The article analyses the factors contributing to the claim of 10% rise in total Foreign Direct Investment in 2020-21 and its impact on economy.
Making sense of increased FDI
Total foreign direct investment (FDI) inflow in 2020-21 is $81.7 billion, up 10% over the previous year, reported a recent Ministry of Commerce and Industry press release.
The short press release highlighted industry and State-specific foreign investment figures without detailed statistical information.
The Reserve Bank of India (RBI) bulletin, which was released a week earlier, has the details.
What explains increased gross inflows
The gross inflow consists of (i) direct investment to India and (ii) repatriation/disinvestment.
The disaggregation shows that direct investment to India has declined by 2.4%.
Hence, an increase of 47% in “repatriation/disinvestment” entirely accounts for the rise in the gross inflows.
In other words, there is a wide gap between gross FDI inflow and direct investment to India.
Similarly, measured on a net basis (that is, “direct investment to India” net of “FDI by India” or, outward FDI from India), direct investment to India has barely risen (0.8%) in 2020-21 over the last year.
What then accounts for the impressive headline number of 10% rise in gross inflow?
It is almost entirely on account of “Net Portfolio Investment”, shooting up from $1.4 billion in 2019-20 to $36.8 billion in the next year.
That is a whopping 2,526% rise.
Further, within the net portfolio investment, foreign institutional investment (FIIs) has boomed by an astounding 6,800% to $38 billion in 2020-21, from a mere half a billion dollars in the previous year.
This explains the surge in gross FDI inflows which is entirely on account of net foreign portfolio investment.
How FDI is different from FII
FDI inflow, in theory, is supposed to bring in additional capital to augment potential output (taking managerial control/stake).
In contrast, foreign portfolio investment, as the name suggests, is short-term investment in domestic capital (equity and debt) markets to realise better financial returns.
But the conceptual distinctions have blurred in official reporting, showing an outsized role of FDI and its growth in India.
How FPI distorted equity markets?
The deluge of FII inflow did little to augment the economy’s potential output.
It added a lot of froth to the stock prices.
When GDP has contracted by 7.3% in 2020-21 on account of the pandemic and the economic lockdown, the BSE Sensex nearly doubled from about 26,000 points on March 23, 2020 to over 50,000 on March 31, 2021.
BSE’s price-earnings (P-E) multiple — defined as share price relative to earnings per share — is among the world’s highest, close behind S&P 500 in the U.S.
FDI inflow’s contribution to domestic output
As Figure below shows, between 2013-14 and 2019-20, the ratio of net FDI to GDP has remained just over 1% (left-hand scale), with no discernible rising trend in it.
The proportion of net FDI to gross fixed capital formation (fixed investment) is range-bound between 4% and 6%.
These stagnant trends are evident when the economy’s fixed investment rate — gross fixed capital formation to GDP ratio — has plummeted from 31.3% in 2013-14 to 26.9% in 2019-20 (right-hand scale).
Thus, FDI inflow’s contribution to domestic output and investment remains modest.
Conclusion
The flood of FIIs has boosted stock prices and financial returns. These inflows did little to augment fixed investment and output growth.
A notable actor has filed a lawsuit in the Bombay High Court against the 5G telecom technology up-gradation, trial runs for which have started in India now.
What is 5G technology?
5G or fifth generation is the latest upgrade in the long-term evolution (LTE) mobile broadband networks.
It mainly works in 3 bands, namely low, mid and high-frequency spectrum — all of which have their own uses as well as limitations.
Issues with the rollout
However, 5G and its rollout in many countries have been hampered due to fears over health concerns even some conspiracy theories as well, which have tried to link it with the coronavirus among other things.
The recent lawsuit is asking questions around the overall impact of 5G and low intensity radiofrequency (RF) electronic magnetic field (EMF) radiation on human health, and its environmental impact as well.
These concerns, while not yet proven, have been raised by various scientists before too.
Arguments raised in the lawsuit
It has stated that the ‘radiation’ it will emit will be “extremely harmful and injurious to the health and safety of the people”.
While using wireless devices one is in a constant dilemma about “RF radiation from wire-free gadgets and network cell towers”.
There is sufficient reason to believe that the radiation is extremely harmful and injurious to the health and safety of the people.
It wants the concerned department to certify that 5G technology is safe for humans and also animals and birds.
Why is 5G essential?
5G promises to revolutionize mobile broadband and is a big generational leap over the existing 4G technology.
