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Opportunity to unlock the full Potential of MSMEs
Context
- India overtook the UK as the world’s fifth-largest economy in 2022, and is on track to achieving PM Narendra Modi’s vision of a $5 trillion economy by 2026-27. Despite concerns of a looming global recession, supply disruptions and the Russia-Ukraine war, India has stood out as a bright spot, growing faster than most major emerging markets. The government’s budget for 2023 presents an opportunity to make the Indian MSMEs competitive and self-reliant.
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What are MSMEs? How are they defined?
- Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 which was notified on October 2, 2006, deals with the definition of MSMEs. The MSMED Act, 2006 defines the Micro, Small and Medium Enterprises based on:
1. The investment in plant and machinery for those engaged in manufacturing or production, processing or preservation of and
2. The investment in equipment for enterprises engaged in providing or rendering of services.
MSMEs in India at present
- The 6.3 crore micro, small and medium enterprises which account for 30 per cent of GDP and employ nearly 11 crore people have demonstrated this spirit of resilience.
- With sales in several industries across the MSME sector reaching 90 per cent of pre-pandemic levels, India’s small businesses are scripting a turnaround.
Union budget 2023: An opportunity to make MSMEs more competitive and self-reliant
- Streamlining input tax credit for e-commerce suppliers: Currently, suppliers selling on e-commerce platforms need to procure input services like logistics, which are taxed at 18 per cent. This leads to precious working capital getting blocked without any visibility of future realisation, potentially discouraging suppliers from adopting e-marketplaces.
- Adequate working capital for small businesses: From meeting fixed expenses such as electricity, rent and employee wages to investing in future growth, adequate working capital is a must for small businesses.
- Lowering GST rates on input services: By lowering GST rates on input services availed by online sellers, the government will not only shore up their finances but also give a leg-up to their digitisation journey. Further, refunds of accumulated input tax credit will improve their cash flow situation.
- Expedited GST relaxation for small online businesses: There is also a need to expedite GST relaxation for small online businesses. In a landmark move last year, the GST Council announced a relaxation of rules for small businesses looking to go online.
- GST relaxation measures for small online vendors: Among other measures, mandatory GST registration was waived for small online vendors with a turnover of less than Rs 40 lakh and Rs 20 lakh for goods and services, respectively.
- Unlocking the potential of MSMEs through Digitization: With just 10 per cent of our MSMEs currently online, expeditious implementation of these new norms is key to unlocking their full potential. Millions of small businesses are waiting in the wings, hoping to reap the benefits of digitisation such as a much bigger addressable market, increased efficiencies and easier access to capital.
- The National Logistics Policy (NLP) can also be leveraged to make MSMEs competitive: The NLP aims to bring down logistics costs as a percentage of the GDP from 13-14 per cent to 8 per cent, on par with developed nations. While lower costs will encourage more MSMEs to use tech-powered logistics services, they will need support to tap rising e-commerce demand from smaller towns and semi-rural areas.
- Indian post and railways can be utilized for cost effective last mile delivery: The government could rope in India Post as a tech-enabled last-mile delivery partner that can facilitate cash-on-delivery transactions at competitive prices. Similarly, the unparalleled reach of Indian Railways can be synergised to ship wares to the remotest parts of the country quickly and cost-effectively.
Why the MSME sector is important especially for India?
- Employment: The Indian MSME sector provides maximum opportunities for both self-employment and wage-employment outside the agricultural sector.
- Help building inclusive and sustainable society: It contributes to building an inclusive and sustainable society in innumerable ways through the creation of non-farm livelihood at low cost, balanced regional development, gender and social balance, environmentally sustainable development, etc.
- For example: Khadi and Village industries require low per capita investment and employs a large number of women in rural areas.
- Contribution to GDP: With around 36.1 million units throughout the geographical expanse of the country, MSMEs contribute around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities.
- Exports: It contributes around 45% of the overall exports from India.
Conclusion
- With a visionary government charting out the nation’s growth path, it is anticipated that the budget would certainly deliver on the challenges for MSMEs and take us closer to the dream of an Atmanirbhar Bharat.
Mains question

Q. Highlight the significance of MSME’s for India. What more efforts can be taken to make MSMEs more competitive and self-reliant?

