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GS Paper: GS2

  • Indian Olympic Association (IOA)

    The Supreme Court has ordered status quo on the implementation of a Delhi High Court order to hand over the affairs of the Indian Olympic Association (IOA) to a Committee of Administrators (CoA).

    Why in news?

    • The FIFA had recently gone ahead and suspended the AIFF, citing “third party interference”, leaving an air of uncertainty on the prospect of India hosting the Under-17 Women’s World Cup in October.
    • The governance of the AIFF had similarly been transferred to a CoA by the Supreme Court.

    Delhi HC case

    • The high court had passed the order on a petition seeking a direction for redrafting of the IOA constitution in accordance with the National Sports Code, 2021.

    Controversy with IOC

    • According to IOC rules, if any national body is governed by a non-elected body, it is seen as interference by a third party.
    • The moment the CoA takes charge, there is 99 per cent chance that India and our sportspersons will get suspended from all international events and Olympic Games.

    Olympics and India

    • India first participated in the Olympics in 1900 in Paris.
    • The country was represented by Norman Pritchard, an Anglo Indian who was holidaying in Paris during that time.
    • The seeds for creation of an organisation for coordinating the Olympic movement in India was related to India’s participation in the 1920 and 1924 Olympics.
    • Back then, Sir Dorabji Tata suggested the need for a Sports body at National level for promoting Olympic Sport in united India.
    • After the 1920 Games, the Committee sending the team to these Games met, and, on the advice of Sir Dorabji Tata, invited Dr. A.G. Noehren (Physical Education Director of YMCA India) to also join them.

    Establishment of Indian Olympic Association (IOA)

    • Subsequently, in 1923-24, a provisional All India Olympic Committee was set-up, which organised the All India Olympic Games in February 1924.
    • Eight athletes from these Games were selected to represent India at the 1924 Paris Summer Olympics, accompanied by manager Harry Crowe Buck.
    • This gave impetus to the development and institutionalization of sports in India, and, in 1927, the Indian Olympic Association (IOA) was formed, with Sir Dorabji Tata as its founding President and Dr. A.G. Noehren as Secretary.
    • The same year as it was formed, 1927, the Indian Olympic Association was officially recognised by the International Olympic Committee.

    Also read

    Better time for Sports in India: PM

     

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  • Lessons for India from the Taiwan standoff

    Context

    The brief visit by the United States House Speaker, Nancy Pelosi, to Taiwan, against stern warnings issued by China, has the potential to increase the already deteriorating relationship between the U.S. and China. For those of us in India watching the events as they unfold around Taiwan, there are valuable lessons to be learnt.

    Background

    • The crisis that began with the visit of Ms. Pelosi to Taipei is still unfolding and there is little clarity today on how it will wind down.
    •  For China, its claims about a rising superpower might ring hollow if it is unable to unify its claimed territories, in particular Taiwan.
    • For the U.S., it is about re-establishing steadily-diminishing American credibility in the eyes of its friends and foes.
    • For Taiwan, it is about standing up to Chinese bullying and making its red lines clear to Beijing.
    • Lessons for India: To be fair, there is growing recognition in New Delhi that it is important to meet the challenge posed by a belligerent China, but there appears to be a lack of clarity on how to meet this challenge.
    • To that extent, the Taiwan crisis offers New Delhi three lessons, at the very least.

    Takeaways for India

    1] Articulate red lines

    • The most important lesson from the Taiwan standoff for policymakers in New Delhi is the importance of articulating red lines and sovereign positions in an unambiguous manner.
    •  New Delhi needs to unambiguously highlight the threat from China and the sources of such a threat.
    • Any absence of such clarity will be cleverly utilised by Beijing to push Indian limits, as we have already seen.
    • Stop confusing international community: Even worse, ambiguous messaging by India also confuses its friends in the international community.
    • If India does not clearly articulate that China is in illegal occupation of its territory, how can it expect its friends in the international community to support India diplomatically or otherwise?
    • In other words, India’s current policy amounts to poor messaging, and confusing to its own people as well as the larger international community, and is therefore counterproductive.

    2] Avoid appeasement

    • Taiwan could have avoided the ongoing confrontation and the economic blockade during Chinese retaliatory military exercises around its territory by avoiding Ms. Pelosi’s visit to Taipei, or perhaps even keeping it low key.
    • Appeasement of China, Taiwan knows, is not the answer to Beijing’s aggression.
    •  India’s policy of meeting/hosting Chinese leaders while the Chinese People’s Liberation Army (PLA) continue(d) to violate established territorial norms on the LAC is a deeply flawed one.
    • Unilaterally catering to Chinese sensitivities even during the standoffs between the two militaries is a mistake.
    • For instance, the parliamentary delegation visits and legislature-level dialogues between India and Taiwan have not taken place since 2017.
    • Soft-peddling of the Quad was a mistake: During the 2000s, India (as well as Australia) decided to soft-peddle the Quad in the face of strong Chinese objections.
    • It is only in the last two years or so that we have witnessed renewed enthusiasm around the Quad.
    • In retrospect, appeasing Beijing by almost abandoning the Quad was bad strategy.