This new technology will be capable of not just ensuring fast internet on our phones, but also help power IoT (Internet of Things) networks to run connected cars and homes smarter.
It will also support the streaming of rich media.
Rollout status in India
5G has not yet been rolled out in India though some companies have been given a trial spectrum to test 5G technology in the country.
Once this is over, it is expected that networks will go live with the 5G bands by the end of this year.
The 5G rollout is expected to gather pace in the country by 2022.
Fear around the impact of 5G radiation on human health
The claim is that the more powerful 5G waves will emit more radiation and cause harm to humans as well as other living beings.
Also, 5G will require more towers in order to ensure better connectivity, and since it will power more than just our smartphones, it will increase human exposure to such radiation in general.
This is an extension of the idea that cellular towers, which emit low-level RF-EMF radiation, are in general damaging our bodies.
But radiation from cellphone towers, mobile phones, WiFi routers is typically called non-ionizing radiation like radio waves, microwaves, and optical radiation.
RF fields have been classified by WHO’s International Agency for Research on Cancer (IARC) as possibly carcinogenic to humans (Group 2B).
Layman understandings over such radiations
There’s no doubt that radiation at very high levels, also referred to as ionizing radiation, heats up our tissue and can eventually lead to cancer.
This applies to medical devices such as a CT-scan machine or X-ray machine, which emit high-level ionizing radiation.
That’s exactly why doctors don’t recommend that you go get a CT scan for every health issue because it does increase unnecessary exposure to radiation.
But there are increasing concerns that our smartphones, other WiFi-ready devices such as laptops, and mobile phone towers which also emit low-level RF radiation are damaging our bodies given the constant exposure.
What WHO has to say?
On its page on 5G, the World Health Organization (WHO) says “no adverse health effect has been causally linked with exposure to wireless technologies.”
But it also states that “only a few studies have been carried out at the frequencies to be used by 5G.”
Given the growing concerns, the WHO is conducting “a health risk assessment from exposure to radio frequencies, covering the entire radiofrequency range, including 5G.”
The article highlights the risk posed by pandemic to the gains made by India on reducing the child labour in India.
Child labour in India
A Government of India survey (NSS Report No. 585, 2017-18) suggests that only 79.6%. of the children in the age group of 14-17 years are attending educational institutions (formal and informal).
The Census of India 2011 reports 10.1 million working children in the age group of 5-14 years.
Out of whom 8.1 million are in rural areas mainly engaged as cultivators (26%) and agricultural labourers (32.9%).
UNESCO estimates based on the 2011 Census record 38.1 million children as “out of school” i.e.18.3% of total children in the age group of 6-13 years.
A Rapid Survey on Children (2013-14), jointly undertaken by the Ministry of Women and Child Development and UNICEF, found that less than half of children in the age group of 10-14 years have completed primary education.
How policies and initiatives helped reduce child labour in India (2001-11)
Child labour in India decreased in the decade 2001 to 2011.
Policy interventions such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005, the Right to Education Act 2009 and the Mid Day Meal Scheme have paved the way for children to be in schools along with guaranteed wage employment (unskilled) for rural families.
Efforts towards convergence of government schemes is also the focus of the implementation of the National Child Labour Project.
Ratifying International Labour Organization Conventions Nos. 138 and 182 in 2017, the Indian government further demonstrated its commitment to the elimination of child labour.
The Ministry of Labour and Employment-operated online portal allows to share information and coordinate on child labour cases at the national, State and local levels for effective enforcement of child labour laws.
Challenges ahead
The economic contraction and lockdowns have worsened the situation, posing a real risk of backtracking the gains made in eliminating child labour.
With increased economic insecurity, lack of social protection and reduced household income, children from poor households are being pushed to contribute to the family income.
With closure of schools and challenges of distance learning, children may drop out leaving little scope for return unless affirmative and immediate actions are taken.
As many schools and educational institutions are moving to online platforms for continuation of learning, the ‘digital divide’ is a challenge that India has to reconcile within the next several years.
The NSS Report titled ‘Household Social Consumption on Education in India’ suggests that in 2017-18, only 24% of Indian households had access to an Internet facility.
The Annual Status of Education Report (ASER) 2020 survey highlights that a third of the total enrolled children received some kind of learning materials from their teachers during the reference period (October 2020) as digital mode of education was opted for.
