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  • [Yojana Archive] India As a Space Power

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    India’s Space Program: A backgrounder

    1. Inception: Indian Space Programme began with the vision of Dr Vikram Sarabhai that we must be second to none in the application of advanced technologies for the benefit of society.
    2. Formation of INCOIS: It was with the formation of the Indian National Committee for Space Research (INCOSPAR) in 1962.
    3. First rocket into space: It was followed by the first sounding rocket launch from Thumba Equatorial Rocket Launching Station in 1963 that the space programme formally took off.
    4. Establishment of ISRO: The Indian Space Research Organization (ISRO) was formed in 1969, superseding INCOSPAR.
    5. Separate department: With the establishment of the Space Commission and the Department of Space (DOS) in 1972, ISRO was brought under DOS.

    Organizations associated with ISRO

    1. Vikram Sarabhai Space Centre (VSSC), Trivandrum: Hub for sounding rockets, solid propellants, etc.
    2. Space Applications Centre (SAC), Ahmedabad: Payload development and related electronics

    Journey of ISRO

    [A] Satellites

    (1) Launching of a Satellite

    • India’s first satellite Aryabhata, which was launched on 19 April 1975, from a launch centre in the former Soviet Union.
    • Later, Bhaskara-I and II, the two experimental earth observation satellites, provided the confidence to build complex operational remote sensing satellites.

    (2) Communication satellites

    • APPLE- Ariane Passenger PayLoad Experiment was India’s first experimental communication satellite.
    • These satellites were launched free-of-cost, which reflects India’s successful international space cooperation policy.

    (3) INSAT Program

    • Two further significant satellite communication experiments were SITE– Satellite Instructional Television Experiment (1975-76) and STEP– Satellite Telecommunication Experimental Project (1977)
    • This paved the way for INSAT (Indian National Satellite) series of satellites.

    [B] Transportation Modules

    (1) SLV

    • In the space transportation domain, the commissioning of the Satellite Launch Vehicle-3 (SLV-3) project in the early 1970s was the first indigenous experimental satellite launch vehicle.
    • As a four stage, all solid, launch vehicle, SLV-3 had its successful launch in July 1980, thrusting India into the select league of six countries with the capability to launch satellites on their own.
    • The ASLV- Augmented Satellite Launch Vehicle project, in the early 1980s, was the next step of evolution in launch vehicle technology.

    (2) PSLV

    • In mid 80s came the Polar Satellite Launch Vehicle (PSLV) project. PSLV was successfully launched in 1994.
    • The vehicle has proven to be a workhorse of ISRO, logging over 50 successful missions, launching national as well as foreign satellites.
    • On 15 February 2017, PSLV created a world record by successfully placing 104 satellites.
    • The nation embarked upon a highly challenging quest to master the complex cryogenic technology.

    (3) GSLV

    • The commissioning of the Geosynchronous Satellite Launch Vehicle (GSLV) in the 1990s was a step in this direction. The launch vehicle was designed with three stages.
    • With the injection of Chandrayaan-2 into Earth Parking Orbit in July 2019, GSLV Mk III successfully entered into its operational phase.

    (4) SSLV

    • The Small Satellites Launching Vehicles (SSLVs) used for commercial launching of small satellites is under incubation.

    [C] Remote Sensing Satellites

    • INSAT-1B, India’s first multipurpose operational satellite was launched in 1983. It brought major revolution in
    • India’s telecommunications, television broadcasting, and weather-forecasting domains.
    • In 1988, IRS-1A, the first operational satellite built in India, started imaging the earth. During the 1990s, ISRO began building INSAT-2 series of multipurpose satellites indigenously.
    • Today, India has a fleet of advanced remote sensing satellites.
    • High Throughput Satellites (HTS) such as GSAT- 11, GSAT-29, and GSAT-19 are supporting the Digital India campaign by boosting the broadband connectivity in rural India.

    Major accomplishments

    (1) Chandrayaan

    • The space science missions of India– Chandrayaan-1, Mars Orbiter Mission, AstroSat, and Chandrayaan-2– have caught the attention of the world.
    • With Chandrayaan-1, India became the fourth country to send a probe to the lunar surface after the United States, the Soviet Union, and Japan.
    • It conclusively discovered water molecules on the lunar surface, it was widely hailed as a path-breaking discovery.

    (2) Mission Mangal (Mars Orbiter Mission)

    • Launched by PSLV in November 2013, the Mars Orbiter Spacecraft encountered Mars in September 2014.
    • With this, ISRO has become the fourth space agency to successfully send a spacecraft to Mars orbit.

    (3) Others

    • AstroSat: It recently made a major breakthrough by discovering one of the earliest galaxies in extreme- Ultraviolet light.
    • NAVIC: ISRO has also successfully established and operationalized Navigation with Indian Constellation (NavIC) which provides highly accurate Position, Navigation, and Time information to users.
    • GAGAN: Further, through GPS Aided GEO Augmented Navigation (GAGAN), ISRO is providing Satellite-based Navigation services for better Air Traffic Management over Indian Airspace.