    3] Economic relationship is a two way process

    • Given that the economic relationship is a two-way process and that, as a matter of fact, the trade deficit is in China’s favour, China too has a lot to lose from a damaged trade relationship with India.
    • More so, if the Taiwan example (as well as the India-China standoff in 2020) is anything to go by, trade can continue to take place despite tensions and without India making any compromises vis-à-vis its sovereign claims.
    • India for sure should do business with China, but not on China’s own terms.

    Conclusion

    The recent crisis offers valuable lessons for India in its dealing with China.

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  • A new global vision for G20

    Context

    While India has taken a clear view of the role of the G20, there is concern that the agenda, themes and focus areas which India will set for 2023 lack vision.

    What is G-20?

    • Formed in 1999, the G20 is an international forum of the governments and central bank governors from 20 major economies.
    • Collectively, the G20 economies account for around 85 percent of the Gross World Product (GWP), 80 percent of world trade.
    • To tackle the problems or address issues that plague the world, the heads of governments of the G20 nations periodically participate in summits.
    • In addition to it, the group also hosts separate meetings of the finance ministers and foreign ministers.
    • The G20 has no permanent staff of its own and its chairmanship rotates annually between nations divided into regional groupings.

    Significance of G20 in shaping global order

    • The G20 plays an important role in shaping and strengthening global architecture and governance on all major international economic issues.
    • It recognises that global prosperity is interdependent and economic opportunities and challenges are interlinked.
    • The challenge is to craft new approaches to overcome the acute global discord.

    Why we need new model of cooperation

    • Multilateral commitments are faltering: Governance in a world that is steadily becoming more equal needs institutional innovation.
    • This is because the role of the United Nations and the World Trade Organization in securing cooperation between donor and recipient country groups is losing centrality.
    •  There are now three socio-economic systems — the G7, China-Russia, and India and the others — and they will jointly set the global agenda.
    • Strategic competition: Ukraine conflict, rival finance, the expanding influence of the trade and value chains dominated by the U.S. and China, and the reluctance of developing countries to take sides in the strategic competition as they have a real choice requires fresh thinking.
    • Preventing the clash of ideas through reorientation: The primary role of the G20, which accounts for 95% of the world’s patents, 85% of global GDP, 75% of international trade and 65% of the world population, needs to be reoriented to prevent a clash of ideas to the detriment of the global good.
    • The solution lies in a new conceptual model seeking agreement on an agenda limited to principles rather than long negotiated anodyne text.

    What should be on agenda when India hosts G20 in 2023

    1] Underlining the need for new framework

    • Redefining common concerns: First, the presumed equality that we are all in the same boat, recognised in the case of climate change, needs to be expanded to other areas with a global impact redefining ‘common concerns’.
    • Second, emerging economies are no longer to be considered the source of problems needing external solutions but source of solutions to shared problems.
    • Third, the BRICS provides an appropriate model for governance institutions suitable for the 21st century where a narrow group of states dominated by one power will not shape the agenda.
    • Ensuring adequate food, housing, education, health, water and sanitation and work for all should guide international cooperation.
    • Principles of common but differentiated responsibilities for improving the quality of life of all households can guide deliberations in other fora on problems that seem intractable in multilateralism based on trade and aid.

    2] Collaboration around science and technology

    •  The global agenda has been tilted towards investment, whereas science and technology are the driving force for economic diversification, sustainably urbanising the world, and ushering the hydrogen economy and new crop varieties as the answer to both human well-being and global climate change.
    •  A forum to exchange experiences on societal benefits and growth as complementary goals would lead to fresh thinking on employment and environment.

    3] Redefining digital access as universal service

    • Harnessing the potential of the digital-information-technology revolution requires redefining digital access as a “universal service” that goes beyond physical connectivity to sharing specific opportunities available.
    • For global society to reap the fruits of the new set of network technologies, open access software should be offered for more cost-effective service delivery options, good governance and sustainable development.

    4] Collaboration in space technology

    • Space is the next frontier for finding solutions to problems of natural resource management ranging from climate change-related natural disasters, supporting agricultural innovation to urban and infrastructure planning.
    • Analysing Earth observation data will require regional and international collaboration through existing centres which have massive computing capacities, machine learning and artificial intelligence.

    5] Collaboration in health sector

    • Public health has to learn from the COVID-19 fiasco with infectious diseases representing a market failure.
    • A major global challenge is the rapidly growing antimicrobial resistance which needs new antibiotics and collaboration between existing biotechnology facilities.

    6]  Avoiding strategic competition

    • Overriding priority to development suggests avoiding strategic competition.
    • Countries in the region will support building on the 1971 UNGA Declaration designating for all time the Indian Ocean as a zone of peace and non-extension into the region of rivalries and conflicts that are foreign to it.