Way forward
It is through strategic partnerships and collaborations involving government, employers, trade unions, community-based organisations and child labour families that we could make a difference building back better and sooner.
We need a strong alliance paving our way towards ending child labour in all its forms by 2025 to achieve Sustainable Development Goal 8.7.
Consider the question “What are the policy measures and programmatic intervention implemented to reduce the child labour in India. How Covid-19 threatens the gains made on reducing the child labour?”
Conclusion
To deal with the child labour challenge, we need the right level of commitment among all the relevant stakeholders and the right mix of policy and programmatic interventions are present.
Recently Cyclone Tauktae and Cyclone Yaas wreaked havoc in several states of India with the credit for the cyclogenesis can be given to exceptionally warmer Indian seas this year, making atmospheric and ocean conditions favourable for frequent formation of cyclones and their rapid intensification.
Introduction
Cyclones are rapid inward air circulation around a low-pressure area. The air circulates in an anticlockwise direction in the Northern hemisphere and clockwise in the Southern hemisphere.
Cyclones are usually accompanied by violent storms and bad weather.
The word Cyclone is derived from the Greek word Cyclos meaning the coils of a snake. It was coined by Henry Peddington because the tropical storms in the Bay of Bengal and the Arabian Sea appear like coiled serpents of the sea.
What are tropical Cyclones?
A Tropical cyclone is an intense circular storm that originates over warm tropical oceans and is characterized by low atmospheric pressure, high winds, and heavy rain.
Cyclones are formed over slightly warm ocean waters. The temperature of the top layer of the sea, up to a depth of about 60 meters, need to be at least 28°C to support the formation of a cyclone.
This explains why the April-May and October-December periods are conducive for cyclones.
Then, the low level of air above the waters needs to have an ‘anticlockwise’ rotation (in the northern hemisphere; clockwise in the southern hemisphere).
During these periods, there is an ITCZ in the Bay of Bengal whose southern boundary experiences winds from west to east, while the northern boundary has winds flowing east to west.
Once formed, cyclones in this area usually move northwest. As it travels over the sea, the cyclone gathers more moist air from the warm sea which adds to its heft.
Formation of a Cyclone
(The above figure shows how cyclones form. The green arrows show where warm air is rising. The red arrows indicate where cool air is sinking)
Requirements for a Cyclone to form
There are six main requirements for tropical cyclogenesis:
Sufficiently warm sea surface temperatures.
Atmospheric instability.
High humidity in the lower to middle levels of the troposphere.
Enough Coriolis force to develop a low-pressure center.
A preexisting low-level focus or disturbance.
Low vertical wind shear.
Origin
The formation and initial development of a cyclonic storm depends upon the transfer of water vapour and heat from the warm ocean to the overlying air, primarily by evaporation from the sea surface.
It encourages formation of massive vertical cumulus clouds due to convection with condensation of rising air above the ocean surface.
Under favorable conditions, multiple thunderstorms originate over the oceans. These thunderstorms merge and create an intense low pressure system (wind is warm and lighter).
Early Stage
In the thunderstorm, air is uplifted as it is warm and light. At certain height, due to lapse rate and adiabatic lapse rate, the temperature of air falls and moisture in the air undergoes condensation.
Condensation releases latent heat of condensation making the air more warmer. It becomes much lighter and is further uplifted.
The space is filled by fresh moisture laden air. Condensation occurs in this air and the cycle is repeated as long as the moisture is supplied.
Due to excess moisture over oceans, the thunderstorm intensifies and sucks in air at much faster rate. The air from surroundings rushes in and undergoes deflection due to Coriolis force creating a cyclonic vortex (spiraling air column. Similar to tornado).
Due to centripetal acceleration (centripetal force pulling towards the center is countered by an opposing force called centrifugal force), the air in the vortex is forced to form a region of calmness called an eye at the center of the cyclone. The inner surface of the vortex forms the eye wall, the most violent region of the cyclone.
All the wind that is carried upwards loses its moisture and becomes cold and dense. It descends to the surface through the cylindrical eye region and at the edges of the cyclone.
Continuous supply of moisture from the sea is the major driving force behind every cyclone. On reaching the land the moisture supply is cut off and the storm dissipates.
If ocean can supply more moisture, the storm will reach a mature stage.
Mature Stage
At this stage, the spiraling winds create multiple convective cells with successive calm and violent regions.
The regions with cumulonimbus cloud (rising limbs of convective cell) formation are called rain bands below which intense rainfall occurs.
