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GS Paper: GS3

  • India’s Current Account Deficit (CAD) Strategy amidst the Global Uncertainty

    Deficit

    Context

    • There seems to be considerable optimism about India’s near-term growth prospects now that the major global energy and commodity shocks have subsided. Even if these shocks have subsided, India still faces one big problem of its large current account deficit (CAD). How will this be managed? It turns out that the answer to both questions lies in one word exports.

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    Deficit

    What is Current Account Deficit (CAD)?

    • A current account is a key component of balance of payments, which is the account of transactions or exchanges made between entities in a country and the rest of the world.
    • This includes a nation’s net trade in products and services, its net earnings on cross border investments including interest and dividends, and its net transfer payments such as remittances and foreign aid.
    • A CAD arises when the value of goods and services imported exceeds the value of exports, while the trade balance refers to the net balance of export and import of goods or merchandise trade.
    • CAD = Trade Deficit + Net Income from Abroad + Net transfers

    What has been the recent trend?

    • Swelling CAD: Over the past year, the post-pandemic normalisation has caused the current account deficit to swell to exceptional proportions.
    • Decline in demand abroad: At home, normalisation has spurred a renewed demand for imported inputs. But abroad, it has had the opposite effect, leading to a decline in demand.
    • India’s import soared while exports fell: Foreign households are no longer demanding so many goods now that the lockdowns that kept them in their houses and the fiscal stimuli that gave them the money to spend have both ended. So, India’s imports have soared just at a time when its merchandise exports have started to fall.
    • Statistics for instance: The difference between the value of goods imported and exported fell to $54.48 million in Q4FY 2021-22 from $59.75 million in Q3 FY2021-22.
    • Service sector is saviour: However, based on robust performance by computer and business services, net service receipts rose both sequentially and, on a year, -on-year basis.

    Future projections

    • Looking ahead, the situation seems set to worsen: Foreign demand will slow further as advanced countries slip into what now seem like inevitable recessions.
    • In the backdrop of recession India’s CAD could widen further: In that case, India’s CAD could widen even further, possibly to four per cent of GDP in 2022-23, double the level that the Reserve Bank of India (RBI) traditionally regards as “safe”.

    Deficit

    Analysis: How should India respond?

    1. Attracting foreign capital inflow: Attract foreign capital inflows worth at least four per cent of GDP.
    • Is this realistic in time of global uncertainty: The world is currently facing unprecedented levels of uncertainty. Two years of the pandemic, now a land war in Europe, inflation and energy crisis in Europe, interest rate hikes in the history of the US Federal Reserve, slowdown in china, etc. In such an uncertain environment, foreign investors prefer to invest in safe assets such as US government bonds rather than emerging markets like India. As a result, India has witnessed large outflows of foreign capital in 2022-23
    1. Deploying RBI’s Forex to pay for imports: If India cannot attract the required amount of capital inflows, the RBI’s foreign exchange reserves could be deployed to pay for imports.
    • Is this strategy sustainable: The country’s reserves are meant to tide the country over short-term problems, such as commodity price spikes. India’s merchandise exports have been structurally weak, stagnating for the past decade, until the pandemic induced a short-lived boom.

    Deficit

    How depreciating rupee could be helpful?

    • Price needs to be adjusted by depreciating rupee: This means that something fundamental needs to change. Ultimately, India’s CAD reflects a mismatch between the demand and supply of foreign exchange. To restore balance, first and foremost, the price needs to adjust, that is, the rupee needs to depreciate.
    • Exporting becomes more profitable: When this happens, exporting becomes more profitable, inducing more and more firms to explore foreign markets. Meanwhile, foreign demand improves, because the rupee depreciation makes India’s products more price-competitive. As a result, exports increase and the CAD falls.
    • Exchange rate depreciation is helpful in sustained growth: The recovery of the Indian economy from the pandemic was largely fuelled by exports. But with exports now declining, this crucial source of growth has now become uncertain for India. Strengthening the export sector is, therefore, critical for sustaining growth.

