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  • Centre and RBI must rely on unconventional policies to manage finances better

    Context

    Amid Ukraine crisis and high oil prices, the larger concern is how the government and the RBI will navigate this period at a time of record government borrowings, and prevent domestic interest rates from hardening.

    The Triffin paradox in current context

    • It is ironic that even as emerging economies running current account deficits are getting punished by a depreciating currency and a hardening of interest rates, we are witnessing the US dollar appreciating and US treasuries strengthening.
    • The most common argument for such a macroeconomic paradox is named after the economist Robert Triffin (the Triffin Paradox).
    •  It postulates that the US current account deficit is purely a reflection of the US supplying large amounts of dollars to fulfil the world’s demand.
    • In other words, central banks across the world must build up claims on the US to back their domestic money growth.

    Dollar’s dominance

    • Former US Federal Reserve Chairman Bernanke even extended this argument in 2005 to the “saving glut” proposition by espousing that emerging economies were accumulating foreign exchange reserves in dollars, and diverting domestic savings to buy US treasuries.
    • There are several counter arguments to this view that effectively state that the dominance of the US dollar is inevitable in the global financial architecture, and it is purely a fault of emerging market economies.

    Need for the unconventional tools to avoid the disruption by government borrowing

    This can be done in the following ways

    1] Spread the borrowing over four quarters after taking real-time view of disruption

    • Every year, the government front-loads its large borrowing programme by completing 60 per cent of the borrowings in the first half of the year.
    • This time, the RBI and the government may take a real-time view of disruptions and spread the borrowings over four quarters, keeping the initial two quarters light.
    • The borrowing programme can also be announced as per a quarterly schedule and there could be even two auctions during the week.
    • These steps could smoothen out the non-disruptive elements in government borrowings.

    2] Reconfigure the borrowing program

    • For example, as rates move up, banks tend to prefer short-term investments while insurance companies, provident funds and others prefer longer-term investments.
    • Given this, the borrowing schedule can be reconfigured with a higher proportion of short-and medium-tenor securities being offered in the initial months, while pushing back the longer tenor securities to the second half of the year.

    3] Push Small Savings Schemes

    • Third, small savings collections have significantly exceeded budget estimates.
    • The government could think of giving a push to small savings schemes such as the Sukanya Samriddhi Yojana (SSY).
    • The SSY has witnessed the registration of 2.82 crore girl children in the seven years since its inception in 2015, leaving enough room for further mop-up.
    • The newly opened accounts may even be given an enhanced savings limit in the first year to catch up for the years lost for these new additions.

    4] Listing of LIC

    • LIC currently holds around Rs 23.5 trillion worth of government bonds, higher than even than the RBI.
    • LIC’s G-sec holding is around 19 per cent, while in comparison the banking system’s ownership stands at around 38 per cent.
    • Thus LIC’s listing should augur well for the bond market as the insurance behemoth may have to deploy a greater share of inflows in safer avenues domestically.
    • This is a plausible option as banks may have to readjust their deposits into credit as the economic recovery gains momentum.

    Conclusion

    Rising oil prices have placed policymakers in an unenviable position. If higher oil prices are fully passed through, it will result in higher inflation and hence higher rates as a consequence.  In such a scenario it is best to follow the first option by using unconventional policy measures.

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  • Motor Vehicles Agreement (MVA) of the BBIN

    With Bhutan continuing to sit out the Motor Vehicles Agreement (MVA) of the sub-regional Bangladesh-Bhutan-India-Nepal (BBIN) grouping, a meeting of the other three countries was held to discuss the next steps in operationalizing the agreement for the free flow of goods and people between them.

    What is Motor Vehicles Agreement (MVA)?

    • India, Nepal, Bhutan and Bangladesh signed a Motor Vehicles Agreement (MVA) for the Regulation of Passenger, Personal and Cargo Vehicular Traffic among the four South Asian neighbours.
    • It was signed on 15 June 2015 at the BBIN transport ministers meeting in Thimpu, Bhutan.
    • The act will facilitate a way for a seamless movement of people and goods across their borders for the benefit and integration of the region and its economic development.

