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  • [Sansad TV] Perspective: India’s Defence Prowess

    [Sansad TV] Perspective: India’s Defence Prowess

    Context: Aero India 2023

    • Being held under the theme – The runway to a billion opportunities – Aero India 2023 is seeing the participation of over a 100 countries.
    • More than 700 exhibitors from India and abroad are taking part in the event.

    The PM described Aero India as an example of India’s growing potential, saying it’s not only a show, but a reflection of India’s self-confidence and capabilities.

    What is Aero India?

    defence
    • Aero India is a biennial air show and aviation exhibition held in Bengaluru, India at the Yelahanka Air Force Station.
    • It is organised by the Defence Exhibition Organisation, Ministry of Defence.
    • The Aero India is the largest air show in Asia.
    • It showcases India’s defence prowess and its capabilities in the aerospace sector.

    Key highlights of Aero India:    Showcasing of domestic defence technologies

    defence

    (1) India’s next-gen indigenous aircraft

    India’s futuristic indigenous aircraft models which are in different stages of development showcased at Aero India 2023 included-

    • 5th Generation Advanced Medium Combat Aircraft
    • Naval Twin Engine Deck-based Fighter jet etc.
    • LCA Mark2

    (2) Light Combat Helicopter Prachand

    • It is an Indian multi-role, light attack helicopter designed and manufactured by the Hindustan Aeronautics Limited under project LCH. It has been ordered by the Indian Air Force and the Indian Army. Its flight ceiling is the highest among all attack helicopters in the world.

    (3) Jetpack Suits

    • A model of a soldier wearing a jetpack being developed by an Indian start-up was inaugurated.
    • The Indian Army has issued a tender to buy 48 jetpacks for troops deployed along the northern borders.

    (4) Hindustan Lead in Fighter Trainer (HLFT)-42

    • HLFT-42, is a project conceived by defence PSU Hindustan Aeronautics Limited (HAL)
    • It is the ‘Next Gen Supersonic Trainer’ will play a critical role in modern combat aircraft training.
    • It is equipped with state-of-the-art avionics like Active Electronically Scanned Array (AESA), Electronic Warfare (EW) Suite, Infrared Search and Track (IRST) with Fly By Wire control (FBW) system.

    Significance of the event

    • Biggest event in Asia: It is the biggest-ever event till date likely to witness the participation of 98 countries, the defence ministers of 32 countries, air chiefs of 29 countries and 73 chief executive officers of global and Indian original equipment manufacturers.
    • Make in India push: The focus of Aero India-2023 this time will be on putting on display indigenous equipment/technologies and forging partnerships with foreign companies, in line with ‘Make in India, Make for the World’ vision.
    • Showcased India’s manufacturing ability: The 2023 edition of Aero India showcases the country as a rising hub for manufacturing military equipment, military aircraft, helicopters and new-age avionics.
    • Exchange of information: Aero India 2023 provided a unique opportunity for exchange of information, ideas and new technological developments in the aviation industry.
    • Facilitation of CEOs meet: The big draw at Aero India is the ‘CEO’s Round Table’ which would allow the Ministry of Defence to showcase opportunities for global and domestic industry to invest in ‘Make in India’ initiatives.
    • Defence collaboration: A Defence Ministers’ Conclave is hosted on February 14. Defence Ministers of friendly foreign countries participated in the meeting, which has been organised on the theme ‘Shared Prosperity through Enhanced Engagements in Defence (SPEED).’
    • Huge investments received: The event witnessed the forging of 266 partnerships, including 201 memorandums of understanding, 53 major announcements, nine product launches and three transfers of technology (ToTs), worth around Rs 80,000 crore.
    • Defence exports: Aero India is an example of the expanding capabilities of India. Many nations have extended their interests in- Light Combat Aircraft (LCA)-Tejas, HTT-40, Dornier Light Utility Helicopter (LUH), Light Combat Helicopter (LCH) and Advanced Light Helicopter (ALH),

    How is India enhancing its defence prowess?

    • Power projection: India has made significant strides in building its defence capabilities over the years. It has the world’s fourth-largest military, comprising of the Indian Army, Indian Navy, and the Indian Air Force, with over 1.4 million active personnel and approximately 2.4 million reserve personnel.
    • Modernization of India’s defence equipment and technology: India has also been investing heavily in modernizing its defence equipment and technology to ensure the country’s national security.  Some of the major achievements of the DRDO include the development of the Agni series of ballistic missiles, the BrahMos supersonic cruise missile, and the Tejas Light Combat Aircraft.
    • Achievements in space technology: India has also made significant progress in the field of space technology, with the ISRO being a prominent player in the global space race. ISRO has successfully launched several satellites and is also involved in developing a manned spacecraft for future space missions.
    • Multilateral defence collaborations: In recent years, India has also been actively pursuing collaborations with other countries to further enhance its defence capabilities. It has signed various defence deals with countries such as the United States, Russia, Israel, and France, among others, to procure advanced defence equipment, technology and to undertake joint military exercises.
    • Realizing significance of maritime domain: India’s defence prowess also extends to its strong maritime capabilities, with the Indian Navy having a fleet of advanced warships, submarines, and maritime patrol aircraft. The Navy is also responsible for the safety and security of the Indian Ocean region, which is strategically important for the country.

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    Why is defence a “strategic imperative” for India?

    • Protecting the ‘Emerging Economy’:  A country known as the fifth largest economy of the world cannot afford to be largely dependent on big arms producing countries, especially in critical defence systems. India is able to withstand global uncertainty only because of its resilient economy.
    • Global arms race: The Ukraine war has upended the global arms industry and the fast emerging Indian defence industry cannot afford to lag behind. In fact, as far as India is concerned, the Ukraine war is a stark reminder of the urgent need to reduce dependence on foreign suppliers for arms.
    • Making sovereign decisions: As the Ukraine war created a dilemma before Indian policy planners to show their loyalty either to the US or Russia, the Indian government maintained neutrality and continued its cordial relationship with Russia.  This is by no means possible if India were at the helms of these nations.
    • Geopolitical dynamics and its uncertainty: The example of the US withdrawing its technical support to Tarapur nuclear power plant in the 1970s had haunted the Indian leadership for long. The US also imposed sanctions on the transfer of dual use technologies to Indian entities. There is no guarantee that the US side will not stop technical or maintenance support to US-supplied weapon systems.
    • Obsolesces of defence alliances: If India puts all its eggs in the Russian basket, it also cannot engage in the same manner with the US. Hence, Indian policy planners are working towards making India a defence production hub for major arms companies of the world.  
    • Rising threats: In the current international scenario, security challenges to India are also mounting. From the Sino-Indian borders to high seas in the Indian Ocean and up to the South China Sea, India needs to be well equipped to defend its national economic and strategic interests. This can only be best served by self-reliance in defence, which will make India free from any strategic compulsions.
    • Strategic autonomy: Defence prowess empowers the country with strategic autonomy, which becomes relevant in the times of any big international crisis. If India is self-reliant in defence systems, it would not be subject to domination/subjugation/manipulation by any country.

    Way forward

    By implementing these measures, India can move forward towards achieving self-reliance in defence, building a robust domestic defence industry and becoming a major player in the global defence industry.

    • Encourage and support domestic defence production: The Indian government should continue to implement policies such as the Defence Production and Export Promotion Policy (DPEPP) and launch initiatives like the Defence Investor Cell and Innovations for Defence Excellence (iDEX) to encourage and support domestic defence production. This will help reduce dependence on foreign suppliers and build a robust domestic defence industry.
    • Foster innovation and research in emerging technologies: India should focus on fostering innovation and research in emerging technologies in defence, such as artificial intelligence and unmanned systems. This will enable the country to develop cutting-edge technologies and maintain a competitive edge in the global defence industry.
    • Collaborate with other countries and build strategic partnerships: India should continue to build strategic partnerships with other countries in the defence industry, both in terms of exports and collaborations. This will help the country access new technologies, markets and build its reputation as a reliable partner.
    • Invest in the education and skill development of the workforce: India should invest in the education and skill development of the workforce to build a strong talent pool in the defence industry. This will ensure that the country has the necessary skills and knowledge to develop and produce critical defence systems indigenously.

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  • [Burning Issue] Shiv Sena Party Symbol Conundrum

    symbol

    Context

    • The Election Commission of India (ECI) has recognized the Eknath Shinde group as the official “Shiv Sena”, allowing them to use the official “Bow & Arrow” symbol and “Shiv Sena” name.
    • The Uddhav Thackeray faction has been allowed to use the name “Shiv Sena (Uddhav Balasaheb Thackeray)” and the symbol of the “flaming torch” for the upcoming bye-elections in the Maharashtra assembly.
    • In this context, this edition of the burning issue will elaborate on the topic of allotment of elections symbols, EC’s role and overall party politics in India. The topic is important for the upcoming Prelims as well as Mains Examination.