    Way forward

    1. Allow the rupee to depreciate,
    2. Encourage foreign firms to produce in India by letting them access their supply chains,
    3. Encourage domestic firms to step up to the competition, and
    4. Create a level playing field for all players.

    Conclusion

    • The large CAD, however, is not a short-term problem: It is a long-term problem requiring a long-term solution. By adopting the discussed strategy, India could potentially solve its two most important macroeconomic problems that are reducing the large CAD and securing rapid, sustained growth.

    Mains question

    Q. What is Current account deficit (CAD)? In a time of global uncertainty How India can reduce its large CAD and secure sustained growth. Analyze

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  • [pib] Social Progress Index (SPI) for states and districts

    Economic Advisory Council to Prime Minister (EAC-PM) will release the Social Progress Index (SPI) for states and districts of India on December 20, 2022.

    Social Progress Index (SPI) Report

    • SPI is a comprehensive tool intended to be a holistic measure of the Social Progress made by the country at the national and sub-national levels.
    • The report has been prepared by Institute for Competitiveness, headed by Dr Amit Kapoor and the Social Progress Imperative, headed by Michael Green.
    • It was mandated by Economic Advisory Council to the Prime Minister of India.

    Objectives of the report

    • With state and district-wise rankings and scorecards, the report aims to provide a systematic account of the social progress made at all levels in the country.
    • The report also sheds light on the achievements of the districts that have performed well on the index and the role of the states in achieving social progress.
    • A special section of the report provides an analysis of the Aspirational Districts of India, leading to a broader understanding of the social progress at the grassroots level.
    • The report will act as a critical enabler and tool for policymakers in the coming years for achieving sustained socio-economic growth.

    Components of SPI

    SPI assesses the performance of states and districts on three dimensions of social progress:

    1. Basic Human Needs: It assesses the performance of states and districts in terms of Nutrition and Basic Medical Care, Water and Sanitation, Personal Safety and Shelter.
    2. Foundations of Wellbeing: It evaluates the progress made by the country across the components of Access to Basic Knowledge, Access to Information and Communication, Health and Wellness, and Environmental Quality.
    3. Opportunity: It focuses on aspects of Personal Rights, Personal Freedom and Choice, Inclusiveness, and Access to Advanced Education.

    (This newscard will be updated once the report is published.)

    Need for SPI

    • GDP is not a holistic measure of a nation’s development: It would be incorrect to state that the economic progress is completely divorced from progress made in areas mentioned above.
    • Social outcomes of developmental economics: The primary goal of the SPI is to provide a rigorous tool to benchmark progress and stimulate progress within countries.
    • No single holistic parameter available: Several indicators, like GHI and HDI, go beyond GDP, but none captures social progress as finely as SPI.
    • Doing away with biased reports: India does not display a respectable position in the index, as even the small neighbours like Nepal have a better rank. India is also the lowest rank holder in BRICS.

     

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  • India test-fires Agni-V Ballistic Missile amid LAC heat

    agni

    India successfully carried out the night trials of the Agni V nuclear-capable ballistic missile days after Indian and Chinese troops clashed in Tawang district of Arunachal Pradesh.

    Why in news?

    • It was a midnight test fire.
    • And there are rumours about the increased range and stealth capabilities of Agni-V missile.

    Agni Missiles

    agni

    • Agni missiles are long range, nuclear weapons capable surface to surface ballistic missile.
    • The first missile of the series, Agni-I was developed under the Integrated Guided Missile Development Program (IGMDP) and tested in 1989.
    • After its success, Agni missile program was separated from the IGMDP upon realizing its strategic importance.
    • It was designated as a special program in India’s defence budget and provided adequate funds for subsequent development.

    Variants of Agni missiles

    1. Agni I: It is a Medium Range Ballistic Missile with a Range of 700-800 km.
    2. Agni II: It is also a Medium Range Ballistic Missile with a Range more than 2000 km.
    3. Agni III: It is also an Inter-Medium Range Ballistic Missile with Range of more than 2,500 Km
    4. Agni IV: It is also an Inter-Medium Range Ballistic Missile with Range is more than 3,500 km and can fire from a road mobile launcher.
    5. Agni-V: Currently it is the longest of Agni series, an Inter-Continental Ballistic Missile (ICBM) with a range of over 5,000 km.
    6. Agni- VI: The longest of the Agni series, an Inter-Continental Ballistic Missile (ICBM) with a range of ICBM 11,000–12,000 km.

