibilities.
• However, states are better able to gauge the needs and concerns of their inhabitants and therefore more efficient at addressing them.
• Horizontal imbalances among state governments result from differing historical backgrounds or resource endowments, and can widen over time.

Conclusion

• The positive of India being a political and economic union is what the XVFC tries to convey.
• However, FCs has always struggled in balancing between ensuring equitable fund distribution among regions and fair fiscal federalism.
• The best way forward would be to adhere to the letter and spirit of the constitution by balancing the Union and state’s revenue powers with expenditure responsibilities listed in the 7th schedule.
• The government must appreciate the problems raised by states, and attempt to address the contemporary issues relevant to the terms of reference.

The report starts with the famous quote of Mahatma Gandhi: “The future depends on what we do in the present”. It would be interesting to see the impact of these overarching and revolutionary recommendations in the times ahead.

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References:

https://www.prsindia.org/policy/report-summaries/report-15th-finance-commission-2021-26#.YDTwjXaMaZE.whatsapp

https://fincomindia.nic.in/ShowContentOne.aspx?id=9&Section=1  (Page no. 399 onwards)

https://pib.gov.in/PressReleasePage.aspx?PRID=1693868

https://www.bloombergquint.com/business/15th-finance-commission-report-challenges-and-controversies

https://scroll.in/article/952357/how-15th-finance-commission-is-trying-to-manage-south-indias-anger-over-tax-division-and-failing

India is witnessing a historic mass mobilization of farmers against three new farm laws. The country’s government maintains that these laws are the cure for a longstanding agrarian crisis. While this claim has been analysed from several angles, the environmental angle has often been overlooked. This is no small oversight since the agrarian crisis in India is underpinned by strong environmental vulnerabilities, including those associated with climate change.

India’s Agriculture: A Backgrounder  

Agriculture in India is a livelihood for a majority of the population and can never be underestimated.

Despite the fact that it accounts for as much as a quarter of the Indian economy and employs an estimated 60 per cent of the labour force, it is considered highly inefficient and incapable of solving the hunger and malnutrition problems. Despite progress in this area, these problems have continued to frustrate India for decades.

(1) Legacy issues

• Agriculture is the primary source of livelihood for about 58 per cent of India’s population.
• Most of them have been facing several major constraints such as input supply, credit availability, proper transport, and market facility, etc.

(2) Land Crunch

• India accounts for only 2.4 per cent of the global land.
• The average size of landholding per state is 1.08 hectares, according to the latest agricultural census.
• Farmers in half the Indian states are marginal (with land less than 1 ha); the remaining are small farmers (landholdings of 1-2 ha).

(3) Population explosion

• India’s population touched 1.38 billion in 2020 —17.7 per cent of the world’s population — according to global population data.
• The country’s population has increased 3.35 times since Independence; by 2027, it will surpass China to become the most populated country in the world.

What holds Indian farmers on a backfoot always?

Major constraints in Indian agriculture are:

• Farming for subsistence makes the scale of the economy in question with a majority of smallholdings.
• Low-access of credit and the prominent role of unorganised creditors affecting decisions of farmers in purchasing of inputs and selling of outputs
• Less use of technology, mechanisation and poor productivity for which the first two points are of major concern
• Very less value addition as compared to developed countries and negligible primary-level processing at farmers level.
• Poor infrastructure for farming making more dependence on weather, marketing and supply chain suitable for high-value crops.

Climate Change and Agriculture

• One of the critical challenges for a country’s food security is climate change and its impact in form of extreme weather events.
• The predicted 1-2.5 degrees Celsius temperature rise by 2030 is likely to show serious effects on crop yields.
• High temperatures may reduce crop duration, permit changes in photosynthesis, escalate crop respiration rates and influence pest population.
• Climate change accelerates nutrient mineralization, hampers fertilizer use efficiency (FUE) and hastens the evapotranspiration in soil.

Agri sub-sectors and climate change

(1) Foodgrains

• Cultivation practices are completely based on climatic situations.
• For example, in India, an increase in temperature by 1.5°C and a reduction in the precipitation of 2 mm can reduce the rice yield by 3 to 15 per cent.

(2) Horticulture

• High temperature causes moisture stress situation, directing to sunburn and cracking symptoms in fruit trees like apricot, apples and cherries.
• The temperature increase at the ripening stage causes fruit burning and cracking in litchi plantation.

(3) Animal husbandry

• Dairy breeds are more prone to heat stress than meat breeds.
• An increase in metabolic heat production breeds leads to higher susceptibility to heat stress; while the low milk giving animals are resistant.
• Poultries, no doubt, are severely sensitive to temperature-associated problems, particularly heat stress.

(4) Fisheries

• Increasing environmental temperature may cause seasonal betterment in the growth and development of fishes.
• But it also enhances the dangers to the populations living away from the thermal tolerance zone.

Burden on Agriculture

(1) Food Security

• Nearly 14 per cent of the population (189.2 million) is still undernourished in India, according to the State of Food Security and Nutrition in the World, 2020 report.
• The Global Hunger Index 2020 placed India at the 94th position among 107 countries.
• Food production must double by 2050 to match the country’s population and income growth.

(2) Demand for nutrition

• Changing demand due to an increase in incomes, globalisation and health consciousness is affecting and going to affect more the production in future. 
• Demand for fruits and vegetables, dairy products, fish and meat is going to increase in future.

(3) Trend for processed food

• Researches, technology improvements, protected cultivation of high-value greens and other vegetables will be more.
• There will be more demand for processed and affordable quality products.

(4) Technology intensiveness

• More competition will be there among private companies giving innovative products, better seeds, fertilizers, plant protection chemicals, customised farm machinery and feed for animals.
• There would be a requirement of cost-effective ways at competitive prices giving more returns on investment by farmers.

One point solution: Climate-resilient agriculture

What is Climate-Resilient Agriculture?

Climate-resilient agriculture (CRA) is an approach that includes sustainably using existing natural resources through crop and livestock production systems to achieve long-term higher productivity and farm incomes under climate variabilities.

Why CRA?

Most countries have been facing crises due to disasters and conflicts; food security, however, is adversely affected by inadequate food stocks, basic food price fluctuations, high demand for agro-fuels, and abrupt weather changes.

• CRA practice reduces hunger and poverty in the face of climate change for forthcoming generations.
• It can alter the current situation and sustain agricultural production from the local to the global level, especially in a sustainable manner.
• Improved access and utilization of technology, transparent trade regimes, increased use of resources conservation technologies, an increased adaptation of crops and livestock to climatic stress are the outcomes.

Strategies and technologies in CRA

(1) Tolerant crops

• Patterns of drought may need various sets of adaptive forms.
• To reach deficient downpour conditions, early maturing and drought-tolerant cultivars need to be developed.

(2) Tolerant breeds in livestock and poultry

• Local or indigenous breeds have the notion to forage for themselves. Indigenous breeds have unique characters that are adapted to very specific eco-systems across the world.
• They are resistant to droughts, thermo-regulation, ability to walk long distances, fertility and mothering instincts, ability to ingest and digest low-quality feed, and resistance to diseases.
• These breeds may not be highly productive in terms of meat or milk production, but are highly adaptive to the unpredictable nature and have low resource footprints.

(3) Water management

• Water-smart technologies like a furrow-irrigated raised bed, micro-irrigation, rainwater harvesting structure, cover-crop method, greenhouse, etc. can support farmers to decrease the effect of variations of climate.
• Hence, many researches across the world have been focusing their efforts on the design, development of cost-effective and environmentally friendly water-conserving devices to enhance water use efficiency.

(4) Agro-advisory

• Response farming is an integrative approach; it could be called farming with advisories taken from the technocrats depending on local weather information.
• The success of response farming, viz., decreased danger and enhanced productivity has already been taken in Tamil Nadu and many other states.

(5) Soil organic carbon

• Different farm management practices can increase soil carbon stocks and stimulate soil functional stability.
• Conservation agriculture technologies (reduced tillage, crop rotations, and cover crops), soil conservation practices (contour farming) and nutrient recharge strategies can refill soil organic matter by giving a protective soil cover.
• Feeding the soil instead of adding fertilizers to the crop without organic inputs is the key point for the long-term sustainability of Indian agriculture.

GoI moves in this direction

The convergence of various policy programmes and sectoral plans has been undertaken by the GoI to ensure synergy and effective utilization of existing resources.

• The National Mission of Sustainable Agriculture was implemented in 2010 under the National Action Plan on Climate Change (NAPCC).
• It aimed to promote the judicious management of available resources and this was one of the eight missions under NAPCC.
• The Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) was launched in 2015 to address the issues of water resources and provide a permanent solution that envisages Per Drop More Crop.
• The Paramparagat Krishi Vikas Yojana mission was executed to extensively leverage adaptation of climate-smart practices and technologies.
• To protect soil health, GOI has launched the Soil Health Card scheme with the main objective of analysing cluster soil samples and advocating farmers regarding their land fertility status.
• Additionally, Neem-Coated Urea was also introduced to minimise the excess addition of urea fertilizers, thereby protecting soil health and supplying plant nitrogen.
• To encourage farmers with more income benefit and ecosystem protection, programmes such as the National Project on Organic Farming and National Agroforestry Policy was introduced in 2004 and 2014 respectively.

Way forward

• The most important pillar of realizing CRA in India is capacity building at all levels.
• For mobilization and allocation of climate finance, we must follow the principles, such as people’s vulnerability-and livelihood-centred approach, polluter-pays principle and a programmatic approach for implementation of the plans and strategies.
• Though environmental sustainability is typically a public good, public investments alone will not suffice to effectively address climate change.
• Achieving climate resilience will require all kinds of professionals, lower and higher, must undergo basic training on how to tackle climate change, from the perspective of each profession and trade.
• In fact, a whole of society approach is needed—from awareness to education and skill development of all types, with skills, expertise and policy research along with finance, for tackling climate change.

Conclusion

• The increase in agriculture-sector expenditure in recent years has been on account of schemes like PM-KISAN, PMFBY, interest subvention and price support and loan waivers, with a focus on providing direct monetary benefits.
• Apart from efforts aimed at helping the agrarian economy recover, the government should enhance expenditure on agricultural infrastructure.
• A number of reports have highlighted that farm operations suffered due to infrastructure bottlenecks such as supply chain distortions, non-availability of credit, lack of quality inputs and marketing infrastructure.
• Instead of cash-based schemes, India needs expenditure enhancing infrastructure for a climate-resilient future.

References:

https://theconversation.com/india-protests-farmers-could-switch-to-more-climate-resilient-crops-but-they-have-been-given-no-incentive-154700

http://www.fao.org/3/nc938en/nc938en.pdf

https://www.downtoearth.org.in/blog/agriculture/why-india-needs-climate-resilient-agriculture-systems-75381

https://www.downtoearth.org.in/blog/agriculture/climate-resilient-agriculture-systems-the-way-ahead-75385

 

A massive glacier burst at Chamoli in Uttarakhand has yet again brought back our focus to the dangers of climate change. At least 58 people are confirmed to have been killed and more than 150 are missing.

Background

• The flash flood began on 7 February 2021 in the environs of the Nanda Devi National Park in the outer Garhwal Himalayas in Uttarakhand.
• It is believed to have been caused by a landslide, an avalanche or a glacial lake outburst flood.
• It has caused flooding in the Chamoli district, most notably in the Rishiganga River, the Dhauliganga River, and in turn the Alaknanda the major headstream of the Ganges.

What has happened in Chamoli?

• Experts are uncertain about what caused the massive Glacial Lake Outburst Flood at Chamoli in Uttarakhand.
• It is unclear whether there was an avalanche in the area recently or whether the lake breach was the result of construction, anthropological activities, climate change etc.

A GLOF or glacial lake outburst flood is suspected. However, the paradox is that this region of the Himalayas does not have any known glacier lakes. However, if it was indeed a GLOF, the question of where the glacier lake is still holding.

What is Glacial Lake Outburst Flood (GLOF)?

• A GLOF is a type of outburst flood that occurs when the dam containing a glacial lake fails.
• An event similar to a GLOF, where a body of water contained by a glacier melts or overflows the glacier, is called a jökulhlaup.
• The dam can consist of glacier ice or a terminal moraine.
• Failure can happen due to various factors such as:

1. Erosion, a buildup of water pressure
2. Avalanche of rock or heavy snow
3. Earthquake or volcanic eruptions under the ice or
4. Displacement of water in a glacial lake when a large portion of an adjacent glacier collapses into it

Possible causes

(A) Avalanche

• An avalanche is falling masses of snow and ice which gathers pace as it comes down the slope.
• It is often caused by erosion or small tremors of earthquakes.
• But an avalanche is unlikely to result in the rise of water of that magnitude what Chamoli witnessed.

(B) Cloudburst

• What happened in Uttarakhand in 2013 was a multi-day cloudburst.
• It is a sudden, very heavy rainfall accompanies by a thunderstorm. But it generally happens in monsoon.
• In fact, the season in which such a disaster was witnessed has surprised experts as there is no immediate trigger that can be pointed to as the reason why water level rose to that level washing away two hydro projects.

(C) Water pockets

• Satellite images do not show a glacial lake near the region, but there’s a possibility there may be a water pocket in the region.
• Water pockets are lakes inside the glaciers, which may have erupted leading to this event. 

Uttarakhand is the birthplace of India’s environmental consciousness as this is where the women stopped the felling of trees in the Chipko Movement.

Why is Uttarakhand so vulnerable to the disasters?

(A) Mystery lies covered under the glaciers

• There are over 1,000 glaciers in Uttarakhand. Almost all of them are receding. Most of the glaciers also have debris cover.
• When glaciers retreat due to rising temperatures, the snow melts but the debris remains. This debris aids in the formation of lakes.

Cause: Retreat of glaciers

• Glaciers have reduced considerably in mass and surface area since the little ice age period.
• This has led to the formation of a large number of glacial lakes all across the Himalayas.
• Many of these high-altitude lakes are potentially dangerous, because of their potential to cause flash floods in the event of a breach.

(B) Topography

• Uttarakhand is located in the midst of young and unstable mountains and is subject to intense rainfall.
• Over the years, the frequency of formation of these lakes has increased.

(C) Seismic activities

• The Himalayas are the world’s youngest mountain ranges, prone to erosion and landslides and unstable because of high seismic activity.
• The current policy of the government of pursuing hydro-power projects indiscriminately cannot be ignored.
• The entire State of Uttarakhand is categorised as falling in Zone-IV and V of the earthquake risk map of India.

(D) Anthropogenic causes

• There is indiscriminate construction activity and the subsequent ecological destruction in the Himalayan region in the name of urbanization and tourism development.
• Studies have shown that widespread settlements, farming, cattle grazing and other anthropogenic activities have destroyed the natural barriers that control avalanches and floods.

What conspiracy theorists have to say?

• Back in 1964, the Chinese tested their first nuclear weapon and India got worried because it was a next-door neighbour.
• The mishap has led to murmurs that the tragedy could possibly be linked to a nuclear device that was left behind during a joint IB (Intelligence Bureau) and CIA (Central Intelligence Agency) operation.
• Its radiations could have triggered the melting of snow as well as the glacier, argued the theorists, leading to the glacial outburst.

Last words ……

(A) The Himalayas are at the Climate edge

• The recent climate change assessment report for India shows significant melting and decline in glacier mass over the Himalayan region in recent decades due to warmer temperatures. 
• There is no doubt that global warming has resulted in the warming of the region.
• Climate change-driven erratic weather patterns like increased snowfall and rainfall, warmer winters have led to the melting point of a lot of snow.

(B) Obsession with Hydropower has to be limited

• As of today, some 7,000 MW of hydroelectric projects are either operating or being constructed in this fragile region; back to back; with no respect for the river or its need to flow naturally.
• The issue is not about hydropower generation or the need for energy or development.
• It is about the carrying capacity of this fragile region, which is even more at risk because of climate change.

Way forward

We need to urgently rise up to the challenge by applying innovative and inclusive solutions that support nature and communities, to restore and rebuild a resilient future for Uttarakhand. For that, a holistic approach is required, which would work on real-time assessment of the highly vulnerable Himalayan region.

Steps that need to be taken at earliest

1. Investing in resilience planning, especially in flood prevention and rapid response.
2. Climate proofing the infrastructure such as by applying road stabilization technologies for fragile road networks and strengthening existing structures like bridges, culverts and tunnels.
3. Strengthening embankments with adequate scientific know-how
4. Reassessing development of hydropower and other public infrastructure.
5. Investing in robust monitoring and early warning system.
6. Establishing implementable policies and regulatory guidelines to restrict detrimental human activities, including responsible eco- and religious tourism policies.
7. Investing in training and capacity building to educate and empower local communities to prevent and manage risks effectively.

Broader planning and management must include:

(a) Coherent research

• There are a lot more glaciologists and others who are working in the area and generating data.
• Multiple scientific groups and institutions are involved. But there is no coherent output. Lots of data are being generated but not being put to good use.
• There has to be one agency dedicated to the job.

(b) Monitoring

• The first step in tackling the threat from these glacial lakes is to start monitoring them and the glaciers more actively and regularly.
• There is a need to monitor every glacier. Glaciers in one basin do not have remarkably different properties.
• Relying only on satellites and remote sensing is not going to be enough.
• What is required is a consolidated state of glaciers in India, with the ability to zoom in on any of them and track the changes happening year by year.

(c) Planning

• Construction-related activities in the state might not have a direct link to Chamoli incident, but these are not entirely benign.
• The Himalayas are very young mountain systems, and extremely fragile and a minor change in orientation of the rocks can be enough to trigger landslides.
• It is important to include glaciers in any environment impact assessment for major projects such as the construction of dams.
• The entire catchment areas should be made part of the impact assessment.

(d) Mitigation

• If we monitor the glaciers regularly, it would enable us to identify the lakes that need mitigation solutions.
• Several structural and geotechnical measures can be applied, and there are successful examples where the threat from these lakes has been reduced.
• It is possible to construct channels for the gradual and regulated discharge of water from these lakes, which will reduce the pressure on them, and minimise the chances of a breach.
• At the same time, it also reduces the volume of water that goes into the flash flood. Also, alarm systems can be set up at the lakes that will warn the community downstream whenever an overflow happens.

Conclusion

• It is not possible to completely prevent these kinds of incidents. But their potential to cause destruction can certainly be minimized.
• Scientists can find a way to let the lake waters slowly drain at the nearby river at a regulated rate so that there is no flooding, and the pressure on the lake does not become unbearable.
• Such solutions can be applied in Uttarakhand, and some work is being done.

It is said that those who fail to learn from history are doomed to suffer from it repeatedly. It is high time, therefore, for the government to realize that the Himalayan Mountains are fragile and impatient.

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References

https://www.downtoearth.org.in/blog/climate-change/chamoli-glacier-burst-it-is-time-to-learn-from-our-mistakes-75419

Flash floods and their mitigation

https://timesofindia.indiatimes.com/india/uttarakhands-chamoli-disaster-what-we-know-so-far/articleshow/80748947.cms

Union Minister for Finance recently presented the Economic Survey 2020-21 in the Parliament. The key highlights are as follows:

[1] Saving Lives and Livelihoods amidst a Once-in-a-Century Crisis

• India focused on saving lives and livelihoods by its willingness to take short-term pain for long-term gain, at the onset of the COVID-19 pandemic
• Response stemmed from the humane principle that Human lives lost cannot be brought back
• GDP growth will recover from the temporary shock caused by the pandemic
• An early, intense lockdown provided a win-win strategy to save lives, and preserve livelihoods via economic recovery in the medium to long-term
• The strategy also motivated by the Nobel-Prize winning research by Hansen & Sergeant (2001): a policy focused on minimizing losses in a worst-case scenario when uncertainty is very high.

[2] State of the Economy in 2020-21: A Macro View

Growth and recovery

• COVID-19 pandemic ensued global economic downturn, the most severe one since the Global Financial Crisis
• The lockdowns and social distancing norms brought the already slowing global economy to a standstill
• Global economic output estimated to fall by 3.5% in 2020 (IMF January 2021 estimates)
• India adopted a four-pillar strategy of containment, fiscal, financial, and long-term structural reforms:
• India’s real GDP to record a 11.0% growth in FY2021-22 and nominal GDP to grow by 15.4% – the highest since independence.
• Agriculture set to cushion the shock of the pandemic on the Indian economy in FY21 with a growth of 3.4%
• Industry and services estimated to contract by 9.6% and 8.8% respectively during FY21
• V-shaped recovery is underway, as demonstrated by a sustained resurgence in high frequency indicators such as power demand, e-way bills, GST collection, steel consumption, etc.

External sector

• India remained a preferred investment destination in FY 2020-21 with FDI pouring in amidst global asset shifts towards equities and prospects of quicker recovery in emerging economies:
• Net FPI inflows recorded an all-time monthly high of US$ 9.8 billion in November 2020, as investors’ risk appetite returned

Vaccination boost

• Economy’s homecoming to normalcy brought closer by the initiation of a mega vaccination drive
• India became the fastest country to roll-out 10 lakh vaccines in 6 days and also emerged as a leading supplier of the vaccine to neighbouring countries and Brazil

[3] Does Growth lead to Debt Sustainability? Yes, But Not Vice- Versa!

Growth causes debt to become sustainable in countries with higher growth rates; such clarity about the causal direction is not witnessed in countries with lower growth rates. Fiscal multipliers are disproportionately higher during economic crises than during economic booms. 

Hue over debts

• Growth leads to debt sustainability in the Indian context but not necessarily vice-versa:
• Debt sustainability depends on the ‘Interest Rate Growth Rate Differential’ (IRGD), i.e., the difference between the interest rate and the growth rate
• Negative IRGD in India – not due to lower interest rates but much higher growth rates – prompts a debate on fiscal policy, especially during growth slowdowns and economic crises
• In India, the interest rate on debt is less than the growth rate – by the norm, not by exception

Policy goals

• Active fiscal policy can ensure that the full benefit of reforms is reaped by limiting potential damage to productive capacity
• Fiscal policy that provides an impetus to growth will lead to a lower debt-to-GDP ratio
• Given India’s growth potential, debt sustainability is unlikely to be a problem even in the worst scenarios
• Desirable to use countercyclical fiscal policy to enable growth during economic downturns
• Active, counter-cyclical fiscal policy – not a call for fiscal irresponsibility, but to break the intellectual anchoring that has created an asymmetric bias against fiscal policy

[4] Does India’s Sovereign Credit Rating Reflect Its Fundamentals? No!