    What are party election symbols?

    • An election symbol is a standardized symbol allocated to a political party. They are used by the parties during their campaigning and are shown on Electronic Voting Machines (EVMs), where the voter chooses the symbol and votes for the associated party.
    • They were introduced to facilitate voting by illiterate people, who can’t read the name of the party while casting their votes.

    How does the Election Commission decide on party symbol disputes?

    • In the 1960s, the Government of India proposed that the regulation, reservation and allotment of electoral symbols should be done through a law of Parliament, i.e., Symbols Order.
    • In a response to this proposal, the Election Commission of India (ECI) stated that the recognition of political parties is supervised by the provisions of the Election Symbols (Reservation and Allotment) Order, 1968 and so will the allotment of symbols. In 1968, the Election Commission promulgated this order.
    • Symbols order has provisions regarding the registration and recognition of political parties as state and national parties.
    • Under Paragraph 15 of the Order, it can decide disputes among rival groups or sections of a recognized political party staking claim to its name and symbol.
    • As per the guidelines, when a recognized political party splits, the Election Commission decides on assigning the symbol by evaluating the support enjoyed by a claimant in both organizational and legislative wings. within the political party.
    • Where it is not possible to decide which group has a majority, the EC may freeze the party’s symbol and allow the groups to register with new names.
    • Additionally, the Supreme Court in the Sadiq Ali case (1972) formulated three tests for deciding on party symbol disputes. In this case, only one test proved conclusive.

    3 tests formulated by the Supreme Court

    Following are the three tests and their application as per which the ECI made its decision–

    Test of Aims and Objects of the Party Constitution

    • Regarding this test, the ECI found that the test could not yield an effective outcome as both sides claimed adherence to the aims and objectives of the party. Therefore, ECI held–

    The application of this test will render an inconclusive answer for the purpose of adjudicating the present dispute.”

    Test of Party Constitution

    • While applying this test, the commission found that the party constitution on which the respondent (Uddhav Thackeray faction) was placing strong reliance was undemocratic. Further, the complete list of office bearers of various bodies was not provided to the commission, whenever elections were held or appointments were made. As per the commission –

    “Any reliance on the test of party constitution for determining the present dispute case would be undemocratic and catalytic in spreading such practices across parties.”

    Test of Majority

    • The election commission of India found that the majority test was in favor of the petitioner (Eknath Shinde faction). The commission found that the majority test outcome in the legislative wing reflected the qualitative superiority of the majority test in favor of the Shinde faction.

    Bigger Picture: Democratic Deficit in Political Parties

    • Several of the political parties in India have witnessed factionalism in the recent past some examples being Janata Dal (United), Samajwadi Party, Indian National Congress etc. highlighting the issue of democratic deficit in political parties.
    • In its order, the ECI highlighted the importance of internal party democracy. It stated–

    The requirement for a written constitution of political parties and an undertaking to the effect that such Constitution adheres to the norms of democracy prescribed in the Constitution of India is meant to promote inner party democracy.”

    Other Issues with Political Parties in India

    • Lack of proper organisation: Another feature of the Indian party system is its lack of structure. Political parties live and die by their organization.
    • Groupism inside India’s party structure: In India, groupism is a major problem for every political party. This shatters a party’s cohesiveness, causing it to split into several factions. Ex. INC, NCP, TMC.
    • Extra-constitutional ways of gaining power: Political parties do not hesitate to utilize uncertain measures to gain political power in addition to legitimate means. Ex. Resort Politics
    • Populist tendencies: In India, it is well-noticed that political parties turn to populist politics to gain power. They take unfair advantage of people’s emotions and compulsions, promote populist slogans, and mislead the public. Ex. Temple reconstruction movements
    • Lack of discipline among party members:  It has been observed that members of various political parties are unconcerned about party discipline, preferring instead to sling dirt at one another. Ex. Undue political statements
    • Communal characteristics: The people of India are influenced by caste and religion, and they have a strong sense of allegiance to their caste and religion.
    • Criminalization of politics: Leaders are valued for their capacity to attract crowds and raise funds as elections become more and more expensive.

    How to attain Internal Democracy within parties?

    • Internal elections: It shall be the duty of the political party to take appropriate steps to ensure the holding of elections at all levels. The political party shall hold elections in an unpartisan way by their ‘karyakartas’.
    • Strengthening Anti-defection Law: The Anti-Defection Act of 1985 requires the party legislators to act according to the party whip which is decided by the diktats of the highest party leadership. One way to democratize political parties is to promote intra-party dissent.
    • Limited reservations: Seats can be reserved for women and members of the backward community including minorities.
    • Empowering ECI: The ECI shall be competent to inquire into allegations of non-compliance with any of the provisions requiring elections.
    • Social audit and penal provisions: ECI should have the penal power to deregister a party until free and fair elections in the party are conducted.
    • Encouraging a new generation of leaders: For a long, there is a widespread impression created that a lot of good people shy away from politics. It is, therefore, necessary that this impression be changed and efficient people brought into the political arena.

    Way forward

    • The 170th report of the Law Commission of India on the reform of electoral laws dedicated an entire chapter to the necessity of providing laws relating to internal democracy within parties.
    • It observed that a political party that does not respect democratic principles in its internal working cannot be expected to respect those principles in the governance of the country.
    • The National Commission for Review of Working of Constitution states that there should be comprehensive legislation regulating the registration and functioning of political parties or alliances of parties in India.

    Conclusion

    • The top leaders of the political parties need to introspect and allow for democratic decision-making in the party’s affair’s thus paving the way for intra-party democracy.
    • Such a step would strengthen the Party Culture in India, thus improving the Political ethics and overall Politics in India.
  • [Sansad TV] Diplomatic Dispatch: Operation Dost & India’s role as First Responder

    [Sansad TV] Diplomatic Dispatch: Operation Dost & India’s role as First Responder

    In this article, we will discuss Operation Dost and India’s increasing profile as a first responder and net security provider.

    Context

    • On 6th of February, a massive earthquake struck southern Turkiye and Syria affecting millions of people in the region.
    • Immediately on receiving news of this tragedy, Prime Minister Narendra Modi directed that all possible assistance be extended to the affected people.

    What is Operation Dost?

    • Operation Dost is an ongoing search and rescue operation initiated by India to aid Syria and Turkey, after the 2023 Turkey–Syria earthquake devastated both countries on 6 February 2023.
    • The Indian Army prepared its rescue teams with relief materials within 12 hours after disaster struck (much before the Turkish Army was mobilised).

    How swiftly did India respond?

    • Rescue ops: The NDRF has already flown close to 100 rescue workers along with dog squads to help with efforts, using specialised CSSR (Collapsed Structure Search and Rescue) equipment and techniques.
    • Doctors’ dispatch: A military medical contingent has set up a field hospital in Turkiye for a 30-bed facility and specials, x-ray machines, ventilators, generators and ambulances
    • Relief material: About 25 Tonnes of relief material, protective gear, clothes, emergency medicines, medical items have already reached, more to follow
    • Tech support: India provided Garuda Aerospace’s drones to the most affected areas to identify those trapped under rubble, along with modified Kisan drones carrying medications, food, and supplies.

    Central Idea: HADR Diplomacy

    • Disaster relief diplomacy, also known as Humanitarian Assistance and Disaster Relief (HADR) diplomacy, refers to a country’s efforts to provide aid and support to other countries affected by natural disasters or conflicts.
    • This approach to diplomacy involves a country’s deployment of personnel, resources, and aid to provide assistance to those in need.
    • It involves the sharing of expertise, resources, and knowledge to provide relief and support during times of crisis.

    Features of HADR Diplomacy

    • Multipronged approach: HADR diplomacy is typically a multilateral effort, involving partnerships between multiple countries, international organizations, and local authorities. This approach allows for a coordinated response to a disaster and promotes international cooperation.
    • Capacity-building: HADR diplomacy involves building up a country’s capacity to provide assistance during times of crisis. This includes training personnel, acquiring equipment and supplies, and developing disaster response plans.
    • Focus on vulnerable populations: HADR diplomacy is often focused on supporting vulnerable populations affected by disasters, such as women, children, the elderly, and those with disabilities.
    • Long-term support: HADR diplomacy goes beyond immediate disaster relief efforts and often involves long-term support for affected communities. This can include rebuilding infrastructure, providing healthcare and education, and promoting economic recovery.
    • Emphasis on communication and information sharing: HADR diplomacy involves effective communication and information sharing between different agencies, governments, and organizations. This is essential for coordinating a response to a disaster and ensuring that resources are used effectively.
    • Respect for local culture and customs: HADR diplomacy involves an understanding and respect for local culture and customs. This helps ensure that relief efforts are culturally appropriate and sensitive to the needs of the affected population.

    Why is it used?