    Strategic significance of Agni Missiles

    • The success of AGNI missiles is in line with India’s stated policy to have ‘credible minimum deterrence’ that underpins the commitment to ‘No First Use’.
    • What makes Agni 5 agile is that it is a “canisterised” missile. It means that the missile can be launched from road and rail platforms, making it easier for it to be deployed and launched at a quicker pace.
    • The canisterisation also gives the missile a longer shelf life, protecting it from the harsher climatic conditions.
    • While India is among the handful of nations with ICBM capability.
    • The next generation of the missile, Agni VI, under development, is expected to have a range of around 8,000 km.

     

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  • Capital Expenditure and Fiscal Consolidation

    Fiscal

    Context

    • The 2023-24 Union budget will be announced on February 1, followed by the states’ respective budgets. These budgets will set the policy tone for the rest of the year and, as such, are followed closely.

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    Situation of Capex and fiscal consolidation after pandemic

    • Rise in fiscal deficit: The overall fiscal deficit of the government has soared and we believe the next few years will be all about getting it back on track.
    • Rising interest payments: This is important because interest payments on past debt make up a whopping 50 per cent of net tax revenues for the central government, leaving very little room for other spending.
    • less room for social spending: Given the needs of the economy on various fronts like health, education and capex, it is important to lower the interest burden over time. That can only be achieved by fiscal consolidation.

    Analysing the tax revenue and expenditure of central and state Government

    • Central government tax revenues have risen faster than state revenues: Both benefitted as small and informal firms struggled with the lockdowns and lost market share to large firms, which tend to pay more taxes.
    • Disparity in revenue collection: A large chunk of the tax revenues in the early part of the pandemic period came from the “special” duty and surcharge on oil, which went primarily to the central government. To be fair, the central government subsequently cut the duty on oil (in both 2021-22 and 2022-23) and the tax share that went to the states rose somewhat.
    • Capex of centre is more: The Centre has committed to more current expenditure than the states. While it increased across the board during the pandemic, current expenditure rose more for the central government.
    • Higher spending on social schemes: This was led by higher social welfare spending (for instance, on the free food distribution scheme) and, more recently, higher subsidies (for example, fertilisers) in the face of rising commodity prices.
    • States have a moderate capex: The common perception is that states have gone all out on unsustainable current expenditure. But the data shows that it’s just a few states which have spent heavily (for example, Telangana, Assam, West Bengal and Punjab).

    Fiscal

    Analyzing the capex and fiscal deficit of central and state government

    • The central government capex has risen but state capex has contracted: Making a commendable choice, the central government used both its tax bounty as well as its ability to borrow more at a time when banking sector liquidity was loose to raise capex spending, which rose by 1.2 per cent of GDP between 2019-20 and 2021-22.
    • Cut in state capex: On the other hand, the states cut back on capex, which has fallen as a percentage of GDP over the last few years, and continues to be on a weak footing in the current year. In fact, putting the central government’s capex alongside the state and public sector capex shows that the overall public sector thrust is not any stronger than it was back in 2018-19.
    • Centre has breached the fiscal deficit target: The central government’s fiscal deficit has overshot targets while the state deficit is relatively contained. At a budgeted 6.4 per cent of GDP in 2022-23, the central government’s fiscal deficit has risen above the pre-pandemic level of 3.4 per cent in 2018-19, and is well above the 3 per cent medium-term target.
    • Sharp fall in states fiscal deficit target: Even though the state fiscal deficit rose in the first year of the pandemic (from 2.5 per cent of GDP in 2018-19 to 3.8 per cent in 2020-21), it has fallen sharply since (to 2.7 per cent in 2021-22).
    • Low borrowing by states: In fact, state government borrowing is rather low in the current year so far. If this continues, the fiscal deficit could be even lower in 2022-23 (around 2.5 per cent of GDP), which is well under the 3 per cent medium-term target, and bang in line with pre-pandemic levels.

