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  • Corruption Perception Index 2019

    The Corruption Perception report for 2019 has been released. It has revealed that a majority of countries are showing little to no improvement in tackling corruption.

    About CPI

    • The CPI is annually released by Transparency International.
    • It draws on 13 surveys and expert assessments to measure public sector corruption in 180 countries and territories, giving each a score from zero (highly corrupt) to 100 (very clean).

    India’s performance

    • India’s ranking in the CPI-2019 has slipped from 78 to 80 compared to the previous year.
    • Its score of 41 out of 100 remains the same.
    • CPI highlighted that unfair and opaque political financing, undue influence in decision-making and lobbying by powerful corporate interest groups, has resulted in stagnation or decline in the control of corruption.

    Global corruption

    • In the Asia Pacific region, the average score is 45, after many consecutive years of an average score of 44, which “illustrates general stagnation” across the region.
    • China has improved its position from 87 to 80 with a score of 41 out of 100, a two-point jump.
    • Despite the presence of high performers like New Zealand (87), Singapore (85), Australia (77), Hong Kong (76) and Japan (73), the Asia Pacific region hasn’t witnessed substantial progress in anti-corruption.
    • In addition, low performers like Afghanistan (16), North Korea (17) and Cambodia (20) continue to highlight serious challenges in the region.
    • The top ranked countries are New Zealand and Denmark, with scores of 87 each, followed by Finland (86), Singapore (85), Sweden (85) and Switzerland (85).

  • Trolling in India

     

    The Amnesty International India has released a report titled “Troll Patrol India: Exposing Online Abuse Faced by Women Politicians in India”. The report analysed more than 114,000 tweets sent to 95 women politicians in the three months during and after last year’s general elections in India.

    Highlights of the report

    • The research found that women are targeted with abuse online not just for their opinions – but also for various identities, such as gender, religion, caste, and marital status.
    • Indian women politicians face substantially higher abuse on Twitter than their counterparts in the U.S. and the U.K.
    • Around 13.8% of the tweets in the study were either “problematic” or “abusive”.
    • Problematic content was defined as tweets that contain hurtful or hostile content, especially if repeated to an individual on multiple occasions, but do not necessarily meet the threshold of abuse.
    • While all women are targeted, Muslim women politicians faced 55% more abuse than others.
    • Women from marginalized castes, unmarried women, and those from non-ruling parties faced a disproportionate share of abuse.

    A matter of concern

    • Abusive tweets had content that promote violence against or threaten people based on their race, national origin, sexual orientation, gender, religious affiliation, age, disability or other categories.
    • They include death threats and rape threats.
    • Problematic tweets contained hurtful or hostile content, often repeated, which could reinforce negative or harmful stereotypes, although they did not meet the threshold of abuse.

  • Enemy Property in India

    • A Group of Ministers (GoM) headed by Union Home Minister will monitor the disposal of over 9,400 enemy properties, which the government estimates is worth about Rs 1 lakh crore.
    • Two committees headed by senior officials will be set up for the disposal of immovable enemy properties vested in the Custodian of Enemy Property for India under The Enemy Property Act.

    What is “Enemy Property”?

    • In the wake of the India-Pakistan wars of 1965 and 1971, there was migration of people from India to Pakistan.
    • Under the Defence of India Rules framed under The Defence of India Act, 1962, the Government of India took over the properties and companies of those who took Pakistani nationality.
    • These “enemy properties” were vested by the central government in the Custodian of Enemy Property for India.
    • The same was done for property left behind by those who went to China after the 1962 Sino-Indian war.
    • The Tashkent Declaration of January 10, 1966 included a clause that said India and Pakistan would discuss the return of the property and assets taken over by either side in connection with the conflict.
    • However, the Government of Pakistan disposed of all such properties in their country in the year 1971 itself.

    How did India deal with enemy property?

    • The Enemy Property Act, enacted in 1968, provided for the continuous vesting of enemy property in the Custodian of Enemy Property for India.
    • The central government, through the Custodian, is in possession of enemy properties spread across many states in the country.
    • Some movable properties too, are categorised as enemy properties.
    • In 2017, Parliament passed The Enemy Property (Amendment and Validation) Bill, 2016, which amended The Enemy Property Act, 1968, and The Public Premises (Eviction of Unauthorised Occupants) Act, 1971.

    Who is an Enemy?