    • Soft power tool: It is mixed with solidarity and empathy at a time when suffering populations require as much help as possible.
    • Building ties: Disaster relief diplomacy can be used to build strong ties between countries and promote international cooperation.
    • Responsible global actor: Disaster relief diplomacy can also serve as a means to demonstrate a country’s commitment to global humanitarian efforts and help build its reputation as a responsible global actor.

    India and HADR Diplomacy

    india
    • India’s humanitarian assistance and disaster relief (HADR) capacities tying into its diplomacy have grown significantly. It began after the 2011 Tsunami.
    • The Quad was also conceived out of an initial blueprint to build disaster response systems in the region.

    Instances of India sending aid to natural disaster-hit countries

    • Maldives: After the 2004 Tsunami, the Indian government announced a composite package worth five crore rupees. Under “Operation Castor”, 50 sorties were undertaken and four aircraft and two Naval ships were engaged in relief operations. Repairing and restoring generators and communication, providing drinking water, and setting up medical camps on ships was also done.
    • Sri Lanka: India sent its forces to carry out rescue operations, called “Operation Rainbow”, in Sri Lanka hours after the Tsunami struck the country on December 26, 2004. Not only this, India provided medical assistance to thousands of victims by setting up medical camps in coordination with the local civil and military health authorities. Preventative medication and vaccines were also supplied.
    • Myanmar: When cyclone Nargis hit Myanmar in 2008 killing at least 20,000 people, India was among the first countries to send aid to them. It gave 125.5 tonnes of relief material, including medicines, clothing, utensils, water tanks, tents and tarpaulin.
    • Japan: The 2011 Tsunami wreaked havoc in Japan. Apart from providing relief materials, India also sent 46 members of the NDRF to search and rescue in the town of Onagawa. It was their first overseas operation. The team included a doctor, three officers, six inspectors, two paramedics and constables and carried 9,000 kg of equipment and food.
    • Nepal: In the aftermath of the 2015 Nepal earthquakes, the NDRF deployed 16 of its urban search and rescue (USAR) teams, which comprised more than 700 rescuers in the country. They rescued 11 injured persons and retrieved 133 dead bodies from the rubble. The teams also organised six medical camps and attended to 1,219 persons. Indian authorities sent more than 1,176 tonnes of relief materials to Nepal.

    India’s traditional rivalry with Turkiye

    Ankara’s long-standing stance on Kashmir and backing Pakistan, especially at the United Nations (UN), pushed some to ask why India was offering aid if Turkiye did not back India’s sovereignty.

    Setting differences aside, why is India helping Turkey?

    • In the case of India providing earthquake relief to Turkey, there are several factors that likely influenced India’s decision:
    • Humanitarian considerations: The primary reason for providing assistance in times of disaster is to help those in need, regardless of political or strategic considerations. The earthquake in Turkey was a humanitarian crisis, and India likely felt compelled to provide assistance to help alleviate the suffering of those affected.
    • Diplomatic reset: Disaster relief efforts can also serve as a means of promoting diplomatic relations between countries. By providing aid to Turkey, India may have been seeking to build goodwill and improve its relationship with the country.
    • Shared interests: Despite past disagreements and conflicts, India and Turkey share some common history, culture and interests such as economic and strategic ties. Providing aid to Turkey may have been a way for India to demonstrate its commitment to these shared interests.
    • International reputation: As a rising global power, India likely sees disaster relief efforts as a means of demonstrating its commitment to global humanitarian efforts and building its international reputation. By providing HADR, India has established itself as a responsible global actor.
    • Cultural and people-to-people ties: India and Turkey share cultural and historical ties, with both countries having a rich cultural heritage. Ex. Ankara granting e-visa facilities to Indian tourists and Bollywood films being popular among Turkish masses.

    While past conflicts and disagreements may influence international relations, countries often engage in aid and diplomatic efforts with countries they may have had past grievances with for a variety of reasons.

    Diplomatically, what did India gain?

    • Bilateral ties reset: In this case, India’s assistance to Turkiye comes at a time when ties are still tense- particularly over unwarranted Turkish statements and aids to radicalists in Kashmir.
    • Global responder image: Especially in the year of India’s G20 presidency, India’s assistance burnishes its image as a leader of the developing world.
    • Military capability on display: This disaster portrayed India’s swift response to rescue operations by mobilizing transporters, field hospitals, and technical teams within hours. It somehow portrays India’s preparedness for War.
    • Improves response time: Op dost would help India with future calamities in India or anywhere in the world.
    • Economic benefits: India’s HADR diplomacy has also brought economic benefits to the country. By providing aid and support to other countries, India has developed trade and economic relationships, and gained access to new markets and resources.

    How can Turkiye benefit from this?

    • Preferring India over appeasing Pakistan: It is becoming increasingly obvious that Turkey is getting disenchanted with Pakistan by and by, the most important factor behind its animosity towards India. The number of illegal Pakistanis.
    • Battling domestic economic crisis: Turkey, which is undergoing a big economic crisis with historically high inflation of 80 percent, has to be pragmatic, not ideological, so as to win more friends than foes.
    • Attracting more Indian tourists: Indians are now the third-largest Asian tourists in Turkey after China and Indonesia. Indian businesses, from food to technology, have been gradually expanding their presence in Turkey.
    • Rebuking its ideals of Khilafat: Turkey perhaps realizes now its failure to emerge as the leader a grouping consisting of Pakistan, Malaysia, Iran, and Qatar, in an attempt to break Saudi and UAE’s ideological supremacy within the Islamic world.
    • Rebuilding ties with Israel: Turkey re-established diplomatic relations with Israel after more than a decade of tensions that erupted in 2010 when Israeli commandos killed 10 Turkish activists in Gaza. India can help them come closer.

    Conclusion

    • Providing relief and aid to not just neighboring, but in the extended neighborhood of West Asia bodes well for the kind of diplomacy India is aiming to conduct in the future.
    • Public diplomacy, such as HADR capacities, remains one of the most effective tools to build capacities on a people-to-people level, conduct of which needs to be done in a humble way.

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  • [Burning Issue] Air India Aircraft Deal and its Significance

    air

    Context

    • Tata Group-owned Air India (AI) placed two mega orders, adding up to a staggering 470 aircraft — for 250 planes with Europe’s Airbus consortium, and 220 with Boeing Co. of the United States.
    • This is the largest order placed by an airline in one go anywhere in the world, beating the 2011 order by American Airlines for a combined 460 aircraft. The biggest order by an Indian carrier before this was IndiGo’s 300-aircraft order in 2019.
    • In this context, this edition of the Burning Issue will elaborate on the deal and its impact on the Indian aviation sector. The topic will be relevant for the GS3 Mains Paper under the subheading Infrastructure development and Airports.

    Details of the Air India order

    • The deal includes seventy of the 470 aircraft wide-body or twin-aisle planes for long-haul flights.
    • Airbus has got the bigger order, but the Boeing order includes an option for a 70-plane top-up, taking the possible order size to 540 aircraft.
    • The mega order cost for Airbus and Boeing aircraft is estimated between $70 billion and $80 billion.
    • Ever since Air India returned to the Tata Group, the new owners have been focussed on sprucing up the product offering, while also planning an extensive expansion for the airline.
    • A five-year roadmap–Vihaan.AI–was prepared with the objective of substantially growing the airline’s network and fleet in a bid to put it on a “path to sustained growth, profitability, and market leadership”.

    About Indian Aviation Industry

    • One of the fastest-growing: The Indian aviation industry is one of the fastest-growing aviation markets in the world.
    • Undergone a significant transformation: Over the last decade, it has undergone a significant transformation, with the rise of low-cost carriers, increased competition, and modernization of airport infrastructure.
    • Growth: The Indian aviation industry has been growing at a rapid pace in recent years. According to the International Air Transport Association (IATA), India is expected to become the third-largest aviation market by 2025.
    • Domestic and International Market: The Indian aviation industry has a mix of domestic and international airlines. The domestic market is dominated by low-cost carriers such as IndiGo, SpiceJet, and GoAir, while the international market is dominated by full-service carriers such as Air India and Jet Airways.
    • Government Support: The Indian government has been supportive of the aviation industry’s growth and has introduced several initiatives to encourage investment and development in the sector. These include the Regional Connectivity Scheme (RCS) called UDAN, which aims to improve connectivity to remote and underserved regions in the country.
    • Infrastructure Development: In recent years, there has been significant investment in airport infrastructure in India. The country has over 100 operational airports, and several new airports are under construction or in the planning stages.
    • Skilled Workforce: The Indian aviation industry has a skilled and well-trained workforce, with several world-class aviation training institutions. Indian pilots and cabin crew are in high demand globally.

    What is driving Indian Aviation Sector Growth?