    Fiscal

    What are the challenges?

    • Less consolidation by states: The states have less fiscal consolidation to do than the central government.
    • High quality spending: Both have a common challenge to commit to more capex, which is considered high quality spending as it “crowds in” private investment if done responsibly. And we believe investment is the only sustainable way to increase the capacity of the economy to grow and create jobs.
    • Balancing the capex and fiscal consolidation: For the central government, the challenge is to hold on to its capex push at a time of fiscal consolidation. For the states, the challenge is to start doing more.

    Fiscal

    What should be the way forward?

    • Lowering the fiscal deficit: The central government’s aim is to lower the fiscal deficit by about 2 per cent of GDP over the next three years. About half of this consolidation can come from lowering current expenditure to pre-pandemic levels.
    • Raising the tax revenue through formalization: Continued formalisation of the economy that raises tax revenues (though “organic” formalisation will likely be more sustainable than “forced” formalisation).
    • Disinvestment of PSUs: A bigger push for disinvestment by selling stakes in public-owned companies, and further tax reforms (in terms of direct taxes and the GST).
    • Capex cut is the last option: If these don’t work, the default option will be to cut capex, which is a concern as it has implications for medium-term growth.

    Conclusion

    • Fiscal consolidation and capital expenditure should go hand in hand. More government spending means more infrastructure building and more chances of growth and employment. However, this spending should be done with sound fiscal base.

  • Day 10| Daily Answer Wars| CD WarZone

    Topics for Today’s question:

    GS-2          Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

    Question

    Q. India’s Higher education institutions (HEIs) are plagued with many administrative and operational issues. Discuss. Suggest ways to overcome them and improve the state of HEIs. (15 Marks)

     

    HOW TO ATTEMPT ANSWERS IN DAILY ANSWER WARS (DAW)?

    1. Daily 1 question either from General Studies 1, 2, 3 or 4 will be provided via live You Tube video session.
    2. You can write your answer on an A4 sheet and scan/click pictures of the same.
    3. The answer needs to be submitted by joining the telegram group given in the link below.

      https://t.me/cdwarzone

    *In case your answer is not reviewed, reply to your answer saying *NOT CHECKED*. 

    1. For the philosophy of Daily Answer Wars and payment: 
    Daily Answer Wars | CD warzone
    Payment Link DAW

  • Draft cybersecurity strategy has been formulated: Centre

    The National Security Council Secretariat (NSCS) has formulated a draft National Cyber Security Strategy, which holistically looks at addressing the issue of security of national cyberspace, the government informed the Lok Sabha.

    What is the National Cyber Security Strategy?

    Conceptualised by the Data Security Council of India (DSCI), the report focuses on 21 areas to ensure a safe, secure, trusted, resilient, and vibrant cyberspace for India.

    The main sectors of focus of the report are:

    • Large scale digitisation of public services: There needs to be a focus on security in the early stages of design in all digitisation initiatives and for developing institutional capability for assessment, evaluation, certification, and rating of core devices.
    • Supply chain security: There should be robust monitoring and mapping of the supply chain of the Integrated circuits (ICT) and electronics products. Product testing and certification needs to be scaled up, and the country’s semiconductor design capabilities must be leveraged globally.
    • Critical information infrastructure protection: The supervisory control and data acquisition (SCADA) security should be integrated with enterprise security. A repository of vulnerabilities should also be maintained.
    • Digital payments: There should be mapping and modelling of devices and platform deployed, transacting entities, payment flows, interfaces and data exchange as well as threat research and sharing of threat intelligence.
    • State-level cyber security: State-level cybersecurity policies and guidelines for security architecture, operations, and governance need to be developed.

    What steps does the report suggest?