    • The amended Act expanded the definition of the term “enemy subject”, and “enemy firm” to include the legal heir and successor of an enemy, whether a citizen of India or a citizen of a country which is not an enemy; and the succeeding firm of an enemy firm, irrespective of the nationality of its members or partners.
    • The amended law provided that enemy property shall continue to vest in the Custodian even if the enemy or enemy subject or enemy firm ceases to be an enemy due to death, extinction, winding up of business or change of nationality, or that the legal heir or successor is a citizen of India or a citizen of a country which is not an enemy.
    • The Custodian, with prior approval of the central government, may dispose of enemy properties vested in him in accordance with the provisions of the Act, and the government may issue directions to the Custodian for this purpose.

    Why were these amendments brought?

    • The thrust of the amendments was to guard against claims of succession or transfer of properties left by people who migrated to Pakistan and China after the wars.
    • The amendments denied legal heirs any right over enemy property. The main aim was to negate the effect of a court judgment in this regard.

    What did these court orders say?

    • One major judgment was passed in the case of the estate of the erstwhile Raja of Mahmudabad, who owned several large properties in Hazratganj, Sitapur and Nainital.
    • Following Partition, the Raja left for Iraq and stayed there for some years before settling in London.
    • After The Enemy Property Act was enacted in the year 1968, the Raja’s estate was declared enemy property. When the Raja died, his son who stayed in India staked claim to the properties.
    • After a legal battle that lasted over 30 years, an apex court Bench on October 21, 2005, ruled in favour of the son.
    • The verdict opened the floodgates for further pleas in courts across the country in which genuine or purported relatives of persons who had migrated to Pakistan produced deeds of gift claiming they were the rightful owners of enemy properties.
    • On July 2, 2010, the then UPA government promulgated an Ordinance that restrained courts from ordering the government to divest enemy properties from the Custodian.
    • The 2005 SC order was thus rendered ineffective, and the Custodian again took over the Raja’s properties.

    Enactment of the Amended Law

    • A Bill was introduced in Lok Sabha on July 22, 2010, and subsequently, a revised Bill was tabled on November 15, 2010. This Bill was thereafter referred to the Standing Committee.
    • However, the said Bill could not be passed during the term of the 15th Lok Sabha, and it lapsed.
    • On January 7, 2016, the President of India promulgated The Enemy Property (Amendment and Validation) Ordinance, 2016, which was replaced by the Bill that became law in 2017.

  • Specialized Supervisory and Regulatory Cadre (SSRC)

    The RBI has decided to recruit 35% of the specialised supervisory and regulatory cadre from the market while the remaining 65% will be recruited via internal promotions.

    Specialized Supervisory and Regulatory Cadre (SSRC)

    • The SSRC will comprise officers in Grade B to Executive Director level.
    • In Nov. last year RBI decided to reorganize its regulation and supervision departments.
    • It merged the three regulatory departments (department of banking, non-banking and cooperative bank) into one and did likewise for the three supervisory departments.
    • As a result, there is only one supervisory department which looks after supervision of banks, NBFCs and cooperative banks and only one regulatory department for these three.
    • The move is aimed at dealing more effectively with potential systemic risk that could come about due to possible supervisory arbitrage and information asymmetry.

  • [pib] National Data and Analytics Platform (NDAP)

     

    NITI Aayog has released its vision for the National Data and Analytics Platform (NDAP).

    National Data and Analytics Platform

    • The platform aims to democratize access to publicly available government data.
    • NDAP will host the latest datasets from various government websites, present them coherently, and provide tools for analytics and visualization.
    • It will spearhead the standardization of formats in which data is presented across sectors and will cater to a wide audience of policymakers, researchers, innovators, data scientists, journalists and citizens.
    • It will follow a user-centric approach and will enable data access in a simple and intuitive portal tailored to the needs of a variety of stakeholders.
    • The development of NDAP will take place over a period of one year. The first version of the platform is expected to be launched in 2021.

  • [op-ed of the day] The flawed spin to India’s cotton story

    Context

    This year, India is expected to be the world’s largest cotton producer, surpassing China in output. However, India’s productivity (yield per unit area), is much lower than other major cotton-producing countries.

    India’s experience with cotton

    • India is the only country growing hybrids: India is the only country that grows cotton as hybrids and the first to develop hybrid cotton back in 1970.
      • What are hybrids: Hybrids are made by crossing two parent strains having different genetic characters.
      • Greater yields: These plants have more biomass than both parents, and capacity for greater yields.
      • Require more inputs: They also require more inputs, including fertilizer and water.
      • Expensive seed production: Though hybrid cottonseed production is expensive, requiring manual crossing, India’s low cost of manual labour makes it economically viable.
      • Rest of the countries: All other cotton-producing countries grow cotton, not as hybrids but varieties for which seeds are produced by self-fertilization.
    • Key issues with the use of hybrids
      • Hybrid seed cannot be propagated over generations: A key difference between hybrids and varieties is that varieties can be propagated over successive generations by collecting seeds from one planting and using them for the next planting.
      • Purchasing the seeds is must: Hybrid seeds have to be remade for each planting by crossing the parents. So for hybrids, farmers must purchase seed for each planting, but not for varieties.
      • Pricing control to the companies: Using hybrids gives pricing control to the seed company and also ensures a continuous market.
      • Increased yield used as justification for high prices: Increased yield from a hybrid is supposed to justify the high cost of hybrid seeds.
      • However, for cotton, a different strategy using high-density planting (HDP) of compact varieties has been found to outperform hybrids at the field level.