    • Already third largest domestic market: India is the third largest domestic aviation market after China and the US. The annual domestic air traffic in pre-covid 2019 for India stood at 144 mn passengers.
    • Income growth and demographic dividend: Increasing income levels, an aspirational middle class, competition between low-cost carriers and enhanced connectivity and infrastructure.
    • Potential to become the 3rd largest international market: The government and the industry say India could become the third largest international — not just domestic — aviation market given the huge gap between potential and current air travel penetration.

    How will Indian aviation shape up?

    • A major shift could happen in the market: So far, IndiGo’s been the largest player with strong promoter support but there are visible signs of competition from Air India and Akasa Air. Indian airlines will eye a greater share of outbound international traffic from the current level of around 45%.
    • While Air India is expected to cross foreign carriers in flights to US and Europe, IndiGo is eyeing Europe and East Asia by 2024. The government has asked airlines and airports to work towards multiple international hubs in India.
    • According to IBEF, India is poised to improve its position from the 7th largest in civil aviation to the third largest in the next 10 years. Given India’s demography and increasing purchasing power, domestic air traffic will certainly move higher.

    Significance of the deal

    • Aspirational Air India: It has put Air India in the league of “aspiring” global airlines. The debt-ridden carrier, which was taken over by the Tata Group in early 2022, plans to turn into “a world-class proposition”. Experts say the bulk order indicates Air India’s intent to reclaim its “pole position” in the domestic aviation market, as well as expand its presence in international routes, BBC reported.
    • Reduce Dependence on Foreign Flyers: the large fleet that will be acquired by Air India will help in reducing the dependence of Indian flyers on foreign carriers such as Emirates, Qatar Airways, Etihad and other Middle Eastern airlines. These orders directly synergize Air India’s fleet with Lufthansa and Singapore Airlines – all part of Star Alliance, the world’s largest global airline alliance,
    • Help enter markets like the US: The purchase of wide-bodied aircraft like the A350s will allow Air India to enter markets like the US and Australia directly by offering non-stop flights from India to these places.
    • Cater to the need of Indian aviation: Air India’s new fleet will help in catering to the needs of India’s growing aviation market. Demand for air travel is again seeing a surge in India and other parts of Asia after the COVID-19 pandemic. As per ICRA, with 986 lakh flyers, domestic air traffic increased 63 per cent year-on-year between April and December 2022 in India.
    • May give a boost to Make in India and employment: The deal can also create jobs for Indians. The Tata group chairman has hinted that some of the aircraft parts could be manufactured in India, which will boost domestic manufacturing and create job opportunities.
    • Improves India’s global Standing: the deal is “important for the industry because, given the recent turbulence in the China market, the alternative growth market in India,”
    • Political signals: “India is also sending a strong political signal that it wants to remain attached to the West at a time when it has appeared ambiguous on Russian sanctions,”

    Impacts on bilateral relations

    • India-France: At a virtual event attended by the Tata Sons chairman and French president Emmanuel Macron said that the Air India deal reflects deepening ties between India and France, as well as the successes and aspirations of India’s civil aviation sector. This achievement shows that Airbus and all its French partners are fully dedicated to developing new areas of dedication with India.
    • India-US: The Indian prime minister and US President Biden acknowledged the Air India and Boeing deal as a “shining example of mutually beneficial cooperation”. The two leaders also expressed a desire to bolster bilateral cooperation in space, semi-conductors, supply chains and defense co-production.
    • India-UK: British prime minister Rishi Sunak also said the Airbus-Air India deal would generate employment opportunities around the UK. This is one of the biggest export deals to India in decades and a huge win for the UK’s aerospace sector.

    Challenges

    • Funding: When the Tatas took over the company, they had absorbed around â‚č15,300 crores of the total debt of â‚č61,562 crore belonging to the bleeding air carrier. Thus, it will be challenging for AI to raise a loan of US $50-60 billion to fund the deal.
    • Mere customer: if the Make-in-India clause is not added to the deal’s final agreement, India could end up being a ‘mere customer’ of goods with the least direct benefit to the Indian economy.
    • Operating costs are high: The Indian aviation industry has many difficulties, including high operating costs. This is caused by a multitude of things, including exorbitant fuel costs, airport fees, and taxes. If all these continued, the profit from these new aircraft will remain low.
    • Infrastructure Barriers: The Indian aviation industry is further hampered by outdated air traffic control systems, insufficient ground support services, and restricted airport capacity.
    • Regulatory Framework: The regulatory framework is a source of difficulties for the Indian aviation industry.

    Conclusion

    • Overall, the Indian aviation industry has come a long way in recent years and is poised for further growth in the future. There will be a shakeout in India’s aviation sector, with the ‘Maharajah’ once more ascending the throne to reign supreme over India’s skies.
    • With a large jump in international air carriers from India, the deal promises to make India an international hub for air travel. The government’s support, investments in infrastructure, and skilled workforce will be critical to ensuring the industry’s success in the years ahead.

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  • [EPW] Can Canada and India reset their Bilateral Relations?

    [EPW] Can Canada and India reset their Bilateral Relations?

    canada

    Context

    • Canadian Foreign Affairs Minister Melanie Joly was on a two-day visit to New Delhi, and both sides hope to cast a reset in their bilateral relations.
    • These have been rather lukewarm despite many enduring linkages of their past histories, politics and people.

    India-Canada Relations: A quick recap

    • India established diplomatic relations with Canada in 1947.
    • In recent years, both countries have been working to enhance bilateral cooperation in a number of areas of mutual importance.

    History of migration

    The history of Indian migration to Canada has a long, complex history, beginning in the mid-19th century and continuing to the present day.

    • Indentured labour: The first recorded Indian migrants to Canada were indentured labourers brought to British Columbia in the late 1860s to work in the rapidly expanding lumber industry.
    • Population measures: These workers were largely from Punjab, India, and they were part of a larger wave of Indian migration spurred by the British government’s encouragement of emigration in the hope of relieving population pressures in India.
    • Less restrictive immigration: In the mid-20th century, the number of Indians migrating to Canada increased dramatically due to the Canadian government’s introduction of less restrictive immigration laws.

    Today, the community includes people from all regions of India, as well as second and third-generation Canadians of Indian descent.

    Indo-Canadian’s contribution in Freedom Struggle

    [A] Ghadr Party

    • The Ghadr party, also known as the Hindustan Ghadr Revolutionary Party nationalist revolutionary organization founded in May 1913 in San Francisco, California, with the aim of securing India’s freedom from British rule.  
    • The party drew its membership mainly from Punjabi Sikh immigrants in the United States and Canada, but also included Hindu and Muslim immigrants from other parts of India.

    [B] Support to INC

    • Canada was one of the first countries to recognize the Indian National Congress and its aims.
    • Canadian political leaders and public figures publicly expressed their support for the Indian struggle and advocated for India’s independence.
    • In the 1940s, Canadian Prime Minister William Lyon Mackenzie King publicly voiced his support for India’s independence and called for a peaceful transition to self-government.

    [C] Open support for freedom

    • Canada also provided moral support to the Indian struggle. In 1947, the Canadian Parliament unanimously passed a motion expressing support for India’s independence.
    • This motion was a strong statement of solidarity with the Indian people and their struggle for freedom.
    • Canada was an important supplier of resources to India during World War II, providing critical material such as food, clothing, and ammunition.
    • Canada also provided financial aid to India’s independence movement, and Canadian citizens raised funds to support the cause.
    Komagatamaru Incident: The Komagata Maru incident was an incident in 1914 involving the Japanese steamship Komagata Maru, carrying 376 Indian passengers who were denied entry to Canada. They had sailed from Hong Kong, intending to immigrate to Canada, but were refused entry at the port of Vancouver due to the Canadian government’s continuous journey regulation. The passengers, mostly Sikhs from Punjab, were forced to return to India, where they were met with violence and harassment by British colonial authorities. The incident has become a symbol of Canada’s history of racist immigration policies aimed at excluding Asians.

    Significant collaborations

    • Trade: Canada is India’s second largest export destination and is the third largest source of imports for India. It is a major source of FDI for India, with total investments of nearly USD 5.5 billion.
    • Investment: India and Canada have strong bilateral relations which have been further strengthened by the India–Canada Foreign Investment Promotion and Protection Agreement (FIPA), signed in 2009.
    • Collaboration on STEM: India and Canada are also engaged in several joint development projects in the areas of science and technology, health, education, and climate change.
    • Energy: India and Canada have recently signed a Joint Declaration on Cooperation in the Field of Renewable Energy.
    • Security: India and Canada are also cooperating in the field of defence, with joint military exercises and training programs.
    • Global institutional reforms: India and Canada are members of the Commonwealth of Nations and the G20, and cooperate on several international issues.