    7] Reviving Global Financial Transaction Tax

    •  A Global Financial Transaction Tax, considered by the G20 in 2011, needs to be revived to be paid to a Green Technology Fund for Least Developed Countries.

    Conclusion

    Given the significance of G20 for the global order it should lead the way in formulating the new framework based on collaboration in areas such as science and technology, innovation and away from aid and trade.

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  • India’s response to Sri Lanka and Myanmar crises is a study in contrast

    Context

    There is a stark contrast contrast between the Indian response to the crisis in Sri Lanka and the dawning civil war in Myanmar.

    Crisis in Myanmar

    • According to UN human rights monitors, over 2,000 people have been killed, around 14,000 are in prison, including 90 lawmakers, over 7,00,000 are refugees and half a million internally displaced.
    • Humanitarian aid to coup opponents is blocked.
    • The economy is in free fall.
    • Though the international community has not accepted the junta or its nominees as official representatives of Myanmar, it has not recognised the unity government as the legitimate successor of the pre-coup elected administration either.
    • Its armed wing, the recently-formed People’s Defence Force (PDF), exists in a shadowy limbo.
    • If it is too weak to impose significant costs on the junta, one root cause is the lack of support from neighbours.
    • As against Europe’s military support for Ukraine’s defence, no Asian country has stepped up to support the unity government and PDF.
    • Role of ASEAN:  It is ASEAN which shouldered the responsibility to mediate in Myanmar, whereas India took the initiative with Sri Lanka.
    • But ASEAN has been largely unsuccessful.
    • The five-point consensus that the junta agreed on with the regional grouping included an immediate end to violence and resumption of negotiations between the ousted administration and the Tatmadaw.
    • ASEAN’s reaction has been weak at best.
    • The US, EU, Australia and Canada announced targeted sanctions on the junta, and the EU imposed an embargo on arms sales to the country. ASEAN did not.

    India’s response and issues with it

    • The contrast between the Indian response to the crisis in Sri Lanka and the dawning civil war in Myanmar could not be starker.
    • There is no support from the India administration for Mizoram’s aid effort, and apparently there is no Indian policy vis a vis the coup either.
    • Cooperation against cross-border insurgency: Given our land and sea borders with Myanmar, and the troubled history of cross-border insurgencies between our two countries, the India’s inertia is alarming, though not entirely surprising.
    • Successive Indian administrations maintained relations with the junta in the hope that they would cooperate against cross-border Indian armed groups.
    • But these insurgencies have reduced.
    • In fact, over the 10 years of Myanmar’s partial democracy, from 2011 to 2021, cross-border support for Indian insurgents dipped sharply.
    • Direct security interest: In other words, we have a direct security interest in the restoration of our neighbour’s democracy.

    Way forward

    • Stringent sanctions: Sanctions that will starve the junta are a first step that Myanmar’s neighbours are yet to try.
    • While ASEAN has the initiative, all Myanmar’s neighbours need to unite on sanctions, especially nations such as Japan, Australia and India that are members of the Quad along with the US.
    • Myanmar ought to have topped the recent Quad summit’s agenda and it is shameful that it did not.
    • It is still not too late to call a virtual emergency meeting of Quad heads of state, along with ASEAN heads of state, to agree to stringent sanctions.

    Conclusion

    Our neighbourhood is more unstable today than it has been for decades. Four of our bordering countries are in free fall, while China’s grip comes closer to our shores by the hour. Can India afford to fiddle while wildfires ignite around us?

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  • India, Bangladesh, Pakistan: What east can teach west

    Context

    The bilateral relationship between India and Bangladesh dominated by endless contentions at the turn of the millennium has transformed into a very productive partnership.

    Contrast between India’s relations with Bangladesh and Pakistan

    • The persistence of cross-border terrorism, the conflict over Kashmir, the militarisation of the frontier, little connectivity, poor trade relations and no formal inter-governmental negotiations paint a bleak picture of the India-Pak border.
    • The inability of successive generations of Indian and Pakistani leaders to bring a closure to Partition in the west makes the talk of a “100-year war” credible.
    • The only trend that can counter this pessimism is the good news from India’s eastern frontier with Bangladesh.
    • In contrast to the talk of a 100-year war between India and Pakistan, India and Bangladesh have proclaimed a “sonali adhyay” or “golden chapter” in bilateral relations.
    • While the unresolved land and maritime territorial disputes constitute one of the main problems in India’s relations with Pakistan, their resolution with Bangladesh transformed the context of bilateral relations.
    • For both Delhi and Dhaka, the reinvention of the bilateral relationship has been one of the most significant successes of their recent foreign policies