• The fifth-largest economy in the world has never been rated as the lowest rung of the investment-grade (BBB-/Baa3) in sovereign credit ratings
• Reflecting the economic size and thereby the ability to repay debt, the fifth-largest economy has been predominantly rated AAA
• China and India are the only exceptions to this rule – China was rated A-/A2 in 2005 and now India is rated BBB-/Baa3

No proper reflection

• India’s sovereign credit ratings do not reflect its fundamentals
• A clear outlier amongst countries rated between A+/A1 and BBB-/Baa3 for S&P/ Moody’s, on several parameters
• Rated significantly lower than mandated by the effect on the sovereign rating of the parameter
• Credit ratings map the probability of default and therefore reflect the willingness and ability of the borrower to meet its obligations
• India’s ability to pay can be gauged by low foreign currency-denominated debt and forex reserves

Transparency is inherent

• India’s fiscal policy reflects Gurudev Rabindranath Tagore’s sentiment of ‘a mind without fear’
• Sovereign credit rating methodology should be made more transparent, less subjective and better attuned to reflect economies’ fundamentals

[5] Inequality and Growth: Conflict or Convergence?

• The relationship between inequality and socio-economic outcomes vis-à-vis economic growth and socio-economic outcomes is different in India from that in advanced economies
• Both inequality and per-capita income (growth) have similar relationships with socio-economic indicators in India, unlike in advanced economies
• Economic growth has a greater impact on poverty alleviation than inequality
• India must continue to focus on economic growth to lift the poor out of poverty
• Expanding the overall pie – redistribution in a developing economy is feasible only if the size of the economic pie grows

[6] Healthcare takes centre stage, finally!

• COVID-19 pandemic emphasized the importance of the healthcare sector and its inter-linkages with other sectors – showcased how a health crisis transformed into an economic and social crisis
• India’s health infrastructure must be agile so as to respond to pandemics – healthcare policy must not become beholden to ‘saliency bias’
• National Health Mission (NHM) played a critical role in mitigating inequity as the access of the poorest to pre-natal/post-natal care and institutional deliveries increased significantly

Reforms are indispensable

• An increase in public healthcare spending from 1% to 2.5-3% of GDP can decrease the out-of-pocket expenditure from 65% to 35% of overall healthcare spending
• Emphasis on NHM in conjunction with Ayushman Bharat should continue.
• Telemedicine needs to be harnessed to the fullest by investing in internet connectivity and health infrastructure

[7] Process Reforms

• India over-regulates the economy resulting in regulations being ineffective even with relatively good compliance with the process        
• The root cause of the problem of over-regulation is an approach that attempts to account for every possible outcome
• Increase in complexity of regulations, intended to reduce discretion, results in even more non-transparent discretion
• The solution is to simplify regulations and invest in greater supervision which, by definition, implies greater discretion
• Discretion, however, needs to be balanced with transparency, systems of ex-ante accountability and ex-post resolution mechanisms
• The above intellectual framework has already informed reforms ranging from labour codes to removal of onerous regulations on the BPO sector

[8] Regulatory Forbearance an emergency medicine, not a staple diet!

• During the Global Financial Crisis, regulatory forbearance helped borrowers tide over temporary hardship
• Forbearance continued long after the economic recovery, resulting in unintended consequences for the economy
• Banks exploited the forbearance window for window-dressing their books and misallocated credit, thereby damaging the quality of investment in the economy
• Forbearance represents emergency medicine that should be discontinued at the first opportunity when the economy exhibits recovery, not a staple diet that gets continued for years

To promote judgement amidst uncertainty, ex-post inquests must recognize the role of hindsight bias and not equate unfavourable outcomes to bad judgement or malafide intent

• An Asset Quality Review exercise must be conducted immediately after the forbearance is withdrawn
• The legal infrastructure for the recovery of loans needs to be strengthened de facto

[9] Innovation: Trending Up but Needs Thrust, Especially from the Private Sector

India entered the top-50 innovating countries for the first time in 2020 since the inception of the Global Innovation Index in 2007, ranking first in Central and South Asia, and third amongst lower-middle-income group economies.

Need for thrust

• India’s gross domestic expenditure on R&D (GERD) is lowest amongst the top ten economies
• India’s aspiration must be to compete on innovation with the top ten economies
• The government sector contributes a disproportionately large share in total GERD at three times the average of the top ten economies
• The business sector’s contribution to GERD, total R&D personnel and researchers is amongst the lowest when compared to the top ten economies
• This situation has prevailed despite higher tax incentives for innovation and access to equity capital
• Indian resident’s share in total patents filed in the country must rise from the current 36% which is much below the average of 62% in the top ten economies

India’s business sector needs to significantly ramp up investments in R&D. For achieving higher improvement in innovation output, India must focus on improving its performance on institutions and business sophistication innovation inputs.

[10] JAY Ho! PM‘JAY’ Adoption and Health outcomes

PM Jan Arogya Yojana (PM-JAY) – the ambitious program launched by Government of India in 2018 to provide healthcare access to the most vulnerable sections demonstrates strong positive effects on healthcare outcomes in a short time.

The impact of PM-JAY on health outcomes by undertaking a Difference-in-Difference analysis based on National Family Health Survey (NFHS)-4 (2015-16) and NFHS-5 (2019-20) is following:

1. Enhanced health insurance coverage: The proportion of households that had health insurance increased in Bihar, Assam and Sikkim from 2015-16 to 2019-20 by 89% while it decreased by 12% over the same period in West Bengal
2. Decline in  Infant Mortality rate: from 2015-16 to 2019-20, infant mortality rates declined by 20% for West Bengal and by 28% for the three neighbouring states
3. Decline in under-5 mortality rate: Bengal saw a fall of 20% while, the neighbours witnessed a 27% reduction
4. Birth Control: Modern methods of contraception, female sterilization and pill usage went up by 36%, 22% and 28% respectively in the three neighbouring states while the respective changes for West Bengal were negligible
5. Low cost care: PM-JAY is being used significantly for high frequency, low cost care such as dialysis and continued during the Covid pandemic and the lockdown.

Overall, the comparison reflects significant improvements in several health outcomes in states that implemented PM-JAY versus those that did not.

[11] Bare Necessities

Access to the ‘bare necessities’ has improved across all States in the country in 2018 as compared to 2012

• It is highest in states such as Kerala, Punjab, Haryana and Gujarat while lowest in Odisha, Jharkhand, West Bengal and Tripura
• Improvement in each of the five dimensions viz., access to water, housing, sanitation, micro-environment and other facilities
• Inter-State disparities declined across rural and urban areas as the laggard states have gained relatively more between 2012 and 2018
• Improved access to the ‘bare necessities’ has led to improvements in health indicators such as infant mortality and under-5 mortality rate and also correlates with future improvements in education indicators.

What next?

• The thrust should be given to reduce variation in the access to bare necessities across states, between rural and urban and between income groups
• The schemes such as Jal Jeevan Mission, SBM-G, PMAY-G, etc. may design an appropriate strategy to reduce these gaps
• A Bare Necessities Index (BNI) based on the large annual household survey data can be constructed using suitable indicators to assess the progress on access to bare necessities.

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References

https://www.indiabudget.gov.in/economicsurvey/

https://pib.gov.in/PressReleseDetail.aspx?PRID=1601273

“Faith is the bird that feels the light and sings when the dawn is still dark.”

– Rabindranath Tagore (quoted by FM in her Budget Speech)

The Union Minister for Finance has finally presented the Union Budget 2021-22 in Parliament, which is the first budget of this new decade and also a digital one in the backdrop of unprecedented COVID-19 crisis.

It was been increasingly seen as a financial vaccine for the infected economy.

Before proceeding with the budget provisions, let’s brush up our basics of what the Union Budget actually is. Refer the following links:

[Prelims Spotlight] Important Keywords Regarding Budget, Fiscal Policy and Taxation

Budgetary procedure in India

Highlights of the 2021 Budget

Rupee Dynamics:

Part: A

The Budget proposals for 2021-22 rest on 6 pillars.

1. Health and Wellbeing
2. Physical & Financial Capital, and Infrastructure
3. Inclusive Development for Aspirational India
4. Reinvigorating Human Capital
5. Innovation and R&D
6. Minimum Government and Maximum Governance

[I]  Health and Wellbeing

• There is substantial increase in investment in Health Infrastructure and the Budget outlay for Health and Wellbeing is Rs 2,23,846 crore in BE 2021-22 as against this year’s BE of Rs 94,452 crore.
• This is an increase of 137 %.

PM Aatmanirbhar Swasth Bharat Yojana

• FM announced this new centrally sponsored scheme, which will be launched with an outlay of about Rs 64, 180 crore over 6 years.
• This will develop capacities of primary, secondary, and tertiary care Health Systems, strengthen existing national institutions, and create new institutions, to cater to detection and cure of new and emerging diseases.
• This will be in addition to the National Health Mission. 

Vaccines

• Provision of Rs 35,000 crore made for Covid-19 vaccine in BE 2021-22.
• The Pneumococcal Vaccine, a Made in India product, presently limited to only 5 states, will be rolled out across the country aimed at averting 50,000 child deaths annually.

Nutrition

• To strengthen nutritional content, delivery, outreach, and outcome, Government will merge the Supplementary Nutrition Programme and the Poshan Abhiyan and launch the Mission Poshan 2.0.
• Government will adopt an intensified strategy to improve nutritional outcomes across 112 Aspirational Districts.

Universal Coverage of Water Supply

• The FM announced that the Jal Jeevan Mission (Urban), will be launched for universal water supply in all Urban Local Bodies with crore household tap connections.

Vehicle scrapping

• A voluntary vehicle scrapping policy to phase out old and unfit vehicles was also announced.
• Fitness tests have been proposed in automated fitness centres after 20 years in case of personal vehicles and after 15 years in case of commercial vehicles

[II] Physical and Financial Capital and Infrastructure

Aatmanirbhar Bharat-Production Linked Incentive Scheme

• FM said that for a USD 5 trillion economy, our manufacturing sector has to grow in double digits on a sustained basis.
• Our manufacturing companies need to become an integral part of global supply chains, possess core competence and cutting-edge technology.
• To achieve all of the above, PLI schemes to create manufacturing global champions for an Aatmanirbhar Bharat have been announced for 13 sectors.

Textiles

• Similarly, to enable the textile industry to become globally competitive, attract large investments and boost employment generation, a scheme of Mega Investment Textiles Parks (MITRA) will be launched in addition to the PLI scheme.
• This will create world class infrastructure with plug and play facilities to enable create global champions in exports. 7 Textile Parks will be established over 3 years.

Infrastructure

• The National Infrastructure Pipeline (NIP) which the FM announced in December 2019 is the first-of-its-kind, whole-of-government exercise ever undertaken.
• The NIP was launched with 6835 projects; the project pipeline has now expanded to 7,400 projects.
• Around 217 projects worth Rs 1.10 lakh crore under some key infrastructure Ministries have been completed.

Infrastructure financing – Development Financial Institution (DFI)

• Dwelling on the infrastructure sector, FM has said that infrastructure needs long term debt financing.
• A professionally managed Development Financial Institution is necessary to act as a provider, enabler and catalyst for infrastructure financing. Accordingly, a Bill to set up a DFI will be introduced.

Asset Monetisation

• Monetizing operating public infrastructure assets is a very important financing option for new infrastructure construction.
• A “National Monetization Pipeline” of potential Brownfield infrastructure assets will be launched.
• An Asset Monetization dashboard will also be created for tracking the progress and to provide visibility to investors.

Roads and Highways Infrastructure

• FM announced that more than 13,000 km length of roads, at a cost of Rs 3.3 lakh crore, has already been awarded under the Rs. 5.35 lakh crore Bharatmala Pariyojana project.
• Of this 3,800 km have been constructed.
• By March 2022, govt. would be awarded another 8,500 km and complete an additional 11,000 km of national highway corridors.
• To further augment road infrastructure, more economic corridors are also being planned.

The states of West Bengal, Tamil Nadu, Kerala, Puducherry and Assam are due to go for Assembly polls by May. So, it is not surprising that budget announcements impacting these states would make headlines.

Railway Infrastructure

• Indian Railways have prepared a National Rail Plan for India – 2030.
• The Plan is to create a ‘future ready’ Railway system by 2030. Bringing down the logistic costs for our industry is at the core of our strategy to enable ‘Make in India’.
• It is expected that Western Dedicated Freight Corridor (DFC) and Eastern DFC will be commissioned by June 2022.

Power Infrastructure

• The past 6 years have seen a number of reforms and achievements in the power sector with the addition of 139 Giga Watts of installed capacity.
• We have almost achieved last mile connectivity, connecting an additional 2.8 crore households and addition of 1.41 lakh circuit km of transmission lines.
• Expressing a serious concern over the viability of Distribution Companies, the FM proposed to launch a revamped reforms-based result-linked power distribution sector scheme.
• The scheme will provide assistance to DISCOMS for Infrastructure creation including pre-paid smart metering and feeder separation, upgradation of systems, etc., tied to financial improvements.

Also read UDAY Scheme

Ports, Shipping, Waterways

• Major Ports will be moving from managing their operational services on their own to a model where a private partner will manage it for them.
• A scheme to promote flagging of merchant ships in India will be launched by providing subsidy support to Indian shipping companies in global tenders floated by Ministries and CPSEs.
• This initiative will enable greater training and employment opportunities for Indian seafarers besides enhancing Indian companies share in global shipping.

Petroleum & Natural Gas

• The government has kept fuel supplies running across the country without interruption during the COVID-19 lockdown period.
• Taking note of the crucial nature of this sector in people’s lives, the following key initiatives are being announced:
• Ujjwala Scheme which has benefited 8 crore households will be extended to cover 1 crore more beneficiaries.
• Government will add 100 more districts in next 3 years to the City Gas Distribution network.
• A gas pipeline project will be taken up in Union Territory of Jammu & Kashmir.
• An independent Gas Transport System Operator will be set up for facilitation and coordination of booking of common carrier capacity in all-natural gas pipelines on a non-discriminatory open access basis.

Financial Capital

• The FM proposed to consolidate the provisions of SEBI Act, 1992, Depositories Act, 1996, Securities Contracts (Regulation) Act, 1956 and Government Securities Act, 2007 into a rationalized single Securities Markets Code.
• The Government would support the development of a world class Fin-Tech hub at the GIFT-IFSC.

Increasing FDI in Insurance Sector

• FM also proposed to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49% to 74% and allow foreign ownership and control with safeguards. 

Disinvestment and Strategic Sale

• In spite of COVID-19, Government has kept working towards strategic disinvestment.
• The FM said a number of transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited among others would be completed in 2021-22.
• Other than IDBI Bank, Government propose to take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22.

[III] Inclusive Development

Under the pillar of Inclusive Development for Aspirational India, the Finance Minister announced to cover Agriculture and Allied sectors, farmers’ welfare and rural India, migrant workers and labour, and financial inclusion.

Agriculture

• Dwelling on agriculture, FM has said that the Government is committed to the welfare of farmers.
• The MSP regime has undergone a sea change to assure price that is at least 1.5 times the cost of production across all commodities.
• The procurement has also continued to increase at a steady pace. This has resulted in increase in payment to farmers substantially.

Land ownership and mapping

• Early this year, PM had launched SWAMITVA Scheme.
• Under this, a record of rights is being given to property owners in villages.
• To provide adequate credit to our farmers, the Government has enhanced the agricultural credit target to Rs. 16.5 lakh crore in FY22.

Operation Green Scheme

• In an important announcement to boost value addition in agriculture and allied products and their exports is the scope of ‘Operation Green Scheme’.
• It is presently applicable to tomatoes, onions, and potatoes, will be enlarged to include 22 perishable products.

Fisheries

• FM proposed substantial investments in the development of modern fishing harbours and fish landing centres.
• To start with, 5 major fishing harbours – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat – will be developed as hubs of economic activity.

Migrant Workers and Labourers

• Government has launched the One Nation One Ration Card scheme through which beneficiaries can claim their rations anywhere in the country. 
• ONORC plan is under implementation by 32 states and UTs, reaching about 69 crore beneficiaries – that’s a total of 86% beneficiaries covered.
• The remaining 4 states and UTs will be integrated in the next few months.
• Government proposes to conclude a process that began 20 years ago, with the implementation of the 4 labour codes.
• For the first time globally, social security benefits will extend to gig and platform workers.
• Minimum wages will apply to all categories of workers, and they will all be covered by the Employees State Insurance Corporation.
• Women will be allowed to work in all categories and also in the night-shifts with adequate protection.

Financial Inclusion

• To further facilitate credit flow under the scheme of Stand Up India for SCs, STs, and women, the FM proposed to reduce the margin money requirement from 25% to 15% and to also include loans for activities allied to agriculture.
• Moreover, a number of steps were taken to support the MSME sector and in this Budget, the Government has provided Rs. 15,700 crore to this sector – more than double of this year’s BE.

[IV] Reinvigorating Human Capital

Education

• The FM has said that the National Education Policy (NEP) announced recently has had good reception.
• More than 15,000 schools will be qualitatively strengthened to include all components of the National Education Policy.

Welfare of the SCs/STs

• Government has set a target of establishing 750 Eklavya model residential schools in tribal areas with an increase in the unit cost of each such school from Rs. 20 crore to Rs. 38 crore, and for hilly and difficult areas, to Rs. 48 crore.
• Similarly, under the revamped Post Matric Scholarship Scheme for the welfare of SCs will benefit 4 crore SC students till 2026.

[V] Innovation and R&D

Research

• The FM has announced the National Research Foundation and added that the NRF outlay will be of Rs. 50,000 crore, over 5 years.
• It will ensure that the overall research ecosystem of the country is strengthened with focus on identified national-priority thrust areas.

Knowledge

• Government will undertake a new initiative – National Language Translation Mission (NTLM).
• This will enable the wealth of governance-and-policy related knowledge on the Internet being made available in major Indian languages.

Space sector

• The New Space India Limited (NSIL) a PSU under the Department of Space will execute the PSLV-CS51 launch, carrying the Amazonia Satellite from Brazil, along with a few smaller Indian satellites.
• As part of the Gaganyaan mission activities, four Indian astronauts are being trained on Generic Space Flight aspects, in Russia. The first unmanned launch is slated for December 2021.

[VI] Minimum Government, Maximum Governance

• Tribunals: FM proposed to take a number of steps to bring reforms in Tribunals for speedy delivery of justice and proposes to take further measures to rationalized the functioning of Tribunals.
• Healthcare: Government has introduced the National Commission for Allied Healthcare Professionals Bill in Parliament, with a view to ensure transparent and efficient regulation of the 56 allied healthcare professions.
• Census: FM announced that the forthcoming Census could be the first digital census in the history of India and for this monumental and milestone-marking task, Rs. 3,768 crore allocated in the year 2021-2022.

Fiscal health

• On Fiscal position, FM underlined that the pandemic’s impact on the economy resulted in a weak revenue inflow.
• The FM said fiscal deficit in 2020-21 is pegged at 9.5% of GDP and it has been funded through Government borrowings, multilateral borrowings, Small Saving Funds and short term borrowings.
• The govt would need another Rs 80,000 crore for which it would be approaching the markets in these 2 months.

Deficit targets

• The fiscal deficit in BE 2021-2022 is estimated to be 6.8% of GDP. The gross borrowing from the market for the next year would be around 12 lakh crore.
• The FRBM Act mandates fiscal deficit of 3% of GDP to be achieved by 31st March 2020-2021.
• The govt plans to continue the path of fiscal consolidation, and intend to reach a fiscal deficit level below 4.5% of GDP by 2025-2026 with a fairly steady decline over the period.

Fiscal consolidation

• The govt hopes to achieve this by-

 the consolidation by first, increasing the buoyancy of tax revenue through improved compliance, and secondly, by increased receipts from monetisation of assets, including Public Sector Enterprises and land etc.

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Part: B

In Part B of the Budget Speech seeks to further simplify the Tax Administration, Litigation Management and ease the compliance of Direct Tax Administration.  The indirect proposal focuses on custom duty rationalization as well as rationalization of procedures and easing of compliance.

Direct Tax Proposals

• The FM provided relief to senior citizens in filing of income tax returns, reduced time limit for income tax proceedings announced setting up of the Dispute Resolution Committee, , relaxation to NRIs, increase in exemption limit from audit and relief for dividend income.
• FM also announced steps to attract foreign investment into infrastructure, relief to affordable housing and rental housing, tax incentives to IFSC, relief to small charitable trusts, and steps for incentivizing Start-ups in the country.
• The Budget proposes to make dividend payment to REIT/InvIT exempt from TDS.
• Stating the resolve of the Government to reduce litigation in the taxation system, the FM said that the Direct Tax Vivad se Vishwas Scheme announced by the Government has been received well.
• In order to allow funding of infrastructure by issue of zero coupon bonds, the Budget proposes to make notified infrastructure debt funds eligible to raise funds by issuing tax efficient zero coupon bonds.

Indirect Tax Proposals

• On the issue of Indirect Tax proposals, the Minister said that record GST collections have been made in the last few months.
• She said several measures have been taken to further simplify the GST.
• The capacity of GSTN system has been announced. Deep analytics and artificial intelligence have been deployed to identity tax evaders and fake billers, launching special drives against them.
• With respect to the custom duty policy, the FM has said that it has the twin objectives of promoting domestic manufacturing and helping India get on to global value change and export better.

Export promotion

• The Budget proposes certain changes to benefit MSMEs which include increasing duty on steel screws, plastic builder wares and prawn feed.
• It also provide for rationalizing exemption on import of duty free items as an incentives to exporters of garments leather and handicraft items.
• It also provides withdrawing exemption on imports of certain kind of leather and raising custom duty on finished synthetic gem stones.
• To benefit farmers, the FM announced raising custom duty on cotton, raw silk and silk yarn.
• She also proposed an Agriculture Infrastructure and Development Cess on a small number of items.
• The Minister said that the Turant Custom Initiative rolled out in 2020 has helped in putting a check of misuse of Free Trade Agreements.

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Other Highlights of Budget Speech

Achievements and Milestones during the COVID-19 pandemic-

Pradhan Mantri Garib Kalyan Yojana (PMGKY)

• Valued at Rs. 2.76 lakh crore
• Free food grain to 80 crore people
• Free cooking gas for 8 crore families
• Direct cash to over 40 crore farmers, women, elderly, the poor and the needy

Aatmanirbhar Bharat package (ANB 1.0)

• Estimated at Rs. 23 lakh crore – more than 10% of GDP
• PMGKY, three ANB packages (ANB 1.0, 2.0, and 3.0), and announcements made later were like 5 mini-budgets in themselves
• Rs. 27.1 lakh crore worth of financial impact of all three ANB packages including RBI’s measures – amounting to more than 13% of GDP

Status of India’s fight against COVID-19

• 2 Made-in-India vaccines – medically safeguarding citizens of India and those of 100-plus countries against COVID-19
• 2 or more new vaccines expected soon
• Lowest death rate per million and the lowest active cases

2021 – Year of milestones for Indian history

• 75th year of India’s independence
• 60 years of Goa’s accession to India
• 50 years of the 1971 India-Pakistan War
• Year of the 8th Census of Independent India
• India’s turn at the BRICS Presidency
• Year for Chandrayaan-3 Mission
• Haridwar Maha-Kumbh

Vision for Aatmanirbhar Bharat

• Atmanirbharta – not a new idea – ancient India was self-reliant and a business epicentre of the world
• AtmaNirbhar Bharat – an expression of 130 crore Indians who have full confidence in their capabilities and skills

    Strengthening the Sankalp of:

• Nation First
• Doubling Farmer’s Income
• Strong Infrastructure
• Healthy India
• Good Governance
• Opportunities for Youth
• Education for All
• Women Empowerment
• Inclusive Development

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Reading the budget

• The Budget, at its simplest, is the government’s tentative income and expenditure statement. Like all financial statements, the devil lies in the fine print.
• At its broadest, the Budget is a pious statement of the government’s policy and ideological intentions.
• It is also the government’s statement of how it seeks to tackle the immediate political (electoral) and economic challenges.
• Hence, any quick assessment of the Budget has to be preliminary.