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February 1, 2023
Drugs in the valley: Pakistan’s new weapon to finance terrorism
Context
- With arms and terror infiltration becoming difficult, Pakistan has now resorted to peddling drugs to degenerate the youth of Jammu and Kashmir. Narcotics, Pakistan’s new weapon to finance terrorism within the Valley, has been dubbed the biggest challenge confronting Jammu and Kashmir by Police Chief Dilbag Singh.
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Background: Pakistan-sponsored terrorism and its impact
- The culture of violence implemented through constant financial and strategic support to the insurgency in the Kashmir Valley by Pakistan by training and infiltrating weapons and militants impacted society in many ways.
- Pakistan-backed terrorism destroyed the centuries-old socioeconomic and sociocultural fabric of society.
- The deaths, mass exodus of Pandits, and increased unemployment eroded the composite way of life and increased boredom, depression, and anxiety among the masses.
How Pakistan’s designs are failing?
- Pakistan-sponsored terrorism is at an all-time low in Jammu and Kashmir, three years after the abrogation of Articles 370 and 35A.
- The number of active militants has fallen from 250 by the end of 2019 to just over 100 by January 2023.
- Security agencies have tried hard to achieve zero terror activities within the Union territory of Jammu and Kashmir and busted 146 terror modules created by Pakistan in 2022.
- As a result, Pakistan’s design to create a culture of violence in the Valley endorsed by self-serving and incestuous political elite under the guise of autonomy for the last 30 years is failing.
Drug strategy of Pakistan in Kashmir
- Strategy serves dual purpose for Pakistan: Now, with the people of Kashmir increasingly relinquishing terrorism and a culture of violence, the drug strategy serves dual purposes for Islamabad. One, to attack the core of the social well-being, and two, to finance terrorism within the Valley.
- Constant infiltration of drugs in the valley: There is a constant infiltration of drugs by Pakistan via the Valley’s Kupwara and Baramulla districts, less-used other drugs such as brown sugar, cocaine, and marijuana are also readily available within the Valley and even in parts of Jammu.
Drug addiction in Kashmir
- Valley is slowly becoming a drug hub: The Kashmir Valley is slowly becoming a drug hub in Northern India, having more than 67,000 drug abusers, of which 90 percent are heroin addicts, using more than 33,000 syringes daily.
- Emerged as country’s top drug affected region: With 2.5 percent of the population using drugs, Kashmir has emerged as the country’s top-drug-affected region, ahead of Punjab, where 1.2 percent of the population is reportedly addicted to drug abuse.
- Residents affected: In November 2022, the state-level narcotic coordination committee meeting chaired by the Chief Sectary revealed that at least six lakh residents were affected by drug-related issues in Jammu and Kashmir.
- Increasing crime rate: Increasing on average, INR 88,000 are spent by a drug abuser in the Valley yearly, increasing Kashmir’s crime rate.
Reasons for this situation
- Collapse of age-old social discipline: A significant reason for such an alarming situation is the near-total collapse of the Valley’s age-old informal social discipline and control mechanisms enforced by village elders.
- Attack on cultural core: Pakistan’s nefarious attack on the Valley’s cultural core has rendered this traditional mechanism of social control ineffective.
- Few contributes in social degradation: The village elders have also often worked hand-in-glove with Pakistan’s evil designs by remaining silent and endorsing the societal degradation.
Jammu and Kashmir police and war against drugs
- Security agencies have trained their focus on drug peddlers: Security agencies in Jammu and Kashmir are known for anti-terror operations. They have successfully created a synergy with the local administration to sabotage Pakistan’s activities and allied forces within the Valley. With Pakistan-sponsored insurgency receding, the security agencies have trained their focus on drug peddlers.
- Security agencies in action: In 2022, under Narcotic Drugs Psychotropic Substances (NDPS) Act, the police registered 1,021 cases and arrested 1700 drug peddlers, including 138 notorious peddlers. During the same time, the security agencies seized enormous quantities of contraband, including 212 kilograms of charas, 56 kilograms of heroin, 13 kilograms of brown sugar, 4.355 tonnes of poppy straw and 1.567 tonnes of fukki.
- Busted narco terror modules: The security agencies also busted many narco-terror modules and arrested 36 persons with huge catches of drugs, arms, ammunition, and money.
- Investigation revealed drugs smuggled from Pakistan: In December 2022, police busted a Pakistan-based narcotics module and arrested 17 persons, including five police officials and some political activists. Investigations revealed that over five kilograms of narcotics valued at INR 5 crore were smuggled from Pakistan in three months.
- Launched Nasha-Mukt Bharat Abhiyan: The local administration has also launched the Nasha-Mukt Bharat Abhiyan an initiative started by the Ministry of Social Justice and Empowerment on 15 August 2020 to eradicate the menace of drug addiction in 272 districts across India. This programme has conducted large-scale awareness programmes in colleges, universities, and within communities.
Way ahead
- The Kashmiri society needs to have an internal interlocution and take a serious look at Pakistan’s policies to foment trouble, especially through narco-terrorism.
- Kashmir’s elders and religious leaders through mosques need to get involved in the war against drugs and guide the youth to engage meaningfully with the spate of developmental activities undertaken by the national and Union territory government following the abrogation of Article 370.
- The government should also initiate and enable public-private partnerships, where local police, military, paramilitary, and citizen bodies act in harmony to make Kashmir free of narco-terror and Pakistan-implemented culture of violence.
Conclusion
- With arms and terror infiltration becoming difficult, Pakistan has now resorted to drug trafficking to destroy Kashmir’s youth. Creating a working synergy between Kashmir’s traditional and formal social control system can go a long way in addressing the drug menace.
Mains question

