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GS Paper: GS3

  • Agreement on Fisheries Subsidies (AFS)

    Context

    The recently concluded twelfth ministerial conference of the World Trade Organisation (WTO) adopted the trade agreement called the Agreement on Fisheries Subsidies (AFS).

    About the AFS

    • WTO negotiations on fisheries subsidies were launched in 2001 at the Doha Ministerial Conference, with a mandate to “clarify and improve” existing WTO disciplines on fisheries subsidies.
    • At the 2017 Buenos Aires Ministerial Conference (MC11), ministers decided on a work programme to conclude the negotiations by aiming to adopt, at the next Ministerial Conference, an agreement on fisheries subsidies which delivers on Sustainable Development Goal 14.6.
    • The recently concluded twelfth ministerial conference of the World Trade Organisation (WTO) adopted a sustainability-driven trade agreement called the Agreement on Fisheries Subsidies (AFS).

    Provisions adopted in the AFS

    • Prohibits three subsidies: Fundamentally, AFS prohibits three kinds of subsidies:
    • First, illegal, unreported, or unregulated (IUU) fishing.
    • Second, fishing of already over-exploited stocks.
    • Third, fishing on unregulated high seas.
    • Two-year transition period for developing countries: As part of special and differential treatment (S&DT), developing countries like India have been given a two-year transition period for phasing out the first two kinds of subsidies within their Exclusive Economic Zone (EEZ).
    • However, the final negotiated outcome, most crucially, lacks the much-needed discipline on subsidies for fishing in other members’ waters and those that contribute to overcapacity and over-fishing (OCOF).
    • Limited AFS: WTO member countries agreed to a limited AFS sans regulations disciplining OCOF subsidies, which have been pushed to the future and are expected to be completed within four years.
    • If negotiations fail, the AFS will stand terminated, as provided in Article 12.
    • Meanwhile, all countries can continue providing most OCOF subsidies, that is, except for fishing on unregulated high seas.

    What are the implications for India?

    • Longer transition period required: India has been demanding that developing countries be given a longer transition period of 25 years to put an end to OCOF subsidies within their EEZ.
    • Economic growth through ocean resources: Given its long coastline of nearly 7,500 kilometres, the blue economy — sustainable use of ocean resources for economic growth — occupies a cardinal place in India’s development trajectory.
    •  India has set a target of exporting marine products worth $14 billion by 2025.
    • Policy space for marine infrastructure: India needs the policy space to invest in developing the marine infrastructure to harness the full potential of the blue economy.
    • Livelihood concerns: Moreover, India needs to protect the livelihood concerns of close to four million marine farmers, the majority of whom are engaged in small-scale, artisanal fishing, which does not pose a great threat to sustainability.
    • However, India’s demand for a longer transition period was not acceptable to many countries who insisted on this period being seven years

    The disparity between Developed countries and Developing countries

    • India rightly contends that WTO disciplines should not be developed in a manner that throttles its emerging sector while richer nations continue to negotiate exemptions for indefinite subsidisation and exclusion of horizontal, non-specific fuel subsidies in the text.
    • Rich countries have historically provided massive subsidies to build capacity for large-scale fishing and fishing in distant waters, thereby contributing the most to depletion.
    • India provided subsidies worth a mere $277 million in 2018, in sharp contrast to the top five subsidisers: China, EU, US, South Korea, and Japan, whose subsidies range from $7,261-$2,860 million respectively.

    Way forward

    • Comprehensive agreement: For the sake of sustainability, countries need to overcome their differences soon and forge a comprehensive agreement with the inclusion of meaningful S&DT, else they risk the indefinite continuation of harmful subsidies by all players.
    • One balancing act could be to consider different ways to effectuate such flexibilities while accommodating the demands in a more targeted manner.
    • Strengthening infrastructure: India could strengthen infrastructure and mechanisms to be able to utilise any future exemptions.

    Conclusion

    For India, the AFS is less-than-perfect, with a potential of no real outcome at the end of four years if the negotiations fail. But negotiations over the global commons are not easy.

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  • Bedti-Varada Interlinking Project

    Environmental groups in Karnataka have criticised the project to link the Bedti and Varada rivers in Karnataka, calling it ‘unscientific’ and a ‘waste of public money’.

    Bedti-Varada Interlinking Project

    • The Bedti-Aghanashini-Varade river-linking project was also included in the country’s major rivers project devised by the then PM Vajpayee government.
    • The Central Government had created a task force to prepare action plans for interlinking the riverbeds in 2002.
    • The project cost and the source of investments were ascertained and suggested that the project be taken up in 2016.