    Key terms of the Agreement

    • Trans-shipment of goods: Cargo vehicles will be able to enter any of the four nations without the need for trans-shipment of goods from one country’s truck to another’s at the border.
    • Free transport: The agreement would permit the member states to ply their vehicles in each other’s territory for transportation of cargo and passengers, including third-country transport and personal vehicles.
    • Electronic permit: As per the agreement each vehicle would require an electronic permit to enter another country’s territory, and border security arrangements between nations’ borders will also remain.
    • Ultra-security: Vehicles are fitted with an electronic seal that alerts regulators every time the container door is opened.

    Implementation status of the agreement

    • The agreement will enter into force after it is ratified by all four member nations.
    • The agreement has been ratified by Bangladesh, India and Nepal.
    • The lower house of the Bhutanese parliament approved the agreement in early 2016, but it was rejected by the upper house in November 2016.
    • Bhutan has requested for a cap to be fixed on the number of vehicles entering its territory

    What next?

    • India remains “hopeful” that Bhutan could change its position on the project, it was decided at a meeting in November 2021 to go ahead for now, given that there are no new signals from Thimphu on the project.
    • Progress on the seven-year-old project has been slow, despite several trial runs being held along the Bangladesh-India-Nepal road route for passenger buses and cargo trucks.
    • There are still some agreements holding up the final protocols.

    Back2Basics: Bangladesh, Bhutan, India, Nepal (BBIN)

    • BBIN Initiative is a sub-regional architecture of countries in Eastern South Asia, a sub-region of South Asia.
    • The group meets through the official representation of member states to formulate, implement and review quadrilateral agreements across areas such as water resources management, connectivity of power, transport, and infrastructure.

     

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  • What is the Temporary Protection Directive of the EU?

    Responding to the crisis, EU Member States made the unprecedented decision to activate a major European Union’s Council Directive, known as the Temporary Protection Directive (TPD).

    What is Temporary Protection?

    • The EU Commission describes “temporary protection” under the TPD as an “exceptional measure to provide immediate and temporary protection to displaced persons from non-EU countries and those unable to return to their country of origin”.
    • The directive applies when there is a risk that the standard asylum system is struggling to cope with demand stemming from a mass influx risking a negative impact on the processing of claims.

    Objectives of this protection

    1. To both establish minimum standards for giving temporary protection to displaced persons
    2. To promote a balance of effort between Member States in receiving and bearing the consequences of receiving such persons

    Why establish standards?

    The Commission gives two reasons for doing so:

    • It reduces disparities between the policies of EU States on the reception and treatment of displaced persons in a situation of mass influx.
    • It promotes solidarity and burden-sharing among EU States with respect to receiving large numbers of potential refugees at one time.”

    What obligations does the TPD place upon EU states?

    According to the European Commission, the TPD “foresees harmonised rights for the beneficiaries of temporary protection”, which include:

    • Residence permit for the duration of the protection (which can last from 1-3 years),
    • Appropriate information on temporary protection,
    • Access to employment,
    • Access to accommodation or housing,
    • Access to social welfare or means of subsistence,
    • Access to medical treatment,
    • Access to education for minors,
    • Opportunities for families to reunite in certain circumstances, and
    • Guarantees for access to the normal asylum procedure

    The TPD also contains provisions for the return of displaced persons to their country of origin, unless they have committed serious crimes or they “pose a threat to security from the benefit of temporary protection”.

     

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  • In news: Pal-Dadhvav Massacre

    The Gujarat government has marked 100 years of the Pal-Dadhvav killings, calling it a massacre “bigger than the Jallianwala Bagh”.

    Pal-Dadhvav Massacre

    • The massacre took place on March 7, 1922, in the Pal-Chitariya and Dadhvaav villages of Sabarkantha district, then part of Idar state.
    • The day was Amalki Ekadashi, which falls just before Holi, a major festival for tribals.
    • Villagers from Pal, Dadhvav, and Chitariya had gathered on the banks of river Heir as part of the ‘Eki movement’, led by one Motilal Tejawat.
    • The movement was to protest against the land revenue tax (lagaan) imposed on the peasants by the British and feudal lords.
    • Tejawat, who belonged to Koliyari village in the Mewad region of Rajasthan, had also mobilised Bhils from Kotda Chhavni, Sirohi, and Danta to participate.