An act of balancing

• The Union Budget 2021-22 is focused on the revival of economic growth and takes cognizance of the need for higher allocation for Covid-19 vaccine development and distribution.
• The expansionary nature of the Budget was the need of the hour and comes along with a roadmap for fiscal consolidation.
• Higher allocation to capital expenditure should support growth revival and job creation.
• All in all, the Budget addresses key issues facing the Indian economy and does the balancing act required in these unusual times.

Few hits to count

• The government gave proper attention to fiscal sustainability while increasing the size of the Budget.
• The budget follows a series of measures as part of the AtmaNirbhar Bharat packages over the last 10 months, which she said, added up to Rs 27.1 lakh crore or 13 per cent of GDP.
• The FM in his speech has accepted the recommendations of the Fifteenth Finance Commission that 41 per cent of net Union tax proceeds be shared with states, and 1 per cent for the UTs of J7K, and Ladakh.
• The spending push is directed towards infrastructure sectors including roads and highways, railways, textiles, metro trains, health and water supply.
• A much-awaited scrapping policy for personal and commercial vehicles is also expected to boost demand for automobiles.
• The budget puts in place an institutional structure – a bad bank and a developmental financial institution (DFI) – that will enable low-cost funds for infrastructure investments.
• What really caught the attention of FIIs tracking the Indian economy was the decision to hike the FDI limit in the insurance sector to 74 per cent from 49 per cent now.
• Budget speech nods for a policy of strategic disinvestment of PSUs barring a bare minimum in four key strategic sectors: from transport and telecom to defence, atomic energy, power, coal, banking and insurance.

Major misses:

Job losses ignored

• The novel coronavirus pandemic and the resultant lockdown led to massive job and livelihood losses.
• Unlike most advanced countries and emerging market economies, India’s response to address the distress of the masses has been meagre.

Extreme spendings

• With its fiscal deficit at 9.5% of GDP for FY21 and 6.8% in FY22 Budget for 2021-22 seems to signal “spend like there is no tomorrow”.
• For well over a decade-and-a-half, we have tried attaining deficit targets (3%) set out in the Fiscal Responsibility and Budget Management (FRBM) Act (2003).

A mirage for farmers

• The Finance Minister has rightly drawn attention to the fact that the purchases under the MSP Programme have increased 1.5 times between 2013-4 and 2019-20.
• Thus, the “true” increase in the purchase price was a meagre 19 %in six years.
• Even this does not translate into a 19 % increase in incomes of the farmer because the costs of inputs such as diesel, labour and seeds have also gone up.

High on agri-subsidies

• From a policy perspective, one must point to the huge bias towards subsidies as compared to investments, especially research and development.
• India spends not even half of what a private global company like Bayer spends on agri-R&D — almost Rs 20,000 crore every year.
• The expenditure on agri-R&D needs to be doubled or even tripled in the next three years if growth in agriculture has to provide food security at a national level and subsidies on food and fertilizers need to be contained.

No tax relief

• Even though the revenue position of the government was tight going into the budget, it must be noted that citizens have also been waiting for a tax exemption relief since 2014.
• But only compliance issues were dealt with in the budget besides giving tax relief to those above 75 years of age.

Environment less in focus

• The budget announces good initiatives like a mission on hydrogen energy, a vehicle scrapping policy and reducing allocation to coal exploration.
• However, reducing the budget for autonomous institutes under the union environment ministry amounts to a symbolic message that when cash strapped environment takes a back seat.

This January 20^th officially marked the end of the Trump era in US politics as Joe Biden took over from him to become the 46th president of the United States of America. This major event is seen worldwide as undoing or a reset of American regressive protectionist policies and moves by Donald Trump.

The world has been waiting for the day to unfold the broad contours of the policy on globalization and international relations. Most expect a return to the pre-Trump era with the US playing a more active role in world dynamics.

India welcomes Biden

PM Modi has personally congratulated Biden on his success and used the occasion to emphasize on the importance of strategic partnership between the two countries.  There is no doubt that the change of regime in the US will not affect the time-tested foundations of this friendship that were in fact laid with Obama administration declaring India as a major defense partner of the U.S.

But much water has flown down the bridge since the time of Obama-Biden rule in the US after Trump.

Lets’ have a look over recent developments in India-US ties:

India’s relationship with the US has been largely confined only on strategic terms and the ties have been unusually constructive under Trump administration.

In the strategic domain, this included, the finalization of many agreements and ministerial and QUAD meets among others.

• India and the United States have recently signed the Basic Exchange and Cooperation Agreement (BECA).
• The two agreements signed earlier are— the Logistics Exchange Memorandum of Agreement (LEMOA) and the Communications Compatibility and Security Agreement (COMCASA).
• American lawmakers had introduced key legislation called HR 2123 which seeks to advance the US-India strategic relationship.
• The legislation would ensure that the US State Department treats India as a “NATO ally” for the purposes of the Arms Export Control Act.

Challenges before the new regime

President Joe Biden faces a slew of important foreign policy challenges some of which include:

(A) Climate change

• Joe Biden has warned the climate crisis poses an “existential threat” to the world as he unveiled a radical change in direction from the Trump era by halting fossil fuel activity on public lands.
• He reaffirmed US commitment for Paris Agreement.
• Biden said he will host an early Leaders’ Climate Summit aimed at raising climate ambition and making a positive contribution to the COP26 and beyond.

(B) China’s expansionism

• The coalition against China is likely to persist and ties with India and other Pacific nations, including Japan and Australia, may be further boosted.
• Ties with Beijing were remarkably tense during the Trump administration.
• The newly administered pentagon has continued Trumps legacy against China’s expansionist moves in the South East Asia.

(C) Pakistan and terror

• The Biden administration considers Pakistan a “major non-NATO ally,” a status bestowed upon only seventeen countries that facilitate military trade and cooperation.
• However, in reality, Pakistan has not acted as an ally ever. The listing of Pakistan in FATF ‘Grey List’ clearly indicates its ambiguous policies.
• It is against this backdrop that new US president Joe Biden must now confront the Pakistan test of appeasement of the new regime.

(Lets’ not get into what the US prospect plans are with the Russia, Taliban and Afghanistan.)

India’s expectations from the new regime

• The US and India see each other as key strategic partners and analysts expect Indo-US relations to be less strained.
• The major change India is hoping for is in terms of—software exports, H1 visa policy, minimum compensation for engineers via which Trump tried discouraging hiring Indian IT professionals.
• Of late, the US was seen pressurizing India on its Agri subsidy policy, for which, there may not be a major shift, but it might be easier to deal with the new regime.

Defense priorities

• The new administration under Biden has iterated that India is ‘bipartisan success story’, and made it clear that strategic ties with India will remain strong, especially on the Indo-Pacific.
• It ensured continuity from the Trump administration in dealing with China’s aggressive actions.

India’s concerns remain

South Asia does not seem to be a priority operational theatre for the new US administration. The Indian apprehension with regard to the Biden liberal administration seems to be a hard-press on various issues like:

(A) Policies toward China and Pakistan

• This could disrupt India’s current strategy. Whatever the complications for the US, Trump’s strident opposition toward China served Indian interests well.
• India could avoid balancing against China and, until the recent troubles on the border, could actually entertain cooperation with Beijing.
• India thus enjoyed the best of both worlds: limiting China’s opposition toward itself while having its rival constrained by American hostility.

(B) Trade disputes

• India seeks reinstatement of its privileged access as a developing country to the U.S. market.
• Trump abolished this benefit and Biden may not restore it without greater U.S. access to the Indian market in return—exactly when New Delhi itself has become more Atmanirbhar.
• More liberal U.S. visa policies for Indian professionals could take the sting out of these trade problems.

(C) Look-out policies

• Excepting its adversaries, the United States did not care much about what happened inside other countries in the areas of human rights, religious freedoms, and democratic practices.
• A Biden administration would likely be different, bringing domestic Indian political developments under greater U.S. scrutiny and possibly pushback.
• This could invite undue interference on Kashmir matters as well.

(C) Iran

• To be a friend of Iran and the US at the same time is getting more and more difficult day by day.
• New Delhi may have to face a disappointment with Washington to continue its oil imports from Iran
• After all, India needs Iran because of Chabahar and Afghanistan — where the American withdrawal is another bone of contention.

Why does this regime change impacts India?

(A) Support against terrorism

• This intense engagement has helped achieve robust support from the US against terrorism.
• This was evident after the Pulwama attack last year, leading to designation of Jaish-e-Mohammed chief Masood Azhar as a global terrorist under UN Security Council Resolution 1267, and the placing of Pakistan on the grey-list of the FATF.

(B) Defence ties

• For India, its relationship with the US on defence issues has strengthened. India has procured over $18 billion worth of defence items from the US, almost half of this in the last five years.
• India conducts more bilateral exercises with the US than with any other country.

(C) Energy

• The other area where the relationship has grown in recent years is energy.
• The bilateral Strategic Energy Partnership was launched in April 2018; India has started importing crude and LNG from the US from 2017 and 2018 respectively.
• The total imports are estimated at $6.7 billion — having grown from zero.

(D) Trade

• In the backdrop of the global economic slowdown, where India’s global exports have fallen consistently, it is important for the country to diversify and strengthen bilateral relations with other markets.
• It has set its sights on “large developed markets”, improved access to which would help its industry and services sectors.
• These include the US, which has, over the last two decades, become a crucial trading partner in terms of both goods and services.

US has no alternatives to India

(A) India as an open data market

• India is, after all, the largest open data market in the universe. Per capita, more data is consumed in India than anywhere else in the world.
• For American “big tech” firms, India provides a scale for their products unavailable in any other country.
• Despite current economic woes, this will continue to be the largest growing and relatively open consumer market for American products and business.

(B) Indian-Americans

• About 4.5 million people of Indian origin live in the US today, but despite their relatively small numbers, Indian Americans are a growing political force in the country.
• Trump and even Biden has sought to court the Indian-American vote in the run-up to the 2020 election.

(C) India as a defence partner

• India is also a large arms importer.
• Defence trade is widely seen as the silver lining in this relationship – US-India defence deals have ballooned in the past decade, from nearly zero in 2008 to a little more than $15bn in 2019.

(D) Solution to China’s hegemony

• On the trade front, India can be an effective supplier rather than being an outsourcing hub if compared to China.
• Strategically also, the U.S. views India as a platform to contain China’s hegemony in the Indo-Pacific.
• India sees it as an opportunity for economic expansion, with the U.S. being an equal partner.

Way forward

• There are rising concerns in the US about India’s fiscal limitations, its ties with Russia, its ponderous response to a pattern of Chinese provocations on its border, and its drift toward illiberal politics.
• The current state of play suggests that the two countries might come at a crossroads.
• India should be prepared to face a situation where Biden presidency is fully geared to deal with Chinese aggressiveness in the Indo-Pacific region militarily through QUAD.
• India has to continue building its defence forces to counter any joint mischief by Pakistan and China on our borders even as our military-level talks with China for disengagement on LAC in Ladakh are kept up.
• Also, India has to use all international forums to warn the democratic world against the grave threat of terrorism that it faces on account of the spread of radicalization.

Conclusion

• President Trump would be remembered for breaking from the traditional polity to confront the new challenges of the present, for shifting the focus from international politics to the domestic situation.
• As usual, India cheers the inevitable strong support by the US on multiple fronts discussed above.  
• However, India needs to keep the new US regime on its side for strategic and security reasons.
• Till then, India should keenly watch Joe Biden unfold his foreign policy agenda.

As the world’s economy transitions into one where economic value is created by bringing about disruption, and consequently behavioural change, governments know they have to create ample runway space for startups to take off.

With that in mind, five years ago, the central government took this into consideration and launched the Startup India Scheme on January 16, 2016, to give new firms, particularly in the Micro, Small and Medium Enterprises (MSME) sector a boost.

What are Startups?

• A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable economic model.
• While entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to become registered, startups refer to new businesses that intend to grow large beyond the solo founder.
• At the beginning, startups face high uncertainty and have high rates of failure, but a minority of them does go on to be successful and influential.  Some startups become unicorns.

Why do we need start-ups?

Start-ups make an indispensable contribution in the economic growth of a nation.

(1) Employment Generation

Entrepreneurship creates more avenues for new job in the economy. This would help harness the readily available employment in our country. This mission will reduce the burden from service and agricultural sector and enables condition of balance in economy.

(2) Creation of Wealth

Since entrepreneurs are attracting investors by investing their own resources, the people of the nation would get benefit when startups grow. Since the money is sharing with the society, wealth is creating within the nation.

(3) Better standard of living

Startups can implement innovations and technologies to improve the living of people. There are many startups who are working for rural areas to develop the community.

(4) Economic growth

GDP plays a vital role in enhancing the economic growth of a country. By supporting and encouraging more startups, it is possible to generate more revenue domestically and consumer’s capital will also flow around the Indian economy.

(5) Source for FDI

It has been noted that in recent years, the volume of foreign investments made in the Indian startup is quite huge. The foreign investments in the startups act as an easy capital raise and technological investment for the startups which makes them readily accept the investments coming towards them.

(6) Culture of Entrepreneurship

Startups encourage a culture of entrepreneurship and innovation which leads to create new job opportunities and provide support to the economy. Success stories motivate talented youth to start their own ventures and help them to become a job provider instead of a job seeker.

(7) Advancement in technology

Startups are more focused on new technologies and cutting-edge innovation. Free from a multilayered corporate bureaucracy, startups are more agile and able to build an idea into a product and improve it upon consumer demand with faster decision-making communications.

Startup India Scheme

• Startup India is an initiative of the Government of India.
• The campaign was first announced by PM Modi during his speech on 15 August 2015 address from the Red Fort.
• The action plan for this initiative is focusing on three areas:
• Simplification and Handholding.
• Funding Support and Incentives.
• Industry-Academia Partnership and Incubation.
• An additional area relating to this initiative is to discard restrictive States Government policies within this domain, such as License Raj, Land Permissions, Foreign Investment Proposals, and Environmental Clearances.
• It was organized by the Department for promotion of industry and internal trade (DPI&IT).

An evaluation of the Scheme

(A) Successes

• Investment: $63 Bn has been invested in Indian startups in the last five years. The Indian tech startups rose about $13.5 Bn in funding across 885 deals in 2017, which is the peak year in terms of funding in the past five years.
• Growth: From 29K startups in 2014, the numbers grew exponentially from 2015-2018 to touch 55K in 2020. Between 2016 and August 2020, Startup India programme says it has recognised over 34.8K startups. 
• IPRs: Among these, 8.3K startups received intellectual property rights (IPR) fee benefits, while over 2.6 lakh people enrolled in the entrepreneurship-focused learning courses.
• Gender inclusion: In terms of gender diversity across workspaces in India, just 9% of the board members of the top 20 unicorn startups in India are women.

(B) Failures

• Clearances: The Startup India scheme had received around 1368 applications by mid-December last year out of which DPIIT has only accepted 502 application forms and recognized them as ‘startups’.
• Delay: The delay and lack of efficiency is a cause for the startup plan to fail in some cases.
• Funding: The concerns of domestic angel and VCs on capital gains tax remain largely unaddressed.
• EODB issues: Venture capital firms and angel investors are more cautious while investing in Indian startups. It is because the conditions, the ease of capital flow and doing business are not stable enough.

Some lacunae of the scheme

• Definitional issues: The scheme is criticized by professionals because of the definition of Start-up provided in the scheme. The definition states that a mere act of developing products or services that do not have the potential for commercialization or have no or limited incremental value for customers would not be a start-up.
• Test of ‘Innovation’: Each startup is scrutinized by an Inter-Ministerial Board (IMB) to see if the startup is ‘innovative’ – i.e. if it is unique or a world first. Most of the start-ups would lie outside the purview of this definition.
• Red tapism: Further eligibility of start-up, lies under definition or not, shall be approved or certified by an inter-ministerial board which is a retrograde step and against the government policy of ‘Min Government Max Governance’.
• Taxation mirage: A tax break of three years has been given in the scheme. Anyone who has business sense knows that only a few of start-ups will be profitable in the first three years and so this handful can avail them of the tax break.
• Patenting terms: The other option for startups to get tax benefits is to get a patent. And we all know that it takes several years to register a patent in India, and if royalty profits accrue before then, the tax benefits will be denied.

Inherent challenges to Start-ups in India

• Financial scarcity: Availability of finance is critical for the startups and is always a problem to get sufficient amounts.
• Lack of Infrastructure: There is a lack of support mechanisms that play a significant role in the lifecycle of startups which include incubators, science and technology parks, business development centers etc.
• Regulatory bottlenecks: Starting and exiting a business requires a number of permissions from government agencies. Although there is a perceptible change, it is still a challenge to register a company and exiting it.
• Compliance hurdles: For example earlier Angel tax, which stands removed no, falls under corruption and bureaucratic inefficiencies as it takes the focus of entrepreneurs away from building a product or service to responding to tax notices and filing appeals.
• Low success rate: Several startups fail due to poor revenue generation as the business grows. As the operations increase, expenses grow with reduced revenues forcing startups to concentrate on the funding aspect, thus, diluting the focus on the fundamentals of business.
• Lack of an Innovative Business Model: To be successful a startup must be innovative. Unfortunately, Indian startups are less innovative than startups elsewhere. Many Indian startups don’t have an original business idea that is disruptive and by which consumers will be provided with better service.
• Non-competitive Indian Markets: Too many startups serving too few consumers are saturating the Indian market.  Most startups serve the fraction of Indians who live in urban India. The majority of Indians who live in rural areas and small towns remain untouched by most startups.

Various initiatives by the Govt.

There are numerous government initiatives to assist start-ups,

• MUDRA Scheme: Through this scheme, start-ups get loans from the banks to set up, grow and stabilize their businesses.
• SETU (Self-Employment and Talent Utilization) Fund: Government has allotted Rs 1,000 Cr in order to create opportunities for self-employment and new jobs mainly in technology-driven domains.
• E-Biz Portal: Government launched e-biz portal, India’s first government to business portal that integrates 14 regulatory permissions and licenses at one source to enable faster clearances and improve the ease of doing business in India.
• Credit Guarantee Fund: launched by the GoI to make available collateral-free credit to the micro and small enterprise sector. Both the existing and the new enterprises are eligible to be covered under the scheme.
• Fund of Funds for Start-ups (FFS): 10,000 Rs corpus fund established in line with the Start-up India action plan under Small Industries Development Bank of India (SIDBI) for extending support to Start-ups.
• Tax Sops: Tax exemption on Capital gain tax, Removal of Angel tax, Tax exemption for 3 years and Tax exemption in investment above Fair Market Value.

Entrepreneurship today is ‘survival driven’ self-employment, formed out of necessity, as well as opportunity motivated, largely because poverty and lack of formal employment opportunities rear its ugly head in striving economies.

Way Forward

The best of the Indian startup ecosystem still lies ahead.

• There is a need for policies and progressive strategies from governments to encourage startups and provide access and assistance in key areas including tax clarity, incubation, affordability and licensing.
• In any case, governments should be well prepared and dedicated to creating a culture of startups to impact the entrepreneurial ecosystem in their cities, countries and citizens.
• Innovation and economic growth depend on being able to produce excellent individuals with the right skills and attitudes to be entrepreneurial in their professional lives.
• It is critical, therefore, that nations set out to develop entrepreneurial skills, attitudes and behaviour in the school systems at all levels as a part of the lifelong learning process.
• To produce effective entrepreneurs who can initiate change, governments need to cut ‘red tape’ and streamline regulations.
• Funding, another daunting and difficult challenge, has to be resolved at earliest with liberal funding mechanisms.
• Apart from all these concerns, Start-up India has potential to solve India’s problems and create jobs. Nonetheless, the challenges and changes are not to be dreaded but defeated.

Conclusion

• The current economic scenario in India is in expansion mode.  Indian Startups are now spread across the length and breadth of the entire country.
• The Indian government’s policies like Make in India, Digital India, Atmanirbhar etc. shows the enthusiasm of centre to imbibe reforms.
• With the government going full hog on Startups, it could arrest the brain drain.
• Efforts are being made by diverse stakeholders in the Indian startup ecosystem to elevate domestic policies in concurrence with global trends.

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References

RSTV

Importance of Startups in Developing Countries & Obstacles Facing Entrepreneurship

https://inc42.com/features/startupindia-at-5-the-defining-moments-from-indias-startup-ecosystem-in-the-last-5-years/

https://www.financialexpress.com/industry/sme/cafe-sme/startup-india-how-entrepreneurs-can-realise-full-potential-of-govts-scheme-remain-competitive/1907610/

https://www.theweek.in/news/biz-tech/2019/01/03/Corruption-securing-funds-key-challenges-for-startups-in-2019-Report.html

https://timesofindia.indiatimes.com/blogs/yankeedoodle/why-startup-india-has-failed-how-to-fix-it/

India battles on multi-layered fronts to counter cross-border terrorism.

Our security forces are constantly engaged in creating an environment of security in the country.  They have been quite successful in diagnosing and executing them.

The airstrike after the Pulwama attack and the earlier surgical strike made clear the zero-tolerance policy of India towards terrorism.

Context

• International terrorism is one of the most serious threats to international peace and security.
• Highlighting yet again the issue of terror at the UN, India has said terror has become a “means of waging war” and requires “global action”.

Why in news?

• Foreign Minister S Jaishankar has recently addressed the United National Security Council (UNSC) open debate over ’20 years after the adoption of resolution 1373’ on combating terrorism.
• Describing terrorism as the greatest threat to mankind, he had proposed an eight-point action plan at the UNSC to ensure effective action against the menace of terrorism.

What is Resolution 1373?

• The Security Council Resolution 1373, adopted unanimously on 28 September 2001, is a counter-terrorism measure passed following the 9-11 terrorist attacks on the United States.
• The resolution was adopted under Chapter VII of the United Nations Charter and is therefore binding on all UN member states.