    Rebuilding the Bangladesh-India ties after 2010

    • The work on rebuilding ties began in earnest in 2010, when Sheikh Hasina came to India after taking charge of Bangladesh as prime minister for the second time in 2009.
    • Addressing bilateral problems: Both sides embarked on an extraordinary effort to address most bilateral problems—including border settlement, river water sharing, cross-border terrorism, market access to Bangladeshi goods, and connectivity.
    • The land boundary deal got parliamentary approval in 2015 in India.
    • India also accepted the award of the Permanent Court of Arbitration in The Hague on settling the maritime boundary dispute between Delhi and Dhaka. 
    • Security cooperation: Cooperation on cross-border terrorism that began a couple of years earlier helped build much-needed political trust between the two national security establishments.
    • Connectivity: On the connectivity front, we have seen a substantive movement towards reopening the border that was largely shut down after the 1965 war between India and Pakistan.
    • Trans-boundary bus services, reopening of railway lines, and the revitalisation of waterways are restoring connectivity in the eastern subcontinent that was severed.
    • Bilateral trade: Bilateral trade volumes have grown by leaps and bounds in recent years touching nearly $16 billion last year.
    • Bangladesh is one of India’s top export markets.
    •  India and Bangladesh have also developed inter-connected power grids facilitating Dhaka’s purchase of power from India.
    • It currently buys about 1200 MW of power from India and an additional 1500 MW is in the pipeline.
    • Development of the northeastern India: Today the northeastern states have realised the immense benefits of deeper economic engagement with Bangladesh — none of them more important than ending the geographic isolation of the region.
    • Assam today is at the forefront of imagining a bolder agenda for deepening economic ties with Bangladesh.
    • Peace and prosperity in the region: For India, the expansive partnership with Bangladesh has significantly eased its security challenges and laid the basis for peace and prosperity in the eastern subcontinent.
    • For Bangladesh, discarding the temptation to balance India and embark on a cooperative strategy has allowed Dhaka to focus on its economic growth and lift itself in the regional and global hierarchy.

    Way forward

    • Consolidating the gains: Rather than regret the unfortunate dynamic on the western frontier and bemoan Pakistan’s reluctance to let the SAARC become a vehicle for regional cooperation, Delhi should focus on consolidating the “golden moment” in the east.
    • The issues that need resolution are protecting the rights of minorities, sharing the waters of more than 50 rivers, promoting cross-border investments, managing one of the longest borders in the world, facilitating trade and preventing illegal migration, countering forces of religious extremism, promoting maritime security in the Bay of Bengal, expanding defence cooperation, and mitigating climate change in the shared regional environment to name a few.
    • Solving problems and tending to the relationship must necessarily be a continuous effort rather than episodic.

    Conclusion

    Nor can Delhi and Dhaka take each other for granted and let domestic politics overwhelm the logic of bilateral cooperation. The 75th anniversary of independence offers Delhi and Dhaka a special opportunity to elevate the ambition for their bilateral partnership.

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  • China’s problem with top US senator visiting Taiwan

    The Speaker of the House of Representatives, Nancy Pelosi, landed in Taiwan, ignoring Chinese threats and a warning by President Xi Jinping to “not play with fire”.

    Why in news?

    • Pelosi’s visit to Taiwan is the highest-level visit by an American official to the island in a quarter century.
    • The senior US politician has been critical of China on multiple fronts over the decades.

    US defiance of One China Policy

    • The US has maintained a ‘One China’ policy since the 1970s, under which it recognises Taiwan as a part of China.
    • But it has unofficial ties with Taiwan as well — a strategy that is known as strategic or deliberate ambiguity.
    • Beijing considers Taiwan a part of China, threatens it frequently, and has not ruled out taking the island by military force at any time.

    Why does China have a problem with Pelosi visiting Taiwan?

    • For China, the presence of a senior American figure in Taiwan would indicate some kind of US support for Taiwan’s independence.
    • This move severely undermined China’s perception of sovereignty and territorial integrity.

    Brief history of China-Taiwan Tensions

    • Taiwan is an island about 160 km off the coast of southeastern China, opposite the Chinese cities of Fuzhou, Quanzhou, and Xiamen.
    • It was administered by the imperial Qing dynasty, but its control passed to the Japanese in 1895.
    • After the defeat of Japan in World War II, the island passed back into Chinese hands.
    • After the communists led by Mao Zedong won the civil war in mainland China, Chiang Kai-shek, the leader of the nationalist Kuomintang party, fled to Taiwan in 1949.
    • Chiang Kai-shek set up the government of the Republic of China on the island, and remained President until 1975.
    • Beijing has never recognised the existence of Taiwan as an independent political entity, arguing that it was always a Chinese province.

    Taiwanese stance

    • Taiwan says that the modern Chinese state was only formed after the revolution of 1911.
    • It was not a part of that state or of the People’s Republic of China that was established after the communist revolution.
    • While the political tensions have continued, China and Taiwan have had economic ties.
    • Many migrants from Taiwan work in China, and China has investments in Taiwan.
    • No doubt, cultural ties are indispensable.
    • In recent years, Taiwan’s government has said only the island’s 23 million people have the right to decide their future and that it will defend itself when attacked.
    • Since 2016, Taiwan has elected a party that leans towards independence.