The ascending air will lose moisture at some point and descends (subsides) back to surface through the calm regions (descending limbs of convection cell – subsiding air) that exist between two rain bands.
Cloud formation is dense at the center. The cloud size decreases from center to periphery.
Rain bands are mostly made up of cumulonimbus clouds. The ones at the periphery are made up of nimbostratus and cumulus clouds.
The dense overcast at the upper levels of troposphere is due to cirrus clouds which are mostly made up of hexagonal ice crystals.
The dry air flowing along the central dense overcast descends at the periphery and the eye region.
Destruction Caused by Cyclones
Cyclones are disastrous in many ways. They do more harm than any good to the coastal areas.
1) Strong Winds
Cyclones are known to cause severe damage to infrastructure through high-speed winds.
Very strong winds which accompany a cyclonic storm damages installations, dwellings, communications systems, trees etc., resulting in loss of life and property.
2) Torrential rains and inland flooding
Torrential rainfall (more than 30 cm/hour) associated with cyclones is another major cause of damages. Unabated rain gives rise to unprecedented floods.
Heavy rainfall from a cyclone is usually spread over a wide area and cause large scale soil erosion and weakening of embankments.
3) Storm Surge
A Storm surge can be defined as an abnormal rise of sea level near the coast caused by a severe tropical cyclone.
As a result of which seawater inundates low lying areas of coastal regions drowning human beings and life stock.
It causes eroding beaches and embankments, destroys vegetation and leads to the reduction of soil fertility.
Recent Cyclones
Cyclone Tauktae
Extremely Severe Cyclonic Storm Tauktae was a powerful tropical cyclone in the Arabian Sea that became the strongest tropical cyclone to make landfall in the Indian state of Gujarat since the 1998 Gujarat cyclone and one of the strongest tropical cyclones to ever affect the west coast of India.
Tauktae brought heavy rainfall and flash floods to areas along the coast of Kerala and on Lakshadweep. There were reports of heavy rain in the states of Goa, Karnataka and Maharashtra as well.
Tauktae resulted in at least 169 deaths in India, and left another 81 people missing.
66 people died, at least 20 people are still missing after Barge P305 sank near Heera oil field, off the coast of Mumbai, although the Indian Navy said it had rescued 186 survivors of the 270 people aboard by May 19.
Losses from Tauktae are estimated at ₹15,000 crore or US$2.1 billion.
Cyclone Yaas
Very Severe Cyclonic Storm Yaas was a relatively strong and highly damaging tropical cyclone that made landfall in Odisha and brought significant impacts to West Bengal during late May 2021.
Yaas formed from a tropical disturbance that the Indian Meteorological Department first monitored on May 23.
Evacuations were also ordered, starting on May 24 on low-lying areas in East Midnapore and West Midnapore and Jhargram.
As of May 28, 20 people have been reported dead due to Yaas.
The total damages in West Bengal, the most heavily impacted state from Yaas, were estimated to be around ₹20 thousand crore (US$2.76 billion).
Management of Cyclones in India
In 2005, the country introduced new laws to set up what’s called the National Disaster Management Authority, a central agency charged with one thing: responding to and minimizing the impact of disasters.
A year later, in 2006, India established a National Disaster Response Force (NDRF), a specialized corps of highly trained men and women focused on disasters such as cyclones and earthquakes. It’s now comprised of almost 25,000 personnel.
Apart from institutional measures, there are many structural and non-structural measures that have been taken for effective disaster management of cyclones:
The structural measures include construction of cyclone shelters, construction of cyclone-resistant buildings, road links, culverts, bridges, canals, drains, saline embankments, surface water tanks, communication and power transmission networks etc.
Non-structural measures like early warning dissemination systems, management of coastal zones, awareness generation and disaster risk management and capacity building of all the stakeholders involved.
These measures are being adopted and tackled on State to State basis under National Cyclone Risk Mitigation Project (NCRMP) being implemented through World Bank Assistance.
Issues in Cyclone Mitigation
Post than pre focus: Disaster management in India is largely confined to post-disaster relief works. It is more about management than loss prevention.
Population: One-third of the population in India lives in the coastal area. Most of them are marginalized people who are ill-prepared and unable to cope up with a disaster.
Poor response: The warning of a cyclone is not properly communicated between the concerned agencies. In many cases, the warning is not taken seriously by the agencies which cause delayed effort for the prevention of a disaster. This was evident in the recent Ockhi cyclone disaster.