    Future Projects

    • Gaganyaan Programme: It was approved by the Government of India in 2018. It has the stated objective of demonstrating human space flight capability to Low- Earth Orbit (LEO) for a defined duration and safe recovery after the mission.
    • Human Space Flight Centre (HSFC): This was constituted in ISRO for implementing the vision on the human space flight programme.

    Major breakthroughs: Commercialization of Space Activities

    • Indian National Space Promotion and Authorization Center (IN-SPACe): The creation of the IN-SPACE to promote, handhold, and authorise Non-Government Private Entities (NGPEs) to undertake space activities shall unleash the next wave of advancements in the sector.
    • New Space India Limited (NSIL):  Empowering the PSU NSIL to own the operational launch vehicles and space assets of ISRO, opens up a new chapter in the management of space activities in the country.
    • ANTRIX: ISRO also has a business branch called Antrix, which markets ISRO’s space products and technologies to a global audience.

    Various challenges

    • Security concerns from private activities: Government worries over knowledge sharing, launch methods, and satellite capabilities have led to a reluctance to allow private actors in the market due to the security concerns.
    • Long gestation period: Many approval processes take a long time to complete. Approvals take around a year and a half. This comes at a time when the next three to four years are critical for the sector’s growth.
    • State control: The ISRO is directly controlled by the Department of Space (DOS), which is under the Prime Minister’s Office.
    • Licensing issues: Another regulatory worry is the licensing structure for satellite earth station gateways, which needs to be transformed to make it easier for any satellite operator to set one up.
    • Limited indigenization: Another challenge is promoting indigenous innovation. In the new global climate, the challenge for the country is to continue to benefit from this innovation.

    Way forward

    • Creating a policy and regulatory framework that is predictable for both ISRO and private firms.
    • Future planetary exploration and space travel should include the private sector.
    • Allowing commercial enterprises to rent ISRO testing facilities for the purpose of testing their products and equipment.
    • Improved regulatory clarity would result in fewer hurdles to entry for private companies and better synergy between ISRO and private partners.
    • Private companies are given incentives to develop satellites or test rockets, lowering costs and increasing incentives for enterprises to build operational spacecraft.
    • ISRO would assist the private sector in attracting both domestic and foreign direct investment by offering access to its satellite technology, facilities, and orbital slots (FDI).

    Conclusion

    • There is a need to liberalise the space sector and allow more private players to use ISRO facilities for developing, launching, and deploying a variety of applications.
    • The government should take appropriate measures to enable the private sector to ensure that India remains at the forefront of the global space industry.

    Also read:

    [Burning Issue] India’s Space Programme

  • For carbon sequestration, India must revisit its policy framework

    Context

    India’s pledge to set a net-zero target by 2070, at the COP26 summit, Glasgow, has again highlighted the importance of forests to help mitigate the challenges of climate change.

    Need for sustainable management of forests

    • The United Nations Framework Convention on Climate Change (UNFCC) framework (2013) of REDD+ for Reducing Emissions from Deforestation and Forest Degradation has highlighted the importance of forest along with the ‘sustainable management of forests for the conservation and enhancement of forest carbon stocks’.
    • Land-based sinks: In a study by Griscom (2017), land-based sinks (natural climate solutions which also include forests) can provide up to 37% of emission reduction and help in keeping the global temperature below 2° C.
    • Natural regeneration model: Recent research has favoured a natural regeneration model of restoration over the existing much-hyped mode of tree planting as such forests are said to secure nearly 32% carbon storage, as per one report of the Intergovernmental Panel on Climate Change.

    Degradation and deforestation in India

    •  As per the State of Forests Report (1989), the country had 2,57,409 sq.km (7.83% of its geographical area) under the open forest category, having a density of 10% to less than 40%.
    • However, in 30 years (2019) this has been increased to 3,04,499 sq. km (9.26%).
    • This means every year on average, nearly 1.57 lakh hectare of forests was degraded. 
    • Anthropogenic pressure: This degradation highlights the presence of anthropogenic pressures including encroachment, grazing, fire, which our forests are subjected to.

    Need for the participation of people to achieve target of carbon sequestration

    • The degradation warrants the participation of people as an essential and effective route to achieve the desired target of carbon sequestration through the restoration of forests.
    • As envisaged in National Forest Policy, 1988, India made its attempt, in 1990, to engage local communities in a partnership mode while protecting and managing forests and restoring wastelands with the concept of care and share. 
    • Later, the concept of forest development agencies was introduced to consolidate the efforts in an autonomous model.
    • Creation of joint forest management committees: The efforts to make this participatory approach operative resulted in the formation of nearly 1.18 lakh joint forest management committees managing over 25 million hectares of forest area.
    • Most of these became active and operative while implementing various projects financed by external agencies such as the World Bank, the Overseas Economic Cooperation Fund (OECF) Japan, the Department for International Development (DFID) United Kingdom and the European Union (EU).
    • A similar system of joint management in the case of national parks, sanctuaries and tiger reserves which existed in the name of eco-development committees initially proved effective.
    • However, the completion of the project period and lack of subsequent funding affected their functionality and also the protection of forests due to a lack of support from participating local communities including associated non-governmental organisations.
    • Customary participation: Except for the National Mission for Green India, in all other centrally sponsored programmes such as Project Tiger, fire management, Integrated Development of Wildlife Habitats (IDWH) including the Compensatory Afforestation Management and Planning Authority (CAMPA), the lack of priority and policy support to ensure the participation of local communities via the institutions of joint forest management committees slowly made their participation customary.
    • This caused a gradual decline in their effectiveness.
    • Role change: The role of local institutions of gram panchayat or joint forest management committees is now restricted to be a consultative institution instead of being partners in planning and implementation.
    • Implications of role change: This indifference and alienation from the participatory planning and implementation of various schemes