    How does the world, and US, view Taiwan?

    • The UN does NOT recognise Taiwan as a separate country; in fact, only 13 countries around the world — mainly in South America, the Caribbean, Oceania, and the Vatican — do.
    • In June, President Biden said that the US would defend Taiwan if it was invaded, but it was clarified soon afterward but America does not support Taiwan’s independence.
    • While the US has no formal ties with Taipei, it remains Taiwan’s most important international backer and arms supplier.

     

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  • India-Bangladesh River Disputes

    India and Bangladesh are likely to ink at least one major river agreement later this month.

    It is gauged that India has agreed to offer Bangladesh a package on river waters-related deals that will be considered a significant advancement in terms of sharing of river resources with Dhaka.

    Why in news?

    • There is a strong possibility that an agreement on the River Kushiyara that flows from Assam into Bangladesh is part of one such agreement.
    • This river got its fame in recent Assam floods.
    • Water sharing is considered a sensitive subject given the fact that it often takes political meaning.

    Rivers between India and Bangladesh

    • Overall, India and Bangladesh have 54 transboundary rivers between them, all of which are part of the drainage system of the Ganga-Brahmaputra-Meghna (GBM) basin.
    • The Padma (the Ganga), the Jamuna (the Brahmaputra) and the Meghna (the Barak) and their tributaries are integral in maintaining food and water security in Bangladesh.
    • In most of these cases, Bangladesh is the lower riparian.
    • This causes concern in Bangladesh that India—being both the upper riparian and first to develop the water resources—can have far more disproportionate control over the rivers.
    • Compounded by the lack of transparent data regarding trans-boundary rivers, such concern can lead to a more serious conflict between the two otherwise friendly neighbours.

    Genesis of the disputes

    • The issues between India and Bangladesh regarding water resource allotment can be traced to the time Bangladesh was still East Pakistan.
    • In 1961, India began construction of the Farakka Barrage—which was to be operational by April 1975—to divert a portion of the dry-season flow and increase the navigability of Kolkata port.
    • When India began its preliminary planning for the project in 1950-51, Pakistan immediately expressed concerns over the potential effect of the project on East Pakistan.

    Moves for disputes resolution: Joint River Commission

    • Soon after the independence of Bangladesh in 1971, the Joint River Commission was formed between India and Bangladesh in 1972.
    • In a joint declaration issued on 16 May 1974, the PM of Bangladesh and India acknowledged the need for the flow augmentation of the Ganga in the lean season to meet the requirements of both countries.

    Often in news: Teesta River Dispute

    • The Bangladesh government has been insistent on sealing the Teesta Waters Agreement, which has eluded settlement so far.
    • Teesta River is a 315 km long river that rises in the eastern Himalayas, flows through the Indian states of Sikkim and West Bengal through Bangladesh and enters the Bay of Bengal.
    • It is a tributary of the Brahmaputra (known as Jamuna in Bangladesh), flowing through India and Bangladesh.
    • It originates in the Himalayas near Chunthang, Sikkim and flows to the south through West Bengal before entering Bangladesh.
    • Originally, it continued southward to empty directly into the Padma River but around 1787 the river changed its course to flow eastward to join the Jamuna river.
    • The Teesta Barrage dam helps to provide irrigation for the plains between the upper Padma and the Jamuna.

    What is the dispute about?

    • The point of contention between India and Bangladesh is mainly the lean season flow in the Teesta draining into Bangladesh.
    • The river covers nearly the entire floodplains of Sikkim while draining 2,800 sq km of Bangladesh, governing the lives of hundreds of thousands of people.
    • For West Bengal, Teesta is equally important, considered the lifeline of half-a-dozen districts in North Bengal.
    • Bangladesh has sought an “equitable” distribution of Teesta waters from India, on the lines of the Ganga Water Treaty of 1996, but to no avail.
    • The failure to ink a deal had its fallout on the country’s politics, putting the ruling party of PM Sheikh Hasina in a spot.

    Q.The hydrological linkages between India and Bangladesh are a product of geography and a matter of shared history. Discuss this statement in line with the Teesta water sharing dispute.

    The deal

    • Following a half-hearted deal in 1983, when a nearly equal division of water was proposed, the countries hit a roadblock. The transient agreement could not be implemented.
    • Talks resumed after the Awami League returned to power in 2008 and the former Indian PM Manmohan Singh visited Dhaka in 2011.
    • In 2015, PM Modi’s visit to Dhaka generated more ebullient lines: deliberations were underway involving all the stakeholders to conclude the agreement as soon as possible.