    Key details

    • The Bedti-Varada project was envisaged in 1992 as one to supply drinking water by the then government.
    • The plan aims to link the Bedti, a river flowing west into the Arabian Sea, with the Varada, a tributary of the Tungabhadra river, which flows into the Krishna, which in turn flows into the Bay of Bengal.
    • A massive dam will be erected at Hirevadatti in Gadag district under the project. A second dam will be built on the Pattanahalla river at Menasagoda in Sirsi, Uttara Kannada district.
    • Both dams will take water to the Varada via tunnels of length 6.3 kilometres and 2.2-km. The water will reach at a place called Kengre.
    • It will then go down a 6.88 km tunnel to Hakkalumane, where it will join the Varada.
    • The project thus envisages taking water from the water surplus Sirsi-Yellapura region of Uttara Kannada district to the arid Raichur, Gadag and Koppal districts.

     

     

  • Places in news: Keibul Lamjao National Park (KLNP)

    Activists surrounding the Keibul Lamjao National Park (KLNP) in Manipur have now taken up the cudgels to ensure that the government does not shift the proposed heritage park from the approved site.

    Keibul Lamjao National Park (KLNP)

    • The KLNP is a national park in the Bishnupur district of the state of Manipur in India.
    • It is 40 km2 in area, the only floating park in the world, located in North East India, and an integral part of Loktak Lake.
    • The national park is characterized by floating decomposed plant material locally called Phumdi at the south–eastern side of the Loktak Lake, which has been declared a Ramsar site.
    • It was created in 1966 as a wildlife sanctuary to preserve the natural habitat of the endangered Eld’s deer.
    • In 1977, it was gazetted as national park.

    Key faunas

    • KLNP is home to the last of the brow-antlered deer (Rucervus eldii eldii), one of the most endangered deer in the world.
    • It is locally called as Sangai.
    • The animal is, in fact, in danger of losing its home—most of the phumdis, or floating swamps, are unable to sustain its weight.
    • In 1951, it was reported extinct, but British tea planter and naturalist Edward Pritchard Gee rediscovered it in 1953.

     

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  • The tricky restructuring of global supply chains

    Context

    After the go-go 1990s and 2000s the pace of economic integration stalled in the 2010s, as firms grappled with the aftershocks of a financial crisis, a populist revolt against open borders and President Donald Trump’s trade war.

    Background of globalisation

    • After the Berlin Wall fell in 1989, main theme of globalisation was efficiency.
    • Companies located production where costs were lowest, while investors deployed capital where returns were highest.
    • Governments aspired to treat firms equally, regardless of their nationality, and to strike trade deals with democracies and autocracies alike.
    • Low prices: All this kept prices low for consumers and helped lift 1bn people out of extreme poverty as the emerging world, including China, industrialised.

     

    Recent worries with globalisation

    • Volatile capital flows destabilised financial markets. Many blue-collar workers in rich countries lost out.
    • Recently, two other worries have loomed large.
    • Cost in case of disruption is high: First, some lean supply chains are not as good value as they appear: mostly they keep costs low, but when they break, the bill can be crippling.
    • Covid-19 was a shock, but wars, extreme weather or another virus could easily disrupt supply chains in the next decade.
    • Dependencies on autocracies have increased: The second problem is that the single-minded pursuit of cost advantage has led to a dependency on autocracies that abuse human rights and use trade as a means of coercion.
    • Hopes that economic integration would lead to reform—what the Germans call “change through trade”—have been dashed: autocracies account for a third of world gdp.

    The fragile state of the international trade and beginning of new phase in globalisation

    • The pandemic and war in Ukraine have triggered a once-in-a-generation reimagining of global capitalism in boardrooms and governments.
    • Supply chain resilience: The supply chains are being transformed, from the $9trn in inventories, stockpiled as insurance against shortages and inflation, to the fight for workers as global firms shift from China into Vietnam.
    • Preferring security over efficiency: This new kind of globalisation is about security, not efficiency: it prioritises doing business with people you can rely on, in countries your government is friendly with.
    • One indication that companies are shifting from efficiency to resilience is the vast build-up in precautionary inventories: for the biggest 3,000 firms globally these have risen from 6% to 9% of world gdp since 2016.
    • Many firms are adopting dual sourcing and longer-term contracts.
    • Investment pattern is inverted: The pattern of multinational investment has been inverted: 69% is from local subsidiaries reinvesting locally, rather than parent firms sending capital across borders.
    • Strategic autonomy: The industries under most pressure are already reinventing their business models, encouraged by governments that from Europe to India are keen on “strategic autonomy”.
    • Moving towards vertical integration: The car industry is copying Elon Musk’s Tesla by moving towards vertical integration, in which you control everything from nickel mining to chip design.
    • Long-term supply deals: In energy, the West is seeking long-term supply deals from allies rather than relying on spot markets dominated by rivals.