Q. With arms and terror infiltration becoming difficult, Pakistan has now resorted to drug trafficking to destroy Kashmir’s youth. Discuss.

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February 1, 2023
Project ELLORA to preserve ‘rare’ Indian languages with AI
Microsoft’s Project ELLORA is helping small languages like Gondi, Mundari become eloquent for the digital world.

Project ELLORA
- To bring ‘rare’ Indian languages online, Microsoft launched the Project ELLORA or Enabling Low Resource Languages in 2015.
- Under the project, researchers are building digital resources of the languages.
- They say that their purpose is to preserve a language for posterity so that users of these languages “can participate and interact in the digital world.”
How is ELLORA creating a language dataset?
- The researchers are mapping out resources, including printed literature, to create a dataset to train their AI model.
- The team is also working with these communities on the project.
- By involving the community in the data collection process, researchers hope to create a dataset that is both accurate and culturally relevant.
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February 1, 2023
Possibility of global recession?
Context
- There have recently been growing concerns about the global economy slipping into recession. These concerns were primarily triggered by the contraction of the US economy, observed in the first half of 2022. Negative growth in two consecutive quarters is commonly but not officially used as an indication of recession.
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Background: Status of the US economy
- First and second quarter of 2022: As reported by the Bureau of Economic Analysis (BEA), the US real Gross Domestic Product (GDP adjusted for inflation) decreased at an annual rate of 1.6 per cent and 0.6 per cent in the first and second quarters of 2022, respectively.
- Third quarter: In the third quarter, however, the US economy grew by 3.2 per cent, signalling a significant recovery.
- Fourth quarter: The latest BEA advance estimates show that the US real GDP increased at an annual rate of 2.9 per cent in the fourth quarter.
- Expansion of US economy a positive sign: Despite the slight decrease from the third quarter, the continued expansion of the US economy at the end of 2022 marks a positive sign, soothing concerns about a recession in 2023.
Economic recovery of the US economy
- Positive growth in fourth quarter: The positive growth in the fourth quarter can primarily be attributed to consumer spending, which increased by an annualised rate of 2.1 per cent, and private inventory investment that showed an upturn in 2022. Although a significant decline from the 5.9 per cent increase in 2021, the difference accounts for the enthused post-Covid economic recovery in 2021.
- The US labour market continues to remain robust: The unemployment rate was recorded at a low of 3.5 per cent in December 2022, matching the pre-pandemic levels. Also, the total non-farm payroll employment increased by 2,23,000 in December, exceeding the Dow Jones estimate of 2,00,000.
- Inflation has eased: While the labour market remains tight, US inflation has eased in the last few months. Consumer prices fell 0.1 per cent in December the largest month-over-month decrease since April 2020, due to reductions in motor vehicle and gasoline prices.
- Layoffs not yet translated into rise in jobless claims: Although not a perfect association, the decline in jobless claims in January shows that the mass layoffs in recent weeks, particularly in the tech sector, have not yet translated into a rise in claims, suggesting the possibility of finding new jobs.
- The reopening of China’s borders can have positive implications for the global economy: As China resumes its economic activities to pre-Covid levels by boosting growth, domestic consumption is expected to increase significantly. With the ease of trans-border movement and eventual increase in exports of consumer and industrial goods, global trade is expected to strengthen as well.
What is Recession?
- A recession is a significant decline in economic activity that lasts for months or even years.
- Experts declare a recession when a nation’s economy experiences negative GDP, rising levels of unemployment, falling retail sales, and contracting measures of income and manufacturing for an extended period of time.
- Recessions are considered an unavoidable part of the business cycle or the regular cadence of expansion and contraction that occurs in a nation’s economy.
Possibility of a global recession
- Elevated inflation continues to be a cause for global concern: Despite the fall in consumer prices, the headline CPI for the US showed an annual increase of 6.5 per cent in December 2022. In spite of the slow-paced increase in headline CPI, persistent elevation in core inflation excluding food and energy continues to be a major issue across economies.
- Interest Rate Hikes on the Horizon: Consequently, the central banks are expected to continue with interest rate hikes in the coming months. On an annualised level, the CPI inflation in Australia also jumped to 7.8 per cent in the 2022 fourth quarter, increasing the likelihood of respective interest rate hikes as well.
- China’s Impact on Commodity Prices: Moreover, an increase in China’s demand for goods post-reopening could drive up commodity prices, thereby creating an inflationary impact. For instance, China’s increased demand for natural gas would mean more competition with the European market, leading to higher commodity prices that can put further inflationary pressures on Europeans already dealing with high energy bills.
- Higher borrowing costs: Rising interest rates would incur even higher borrowing costs that could dampen consumer spending. While sectors sensitive to high borrowing costs such as housing and construction have slowed down significantly.
Conclusion
- Among the positive signs are the continued expansion of the US economy and the reopening of China’s borders. Rising inflation remains a cause for global concern. However, prevalence of mixed signals suggests that the onset and depth of a global recession in 2023 are not certain.
Mains question