    To implement cybersecurity in the above-listed focus areas, the report lists the following recommendations:

    • Budgetary provisions: A minimum allocation of 0.25% of the annual budget, which can be raised up to 1% has been recommended to be set aside for cyber security.
    • Ministry-wise allocation: In terms of separate ministries and agencies, 15-20% of the IT/technology expenditure should be earmarked for cybersecurity.
    • Setting up a Fund of Funds: The report also suggests setting up a Fund of Funds for cybersecurity and to provide central funding to States to build capabilities in the same field.
    • R&D, skill-building and technology development: The report suggests investing in modernisation and digitisation of ICTs, setting up a short and long term agenda for cyber security via outcome-based programs and providing investments in deep-tech cyber security innovation.
    • National framework for certifications: Furthermore, a national framework should be devised in collaboration with institutions like the National Skill Development Corporation (NSDC) and ISEA (Information Security Education and Awareness) to provide global professional certifications in security.
    • Creating a ‘cyber security services’: The DSCI further recommends creating a ‘cyber security services’ with cadre chosen from the Indian Engineering Services.
    • Crisis management: For adequate preparation to handle crisis, the DSCI recommends holding cybersecurity drills which include real-life scenarios with their ramifications. In critical sectors, simulation exercises for cross-border scenarios must be held on an inter-country basis.
    • Cyber insurance: Cyber insurance being a yet to be researched field, must have an actuarial science to address cybersecurity risks in business and technology scenarios as well as calculate threat exposures.
    • Cyber diplomacy: Cyber diplomacy plays a huge role in shaping India’s global relations. To further better diplomacy, the government should promote brand India as a responsible player in cyber security and also create ‘cyber envoys’ for the key countries/regions.
    • Cybercrime investigation: It also suggests charting a five-year roadmap factoring possible technology transformation, setting up exclusive courts to deal with cybercrimes and remove backlog of cybercrimes by increasing centres providing opinion related to digital evidence under section 79A of the IT act.
    • Advanced forensic training: Moreover, the DSCI suggests advanced forensic training for agencies to keep up in the age of AI/ML, blockchain, IoT, cloud, automation.
    • Cooperation among agencies: Law enforcement and other agencies should partner with their counterparts abroad to seek information of service providers overseas.

    What next?

    • India has to contend with the importance and necessity of cyber offences as much as cyber defence.
    • As of today, India’s primary or possibly only response measures appear to be defensive.
    • India has to also invest in more offensive cyber means as a response.

     

     

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  • What caused the great Indian Airport jam?

    airport

    As more passengers take to the skies, airports in India’s top cities—Delhi, Mumbai, and Bengaluru—are witnessing heavy traffic.

    What is causing congestion at airports?

    • There are lengthy queues at airport entry, check-in counters, security, and immigration.
    • There is crowding at baggage claim areas too.
    • This is the result of an unexpected surge in demand for air travel because of the holiday season—the last two years saw muted demand during this period because of the pandemic.
    • Air traffic has been 1-7% above pre-covid levels of 4 lakh daily flyers for the past 10 days.
    • Consequently, the personnel strength of CISF at check-in, the number of X-Ray machines and automatic trays for security, as well as baggage belts, have fallen short in handling the demand.

    Which airports are most affected?

    • The congestion is more severe at airports with maximum connectivity such as Delhi, Mumbai, Bengaluru, and Hyderabad.
    • The worst-hit is Delhi—the busiest airport in India and 10th busiest in the world.
    • Delhi handles the largest share of international as well as domestic air traffic in the country with a 27% share in international segment for the country and 20% in overall air traffic in India.
    • The airport, with three terminals, has a capacity to handle around 70 million passengers per annum.
    • Over the last 10 days, the airport has handled over 190,000 passengers daily, which is close to its full capacity.

    Is airport congestion an India-specific problem?

    • Globally, air travel continues to face disruptions.
    • Europe’s busiest airport, London Heathrow, needs to hire around 25,000 staff to manage peak hours.
    • Schiphol in Amsterdam has imposed a 20% cap on capacity to manage traffic.
    • The aviation industry laid off thousands of people during the pandemic, and expects staff strength to realign by mid-2023.

    What is being done to decongest airports?

    • The aviation ministry has recommended a reduction in the number of flights and more manpower at all check-in and baggage drop counters.
    • It has sought for increasing the number of X-ray machines and baggage trays for security check.
    • The government will also analyse manpower requirements at immigration counters and, if required, additional personnel will be deployed.
    • IndiGo, the largest airline in India, has asked fliers to report 3.5 hours early for domestic flights from Delhi.