    Challenges

    • Protectionism: The danger is that a reasonable pursuit of security will morph into rampant protectionism, jobs schemes and hundreds of billions of dollars of industrial subsidies.
    • Long-run inefficiencies: The long-run inefficiency from indiscriminately replicating supply chains would be enormous.
    • Were you to duplicate a quarter of all multinational activity, the extra annual operating and financial costs involved could exceed 2% of world gdp.

    Way forward

    • Restraint: Because of the above challenges, restraint is crucial.
    • Diversification: Governments and firms must remember that resilience comes from diversification, not concentration at home.
    • Diversify in the areas controlled by autocracies: The choke-points autocracies control amount to only about a tenth of global trade, based on their exports of goods in which they have a leading market share of over 10% and for which it is hard to find substitutes.
    • The answer is to require firms to diversify their suppliers in these areas, and let the market adapt. 

    Conclusion

    Will today’s governments be up to the task? Myopia and insularity abound. But if you are a consumer of global goods and ideas—that is to say, a citizen of the world—you should hope globalisation’s next phase involves the maximum possible degree of openness.

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  • Why Assam gets flooded every year

    Disaster struck Dima Hasao, central Assam’s hill district, in mid-May after incessant heavy rainfall.

    Impacts of the disaster

    • The 170 km railway line connecting Lumding in the Brahmaputra Valley’s Hojai district and Badarpur in the Barak Valley’s Karimganj district was severely affected.
    • The Assam government and Railway Ministry’s assessments said the district suffered a loss of more than ₹1,000 crore, but ecologists say the damage could be irreversibly higher.

    How severe has the rain been in Assam?

    • Assam is used to floods, sometimes even four times a year, resultant landslides and erosion.
    • But the pre-monsoon showers this year have been particularly severe on Dima Hasao, one of three hill districts in the State.
    • Landslips have claimed four lives and damaged roads.
    • The impact has been most severe on the arterial railway, which was breached at 58 locations leaving the track hanging in several places.
    • The disruption of train services, unlikely to be restored soon, has cut off the flood-hit Barak Valley, parts of Manipur, Mizoram and Tripura.

    Why is the railway in focus post-disaster?

    • Dima Hasao straddles the Barail, a tertiary mountain range between the Brahmaputra and Barak River basins.
    • The district is on the Dauki fault (the prone-to-earthquakes geological fractures between two blocks of rocks) straddling Bangladesh and parts of the northeast.
    • British engineers were said to have factored in the fragility of the hills to build the railway line over 16 years by 1899.
    • The end result was an engineering marvel 221 km long over several bridges and through 37 tunnels, laid along the safer sections of the hills.

    A faulty experiment

    • A project to convert the metre gauge track to broad gauge was undertaken in 1996 but the work was completed only by March 2015 because of geotechnical constraints and extremist groups.
    • The broad-gauge track was realigned to be straighter, but a 2009-10 audit report revealed that the project had been undertaken without proper planning and visualisation of the soil strata behaviour.
    • The report gave the example of the disaster-prone Tunnel 10 on the realigned track that was pegged 8 meters below the bed of a nearby stream.

    Is only the railway at fault?

    • There is a general consensus that other factors have contributed to the situation Dima Hasao is in today.
    • Roads in the district, specifically the four-lane Saurashtra-Silchar (largest Barak Valley town) East-West Corridor, have been realigned or deviated from the old ones that were planned around rivers and largely weathered the conditions.
    • The arterial roads build over the past 20 years often cave in and get washed away by floods or blocked by landslides.
    • Shortened cycles of jhum or shifting cultivation on the hill slopes and unregulated mining have accentuated the “man-made disaster”.
    • Massive extraction of river stone, illegal mining of coal and smuggling of forest timbe has led to the disaster.
    • These activities have increased water current besides weakening either side of riverbanks.

    How vital are the rail and highway through Dima Hasao?

    • Meghalaya aside, Dima Hasao is the geographical link to a vast region comprising southern Assam’s Barak Valley, parts of Manipur, Mizoram and Tripura.
    • Moreover, this track is vital for India’s Look East policy that envisages shipping goods to and from Bangladesh’s Chittagong port via Tripura’s border points at Akhaura and Sabroom.
    • These are the last railway station near the Feni River that serves as the India-Bangladesh border.