Q. Highlight the current situation of global economies. Discuss if there’s a global recession in 2023?

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January 31, 2023
Process to set up 16th Finance Commission set to kick off soon
The Centre will soon kick off the process to set up the Sixteenth Finance Commission, with the Finance Ministry likely to notify the terms of reference.

What is the Finance Commission?
- The Finance Commission (FC) was established by the President of India in 1951 under Article 280 of the Indian Constitution.
- It was formed to define the financial relations between the central government of India and the individual state governments.
- The Finance Commission (Miscellaneous Provisions) Act, 1951 additionally defines the terms of qualification, appointment and disqualification, the term, eligibility and powers of the Finance Commission.
- As per the Constitution, the FC is appointed every five years and consists of a chairman and four other members.
- Since the institution of the First FC, stark changes in the macroeconomic situation of the Indian economy have led to major changes in the FC’s recommendations over the years.
Constitutional Provisions

Several provisions to bridge the fiscal gap between the Centre and the States were already enshrined in the Constitution of India, including Article 268, which facilitates levy of duties by the Centre but equips the States to collect and retain the same.

Article 280 of the Indian Constitution defines the scope of the commission:
1. Who will constitute: The President will constitute a finance commission within two years from the commencement of the Constitution and thereafter at the end of every fifth year or earlier, as the deemed necessary by him/her, which shall include a chairman and four other members.
2. Qualifications: Parliament may by law determine the requisite qualifications for appointment as members of the commission and the procedure of selection.
3. Terms of references: The commission is constituted to make recommendations to the president about the distribution of the net proceeds of taxes between the Union and States and also the allocation of the same among the States themselves. It is also under the ambit of the finance commission to define the financial relations between the Union and the States. They also deal with the devolution of unplanned revenue resources.
Important functions
- Devolution of taxes: Distribution of net proceeds of taxes between Center and the States, to be divided as per their respective contributions to the taxes.
- Grants-in-aid: Determine factors governing Grants-in-Aid to the states and the magnitude of the same.
- Augment states fund: To make recommendations to the president as to the measures needed to augment the Fund of a State to supplement the resources of the panchayats and municipalities in the state on the basis of the recommendations made by the finance committee of the state.
- Any financial function: Any other matter related to it by the president in the interest of sound finance.
Members of the Finance Commission
- The Finance Commission (Miscellaneous Provisions) Act, 1951 was passed to give a structured format to the finance commission and to bring it to par with world standards.
- It laid down rules for the qualification and disqualification of members of the commission, and for their appointment, term, eligibility and powers.
- The Chairman of a finance commission is selected from people with experience of public affairs. The other four members are selected from people who:
1. Are, or have been, or are qualified, as judges of a high court,
2. Have knowledge of government finances or accounts, or
3. Have had experience in administration and financial expertise; or
4. Have special knowledge of economics
Key challenges for 16^th FC
- Overlap with GST council: A key new challenge for the 16th FC would be the co-existence of another permanent constitutional body, the GST Council.
- Conflict of interest: The GST Council’s decisions on tax rate changes could alter the revenue calculations made by the Commission for sharing fiscal resources.
- Feasibility of recommendations: Centre usually takes the Commission’s recommendations on States’ share of tax devolution and the trajectory for fiscal targets into account, and ignores most other suggestions.
Major outstanding recommendations