    Issues from the Indian side

    • It remains an unfinished project and one of the key stakeholders — West Bengal CM is yet to endorse the deal.
    • Her objection is connected to “global warming. Many of the glaciers on the Teesta basin have retreated.
    • The importance of the flow and the seasonal variation of this river is felt during the lean season (from October to April/May) as the average flow is about 500 million cubic metres (MCM) per month.
    • The CM opposed an arrangement in 2011, by which India would get 42.5% and Bangladesh 37.5% of the water during the lean season, and the plan was shelved.

    Why does this deal matters?

    • India and Bangladesh have resolved border problems through the Land Boundary Agreement of 2015.
    • However, both nations have locked horns over the sharing of multiple rivers that define the borders and impact lives and livelihoods on both sides.

     

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  • India-UK Relations

    Context

    • The year 2022 is significant for both India and the UK as our country commemorates the 75th anniversary of its Independence and the two celebrate 75 years of bilateral ties.
    • India-UK relations were elevated to a Comprehensive Strategic Partnership in 2021, based on a shared commitment towards democracy, fundamental freedoms and multilateralism.

    Background of the India-UK ties

    • Partnership: The historical legacy has its own imprint on the relationship. But what is truly remarkable is the broad range of partnerships that have evolved between the two countries, transcending trade, investment and strategic affairs.
    • Close ties: This broader partnership between the world’s fifth and sixth largest economies has its foundations on three critical aspects: education, common law system and the increasingly influential role and impact of the Indian diaspora in the UK.
    • Shared values: The India-UK partnership is based on shared values, respect for the rule of law and common law, and institutional integrity protected by democratic institutions in the both the countries.

    What progress has been made in the India-UK relationship?

    1.Economic: During 2019-20, trade between the two countries stood at US$ 15.45 billion with the balance in favor of India. Between April 2021-February 2022, Indian exports to the UK stood at US$ 9.4 billion (2.5% of India’s exports). The imports in the corresponding period were US$ 6.59 billion (1.2% of India’s imports). There is a scope for significant improvement. Both countries expect that the bilateral trade can reach US$ 100 billion by 2030.

    2.Defense and Security: India and the UK signed the Defence and International Security Partnership (DISP) in November 2015. It provides a strategic roadmap and direction to the evolving India-UK Defence Relations. At present some 70 companies in the UK supply goods for aircraft and related equipment besides supporting platforms like the Jaguar, Mirage and Kiran aircraft.

    3.Indian Diaspora: Around 1.5 million people of Indian origin live in Britain. Indian diaspora are making significant contributions to the British Society. This includes 15 Members of Parliament, three members in Cabinet, and two in high office as Finance and Home Ministers.

    4.Education: The UK-India Education and Research Initiative (UKIERI) was launched in 2005. A new ‘UKEIRI Mobility Programme: Study in India’ was also launched in 2019. Under this Britain’s universities collaborate with Indian partners and send UK students to India.

    5.Health: The successful partnership between Oxford University, AstraZeneca and SII on COVID-19 vaccine demonstrated the potential of Indian and UK expertise working together to solve international challenges. The two sides are also working on pandemic preparedness, Antimicrobial Resistance (AMR), digital health, Ayurveda and alternative medicines, as well as health worker mobility.

    What is the significance of India-UK Relationship?

    1.Regional and global issues of mutual interest: A healthy relationship between the two is imperative for enhancing cooperation in the Indo-Pacific, Afghanistan, UNSC, G20 and Commonwealth. For instance, India welcomed the UK’s accession in the Indo-Pacific Ocean’s Initiative under the Maritime Security pillar.

    2.Tackling Climate Change: The cooperation between them can be helpful to achieve the goals of the Paris Agreement and in implementing the Glasgow Climate Pact. For instance, the countries have agreed to work for early operationalisation of the Global Green Grids-One Sun One World One Grid Initiative (OSOWOG) under ISA. They are also working on the IRIS platform under CDRI which was jointly launched by India and UK at COP26.

    3.Supporting 3rd World Countries: Through the Global Innovation Partnership, India and UK have agreed to co-finance up to £ 75 million to support the transfer and scale up of climate smart sustainable innovations to third countries. The novel GIP Fund created under this Partnership will also aim to raise additional £ 100 million from the market to support Indian innovations.

    3.Strategic Considerations: India can engage with the UK to counter China’s rise in the Indian Ocean Region. The UK on other hand can use India as an alternative destination to China and its companies can invest in India as part of China plus one strategy. It is the business strategy to avoid investing only in China and diversify business into other countries.