    Way forward

    • Revisit legal and policy mechanism: To achieve net-zero targets there is a need to revisit our existing legal and policy mechanisms.
    • Incentivise local communities: We also need to incentivise the local communities appropriately and ensure fund flow for restoration interventions.
    • There is a need for duly providing for the adequate participation of local people in planning and implementation through local institutions.
    • Replicate Telangana model: Political priority and appropriate policy interventions as done recently in Telangana by amending the panchayat and municipal acts and creating a provision for Telangana Haritha Nidhi need replication in other States.
    • Financial and institutional support mechanisms: These should be supported by enabling financial and institutional support mechanisms and negotiations with stakeholders
    • Though India did not become a signatory of the Glasgow Leaders’ Declaration on Forests and Land Use, the considerations of land tenure and the forest rights of participatory communities with accelerated finances will help aid steps in the race toward net zero.

    Consider the question “India is witnessing enormous degradation of forests and deforestation. This warrants the participation of people as an essential and effective route to achieve the desired target of carbon sequestration. In context of this, elaborate the importance of people participation and suggest the way forward.”

    Conclusion

    This inclusive approach with political prioritisation will not only help reduce emissions but also help to conserve and increase ‘our forest cover’ to ‘a third of our total area’. It will also protect our once rich and precious biological diversity.

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  • Explained: Digital Health ID

    The PM has recently launched the flagship Ayushman Bharat Digital Mission (ABDM) which involves the creation not just a unique digital health ID for every citizen.

    Ayushman Bharat Digital Mission

    What is the unique health ID?

    • If a person wants to be part of the ABDM, she must create a health ID, which is a randomly generated 14-digit number.
    • The ID will be broadly used for three purposes: unique identification, authentication, and threading of the beneficiary’s health records, only with their informed consent, across multiple systems and stakeholders.

    Why is this initiative significant?

    • The initiative has the potential to “increase the ease of living” along with “simplifying the procedures in hospitals”.
    • At present, the use of digital health ID in hospitals is currently limited to only one hospital or to a single group, and mostly concentrated in large private chains.
    • The new initiative will bring the entire ecosystem on a single platform.
    • The system also makes it easier to find doctors and specialists nearest to you.
    • Currently, many patients rely on recommendations from family and friends for medical consultation, but now the new platform will tell the patient who to reach out to, and who is the nearest.
    • Also, labs and drug stores will be easily identified for better tests using the new platform.

    How can one get it?

    • One can get a health ID by self-registration on the portal or by downloading the ABMD Health Records app on one’s mobile.
    • Additionally, one can also request the creation of a health ID at a participating health facility.
    • Health facilities may include government or private hospitals, community health centres, and wellness centres of the government across India.
    • The beneficiary will also have to set up a Personal Health Records (PHR) address for consent management, and for future sharing of health records.

    What is a PHR address?

    • It is a simple self-declared username, which the beneficiary is required to sign into a Health Information Exchange and Consent Manager (HIE-CM).
    • Each health ID will require linkage to a consent manager to enable sharing of health records data.
    • An HIE-CM is an application that enables sharing and linking of personal health records for a user.
    • At present, one can use the health ID to sign up on the HIE-CM; the National Health Authority (NHA), however, says multiple consent managers are likely to be available for patients to choose from in the near future.

    What does one need to register for a health ID?

    • Currently, ABDM supports health ID creation via mobile or Aadhaar.
    • The official website states that ABDM will soon roll out features that will support health ID creation with a PAN card or a driving licence.
    • For health ID creation through mobile or Aadhaar, the beneficiary will be asked to share details on name, year of birth, gender, address, mobile number/Aadhaar.

    Is Aadhaar mandatory?

    Ans. No, it is voluntary.

    • One can use one’s mobile number for registration, without Aadhaar.
    • If the beneficiary chooses the option of using her Aadhaar number, an OTP will be sent to the mobile number linked to the Aadhaar.
    • However, if she has not linked it to her mobile, the beneficiary has to visit the nearest facility and opt for biometric authentication using Aadhaar number.
    • After successful authentication, she will get her health ID at the participating facility.

    Are personal health records secure?

    • The NHA says ABDM does not store any of the beneficiary health records.
    • The records are stored with healthcare information providers as per their “retention policies”.
    • They are “shared” over the ABDM network “with encryption mechanisms” only after the beneficiary express consent.

    Can one delete my health ID and exit the platform?

    Ans. Yes, the NHA says ABDM, supports such a feature.  Two options are available: a user can permanently delete or temporarily deactivate her health ID.