    Cotton planting strategies

    • What other countries do?
      • Compact and short-duration varieties: For over three decades, most countries have been growing cotton varieties that are compact and short duration.
      • 5kg seeds/acre: These varieties are planted at high density (5 kg seeds/acre).
      • These varieties have 5-10 bolls per plant.
    • What is done in India?
      • Low density and long duration: Hybrids in India are bushy, long duration and planted at a ten-fold lower density.
      • 0.5 kg seeds/acre: Hybrids are planted at a lower density of 0.5kg/acre.
    • Which strategy is more beneficial?
      • The lower boll production by compact varieties (5-10 bolls per plant) compared to hybrids (20-100 bolls/plant) is more than compensated by the ten-fold greater planting density.
      • Experience of Brazil: The steep increase in productivity for Brazil, from 400 to 1,000 kg/hectare lint between 1994 and 2000 coincides with the large-scale shift to a non-GM compact variety.

    Why should India opt for short duration variety?

    • Cotton being a dryland crop: Cotton is a dryland crop and 65% of the area under cotton in India is rain-fed.
      • Advantage of short duration variety in the rain-fed area: Farmers with insufficient access to groundwater in these areas are entirely dependent on rain. Here, the shorter duration variety has a major advantage as it reduces dependence on irrigation and risk.
      • Particularly late in the growing season when soil moisture drops following the monsoon’s withdrawal.
      • This period is when bolls develop and water requirement is the highest.
    • Productivity and input costs of the varieties: It has more than twice the productivity.
      • Half the fertilizer (200 kg/ha for hybrids versus 100 kg/ha for varieties).
      • Reduced water requirement.
      • And less vulnerability to damage from insect pests due to a shorter field duration.

    Impact of Policy

    • Why India persisted with hybrids during 1980-2002
      • Two phases of policy have contributed to this situation.
      • The first phase- Before GM cotton: The answers lie with the agricultural research establishment.
      • The second phase: The phase where the question of hybrids versus compact varieties could have been considered, was at the stage of GM regulation when Bt cotton was being evaluated for introduction into India.
      • International experience not taken into account: It would not have been out of place to have evaluated the international experience, including the context of the introduction of this new technology.
      • Agro-economic conditions were not taken into account: Importantly, agro-economic conditions where it would be used should have been a guiding factor.
      • The narrow scope of evaluation: The scope of evaluation by the GM regulatory process in India was narrow, and did not take this into account.
      • Consequently, commercial Bt hybrids have completely taken over the market, accompanied by the withdrawal of public sector cottonseed production.

    Key takeaways

      • Frist–Outcome of technology depends upon the context: Outcome of using a technology such as Bt is determined by the context in which it is deployed, and not just by the technology itself.
        • Negative fallout: If the context is suboptimal and does not prioritise the needs of the principal stakeholders (farmers), it can have significant negative fallouts, especially in India with a high proportion being marginal and subsistence farmers.
      • Second–Better consultation in policy: There is a need for better consultation in policy, be it agriculture as a whole or crop-wise.
        • Socioeconomic consideration in GMO risk assessment: India is a signatory to international treaties on GMO regulation (the Convention on Biological Diversity, and the Cartagena Protocol on Biosafety), which specifically provide for the inclusion of socio-economic considerations in GMO risk assessment.
        • However, socioeconomic and need-based considerations have not been a part of the GMO regulatory process in India.

    Conclusion

    Given the distress, the cotton-growing farmers are facing this is the right time to review the grounds on which Bt cotton was introduced in India.

  • [op-ed snap] Where demand has gone

    Context

    That India is in the midst of a serious economic slowdown is no longer in question. The debates are now mostly about what to do about it.

    Where is the GDP growth coming from?

    Fall in consumption expenditure in absolute terms: The leaked National Sample Survey (NSS) consumer expenditure data -shows that real monthly per capita expenditure has in fact fallen in absolute terms between 2011-12 and 2017-18.