Lack of awareness: among people about the impact and magnitude of the disaster. Also what to act during and post disasters.
Coordination Issues: There is also a lack of coordination between the local communities for search and rescue missions. Also poor coordination state and center coordination and its agencies.
Measures need to be taken for effective mitigation
Pre Disaster
Provide cyclone forecasting, tracking and warning systems
Construction of cyclone shelters, cyclone-resistant buildings, road links, bridges, canals, drains etc.
Establishing Early Warning Dissemination System (EWDS) and Capacity building for coastal communities.
During disaster
Cautionary advice should be put out on social platforms urging people to stay safe
The perception of people decides the intensity of the disaster. If people take necessary proactive steps to deal with disaster then even the severe disaster can be dealt with minimum damage.
Delivery of food and health care via mobile hospitals, with priorities to women child & elders.
Protection of the community and their evacuation and quicker response.
Post-disaster
It is vital that the learning from each event is shared nationally, and the capacity of officials and communities to manage disasters built continuously.
Among the securities available to individuals in many countries is insurance against property losses. Viable policies should be made available in India too.
Providing alternative means of communication, energy and transport just after the disaster.
Way Forward
Infrastructure of the regions that are vulnerable to cyclonic activities must be made/ designed so that evacuation process gets easy and damage gets minimized.
Forecast techniques must be improved so as to get more time for preparing before a cyclonic storm.
School and social awareness campaigns must be organized in the vulnerable areas for better individual preparedness.
NDRF and other emergency forces must be made more equipped with emergency kits and modern machinery for them to play a better role in keeping them and others safe.
Now the imperative for India is not only to have infrastructure that is resilient, functional and that can bounce back after a disaster, but also to have infrastructure withstand and be operational during a crisis.
For this India need to employ more technology, strict following of command structure, and most importantly the participation and cooperation of local communities in the affected area.
There must be test facilities made for the emergency forces to prepare themselves better for the actual situations.
One is to look at this as an outlier — after all, India, like most other countries, is facing a once-in-a-century pandemic — and wish it away.
The other way would be to look at this contraction in the context of what has been happening to the Indian economy since the regime change.
Impact of the new regime
Let’s look at the most important ones.
(1) Gross Domestic Product
Contrary to perception advanced by the Union government, the GDP growth rate has been a point of growing weakness for the last 5 of these 7 years.
The GDP growth rate steadily fell from over 8% in FY17 to about 4% in FY20, just before Covid-19 hit the country.
The economy was already struggling with massive bad loans which were further deteriorated by demonetization and the GST regime.
(2)GDP per capita
Often, it helps to look at GDP per capita, which is total GDP divided by the total population, to better understand how well-placed an average person is in an economy.
At a level of Rs 99,700, India’s GDP per capita is now what it used to be in 2016-17 — the year when the slide started.
As a result, India has been losing out to other countries. A case in point is how even Bangladesh has overtaken India in per-capita-GDP terms.
(3) Unemployment rate
This is the metric on which India has possibly performed the worst.
First came the news that India’s unemployment rate, even according to the government’s own surveys, was at a 45-year high in 2017-18 — the year after demonetization and GST.
Then in 2019 came the news that between 2012 and 2018, the total number of employed people fell by 9 million — the first such instance of total employment declining in independent India’s history.
As against the norm of an unemployment rate of 2%-3%, India started routinely witnessing unemployment rates close to 6%-7% in the years leading up to Covid-19.
The pandemic, of course, made matters considerably worse.
What makes India’s unemployment even more worrisome is the fact that this is happening even when the labor force participation rate — which maps the proportion of people who even look for a job — has been falling.
(4)Inflation rate
After staying close to the $110-a-barrel mark throughout 2011 to 2014, oil prices (India basket) fell rapidly to just $85 in 2015 and further to below (or around) $50 in 2017 and 2018.
On the one hand, the sudden and sharp fall in oil prices allowed the government to completely tame the high retail inflation in the country, while on the other, it allowed the government to collect additional taxes on fuel.
But since the last quarter of 2019, India has been facing persistently high retail inflation.
Even the demand destruction due to lockdowns induced by Covid-19 in 2020 could not extinguish the inflationary surge.
(5) Fiscal deficit
The fiscal deficit is essentially a marker of the health of government finances and tracks the amount of money that a government has to borrow from the market to meet its expenses.