- Creating a Fiscal Council: The 15th FC has suggested creating a Fiscal Council where Centre and States collectively work out India’s macro-fiscal management challenges, but the government has signalled there is no need for it, he pointed out.
- Creating a non-lapsable fund for internal security: The centre accepted to set up a non-lapsable fund for internal security and defense ‘in principle’, its implementation still has to be worked out.
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January 31, 2023
Layoff and the conditions for retrenchment
Context
- Last year, around 1,60,000 workers in the tech industry were laid off globally. In contrast, in just this month alone some 60,000 tech workers have been laid off till now. On the back of a gloomy global economic outlook and prospects of a possible recession, tech firms across the world from US-based giants like Alphabet, Amazon and Meta to early-stage startups have engaged in large-scale retrenchments.
What is means by Lay-Off?
- A layoff is the temporary or permanent termination of employment by an employer for reasons unrelated to the employee’s performance.
- Employees may be laid off when companies aim to cut costs, due to a decline in demand for their products or services, seasonal closure, or during an economic downturn.
- When laid off, employees lose all wages and company benefits but qualify for unemployment insurance or compensation (typically in USA).
Inflation after strong recovery of the global economy: Two factors
- Outpaced demand: Buoyed by extraordinary pandemic relief support to households, aggregate demand in advanced economies outpaced supply.
- Supply chain disruption as a result of Russia- Ukraine war: the armed conflict between Russia and Ukraine caused supply-chain disruptions, leading to global inflationary pressures for food and fuel. In response, the US Federal Reserve has rapidly hiked rates.
Layoff drive in India
- Lay-offs in India: As multinational firms seek to cut their payroll figures worldwide, this lay-off drive has made its way to India as well.
- Impact on Indian workers: Indian workers, including expatriates and local employees, in both the traditional IT sector and the tech-based startup sector have been affected.
- Slowdown in funding in 2022: Despite a strong start, funding in India began to slow down in 2022, with third-quarter funding falling to a two-year low.
- Rising interest rates and cost of capital: Rising interest rates have meant that the cost of capital has increased and venture capitalists have to be more selective about how they deploy funds in this funding winter.
- Restructuring and cost-cutting for Indian tech startups: Indian tech startups are under pressure to cut costs and restructure their businesses in search for profitability. As a result, startups, including unicorns have engaged in broad-based retrenchments.
Retrenchment conditions according to Industrial Disputes Act
- One month notice with reasons is must: Employers must give a one-month notice with reasons for retrenchment to workers who have been in continuous service for at least a year.
- Must provide compensation: Employers must give retrenchment compensation.
- Notice shall be served: A notice in the prescribed manner must be served on the appropriate government.
- Principle of last come first go shall be followed: Employers must follow the principle of last come, first go while retrenching employees.
Concerns for contract workers
- Employers often skirt legal requirements by asking for voluntary resignations to remain outside the scope of retrenchment provisions.
- In any case, these mandates only apply to non-managerial employees; managerial employees are governed by their employment contracts.
- There are no similar protections available to gig or contract workers.
Conclusion
- Even as India seeks to lead a digital and technologically-driven world, it is important to note that the tech sector is not immune to harsh macroeconomic realities. It is crucial for the government and private sector to work together to mitigate the impact of layoffs on workers and to ensure that the industry continues to grow and create opportunities for all.
Mains question

Q. Layoffs have been frequently reported in the news recently. In this context, briefly explain the term layoffs and discuss the factors contributing to them? Highlight the impact of layoffs in India.