    • 8 % decline in a rural area: In rural areas, consumption expenditure decreased by 8.8 per cent.
    • 2% decline in an urban area: While in urban areas it increased by 2 per cent, leading to an all India decline of 3.7 per cent.
    • Where is the growth coming from: If average consumer expenditure is down, then where is the GDP growth coming from?
      • Consumer expenditure contribution: After all, according to National Accounts Statistics (NAS) consumer expenditure is around 60 per cent of the GDP.
      • And given the other contributors to GDP-investment and government spending- are not growing spectacularly, consumer expenditure should be growing rather than decreasing.
      • So, to get an overall 5 per cent growth rate, consumer expenditure should be growing at higher than 5 per cent.
    • NSS vs. NAS- a genuine puzzle: How can consumption expenditure be going down in absolute terms according to the NSS estimates and be growing at more than 5 per cent according to the NAS?
      • Variation in data a norm: That these two types of estimates of consumption expenditure do not match is well-known, and that is the case in other countries as well.
      • The discrepancy at alarming proportions: In the 1970s, consumer expenditure according to NSS estimates was around 90 per cent of consumer expenditure according to NAS, but in 2017-18 it was only 32.3 per cent.
      • Data from two different countries: It is as if we are looking at data from two different countries.
      • One where the consumption expenditure growth is positive and propping up the GDP growth rate and the other where it is actually falling.

    A few inferences that pertain to the state of the economy and the policy options.

    • Reasons for the discrepancy between NSS data and NAS data.
    • First- Presence of large informal sector:
      • 50% contribution to GDP: Informal sector accounts for nearly half of the GDP and employs 85 per cent of the labour force.
      • Guesswork on performance: In national income accounts, growth in the informal sector is estimated by extrapolating from the performance of the formal sector. Which is largely guesswork.
    • Second- Making effects of the expansionary policy less pronounced:
      • Expansionary fiscal policy more effective than appear to be: Because of the presence of the informal sector, expansionary fiscal policy will be more effective than what would appear from official statistics, as a big part of its impact will be felt in the informal sector.
      • Why is it so? The reason is that a big segment of the population is located in the informal sector; they are poorer and tend to spend a much higher fraction of their income on consumption.
      • This group has been seriously affected by the economic slowdown.
    • Third-Results of expansionary policy would be apparent after a delay
      • Apparent effects of policy much worse than what it would be: The effect of an expansionary policy on the budget deficit will look much worse than what it would be since the estimates of its effect on income expansion and tax collection will be largely based on the formal sector.
      • Informal sector boosting the formal sector: Some of the income generated in the informal sector will boost demand in the formal sector through consumer demand for mass-consumption items (for instance, biscuits, as opposed to automobiles).
      • Good medium-term pictures: Therefore, in the medium term, once the engine of the economy starts moving, the income expansion and deficit numbers will look better.
    • Final-Tax cuts will achieve little
      • Only 3-5% population affected: The tax cut will affect barely 3-5 per cent of the adult population.
      • Contribution of taxes in GDP: Income tax revenues amount to around 5 per cent of the GDP and corporate income taxes around 3.3 per cent.
      • Rich tends to save more: Most of the tax is paid by the richest among these groups (the top 5 per cent taxpayers contribute 60 per cent of individual income tax revenue), and the rich tend to spend a smaller fraction of their income (and save more).
      • Little impact on GDP: Irrespective of the number of people affected, and even if they spend the entire increase in their income as a result of the tax cut, the overall economic impact will be small relative to the GDP.
      • The futility of tax cut: Therefore, a tax cut for the rich would be less effective in raising spending compared to an equivalent amount being given to poorer groups who spend a much higher fraction of their incomes.

    Conclusion

    The government should not underestimate the role of the informal sector in the economy. To get the engine of the economy revving, an expansionary fiscal policy that harnesses the energy of the informal sector to boost aggregate demand is the order of the day.

     

     

  • Democracy Index 2019

     

    The latest edition of the Democracy Index spells gloom for India. The world’s biggest democracy slipped 10 places in the 2019 global ranking to 51st place.

    Democracy Index

    • The report is published by The Economist Intelligence Unit — the research and analysis division of The Economist Group, which is the sister company to The Economist newspaper.
    • It records how global democracy fared, analysing 165 independent states and two territories.
    • The 2019 survey attributes the primary cause of “the democratic regression” to “an erosion of civil liberties in the country”.

    India’s performance

    • India’s overall score fell from 7.23 to 6.9, on a scale of 0-10, within a year (2018-2019) — the country’s lowest since 2006.
    • India was graded in electoral process and pluralism (8.67), government functioning (6.79), political participation (6.67), political culture (5.63) and civil liberties (6.76).
    • In the Asia and Australasia region, India ranks eighth, behind Taiwan and Timor-Leste.
    • The report talks about the repeal of both Article 370 and Article 35A and various restrictions such as house arrests, internet shutdowns and excessive use of forces.