Major provisions of the resolution

• The resolution aimed to hinder terrorist groups in various ways. 
• UN member states were encouraged to share their intelligence on terrorist groups in order to assist in combating international terrorism.
• The resolution also calls on all states to adjust their national laws so that they can ratify all of the existing international conventions on terrorism.
• It stated that all States “should also ensure that terrorist acts are established as serious criminal offences in domestic laws and regulations and that the seriousness of such acts is duly reflected in sentences served.”

How Terrorism has become a global issue?

• The rise of ISIS and the growing problem of foreign fighters have led, in recent years, to some wider acknowledgment that terrorism is a global catastrophe.
• 9/11, 26/11, Christchurch terror attacks have transformed the global belief of terrorism being a local problem.

Impacts of Terrorism

(1) Economic impacts

Terrorism also thwarts economic growth indirectly by affecting macroeconomic variables, e.g., by reducing FDI, lessening domestic investment, increasing inflation, increasing non-development government expenditures (law and order and Security), damaging stock markets, and increasing unemployment, among others.

(2) Political impacts: A Terror incident shakes the very foundation of a legitimate government and its establishments on moral grounds of accountability (for intelligence failure to avert terror incidences). This results in political instability.

(3) Socio-cultural impacts: Terrorism is often associated with a particular religion or ethnicity. This often leads to paranoia towards a religion leading to communal tensions. Multi-diverse countries like India are the worst hit.

(4) Loss of Life & Property

This is the main impact of a terrorist event. But as we know, casualties are not the only way terrorists can achieve their goals. When people stop leaving their homes and carrying out their lives as normal due to real or perceived terrorist threats, businesses see the impact on their bottom line.

The 8-Point Action Plan

In a first intervention since India joined the UNSC as a temporary member on 1 January 2021, S. Jaishankar had put forward an eight-point action plan as part of his zero-tolerance policy for terrorism, saying there are “no good and bad terrorists” and there should be “no ifs and buts” around terrorist activities.

1. Summon the political will to combat terrorism.

Nor should we allow terrorism to be justified and terrorists glorified. All member states must fulfill their obligations enshrined in international counter-terrorism instruments and conventions.

2. Do not countenance double standards in this battle.

Terrorists are terrorists; there are no good and bad ones. Those who propagate this distinction have an agenda. And those who cover up for them are just as culpable.

3. Reform the working methods

Reform the working methods dealing with sanctions and counter-terrorism. The practice of placing blocks and holds on listing requests without any rhyme or reason must end.

4. Firmly discourage exclusivist thinking that divides the world and harms our social fabric.

Such approaches facilitate radicalization and recruitment by breeding fear, mistrust, and hatred among different communities. The UNSC should be on guard against new terminologies and misleading priorities that can dilute our focus.

5. Enlisting and delisting

Enlisting and delisting individuals and entities under the UN sanctions regimes must be done objectively, not for political or religious considerations.

6. Curbing terror linkages

Linkages between terrorism and transnational organized crime must be fully recognized and addressed vigorously.

7. Combating terrorist financing

It will only be as effective as the weakest jurisdiction. The Financial Action Task Force (FATF) should continue to identify and remedy weaknesses in anti-money laundering and counter-terror financing frameworks. Enhanced UN coordination with FATF can make a huge difference.

8. Adequate funding

Adequate funding to UN Counter-Terrorism bodies from the UN regular budget requires immediate attention. The forthcoming 7th review of the UN’s Global Counter-Terrorism Strategy offers an important occasion to strengthen measures to prevent and combat terrorism and building capacities of member states.

Global facets of Terrorism

Terrorism is the calculated use of violence to create a general climate of fear in a population and thereby to bring about a particular political or social objective.

It has been practiced by political organizations with both rightist and leftist objectives, by nationalistic and religious groups, by revolutionaries, and even by state institutions such as armies, intelligence services, and police.

Various attempts have been made to distinguish among types of terrorist activities. In general, there are three basic facets of terrorism – international terrorism, domestic terrorism and transnational terrorism.

We need to be familiar with these five types of terrorism:

• State-Sponsored terrorism, which consists of terrorist acts on a state or government by a state or government.
• Dissent terrorism, which are terrorist groups which have rebelled against their government.
• Terrorists and the Left and Right, which are groups rooted in political ideology.
• Religious terrorism, which are terrorist groups which are extremely religiously motivated and
• Criminal Terrorism, which are terrorists acts used to aid in crime and criminal profit.

Terror tactics these days are more modernizing through new technologies such as:

Bio-terrorism: It is the intentional release of biological agents to cause illness or death in humans, animals, or plants. These agents may be bacteria, fungi, toxins, or viruses. They may be naturally occurring or human-modified.

Cyber-terrorism: It is the convergence of cyberspace and terrorism. It refers to unlawful attacks and threats of attacks against computers, networks, and the information stored therein when done to intimidate or coerce a government or its people in furtherance of political or social objectives.

Why do people resort to terrorism?

Individuals and groups choose terrorism as a tactic because it can:

• Act as a form of asymmetric warfare in order to directly force a government to agree to demands
• Get attention and thus political support for a cause
• Directly inspire more people to the cause (such as revolutionary acts) – propaganda of the religion/separatism
• Indirectly inspire more people to the cause by provoking a hostile response or over-reaction from enemies to the cause

Somewhere in the roots of domestic terrorism, socio-cultural deprivation remains the prime mover.

Terrorism in India

Following are the types of terrorism which threatens India’s security and internal peace and tranquility.

1. Ethnic terrorism
2. Religious terrorism
3. Ideological terrorism

Ethnic Terrorism: Terrorism based on an identity crisis, resource crisis, and cultural imperialism among various ethnic groups is called ethnic terrorism. It is spread in the northeast region of India.

Religious terrorism: The systematic violence propagated based on religion is called religious terrorism. The feeling of religious superiority is at the root of this terrorism. Religious terrorism in modern times is considered terrorism.

Ideological terrorism: If the purpose of planned violence is motivated by communist elements, it is called Left Terrorism or Naxalism/Maoism.

The UN and its handling of Terrorism

The UN’s counter-terrorism work in recent years can be organized under three headings:

First, a norm-setting role that includes-

• the development and promotion of a Global Counter-Terrorism Strategy and efforts to counter violent extremism,
• a set of international conventions, and
• far-reaching UNSC  resolutions imposing counter-terrorism obligations on member states;

Second, capacity-building activities to help countries meet some obligations (through FATF and all) and

Third, Security Council-mandated sanctions, in the 1990s, against state sponsors of terrorism, and since 9/11 against hundreds of individuals and entities affiliated with Al Qaida.

The UN has accumulated ample experience and a proven record of success in its efforts to end civil wars over the past two and a half decades.

However, serious questions arise regarding the preparedness of the UN’s conflict management tools, in particular its peace operations, to deliver mandates in countries affected by terrorist insurgencies, such as Afghanistan, Iraq, Libya, Syria, Somalia, Yemen and Lebanon.

Limitations to the UN

The U.N. is too political, too uncoordinated, too focused on process rather than outcomes and follow-up, and too far removed from the people who actually deal with the problems of terrorism.

• Invocation of a “war on terrorism” and adoption of reflexive security measures renders very serious pressure on any organization such as the UN.
• As an intergovernmental organization catering to the needs and driven by the interests of national governments, the UN is constitutionally ill-equipped to implement counter-terror measures.
• The UN’s comparative advantage may thus lie in supporting and mobilizing funding for networks that would allow for the sharing of best practices among such local actors.

Need for a global action

A high-level review of UN peace operations concluded in 2015 that the UN peacekeeping missions, due to their composition and character, are not suited to engage in counter-terrorism operations. This is mainly because-

• The growing presence of religious terrorist groups in many of today’s civil war environments complicates the UN’s peacemaking.
• This is because many of these groups pursue maximalist demands that are very difficult to meet or to incorporate into political settlements based on human rights and democratic governance.
• Even where such groups may be motivated primarily by local, legitimate, and reversible grievances, key powers tend to discourage negotiations with them.
• Again, extremists groups have proven difficult to engage around respect for humanitarian norms, which the UN has successfully employed elsewhere with other armed non-state actors.
• The UN has increasingly become a target of such groups, which has led it to ever greater preoccupation with protecting itself rather than local civilians.
• This has greatly hampered its ability to engage with the local population, win hearts and minds, and mediate local disputes.

India’s action: Leading from the front

India has been fighting insurgency and terrorism since its days of independence.

• India has been at the forefront for a call of global action against terrorism which is increasingly becoming a global phenomenon.
• India has been calling for the passing of the Comprehensive Convention on International Terrorism (CCIT) at the UN. CCIT calls for a common definition of terror and the criminalization of international terrorism.
• A decade of relentless efforts by India to get Pakistan-based terror master Masood Azhar listed as a global terrorist by the UNSC finally came to fruition in 2019.
• India has been successful in drawing attention to its problem of terrorism by casting Pakistan as a breeder and supporter of terrorist organizations.  To this testimony, India’s role play at the FATF against Pakistan is globally visible.

This signifies India’s leadership in global counter-terrorism efforts.

Way Forward

• Indeed, around the world many governments continued to rely primarily on military and law enforcement tools in their counter-terrorism efforts often to the detriment of human rights and with insufficient attention paid to underlying drivers of extremism.
• The world needs to shift its focus primarily from military and law enforcement tools towards a holistic approach.
• This is because counter-terrorism efforts often tend to detriment the human rights and least attention is paid to underlying drivers of extremism.

Endorsing the Christchurch Call

Christchurch call of action is an initiative named after the New Zealand city where 51 people were killed in an attack on mosques.

The attack had highlighted the urgent need for action and enhanced cooperation among the wide range of actors with influence over this issue, including governments, civil society, and online service providers, such as social media companies, to eliminate terrorist and violent extremist content online.

The initiative outlines collective, voluntary commitments from governments and online service providers intended to address the issue of terrorist and violent extremist content online and to prevent the abuse of the internet.

Such collaboration can be extended over various parameters of counter-terrorism moves by the global community.

A note for the UN

While it is true that the UN’s operational counter-terrorism activities have faced severe shortfalls and limitations; the UN has proven a useful venue for establishing the broad normative and cooperative frameworks for collective counter-terrorism action.

• The UN needs to reflect on how it can adapt its peace operations to deliver on their mandate in theaters where terrorist networks are present.
• Among the key questions the UN will need to confront are: how to identify elements among violent extremist groups that could potentially be engaged in mediation, peace and reconciliations processes.
• The UN has to arrive at a how to adapt Disarmament, Demobilization, and Reintegration programs to the context of violent extremism.

India has to be ‘all-alert ‘

Looking to international organizations such as the UN has lost much of its appeal since the war in Iraq and Afghanistan. The loss of credibility renders it incapacity of any substantial action against these insurgents or the countries that harbor them.

• Technological advancements and, arguably, new geopolitical alliances also bring with them new terrorist threats.
• Despite myriad ideological and operational complexities when it comes to terrorist groups active in the country, India is outperforming its peers when it comes to meeting these challenges.
• However, the fight against terrorism is far from over.
• India must be prepared with its military and diplomatic options to eliminate these threats well in advance.

Conclusion

• Terrorism is not just a violent activity but it attacks the social, cultural, and defense fabric of the country and society and hinders its sustainable development.
• All countries must solve problems like the socio-economic unjust, refugee crisis, human rights abuses globally, and stands unanimously against all forms of terrorism to end it.

In conclusion it can be said, India’s war against terrorism remains largely her own problem.  For time to come, India will have to deal with its problem of terrorism on its own accord.

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References

https://www.orfonline.org/research/one-year-since-the-christchurch-call-to-action-a-review/

https://timesofindia.indiatimes.com/india/in-8-point-action-plan-against-terrorism-jaishankar-slams-pak-takes-a-dig-at-china/articleshow/80241500.cms

https://www.thequint.com/news/india/eam-jaishankars-8-point-action-plan-in-unsc-to-combat-terrorism#read-more#read-more

https://en.wikipedia.org/wiki/Terrorism_in_India

http://www.ipcs.org/comm_select.php?articleNo=1657

This December, we commemorated the 30th anniversary of the HDI.

Out of 189 countries, India has ranked 131 on the Human Development Index 2020 prepared by the United Nations Development Programme (UNDP). With an HDI value of 0.645, the country fell in the medium human development category.

People are the real wealth of a nation. The basic objective of development should be to create an enabling environment for people to live long, healthy and creative lives. This may appear to be a simple truth.

Background

• The human quest for knowledge has been sustained by an unspoken assumption: that the answers to life’s questions can be found if we try hard enough.
• And when we do, we will be able to reorganize society in rational ways, free from superstition, dogma, and oppression.
• Yet, the ideas that liberate one generation become the shackles of the next. It is the relentless march of ideas that add to the beauty, sense and the meaning of life.
• One such simple, but the transformational idea was the Human Development Index (HDI) as a measure of progress.

The Human Development Index

• The HDI combines indicators of life expectancy, education or access to knowledge and income or standard of living, and captures the level and changes to the quality of life.
• The index initially launched as an alternative measure to the gross domestic product, is the making of two acclaimed economists from Pakistan and India, namely Mahbub ul Haq and Amartya Sen.
• It stresses the centrality of human deve­lop­ment in the growth process and was first rolled out by the United Nations Development Programme in 1990.

Dimensions of the Human Development Index

The idea that progress should be conceived as a process of enlarging people’s choices and enhancing their capabilities is the central premise of the HDI.

Since its launch, the HDI has been an important marker of attempts to broaden measures of progress. The HDI considers three main dimensions to evaluate the development of a country:

1. Long and healthy life

The long and healthy life dimension is measured by life expectancy at birth. The life expectancy at birth is a statistical measure that an average individual is expected to live based on certain demographic factors such as the year of birth and current age.

2. Education

This is a second dimension in the HDI. The indicators of education are the expected years of schooling and the mean years of schooling. According to the UN, the average maximum years of schooling is 18 years, while the mean maximum years of schooling is 15 years.

3. Standard of living

The standard of living is usually measured by the gross national income (GNI) per capita. The GNI indicates the total domestic and foreign output created by the residents of a certain country.

Major highlights of the 2020 Report

• Out of 189 countries, Norway, Ireland and Switzerland are in the top three rungs.
• The size of economic resources, as usual, has been a key factor affecting human development; the distribution and allocation of these resources also play a major role in determining the level of human development.
• The 2019 HDI ranks India with a per capita income of $6,681 in the 131st position, a notch lower than its 130th rank in 2018, which puts it in the medium human development category.

What India has achieved over the years?

• The report stated that since 1990, the HDI value of India has increased to 0.645 from 0.429, registering an increase of over 50%.
• During the same period, the life expectancy at birth in India rose by nearly 12 years, while mean years of schooling witnessed an increase of 3.5 years.
• During this while, the expected years of schooling also rose by 4.5 years.
• Moreover, during this period, GNI per capita of India also increased, registering a rise of nearly 274%.

India has gained but still lags far behind

• However, trends for the last three decades indicate that India has raised its HDI score at an annual average rate of 1.42%, almost a third higher than the 1% growth clocked by developing countries as a whole.
• But India’s gains still lag behind many other Asian nations like China (1.47%), Bangladesh (1.64%), Cambodia (1.66%) and Myanmar (1.86%).
• And a closer look at the other composite indices from the family of development indices shows that India falters badly in many areas, especially on the gender and income distribution fronts.

All of which isn’t surprising given that it was in 1991 that India initiated economic liberalisation. The HDI improvement over this period essentially captures the benefits that accrued to Indian society from that historic decision.

• Decline in Infant Mortality Rate & Maternal Mortality Rate.
• Increased Immunization.
• Better housing, sanitation and education.
• Smaller families, growing income.
• Improved public healthcare infrastructure, particularly, preventive healthcare.

Very often has been insisted on the inadequacy of income as the sole indicator of welfare and augmented, that measuring income is losing its utility, becoming more puzzling and contributes only insignificantly to human development.

Limitations of HDI

HDR has been always disputable and has caught the public-eye, whenever it was published. It has many reasons.

One of them is that the concept of human development is much deeper and richer than what can be caught in any index or set of indicators. Another argument is that its concept has not changed since 1990 when it was also defined in the first.

(1) An incomplete indicator

• Human development is incomplete without human freedom and that while the need for qualities judgement is clear; there is no simple quantitative measure available yet to capture the many aspects of human freedom.
• HDI also does not specifically reflect quality of life factors, such as empowerment movements or overall feelings of security or happiness.

(2) Limited idea of development

• The HDI is not reflecting the human development idea accurately.
• It is an index restricted to the socio-economic sphere of life; the political and civil spheres are in the most part kept separate.
• Hence there is a sub-estimation of inequality among countries, which means that this dimension is not being taken into consideration appropriately.

(3) A vague concept

• Concerning data quality and the exact construction of the index HDI is conceptually weak and empirically unsound.
• This strong critic comes from the idea that both components of HDI are problematic. The GNP in developing countries suffers from incomplete coverage, measurement errors and biases.
• The definition and measurement of literacy are different among countries and also, this data has not been available since 1970 in a significant number of countries.

(4) Data quality issues

• The HDI, as a combination of only four relatively simple indicators, doesn’t only raise a questions what other indicators should be included, but also how to ensure quality and comparable input data.
• It is logical that the UNDP try to collect their data from international organizations concentrating in collecting data in specific fields.
• Quality and trustworthiness of those data is disputable, especially when we get the information from UN non-democratic members, as for example Cuba or China.

(5) A tool for mere comparison

• The concept of HDI was set up mainly for relative comparison of countries in one particular time.
• HDI is much better when distinguishing between countries with low and middle human development, instead of countries at the top of the ranking.
• Therefore, the original notion was not to set up an absolute ranking, but let’s quite free hands in comparison of the results.

(6) Development has to be greener

• The human development approach has not adequately incorporated environmental conditions which may threaten long-term achievements on human development. The most pervasive failure was on environmental sustainability.
• However, for the first time in 2020, the UNDP introduced a new metric to reflect the impact caused by each country’s per-capita carbon emissions and its material footprint.
• This is Planetary Pressures-adjusted HDI or PHDI. It measured the amount of fossil fuels, metals and other resources used to make the goods and services it consumes.

(7) Wealth can never equate welfare

• Higher national wealth does not indicate welfare. GNI may not necessarily increase economic welfare; it depends on how it is spent.
• For example, if a country spends more on military spending – this is reflected in higher GNI, but welfare could actually be lower.

Significance of HDI

Social measures of development ought to be factored in to calculate a country’s overall level of development. Some believe that additional factors such as human rights and happiness are very important. But still, HDI is a relevant factor.

• It is one of the few multidimensional indices as it includes indicators such as literacy rate, enrollment ratio, life expectancy rate, infant mortality rate, etc.
• It acts as a true yardstick to measure development in real sense.
• Unlike per capital income, which only indicates that a rise in the per capital income implies economic development; HDI considers many other vital social indicators and helps in measuring a nation’s well-being.
• It helps as a differentiating factor to distinguish and classify different nations on the basis of their HDI ranks.

Lessons for India

• Global experiences offer India a way out of this predicament.
• Studies show that high growth accompanied by more effective income distribution and female empowerment strategies can help enhance human development, even with moderate social expenditures.
• Clearly, India’s HDI scores can also be substantially enhanced if a politically committed government rolls out inclusive policies that strengthen public health, education and nutrition, and end gender discrimination to usher in a more egalitarian order.

Way forward: It lies in Sustainable Development

• Both sustainable development and poverty eradication are both long-term and urgent endeavours, requiring not only the gradual and substantial redirection of country policies but a rapid response to pressing problems.
• Ideally, sustainable development could provide an overarching framework within which all sub-goals (eg poverty eradication, social equality, ecosystem maintenance, climate compatibility) are framed.
• It is not a subset of development; it is development (in a modern world of resource limits).
• Environmental issues are not one factor among many but the meta-context within which poverty and other goals are sought.
• Investing more in public research could lead to technological solutions to poverty and sustainability problems becoming more rapidly and openly available.

Developed nations owe it to all

• To engage the broad coalition of support required to maintain high levels of development co-operation, rich countries will have to appeal to mutual benefit, not just charity.
• There is a serious danger that poor countries may come under pressure to compromise on poverty reduction objectives for the sake of the planet – “green aid conditionalities” could emerge.
• It should be made explicit that the poorest countries should follow whatever path best brings them out of poverty, including engaging in dirty growth if that means eradicating poverty faster.

Not to forget

• From its beginnings, the HDR has argued for taking seriously the role of local specificity in thinking about economic and social development.
• This recognition underlines the inherent limitations of global indicators and rankings. Such indicators can only help prompt focus and consideration relative backwardness.

Conclusion

• To sum up, the introduction of the HDI three decades ago was an early attempt to address the shortcomings in conventional measures of wellbeing.
• The HDI has continued to attract widespread attention and motivates the work of activists, scholars and political leaders around the world.
• The HDI compels us to ask what matters more, the quantitative expansion of an economy, or the qualitative improvement in the capabilities of society.
• Indeed the revival of interest in this subject at the highest levels of government is the need of the hour.

If a metaphor is used, human development accounting represents a house and the HDI is the door to the house. One should not mistake the door to be the house and one should not stop at the door, rather one should enter the house.

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References

https://www.epw.in/tags/human-development-index#slideshow-2

https://www.deccanherald.com/opinion/the-measure-of-progress-926696.html

https://www.financialexpress.com/lifestyle/health/india-ranks-131-on-human-development-index-2020-all-you-need-to-know/2155827/

Human Development Index: How to cope with its limitations?

https://timesofindia.indiatimes.com/blogs/toi-editorials/unfinished-story-indias-hdi-ranking-shows-success-in-poverty-reduction-but-failure-on-equality/

Our PM has inaugurated Rewari-Madar section of Western Dedicated Freight Corridor (DFC).  He also flagged off the world’s first double-stack long-haul 1.5-km-long container train hauled by electric traction from New Ateli-New Kishangarh. Last month, he had inaugurated a 351-km section between Khurja and Bhaupur in Uttar Pradesh for commercial operations.

For years, freight trains suffered second class treatment as express trains and other passenger trains got priority to use the tracks. All trains use the same tracks. As a result, goods never reached their destination in time. Both industry and the railways suffered as a result.

Dedicated Freight Corridors (DFCs)

• The DFC project was first proposed in April 2005 to address the needs of the rapidly developing Indian economy.
• They were proposed to ensure a more reliable, economical and faster transportation of goods.
• DFCs are planned to be ‘freight-only’ corridors which will make it cheaper, faster, and more reliable to move goods between industrial heartlands in the North and ports on the Eastern and Western coasts.
• These corridors seek to bring a paradigm shift in Railway Freight Operations in the country, thus providing relief to the heavily congested Golden Quadrilateral.