    Recent souring of ties

    canada

    [A] Racist Policies

    • Canada’s perceived shift away from its traditional stance of neutrality has put at odds with India’s traditional non-alignment policy.
    • Additionally, Canada’s criticism of India’s human rights record has been seen as offensive by many in India, leading to strained diplomatic relations.
    • Additionally, Canada’s failure to exempt India from visa requirements has also been seen as a sign of disrespect.

    [B] Open support of Khalistan movement

    • Over 100,000 Canadians recently took part in voting for the Khalistan Referendum in Brampton, Ontario on 19 September which was organised by pro-Khalistani.
    • Visuals on social media showed a huge number of men, women queueing up to vote in for Khalistan Referendum. 
    • Indian government had warned Canadian govt against the anti-India forces growing in the country.
    • However, the Canadian government refused to stop them from expressing their views by holding the Khalistan Referendum and linking it with a “peaceful and democratic” process.

    [C] Other Impediments

    • Trade decline: India-Canada bilateral trade has been declining since 2013 and currently stands at around $7 billion. There is room to increase this trade and investments in both directions.
    • Illegal immigration: Canada has been increasingly concerned about illegal immigration from India, as well as the backlog in processing applications for legal immigration, both of which have caused tension between the two countries.
    • No security consensus: India and Canada have been working to enhance their defense and security ties, but the two countries have yet to sign a formal security agreement.
    • Under-utilized agriculture: Canada and India have been in negotiations to open up the agricultural sector to more trade, but disagreements over import restrictions and subsidies continue to be a major obstacle.
    • Human rights allegations on India: India and Canada have also clashed over human rights issues, with Canada criticizing India’s policies on religious minorities, freedom of speech, and other human rights issues.

    Why is Canada suddenly recognizing India’s importance?

    [A] Indo-Pacific Strategy

    • First is Canada’s Indo-Pacific Strategy that was issued last November. While it calls China “an increasingly disruptive global power,” it describes India as Canada’s “critical partner” for its regional and global objectives. This is music to Indian ears.
    • Indeed, this 23-page report mentions India 27 times, underlining their “shared tradition of democracy and pluralism, a common commitment to a rules-based international system.”

    [B] Merchandise trade

    • Canada and India have strong economic ties, with two-way merchandise trade between the two countries reaching $9.5 billion in 2019.
    • Canada is also India’s second-largest source of foreign direct investment, and Indian investments in Canada have grown significantly in recent years.

    [C] Cultural ties

    • Canada and India also have strong people-to-people ties, with the Indian diaspora in Canada estimated to be more than one million strong.
    • Sikhs constitute a significant proportion of the Indian diaspora, they make up less than one percent (a little over 500,000) of Canada’s total population.
    • Cultural tourism is boosting between the two countries.

    [D] Newfound enthusiasm

    • This newfound enthusiasm was visible in the press release issued in Canberra on the eve of the Canadian foreign minister’s visit to India.
    • India’s growing strategic, economic and demographic importance makes it a critical partner for Canada in the Indo-Pacific.
    • In turn, Canada can be a reliable supplier of critical minerals, a stronger partner in the green transition, as well as a major investor.

    Why is Canada important for India?

    • Destination for Indian students: Canada is one of the top sources for foreign students for Indian universities. India is the second largest source of immigrants to Canada.
    • 2nd largest trade partner: Canada is India’s second-largest trading partner, and trade between the two countries has been growing steadily.
    • Vibrant diaspora: Canada is home to a large and vibrant Indian diaspora, and the two countries enjoy strong people-to-people ties.
    • Source of FDI: Canada is also an important source of foreign direct investment for India, and provides an important source of capital to Indian businesses.
    • Liberal visas and citizenship: Canada is also an important source of skilled immigrants for India and is a popular destination for students and professionals from India.
    • Trade partnership: Both nations look forward to their proposed Early Progress Trade Agreement (EPTA) before they finalize their CEPA.

    Way forward

    • Strengthening diplomatic ties: India and Canada should work towards strengthening their diplomatic ties, by engaging in more frequent diplomatic exchanges and dialogue. This could include increasing the number of high-level visits between both countries, and exploring opportunities for collaboration in areas such as trade, investment, and education.
    • Enhancing trade relations: India and Canada should focus on enhancing their bilateral trade relations, by exploring the potential for increased exports and investment. This could involve investing in joint initiatives that promote economic growth, as well as taking steps to reduce barriers to trade and investment.
    • Nurturing people-to-people ties: India and Canada should aim to encourage more people-to-people exchanges between the two countries. This could include increasing the number of students and scholars studying and teaching in each other’s countries, as well as promoting cultural exchanges and tourism.
    • Enhancing security cooperation: India and Canada should work together to enhance their security cooperation, by increasing information sharing and collaboration on countering terrorism, cyber-security, and other common security threats.
    • Technology collaboration: India and Canada should explore new areas of collaboration, such as in the fields of renewable energy, space exploration, and artificial intelligence. This could involve engaging in joint research and development initiatives, as well as exploring opportunities for joint ventures.

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  • [Burning Issue] Energy Security and Energy Transition

    energy

    Context

    • The India Energy Week in Bengaluru held from February 6th to 8th marks the first
    • major event under India’s G20 presidency. The event highlighted the need for energy transition and energy security.
    • Thus, this edition of the burning issue will elaborate on the concept of energy security and energy transition.

    What is Energy Security?

    • Energy security is the uninterrupted process of securing the amount of energy that is needed to sustain people’s lives and daily activities while ensuring its affordability.
    • Per the International Energy Agency (IEA), energy security has two main aspects: long-term and short-term energy security. The former deals with investments in energy supply and how it connects to timely economic developments and environmental needs.
    • The latter, on the other hand, mainly tackles how the energy system is able to carry out prompt responses to sudden changes in the energy supply and demand cycle.
    energy

    Why Energy Security is important?

    • Sustain economic growth: Access to energy affects the provision and sustainability of humans’ basic needs. Apart from that, it also contributes to a country’s economic growth, political stability, and overall development and security of other sectors such as agriculture and manufacturing.
    • Sustainable energy planning: Along with energy accessibility, affordability, and sustainability, energy security forms a significant part of determining sustainable energy planning.
    • Food security: Energy security is tied to food security and food transportation, in a way that the agricultural sector is both an energy user and an energy generator. Further, food production covers about 70% of water consumption and 6% of energy consumption on a global scale.
    • The rapid growth of energy demand brought about by economic expansion, population growth, new energy uses, and income growth makes energy security a pressing concern.

    What is Energy Transition?

    • Energy transition refers to the global energy sector’s shift from fossil-based systems of energy production and consumption — including oil, natural gas and coal — to renewable energy sources like wind and solar, as well as lithium-ion batteries.
    • The increasing penetration of renewable energy into the energy supply mix, the onset of electrification and improvements in energy storage are all key drivers of the energy transition.
    • Regulation and commitment to decarbonization have been mixed, but the energy transition will continue to increase in importance as investors prioritize environmental, social and governance (ESG) factors.
    • Historically speaking, energy transitions are not new. In the past, we have seen huge epoch-marking shifts like the transition from using wood to using coal in the 19th century or from coal to oil in the 20th century.
    • The energy transition, however, is not only limited to the gradual closure of coal-fired power stations and the development of clean energies: it is a paradigm shift that concerns the entire system.

    Why Energy Transition is needed?

    • Paris deal commitment: In December 2015, at COP 21 in Paris, an international agreement has signed that set the target of limiting global warming by the end of this century to below 2°C compared with pre-industrial levels and preferably limiting it to 1.5°C. In order to achieve this goal, our main tool is the energy transition
    • Protecting the Planet: The urgency of protecting the planet from the greatest threat it has ever had to face, and of doing so as quickly as possible. This impetus has accelerated the changes in the energy sector

    Why the alignment of the two concepts seems difficult?

    • Lack of financial resources: energy transition for energy security requires huge financial resources which most nations especially developing nations lack.
    • Lack of mature new energy technology: most of the technologies which are needed for the energy transition such as 3rd generation bio-fuels, green hydrogen, fuel cell etc. are still in the developmental stage and require maturity to be deployed at large scale.
    • Still heavy dependence on fossil fuels: due to their nature and availability, the world is still heavily dependent on fossil fuels for its energy need. Even developed nations like Britain, the US, Russia etc. still get their majority energy supplies in form of non-renewables.
    • A wide gap between developed and developing nations: A sharpening divide between advanced and developing countries on priorities in the transition. The developed nations are pressurizing developing nations to go for energy transition whereas the developing countries demand developed nations to pay for this transition and blame them for the climate crisis.
    • Balancing present with future: overnight transition to renewable is neither possible nor desirable. What is needed is to balance the needs of the present and future with a simultaneous and gradual reduction of non-renewables and increase deployment of renewable energy.
    • Challenging international situation: such as the Russia-Ukraine war, high inflation, slow international growth has made nations to again go back to nonrenewable sources such as coal and natural due to more availability and cheaper price leading to increased demand for coal after a decade.
    • No ideal energy mix: There is no ideal mix that will be unanimously adopted worldwide. The energy transition is specific to each country or group of countries, even if the aim during international climate summits is to adopt major global objectives.
    • The transition process is slow: Energy systems lack momentum, making energy transitions a slow process.