    Challenges in India-UK relations

    1.BREXIT

    • Impact on Diaspora– Many members of Indian Diaspora in Britain had voted against BREXIT because it is likely that Indian IT Professional in Britain will face tough competition when UK will open up its border for more skilled migration.
    • Impact on Indian Companies in UK– A hard Brexit would inevitably impact more than 800 Indian companies in UK in crucial sectors of British economy Indian. But data has shown that companies are increasing investments in the UK and creating many thousands of new jobs. This demonstrates that, Brexit or no Brexit, India supports Britain.
    • Impact on India-EU Relations –With €72.5 billion worth of India-EU trade and €19.4 billion of India UK trade at stake, all partners needed to think through this issue carefully in the business and commercial context. Brexit seems to be a challenge to the India EU strategic partnership but India would need to learn to manage its relations with the EU without UK
    • Impact on Trade–Forging a Free Trade Agreement with India will not be a priority for UK as it leaves EU. Instead, Britain would initially focus on tackling existing barriers to trade. But India should grab the opportunity to fill the trade gap in UK, post-Brexit.

    2.Visas and Immigration

    • Illegal Migration: There are more than 1 lakh illegal Indian immigrants in UK. Britain has started putting pressure on Indian government to ensure that Indians who have no right to remain in UK be sent back to India
    • Latest Measures: On the other hand, a white paper on post-Brexit visas and immigration strategy has been unveiled. It is expected to benefit Indian students and professionals, with a focus on skills rather than country of origin. An annual cap of 20,700 on the number of skilled work visas issued will also be removed.

    3.Terrorism

    • In the context of Brexit, unlike the United States’ contemporary view, India continues to be hyphenated with Pakistan in London’s outlook.
    • India states the fact that bilateral relations went beyond the economic realm to issues such as security and terrorism were not being heeded in Britain, despite continuous efforts by India over the past decades.

    4.Totalization agreement

    • The UK government has also made it mandatory for people to pay a health care surcharge as part of their immigration application.
    • When employees are there for a short term as part of their work, it is important that they get to keep their hard-earned money rather than giving UK thousands of pounds of free money as social security taxes.
    • Therefore, it is important for UK and India to sign the totalization agreement at the earliest.
    • The totalization agreement with the UK would have exempted Indian professionals who are working for a certain period of time in the UK from paying those social security taxes if they are paying such taxes in India.

    Way forward

    • The historical baggage also needs to be addressed cooperatively to diminish the possibility of hindrance in future cooperation.
    • The India-United Kingdom are dynamic democracies and the world’s leading economies with impressive advancements in human resources, manufacturing, innovation, research, education, space, defence, green technologies, and clean energy, among other areas.
    • This relationship can be utilized for the betterment of the fields and more collaborations should be undertaken.

    Conclusion

    • As we celebrate the historic collaboration between the UK and India in producing the Covishield vaccine, and look forward to the much-awaited signing of the bilateral Free Trade Agreement, we should not lose sight of the tremendous power that transnational university-wide collaborations can leverage in the accord. Education, research and knowledge partnership ought to become the centre-piece of the India-UK relationship at 75, as we move forward.

    Mains question

    Q.Analyse India-UK bilateral relations with scope of upscaling and challenges they need to overcome .

     

  • Deciding the terms of debate on freebies, subsidies and compensation

    Context

    The Reserve Bank of India, in a report published in June, linked the precarious state of state finances to “freebies”, particularly power subsidies, and last week, the Supreme Court, waded into the debate, recommending the creation of an expert body to examine the matter.

    Political, economic and institutional context

    • The determination of what is a good or bad freebie is and always will be a political choice.
    • A constructive debate must necessarily locate itself in the underlying political, economic and institutional context in which these so-called freebies are a feature of our electoral politics.
    • In the Public Interest Litigation filed in the Supreme Court, the petitioner has argued that “irrational freebies… is analogous to bribery”.
    • Commodification of electoral process: The problem with this framing is that it commodifies the electoral process and strips voters of their agency.
    • Voters, in this framing, are passive, unsophisticated actors who can be bought and therefore there is a need to be vigilant.
    • The honourable court had gone a step further, arguing for an expert, independent body, rather than Parliament, to tackle the issue.
    • This is judicial overreach and it privileges “experts” over legitimate democratic negotiation and strikes at the core of the political bargain.
    • Politics is central to welfare, not experts.

    Economic context

    • In that spirit, a debate on the merits and demerits of freebies is important but this debate cannot be divorced from the economic context.
    • India’s structural transformation, particularly since 1991, has been slow and unique.
    • Despite abundant low-skilled labour, our growth trajectory has mostly skipped manufacturing, growing instead on the back of a far smaller, high-skilled services sector.
    • Consequently, as economist Amit Basole has shown the bulk of jobs our economy generated even in its peak growth years were in the largely informal, low value add construction sector.
    • The distributional consequences of this have been significant.
    • Under-employment and low inter-generational mobility have been persistent features of the Indian economy resulting in deep inequalities.
    • Growth lifted a large population out of poverty.
    • However, as the World Bank data show, most of those who escaped poverty between 2005-2012 moved into the vulnerable group — one income shock away from falling below the poverty line.
    • Somewhat reassuringly, democracy created pressure on our politics to respond to these economic failures.
    • It is in this context that the demand for so-called freebies has found legitimate place in our democracy.