    The fateful day

    • Tejawat had been outlawed by the Udaipur state, which had announced a Rs-500 reward on his head.
    • The Mewad Bhil Corps (MBC), a paramilitary force raised by the British that was on the lookout for Tejawat, heard of this gathering and reached the spot.
    • On a command from Tejawat, nearly 2000 Bhils raised their bows and arrows and shouted in unison- ‘We will not pay the tax’.
    • The MBC commanding officer, HG Sutton, ordered his men to fire upon them creating a huge stampede.
    • Nearly 1,000 tribals (Bhils) fell to bullets. While the British claimed some 22 people were killed, the Bhils believe 1,200-1,500 of them died.

    Must read:

    Important Rebellions and Peasant Movements

     

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  • [pib] Petascale Supercomputer “PARAM Ganga” established at IIT Roorkee

    The National Supercomputing Mission (NSM) has now deployed “PARAM Ganga”, a supercomputer at IIT Roorkee, with a supercomputing capacity of 1.66 Petaflops.

    What is a Supercomputer?

    • A supercomputer is a computer with a high level of performance as compared to a general-purpose computer.
    • The performance of a supercomputer is commonly measured in floating-point operations per second (FLOPS) instead of million instructions per second (MIPS).
    • Since 2017, there are supercomputers which can perform over a hundred quadrillion FLOPS (peta FLOPS).
    • Since November 2017, all of the world’s fastest 500 supercomputers run Linux-based operating systems.

    PARAM Ganga

    • PARAM Ganga is designed and commissioned by C-DAC under Phase 2 of the build approach of the NSM.
    • It is based on a heterogeneous and hybrid configuration of Intel Xeon Cascade lake processors, and NVIDIA Tesla V100.
    • There are 312 (CPU+GPU+HM) nodes with a total peak computing capacity of 1.67 (CPU+GPU+HM) PFLOPS performance.
    • The cluster consists of compute nodes connected with the Mellanox (HDR) InfiniBand interconnect network.
    • The system uses the Lustre parallel file system and operating system is CentOS 7.x.

    Back2Basics: National Supercomputing Mission (NSM)

    • NSM is a proposed plan by GoI to create a cluster of seventy supercomputers connecting various academic and research institutions across India.
    • In April 2015 the government approved the NSM with a total outlay of Rs.4500 crore for a period of 7 years.
    • The mission was set up to provide the country with supercomputing infrastructure to meet the increasing computational demands of academia, researchers, MSMEs, and startups by creating the capability design, manufacturing, of supercomputers indigenously in India.
    • Currently there are four supercomputers from India in Top 500 list of supercomputers in the world.

    Aims and objectives

    • The target of the mission was set to establish a network of supercomputers ranging from a few Tera Flops (TF) to Hundreds of Tera Flops (TF) and three systems with greater than or equal to 3 Peta Flops (PF) in academic and research institutions of National importance across the country by 2022.
    • This network of Supercomputers envisaging a total of 15-20 PF was approved in 2015 and was later revised to a total of 45 PF (45000 TFs), a jump of 6 times more compute power within the same cost and capable of solving large and complex computational problems.

    When did India initiate its efforts to build supercomputers?

    • India’s supercomputer program was initiated in the late 1980s, when the United States ceased the export of a Cray Supercomputer due to technology embargos.
    • This resulted in India setting up C-DAC in 1988, which in 1991, unveiled the prototype of PARAM 800, benchmarked at 5 Gflops. This supercomputer was the second-fastest in the world at that time.
    • Since June 2018, the USA’s Summit is the fastest supercomputer in the world, taking away this position from China.
    • As of January 2018, Pratyush and Mihir are the fastest supercomputers in India with a maximum speed of Peta Flops.

    What are the phases of the National Supercomputing Mission?

    Phase I:

    • In the first phase of the NSM, parts of the supercomputers are imported and assembled in India.
    • A total of 6 supercomputers are to be installed in this phase.
    • The first supercomputer that was assembled indigenously is called Param Shivay. It was installed in IIT (BHU) located in Varanasi.
    • Similar systems, Param Shakti (IIT Kharagpur) and Param Brahma (IISER, Pune) were also later installed within the country.
    • The rest will be installed at IIT Kanpur, IIT Hyderabad and Jawaharlal Nehru Institute of Advanced Studies (JNIAS).