    • On deletion, the unique health ID will be permanently deleted, along with all demographic details.
    • The beneficiary will not be able to retrieve any information tagged to that health ID in the future, and will never be able to access ABDM applications or any health records over the ABDM network with the deleted ID.
    • On deactivation, the beneficiary will lose access to all ABDM applications only for the period of deactivation.
    • Until she reactivates her health ID, she will not be able to share the ID at any health facility or share health records over the ABDM network.

    What facilities are available to beneficiaries?

    • Users can access personal digital health records right from admission through treatment and discharge.
    • One can access and link his/her personal health records with your health ID to create a longitudinal health history.

    What other features will be rolled out?

    • Upcoming new features will enable access to verified doctors across the country.
    • The beneficiary can create a health ID for her child, and digital health records right from birth.
    • Third, she can add a nominee to access her health ID and view or help manage the personal health records.
    • Also, there will be much inclusive access, with the health ID available to people who don’t have phones, using assisted methods.

    How do private players get associated with a government digital ID?

    • The NHA has launched the NDHM Sandbox: a digital architecture that allows helps private players to be part of the National Digital Health Ecosystem as health information providers or health information users.
    • The private player sends a request to NHA to test its system with the Sandbox environment.
    • The NHA then gives the private player a key to access the Sandbox environment and the health ID application programming interface (API).
    • The private player then has to create a Sandbox health ID, integrate its software with the API; and register the software to test link records and process health data consent requests.
    • Once the system is tested, the system will ask for a demo to the NHA to move forward. After a successful demo, the NHA certifies and empanels the private hospital.

    Now try this PYQ:

    Consider the following statements:

    1. Aadhaar metadata cannot be stored for more than three months.
    2. State cannot enter into any contract with private corporations for sharing of Aadhaar data.
    3. Aadhaar is mandatory for obtaining insurance products.
    4. Aadhaar is mandatory for getting benefits funded out of the Consolidated Fund of India.

    Which of the statements given above is/are correct?

    (a) 1 and 4 only

    (b) 2 and 4 only

    (c) 3 only

    (d) 1, 2 and 3 only

     

    [wpdiscuz-feedback id=”3o1iiih1nf” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

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  • MSP is not the way to increase farmers’ income

    Context

    The recently released data for 2018-19 Situation Assessment Survey (SAS) of agricultural households paints a bleak picture for doubling farmers’ income.

    Background

    • Prime Minister Narendra Modi set out an ambitious target to double farmers’ incomes by 2022-23.
    • The Ashok Dalwai Committee made it clear that the target of doubling farmers’ incomes was in real terms.
    •  Required rate: The committee clearly stated that a growth rate of 10.4 per cent per annum would be required to double farmers’ real income by 2022-23.
    • The goal was to be achieved over seven years with the base year of 2015-16.
    • According to an estimate of farmers’ income for 2015-16 by NABARD in 2016-17, the average monthly income of farmers for 2015-16 was Rs 8,931.
    • However, unless a similar survey is conducted in 2022-23, we won’t really know what happened to the target of doubling farmers’ real income.

    Determining the growth rate of farmers income

    • As per Situation Assessment Survey (SAS) of agricultural households for 2018-19, an average agricultural household earned a monthly income of Rs 10,218 in 2018-19 (July-June) in nominal terms.
    • We have a similar SAS for 2012-13, when the nominal income was Rs 6,426.
    • In nominal terms, the compound annual growth rate (CAGR) turns out to be 8 per cent between 2012-13 to 2018-19.
    • Choice of deflator: If one deflates nominal incomes by using CPI-AL (consumer price index for agricultural labour), which should be the logical choice, then the CAGR turns out to be just 3 per cent.
    • If one uses WPI (wholesale price index of all commodities), the CAGR in real incomes turns out to be 6.1 per cent.
    • This vast difference is just due to the choice of deflator.
    •  However, there is another SAS that the NSO conducted for 2002-03.
    • When one compares CAGR in farmers’ real income (deflated by CPI-AL) over 2002-03 to 2018-19, it turns out to be 3.4 per cent (and 5.3 per cent if deflated by WPI).
    • A better method would have been to look at average annual growth rates (AAGR), if yearly data was available.
    • The AAGR for agri-GDP is available and at an all-India level, between 2002-03 to 2018-19, it turns out to be 3.3 per cent.

    Policy message about farmers income from SASs

    • One, the share of income from rearing animals (this includes fish) has gone up dramatically from 4.3 per cent in 2002-03 to 15.7 per cent.
    • Two, the share of income from the cultivation of crops has decreased from 45.8 per cent to 37.7 per cent.
    • Three, the share of wages and salaries has gone up from 38.7 per cent to 40.3 per cent.
    • Four, the share of income coming from non-farm business has come down from 11.2 per cent to 6.4 per cent.