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January 30, 2023
National IPR Policy: Discussing the rights of all the stakeholders
Context
- In May 2016, the then Department of Industrial Policy and Promotion (now known as the Department for Promotion of Industry and Internal Trade) under the Ministry of Commerce released the 32-page National IPR Policy. The overall purpose of this document was to spell out the government’s comprehensive vision for the IPR ecosystem in the country towards shaping a more innovative and creative Bharat.
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What is a Patent?
- A patent is an exclusive set of rights granted for an invention, which may be a product or process that provides a new way of doing something or offers a new technical solution to a problem.
Know the basics: Intellectual Property rights (IPR)
- IPR refers to the legal rights that protect an individual’s or company’s creations and inventions (such as inventions, literature, music, and symbols) from being used or copied by others without permission.
- IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create.
- By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish.
Three important objectives of National IPR policy document
- Strong and effective IPR laws: Under the head Legal and Legislative Framework, the goal was to have strong and effective IPR laws, which balance the interests of right owners with larger public interest.
- Modernise and strengthen IPR administration: Under Administration and Management, the objective was to modernise and strengthen service-oriented IPR administration; and
- Strengthening adjudicatory mechanism: Under Enforcement and Adjudication, the focus was to strengthen the enforcement and adjudicatory mechanisms for combating IPR infringements.
Changes in IPR ecosystem so far
- Structural and legislative changes: Over the last six years, the IPR ecosystem in this country has witnessed both structural and legislative changes.
- Intellectual Property Appellate Board (IPAB): IPAB was dissolved in April 2021 as part of tribunal reforms, and its jurisdiction was re-transferred to high courts.
- Dedicated IP Division: This was followed by the establishment of dedicated IP benches the IP Division by the Delhi High Court, arguably the country’s leading court on the IPR front, for speedier disposal of IPR disputes.
- IP friendly environment: Such measures, one presumes, are intended to convey to investors and innovators that Bharat is an IP-savvy and even IP-friendly jurisdiction without compromising on national interest and public health commitments.
- For instance: This is evident from the very same National IPR Policy which, among other things, expressly recognises the contribution of the Indian pharmaceutical sector in enabling access to affordable medicines globally and its transformation to being the pharmacy of the world.
What are the concerns?
- Patent-friendliness, rather patentee-friendliness: It appears that the patent establishment of the country has drawn a very different message it has gone on an overdrive to prove its patent-friendliness, rather patentee-friendliness, in the pharmaceutical sector at the expense of public health and national interest respectively.
- Evergreening of patents on critical drugs: Evergreening patents on drugs which relate to treatment of diabetes, cancers, cardiovascular diseases and other serious conditions continue to be granted to pharmaceutical innovator companies by the Indian Patent Office.
- Enforcements at the expense of statutory rights: Worse, they are regularly enforced through courts at the expense of the statutory rights of generic manufacturers and to the detriment of patients.
- Unavailability of affordable drugs: The delayed entry of generic versions of off-patent drugs affects adversely the availability of affordable medicines to patients in a lower middle-income country such as Bharat where most middle-class families and below are only a hospital-visit away from dipping into their hard-earned savings.
Way ahead
- It must be understood that IP legislations such as the Patents Act do not exist for the sole benefit of IP right owners.
- Patent bargain is in which the society is expected to benefit from dynamic innovation-based competition between market players.
- Clearly, there are four stakeholders under the Patents Act the society, government, patentees and their competitors.
- Each of these stakeholders has rights under the statute which makes all of them right owners.
- To interpret, apply and enforce the Act to the exclusive benefit of patentees, and that too evergreening patentees, is to abridge and reduce to a naught the legitimate rights of other stakeholders, leading to sub-optimal and worse, anti-competitive market outcomes.
Conclusion
- It is one thing to operate under the understandable belief that Bharat needs to add layers to its IPR ecosystem to attract investment. However, it is entirely another to equate IPR-sensitivity with a pro-patentee position at the expense of public health obligations and long-term national interest. Make in India must be reconciled with Atmanirbhar Bharat, and in the event of conflict between the two, the latter must prevail for Bharat to retain its position as the pharmacy of the world.
Mains question

Q. What is Intellectual property rights? Discuss the changes taken place in India’s IPR ecosystem so far and highlight the concerns.

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January 30, 2023
Domestic Goat as a Drug Factory
India’s domestic goats have attracted the attention of biotechnology companies wishing to produce therapeutic proteins in bulk.