    Phase II:

    • The supercomputers that are installed so far are about 60% indigenous.
    • The 11 systems that are going to be installed in the next phase will have processors designed by the Centre for Development of Advanced Computing (C-DAC) and will have a cumulative capacity of 10 petaflops.
    • These new systems are to be constructed more cost-effectively than the previous ones.
    • One of the 11 proposed supercomputers will be installed
    • at C-DAC exclusively for small and medium enterprises so that they can train employees as well as work on supercomputers at a very low cost.

    Phase III:

    • The third phase aims to build fully indigenous supercomputers.
    • The government had also approved a project to develop a cryogenic cooling system that rapidly dispels the heat generated by a computing chip. This will be jointly built together by IIT-Bombay and C-DAC.

     

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  • Women and Politics

    Context

    For a proper appraisal of the relations between gender and democracy, we ought to examine the links between violence, representation, and the political participation of women.

    Role of women in South Asian democracy

    • Historically, one of the peculiar paradoxes of South Asian democracy has been the continued presence of strong women leaders at the executive centre coupled with a generally appalling condition of women in society at large.
    • South Asia has had the largest number of women heads of state — including Sirimavo Bandaranaike, Chandrika Kumaratunga, Indira Gandhi, Khaleda Zia, Sheikh Hasina, and Benazir Bhutto — of any region in the world till recently.
    • Under-represented: While women have played very visible and important roles at the higher echelons of power and at the grassroots level in social movements, they have been under-represented in political parties as officials and as members of key decision-making bodies.

    Electoral representation of women in India

    • In India, women currently make up 14.6 per cent of MPs (78 MPs) in the Lok Sabha, which is a historic high.
    • Although the percentage is modest, it is remarkable because women barely made up 9 per cent of the overall candidates in 2019.
    • In electoral representation, has fallen several places in the Inter-Parliamentary Union’s global ranking of women’s parliamentary presence, from 117 after the 2014 election to 143 as of January 2020. 
    • In terms of electoral quotas, there were two outstanding exceptions in the 2019 general elections.
    • Voluntary parliamentary quota: West Bengal under Mamata Banerjee and Odisha under Naveen Patnaik opted for voluntary parliamentary quotas, fielding 40 per cent and 33 per cent women candidates, respectively.

    Growing turnout of women voters and its implications

    • Assertion of citizenship rights: In 1962, the male voter turnout in India was 16 percentage points higher than for women. Six decades later, in the 2019 Lok Sabha elections, women’s participation exceeded that of men for the first time.
    • This suggests an increasing assertion of citizenship rights among women.
    • The growing turnout of women voters could influence political parties’ programmatic priorities and improve their responsiveness to women voters’ interests, preferences, and concerns, including sexual harassment and gender-based violence.
    • Women-centric schemes: The state government in Bengal ran and highlighted many women-centric schemes that potentially played a central role in their victory.
    • The central government must be commended for its achievements in two areas in particular: Its DBT schemes such as the Pradhan Mantri Vaya Vandana Yojana and the Pradhan Mantri Surakshit Matritva Abhiyan.
    • As a result, maternal mortality rate has reduced from 167 (2011-13) to 113 (2016-18).
    • The Maternity Benefit (Amendment) Bill, 2017 is another landmark achievement that extended the paid maternal leave to 26 weeks from the existing 12 weeks.

    Way forward

    • Government must use its parliamentary majority to finally pass the Women’s Reservation Bill, as was promised in their 2014 election manifesto.
    • Until that happens, the initiative taken by the governments of Banerjee and Patnaik to increase women’s parliamentary presence must serve as an inspiration to other Indian states.

    Conclusion

    The extent to which parties represent women and take up their interests is closely tied to the health and vitality of democratic processes.

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  • Labour Ministry launches ‘Donate a Pension’ Scheme 

    The Union Labour and Employment Ministry has launched the “donate a pension” scheme.

    ‘Donate a Pension’ Scheme

    • This scheme allows any citizen to pay the premium amount on behalf of an unorganized worker under the Pradhan Mantri Shram Yogi Maan-Dhan
    • Maan-Dhan scheme is a government scheme meant for old age protection and social security of unorganized workers.

    Eligibility criteria and benefits

    • The scheme was launched in 2019, allows unorganized sector workers between 18 and 40 years who earn up to ₹15,000 a month to enroll by paying a premium amount between ₹55 and ₹200, depending on the age, that would be matched by the government.
    • On reaching the age of 60, the beneficiaries would get a ₹3,000 monthly pension.