    Way forward

    • Survey results indicates that the scope for augmenting farmers’ incomes is going to be more and from rearing animals (including fisheries).
    • There is no minimum support price (MSP) for products of animal husbandry or fisheries and no procurement by the government.
    •  It is demand-driven, and much of its marketing takes place outside APMC mandis.
    • This is the trend that will get reinforced in the years to come as incomes rise and diets diversify.
    • Those who advocate raising the MSP of grains and government procurement, irrespective of increasing grain stocks to more than double the buffer stocking norms, are living in the past — and advocating a very expensive food system.
    • That will fail sooner or later.
    • Wisdom lies in investing more in animal husbandry (including fisheries) and fruits and vegetables, which are more nutritious.
    • The best way to invest is to incentivise the private sector to build efficient value chains based on a cluster approach.

    Consider the question “Why the role of MSP in increasing the farmers’ income has been repeatedly questioned? What are the alternatives to achieve the doubling of farmers’ income?”

    Conclusion

    Too much focus on increasing MSP to increase farmers’ income is not helping the cause. What we need is an investment in animal husbandry (including fisheries) and fruits and vegetables.

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  • National monetisation pipeline has narrow outlook

    Context

    Recently, FM announced the National Monetisation Pipeline (NMP) to lease a slew of “brownfield” (already developed) but underutilised public sector assets to the private sector with the objective of raising Rs 6 lakh crore.

    About the NMP

    • The assets identified for lease include roads, railways, ports, power, mining, aviation, oil and gas pipelines, warehouses, hotels and even two sports stadia.
    • The idea is to create “structured public-private partnerships” to unlock value from public sector assets and to recycle the revenues so raised into new infrastructure.
    • But the move raises several concerns.

    3 concerns with NMP

    1) Government is preferring financial value of assets over public welfare

    • The design of the NMP is out of sync with existential challenges — global warming, pandemics, geopolitical chaos and fundamentalism.
    •  The assets are valued on the basis of conventional financial metrics (enterprise value, book value, net present value, the costs of comparable assets).
    • The model seemingly absolves the government from the responsibility to unlock the intrinsic “social” (to include “smart” and “clean” ) value of these assets.

    2) It will lead to concentration of capital

    • NMP is designed to attract deep-pocketed financial institutions (PE firms) and industrial conglomerates.
    • This is because the valuations are so high that few other entities will have the resources or the risk carrying capacity to respond.
    • The result will be a deepening of the concentration of capital and existing inequalities.
    • There will be economic and social implications.

    3) Addressing the system problem

    • The government should have asked itself a fundamental question before placing a substantial share of public assets on the block:
    • Why have these assets been so poorly managed?
    • Was it because of bad leadership, inadequate talent within the PSEs, and/or systemic and structural shortcomings?
    • If the reason for low productivity was poor leadership or lack of talent, the transfer of these assets to a different, private sector-led organisational and investment structure would make sense.
    • Structural issues: But if the reason had to do with structural impediments, then such a change may not be warranted, at least not in the first instance.
    •  The example, gas pipelines GAIL are hugely underutilized, but this is not because of the “inefficiency” of GAIL, the PSE operator.
    • It is because of structural factors such as the shortage of domestic gas supplies; the regressive taxation system; the relatively uncompetitive price of gas and the perennial tussle between the Centre and state governments over land access.
    • A similar point can be made about most of the other assets identified for monetisation.
    • Their low productivity is because their PSE operators have faced a combination of systemic hurdles related to weak dispute resolution mechanisms; regulatory miasma; lack of transparency in governance; pricing distortions and intrusive bureaucratic intervention.
    • Way forward: So, until and unless these systemic problems are addressed, the private sector will find it difficult to harness the full value of these assets and the transfer of operatorship to them will offer at best a partial palliative.

    Conclusion

    Private-public investment structures make sense, but they must be modeled to also generate social value. In today’s world, there are no shortcuts to sustainable development.

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  • First group insolvency proceeding points to larger weakness in IBC

    Context

    National Company Law Appellate Tribunal (NCLAT) stayed the approval granted by the Mumbai bench of the National Company Law Tribunal (NCLT) to the resolution plan for the Videocon Group.

    Concerns with resolution plan

    • Resolution plan submitted by Twinstar Technologies, provided for payment of Rs 2,962 crore — a mere 4.15 per cent of Videocon’s total admitted debt of Rs 64,838 crore.
    • Payment of debt not in fair and equitable manner:  Under the IBC (Section 30(2)(b)), the resolution plan must provide for payment of debts amongst creditors in a “fair and equitable” manner.
    • However, in the plan submitted by Twinstar, unsecured assenting financial creditors and operational creditors are getting a paltry 0.62 per cent and 0.72 per cent of their admitted dues.
    • Even the secured assenting and dissenting financial creditors had to settle for only 4.9 per cent and 4.56 per cent of their respective dues.
    • Confidentiality obligation concerns: Twinstar’s bid of Rs 2,962 crore is close to the liquidation value of the Videocon Group estimated at Rs 2,568 crore, thereby raising legitimate suspicion and concern over the confidentiality of the resolution process.
    • The I&B Regulations, 2016 state that the resolution professional must maintain the confidentiality of the fair market value and liquidation value of the corporate debtor and can only disclose the same to the CoC members after the resolutions plan have been submitted.
    • Time delay: Status-quo ante has been restored until the next date of hearing by which time more than three years would have passed since the Videocon group was admitted into insolvency proceedings.
    • This is way beyond the statutory timeline of 330 days.