Its conceptualization

• The inception of DFCs can be understood clearly as one delves into Indian Railways’ freight operations scenario in the past.
• It was majorly the Golden Quadrilateral, linking the four metropolitan cities of Delhi, Mumbai, Chennai and Howrah and its two diagonals.
• This comprised 16% of the route, that carried over 52% of passenger traffic and 58% of freight traffic.

Executing into reality

• Several large coal mines and steel production facilities are located along the proposed Eastern DFC line.
• Container traffic is also predominant along the Western DFC route, arriving mainly from the Jawaharlal Nehru Port (JNPT).
• An SPV, ‘Dedicated Freight Corridor Corporation of India Limited’ (DFCCIL) has been set up under the Ministry of Railways to facilitate the functioning of these corridors.
• Both corridors entail an investment of $12 billion, with the World Bank and JICA (Japan International Cooperation Agency) partly funding the project with around $1.86 bn and $5.2 bn respectively.

Eastern and Western DFCs

(A) The Eastern DFC passes through Punjab, Haryana, Uttar Pradesh, Bihar, Jharkhand and West Bengal. It will be divided into two segments:

1. An electrified double-track segment of 1,409 km between Dankuni in West Bengal and Khurja in Uttar Pradesh
2. A single line segment of 447 km between Ludhiana – Khurja – Dadri

(B) From JNPT to Dadri via Vadodara-Ahmedabad- Palanpur-Phulera- Rewari, Western DFC will pass through Haryana, Rajasthan, Gujarat, Maharashtra and Uttar Pradesh.

• It is proposed to join the Eastern Corridor at Dadri.
• The Western Corridor primarily comprises of container traffic from JNPT and Mumbai Port in Maharashtra and other ports, including Pipavav, Mundra and Kandla in Gujarat.

The western corridor would primarily cater to containerized traffic, mostly exports and imports, while the eastern corridor will be used most to move coals from mines in east India to power plants in north.

Why need DFCs?

• To resolve the increasing need for road decongestion, accident reduction and ensuring energy security, the DFCs were launched to aid the growth of rail transportation in India.
• With the construction of these Freight Corridors, Indian Railways will open new avenues for investment and greater economic development.
• This will also lead to the construction of industrial corridors and logistic parks along these routes, thereby making the industrial ecosystem more competitive.
• The new corridors will permit the trains to carry higher loads, in a more reliable manner.
• These lines are also being built to maximise speeds to 100 km/hour, up from the current average freight speed of 20 km/hour. They will carry a capacity of 6,000 to 12,000 gross tonne of freight trains.
• Additionally, the DFCs will also reduce transit time from freight source to destination.

Global examples

Critical economies across the world have their own DFCs.

• China’s new DFCs have been designed with the objective to link hinterland areas with ports, along with the aim to transfer commodities, raw materials, and other critical resources of production to-and-fro from the northern to the southern region.
• As per their recent plans, China aims to divorce its passenger traffic completely from its freight traffic by 2020.
• Freight Railways in America, though privately-owned, is one of the best in the world, and while some of its routes are used by passenger Amtrak service trains, it carries 4 times the freight for a single kilometre.
• While China carried 3,358 million tonnes of freight in 2015 via rail, for India the number stood at 1,220 million tonnes as late as 2018.

Clearly, for its geographic scale, India must look at China and the US as ideal examples when it comes to DFCs.

Issues with Railways Freight

(a) Highways are more feasible

• The share of roads in freight transport is more than half in India; while in China, it is only 30%.
• As more highways are getting built rapidly, the share of roads in freight transport is increasing at accelerating rate.

(b) Costly transport

• The working of Indian Railways is caught up between making it a self-sufficient organisation and serving it as a transport system for the poor.  The passenger fares usually remain static for years.
• In order to keep finances in check, freight charges have been raised in the past. This discrepancy between freight charges and passenger fares seem to distort the Railways’ performance.

(c) Decline in coal freight

• Freight contributes nearly two-thirds of Indian Railway’s revenue and coal transport alone contributes to half of that.
• Decreasing dependency on coal with increasing thrust on renewable energy has crippled railway revenue from freights.

(d) Lack of finances

• Indian Railways spends heavily on revenue expenditure – there is little left for capital expenditure.
• About 94 percent of the system’s revenues are spent on operating costs and social obligations, leaving little to modernize its infrastructure.

(e) A network of delays

• The railways have been losing freight for years. Today, trains carry just 30 percent of India’s freight, down from nearly 80 percent 30 years ago.
• Most passenger and freight lines are shared, and, when there is a delay, passenger trains are always prioritized. This makes it impossible to ensure deliveries within a set time.

(f) Stuck into monopoly

• The Indian railways have lacked investment. There’s been an inability to raise passenger fares because it’s a political ideology that public transport in India needs to be accessible for everyone.
• Popular reforms aim at subsidised tariff due to political incentives. This leads to an increase in freight pricing which adds to inflation.

(g) Populist development

• Railways sometimes seem to be diverting from core issues of safety and operation and to populist needs.
• These measures are aimed at wooing corporate travellers. Rail budgets are often about new trains, bullet trains and Wifi.

Significance of DFCs

 (a) Decongestion of roads

Around 70% of the freight trains currently running on the Indian Railway network are slated to shift to the freight corridors, leaving the paths open for more passenger trains. This will reduce congestion on the main tracks and enable passenger trains to move faster.

(b) Increased NTKM Capacity

The DFC shall reform the transportation sector and will create more capacity on trunk routes of Indian Railways as goods trains shall be able to run freely on DFC without any restrictions imposed by the movement of passenger trains. (NTKM stands for transportation of 1 tonne of goods over 1 km.)

(c) Improvised logistics and connectivity

Tracks on DFC are designed to carry heavier loads than most of the Indian Railways. It will connect the existing ports and industrial areas for faster movement of goods.

(d) Speed and Punctuality

To begin with, freight trains will run according to a timetable and as fast as express trains. DFCs would offer a sharp increase in the average speed of freight trains – from a frustrating 25kmph to 70kmph.

(e) Employment generation

Thousands of people will get employed in the construction of the corridor and other facilities along the corridor, including logistics parks to handle cargo and townships these corridors.

Some inevitable challenges

DFC has been a showcase project for IR in the past decade but it has suffered challenges relating to land acquisition, utility shifting, funding from multilateral and donor agencies, lack of consensus on the design and re-bidding of construction contracts.

These bottlenecks have seen the project fall behind the original timelines.

Way forward

DFCs present a significant opportunity for freight logistics in India. What is important is to see how increasingly optimistic traffic projections will be realized.  That depends upon the industrial and trade growth in India and the development of industrial corridors and the feeder network.

• Once DFC is operational, the average speed of freight trains will go up from 25 kmph to 70 kmph, reducing the transit time by more than half.
• Trainload would be increased almost thrice (5000 tonnes to 13,000 tonnes), ensuring an enhanced economy of scale and reduced the cost of transport.
• This will ensure a higher modal share for railways in the freight business.
• Also, the capacity released by freight trains on the existing lines can be used by IR to operate more passenger trains at higher speeds, resulting in increased revenues for the transporter.

It would also play a lead role in transforming the railways from a loss-making operation to an efficient and profitable venture. Also, it would be interesting to see the potential all these corridors hold for the regions they pass through.

Conclusion

• The DFCs project is the biggest leap for Indian Railways, not just because of its route length, but also because of the technology it ushers, the rail infrastructure it will enable, and the socio-economic transformation it shall result in.
• 20-30 years from now, the DFCs are going to be indispensable to India’s logistics sector. From private to public, every company would want a ride on these corridors.

If completed on a timely basis, DFC has the potential to be a game-changer not just for Indian Railways, but the trade and economics of the country. It will reduce the overall logistics cost of trade between the hinterland and gateway ports, making India a favourable destination for EXIM trade.

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References

https://swarajyamag.com/infrastructure/indian-railways-dedicated-freight-corridor-will-change-more-than-just-the-way-goods-are-hauled

https://www.financialexpress.com/economy/dedicated-freight-corridor-vital-for-getting-indain-railways-back-on-track-irctc-co-in/243542/

https://www.dailyo.in/business/indian-railways-transportation-narendra-modi-freight-trains-national-development-alliance/story/1/2859.html

https://www.businesstoday.in/current/policy/5-big-challenges-indian-railways-faces/story/237388.html

Ethiopia has been on the brink of a civil war. On Nov 4 2020, Prime Minister Abiy Ahmed declared war on the country’s Tigray region. The Tigray region is ruled by the Tigray People’s Liberation Front (TPLF). The war was declared in response to the TPLF’s attack on a federal military base in Tigray.

The Ethiopian Crisis: A backgrounder

• The animosity between Tigrayans and Eritrea goes back to the Ethiopian-Eritrean war that occurred between 1998 and 2000.
• It occurred approximately two decades ago was extremely brutal and resulted in the deaths of thousands of soldiers.

• The roots of this crisis can be traced to Ethiopia’s system of government. Since 1994, Ethiopia has had a federal system in which different ethnic groups control the affairs of 10 regions.
• The Tigray People’s Liberation Front (TPLF) – was influential in setting up this system.
• It was the leader of a four-party coalition that governed Ethiopia from 1991, when a military regime was ousted from power.
• Under the coalition, Ethiopia became more prosperous and stable, but concerns were routinely raised about human rights and the level of democracy.

How it escalated into a crisis?

• Eventually, discontent morphed into protest, leading to a government reshuffle that saw Mr Abiy appointed PM.
• Abiy liberalized politics, set up a new party (the Prosperity Party), and removed key Tigrayan government leaders accused of corruption and repression.
• Meanwhile, Abiy ended a long-standing territorial dispute with neighbouring Eritrea, earning him a Nobel Peace Prize in 2019.
• These moves won Abiy popular acclaim, but caused unease among critics in Tigray. Tigray’s leaders see Abiy’s reforms as an attempt to centralize power and destroy Ethiopia’s federal system.

The clouds of a Civil War

• The conflict came to a head in September, when Tigray defied the central government to hold its own regional election.
• The central government, which had postponed national elections because of coronavirus, said it was illegal.
• The rift grew in October, when the central government suspended funding for and cut ties with Tigray. Tigray’s administration said this amounted to a “declaration of war”.
• Tensions increased. Then, in what the International Crisis Group termed a “sudden and predictable” descent into conflict.

Abiy accused Tigrayan forces of attacking an army base to steal weapons. His government, he said, was therefore forced into a military confrontation.

Its’ repercussions

• If the conflict intensifies, there are fears it could spill over into neighbouring countries.
• There have already been reports of missiles fired into Eritrea and 27,000 refugees fleeing to Sudan.
• There is also a concern that the conflict could exacerbate ethnic tensions elsewhere in Ethiopia.
• There have been reports of blocked roads, with internet and communication lines being cut off in Ethiopia.
• Now, this latest conflict has only increased the number of displaced people and may lead to a humanitarian crisis.

The larger conflict: A new ‘Afghanistan of Africa’ in making

• The US and China have several strategic military bases in that region, the closest being Djibouti.
• In November 2020, it was reported that President Vladimir Putin had approved the creation of a Russian naval facility in Sudan.
• This would be capable of mooring nuclear-powered surface vessels, clearing the way for Moscow’s first substantial military foothold in Africa since the Soviet fall.
• If these military bases and facilities were to be impacted in any way, it may cause foreign powers to get militarily involved in the region’s conflict.

A crisis beyond a country

• The Horn of Africa is also a short water crossing away from the crisis torn Yemen and the rest of the Arabian Peninsula.
• Earlier, in the midst of Ethiopia’s long-standing conflict with Egypt over the construction of the Grand Ethiopian Renaissance Dam over the Blue Nile, Sudan had already found itself forcefully involved in the spat.
• Sudan and Egypt were engaged in joint military exercises in what observers said was an indication of deepening ties between the two countries.
• With Ethiopian civilians escaping in large numbers to Sudan, the country may find itself inadvertently drawn into the war.  
• If the conflict were to spill outside Ethiopia’s borders, it may potentially destabilize the Horn of Africa region.

A quick recap: Horn of Africa

• The Horn of Africa comprises four countries — Ethiopia, Eritrea, Djibouti and Somalia, but, in its wider political and economic context, the term also includes Sudan, South Sudan, Kenya and Uganda.
• As a quintessential microcosm of Africa, the area has seen it all: imperialism, neo-colonialism, Cold War, ethnic strife, intra-African conflict, poverty, disease, famine and much else.
• The sub-region covers a wide spectrum from Ethiopia — an ancient civilization and a nation that retained its independence (except for a short period) — to Somalia, the most failed state on the planet today.
• Eritrea and Djibouti, smaller neighbours located on the seashore, have had their own share of strife and strained relations with Ethiopia and Somalia respectively.
• Eritrea emerged as an independent state after a 30-year-long confrontation with Ethiopia, a development that turned the latter into a landlocked country.
• Djibouti, the erstwhile French Somaliland, has been a beacon of relative stability and prosperity, which has contributed to mediation and peace-making efforts in and outside the Horn of Africa.

Why is Horn of Africa so important?

The turn of such events near the Horn of Africa has direct consequences for the safety and future of all seaports on the Red Sea as well as on the entire security of the Arabian Gulf.

• The Horn of Africa enjoys an excellent strategic location south-west of the Red Sea and the Gulf of Aden.
• The strategic importance of this East African region comes from it being the source of the Nile and a gate to the Red Sea and the Gulf of Aden.
• Its location on one side of some of the world’s major trade sea lanes and land routes gives it vital importance.
• The straits of Bab El-Mandeb, which lies at the heart of this region, connects the energy-rich Middle East to Europe and, along with the Suez Canal, is considered a jugular vein for global trade.
• Djibouti is the choke point on this shipping route.

Geopolitical angle

The area has always been a magnet for international powers because of the sea traffic going by, major ports in the area, tremendous nearby riches, weapons trading, crossing points for people and merchandise and the dangers of piracy.

• The international importance of the Horn of Africa was boosted after the first war on Iraq and foreign intervention in Somalia.
• Now, with the war in Yemen, the international and regional competition for control over the Horn of Africa is at its fiercest.
• Besides positioning for control of the major ports in the area, there is the China competing with the West in Djibouti, and so is the US.

Indian perspective

• India has been paying greater attention to the region. Since 2017, India has opened embassies in Djibouti and Eritrea and our President has also made a state visit to Djibouti and Ethiopia.
• India has been always a foremost responder for humanitarian assistance in the Horn of Africa Region through the Indian Navy.
• Such latest missions underline India’s growing capability and willingness to undertake naval missions and support regional countries in the greater Indian Ocean region.
• These efforts must be directed to increase Indian leverage and limit Chinese influence in the region.

The China factor and Indian concerns

• Since 2008, China’s People’s Liberation Army (PLA) has been present in the region under the pretext of conducting anti-piracy operations off the coast of Somalia.
• In fact, it has even sent nuclear submarines to the region and has also conducted naval exercises with the navies of Russia and Iran.
• In 2017, China opened its first overseas military base in the region at Djibouti and is now firmly consolidating itself as a major player in regional affairs.
• Furthermore, China has built a spate of large infrastructure projects in the Horn of Africa, including the modern railway line connecting land-locked Ethiopia with the port of Djibouti.
• It is emerging as a major economic partner for other Red Sea states like Egypt.
• Hence the steadily growing military and economic footprint of China makes this region increasingly more important from India’s geostrategic calculations.

Thus China has stepped up activity in the African region, which is traditionally within India’s sphere of influence, thereby looking to expand its presence in the Indian Ocean Region.

Way forward

• The global strategic community should pay more attention to the prevailing conditions and power dynamics in this African region.
• The world must become more active in examining and discussing the complex problem in-depth with the governments in Eastern Africa, the African Union and others to be able to make a meaningful its resolution.
• What happens in the region has a direct bearing on India’s security and well-being, and this is becoming clearer and more urgent by the day.

The crisis must be averted

• Ethiopia in recent years has been achieving respectable economic growth.
• Regional tensions, however, with Eritrea and Egypt because of Ethiopia’s Grand Renaissance Dam project increased until the beginning of 2018.
• During the past two decades, the region has seen horrible human tragedies because of famines and wars.
• The world still remembers the tragic famines in Ethiopia and Eritrea and how these two countries depended for a long time on foreign aid.
• It must also not be forgotten that the 1998 war between these belligerent sister countries caused the death of about 100,000 people and ended any contact between them.

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References

https://www.thehindu.com/opinion/editorial/the-war-within-on-ethiopia-political-situation/article33061048.ece

https://indianexpress.com/article/explained/how-ethiopias-tigray-crisis-is-impacting-the-horn-of-africa-7054436/

https://www.rnz.co.nz/news/world/431248/ethiopia-s-tigray-crisis-explained-the-long-medium-and-short-story

https://thearabweekly.com/strategic-turning-point-horn-africa

https://www.deccanherald.com/opinion/understanding-indian-ties-with-horn-of-africa-countries-908243.html

We owe it to the next generation who will have to bear the burden of climate change and pay off the debt of the recovery…..

The international community, including the European Union (EU) and India, gathered at the Climate Ambition Summit 2020. The Summit was held on the 5th anniversary of the Paris Agreement.

This edition of Burning Issue takes stock of the progress made on climate action in the last 5 years.

The story at a glance

• Five years ago, as negotiations for the Paris climate agreement ran into overtime, a worldwide urgency was felt for reaching an accord. Thus came to being, the Paris Agreement.
• Yet five years after the Paris pact was signed, the heady wine of global climate collaboration has been soured by rogue nations backsliding, and in the case of the US, even withdrawing from the agreement.
• And effective climate action has been hampered by continued fossil fuel propaganda as well as by related economic policies like fossil fuel subsidies (as in the case for natural gas) anywhere in the world.
• Under the agreement, 2020 was supposed to be a milestone year, with a deadline for setting more ambitious targets to cut emissions.
• But, the deadly global pandemic had stalled all the efforts as well as talks. Then came, the Climate Ambition Summit 2020.

What is the Paris Agreement?

• The Paris Agreement is a legally binding international treaty on climate change. It was adopted by 196 Parties at COP 21 in Paris, on 12 December 2015 and entered into force on 4 November 2016.
• Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.
• To achieve this long-term temperature goal, countries aim to reach global peaking of greenhouse gas emissions as soon as possible to achieve a climate-neutral world by mid-century.
• It is a landmark process because, for the first time, a binding agreement brings all nations into a common cause to undertake ambitious efforts to combat climate change and adapt to its effects.

Key points of the agreement

The action plan

• Implementation of the Paris Agreement requires economic and social transformation, based on the best available science.
• The Agreement works on a 5- year cycle of increasingly ambitious climate action carried out by countries.
• By 2020, countries submit their plans for climate action known as nationally determined contributions (NDCs).

Five years after: Where are we now?

All states have submitted their national contributions to mitigate and adapt to climate change. Distant hypothetical targets are being set. Seems like we are still speeding in the wrong direction or we are lagging far behind.

(1) Unclear targets and response

The world is still unclear since five years as to how the net-zero pledges will translate into shorter term targets. Few of the countries that have announced ambitious long-term goals have implemented national policies to reach them in time.

(2) Degradation isn’t stopped

Meanwhile, we continue to destroy the world’s carbon sinks, by cutting down forests – the world is still losing an area of forest the size of the UK each year, despite commitments to stop deforestation – as well as drying out peatlands and wetlands, and reducing the ocean’s capacity to absorb carbon from the air.

(3) Countries aren’t scaling up their targets

Although 151 states have indicated that they will submit stronger targets before December 31, only 13 of them, covering 2.4 per cent of global emissions, have submitted such targets. While states have been slow to update their national contributions for 2025-2030, several have announced exaggeratedly high “net zero” targets in the recent past.

Issues in setting up targets

A chasm between aspirations and emissions remains, as does the continued economic gap between developed and developing countries.

(1) Credibility of the commitments

• The credibility checks; Are these long-term net zero goals aligned with short-term actions, policies and measures? And we know very well.
• Many net zero goals have not yet been embedded in national contributions and long-term strategies under the Paris Agreement.
• Current national contributions are not on track for such a fall.  For many there is a mismatch between short-term actions and long-term commitments.

(2) Fixing accountability

• In any case, accountability under the Paris Agreement is limited. States are not obliged to achieve their self-selected targets.
• There is no mechanism to review the adequacy of individual contributions. States are only asked to provide justifications for the fairness and ambition of their targets.
• The transparency framework does not contain a robust review function, and the compliance committee is facilitative and limited to ensuring compliance with a shortlist of binding procedural obligations.

(3) Fairness of climate action

• The principles of equity, justice and fairness are fundamental to understanding and addressing the challenges of global climate change.
• These principles are legally side-stepped in the Paris Agreement.
• This is because the problem has been caused by the emissions of the rich countries for several centuries but will primarily impact the poorest people and poorest countries.

Analysis: A success in making

(1) Political resilience: A no mean achievement

The accord itself has proved remarkably resilient. Bringing together 196 nations in 2015 was not easy. The failure, discord and recriminations of those decades were left behind as delegates from 196 countries hugged, wept and cheered in Paris.

(2) All emitters concurred

The agreement has proven to be inclusive and at scale, with the participation of countries representing 97% of global emissions. It gave a powerful signal of hope in the face of the climate emergency.

(3) Clean energy shift

Renewable energy will make up about 90% of the new energy generation capacity installed around the world, according to the International Energy Agency. That massive increase reflects rapid falls in the price of renewable energy (ex. solar tariffs in India) now competitive or cheaper than fossil fuel generation.

(4) Worldwide quests for net-zero emissions

Many nations led the way in adopting net-zero targets. In September this year, China surprised the world by its pledge to achieve net-zero emissions in 2060. US president-elect Joe Biden has also pledged to adopt a target of net zero emissions by 2050. That puts more than two-thirds of the global emitters under a commitment.

(5) Normalizing 1.5C

One of the biggest surprises of Paris was the inclusion of 1.5C as an aspirational limit on global temperature rise. Official recognition of 1.5C did not make it any less of a long shot. But it shifted the onus away from proponents of 1.5C having to defend its feasibility, to proponents of 2C having to defend sacrificing vulnerable communities.

(6) Institutional change

The Paris Agreement has no central enforcement mechanism. That does not mean it is unenforceable. Institutions ranging from financial regulators to city authorities are embedding the deal’s targets and principles in their policies, creating new avenues for accountability.

A caution: For the world to be serious again

Any sense of optimism about the progress driven by the Paris deal must be tempered by the harsh reality of how far there is to go. Here is what has yet to change.

(1) Rising emissions

Global greenhouse gas emissions have continued to grow, with a billion tonnes of CO2 added to annual figures between 2015 and 2018. The trend is dominated by emerging economies in Asia, as incumbent energy industries meet a hunger for development by any means. Advanced economies are not cutting emissions fast or consistently enough to offset growth elsewhere.