    Features of the scheme

    • The scheme allows a citizen to “donate the premium contribution of their immediate support staff such as domestic workers, drivers, helpers, caregivers, nurses in their household or establishment.
    • The donor can pay the contribution for a minimum of one year, with the amount ranging from ₹660 to ₹2,400 a year depending on the age of the beneficiary, by paying through maandhan.in or visiting a Common Service Centre.

     

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  • Legacy of Savitribai and Jyotirao Phule

    Maharashtra Governor has recently received flak for his remarks on the social reformist couple Jyotirao and Savitribai Phule.

    Who were the Phules?

    • Mahatma Jyotirao and Savitribai Phule stand out as an extraordinary couple in the social and educational history of India.
    • They spearheaded path-breaking work towards female education and empowerment, and towards ending caste- and gender-based discrimination.
    • In 1840, at a time when child marriages were common, Savitri at the age of ten was married to Jyotirao, who was thirteen years old at the time.
    • The couple later in life strove to oppose child marriage and also organised widow remarriages.

    The Phules’ endeavors and legacy

    • Education: Jyotirao, the revolutionary that he was, observed the lack of opportunities for education for young girls and women.
    • Leaders of the masses: He started to educate his wife at home and trained her to become a teacher. Together, by 1848, the Phules started a school for girls, Shudras and Ati-Shudras in Poona.
    • Widow shelter: The historic work was started by Jyotirao when he was just 21 years old, ably supported by his 18-year-old wife. In 1853, Jyotirao-Savitribai opened a care centre for pregnant widows to have safe deliveries and to end the practice of infanticide owing to social norms.
    • Prevention of infanticide: The Balhatya Pratibandhak Griha (Home for the Prevention of Infanticide) started in their own house at 395, Ganj Peth, Pune.

    The Satyashodhak Samaj:

    • Literally meaning ‘The Truth-Seeker’s Society’ was established on September 24, 1873 by Jyotirao-Savitribai and other like-minded people.
    • The Samaj advocated for social changes that went against prevalent traditions, including economical weddings, inter-caste marriages, eradication of child marriages, and widow remarriage.
    • The Phules also had far-sighted goals — popularising female education, establishing an institutional structure of schools in India, and to have a society where women worked in tandem with men.

     

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  • [Burning Issue] Russian conflict and the impact on food, farming

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    Context

    Russia’s invasion of Ukraine has put global commodity markets in a tizzy. It is now threatening to push up farming costs and send food prices soaring. Food inflation in India may thus soon enter doubledigit territory. Let’s takes a look at the impact and other aspects of the issue.

    Household budget hit

    If the conflict in Ukraine worsens, India could end up exporting more wheat, thereby pushing retail prices higher.

    Back to basics: How is inflation measured?

    1. In India, inflation is primarily measured by two main indices — WPI and CPI, which measure wholesale and retail-level price changes, respectively.
    2. The CPI calculates the difference in the price of commodities and services such as food, medical care, education, electronics etc. which Indian consumers buy for use.
    3. On the other hand, the goods or services sold by businesses to smaller businesses for selling further is captured by the WPI.
    4. In India, both WPI and CPI are used to measure inflation.

    Current Trend of Inflation in India

    • The average headline Consumer Price Index-Combined (CPI-C) inflation in India moderated to 5.2 per cent in 2021-22 (April-December) from 6.6 per cent in the period of 2020-21.
    • The CPI inflation remained range bound as food prices eased considerably due to the supply management response by the Government.

    (1) Food Inflation

    • Food inflation remained benign this span.
    • While seasonality plays a significant role in the case of vegetables, random shocks like untimely rains also have an impact on their availability and prices.
    • Proactive measures were taken to contain the price rise in pulses and edible oils that reported high inflation reflecting the impact of imported inflation in these commodities.
    • Reduction in central excise and subsequent cuts in VAT by most States has also helped ease petrol and diesel prices.

    (2) Wholesale Inflation

    • Wholesale inflation based on Wholesale Price Index (WPI), after remaining very benign during the previous financial year on account of pandemic induced weakening of economic activity.
    • This was attributable to the pick-up in economic activity, sharp increase in international prices of crude oil and other imported inputs, and high freight costs.