    India: A flawed democracy?

    The Index also categorizes India under “flawed democracies”, i.e. countries that hold free and fair elections and where basic civil liberties are respected, but have significant weaknesses in aspects of democracy, such as problems in governance, an underdeveloped political culture and low levels of political participation.

  • Global Risks Report 2020

    The top five risks to humanity are recently published in the Global Risks Report of the World Economic Forum (WEF).

    Top five risks

    • An important finding of the report is that today’s younger generation, consisting of “Millenials” born after 1980 have ranked environmental risks higher than other older respondents in the short- and long-terms.
    • According to the report, the top five risks by likelihood over the next decade are:
    1. Extreme weather events like floods and storms
    2. Failure of climate change mitigation and adaptation
    3. Major natural disasters like earthquakes, tsunamis, volcanic eruptions and geomagnetic storms
    4. Major biodiversity losses and ecosystem collapse
    5. Human-made environmental damage and disasters

    Top 5 risks by severity of impact over the next 10 years

    • Failure of climate change mitigation and adaptation
    • Weapons of mass destruction
    • Major biodiversity loss and ecosystem collapse
    • Extreme weather events (e.g. floods, storms, etc.)
    • Water crises

    Top most strongly connected global risks

    • Extreme weather events + failure of climate change mitigation and adaptation
    • Large-scale cyber-attacks + breakdown of critical information infrastructure and networks
    • High structural unemployment or underemployment + adverse consequences of technological advances
    • Major biodiversity loss and ecosystem collapse + failure of climate change mitigation and adaptation
    • Food crises + extreme weather events

    Other risks

    • The report also warned about the increasing economic and societal costs due to non-communicable diseases and the lack of research on vaccines and drug resistance to address the threat of pandemics in the recent future.
    • “Economic confrontations” and “domestic political polarization” are significant short-term risks in 2020, the report said.
    • This is a warning for the global South including India and Africa where social unrest has seen a rise. For example, unrest has grown among India’s youth.

  • ‘Time to Care’ Report

     

    The report ‘Time to Care’  was recently released ahead of the 50th Annual Meeting of the World Economic Forum (WEF).

    ‘Time to Care’ Report

    • It is published by Oxfam International.
    • Its calculations are based on the latest data sources available, including from the Credit Suisse Research Institute’s Global Wealth Databook 2019 and Forbes’ 2019 Billionaires List.

    Findings of the report

    • Although global inequality has declined over the past three decades, domestic income inequality has risen in many countries, particularly in advanced economies and reached historic highs.
    • The report said that the world’s 2,153 billionaires have more wealth than the 4.6 billion people who make up 60 per cent of the planet’s population.
    • The report flagged that global inequality is shockingly entrenched and vast and the number of billionaires has doubled in the last decade, despite their combined wealth having declined in the last year.
    • The Oxfam report further said “sexist” economies are fuelling the inequality crisis by enabling a wealthy elite to accumulate vast fortunes at the expense of ordinary people and particularly poor women and girls.

    Income inequality in India

    • India’s richest 1 per cent hold more than four-times the wealth held by 953 million people who make up for the bottom 70 per cent of the country’s population.
    • The total wealth of all Indian billionaires is more than its full-year budget.
    • Regarding India, Oxfam said the combined total wealth of 63 Indian billionaires is higher than the total Union Budget of India for the fiscal year 2018-19 which was at Rs 24,42,200 crore.
    • It further said women and girls put in 3.26 billion hours of unpaid care work each and every day — a contribution to the Indian economy of at least Rs 19 lakh crore a year, which is 20 times the entire education budget of India in 2019 (Rs 93,000 crore).
    • He said women and girls are among those who benefit the least from today’s economic system.
    • They spend billions of hours cooking, cleaning and caring for children and the elderly. Unpaid care work is the ‘hidden engine’ that keeps the wheels of our economies, businesses and societies moving.

    Data on earnings

    • Oxfam said governments are massively under-taxing the wealthiest individuals and corporations and failing to collect revenues that could help lift the responsibility of care and tackle poverty and inequality.
    • As per the report, it would take a female domestic worker 22,277 years to earn what a top CEO of a technology company makes in one year.
    • With earnings pegged at Rs 106 per second, a tech CEO would make more in 10 minutes than what a domestic worker would make in one year.
    • Besides, direct public investments in the care economy of 2 per cent of GDP would potentially create 11 million new jobs and make up for the 11 million jobs lost in 2018, the report said.