(2) Rising temperatures

As emissions rise, so too do temperatures. 2020 is set to be 1.2C warmer than pre-industrial times and among the three hottest years on record. Droughts and floods are confounding subsistence farmers the world over. The atmosphere will keep serving up new records for generations. Temperatures will not stabilize until emissions reach net-zero, because carbon dioxide builds up in the air.

(3) Rising fossil fuel production

The phrase “fossil fuels” do not appear in the Paris Agreement. Nor do the words “coal”, “oil” or “gas”. To meet the Paris goals, the vast majority of hydrocarbons need to stay in the ground — but that was too blunt a reality to concede for countries economically reliant on them.

(4) The vulnerable continue to suffer

Within and between countries, it is poor and marginalised people who are most exposed and continue to suffer the climate crisis. The Paris Agreement has failed to acknowledge that some people will experience loss and damage that cannot be mitigated against or adapted to.

(5) Climate finance is still meagre

Climate finance flows from rich governments have increased on the face of it. But the majority is delivered as loans, not grants, adding to the debt burden of developing countries.  There is no compensation for victims of climate disaster, only talking shops and insurance schemes they must pay the premiums for.

Global scene

(1) US retreat

• The US – the world’s second-biggest emitter began the process of withdrawal from Paris, under President Trump in 2017.
• The Kyoto 1997 protocol fell apart after the US signed but failed to ratify the agreement, leaving climate negotiations in limbo for a decade.
• However, the president-elect Joe Biden announced the US’s return to the Paris Accord, accompanied by a battery of measures vide his election mandates.
• Biden has also announced his support for a carbon border tax, a mechanism that the European Commission also wants to put in place.

(A carbon border tax is a tax on carbon emissions attributed to imported goods that have not been carbon-taxed at the source.)

(2) Chinese over-ambitions

China surprised the world with a pledge to make itself carbon neutral by 2060. With this, China has an opportunity to assert its global leadership on climate before Biden takes an ambitious green agenda to the White House. China committed to values compared to 2005 levels:

• Reduce carbon intensity by over 65% by 2030 (compared to its initial commitment of 60-65%)—it was at 48.1% at the end of 2019;
• Increase non-fossil energy to around 25% by 2030 (compared to 20% in their current target)—it was at 15.3% at the end of 2019;
• Increase forest stock volume to 6 billion cubic meters by 2030 (compared to 4.5 billion in their current target)—it was approximately 4.5 billion cubic meters at the end of 2019; and
• Increase the total installed capacity of wind and solar to 1,200 gigawatts by 2030 (no previous target)—it was at 415 gigawatts at the end of 2019. 

India and the Paris Agreement

India has achieved 21% of its emissions intensity reduction target as a proportion of its GDP in line with its pledge to a 33-35% reduction by 2030.

(1) Clean energy

India, the world’s fourth-largest renewable energy market, has been one of the leaders in this transition. India has grown its renewables capacity by 250% in just the last five years and plans to expand it by another 500% to reach 450 gigawatts by 2030.

(2) CO2 emission reduction

The Emissions Gap Report has stated that India’s per capita emissions are actually 60% lower than the global average. Also, emissions in the country grew 1.4% in 2019, much lower than its average of 3.3% per year over the last decade, the report said.

India was the only major G20 country that was on track towards keeping to its nationally determined commitments to halt runaway global warming.

Climate Diplomacy and India

• India has not caused the climate change crisis and, unlike developed nations, but it is meeting its obligations under the Paris Agreement. India is one of the few overachievers in terms of meeting the NDCs.
• We cannot make lofty promises as China or the US does.
• Climate negotiations potentially are more far-reaching for our polity, economy and society.
• Several are suggesting that our best option is a “No” to more ambitious commitments.

Going beyond coercive environmentalism

China’s vigorous mobilization of state power to enforce new environmental norms in the last few years has helped China on climate issues. This has been hailed as the model for “authoritarian environmentalism” which has been more effective than the “liberal environmentalism”

• The urgency of addressing climate change is likely to intensify in the immediate term with regime change in the US and overambitious Beijing.
• India’s ability to influence the new geopolitics of climate change will depend a lot on its domestic political resilience (as in case of stubble-burning).
• The question of penalizing stubble burning that chokes the cities of north-western India during the early winter months is only one of the issues in the larger argument.

Gearing up for uncertainties

• India needs to be cognizant that some are preparing tools of coercive climate diplomacy. EU is eyeing a carbon border adjustment mechanism by 2021.
• The Biden administration will also look to favour a carbon tax with border adjustments, although whether it can get through such legislation remains uncertain.
• Caution needs to be our watchword. For a sui generis state such as ours with varied interests, to gather allies with similar climate goals is not easy.

Way forward: The grounds for optimism

• The Paris agreement still provides the best hope of avoiding the worst ravages of climate breakdown: the question is whether countries are prepared to back it up with action, rather than more hot air.
• Renewing the shorter term commitments is the best way ahead.
• Making promises for the 2050s-60s is one thing, but major policy changes are needed now to shift national economies on to a low-carbon footing.
• None of these (net zero) targets will be meaningful without very aggressive action in this decade. Diplomacy is inevitably a tool in global climate action.

Conclusion

• For many, there is a mismatch between short-term actions and long-term commitments. A credible short-term commitment with a clear pathway is the key.
• Not all states will be in a position to pledge net-zero targets, nor should they be expected to.
• All states, including India, can, however, pledge actions that are credible, accountable and fair.
• Our real test on climate change is on building a new domestic consensus that can address the economic and political costs associated with an internal adjustment to the prospect of a great global reset.

The rising abuse of narcotic drugs in India has come to limelight after the alleged suicide of a notable actor due to depression induced by chronic drug abuse. Since then, the Narcotics Control Bureau has been making high profile arrests over drugs possession (notably the cannabis).

And again in a contrary move, India surprisingly voted in favour of a highly divided resolution in the UN Commission for National Drugs to remove Cannabis from the category of most dangerous drugs.

This arguably has led to mixed opinion whether to legalize cannabis in India, which has been long slated demand.

Films like ‘Udta Punjab’ have graphically portrayed the crisis faced by the society and its youth with regard to the drug menace. While the film highlighted the drug menace in a bordering state, the rest of the country can by no means be complacent.

Substance abuse in India: A deep malaise

There is a worldwide consensus that misuse of narcotics and psychoactive substances is on the rise, and India is no exception to this. Look at this data:

A 2019 national study conducted by AIIMS-Delhi on the prevalence of drug abuse in the country, establishes that:

• A substantial percentage of people use psychoactive substances (alcohol, cannabis and opioids), and adult men top the list of drugs users.
• Alcohol is the most commonly abused psychoactive substance followed by cannabis, opioids (heroin, opium) and inhalers.
• Addiction generally begins with alcohol, moves towards nicotine and cannabis – considered as gateways to hard drugs – and then hard substances.

National Crime Records Bureau’s (NCRB) annual Accidental Death & Suicides in India (ADSI) reports:

• In the year 2019, 7719 out of the total 7860 suicide victims due to drug abuse/alcohol addiction were male.
• Even in the data relating to deaths due to road accidents, drugs & alcohol are one of the most causative factors. 

India’s vulnerability to Psychotropic substances

The estimate of the global drug trade is of the order of $360 billion contributed by Heroin – $100-110 billion, Cocaine $110-130 billion, Cannabis $75 billion and synthetic drugs $60 billion.

[A] Proximity to Drug Heavens

India is unfortunately sandwiched between a few of the countries who are the biggest producers of illicit opium, while itself being known to be the largest manufacturer of licit opium.

(1)  Golden Crescent

• The Golden Crescent is the name given to one of Asia’s two principal areas of illicit opium production, located at the crossroads of Central, South, and Western Asia.
• This space overlaps three nations, Afghanistan, Iran, and Pakistan, whose mountainous peripheries define the crescent.

(2) Golden Triangle

• The Golden Triangle is the area where the borders of Thailand, Laos, and Myanmar meet at the confluence of the Ruak and Mekong rivers.
• It has been one of the largest opium-producing areas of the world since the 1950s.

[B] Social Factors

(1) Experimentation

Youth are often motivated to seek new experiences, particularly those they perceive as thrilling or daring.  

(2) Neurotic Pleasure and recreation

Abused drugs interact with the neurochemistry of the brain to produce feelings of pleasure. The intensity of this euphoria differs by the type of drug and how it is used.

(3) To bust mental stress

Some adolescents suffer from depression, social anxiety, stress-related disorders, and physical pain. Using drugs may be an attempt to lessen these feelings of distress.

[C] Cultural factors

(1) Folk examples

Many culture and religiosity in India moralize the use of Ganja, Bhang through Chillam and Hookahs. We can find many adults and the old-age population still practising such habits.

(2) Peer-pressure

Many teens use drugs “because others are doing it”—or they think others are doing it—and they fear not being accepted in a social circle that includes drug-using peers.

(3) Hype and glorification

Setting other national issues of importance apart, the mass media often creates hype and curiosity among the youth by audio-visuals, undue exaggerated reporting and media trials of the accused persons.

Impacts of Drug Abuse

(1) Psychological Impact

Overt abuse of drugs causes chronic mental disorders and habit forming tendencies. I can have numerous long-term health effects. These include- depression, anxiety, panic disorders, increased aggression, increased aggression, paranoia and hallucinations.

(2) Physiological impact

Abusing a drug, or misusing a substance can produce other short-term effects, such as: changes in appetite, sleeplessness or insomnia,  increased heart rate, slurred speech, changes in cognitive ability, a temporary sense of euphoria and loss of coordination.

(3) Social impact

Not only impact drug abusers’ lives but equally affect their families and the community at large. Problems such as criminal activity, alienation, domestic violence, and child abuse or neglect may also be present in families experiencing substance abuse.

(4) Economic Impact

Studies show that drug abuse leads to poverty and family breakdown.  In families disrupted by drug abuse, poverty is often transmitted from parents to children.

(5) Public hazards

Injection drug use is the leading risk factor for new human immunodeficiency virus (HIV) infections. Tuberculosis (TB) rates have increased significantly among drug-using populations, especially drug-resistant TB in HIV-infected drug users.

Drug abuse also results in numerous road accidents.

Legal mechanisms in India

(1) Indian Constitution

• Article 47 of the Indian Constitution is one of the DPSP which directs the State to raise the level of nutrition and the standard of living and to improve public health as among its primary duties.
• It states that the State shall endeavour to bring about prohibition of intoxicating drinks and drugs which are injurious to health.

 (2) NDPS Act

• On November 14, 1985, the Narcotics Drugs and Psychotropic Substances (NDPS) Act was enacted, banning all narcotic drugs. This was amended in 1987.
• Under the Act, it is illicit for a person to produce or manufacture/cultivate, possess, sell, purchase, transport, store, and/or consume any narcotic drug or psychotropic substance.

(3) Nasha Mukt Bharat campaign

• This campaign launched this year in 2020, is run for 272 Most Affected Districts’ by the Ministry of Social Justice and Empowerment.
• It focuses on a three-pronged strategy combining- efforts of Narcotics Bureau, Outreach/Awareness by Social Justice and Treatment through the Health Dept.

#Global initiatives: UN-CND

• The UN Commission on Narcotic Drugs is one of the functional commissions of the UN Economic and Social Council.
• It is the central drug policy-making body within the UN system and has important functions under the international drug control conventions.

Challenges in curbing drug abuse

(1) Local availability

• Ephedrine is a banned drug that is quite shockingly, being sold in the country openly. It is manufactured in private labs in India, albeit under Government regulations, and it is suspected that these labs have been leaking it to the International drug.
• Methamphetamine is the ‘baap’ of all drugs in the market. Youth disheartened by the costly drugs choose to switch over to crystal Meth, which can be easily manufactured in a laboratory.

(2) Other sin goods are allowed

• Alcohol and tobacco can be more harmful to individuals and society than recreational drugs like cannabis and ecstasy that are governed by disproportionately strict regulations.
• This skewed regulatory framework leads to economic losses with a high number of people incarcerated and people in need not having access to opioids.

(3) Flawed regulations

• There is a loophole in the NDPS Act that it only bans the usage of buds and resins.
• It is believed that the government intentionally kept this loophole to leave bhang, which is made out of leaves, out of the coverage under the law that would have prohibited its use even for religious purposes.

(4) Illicit and large-scale Smuggling

• The NCB has started a campaign to crack down on drug smuggling networks across the country and has identified several syndicates which operate from different parts of the country.
• In fact, the agency has estimated that heroin business in India is worth around Rs1,44,000 crore (approximately 19 billion US dollars) and there are around 20 lakh dependent users of this high drug in the country.

(5) Lack of rehab centres

• Most of the de-addiction centres in India are run by NGOs and there is not even one exclusive government rehabilitation centre as they are either merged with public health centres (PHC) or major government hospitals.
• The private rehabilitation centres charge at least Rs 10,000 – Rs 15,000 a month and only government hospitals are affordable for many people

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Centre-stage of the Debate: De-stigmatizing / Legalizing Cannabis

The United Nations Commission on Narcotic Drugs (CND) voted to remove cannabis and cannabis resin from Schedule IV of the 1961 Single Convention on Narcotic Drugs, decades after they were first placed on the list. India was part of the voting majority.

Why?

Banning the production of the cannabis, and associated products, has not had any benefit whatsoever for India. As a youth, we all know some or other in our friend circle who consumes it immensely.

India has the least priced cannabis available in the world that too after regulations. This causes more possibility of abuses.

(1) Health benefits

• The cannabinoids found in Cannabis is a great healer and has found mention in the Ayurveda.
• It can be used to treat a number of medical conditions like multiple sclerosis, arthritis, epilepsy, insomnia, HIV/AIDS treatment, cancer.

(2) Ecological benefits

• The cannabis plant and seeds apart from being labeled a ‘super-foods’ as per studies, is also a super-industrial carbon negative raw material.
• Each part of the plant can be used for some industry. Hemp currently is also being used to make bio-fuel, bio-plastics and even construction material in certain countries. Cosmetic industry has also embraced Hemp seeds.

 (3) Marijuana is addiction-free

• An epidemiological study showed that only 9%  of those who use marijuana end up being clinically dependent on it.
• The ‘comparable rates’ for tobacco, alcohol and cocaine stood at 32%, 15% and 16% respectively.

(4) Good source of Revenue

• By legalizing and taxing marijuana, the government will stand to earn huge amounts of revenue that will otherwise go to the Italian and Israeli drug cartels.
• In an open letter to US President George Bush, around 500 economists, led by Nobel Prize winner Milton Friedman, called for marijuana to be “legal but taxed and regulated like other goods”.

(5) A potential cash crop

• The cannabis plant is something natural to India, especially the northern hilly regions. It has the potential of becoming a cash crop for poor marginal farmers.
• If proper research is done and cultivation of marijuana encouraged at an official level, it can gradually become a source of income for poor people with small landholdings.

(6) Prohibition was ineffective

• In India, the consumption of synthetic drugs like cocaine has increased since marijuana was banned, while it has decreased in the US since it was legalized in certain states.
• Moreover, these days, it is pretty easy to buy marijuana in India and its consumption is widespread among the youth. So it is fair to say that prohibition has failed to curb the ‘problem’.

 (7) Marijuana is less harmful

• Marijuana consumption was never regarded as a socially deviant behaviour any more than drinking alcohol was. In fact, keeping it legal was considered as an ‘enlightened view’.
• It is now medically proven that marijuana is less harmful than alcohol.

Risks of Legalizing Cannabis

(1) Health risks continue to persist

• There are many misconceptions about cannabis. First, it is not accurate that cannabis is harmless.
• Its immediate effects include impairments in memory and in mental processes, including ones that are critical for driving.
• Long-term use of cannabis may lead to the development of addiction of the substance, persistent cognitive deficits, and of mental health problems like schizophrenia, depression and anxiety.
• Exposure to cannabis in adolescence can alter brain development.

(2) A new ‘tobacco’ under casualization

• A second myth is that if cannabis is legalized and regulated, its harms can be minimized.
• With legalization comes commercialization. Cannabis is often incorrectly advertised as being “natural” and “healthier than alcohol and tobacco”.
• Tobacco, too, was initially touted as a natural and harmless plant that had been “safely” used in religious ceremonies for centuries.

(3) Unconvincing Advocacy

• Advocates for legalization rarely make a convincing case. To hear some supporters tell it, the drug cures all diseases while promoting creativity, open-mindedness, moral progression.
• Too much trivialization of Cannabis use could lead to its mass cultivation and a silent economy wreaking havoc through a new culture of substance abuse in India.

Way forward

• Scaling up enforcement within and strict surveillance along our porous borders, airports and sea ports are the only way to check drug abuse for India.
• For Cannabis/ Marijuana, it’s important to make a distinction between legalization, decriminalization and commercialization.   
• As with alcohol and tobacco products, the use of cannabis must be regulated, taxed and monitored. Its threats must be conveyed through proper mechanism as we do in case of Tobacco.
• We must ensure that there are enough protections for children, the young, and those with severe mental illnesses, who are most vulnerable to its effects.

Conclusion

• The debate on the legalization of marijuana in India has started on social media and other noted platforms.
• It is to be noted that India’s tryst with cannabis is centuries old and even ancient texts mention the plant being used by both nobility and common folk.
• Even today, we come across ‘holy men’ smoking marijuana in public and photographs of them blowing clouds of smoke are almost symbolic.
• Hence, laws should be made to suit people so that they do not break the law to maintain their lifestyle.  Laws should weave around an existing lifestyle, not obstruct it. Or else laws will be broken.

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References

https://www.ncbi.nlm.nih.gov/books/NBK64258/

https://www.thehindu.com/todays-paper/tp-opinion/should-marijuana-be-legalised/article19468527.ece

https://www.scoopwhoop.com/inothernews/legalize-marijuana/

https://www.business-standard.com/article/opinion/the-economics-of-cannabis-120120401549_1.html

https://indianexpress.com/article/opinion/editorials/clear-the-smoke-cannabis-decriminalisation-7094364/

Universal vaccination programs have eliminated smallpox and reduced serious diseases including measles, mumps, rotavirus, and polio. But in the coming few months, India will witness another great event in its history — the great Covid vaccination exercise. This is vaccination going to be one of the most anticipated events in the country. This mass universal vaccination drive might prove to be a daunting task.

Making of a vaccine

• A vaccine has to pass three tests to be successful – quality, ease of delivery, and public acceptance.
• Quality, in turn, has three attributes – safety, efficacy, and duration of protection.
• These are initially assessed in animals, then in humans through rigorously three-phased clinical trials involving thousands of persons, followed by post-marketing surveillance of several thousands more.

India’s potential in vaccine-making

• The universal immunisation programme in India has well established and time-tested vaccine distribution systems.
• India has run massive immunisation programme earlier too, makes 60% of the world’s vaccines and is home to half a dozen major manufacturers, including Serum Institute of India – the largest in the world.
• Not surprisingly, there’s no lack of ambition when it comes to vaccinating a billion people against Covid-19.
• India plans to receive and utilise some 500 million doses of vaccines against the disease and immunize up to 250 million people by July next year.

Mechanisms available

• India’s vaccine distribution network is operated through four government medical store depots (GMSDs) in Karnal, Mumbai, Chennai and Kolkata, which procure vaccines from the manufacturers.
• About 53 state vaccine stores get their supplies either from these GMSDs or directly from manufacturers.
• The state vaccine stores then distribute the vaccines to regional, district and sub-district level cold chain points via insulated vans.
• The vaccine management has improved over the years thanks to a real-time supply chain management system known as the electronic vaccine intelligence network (eVIN).

EVIN: The COVID-19 delivery system will use the UIP platform, with the innovative Electronic Vaccine Intelligence Network enhancing efficiency and diligence.

CO-WIN Platform: This user friendly mobile app for recording vaccine data is working as a beneficiary management platform having various modules. Once people start to register for the app, the platform will upload bulk data on co-morbidity provided by local authorities.

India’s efficacy

• India ranked within the 51-75 percentile range among 89 countries on effective vaccine management as per a global analysis by WHO-UNICEF in 2018.
• Its performance was relatively poor when it came to following the required vaccine arrival procedures and using the MIS system for estimating demand of vaccine, syringe, etc.

Various challenges looming before the roll-out of Vaccine

[A] Infrastructure and other ground challenges

For India, the magnitude of the task at hand is huge. If we have 1.3 billion Indians, a two-dose vaccine (such as Moderna or Oxford vaccine) implies 2.6 billion doses that need to be given across the nation.

(1) Supply-chain challenges

• The  supply  chain  of  the  vaccines  has to  be  strictly monitored  for  temperatures as the vaccines tend to be very sensitive to temperature variations.
• Storing  the vaccines  in  temperature controlled  boxes proves  to  be  challenging  in  India,  because  of problems  with electricity supply, which in many places in India tends to get interrupted frequently.

(2) Infrastructure challenges

• Getting vaccines to people who need them will require over a billion vials to be manufactured, filled and shipped, at top speed and in some cases, under extreme stress.
• India needs to scale up its cold chain and distribution infrastructure for the last-mile connectivity.
• Cooling facilities in the final delivery stages and a lack of storage at clinics would pose the biggest challenge to delivering vaccines on a high scale.

 (3) Inter-state disparity

• What adds to the vaccination challenge is the inter-state disparity in the distribution of cold chain points across the country.
• Jharkhand, Uttar Pradesh, and Bihar are among the least served states when it comes to cold chain infrastructure.
• It won’t be easy to fill such deficits given that most of the private sector cold chain network is concentrated in the bigger cities and towns.

[B] Access challenges

(1) Access and affordability

• Vaccine distribution poses another daunting challenge, and is accompanied by questions such as how much it will cost and who will pay for it.
• Some of the concerns are about corruption over access to vaccines.

(2) Vaccine safety

• It is essential to assess safety as the vaccine will be administered to healthy persons.
• This is a concern because some candidate vaccines have previously been known to have serious adverse effects.
• The choices of vaccines, distribution, identifying groups for early vaccination, storage and more importantly, trained personnel, all play a role, the experts underline.

(3) Uptake and monitoring

• Apart from distribution and delivery, other issues would be vaccine uptake and monitoring.
• Vaccine uptake requires confidence in the vaccines and the delivery system.
• Documentation of vaccination and the tracking and investigation of vaccine safety events are essential components of monitoring.
• India also has to battle with vaccine hesitancy. These have not been done well looking at the past experience.

[C] Ethical challenges

Acute humanitarian crises pose complex ethical dilemmas for policy-makers, particularly in settings with inadequate health-care services, which often become dependent on external agencies for urgently needed care.

When resources, especially staff, are scarce, decision-makers often choose among interventions – implicitly or explicitly – on the basis of cost-effectiveness because they are seeking to maximize benefits.

Many ethical issues surround the development and use of vaccines. These issues include

• Requiring vaccination by law;
• Development and testing of vaccines;
• Informed consent about the benefits and risks of vaccination; and
• Equitable distribution of vaccines

Among these, one is very crucial, i.e.