    Confidentiality rules need to be revised

    • The CoC members must, on receipt of the information, issue an undertaking of confidentiality.
    • But no such obligation falls on the resolution professional.
    • Further, Section 29(2) of the code provides that the resolution professional must disclose all “relevant information” to the resolution applicant and it is for the resolution applicant to ensure compliance with confidentiality obligations.
    • Again, there is no such duty imposed on the resolution professional.
    • Even under Section 25 of the code, titled “Duties of resolution professional”, the specific duty to maintain confidentiality of sensitive information is absent.
    • Clearly, the current regime does not have much deterrence value so as to ensure solemn adherence to confidentiality.

    Conclusion

    Videocon was one of the first test cases to examine the prospects of insolvency jurisprudence in India and the first one, for group insolvency proceedings.  However, almost four years and a 95 per cent haircut later, the call for an immediate course correction couldn’t be louder.

    Back2Basics: Operational creditor and financial creditors

    • When a corporate defaulter is brought under the resolution process (Corporate Insolvency Resolution Process or CIRP), there can be two types of creditors to whom the corporate should give back money –
    • (1) the entities who gave loans or funds to the corporate.
    • (2) the entities from whom the corporate bought inputs and other services.
    • The financial creditors are basically entities (lenders like banks) that have provided funds to the corporate.
    • Their relationship with the entity is a pure financial contract, such as a loan or debt security.
    • On the other hand, business and other entities that have provided inputs and other materials and services and to whom the defaulted corporate owes a debt are called as operational creditors.
    • Both have claims on the defaulted corporate or the defaulted corporate owe payments to both these categories.
    • Rights for these categories under the resolution process are also different.
    • The IBC gives a clear preference to the claims of the financial creditors over the operational creditors through several procedures.

    Haircut

    • A haircut is the difference between the loan amount and the actual value of the asset used as collateral.
    • It reflects the lender’s perception of the risk of fall in the value of assets.
    • But in the context of loan recoveries, it is the difference between the actual dues from a borrower and the amount he settles with the bank.

  • A cardinal omission in the COVID-19 package

    Context

    On July 8, 2021, the Union government announced the “India COVID-19 Emergency Response and Health Systems Preparedness Package: Phase II”. But it lacks provision for the medical workforce.

    Objectives of the package

    • The stated purpose of the package is to boost health infrastructure and prepare for a possible third wave of COVID-19.
    • There is plan to increase COVID-19 beds, improve the oxygen availability and supply, create buffer stocks of essential medicines; purchase equipment and strengthen paediatric beds.

    What is lacking in the package?

    • Workforce shortage: The package barely has any attention on improving the availability of health human resources.
    • As reported in rural health statistics and the national health profile there are vacancies for staff in government health facilities, which range from 30% to 80% depending upon the sub-group of medical officers, specialist doctors to nurses, laboratory technicians, pharmacists and radiographers, amongst others.
    • Interstate variation: In addition, there are wide inter-State variations, with States that have poor health indicators with the highest vacancies.

    Way forward

    • Package for filling the existing vacancies: The COVID-19 package II needs to be urgently supplemented by another plan and a similar financial package (with shared Union and State government funding) to fill the existing vacancies of health staff at all levels. 
    • An objective approach to assess the mid-term health human resource needs could be the Indian Public Health Standards (IPHS).
    • IPHS prescribes the human resources and infrastructure needed to make various types of government health facilities functional.
    • The pandemic should be used as an opportunity to prepare India’s health system for the future.
    • Scrutiny of the progress on policy decision: The progress on key policy decisions, for the last few years, to strengthen India’s health system, including those in India’s national health policy of 2017, need to be objectively scrutinised.
    • These two sets of policy decisions should be reviewed and progress monitored, through a meeting of the Central Council of Health and Family Welfare, of which the Health Ministers of the States are members.

    Conclusion

    India’s health system will not benefit from ad hoc and a patchwork of one or other small packages. It essentially needs some transformational changes.

  • What the US’s recognition of killings of Armenians as genocide mean

    What is genocide

    • According to Article II of the UN Convention on Genocide of December 1948, genocide has been described as carrying out acts intended “to destroy, in whole or in part, a national, ethnic, racial or religious group”.

    Why Armenians were targeted

    • In a way, the Armenians were victims of the great power contests of the late 19th and early 20th centuries.
    • The resentment started building up after the Russo-Turkish war of 1877-78 in which the Turks lost territories.
    • In the Treaty of Berlin, big powers dictated terms to the Ottomans, including putting pressure on Sultan Abdülhamid II to initiate reforms “in the provinces inhabited by Armenians, and to guarantee their security against the Circassians and Kurds.”
    • The Sultan saw this as a sign of strengthening ties between the Armenians and other rival countries, especially Russia.
    • Post the treaty, there were a series of attacks on Armenians by Turkish and Kurdish militias.
    • In 1908, the Young Turks wrested control from the Sultan and promised to restore imperial glory.
    • Under the Turks, the empire became more and “Turkik” and persecution against the ethnic minorities picked up.
    • In October 1914, Turkey joined the First World War on the side of Germany.
    • In the Caucasus, they fought the Russians, their primary geopolitical rival.
    • But the Ottomans suffered a catastrophic defeat in the Battle of Sarikamish by the Russians in January 1915.
    • The Turks blamed the defeat on Armenian “treachery”.