    How to bring equilibrium between the two?

    • Increase funding to promising technologies: The expert view is that the government should consider innovative market reforms to further incentivize the deployment and uptake of renewable energy (RE). It pointed out that government should provide support for RE technologies, including utility-scale battery energy storage systems, round-the-clock plants, and decentralized renewable energy that can replace our dependence on thermal power plants.
    • Risk management: To improve the energy security situation, risk management is key. This process involves eliminating risks by diversifying energy sources, absorbing risks by creating a reserve margin of power generation capacities, and preparing for inevitable supply disruptions by creating strategic reserves.
    • Funding developing countries: the developed nations under their commitment made in Paris deal 2015 must provide the fund to developing nations to deploy renewable sources of energy.
    • Reduce support for fossil fuels: The government should also avoid providing fresh support for coal-based thermal power and phase out existing support measures. In FY21, coal subsidies continued to be two times higher than that for RE and stood at â‚č12,976 crore.
    • Accelerate deployment of RE: India needs to invest in deflationary renewable energy. The pace of deployment of RE has been slow, so the government should accelerate the deployment of RE and other flexible generation sources to make RE a firm power

    Conclusion

    “The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil.”

    • The energy transition is vital to saving the planet from the effects of climate change. Major transformations are underway in the global energy sector, from growing electrification to the expansion of renewable energy, upheavals in oil production and globalization of natural gas markets.
    • India also needs to ensure long-term planning to ensure universal energy access and meet its commitment under Paris Agreement to ensure sustainable growth, energy security, and successful energy transition.

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  • [Sansad TV] Perspective: Anti-Copying Law

    [Sansad TV] Perspective: Anti-Copying Law

    Context

    • Academic cheating has become a major problem in many countries, including India.
    • To address this issue, the State of Uttarakhand in northern India has recently enacted new anti-copying laws to curb cheating in exams.
    • We will take a closer look at India’s strictest Anti-Copying Law which has come into force in Uttarakhand.

    Uttarakhand Competitive Examination (Measures for Prevention of Unfair Means in Recruitment) Ordinance

    • The new anti-cheating law in Uttarakhand is legislation that aims to reduce cheating during exams and promote fairness in the educational system.
    • This comes after the UKPSC paper leak which led to cancellation of exams for around 1.4 lakh government job aspirants and to understand the implications of this law.

    Key provisions

    • 10 year ban: Under `Anti-copying law’, candidates involved in cheating will be punished and a `ban of 10 years` will be imposed on them.
    • Fine and imprisonment: There is a provision to impose a fine of 10 crore along with life imprisonment or 10 years in jail for the copycat mafia. 
    • Property confiscation: Apart from this, there is also a provision to attach the property of the copying mafia.

    Need for the law

    copy
    • Integrity of the educational system: It undermines the integrity of the education system and the value of educational qualifications, and it also detracts from students’ learning experiences.
    • Prevent opportunism: The laws aim to ensure that students can obtain their qualifications through honest and fair means and to promote a culture of academic integrity.
    • Create level playing field: The objective of the law is to create a level playing field for all students and ensure that educational achievements are based on merit and hard work rather than cheating.

    Issues with academic cheating/copying

    • Induces culture of Dishonesty: Cheating encourages a culture of dishonesty and opportunism, leading to a lack of respect for the academic process and for the institution as a whole.
    • Compromises merit: The new laws were introduced in response to concerns about the high levels of academic dishonesty in the State and the negative impact it has on the education system and society as a whole.
    • Promotes imposters: Cheating and copying can lead to a lack of understanding of the subject, which can lead to poor performance at work.
    • Curse for the talent: Cheating undermines the educational system. It devalues the hard work of those who have studied and learned the material legitimately.
    • Unfair advantage: Exam cheating gives students an unfair advantage over those who choose to work hard and study for their exams. This puts those who don’t cheat at a disadvantage and can lead to feelings of resentment and frustration.
    • False sense of accomplishment: Cheating and copying can lead to a false sense of accomplishment, as students may not learn the material fully and may perform poorly on exams or assignments.
    • Discourages hardwork: Cheating can lead to a lack of motivation, as students may not feel the need to work hard and learn when they know they can simply copy or cheat.
    • Lack of personal growth: Cheating on an exam does not help students learn or grow, as it does not provide any real understanding of the material. It also does not help students develop the skills and knowledge needed to succeed in their academic and professional careers.
    • May lead to dropouts: Cheating erodes the trust between faculty and students, as faculty may become suspicious and less willing to invest in their students.

    Benefits provided by the Law

    The new anti-cheating law in Uttarakhand is a step in the right direction, for it provides several benefits:

    • Fairness and integrity: The law aims to reduce instances of cheating and promote fairness in the educational system. By imposing severe punishments on those who cheat, it creates a level playing field for all students and ensures that educational achievements are based on merit and hard work.
    • Credibility of the educational system: The new law helps to maintain the credibility of the educational system and ensures that educational degrees and certificates are recognised as legitimate and reflective of actual knowledge and skills.
    • Discouragement of cheating: By imposing severe punishments on those who cheat, the law is intended to discourage cheating and promote a culture of honesty and hard work. This can lead to an overall improvement in the quality of education in the state.
    • Increased value of educational achievements: With fewer instances of cheating, the value of educational achievements are expected to increase. This can improve the job prospects of students and increase the overall competitiveness of the state’s workforce.
    • Improving academics quality: Many schools and colleges are now taking steps to improve the quality of education and reduce students’ stress levels in best possible manner.
    • Broader message: In addition to addressing the issue of academic cheating, the new anti-copying laws in Uttarakhand are also having a wider impact on the education system in the entire nation. The new laws are also helping to promote a more ethical and responsible attitude among students, both in Uttarakhand and in other parts of India

    Criticisms of the legislation

    • Coercive punishments: Some students and parents have criticised the laws, arguing that they are too harsh and that they unfairly penalise students. We as a nation pardon death penalty but attenuate such petty mistakes.
    • Doesn’t address root cause of cheating: They also argue that the laws do not address the root causes of cheating, such as the lack of quality education and the high level of stress and competition faced by students.
    • Performance pressure on marginalized students: The new law could lead to some unintended consequences, such as increased pressure on students to perform well and avoid cheating, which could negatively impact their mental health and well-being.

    Way forward

    • Taking all stakeholders to table: In the long term, the success of the laws will depend on the ability of educators, students, and parents to work together to create a supportive and ethical learning environment that values knowledge, hard work, and integrity.
    • Provide quality education: This requires a commitment to providing quality education, reducing the stress level faced by students, and promoting a positive and ethical attitude among students and other members of the education community.
    • Address mental health of students: It is important to ensure that the law is implemented in a way that strikes a balance between promoting fairness and protecting the well-being of students. Ex. Pariksha pe Charcha by PM.

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  • [Burning Issue] The Adani-Hindenberg Issue

    adani

    Context

    • In a little over a week since New York-based investor research firm Hindenburg Research has accused industrialist Gautam Adani-led conglomerate of “brazen stock manipulation and accounting fraud scheme over the course of decades”.
    • This edition of the Burning issue will elaborate on the Hindenberg research issue and other factors coming out of the issue.

    About the Hindenberg group and its report

    • Hindenburg Research is a company that specializes in forensic financial research.
    • It especially looks for accounting irregularities; undisclosed related-party transactions; illegal/ unethical business or financial reporting practices; and undisclosed regulatory, product, or financial issues in companies.
    • In late January, Hindenburg Research, which specializes in short selling, published a report critical of the group’s finances.
    • The research firm, which has short positions in Adani companies through US-traded bonds and non-Indian-traded derivative instruments, said key listed companies in the group had “substantial debt” which has put the entire group on a “precarious financial footing”.

    Outcome of the report

    • The seven listed firms have still lost about half their market value – or more than USD 100 billion combined – since the US-based short-seller last week questioned the group over its debt levels, Reuters reported. The listed Adani firms now have a combined market value of USD 108 billion, versus USD 218 billion before Hindenburg’s report.
    • Political storm: The report has also caused a political storm in the country with opposition stalling the parliament and demanding a JPC or Supreme court led investigation of the allegations against the Adani Group on the basis of the Hindenburg report.

    UPSC exam perspective

    • Since the issue is still evolving and both sides are claiming them to be true, the actual truth remains unknown.
    • Therefore, this article will tell about both facets of the issue.