#Prioritization

It is a matter of distributive justice. Distributive justice requires the fair allocation of scarce basic resources, such as shelter, food, potable water and vaccines is not an exception to this.

• Different rules govern decision-making and priority-setting during acute crises.
• Objective, transparent processes for making priority-setting decisions are extremely important to maintain trust in the vaccination plans.
• Incidentally, the intent behind identifying the high-priority groups to receive the vaccine first was to safeguard them from severe disease and not to break the virus transmission chain.

Prioritized group as per our Health Ministry

Prioritized Population Groups include:

1. Healthcare Workers in both Government and Private Healthcare facilities
2. Frontline Workers including personnel from state and central police department, armed forces, home guard, civil defence organizations, disaster management volunteers and municipal workers and
3. Prioritized Age Group, which includes those aged above 50 years & those with co-morbidities

(Note: This is not the sequence, but categorization.)

[D] The biggest global challenge: Vaccine Nationalism

• Vaccine nationalism occurs when a country manages to secure doses of vaccine for its own citizens or residents before they are made available in other countries.
• This is done through pre-purchase agreements between a government and a vaccine manufacturer.
• It is harmful to equitable access to vaccines.

Why it has to go away?

• Most vaccine development projects involve several parties from multiple countries.
• With modern vaccines, there are very few instances in which a single country can claim to be the sole developer of a vaccine.
• And even if that were possible, global public health is borderless. As COVID-19 is illustrating, viruses can travel the globe.

“An outbreak anywhere is an outbreak everywhere”.

Way forward

• Considering the large population and limited capacity of production and distribution of vaccine, it will not be easy to provide everyone around the world with the vaccine at the same time.
• There is a need to develop a strategy for the same which will guide us in deciding who should receive the vaccine first.
• In this context, any effective vaccine that is developed should be treated as a global public good and should be distributed equally around the world, regardless of where it was invented or of a country’s ability to pay.
• There has to be a comprehensive global framework that will ensure priority for the most vulnerable populations.
• International institutions — including the WHO — should coordinate negotiations ahead of the next pandemic to produce a framework for equitable access to vaccines during public health crises.

Conclusion

The allocation of a limited supply of vaccine calls for a fine balance between utility and equality and fairness. Accountability demands that decision-making be explicit, documented and open to public review.

• Efforts to maximize utility can conflict with the egalitarian goal of helping the neediest.
• When limited supplies are allocated to the most vulnerable, overall health utility is sometimes suboptimal.
• From the perspective of value pluralism, balancing utility and equality should be the goal, rather than prioritizing one or the other.
• When it comes to vaccination, the utility is fortunately often greatest when the most socially disadvantaged groups are targeted.

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References

https://www.livemint.com/news/india/india-s-vaccine-distribution-challenge-explained-in-five-charts-11607106132744.html

https://www.bbc.com/news/world-asia-india-55048925

https://www.weforum.org/agenda/2020/09/covid-19-vaccine-global-health-covax/ https://intelligence.weforum.org/topics/a1G0X000006O6EHUA0?tab=publications

https://www.thelancet.com/journals/laninf/article/PIIS1473-3099(20)30773-8/fulltext#seccestitle90

https://www.devex.com/news/opinion-the-unspoken-covid-19-vaccine-challenges-distribution-and-corruption-98437

The ongoing stand-off between the Union government and protesting farmers does not show any signs of a resolution at the moment. Farmers, especially in Punjab and Haryana, have been protesting against the three agriculture laws enacted by the central government.

The situation is extremely volatile since the farmers are determined not to leave Delhi and camp therein for months for further protests.

The Three Contentious Laws: A quick recap

Tap here for a comprehensive image

(1) Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020:

• It expands the scope of trade areas of farmers produce from select areas to “any place of production, collection, and aggregation”. It allows electronic trading and e-commerce of scheduled farmers’ produce.
• It prohibits state governments from levying any market fee, cess or levy on farmers, traders, and electronic trading platforms for trade of farmers’ produce conducted in an ‘outside trade area’.

(2) Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020:

• It creates a national framework for contract farming through an agreement between a farmer and a buyer before the production or rearing of any farm produce.
• It provides farmers engaging with Agri-business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce by a mutually agreed price framework.

(3) Essential Commodities (Amendment) Act 2020:

• It allows for the center to regulate food items through essential commodities.  
• It also requires that imposition of any stock limit on agricultural produce be based on price rise

Agitators at the forefront

Farmers in Punjab and Haryana are known for their adamant attitudes. They are heavily dependent on public procurement and assured price through MSP. Nearly 88% of the paddy production and 70% of the wheat production in Punjab and Haryana (in 2017-18 and 2018-19) has been absorbed through public procurement.

Why are farmers fuming over these laws?

These bills sought to bring much-needed reforms in the agricultural marketing system. However, farmers are apprehensive that the free market philosophy supported by these bills could undermine the Minimum Support Price (MSP) system and make farmers vulnerable to market forces.

Let us look at all their concerns one by one:

(1) Fear against the end of Mandi System

• The APMC regulates the mandi (marketplace) where farmers bring their produce, and therefore, guarantees that they receive the MSP.
• Since the state governments will not be able to regulate the trade outside the APMC markets, farmers believe the laws will gradually end the mandi system and leave farmers at the mercy of corporates.

(2) Fear over MSPs and procurement guarantee

• Farmers believe that dismantling the mandi system will bring an end to the assured procurement of their crops at MSP.
• Similarly, farmers believe the price assurance legislation may offer protection to farmers against price exploitation, but will not prescribe the mechanism for price fixation.
• They are demanding the government guarantee MSP in writing, or else the free hand given to private corporate houses will lead to their exploitation.

(3) Fear of Arhatiyas

• The arhatiyas (commission agents) and farmers enjoy a friendship and bonding that goes back decades.
• On an average, at least 50-100 farmers are attached with each arhatiyas, who takes care of farmers’ financial loans and ensures timely procurement and adequate prices for their crop.
• Farmers believe the new laws will end their relationship with these agents and corporates will not be as sympathetic towards them in times of need.

 (4) Fear over the end of subsidised electricity

• Farmers concerns are also fuelled by the proposed Electricity (Amendment) Bill 2020 which might end their access to subsidised electricity.
• The bill seeks to create an Electricity Contract Enforcement Authority (ECEA), a move aimed to further centralization.
• Another concern is the transfer of subsidies through DBT. Farmers will have to pay first from their own pocket, after which they will get subsidies.

(5) Fear over Contract Farming

• The FAPA Act formalizes contract cultivation through a “national framework” and explicitly prohibits any sponsor firm from acquiring the land of farmers through purchase, lease or mortgage.
• But farmers fear over the big corporate players’ monopoly over food processing industry and its supply chain dynamics.
• They fear that their ownership rights would be at risk as the Act provides for debt instruments for the companies which have their own recovery mechanisms.

(6) Fear over dispute resolution

• The FAPA Act provided for a three-level dispute settlement mechanism by the conciliation board, Sub-Divisional Magistrate and Appellate Authority.
• Since the highest level of appeal for the farmer against any private entity was the Appellate Authority, the farmer is effectively prevented from moving the Court.
• Thus, they claim that the Act was highly skewed in favor of private entity as the individual farmers did not have the resources that private companies had.

(7) Fear over EC Amendment Act

• The original EC Act de-regulated food items including cereals, pulses, potato, onion, edible oilseeds, and oils, and could only be regulated in the extraordinary circumstances.
• The new law states that government regulation of stocks will be based on rising prices.
• This stock-limiting puts farmers at the peril of the government and thus prevent them from making from any profit during any extra-ordinary circumstances as most of the time they only have to bear losses. (Ex. Onion farmers in Maharashtra).

What are the broader concerns?

Agriculture per se deals with everything that a farmer does — right from field preparation and cultivation to also the sale of his/her own produce.

 (1) The centre has overreached

• Article 246 of the Constitution places “agriculture” in entry 14 and “markets and fairs” in entry 28 of the State List.
• But entry 42 of the Union List empowers the Centre to regulate “inter-State trade and commerce”.
• While trade and commerce “within the State” are under entry 26 of the State List, it is subject to the provisions of entry 33 of the Concurrent List – under which the Centre can override.
• The Centre, in other words, has passed a law that removes all impediments to both inter-and intra-state trade in farm produce, while also overriding the existing state APMC Acts. The FPTC Act does precisely that.

(2) States authority grossly surpassed

• The act of primary sale at a mandi by the farmer is as much “agriculture” as production in the field.
• “Trade” begins only after the product has been “marketed” by the farmer.
• Going by this interpretation, the Centre is within its rights to frame laws that promote barrier-free trade of farm produce (inter-as well as intra-state) and do not allow stockholding or export restrictions.
• But these can be only after the farmer has sold. Regulation of the first sale of agricultural produce is a “marketing” responsibility of the states, not the Centre.

(3) A totalitarian move

• There is a debate around the constitutional provisions with regard to the respective domains of the State and the Union with regard to agricultural marketing,
• However, issues affecting the farming community have a far greater bearing on the States relative to the Centre.
• While enacting the Bills, the Centre extended little consideration to the sensitivity or consultations of the States who are busy fighting the pandemic this hour.

(4) Media insensitivity

• Punjab and Haryana farmers have been at the forefront of this struggle and the other regions were slow to catch up.
• The media terming it as a movement of ‘middlemen’ carried out by opposition parties and covertly supported by the ‘Khalistanis’ is the most distressing aspect.
• This claim, for which no evidence has been offered, has been amplified by many news channels.

Wait! Before you make up your mind ….. Ever wonder, why did the govt intervene through these legislations?

(1) Flawed argument over MSP

• These bills do not mention to do away with MSPs. Moreover APMCs have never assured that farmers get MSPs (which itself has no legal backings).
• Over 80% of all land holdings were small and marginal with less than 2 hectares of farm land and hence, most of them, far from selling, end up buying food for even their own consumption.
• In such cases, the rise in MSP actually hurts these farmers instead of helping them. The government assured price only helps a few large farmers.

(2) Food security is no more an issue

• The roots of state intervention in agriculture, from government procurement to rationing and restrictions on private traders are to found in recurring food shortages in the period after Independence.  
• Many experts believe that these incentives are not needed today because India is a food-surplus country now.
• This is what the current reforms seek to abolish. The sharp rise in India’s agriculture exports is often cited as evidence of this fact.

(3) An equalizing move for all

• The average nutritional intakes in India are much lower than just developed countries and, the purported food surplus seems to be the result of inadequate food consumption due to affordability issues.
• There still exists malnutrition as most of the public cannot afford good diets.
• According to research by the International Food Policy Research Institute, 63.3% of people in rural India could not afford the Cost of a Recommended Diet (CoRD).

(4) Protesting farmers are better off than the rest

Data from a 2013 survey carried out by the National Statistical Office (NSO) shows that farmers from Punjab and Haryana had the highest incomes in the country.

• The farmers who are protesting outside Delhi’s borders are among the richest among their peers in India.
• A disproportional share in government procurement at MSP plays an important role in this.
• States where there are no large-scale MSP operations tend to have lower prices in private markets as well. That incentivizes the richer farmers to lobby for the continuation of the status quo.

(5) Contract farming was a long pending issue

• Contract farming in India has shown that marginal and small farmers are generally excluded.
• The problems they face include the following- highly one-sided i.e. pro-contracting agency contracts, delayed payments, undue rejections and outright cheating among others.
• Hence it was necessary for the govt. to bring legislation.

Much of government procurement at MSPs — of paddy, wheat and increasingly pulses, cotton, groundnut and mustard — happens in APMC mandis. In a scenario where more and more trading moves out of the APMCs, these regulated market yards will lose revenues. “They may not formally shut, but it would become like BSNL versus Jio. And if the government stops buying, we will be left with only the big corporates to sell to….

Govt and farmers at crossroads: A timeline

In its first term, the government was forced to retract its proposal to ease the 2014-15 land acquisition norms fearing a political backlash, following massive protests across the country.  But the peace it bought with the farmers was short-lived.

Farmers’ angst in nooks and corners of rural India had been simmering, bursting out in spurts of violence like the one witnessed in Madhya Pradesh’s Mandsaur in 2017 where farmers were protesting, demanding loan waiver and higher crop prices.

This was followed by the 2018 farmers’ agitation in Maharashtra. Moved by the poor implementation of the loan waivers, thousands of farmers undertook a march from Nashik to Mumbai demanding redressal. Though then the government decided to fulfil the demands, it, however, retreated.

Why do farmers get on the streets?

• It’s not that farmers’ agitation has picked pace only since 2014. But agriculture sector experts say farmers’ grievances have mostly remained unaddressed.
• Rural distress has been on the rise, stoking farmers’ anger. Politics has added fuel, making a lethal cocktail.
• Even though Punjab and Haryana are not as critical to the country’s food security as they were a few decades ago, they are extremely important in India’s farm economy.
• Decades of high farm earnings also mean that the peasantry in these two states has much more in terms of material wherewithal to fight for its interests.
• Therefore, the fact that the government’s attempts to undermine their interests by enacting the recent farm laws have triggered a sharp political backlash is hardly surprising.

What do they want?

• Farmers would want no restrictions on the movement, stocking and export of their produce.
• For example, Maharashtra’s onion growers have vehemently opposed the Centre’s resort to banning on exports and imposition of stock limits whenever retail prices have tended to go up.
• But these restrictions relate to “trade”.
• When it comes to “marketing” — especially dismantling of the monopoly of APMCs — farmers, especially in Punjab and Haryana, aren’t very convinced about the “freedom of choice to sell to anyone and anywhere” argument.

From the government’s standpoint, the elephant in the room would be if the farmers insist on an additional demand: Making MSP a legal right. That would be impossible to meet, even if the three farm laws get repealed.

What options does the government have?

While the farmers want the three farm laws to be repealed and a new law with a provision that ensures the MSP is not tinkered with, the government has maintained that MSP is not being done away with.

These may be just fears, but they aren’t small.

(1) Repealing the laws

• Punjab farmer leaders, including two major political parties, demand repeal of these laws.
• Overall, almost 90 per cent of the agri-produce is sold to the private sector. However, repealing would mean bringing back controls, licence raj and the resultant rent-seeking.
• Milk, poultry, fishery, etc. don’t go through the mandi system and their growth rates are 3 to 5 times higher than that of wheat and rice.

(2) Legally enforcing the MSPs

• Another demand is making the MSP statutory and legally binding even on the private sector.
• This is impractical as there are 23 commodities for which MSPs are announced, but in actual practice only wheat and rice enjoy MSPs in any meaningful manner and that too only in 6-7 states.
• The FCI is overloaded with grain stocks that are more than 2.5 times the buffer stock norms.
• If the government cannot cope up with excess production of just wheat and rice in any meaningful way, think of how it will handle 23 commodities under MSP.

(3) Implementing Price Stabilization Scheme

• The third policy option is to use the Price Stabilization Scheme to give a lift to market prices by pro-actively buying a part of the surplus whenever market prices crash.
• Farmers can use Commodity Derivatives Exchanges where farmers can buy “put options” at MSP before they even sow their crops.
• If the market prices at the time of harvest turn out to be below MSP, government can compensate them partly for lower market prices (which again aren’t feasible for the govt.)

(4) Decentralizing MSPs and other subsidies

• Another option is to totally decentralize the MSP, procurement, stocking, and public distribution system (PDS).
• The Centre can get off from MSP, PDS, fertilizer subsidy, and MGNREGA and let the states decide it.
• So, the whole money on food subsidy can be allocated to states on the basis of their share in all-India poverty/proportion of vulnerable population.

A bigger challenge at the moment

• Several farmers said that they had come prepared to dig in for a prolonged struggle.
• Farmers are carrying ration that can last months and are in no mood to turn back. Any use of force by the state may lead to a major law and order disruption.
• In the current situation, the police have already used water cannons and tear gas to disperse the agitated farmers — but both methods have failed.
• This could lead to a severe law and order crisis.
• Moreover, international voices are also rising on the credibility of the government to address the farmers concerns, which is not a healthy sign.

Way forward: Give reforms a chance

Reforms in agriculture have been overdue.  There has been rhetoric in last 10 years in favour of agricultural but very few concrete steps have been taken.

One rhetoric is very clear now. The APMC mandis were never filled with good samaritans and neither is the MSP religiously enforced everywhere.

• Just passing these laws won’t be enough. The success of liberalizing the farm market will hinge on effective implementation, constant monitoring and timely action.
• Accelerating research and academic excellence could bring in the ‘best in class’ technologies and can multiply farmers’ incomes.
• As far as the APMCs and commission agents are concerned, the governments should work on a clear roadmap to modernize them by facilitating them in providing value-added services.
• They could be leveraged to set-up grading and sorting, warehousing, cold chains and food processing infrastructure. This way, it is a win-win-win for the state government, farmers and the commission agents.
• While taking the control away from these agents, the government must also ensure that the gap is filled with foolproof mechanisms to ensure timely payments to farmers to avoid any cash crunch.

Don’t fear the competition

• When we create competition for their produce, the price improves. There are more buyers, more choices. Farmers can reap the benefits of that.
• The COVID-19 crisis opened a window of opportunity to reform the agri-marketing system.  Patience and professionalism will bring rich rewards in due course, not noisy politics.

Conclusion

• The governments must try to allay the fears of farmers over the Farm Bills and it is never too late to rethink. Unconditional talks with farmers would be an appropriate starting point.
• There is genuine uncertainty over what private procurement will mean. Will it mean greater corporate power over farmers, possibly unhealthy monopolies or duopolies?
• Leveraging the reforms and moving forward rather is the most feasible solution than to protest amid the pandemic.
• What farmers need and are asking for is legally guaranteed remunerative prices. If the Bills are perceived of good intent, then the government should not shy away from proper parliamentary scrutiny of all its details.
• Political parties that are opposing these Bills should coordinate better keeping farmers’ interests in the forefront, and not their party politics.

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References

Minimum Support Prices for Agricultural Produce

Farmers’ protest a big challenge for Modi. Bigger than demonetisation, GST

https://www.hindustantimes.com/india-news/four-key-aspects-of-the-farmers-protest/story-UKuhPOVY7N3nAs1OZXBU0L.html

https://www.businessinsider.in/india/news/apmc-and-msp-will-continue-under-new-farm-bills-2020/slidelist/78230172.cms

Dr. B R Ambedkar, in his lecture “Castes in India” in 1916 –

“One of the most intrinsic characteristics of the caste system is endogamy, which prohibits marriage outside of caste and the maintenance of caste in India is premised on the enforcement of strict endogamy.“

Discourse on interfaith marriages in India at present involves diverse narratives ranging from opposition and resistance to acceptance.

Forced religious conversions for interfaith marriages cases are widely seen in news these days. And many states are attempting to ban religious conversion for the sole purpose of marriage. The state of Uttar Pradesh has seen its first arrest under the new ordinance so passed.

What is Inter-faith Marriage?

• Interfaith marriage, sometimes called a “mixed marriage”, is marriage between spouses professing different religions.
• For individuals who choose interfaith marriage, love is their sole motivation and relationship is generally viewed in terms of individual compatibility.

Interfaith Marriages in India

• The right to marry is a part of the right to life under Article 21 of the Indian Constitution.
• It is a universal right and it is available to everyone irrespective of their gender.
• A forced marriage is illegal and is invalidated in different personal laws on marriage in India, with the right to marry recognized under various religious laws.

Provisions for such marriages

• The Special Marriage Act, 1954 (SMA) was enacted to facilitate the marriage of couples professing different faiths, and preferring a civil wedding.
• However, some practical problems arise in registering such marriages.
• The law’s features on prior public notice being given and objections for the safety and privacy of those intending to marry across religions.
• To overcome this, many settle for marriage under the personal law of one of them, with the other opting for religious conversion.

Core Issue: Religious Conversions

Religious conversion is one of the most heated issues under interfaith marriage. There are various reasons for which people do convert their religion like:

• Voluntary Conversions i.e. conversions by free choice or because of change of beliefs
• Forceful Conversions i.e. conversions by coercion, undue influence or inducement
• Marital Conversions i.e. conversions due to marriage
• Conversion for convenience

The larger Constitutional issue

(A) Article 21

• Many high courts across India have ruled that- an individual’s right to marry a person of his or her choice is a fundamental right that cannot be denied on the basis of caste or religion by anybody.
• In the Hadiya Case (2016), the Supreme Court had ruled that the right to marry a person of one’s choice is integral to Article 21 (right to life and liberty) of the Constitution.

(B) Article 25

• Article 25 talks about the term “propagate” which means to promote or transmit or merely freedom of expression.
• The question of whether ‘right to convert’ comes under the ambit of ‘right to propagate any religion’ holds fundamental importance to determine the constitutionality of anti-conversion laws.
• There is no expressed provision for ‘conversion’ in the Indian Constitution but there are proponents whose contention is in the favour that right to conversion is implicit under Article 25 which emerges from freedom of conscience.

(C) Rights of women

• Any individual has the absolute right to choose a life partner and this cannot be affected by matters of faith.
• Again, the perception of such marriages is considered okay for males but not for females.
• This indicates gendered responses of the society towards such marriages.

Furore over interfaith marriage

Religious conversion has emerged as the practical way to cohabit as a couple, in a country where neither the inter-faith, inter-caste nor the live-in couples can earn societal approval.

• As per some Personal laws, in order to get married conversion of religion to get equalized is the only way.
• There are cases of being allegedly lured and honey-trapped by men and those girls now seeking their help to free themselves.
• Interfaith marriages these days are believed to be a forced conversion of the women spouses.
• Fundamentalists’ claims that men of a particular religion are trained on the intricacies of religious doctrine to allure other religion women for marriage in an attempt to finish off her religion.

States narrative against interfaith marriages

• Uttar Pradesh is the latest state to implement a law against forceful inter-faith conversions for marriage, amid similar steps by other states. Its proposed law defines punishment and fine for three different cases.

1. Conversion is done though “misrepresentation, force, undue influence, coercion, allurement or by any fraudulent means” would face a jail term of one to 5 years, and a minimum fine of Rs 15,000.
2. Conversion of a minor, a woman from the SC or ST would have to face a jail term from three to 10 years, with a minimum fine of Rs 25,000.
3. If such conversion is found at the mass level, then those guilty would face a jail term from three to 10 years, with a minimum fine of Rs 50,000.

• It proposes among other things that a marriage will be declared “shunya” (null and void) if the “sole intention” of the same is to “change a girl’s religion”.

Such legislations are archaic because,

• In the K.S. Puttuswamy or ‘privacy’ judgment, the Supreme Court had already clarified that any interference by the State in an adult’s right to love and marry has a “chilling effect” on freedoms.
• The choice of a life partner, whether by marriage or outside it, is part of an individual’s “personhood and identity”, the apex court has held.
• In the Lata Singh case, the top court recognised the country is going through a “crucial transformational period”.
• It said the “Constitution will remain strong only if we accept the plurality and diversity of our culture”.