Typically, there are two downsides of excessive borrowing:
One, government borrowings reduce the investible funds available for the private businesses to borrow (this is called “crowding out the private sector”); this also drives up the price (that is, the interest rate) for such loans.
Two, additional borrowings increase the overall debt that the government has to repay. Higher debt levels imply a higher proportion of government taxes going to pay back past loans. For the same reason, higher levels of debt also imply a higher level of taxes.
On paper, India’s fiscal deficit levels were just a tad more than the norms set, but, in reality, even before Covid-19, it was an open secret that the fiscal deficit was far more than what the government publicly stated.
(6)Rupee vs dollar
The exchange rate of the domestic currency with the US dollar is a robust metric to capture the relative strength of the economy.
A US dollar was worth Rs 59 when the government took charge in 2014.
Seven years later, it is closer to Rs 73. The relative weakness of the rupee reflects the reduced purchasing power of the Indian currency.
What’s the outlook on growth?
The biggest engine for growth in India is the expenditure by common people in their private capacity.
This “demand” for goods accounts for 55% of all GDP.
The private consumption expenditure has fallen to levels last seen in 2016-17.
West Bengal CM has announced that the outgoing Chief Secretary would be appointed Chief Advisor to the Chief Minister.
Story so far
A senior IAS officer has been the subject of a tussle between the Centre and the state government over the last few days.
He was due to begin an extension of three months after retiring as Chief Secretary, but the Centre instead asked him to report and join the Government of India.
He did not do so.
How officers get an extension?
Rule 16(1) of DCRB (Death-cum-Retirement Benefit) Rules says that “a member of the Service may be given an extension of service for a period not exceeding three months in the public interest, with the prior approval of the Central Government”.
For an officer posted as Chief Secretary of a state, this extension can be for six months.
Central Deputation
In normal practice, the Centre asks every year for an “offer list” of officers of the All India Services willing to go on central deputation.
Rule 6(1) of the IAS Cadre Rules says an officer may with the concurrence of the State Governments concerned and the Central Government, be deputed for service under the Central Government or another State Government…”
It says “in case of any disagreement, the matter shall be decided by the Central Government and the State Government or State Governments concerned shall give effect to the decision of the Central Government.”
Issues with such deputation
Because of the Rule, states have to bear the brunt of arbitrary actions taken by the Centre, while the Rule makes it difficult for the Centre to enforce its will on a state that refuses to back down.
What next
The Centre cannot take action against civil service officials who are posted under the state government unless the latter agrees.
Rule 7 of the All India Services (Discipline and Appeal) Rules, 1969, states that the authority to institute proceedings and to impose penalty will be the state government.
For any action to be taken against an officer of the All India Services, the state and the Centre both need to agree.
China will for the first time allow couples to have a third child in a further relaxation of family planning rules five years after a “two-child policy” largely failed to boost birth rates.
Do you think that the One-Child Policy would be effective for population control in India?
What was the One-Child Policy?
China embarked upon its one-child policy in 1980 when the Communist Party was concerned that the country’s growing population, which at the time was approaching one billion, would impede economic progress.
The policy was implemented more effectively in urban areas.
It was enforced through several means, including incentivizing families financially to have one child, making contraceptives widely available, and imposing sanctions against those who violated the policy.
How well did the policy fare?
Chinese authorities have long hailed the policy as a success, claiming that it helped the country avert severe food and water shortages by preventing up to 40 crore people from being born.
However, the policy was also a source of discontent, as the state used brutal tactics such as forced abortions and sterilizations.
It also met criticism and remained controversial for violating human rights, and for being unfair to poorer Chinese since the richer ones could afford to pay economic sanctions if they violated the policy.
Additionally, China’s rulers have been accused of enforcing reproductive limits as a tool for social control.
The Uighur Muslim ethnic minority, for example, has been forced to have fewer children to restrict the growth of their population.
Demographic changes due to the policy
Due to the policy, while the birth rate fell, the sex ratio became skewed towards males.
This happened because of a traditional preference for male children in the country, due to which abortion of female fetuses rose and so did the number of girls who were placed in orphanages or abandoned.
Experts have also blamed the policy for making China’s population age faster than other countries, impacting the country’s growth potential.
It is also suggested that because of the long-lingering impact of the policy, China would be unable to reap the full benefits of its economic growth and will need other ways to support it.
Skeptics of the new move
Experts say relaxing limits on reproductive rights alone cannot go a long way in averting an unwanted demographic shift.