    How the killings took place

    • As the War was still waging, the Ottomans feared that Armenians in eastern Anatolia would join the Russians if they advanced into Ottoman territories.
    • First, Armenians in the Ottoman Army were executed.
    • On April 24, the Ottoman government arrested about 250 Armenian intellectuals and community leaders. Most of them were later executed.
    • The Ottoman government passed legislation to deport anyone who is a security risk.
    • Then they moved Armenians, including children, en masse to the Syrian Desert. That was a march of death.
    • Before the First World War broke out in 1914, there were 2 million Armenians in the Ottoman Empire.
    • According to a study by the University of Minnesota’s Center for Holocaust and Genocide Studies, in 1922, four years after the War, the Armenian population in the region was about 387,800.
    • This has led historians to believe that up to 1.5 million Armenians were killed during the course of the War.

    What is Turkey’s response

    • Turkey has acknowledged that atrocities were committed against Armenians, but denies it was a genocide which comes with legal implications.
    • Turkey also challenges the estimates that 1.5 million were killed.
    • The Turkish Foreign Ministry has issued a strong statement to Mr. Biden’s announcement saying it doesn’t not have “a scholarly and legal basis, nor is it supported by any evidence”.
    • Turkey has called on the U.S. President to correct the mistake of recognition as genocide.

  • Time to undo the RTE bias against private non-minority institutions

    The article highlights the issues with the exemption of aided and non-aided minority institutions from the Right to Education Act.

    Is RTE enforceable against individuals?

    • Most fundamental rights are enforceable against the state, not against private individuals.
    • Certain rights, however, are horizontally enforceable too, that is, they can be enforced against individuals.
    • The Right to Free and Compulsory Education Act or RTE falls in the latter category.
    • The right to education was initially mentioned in Article 45 as a part of the Directive Principles.

    Evolution of Article 21A

    • The Supreme Court in 1992 held in Mohini Jain v. State of Karnataka that the right to education was a part of the right to life recognised in Article 21.
    • The next year, the court in Unnikrishnan JP v. State of Andhra Pradesh held that the state was duty-bound to provide education to children up to the age of 14 within its economic capacity.
    • The court also acknowledged that private educational institutions, including minority institutions, would have to play a role alongside government schools.
    • The right to education was finally given the status of a fundamental right by the 86th constitutional amendment in the year 2002 by the addition of Article 21A in the Constitution.
    • The Supreme Court held in P. A. Inamdar case that there shall be no reservation in private institutions and that minority and non-minority institutions would not be treated differently.

    Impact of 93rd amendment

    • In 2005, the Constitution was amended by the 93rd amendment to include Clause(5) to Article 15 which dealt with the fundamental right against discrimination.
    • The clause permitted the state to provide for advancement of “backward” classes by ensuring their admission in institutions, including private institutions.
    • The clause, however, excluded both aided and unaided minority educational institutions thus overruling the Supreme Court’s judgment in P.A. Inamdar case.

    Discrimination in RTE

    • When the RTE Act was subsequently enacted in 2009, it did not directly discriminate between students studying in minority and non-minority institutions.
    • Subsequently, the provision of 25 per cent reservation in private institutions was however challenged in Society for Unaided Private Schools of Rajasthan v. Union of India where the court upheld the validity of the legislation exempting only unaided minority schools from its purview.
    • In response to the judgment, the RTE Act was amended in 2012 to mention that its provisions were subject to Articles 29 and 30 which protect the administrative rights of minority educational institutions.
    • So, the onus on private unaided schools was much higher than that on government schools, while even aided minority schools were exempt.
    • But the constitutional provision enabling the RTE Act, that is, Article 21, does not make any discrimination between minority and non-minority institutions.

    Issues

    • The above provisions of RTE made it violative of Article 14 and also economically unviable for many private schools.
    •  Not only has RTE unreasonably differentiated between minority and non-minority schools without any explicable basis, there is also no rational nexus between the object of universal education sought to be achieved by this act and the step of excluding minority schools from its purview.
    • Given the doctrine of harmonious construction of fundamental rights, it is unclear why the court granted complete immunity to minority institutions when several provisions of RTE would not interfere with their administrative rights.
    • RTE has provisions such as prevention of physical/mental cruelty towards students as well as quality checks on pedagogical and teacher standards which children studying in minority institutions should not be deprived of and to that extent be discriminated against.

    Way forward

    • The Kerala High Court held in Sobha George v. State of Kerala that Section 16 of RTE, which forbids non-promotion till the completion of elementary education, will be applicable to minority schools as well. 
    • The bench said that the courts must examine whether provisions such as Section 16 of RTE are statutory rights or fundamental rights expressed in a statutory form.
    • If the latter, then the Pramati case judgement will not be fully available to minority institutions.
    • The Supreme Court should take inspiration from the prudent decision delivered by the Kerala High Court and overrule its own judgment delivered in the Pramati Educational Society.