Arguements by the States

• It is accused that interfaith marriages often induce “undue influence”, “allurement” and “coercion” for religious conversions.
• Often, negotiations and accommodation post-marriage involve the issue of identity and its expression in the family.
• The recent murder of 20-year-old college girl by her stalker is a case in point. She was shot in the head from point-blank range. Matters came to head after she had filed a molestation complaint against the stalker month’s back, who was pressuring her to convert and marry him.
• It translates as violence against women’s autonomy.

Societal Response and Threats

• The couple faces societal norms against their alliances that are sometimes labelled as immoral, unholy or acts based on lust.
• It brings up the aspect of women as symbols of honour and ‘honour killings’ as one of the societal responses to interfaith marriages.
• Response to such alliances may also go to the extent of killings and ex-communication of individuals (by Khap Panchayats) who attempt to cross their community’s boundaries.
• Interfaith marriages also pose an ideological dilemma to different religious groups.
• On the one hand, different religions promote the philosophy of acceptance and concern for fellow human beings, and on the other hand, there is rigidity in the process of marriage.

Arguments in favour of such marriages

• Interfaith marriages have the potential to build a strong base for community-level changes towards greater sensitivity and acceptance among different faiths/religions.
• These marriages reflect the ‘genuine extent of heterogeneity’ in society, promote pluralism and diminish ‘ideological monopoly’ of different religions.

A sole matter of individual rights

• Ironically, interfaith marriages themselves are fairly common in India.
• The freedom of decision of his/ her marriage shall lie with the person only. The need is to accept the fact.
• Prohibition deprives a woman of her agency and, in effect, controls female sexuality.
• There are many high profile examples in fields such as the arts, sports, journalism, and business as well as politics.

Conclusion

• Marriage is an extremely personal affair. The right to marry a person of one’s choice or to choose one’s partner is an aspect of constitutional liberty as well as privacy.
• The issue of conversion can be resolved by actually agreeing to not convert.
• Marriage done solely for the purpose of conversion and conversion by misrepresentation, force, fraud, undue influence, inducement, allurement should be discouraged.
• In short, we should be focusing on dismantling the barriers of religion, caste and other divisions rather than bring up more barriers in these endeavours as is the attempt now.

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References

https://blog.ipleaders.in/religious-conversion-law/

https://thediplomat.com/2020/11/push-to-legislate-interfaith-marriages-sparks-backlash-in-india/

https://indianexpress.com/article/explained/explained-what-a-2013-study-revealed-about-interfaith-marriages-6742991/

https://www.deccanherald.com/specials/sunday-spotlight/why-we-can-t-have-laws-curtailing-the-right-to-marry-918518.html

https://journals.sagepub.com/doi/pdf/10.1177/2393861717730620

UP Law against Forceful Inter-Faith Marriage and Conversions

India is one of such paradises on earth where you can speak your heart out without the fear of someone gunning you down for that, or, it has been until now. Even if the situation of Indians is a lot better than that of their fellow citizens of other nations, the picture is not really soothing or mesmerizing for Indians any more. This observation is being made with regard to the exercise of the right of freedom of speech and expression in the context of social media and the hurdles placed on that by the arbitrary use of the so-called cyber laws of the nation.

The Kerala government withdrew its controversial ordinance allowing police to arrest individuals for social media posts just two days after it had been introduced.  It had introduced Section 118A in the Kerala Police Act, to penalise ‘offensive,’ ‘abusive,’ and ‘threatening’ social media posts. The amendment had triggered off a public outcry leading to its hasty withdrawal.

Before delving into the issue in details, we should first understand the case of Kerala and its relation with the erstwhile Section 66A of the IT Act.

What was Kerala’s Law?

• Section 118A criminalized the communication of abusive, defamatory and intimidating speech.
• It says that any expression, publication or dissemination of threatening, abusive, defamatory or humiliating content made through any mode of communication punishable if the person does it knowing it to be false and damaging to reputation or mind of another person.
• A person, if convicted for the offence, could be punished with imprisonment of upto 3 years or fine of Rs. 10,000 or both.
• This is not just for writing or creating such a post, but those who share that post or opinion will also face the same kind of punishment.

Ambiguity over the Law

• The terms like “threatening, abusing, humiliating or defaming” were not defined in Section 118A of the Kerala Police Act.
• The outlawed sections spoke of vague notions like ‘annoyance’ and ‘inconvenience’, which are not defined in law anywhere.
• But Section 2 of the same Act states that the words and expressions not defined under the said law shall have the meanings as defined in the Indian Penal Code (IPC) or Code of Criminal Procedure (CrPC).
• Out of four actions criminalized under the latest amendment by Kerala, only defamation is clearly defined in the IPC.

Section 66A in a new bottle

Section 66A of the IT Act dealt with information related crimes in which sending information, by means of a computer resource or a communication device, which is inter alia offensive, derogatory and menacing is made a punishable offence.

The entire provision was struck down by the Supreme Court in the Shreya Singhal judgement.

• In judgement, the Court had found that Section 66A was contrary to both Articles 19 (free speech) and 21 (right to life) of the Constitution.
• It lay in the fact that it had created an offence on the basis of undefined actions: such as causing “inconvenience, danger, obstruction and insult”.
• These did not fall among the exceptions granted under Article 19 of the Constitution, which guarantees the freedom of speech.

In addition, the court had noted that Section 66A did not have procedural safeguards like other sections of the law with similar aims, such as:

1. The need to obtain the concurrence of the Centre before action can be taken.
2. Police authorities could proceed autonomously, literally on the whim of their political masters.

Criticisms of the Keralan law

It needs no explanation that the law had the potential for great abuse against lay people and the media alike. It gives enormous, unbridled powers to the police. Anybody could be accused of humiliating someone and prosecuted.

• Terming the law draconian, experts has said that the new law was another affront on free speech and its wide and vague ambit left it vulnerable to rampant misuse.
• The law was no way related to women’s safety or anything that the government had earlier said.
• The law would have been misused by people who may want to sue over the smallest disagreements and by those who are already misusing defamation laws.
• Its misuse would not have been restricted to political criticism or religious opinion formation but “all ‘likes’, blogs, ‘unfriending’ now will be settled at police stations,” he says.
• It mentioned “class of persons” in the law which could even mean deities, any group, organisation, brand or company.
• It will effectively be a DDOS attack (denial-of-service attack) on the police functioning on the state, as well as on the police. There will be a huge rush of FIRs filed against all kind of issues between people.
• Another aspect of worry was that it gave power to the police to file suo-motu cases against anyone.

Bigger Picture: Freedom of Speech on Social Media

• The Internet and Social Media has become a vital communications tool through which individuals can exercise their right to freedom of expression and exchange information and ideas.
• In the past year or so, a growing movement of people around the world has been witnessed who are advocating for change, justice, equality, accountability of the powerful and respect for human rights.
• In such movements, the Internet and Social Media has often played a key role by enabling people to connect and exchange information instantly and by creating a sense of solidarity.
• And in the light of the growing use of the internet and social media as a medium of exercising this right, access to this medium has also been recognized as a fundamental human right.

Hate Mongering: A new cool

Social media today is a hotbed of toxic and hateful conversations. Curbing hate speech and fake news has emerged as a critical challenge for governments globally.

• Unregulated social media promotes misinformation, hate speech, defamation, and threats to public order, terrorist incitement, bullying, and anti-national activities.
• Abusive posts do promote violence against or threaten people based on their race, national origin, sexual orientation, gender and religious affiliation.
• On grim situations, they include death threats and rape threats to women.
• Also, the fake news panacea is not a new phenomenon linked to the rise of social media. Fake news has even lead to lynchings.

Why controlling social media expressions is a difficult task?

It is undeniable that the consequences of the narrative that takes shape on online platforms, more often than not, have real life implications.

• The number of users on social media is ever-increasing and the volume of traffic is too huge to monitor.
• The social media platforms are least bothered about public normalcy and social order.
• They even with public policy departments seem to neglect their role in curbing hate- content and misinformation.
• If over-regulated, the platforms would become ripe for the state’s control over the public perception through state-promoted posts.

Limited cyber safeguards

• There is no specific legislation in India which deals with social media except The Information Technology Act, 2000.
• There are several provisions in it which can be used to seek redress in case of violation of any rights in the cyberspace, internet and social media.

Other provisions are:

Some of the safeguards include Section 67 IT Act (punishment for publishing or transmitting obscene material in electronic form); Section 506 IPC (punishment for criminal intimidation); Section 509 IPC (word, gesture or act intended to insult the modesty of a woman); Section 500 IPC (punishment for defamation).

Way forward

• The regulations to deal with such issues in India are insufficient and are also scattered across multiple acts and rules under the IPC, the IT Act and CrPC.
• The need is to harmonize and unify the existing laws.
• Moreover, there is a need to amend the draft intermediary guidelines rules to tackle modern forms of hate content that proliferate on the Internet.
• Therefore, it is imperative for the government to recognize the menace of hate speech and ensure that there is proper regulation in place to tackle the issue.

Keeping all this in mind, the Government should consult technical experts to look into all the possible facets of the use and misuse of social media and recommend a suitable manner in which it can be regulated without hindering the civil rights of citizens.

Conclusion

There is no doubt that we require some legal provisions to protect persons from cyber bullying. But the amendment brought in by Kerala provided ample scope for gross misuse.

• It is clearly evident that social media is a very powerful means of exercising one’s freedom of speech and expression.
• However, it is also been increasingly used for illegal acts which has given force to the Governments attempts at censoring social media.
• Where on the one hand, the misuse of social media entails the need for legal censorship, on the other hand, there are legitimate fears of violation of civil rights of people.
•  What is therefore desirable is regulation of social media, not its censorship.

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References

https://thewire.in/government/kerala-free-speech-law-constitution

https://indianexpress.com/article/explained/as-kerala-brings-new-gag-law-recalling-sc-rap-on-another-5-years-ago-7061423/

https://www.thenewsminute.com/article/keralas-new-118a-law-is-section-66a-new-bottle-138185

http://www.legalserviceindia.com/legal/article-426-social-media-and-freedom-of-speech-and-expression.html

https://timesofindia.indiatimes.com/city/thiruvananthapuram/government-decides-to-backtrack-from-implementing-kerala-police-act-amendment/articleshow/79365385.cms

https://www.oneindia.com/explained-what-is-118a-of-the-kerala-police-act-cs-3180068.html

India’s decision to stay out of the China-backed Regional Comprehensive Economic Partnership, or RCEP, Asia’s mega free-trade agreement (FTA), has been met both with a sense of approval and disappointment and divided economists on the issue.

Context

• Last week, the Regional Comprehensive Economic Partnership (RCEP) was signed by 15 countries led by China, Japan, South Korea, Australia, New Zealand, and the 10-country ASEAN group.
• It is billed as one of the world’s largest Free Trade Agreement (FTA), accounting for nearly 30% of the global GDP covering 30% of the world’s population.
• After long negotiations, India exited the grouping last November, saying it wanted to protect its economy from rising trade deficits with a number of RCEP members.
• India’s decision is still the subject of much debate, and the RCEP has left a special window open for India to rejoin at a future date.

Regional Comprehensive Economic Partnership (RCEP)

Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement (FTA) between –

• The 10 members of ASEAN = Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam
• Additional members of ASEAN +3 = China, Japan, South Korea
• Members with which ASEAN countries have FTA = Australia, New Zealand

What is the objective of RCEP?

• RCEP aims to create an integrated market with 15 countries, making it easier for products and services of each of these countries to be available across this region.
• The negotiations are focused on the following:

Trade in goods and services, investment, intellectual property, dispute settlement, e-commerce, small and medium enterprises, and economic cooperation.

China in RCEP

• RCEP was pushed by Beijing in 2012 in order to counter another FTA that was in the works at the time: The Trans-Pacific Partnership (TPP).
• The US-led TPP excluded China.  However, in 2016 US President Donald Trump withdrew his country from the TPP.
• Since then, the RCEP has become a major tool for China to counter the US efforts to prevent trade with Beijing.

Significance for China

• The beginning of RCEP is a major development that will help China and trade in the Asia-Pacific region in the post-Covid-19 scenario.
• It will give China access to Japanese and South Korean markets in a big way, as the three countries have not yet agreed on their FTA.
• While China already has a number of bilateral trade agreements, this is the first time it has signed up to a regional multilateral trade pact.

RCEP and India

• India ended negotiation on RCEP over terms that were perceived to be against its interests.

• The ties with China in recent months have been disturbed by the military tension in eastern Ladakh along the LAC.
• In the meantime, India has also held a maritime exercise with Japan, Australia, and the United States for the “Quad” that was interpreted as an anti-China move.

Why did India walk out?

• India decided to exit RCEP negotiations over “significant outstanding issues”.
• Its decision was to safeguard the interests of industries like agriculture and dairy and to give an advantage to the country’s services sector.
• The current structure of RCEP still does not address these issues and concerns.

 (1) Escalated tensions with China

• Escalated tension with China is considered to be a major reason for India’s decision.
• Major issues that were unresolved during RCEP negotiations were related to the exposure that India would have to China.

(2) Surge in imports

• This included India’s fears that there was “inadequate” protection against surges in imports.
• It felt there could also be a possible circumvention of rules of origin— the criteria used to determine the national source of a product.
• In the absence of this, other partner countries could dump their products by routing them through other countries that enjoyed lower tariffs.

(3) Rules of origin criteria

• Its concerns on a “possible circumvention” of rules of origin — the criteria used to determine the national source of a product — were also not addressed.
• Current provisions in the deal reportedly do not prevent countries from routing, through other countries, products on which India would maintain higher tariffs.
• This is anticipated to allow countries like China to pump in more products.

(4) Inability for countermeasures

• India was unable to ensure countermeasures like an auto-trigger mechanism to raise tariffs on products when their imports crossed a certain threshold.
• It also wanted RCEP to exclude most-favoured-nation (MFN) obligations from the investment, especially to countries with which it has border disputes.

(5) No assurance of market access to India

• RCEP also lacked clear assurance over market access issues in countries such as China and non-tariff barriers on Indian companies.
• The agreement would have forced India to extend benefits given to other countries for sensitive sectors like defence to all RCEP members.

(6) Trade balances paradox

• India’s stance on the deal also comes as a result of learnings from unfavourable trade balances that it has with several RCEP members, with some of which it even has Free Trade Agreements.
• Taking the current scenario, India only exports 20% to the RCEP countries, while the import is accounted for 35%.
• Furthermore, RCEP members like China are well known for using non-tariff barriers against Indian products in the past, preventing India from growing its export to these countries.

(7) Protecting domestic industries

• Several sections of the Indian industry have raised concerns over RCEP.

• They have argued that some domestic sectors may take a hit due to cheaper alternatives from other participant countries.
• For instance, the dairy industry was expected to face stiff competition from Australia and New Zealand. Similarly, steel and textiles sectors have also demanded protection.

The global hoax of FTAs

• Our External Affairs Minister has inferred that the mantra of an open and globalised economy was used to justify unfair trade and production practices against India.
• In the name of openness, we have allowed subsidised products and unfair production advantages from abroad to prevail.
• The effect of past trade agreements has been to de-industrialize some sectors, said EAM without mentioning RCEP directly.
• The consequences of future ones would lock us into global commitments, many of them not to our advantage.

Gains from opting out

India comprises half of the world population and accounts for nearly 40% of global commerce and 35% of the GDP. Without India, the RCEP does not look as attractive as it had seemed during negotiations.

(1) A Diplomatic win

• ASEAN has been keen on a diversified portfolio so that member states can deal with major powers and maintain their strategic autonomy. Without India, the ASEAN has no major partner except China.
• India signalled that, despite the costs, China’s rise has to be tackled both politically and economically.

(2) Not becoming China’s dumping ground

• China provides enormous subsidies to its domestic products and goods. Consequently, this makes it vulnerable to the Indian market which becomes a dumping station.
• China also needs greater access to the Indian market as Chinese companies have been suffering because of the US-China trade war that affected Chinese manufacturing companies in the past 2 years.
• So, it could have proven to be a detriment to the Make in India initiative.

(3) Relief for Indian Farmers

• Farmers opine that RCEP deal could have aggravated the agrarian crisis.
• The input prices are heavily taxed in India and thus the Indian farmers are not being provided with the profitable prices which result in significant losses and also throwing farmers into a debt trap.
• India after green revolution emerged as a self-sufficient country in agricultural product.  It could have brought India’s ‘food sovereignty’ at stake as opening markets.

Limited benefits that RCEP would have offered

(1) Boosting the existing ties

• Clubbing with the ASEAN has always been a principal policy priority for India’s Act East Policy.
• The RCEP agreement would have complimented India’s existing FTAs with the ASEAN and some of its member countries.
• It would have also helped achieve its goal of greater economic integration with countries East and South East of India through better access to a vast regional market ranging from Japan to Australia.

(2) Expansion of services sector

• The RCEP would have created opportunities for Indian companies to access new markets.
• India is well placed to contribute to other countries in RCEP through its expertise in services.

(3) Counterbalancing China

• Both geopolitically and geo-economically, China now looks set to dominate the Indo-Pacific.
• India’s allies in Southeast Asia, as well as Australia, wanted India to join it to balance China.
• Some of these are founded on opacity that surrounds the Chinese government’s decision making.

Wait! Did we miss the bus?

(1) Capturing Foreign Markets

• Trade with RCEP nations was a chance for Indian service, IT, health and education sectors to prove its leverage. That is to say, India’s service sector had huge export potential in RCEP.
•  ‘Rules of origin’ could have also provided a possible chance for India to become a major hub in coordinating with the regional partners and establishing a trustable value chain.

(2) Could have helped boost exports

• Confederation of Indian Industry (CII) has called for signing RCEP agreement, as India could have also served as a major market for final good.
• RCEP could have helped India in further export to the 3rd world nations, and primarily to West Asia, Africa and few European countries.

(3) Isolation from global value chain

• India’s absence in integrating with global value chains will impact India’s internal and external ambitions.
• India’s own evidence shows that jobs linked to global value chains earn one-third more than those jobs focused on the domestic market.
• The inability to accede to the RCEP and ensure India’s integration into these emerging global value chains means India will lose out on a key opportunity to create such high-quality, high-paying jobs.
• Moreover, India’s absence in both of Asia’s two key economic architectures will take away from India’s goals as a regional and Indo-Pacific power, as well as a prospective global power.

(4) Missed opportunity with ASEAN

• The large size of the Indian economy and its negotiating heft would pose a valuable counterpoint to China within the grouping.
• Several RCEP countries still hope India will reconsider its decision of staying out.
• For ASEAN countries that led the RCEP negotiations, India’s presence would provide weight to the centrality of the ASEAN grouping in the region.
• It is for this reason that Japan led the drafting of the special statement on India, which would waive the 18-month mandatory waiting period if India applied formally to rejoin the group.

Why should India review its decision?

The COVID-19 pandemic has left the global economy in a state of disarray. For the first time in 60 years, nearly every country in the RCEP grouping is facing a recession.

(1) For a speedy economic recovery

• With global trade and the economy facing a steep decline due to Covid-19 pandemic, RCEP could serve as a bulwark in containing the free fall of the global economy and re-energizing economic activity.
• Further, the RCEP presents a unique opportunity to support India’s economic recovery, inclusive development and immediate job creation even as it helps strengthen regional supply chains.

(2) Rhetoric vs reality

• While deficits have increased for India in all foreign trade, India’s FTAs or PTAs (Preferential Trade Agreements) do not account for a bigger chunk of the trade deficit than they did before.
• The growing trade deficits come from the downturn in India’s GDP since 2016, and the decline in manufacturing.
• It is said that imports from China would have flooded had India entered RCEP, but haven’t they already flooded the country?

(3) Learning from allies

• In this regard, India can draw inspiration from Japan & Australia, India’s Quad partners.
• They chose to bury their geopolitical differences with China to prioritize what they collectively see as a mutually beneficial trading compact.

(4) Balancing the block

• It is not just because gains from trade are significant, but the RCEP’s membership is a prerequisite to having a say in shaping RCEP’s rules.
• This is necessary to safeguard India’s interests and the interests of several countries that are too small to stand up to the largest member, China.

(5) China is too big to defeat

• Even before the RCEP, China was an important player in regional trade and regional supply chains, and RCEP made its position stronger.
• Interestingly, even with the Covid-19 pandemic, other countries went ahead and signed the RCEP agreement without India.
• China now has an advantage vis-a-vis India in the 14 markets of RCEP. It also has more bilateral agreements in the region than India.

(6) Doing away with Protectionism

• It has been argued that Indian industry has hidden behind a wall of protectionism for far too long, and must open itself to global competition.
• There is a tendency in Indian industry to seek protection, whenever any steps towards globalization are taken.
• However, it is an acknowledged fact that globalization did benefit the Indian economy; it brought in newer technology and made Indian industry far more competitive.

Way forward

• India, as an original negotiating participant of RCEP, has the option of joining the agreement without having to wait 18 months as stipulated for new members in the terms of the pact.
• A possible alternative for India is to review its existing bilateral FTAs with some of these RCEP members as well as newer agreements with potential for Indian exports.
• There is also a growing view that it would serve India’s interest to invest strongly in negotiating bilateral agreements with the US and the EU, both currently a work in progress.
• Nor is the problem only China, because India has a trade deficit with virtually every country in the Asia-Pacific.
• The problem is a broader one, of India’s competitiveness, which has to be improved so that opening up leads to more benefits than costs, to industrialisation and not it’s opposite.

Conclusion

• Economic isolation can never be a not an option for India. It does not seem a good idea for India to be out of the agreement from its inception, only to join it later.
• Given India’s own ambitions to generate growth and jobs within India, and becoming a key player and rule-maker on the world stage, India’s decision to withdraw from the RCEP is debatable.
• India must now translate this withdrawal into a commitment for domestic reforms to prepare itself for the next opportunity to integrate itself into the global value chains and unleash Indian manufacturing.
• However, having no deal is far more prudent than signing up for a bad one.
• It is easy to succumb to the rapturous sound of global applause, but far tougher to make a tactical retreat in the larger national interest.

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References

What is the significance of RCEP for India?

How will RCEP benefit member nations and what does India’s exit from the trade pact mean

https://www.thehindu.com/business/a-day-after-rcep-jaishankar-slams-trade-pacts-globalisation/article33110309.ece

https://www.thehindu.com/opinion/lead/indias-no-to-rcep-could-still-be-a-no/article33145957.ece

https://www.hindustantimes.com/analysis/why-india-was-right-in-staying-out-of-rcep/story-IbGTgBnZBwS4vvJbzxITxH.html

Not signing RCEP could be one of Modi’s biggest blunders, ‘atmanirbhar’ an admission of defeat

https://www.business-standard.com/article/opinion/india-rcep-and-economic-theory-120112300193_1.html