The main factors behind fewer children being born, they say, are rising costs of living, education, and supporting aging parents.
The problem is made worse by the country’s pervasive culture of long working hours.
There has also been a cultural shift during the decades in which the one-child policy remained in force, with many couples believing that one child is enough, and some expressing no interest in having children.
RDSO (Research Design & Standards Organization) of Indian Railways has become the FIRST Institution to be declared SDO under the “One Nation One Standard ” mission of BIS ( Bureau of Indian Standards).
About RDSO
Research Designs & Standards Organization (RDSO), Lucknow, \ is the sole R&D Wing of the Ministry of Railways.
It is one of India’s leading Standard formulating Body undertaking standardization work for the railway sector.
Answer this PYQ in the comment box:
Q.Consider the following statements:
The Standard Mark of the Bureau of Indian Standards (BIS) is mandatory for automotive tyres and tubes.
AGMARK is a quality Certification Mark issued by the Food and Agriculture Organisation (FAO).
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
What is One Nation One Standard mission?
The purpose of setting standards and enforcing them is not to bring back “inspection raj” but to ensure that quality products are made available to consumers.
The Bureau of Indian Standards (BIS), the only national body that frames standards, has come out with more than 20,000 standards for various products and services so far.
Besides this, there are about 50-odd agencies that have framed about 400 standards in the country.
There are multiple standards in the country for a single product/service. The new mission is to converge such standards with the BIS.
Objectives of the mission:
No one should feel the need to go abroad to get a quality certification.
Lab testing in India should be of world standards. Modern equipment and the latest technologies would be used there.
Why such a move?
Having uniform national standards will help in making it mandatory for more products.
The government proposes to set Indian standards in line with the global benchmarks, just like other countries enforce their standards on imported products.
The Centre, through this move, wants foreign goods coming into India to comply with Indian standards.
Back2Basics: Bureau of Indian Standards (BIS)
BIS is the National Standards Body of India working under the aegis of the Ministry of Consumer Affairs, Food & Public Distribution.
It is established by the Bureau of Indian Standards Act, 1986 which came into effect on 23 December 1986.
The organization was formerly the Indian Standards Institution (ISI), set up under the Resolution of the Department of Industries and Supplies in September 1946.
The ISI was registered under the Societies Registration Act, 1860.
A new Bureau of Indian standard (BIS) Act 2016 has been brought into force with effect from 12 October 2017.
The Act establishes the Bureau of Indian Standards (BIS) as the National Standards Body of India.
The article gives the overview of the impact of second Covid wave on the fiscal health of the States.
Impact of first Covid wave on fiscal health of states
The analysis of the fiscal data for all states with the exception of Goa, Manipur, Meghalaya and Sikkim reveal a grim picture.
The aggregate revenue deficit for 24 state governments soared to Rs 4 trillion as per the revised estimates (RE) for 2020-21, up from a modest budgeted amount of Rs 353 billion.
And, despite a 16 per cent cut in capital spending, the fiscal deficit of these states deteriorated to Rs 8.7 trillion in 2020-21 (RE), up from the budgeted estimate of Rs 6.0 trillion.
How states had projected ambitious decline in revenue deficit
The budgets for the ongoing fiscal year, had projected an ambitious, decline in the aggregate revenue deficit to Rs 1.2 trillion, lower than the pre-Covid-19 level of Rs 1.3 trillion in 2019-20.
This has benefitted from the considerable expansion in their revenue receipts this year, forecasted at 24.7 per cent, compared to a moderate 12.4 per cent increase in their aggregate revenue expenditure.
This anticipated shrinking of the revenue deficit has allowed states to plan for a substantial expansion in their capital expenditure and net lending pegged at 34.1 per cent.
This anticipated shrinking also allowed the States to attempt a modest correction in their budgeted fiscal deficit, bringing it down to Rs 7.6 trillion in 2021-22 from Rs 8.7 trillion in 2020-21 (RE).
Fiscal concerns over second Covid wave
The second wave of Covid-19 infections and its spread to rural areas has fanned fiscal concerns.
The curtailed consumption of discretionary items and contact-intensive services will dampen the growth of states’ own tax revenues this year.
Moreover, lower mobility during the regional lockdowns will constrain tax revenues that states earn on fuels.
The data for the generation of GST e-way bills confirms that the staggered imposition of the localised lockdowns has had an adverse impact on economic activity since April.