    The Brighter Picture

    Importance of Billionaires for a Nation

    • Development of industries: Companies established by these billionaires invest in the development of industries in a nation which in turn helps in the development of the nation. The Reliance group’s telecom giant Jio, Reliance petrochemical plants and Adani Ports, energy are to name a few.
    • The face of nation: billionaires represent the face of their nation. Bill Gates, Elon musk, Jack Ma, Mukesh Ambani are well-known billionaires recognized around the world.
    • Brings investment: the companies of these billionaires attract a huge amount of foreign investments which help a lot in bringing new technologies and also capital in the domestic economy. For example- Google has paid â‚č33,737 crores to Jio Platforms Limited, a subsidiary of the Mukesh Ambani-owned Reliance Industries Limited (RIL).
    • Reduce import dependence: With the coming of new technologies or establishing industries for the manufacturing of the products not produced in the country, companies of these billionaires help in reducing imports of the nation. For example, the TATA group, Reliance and Adani have established their defense manufacturing companies which are helping in reducing defence imports and indigenization of defence products.
    • Represent face of emerging India– Oxfam India’s latest report which was released on the opening day of the World Economic Forum in Davos, Switzerland reveals that the total number of billionaires in India increased from 102 in 2020 to 166 billionaires in 2022. It’s an indication of the growing economy in India.
    • High taxes to government: The billionaires and their companies pay high amounts of taxes to the government, therefore, helping the nation grow. According to an estimate, A 2% tax on the top 100 billionaires would give the government enough money to raise health expenditure to 3% of the GDP.
    • Philanthropy: Billionaires in India are well known for their philanthropy. Billionaires Gautam Adani, HCL Technologies’ Shiv Nadar, and Happiest Minds Technologies’ Ashok Soota are the three Indians who have been named in the 16th edition of Forbes Asia’s Heroes of Philanthropy list.

    The case of Adani group and its contribution to India’s growth

    • Adani Group is one of India’s largest conglomerates and is involved in a wide range of industries and activities, including energy, infrastructure, logistics, resources, agribusiness, and real estate.
    • Adani has been instrumental in the development of India’s energy security, with the Adani Group owning and operating the world’s largest solar power plant in Gujarat. Additionally, Adani’s efforts have resulted in the development of numerous infrastructure projects across India, such as ports, airports, roads, and highways.  His company is also involved in activities such as mining, power generation, and transmission, and is a major player in the renewable energy sector.
    • In addition to his business accomplishments, Adani has also been involved in several philanthropic initiatives, such as the Adani Foundation, which provides education and healthcare services to underprivileged communities.

    The Darker Picture

    • Leads to crony capitalism: A political-economic system in which success in business depends on close relationships between business people and government officials, rather than on merit and competition. Adani Group (CAG report highlighted “undue benefits” that the Gujarat government gave to Adani Ports by waiving waterfront and other charges); The 2G spectrum scam; Coalgate Scandal etc. Also, India was ranked in 9th position in crony capitalism where crony sector wealth accounted for 3.4% of Gross Domestic Product (GDP)
    • Creates Distrust in the economy: The revelation of facts, such as by the Hindenberg Report, creates distrust in the economy leading to decreased capital inflows and thus investments.
    • Stock market crashes: Such a report causes economic loss to companies as happened recently with Adani company’s stocks.
    • Propaganda against India: such reports are also claimed to be part of the propaganda to tarnish India’s image at the global level. The timing of the release of the Hindenburg report is susceptible- just before release of Rs 20,000 crore FPO by Adani group and the Budget session of Indian parliament.

    Ethical issues with billionaires

    • Tax Avoidance: Many billionaires take advantage of loopholes and offshore accounts to avoid paying taxes on their income, depriving governments of much-needed revenue.
    • The exploitation of Workers: Billionaires often employ workers from developing countries, paying them low wages and subjecting them to poor working conditions.
    • Political Power: Some billionaires use their wealth to influence politicians and governments, creating a system of unequal power and privilege.
    • Concentration of Wealth: The vast wealth of billionaires is often seen as morally wrong when so many people in the world live in poverty.

    Conclusion

    • The ultimate major loser in this row is the investors in Adani Group who suffered losses after the short-seller Hindenburg Research’s report. Thus, currently, there is a need to safeguard the investors.
    • The Securities and Exchange Board of India (SEBI) should suggest measures to ensure the protection of Indian investors after the short selling.
    • Simultaneously, the allegations against Adani Group must be verified by SEBI through an independent inquiry along with the role of Hindenberg Research in the whole issue. 
  • Sansad TV Perspective: Health of India’s Banking System

    Sansad TV Perspective: Health of India’s Banking System

    Context

    • The Indian banking sector remains resilient and stable.
    • Various parameters relating to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy.
    • That’s the statement from the RBI amid heightened concerns about the exposures of banks to a business conglomerate.

    Why in news?

    • The Budget 2023-24 has no provisions for capital infusion.
    • This reflects the confidence of the government in the robust position of the Indian banking system.

    Key indicators from Financial Stability Report (December 2022)

    • High aggregate deposits: The Indian banking sector recorded a healthy growth in deposits and advances during FY 2022, with the aggregate deposits of the scheduled commercial banks rising by 11.7% and the aggregate advances increasing by 10.2%.
    • Decline in NPAs: The gross non-performing assets (NPA) ratio of all scheduled commercial banks (SCBs) declined from 9.1% in March 2021 to 8.2% in September 2022, driven by a reduction in NPAs of public sector banks (PSBs).
    • Adequate capital: The Indian banking sector is well capitalized, with the capital-to-risk-weighted assets ratio (CRAR) of SCBs at 13.3% as of September 2022, higher than the regulatory requirement of 11.5%.
    • Credit growth increased: Credit growth of banks remained strong during FY 2022, with the credit growth of SCBs increasing from 8.4% in March 2021 to 10.1% in September 2022.
    • Moderate liquidity: RBI liquidity management operations during FY 2022 provided significant liquidity support to the banking system and helped to maintain overall financial stability.

    What led to improvements of banking prospects?

    • Non-impacted by global recession: The financial system remained resilient to external shocks as the overall capitalization of the banking sector improved and credit growth remained strong.
    • Stable Rupee: The Indian rupee (INR) remained largely stable during FY 2022, with the rupee depreciating by 0.8% against the US dollar (USD) during the year.
    • Stable equity markets: The Indian equity markets performed well during FY 2022, with the BSE Sensex recording a gain of 24.2% during the year.
    • High forex reserves: The foreign exchange reserves of India stood at US$ 574.2 billion as of December 2022, a rise of 13.5% over the level at end-March 2021.
    • Healthy credit ratings: International rating agencies like Moody’s Investor Service and Standard & Poor’s global rating have upgraded their outlook for the Indian banking system based on its performance in the last couple of years.

    What contributes to resilient and stability in Indian banking system?

    • RBI’s prudency: The RBI as a regulator is excellent and it is well-recognized in the world. It handles the regulation and supervision of such a heterogeneous system involving cooperative banks, foreign banks, and even NBFCs with great efficiency.
    • RBI’s global stature: The respect the RBI commands in the world is extremely high. For instance, the Federal Reserve, Washington invited officers of RBI in 2009 after the collapse of the Lehman Brothers.
    • Timely assessment: RBI is extremely watchful at the macro, institutional, and individual levels and releases periodical reports like the Financial Stability Report.
    • Checks and balances: The Asset Quality Review which RBI initiated in 2018 is crucial in identifying and plugging the loopholes. The banks have deployed a risk assessment department and risk assessment officers. RBI has made various provisions and starts flagging the risks ex. Special Mention Account.

    Achievements of the Indian Banking Sector

    • NPA crisis under control: The issues of NPA and Twin Balance Sheet problems were addressed through proactive measures of government and RBI like Recognition, Resolution, Recapitalization, and Reforms.
    • Credit Growth: The credit growth in the banking sector has been very impressive in the past few years. The credit to GDP ratio has increased from 48.3% in 2008 to 74.3% in 2018. This has led to increased availability of credit to businesses and individuals.
    • Expansion of banking services: The banking sector in India has seen tremendous growth in the past decade. The number of bank branches has grown from around 80,000 in 2000 to more than 1,50,000 in 2018. This has led to an increase in the access of banking services to the masses.
    • Financial Inclusion: The banking sector has also played an important role in making financial services accessible to the unbanked population of India. The Pradhan Mantri Jan-Dhan Yojana (PMJDY) launched in 2014 has been a major success, with more than 32 crore accounts opened so far.
    • Digitization: The banking sector has seen a rapid digitization, with banks providing various digital services such as mobile banking, internet banking, and cardless cash withdrawals. This has enabled customers to access banking services from anywhere, anytime.
    • Financial Innovation: The banking sector has also seen a great deal of financial innovation. Banks have introduced various new products and services such as credit cards, debit cards, and mutual funds. These products have helped customers to access a wide range of financial services.