    Issues: Divergence if figures

    • The consequent divergence between CPI-C and WPI inflation during the year remained a subject of debate.
    • This divergence can be explained by factors such as variations due to base effect, difference in scope and coverage of the two indices, their price collections, items covered and difference in commodity weights.
    • Further, WPI is more sensitive to cost-push inflation led by imported inputs.
    • With the gradual waning of base effect in WPI, the divergence in CPI-C inflation and WPI inflation is also expected to narrow down.

    Global Inflation

    • In 2021, inflation picked up globally as economic activity revived with opening-up of economies.
    • The surge in energy, food, non-food commodities, and input prices, supply constraints, disruption of global supply chains, and rising freight costs across the globe stoked global inflation during the year.
    • Crude oil prices also witnessed an upswing due to increased demand from recovering economies and supply cuts by the Organization of the Petroleum Exporting Countries and its allies (OPEC+).

    A global comparison

    • Advanced Economies include 40 economies and Emerging Markets and Developing Economies (EMDEs) include 156 economies as per IMF classification.
    • In comparison to many EMDEs and advanced economies, consumer price inflation in India remained normal range bound in the recent months.
    • As against this, inflation in USA touched 7.0 per cent in December 2021, the highest since 1982, driven largely by second hand vehicles and energy.
    • While in the UK it hit a nearly 30 years high of 5.4 per cent in December 2021 mainly on account of rising food prices.

    What is the Conflict?

    • Contestation about post-Cold War central European territoriality and resurrecting a burnished Russian past is at the core of the Ukraine crisis.
    • Ukraine and Russia share hundreds of years of cultural, linguistic and familial links.
    • For many in Russia and in the ethnically Russian parts of Ukraine, the shared heritage of the countries is an emotional issue that has been exploited for electoral and military purposes.
    • As part of the Soviet Union, Ukraine was the second-most powerful Soviet republic after Russia, and was crucial strategically, economically and culturally.
    • The balance of power in the region, Ukraine being a crucial buffer between Russia and the West, Ukraine’s bid for NATO membership and Russian interests in the Black Sea accompanied by the protests in the Ukraine are the major causes of the ongoing conflict.

    How will the Russia-Ukraine conflict impact India?

    • The war in the Black Sea region, which is both a production and trade hub, has pushed prices of crude oil, wheat, corn, cooking oil, and fertilizers to new highs.
    • Recently, crude prices touched a high of $139 per barrel, the highest since 2008.
    • Global wheat prices have shot up 91% year-on-year (y-o-y), while corn prices rose by 33% y-o-y.
    • As India is acutely dependent on imports of edible oil and fertilizers, consumers may see prices of these soaring to painful levels.
    • Besides, an impending shortage of fertilizers in the country ahead of the Kharif planting season can lead to unrest in rural areas.

    Can government grain stocks shield consumers?

    • As on mid-February, the central stock of grains comprising rice and wheat was a staggering 54 million tonnes (mt), a surplus of more than 30 mt.
    • It is more than what is required for the country’s public distribution system (PDS).
    • With a record harvest of wheat set to hit the markets later this month, the government can liquidate its wheat stocks to keep prices in check.
    • However, if global prices rise further and the conflict in Ukraine worsens, India could end up exporting more wheat, thereby pushing retail prices higher.
    • Together with higher edible oil and fuel prices, food inflation could touch double-digit highs.

    How will the price rise affect the farming community?

    • Farmers can now expect prices at a premium to the minimum support prices (MSPs) announced by the government.
    • Wholesale wheat prices are now higher than the MSP, while mustard prices, at ₹7,000 per quintal, are already 40% higher than the MSP and may cross the ₹10,000 mark.
    • However, steep prices of inputs will add to the cost.

    What is the impact of high crude prices?

    • Historic data show a close correlation between a rise in crude oil and food prices.
    • Crude prices impact food prices more than even food production. Crude prices are hovering in the $120-130 per barrel range.
    • Even if this were to cool down to the $100-110 level, it would impact fertilizer prices and shipping costs significantly.
    • High crude prices also lead to diversion of food crops to produce biofuels, thus pushing up crop prices.
    • India has not raised fuel prices since November and a significant hike is expected soon.

    What measures can the government take?