This will result in a sequential slowdown in GST collections that will be reported in the subsequent two months.
Nevertheless, the GST collections is likely to nearly double to Rs 1.7 trillion in the first quarter of this year, up from Rs 0.9 trillion over the same period last year, boosted by the record-high collections in April,
That reflected healthy economic activity in March.
The shortfall and way forward
States’ own tax collections is estimated to trail their budget estimates as they were drawn up before the second wave.
For this year, state GST collections would be at Rs 6.1 trillion, falling below their projected revenues of Rs 8.7 trillion.
This indicates a GST compensation requirement of Rs 2.65 trillion — only 38 per cent of which may be met through the expected GST compensation cess collections.
Following the meeting of the GST Council, the Finance Minister has indicated that a back-to-back loan of Rs 1.58 trillion will be provided to the states.
If the tranches of this loan start flowing to the states soon, it will alleviate their anticipated revenue crunch over the next two months.
Already, there has been a sharp rise in the size of the upcoming State Development Loan auction to Rs. 19,550 crore, relative to the modest average size of around Rs. 7,400 crore seen so far in the first eight auctions held in FY2022.
Conclusion
In any case, the capital spending budgeted by certain state governments this year appears to be optimistic. Moreover, localised restrictions imposed during the last two months are expected to have constrained activity.
The article highlights the need for coherent cryptocurrency policy and avoid missing the benefits offered by the technology.
Growing dominance of cryptocurrencies
Created by Satoshi Nakamoto in 2008, Bitcoin is the most popular cryptocurrency.
It is a fully decentralised, peer-to-peer electronic cash system that didn’t need the purview of any third-party financial institution.
The Bitcoin, which traded at just $ 0.0008 in 2010, commanded a market price of just under $65,000 this April.
Many newer coins were introduced since Bitcoin’s launch, and their cumulative market value touched $ 2.5 trillion this May.
Within a span of just over a decade, their value has surpassed the size of economies of most modern nations.
The “cryptomarket” grew by over 500 per cent, even while the pandemic unleashed global economic carnage not seen since the Great Depression.
China’s recent crackdown on cryptocurrency had far-reaching consequences.
An astounding trillion US dollars were wiped out from the global cryptomarket within a span of 24 hours.
This kind of volatility mentioned above has always been a concern for regulators and investors alike.
India’s approach
Law enforcement and taxation agencies have called for a ban, expressing concerns over cryptocurrencies being used as instruments for illicit activities, including money laundering and terror funding.
In 2018, the Reserve Bank barred our financial institutions from supporting crypto transactions — but the Supreme Court overturned it in 2020.
Yet, Indian banks still block these transactions, and the government has circulated a draft bill outlawing all cryptocurrency activities, which has been under discussion since 2019.
The Reserve Bank has announced the launch of a private blockchain-supported official digital currency, similar to the digital Yuan.
India is increasingly mimicking China’s paradoxical attempt to centralise a decentralised ecosystem.
India is trying to decouple cryptocurrencies from their underlying blockchain technology, and still derive benefit.
Unfortunately, this is impractical, and shows a lack of understanding of this disruptive innovation.
The funds that have gone into the Indian blockchain start-ups are less than 0.2 per cent of the amount the sector raised globally.
The current central government approach makes it near-impossible for entrepreneurs and investors to acquire much economic benefit.
Need for regulation
Regulation is definitely needed to prevent serious problems, to ensure that cryptocurrencies are not misused, and to protect unsuspecting investors from excessive market volatility and possible scams.
However, regulation needs to be clear, transparent, coherent and animated by a vision of what it seeks to achieve.
India has not been able to tick these boxes, and we’re in danger of missing out in the global race altogether.
Way forward
Any new regulations made in this sector should prevent the misuse of these digital assets without hindering innovation and investments.
Provisions have to be made to route the value extracted from these networks transparently into our financial system.
Regulatory uncertainties over India’s position on cryptocurrency highlights the need for clear-headed policy-making.
Consider the question “India was a late adopter in all the previous phases of the digital revolution be it the semiconductors, the internet or smartphones. Do you think the same is happening again in India’s adoption of cryptocurrencies and blockchain technology?”
Conclusion
We are currently on the cusp of the next phase, which would be led by technologies like blockchain. We have the potential to channel our human capital, expertise and resources into this revolution, and emerge as one of the winners of this wave. All we need to do is to get our policymaking right.