    Systemic risks to Indian Banks

    • Non-Performing Assets (NPAs): With the rise in NPAs, banks are exposed to the risk of defaults, write-offs and losses.
    • Credit Risk: Banks are exposed to credit risk when borrowers are unable or unwilling to repay their loans.
    • Interest Rate Risk: Banks are exposed to interest rate risk when their assets and liabilities have different maturities and/or interest rates.
    • Regulatory Risk: Banks are subject to stringent regulations and changes in regulations can significantly impact their profitability.
    • Operational Risk: Banks are exposed to operational risk from a variety of sources, including technical failures, fraud, and human error.
    • Cybersecurity Risks: As banks become increasingly reliant on digital systems and processes, there is an increased risk of cyber-attacks and data breaches.

    Way ahead

    • Privatization in near future: After addressing key concerns like the NPAs and recapitalization, the government is moving towards the substantive reform of privatization. It was also announced in the Budget speech of 2022-23 that the idea is to have a few big banks.
    • Increased monitoring and compliance: RBI is also constantly improving its ways and mechanism of monitoring and regulation to be risk-proof in the future. Banks are also in compliance with the Large Exposure Framework (LEF) guidelines issued by the RBI.
    • Leveraging technology: In the mechanisms deployed by the RBI, there is a red alert in case of any discrepancy in the system. Technology can help to a great extent in increasing the frequency and time efficiency of addressing such red alerts. Thus, RBI should leverage technology.

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  • [Burning Issue] Indian Budget and Fiscal Deficit

    deficit

    Context

    • In the Union Budget for 2023-24, Finance Minister Nirmala Sitharaman chose the path of relative fiscal prudence and projected a decline in fiscal deficit to 5.9% of gross domestic product (GDP) in FY24, compared with 6.4% in FY23.
    • Ms. Sitharaman said the government planned to continue on the path of fiscal consolidation and reach a fiscal deficit below 4.5% by 2025-26.
    • In this context, this edition of the burning issue will elaborate on the issue of the Fiscal deficit of the Indian government and its roadmap for fiscal consolidation.

    What is a Fiscal Deficit?

    • Fiscal Deficit is the difference between the total income of the government (total taxes and non-debt capital receipts) and its total expenditure.
    • A fiscal deficit situation occurs when the government’s expenditure exceeds its income. 
    • Simply put, it is the amount the government spent beyond its income and is measured as a percentage of the GDP.
    • The Fiscal Responsibility and Budget Management (FRBM) Act was enacted in 2003 which set targets for the government to reduce fiscal deficits. The Budget 2019-20 has pegged the fiscal deficit for the year 2019-20 at 3.3% of GDP.

    Current situation of Fiscal Deficit in India

    • Reduced fiscal deficit target: In Union Budget 2023-24, the fiscal deficit to GDP is pegged at 5.9% in FY24. This ratio has declined from 6.4% in 2022-23 (revised estimate) and 6.7% in 2021-22 (actual).
    • Reduced revenue deficit: In the revenue budget, the deficit was 4.1% of GDP in 2022-23 (revised estimate). In Union Budget 2023-24, the revenue deficit is 2.9% of GDP. If interest payments are deducted from a fiscal deficit, which is referred to as the primary deficit, it stood at 3% of GDP in 2022-23 (RE).
    • The primary deficit, which reflects the current fiscal stance devoid of past interest payment liabilities, is pegged at 2.3% of GDP in Union Budget 2023-24.
    • India is ‘fairly’ confident to meet its target to cut its fiscal deficit by nearly 200 basis points to 4.5% of GDP in the next three years, assuming there is no major global economic shock.
    • As economic growth continues and the government aims to cut spending on subsidies, the deficit should be able to fall to 4.5% of GDP by 2025/26.

    What is fiscal consolidation?

    • Fiscal consolidation refers to the ways and means of narrowing the fiscal deficit. A government typically borrows to bridge the deficit. It will then have to allocate a part of its earnings to service the debt.
    • The interest burden will increase as the debt increases. In the Budget for FY22, of the total government expenditure of over â‚č34.83 lakh crore, more than 8.09 lakh crore (around 20 percent) went towards interest payment.
    • Debt is one liability that is difficult to defer and, at the end of the day, the government struggles to find more resources not just for capital expenditure but also for revenue expenditure. In the long run, the uncontrolled fiscal deficit will hurt economic growth.

    Is fiscal consolidation legally mandated in India?

    • The seeds for fiscal consolidation were sown in 1994 by the then Finance Minister Manmohan Singh. In his budget speech for FY95, he highlighted the need for fiscal discipline and pronounced a policy to end monetizing the deficit. 
    • As open market borrowings piled up to fund the deficit, Yashwant Sinha in his budget speech for FY01 called for a strong institutional framework to ensure fiscal responsibility. This resulted in the enactment of the ‘Fiscal Responsibility and Budget Management (FRBM) Act, 2003’, which mandated limiting the fiscal deficit to 3 percent of GDP.

    What is the government doing to achieve fiscal consolidation?

    • The fiscal policy needs to remain “accommodative”: with a focus on gross capital formation in the economy with enhanced capital spending, especially infrastructure investment.
    • Enhanced capital spending: In Budget 23-24, capital spending is expected to rise to 3.3% of GDP. Ms. Sitharaman stressed that infrastructure investment has a larger multiplier effect on economic growth and employment. In this context, various schemes such National Monetization Pipeline, Gati Shakti Yojana, etc. have been launched.
    • Helping states too: The interest-free loan of â‚č1.3 lakh crore for 50 years provided to States should help them spend and boost growth.
    • Increased revenue of the government: According to the CGA data for the first eight months of FY23, GoI’s gross tax revenues (GTR) has shown a growth of 15.5% which is just above the nominal GDP growth of 15.4% estimated for the full year of FY23. With this, the GoI’s GTR may be estimated at INR31.3 lakh crore in FY23, exceeding the budgeted magnitude by about INR3.7 lakh crore.
    • Reducing subsidies: Two favorable trends relate to the prospect of moderation of global crude prices accompanied by a fall in inflation. This may open up the possibility of reducing some of the relatively large petroleum price-linked subsidies. While the GoI has already committed to an expanded free food grain scheme under PM-GKAY, some of the fertilizer and petroleum subsidies may be reduced.

    What are the challenges?

    • Less consolidation by states: The states have less fiscal consolidation to do than the central government.
    • Committing to High-quality spending: Both have a common challenge to commit to more capex, which is considered high-quality spending as it “crowds in” private investment if done responsibly. And we believe that investment is the only sustainable way to increase the capacity of the economy to grow and create jobs.
    • Balancing the capex and fiscal consolidation: For the central government, the challenge is to hold on to its capex push at a time of fiscal consolidation. For the states, the challenge is to start doing more.

    Is there a trade-off between fiscal consolidation and growth?

    • It is debatable. Many economists have said that speedier economic growth depends on limiting the fiscal deficit. They reason that a high fiscal deficit will increase borrowings and the interest burden would curtail the government’s ability to spend productively. Also, increased government borrowing will crowd out the private sector in the debt market, leading to higher interest rates, which will hurt growth.
    • Other economists have argued that fiscal consolidation is not a fiscal compression mechanism, rather it is an expenditure-switching mechanism. The original FRBM Act of 2003, they say, pushed for shifting the expenditure from revenue to capital, which will lay the foundation for higher growth. They argue that the FRBM Amendment Act of 2018 completely dilutes the original Act to become contractionary.

    What more can be done? The way forward

    • Supporting growth in the short and medium term: Given the relatively lower revenue growth expected in FY24, it may be best to contain the growth of revenue expenditure and continue to emphasize capital expenditure growth as it is associated with higher multipliers.
    • Infrastructure expansion should continue: to be the main priority for government expenditure while continuing to encourage Aatmanirbhar Bharat.
    • Promote Employment generation: The GoI may also need to signal its priority for employment creation. The sector that suffered the most during COVID-19 was trade, hotels, transport, storage et. al. which is employment intensive. This sector would need to be supported through government programs that generate demand specific to these segments.
    • Urban employment schemes: It would also be worthwhile considering whether the rural employment guarantee scheme should be extended to urban areas as has been done by some state governments.
    • Raising the tax revenue through formalization: Continued formalization of the economy that raises tax revenues (though “organic” formalization will likely be more sustainable than “forced” formalization).
    • Disinvestment of PSUs: A bigger push for disinvestment by selling stakes in public-owned companies, and further tax reforms (in terms of direct taxes and the GST).

    Conclusion

    • Fiscal consolidation and capital expenditure should go hand in hand. More government spending means more infrastructure building and more chances of growth and employment. However, this spending should be done with a sound fiscal base.
    • Thus, careful calibration would be required for limiting revenue expenditure growth in order to retain space for capital expenditure to grow adequately with a view to supporting growth.

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