    Challenges

    • While democratic pressures led to the halting creation of limited social protection in the form of PDS and MGNREGA, they did not translate into investments in core public and merit goods — health and education being the most critical.
    • It is these accumulated failures that have created the new political logic that we confront today.
    • A logic where welfare freebies are being offered to compensate citizens for what economic growth has failed to do.

    Conclusion

    The answer does not lie in rapping state governments on the knuckles for being profligate. It lies in building a renewed democratic consensus on our economic and institutional growth path.

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  • fiscal federalism in India

    Context

    The centralisation of fiscal powers in India has been blamed for the poor fiscal health of the states.

    Centralisation of fiscal powers: A background

    • Jawaharlal Nehru believed that socio-economic inequities could be addressed through the planning process.
    • A degree of centralisation in fiscal power was required to address the concerns of socio-economic and regional disparities.
    • As a result asymmetric federalism is inherent to the Indian Constitution.
    • India was never truly federal — it was a ‘holding together federalism’ in contrast to the ‘coming together federalism,’ in which smaller independent entities come together to form a federation (as in the United States of America).
    • In fact, the Government of India Act 1935 was more federal in nature than the Constitution adopted on January 26, 1950 as the first offered more power to its provincial governments.
    • Historically, India’s fiscal transfer worked through two pillars, i.e., the Planning Commission and the Finance Commission. 
    • But the waning of planning since the 1990s, and its abolition in 2014, led to the Finance Commission becoming a major means of fiscal transfer as the commission itself broadened its scope of sharing all taxes since 2000 from its original design of just two taxes — income tax and Union excise duties.
    •  Today, the Finance Commission became a politicised institution with arbitrariness and inherent bias towards the Union government.
    • Tamil Nadu government constituted a committee under Justice P.V. Rajamannar in 1969, the first of its kind by a State government, to look at Centre-State fiscal relations and recommend more transfers and taxation powers for regional governments.

    Declining fiscal capacity of the states

    • While States lost their capacity to generate revenue by surrendering their rights in the wake of the Goods and Services Tax (GST) regime, their expenditure pattern too was distorted by the Union’s intrusion, particularly through its centrally sponsored schemes.
    • The ability of States to finance current expenditures from their own revenues has declined from 69% in 1955-56 to less than 38% in 2019-20.
    • While the expenditure of the States has been shooting up, their revenues did not.
    • Stagnant revenue: Since States cannot raise tax revenue because of curtailed indirect tax rights — subsumed in GST, except for petroleum products, electricity and alcohol — the revenue has been stagnant at 6% of GDP in the past decade.

    Implications of fiscal centralisation in India

    • Use of non-divisive cess: Even the increased share of devolution, mooted by the Fourteenth Finance Commission, from 32% to 42%, was subverted by raising non-divisive cess and surcharges that go directly into the Union kitty.
    •  This non-divisive pool in the Centre’s gross tax revenues shot up to 15.7% in 2020 from 9.43% in 2012, shrinking the divisible pool of resources for transfers to States.
    • Cut in the corporate tax: The recent drastic cut in corporate tax, with its adverse impact on the divisible pool, and ending GST compensation to States have had huge consequences.
    • States paying high interest rates: States are forced to pay differential interest — about 10% against 7% — by the Union for market borrowings.
    • Centrally sponsored schemes curbing autonomy:  There are 131 centrally sponsored schemes, with a few dozen of them accounting for 90% of the allocation, and States required to share a part of the cost.
    • They spend about 25% to 40% as matching grants at the expense of their priorities.
    • These schemes, driven by the one-size-fits-all approach, are given precedence over State schemes, undermining the electorally mandated democratic politics of States.
    • In fact, it is the schemes conceived by States that have proved to be beneficial to the people and that have contributed to social development.
    • Driven by democratic impulses, States have been successful in innovating schemes that were adopted at the national level.
    • The diversion of a State’s own funds to centrally sponsored schemes, thereby depleting resources for its own schemes, violates constitutional provision.
    • Deepening inequality: The World Inequality Report estimates ‘that the ratio of private wealth to national income increased from 290% in 1980 to 555% in 2020, one of the fastest such increases in the world.
    • The poorest half of the population has less than 6% of the wealth while the top 10% nearly grab two-third of it’.
    • India’s tax-GDP ratio has been one of the lowest in the world — 17% of which is well below the average ratios of emerging market economies and OECD countries’ about 21% and 34%, respectively.
    • Its income tax base has been very narrow.
    • Indirect tax still accounts for about 56% of total taxes.
    • Instead of strengthening direct taxation, the Union government slashed corporate tax from 35% to 25% in 2019 and went on to monetise its public sector assets to finance infrastructure.

    Conclusion

    In sum, India’s fiscal federalism driven by political centralisation has deepened socio-economic inequality, belying the dreams of the founding fathers who saw a cure for such inequities in planning. It has not altered inter-state disparities either.

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