    • Other than liquidating its public stock of grain, the government can restrict exports to keep cereal price inflation in check.
    • As for edible oil, import duties have already been reduced significantly.
    • Retail food inflation, which rose to a 13-month high of 5.4% in January, is likely to rise further.
    • To ensure that the hunger situation does not get worse, it can expand PDS and enrol many more households.
    • On the fertilizer front, the government may have to secure supplies from Canada, Israel, and China.

    The overall impact of the Conflict?

    • The Russia-Ukraine crisis will send cooking gas, petrol and other fuel bills soaring for Indian households and businesses. Higher oil prices add to freight/transportation costs.
    • Depending on how long global oil prices remain elevated, the tensions could raise questions on the RBI’s credibility in making inflation projections and upset the government’s budget calculations, particularly fiscal deficit.
    • The surge in crude oil prices will lead to an increase in India’s oil import bills, and gold imports could jump back up, keeping the rupee under pressure.
    • India’s imports of petroleum products from Russia are only a fraction of its total oil import bill and, thus, replaceable.
    • However, getting alternative sources for fertilisers and sunflower oil may not be as easy.
    • Exports to Russia account for less than 1% of India’s total exports, but exports of pharmaceuticals and tea could face some challenges, as will shipments to CIS countries. 
    • Freight rate hikes could make overall exports less competitive, too.

    Way Forward

    • It is important to reform the grain-management-cum-food-subsidy system to release precious resources for growth of agriculture.
    • This should be combined with taking giant strides to raise productivity and producing more nutritious food while protecting the environment.
    • The paradox of Indian policy making can be judged by looking at the Union budget for the 2022-23 which provides more than Rs 2 lakh crore for food subsidy while agri-research and development gets a paltry Rs 8,500 crore.
      • It is well-known that agri-R&D gives a much higher return in terms of promoting growth with competitiveness, and reduces poverty by making food cheaper and controlling food inflation.
      • Hence India should focus more on agri-research and development.
    • On the fiscal side, the Government, which has been conservative in its revenue assumptions in the Budget, has the room to pre-emptively cut domestic fuel taxes to nip inflationary expectations, stoke faltering consumption levels and sustain India’s fragile post-Covid-19 recovery through this global churn.
    • Buffer stock of pulses have been used to tackle price volatility of these commodities. Pulses from the buffer were used very effectively during the COVID-19 pandemic for supplying @ 1 kg per household per month free of cost to approx.

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  • Protocols for social media

    Context

    The lack of clear systems within social media companies that claim to connect the world is appalling. It is time that they should have learned from multiple instances, as recent as the Israeli use of force in Palestine.

    Role of social media platforms in the context of conflict

    • There was no unpredictability over conflicts in the information age spilling over to social media platforms.
    • In the context of conflict, social media platforms have multiple challenges that go unaddressed.
    • Threat of information warfare: Content moderation remains a core area of concern, where, essentially, information warfare can be operationalised and throttled.
    • Their sheer magnitude and narrative-building abilities place a degree of undeniable onus on them.
    • After years of facing and acknowledging these challenges, most social media giants are yet to create institutional capacity to deal with such situations.
    • Additionally, they also act as a conduit for further amplification of content on other platforms.
    • Major social media platforms such as Facebook, Instagram, and Twitter also provide space for extremist views from fringe platforms, where the degree of direct relation to the user generating such content is blurred.

    Technology falls short

    • Misinformation and disinformation are thorny challenges to these platforms.
    • Algorithmic solutions are widely put to use to address them.
    • These include identification of content violative of their terms, reducing the visibility of content deemed inappropriate by the algorithm, and in the determination of instances reported to be violative of the terms by other users.
    • More often than not in critical cases, these algorithmic solutions have misfired, harming the already resource-scarce party.
    • The operational realities of these platforms require that the safety of users be prioritised to address pressing concerns, even at the cost of profits.

    Lessons for India

    • The lack of coherent norms on state behaviour in cyberspace as well as the intersection of business, cyberspace, and state activity is an opportunity for India.
    • Indian diplomats can initiate a new track of conversations here which can benefit the international community at large.
    • India should ensure that it initiates these conversations through well-informed diplomats.
    • Finally, it is necessary to reassess the domestic regulatory framework on social media platforms.
    • Transparency and accountability need to be foundational to the regulation of social media platforms in the information age.

    Conclusion

    It is in our national interest and that of a rule-based global polity that social media platforms be dealt with more attention across spheres than with a range of reactionary measures addressing immediate concerns alone.

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