    Easing the airport congestion  

    • There is no immediate solution, and the government’s action plan will only bring temporary relief. Increasing the number of personnel at entry, security, and immigration will take time.
    • Higher usage of the contactless travel platform—Digi Yatra—for passengers without check-in luggage is expected to ease the congestion a bit.
    • Cities like Delhi and Mumbai need additional infrastructure.
    • However, the Jewar airport in Noida and the Navi Mumbai airport are expected to be operational only by 2024.

     

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  • GI tag sought for Beypore Uru

    beypore uru

    The District Tourism Promotion Council, Kozhikode has applied for a Geographical Indication (GI) tag for the famous Beypore Uru (boat).

    Beypore Uru

    • Beypore Uru is a wooden dhow (ship / sailing boat / sailing vessel) handcrafted by skilled artisans and carpenters in Beypore, Kerala.
    • They are a symbol of Kerala’s trade relations and friendship with the Gulf countries.
    • It is purely made of premium wood, without using any modern techniques.
    • The wood used is still sawed the traditional way which requires immense expertise.
    • It takes anywhere between 1-4 years to build each Uru and the entire process is done manually.

    Its historic significance

    • Historical records show that Beypore has been a legendary maritime hub for traders from across the world since the 1st Century C.E.
    • The iconic Uru ships have been in high demand for around 2000 years.
    • The history of Khalasis, skilled natives engaged in launching the Uru boats at Beypore, dates back to 2000 years.
    • The prominent people among them are Odayis. They manage the technical matters of ship building.
    • Their family name comes from Odam (a type of small ship previously used in interactions/trade between the Malabar coast and Lakshadweep).
    • They are also referred to as Mappila Khalasis as majority of them are Mappila Muslims.

     

    Try this PYQ:

    Q.With reference to ‘Changpa’ community of India, consider the following statement:

    1. They live mainly in the State of Uttarakhand.
    2. They rear the Pashmina goats that yield fine wool.
    3. They are kept in the category of Scheduled Tribes.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 and 3 only

    (c) 3 only

    (d) 1, 2 and 3

     

    [wpdiscuz-feedback id=”jmhupo6jvk” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

    Back2Basics: Geographical Indication (GI)

    • A GI is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
    • Nodal Agency: Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
    • India, as a member of the World Trade Organization (WTO), enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 w.e.f. September 2003.
    • GIs have been defined under Article 22 (1) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
    • The tag stands valid for 10 years.

     

     

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  • India-China clash: Why China has opened new front?

    China

    Context

    • There has been yet another transgression by Chinese troops across the Line of Actual Control (LAC) between India and China. That it culminated in violence, that it took place this time in the Eastern Sector of their boundary dispute, or that it should take place in the middle of winter should surprise no one. If there is one lesson that can be drawn from India’s experiences with Chinese transgressions over the last decade or so, it is that the Chinese seem to set the pace on the nature and timing of these transgressions.

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    Army’s statement about the clash

    • On December 9, 2022, People’s Liberation Army (PLA) troops contacted the LAC in the Tawang sector, which was contested by own troops in a firm and resolute manner.
    • This face-off led to minor injuries to a few personnel from both sides,” “Both sides immediately disengaged from the area.”