    Consider the question “What are the issues with the exemption of aided and non-aided minority institution from the RTE Act.”

    Conclusion

    RTE as legislation may be well-intentioned, but the time has come to relook at the discriminatory nature of RTE against private non-minority institutions, and to that extent, undo the damage done by 93rd Amendment and the subsequent SC judgments.

  • Making Budget work

    The article deals with the marked departures in this year’s Budget and the challenges in realising the changes.

    Three paradigm shifts from past in this the Budget

    1)Increased infrastructure spending

    • The main theme of the budget is a big thrust on infrastructure spending and public investment.
    • If the budgeted numbers are realised, capex would have grown from 1.6 per cent of GDP pre-COVID to 2.5 per cent in two years.
    • With India’s investment/GDP ratio falling by 5 percentage points over the last decade, a sustained public investment push — with its large multiplicative effects — is a much-needed impetus to reinvigorate growth and create jobs.

    Implications of increased spending

    • The certainty sustained public investment is likely to crowdin private investment.
    • The certainty of investment-led employment that is likely to reduce household precautionary savings.
    • However, higher capex spend is being paid for by disinvestment and privatisation.
    • Effectively, non-core public-sector assets that don’t generate positive externalities — and, in fact, potentially distort the sectors they compete in — are expected to be replaced with much-needed physical and social infrastructure.
    • This newly created physical and social infrastructure emanate positive externalities and necessarily suffer from under-provisioning by the private sector.
    • If successfully executed — this will not be a case of selling the family silver to pay a credit card bill.
    • Instead, it will be akin to a productivity-enhancing asset swap on the public sector’s balance sheet.

    2) Shift in the way for financing infrastructure

    • In stark contrast to the PPP model, infrastructure will now be financed off public sector balance sheets and, once operational and viable, will be monetised so as to recycle proceeds into the next project.
    • In theory, this is the appropriate division of public-private risk sharing.
    • It combines the public sector’s ability to better mitigate upstream risk while taking advantage of the glut of global liquidity potentially attracted to downstream projects.

    3) Shift is towards more conservative and transparent fiscal accounting

    • There has been much focus on bringing the Food Corporation of India (FCI) liabilities back on the budget.
    • Less appreciated is the conservatism with which tax revenues have been budgeted for.
    • Revised estimates peg this year’s gross taxes at 9.9 per cent of GDP.
    • But for that to happen, taxes, net of excise, will need to contract by 20 per cent in the last quarter.
    • So it’s very likely gross taxes will end up 0.5 per cent of GDP higher this year.
    • Not only is this a welcome departure from the past when revenues were consistently over-budgeted, but it sets the base for next year.
    • With nominal GDP expected to grow in double digits, it’s likely taxes, net of excise, will experience a higher-than-unitary-elasticity to growth, especially given the increased formalisation that COVID has spawned.
    • Tax collections are, therefore, likely to exceed budgeted levels in 2021-22.
    • It behooves a very uncertain macroeconomic environment and creates some buffer if crude prices keep rising or other revenues don’t materialise.
    • Credible accounting over time will bring down risk premia in bond yields, and paradoxically generate a stimulative impulse.

    Three challenges in realising these changes

    1) Execution challenge

    • The budget’s impact on shaping the macroeconomic narrative will depend on the speed and efficacy of simultaneously building and selling public assets.
    • It will be important, for instance, to front-load disinvestment and strategic sales to take advantage of buoyant equity markets before global central banks become more cautious.
    • With debt likely to rise to almost 90 per cent of GDP this year, it’s now incumbent on all stakeholders to consistently deliver the 10 per cent nominal GDP growth that’s needed to first stabilise debt at these levels and then bring it down.
    • Viewed from this lens, it is a budget where execution is vital.

    2) Withdrawal of the policy support at appropriate time

    • While fiscal policy is being appropriately counter-cyclical at the moment, it must be equally nimble in the other direction.
    • When the recovery gets more entrenched, policy support should be withdrawn with equal speed and alacrity.

    3) Role of monetary policy

    • With fiscal policy playing a primary role, monetary policy must slowly take a back seat.
    • The combination of a more relaxed fiscal path and domestic private sector savings normalising after the COVID surge could result in equilibrium bond market yields rising [fall in the price of bond] — but that is a cost worth incurring for a meaningful public investment push.
    • In the near term, the RBI may focus on ensuring this new equilibrium is reached in a non-disruptive manner.
    • Given the current slack in the economy, it’s understandable if fiscal and monetary are temporarily complementary.
    • But as confidence in the recovery grows, fiscal and monetary must quickly become substitutes — with the RBI progressively normalising liquidity to wardoff financial stability and fiscal dominance concerns — so as to safeguard macroeconomic stability.

    Consider the question “This year’s Budget marked many departures from the past Budgets. However, there are several challenges in realising these departures. What are such departures and identify the challenges in realising them?”

    Conclusion

    The budget must be commended for embarking on important paradigm shifts. But its success, and in turn the sustainability of India’s recovery, will now come down squarely to policy execution and coordination.