Domestication of Goats
- The domestic goat (Capra hircus) is a familiar presence in the rural landscape of India and in many developing countries.
- The goat has played an important economic role in human communities from the time it was domesticated about 10,000 years ago.
- It has even been argued that the domestication of goats was an important step in mankind’s shift from a hunting-gathering lifestyle to agricultural settlements.
Various breeds found in India
- The Food and Agriculture Organisation (FAO) estimates that the world has 830 million goats belonging to about 1,000 breeds.
- India has 150 million from over 20 prominent breeds including-
1. Marwari: Rajasthan has the most number of goats — the Marwari goat found here is hardy and well-adapted to the climate of deserts.
2. Osmanabadi: Another hardy breed, found in the dry regions of Maharashtra, Telangana and North Karnataka is the Osmanabadi.
3. Malabari: Also called Tellicherry of North Kerala, it is a prolific breed with low-fat meat, and shares these traits with the beetal goat of Punjab.
4. Black Bengal goat: The east Indian Black Bengal goat is a vital contributor to the livelihoods of the rural poor of Bangladesh. It contributes over 20 million square feet of skin and hides to the world’s demands for leather goods, from fire-fighters gloves to fashionable handbags.
5. Jamunapari: These goats from Uttar Pradesh were favoured as they yield 300 kg of milk during eight months of lactation. Once in England, the Jamunapari was bred with local breeds to produce the Anglo-Nubian, a champion producer of high-fat milk.
Why are goats significant for farmers?
- Goats have a quick generation time of about two years.
- General benefits of goat milk out-powers the high-fat buffalo milk.
- As many farmers lack the space or funds to rear cattle, the goat is rightly called “the poor man’s cow”.
- There are no specific fodder requirements for goat. It can feed even on the neem leaves.
Significance in therapeutics: Antithrombin production
- Goats have attracted the attention of biotechnology companies wishing to produce therapeutic proteins in bulk.
- The first success came with ATryn, the trade name for a goat-produced antithrombin III molecule.
- Antithrombin keeps the blood free from clots, and its deficiency (usually inherited) can lead to serious complications such as pulmonary embolisms.
- Affected individuals need antithrombin injections twice a week, usually purified from donated blood.
- Recently, the monoclonal antibody cetuximab, which has been approved by the FDA as an anti-cancer drug against certain lung cancers, has also been produced in cloned goat lines.
Why is it a significant development?
- Transgenic goats carrying a copy of the human antithrombin gene have cells in their mammary glands that release this protein into milk.
- It has been claimed that one goat could produce antithrombin equivalent to what was obtained from 90,000 units of human blood.
- Large quantities can be made this way (10 grams per litre of milk).
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January 30, 2023
What is Immune Imprinting?
A slew of recent studies has shown that a phenomenon in our bodies, called immune imprinting, might be making new boosters vaccines far less effective than expected for coronavirus infection.