    China

    Events of Chinese transgressions: Need to understand the nature and timing

    • Depsang in Ladakh, 2013: Chinese troops came across the LAC, pitched tents and refused to move for several weeks until New Delhi threatened to cancel the planned visit of Premier Li Keqiang to India. This might have been a diplomatic victory for the Indian government but it also highlighted the inability of the Indian military to bring an end to the standoff or the unwillingness of the government to let the military take the lead in responding.
    • Chumar in Ladakh, Sept, 2014 in the middle of the Xi Jinping’s first visit to India: Chinese intruded at Chumar, also in Ladakh, in the middle of Chinese President Xi Jinping’s first state visit to India. This was in keeping with a reasonably long tradition of Chinese transgressions during important visits but it was also notable for confronting Indian troops in an area where they enjoyed a degree of military advantage.
    • Doklam in 2017: China provoked India with infrastructure development in a third country in Bhutan’s Doklam territory. This was a case of China trying to browbeat an Indian treaty ally.
    • Transgression across multiple locations in 2020 and Galwan valley clash: The Chinese PLA took advantage of Covid-19 and a lack of Indian military alertness to transgress across multiple locations on the LAC in eastern Ladakh. On June 15, 2020 episode when 20 Indian soldiers were killed and several others were injured in violent clashes with the PLA troops in Ladakh’s Galwan Valley.

    Why China has opened new front in Tawang?

    • Status quo along the boundary are no longer going to be limited to the Western Sector: China has traditionally been active in areas close to Ladakh given the significance of the Xinjiang-Tibet region in its domestic narrative. However, with its sights on an ageing Dalai Lama, and the issue of his succession, Beijing will want to bring into focus its claims on Tawang, and the rest of Arunachal Pradesh.
    • Huge investment in infrastructure in eastern sector: China has invested in infrastructure in the Eastern Sector over many years. This includes rail, road, and air connectivity, better telecommunications, as well as improved capacity to station and supply troops and artillery.
    • Centrality of the boundary issue in the India-China relationship: External Affairs Minister S Jaishankar has repeatedly asserted that it is no longer possible to separate the boundary question from the overall relationship and that peace and tranquillity on the LAC is the key to restoring relations. However, China is likely to keep up the pressure on the ground along the LAC, even as they continue to suggest that the two countries look beyond the differences, much like Chinese Foreign Minister Wang Yi’s comments during his March 2022 visit when he claimed that the two sides need to “inject more positive energy” into the relationship.

    China

    India’s preparedness and learnings from the incident

    • Indian Army anticipated such kind of transgression in eastern sector: The Indian Army had for long anticipated that the PLA would activate the eastern sector of the LAC, and to that extent, it is evident that steps were taken to beef up military preparedness in the region.
    • Light on what gaps to address: What the incident has effectively achieved though is the lighting up of one more section of the LAC at a time the issues in Ladakh have not yet been settled, from the point of view of India.
    • China appears not want to disengage: After 16 rounds of talks, a disengagement has taken place in eastern Ladakh, but it has not restored the status quo that prevailed in April 2020. China, for its part, appears reluctant to hold any further rounds of talks on the leftover problems in Ladakh, including its play in Depsang and Demchok areas.
    • China is only increasing the economic gap between itself and India: China has only increased the economic gap between itself and India and in the intervening years, not only built up more infrastructure in its border provinces but also tried to integrate these regions much more closely with neighbouring economies such as Pakistan and Nepal through grand projects such as the Belt and Road Initiative and pressuring Thimphu to open formal diplomatic ties with Beijing.

    Way ahead

    • India’s relationship with China has been teetering from bad to worse over the last 32 months since the standoff in Ladakh began, and it seems unlikely to improve unless Beijing’s calculus vis a vis India and the region undergoes a drastic change.
    • While Delhi’s G20 leadership may bring opportunities for engagement with Beijing, what is required first is a clear vision and a grand strategy to deal with the China challenge, instead of reacting to each crisis as it emerges.

    China

    Conclusion

    • With its sights on an ageing Dalai Lama, and the issue of his succession, Beijing will want to bring into focus its claims on Arunachal Pradesh. The border stand-off seems to have been managed for now, but Delhi needs a clear vision, grand strategy to deal with China instead of reacting to each crisis as it emerges.

    Mains question

    Q. There has been yet another transgression by Chinese troops across the Line of Actual Control (LAC) between India and China. Why China has opened new front in eastern sector? Discuss.

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  • Day 9| Daily Answer Wars| CD WarZone

    Topics for Today’s question:

    GS-3          Bilateral, regional and global groupings and agreements involving India and/or affecting  India’s interests.

    Question)

    Q. In light of the prominence that the Indo-Pacific has gained in the recent years, examine how India can enhance its presence in the region. (10 Marks)

     

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