What is Immune Imprinting?
- Immune imprinting is a tendency of the body to repeat its immune response based on the first variant it encountered.
- Our body does this through infection or vaccination — when it comes across a newer or slightly different variant of the same pathogen.
- The phenomenon was first observed in 1947, when scientists noted that “people who had previously had flu, and were then vaccinated against the current circulating strain, produced antibodies against the first strain.
- At the time, it was termed the ‘original antigenic sin’ but today, it’s commonly known as imprinting.
How imprinting works for immune system?
- Imprinting acts as a database for the immune system, helping it put up a better response to repeat infections.
- After our body is exposed to a virus for the first time, it produces memory B cells that circulate in the bloodstream and quickly produce antibodies whenever the same strain of the virus infects again.
- The problem occurs when a similar, not identical, variant of the virus is encountered by the body.
- In such cases, the immune system, rather than generating new B cells, activates memory B cells.
- This in turn produce antibodies that bind to features found in both the old and new strains, known as cross-reactive antibodies.
Are the booster doses completely useless?
- These cross-reactive antibodies do offer some protection against the new strain,.
- However they are not as effective as the ones produced by the B cells when the body first came across the original virus.
How to circumvent immune imprinting?
- Currently, several ongoing studies are trying to find a way to deal with imprinting.
- Some scientists have said nasal vaccines might be better at preventing infections than injected ones.
- They believe the mucous membranes would create stronger protection, despite carrying some imprint of past exposure.
- Researchers are also trying to find if spacing out coronavirus vaccine shots on an annual basis, could help with the problem of imprinting.
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China plus one (C+1) strategy and advantage for India
Context
- In January 2023, India surpassed China to become the world’s most populous country with a population count of approximately 1.417 billion as against China’s 1.412 billion, as estimated by the World Population Review (WPR). This creates both opportunities and challenges for India.
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The global turmoil and China as enablers of the Indian growth story
- There are three factors that have enabled the Indian growth story.
- Overdependence on specific economies: If the pandemic had had one crucial lesson for the global economy, it must be reducing the overdependence on China-specific Global Value Chains (GVCs). As is evident from the pandemic, the subsequent Ukraine-Russia war or the recent disastrous COVID-19 surge in China the overdependence on specific economies is bound to have cascading effects on the world economy because of the macroeconomic shocks they produce.
- Glocalised models of economic partnerships: Countries now strive to strike the right balance between globalisation and localisation, through bilateral and multilateral platforms characterised by leveraging sub-regional comparative advantages. To a large extent, these emerging forms of glocalised models are also based on controlling Beijing’s political and economic prowess in the Indo-Pacific and beyond, where India plays an active role.
- Use of technology: There is no doubt that the pandemic has provided an uptick in the use of technology ranging from the provision of social security payments at the grassroots to government-level conferences.
China plus one (C+1) strategy
- The US-China trade war and the pandemic-induced supply chain disruptions emanating from China have indeed paved the way for many western corporates to consider a China Plus One (C+1) strategy.
- The strategy would entail diversifying investments from China to other countries, to mitigate the economic and geopolitical risks associated with the former.
- While many also hail Vietnam as another economy to be in the race of attracting investments fleeing China, India could be the potential frontrunner in the C+1 game.
Why makes India to surge ahead in C+1?
- India’s economic advancement: India has a demographic advantage over China, with a larger percentage of its population under 30. This young population is expected to drive consumption, savings, and investments, leading to India’s goal of a multi-trillion dollar economy.
- Low cost of labour is an advantage: India has a low cost of labor and other forms of capital, making production costs lower and increasing competitiveness in international markets. India’s labor cost is also half that of Vietnam, making it a strong player in electronics and semiconductor manufacturing.
- India’s heavy infrastructure investment: A heavy investment in physical infrastructure through the National Infrastructure Pipeline (NIP) is expected to reduce costs in manufacturing sectors and cut transportation time and costs by 20%. This is in contrast to China, where multiple companies handle different parts of the transportation process, increasing costs
- India’s conducive business environment: Recent policy interventions in India such as the Production Linked Incentive (PLI) scheme, tax reforms, liberalization of FDI policies, setting up of land pools and organizing business summits have helped attract investments to the domestic economy. These efforts, driven by the Make in India initiative, have also been supported by efforts to promote competitive federalism and reduce transaction costs of doing business.
- India’s digital advantage: India’s high internet penetration at 43% allows for digital skilling initiatives to bring returns across various economic sectors, particularly services. A combination of home-grown technologies and greater access to Google and Facebook, which are banned in China, gives Indian youth a digital edge.
- As English is the second language provides ease of communication: the prevalence of the English language skill set in the young Indian populace undoubtedly puts India ahead of China. As English is the second official language in the Indian states, it provides business executives with ease of communication in conducting business with North American and European clients.
- Well balanced economic partnerships: India’s economic partnerships are characterized by utilizing sub-regional comparative advantages and controlling Beijing’s political and economic power in the Indo-Pacific. India’s decision to not join the RCEP in 2020 to protect its domestic market and curb trade deficits sends a strong signal of its disassociation with Beijing in trade partnerships. The CEPA signed with the UAE in 2022 is expected to increase two-way trade to $100 billion in five years by opening access for Indian exporters to Arab and African markets.
- Dynamic Indian diplomacy: India has strengthened its economy through diplomatic partnerships and trade agreements, such as the QUAD, I2U2, and agreements with Australia, Canada, the European Union, and African countries. These partnerships have provided Indian businesses with greater access to finance, technology, and new markets. As India assumes the presidency of the G20 and the Shanghai Cooperation Organization this year, it is well-positioned to navigate changing globalisation trends and be a strong voice for the Global South.
- Most important is the large domestic market: India’s large domestic market with a population of 1.3 billion and increasing incomes at 6.9 percent per annum offers a competitive alternative to China’s massive domestic market. With a population base of 98 million, Vietnam’s market is much smaller in comparison.
Conclusion
- Indian economy that has risen from the ashes like a phoenix after a year of negative growth caused by the pandemic-led lockdown. India’s 74th Republic Day, therefore, should not merely mark a remembrance of the past or a celebration of adoption of the world’s largest and most comprehensive constitution, but should also be a celebration of the dazzling future of a roaring economy that will show light to a dreary world.
Mains question

Q. What is China plus one (C+1) strategy? Discuss why it is said that India will surge ahead in C+1?

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January 27, 2023