     

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  • Explained: BSF powers and jurisdiction

    A blueprint that defines the extended jurisdiction of the Border Security Force (BSF) and its new logistical requirements in frontier States has been prepared and is soon expected to be submitted to the Union Home Ministry.

    What is the news?

    • While in Punjab, West Bengal and Assam, the BSF jurisdiction, from the border towards the hinterland, was enhanced from the earlier 15 km to 50 km.
    • In Gujarat the same limit has been reduced from 80 km to 50 km, while in Rajasthan the limit has been kept unchanged at 50 km.

    Do you know?

    BSF currently stands as the world’s largest border guarding force. It has been termed as the First Line of Defence of Indian Territories.

    About Border Security Force (BSF)

    • The BSF is India’s border guarding organization on its border with Pakistan and Bangladesh.
    • It comes under the Ministry of Home Affairs.
    • It was raised in the wake of the 1965 War on 1 December 1965 for ensuring the security of the borders of India and for matters connected therewith.
    • The BSF has its own cadre of officers but its head, designated as a Director-General (DG), since its raising has been an officer from the Indian Police Service (IPS).

    What are the new modifications?

    • The MHA has exercised the powers under the Border Security Force Act of 1968.
    • It has thus outlined the area of BSF’s jurisdiction.

    Powers exercised by BSF in its jurisdiction

    BSFs jurisdiction has been extended only in respect of the powers it enjoys under:

    1. Criminal Procedure Code (CrPC)
    2. Passport (Entry into India) Act, 1920 and
    3. Passport Act, 1967

    Arrest and search

    • BSF currently has powers to arrest and search under these laws.
    • It also has powers to arrest, search and seize under the NDPS Act, Arms Act, Customs Act and certain other laws.

    Sanctions behind such powers

    • Scarcely populated borders: At that time, border areas were sparsely populated and there were hardly any police stations for miles.
    • Trans-border crimes: To prevent trans-border crimes, it was felt necessary that BSF is given powers to arrest.
    • Manpower crunch: While police stations have now come up near the border, they continue to be short-staffed.

    Various issues at Borders

    1. Encroachment
    2. Illegal incursion
    3. Drug and cattle smuggling

    Impact on State Police jurisdiction

    • Such moves are aimed to complement the efforts of the local police.
    • Thus, it is an enabling provision.
    • It’s not that the local police can’t act within the jurisdiction of the BSF.
    • The state police have better knowledge of the ground.
    • Hence BSF and local Police can act in cooperation.

    Criticism of the move

    • At a basic level, the states can argue that law and order is a state subject and enhancing BSF’s jurisdiction infringes upon powers of the state government.
    • In 2012, then Gujarat CM and the present PM had opposed a central government moves to expand BSF’s jurisdiction.

     

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  • Communication gap between the MPC and RBI

    Context

    Communication is a critical element of monetary policy. Yet there seems to be a gap between what the MPC says and what the RBI does.

    About MPC

    • The Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016,  to provide for a statutory and institutionalised framework for a Monetary Policy Committee, for maintaining price stability, while keeping in mind the objective of growth.
    • Highest monetary policy-making body: By law, the Monetary Policy Committee is the highest monetary policy-making body in the land, tasked with deciding monetary policy changes at regular intervals.
    • Composition: The MPC will have six members – the RBI Governor (Chairperson), the RBI Deputy Governor in charge of monetary policy, one official nominated by the RBI Board and the remaining three members would represent the Government of India.
    • The MPC will be chaired by the Governor.
    • Under the inflation targeting regime, the most important role in communication belongs to the MPC.

    Communication with public

    • Monetary policy changes are communicated through formal statements, with the discussions underlying these decisions also being published, so that the public can understand why the MPC decided the way that they did.
    • Communication gap: Over the past few years, a communication gap seems to have opened up between what the MPC has been saying and what the RBI has been doing, thereby potentially eroding the credibility of the IT framework.
    • Influencing inflation expectations: Communication is an important part of the ability of the central bank to influence inflation expectations. 

    Following are the ways which indicate the communication gap between the RBI and the MPC, with several implications for the credibility of the MPC.

    1] Separate statements

    • During the first few years of the inflation-targeting regime from 2016 to 2018, the process of communication worked quite well.
    • On the days of policy announcements, the governor and his deputies would participate in a press conference.
    • From 2019 onwards, however, things began to change.
    • Governor’s separate statement: The RBI began to release a separate governor’s statement on the day of the monetary policy meeting, presenting an inflation outlook and even explaining the decision taken by the MPC.
    • MPC statement: It has overlapped with the MPC statement; at times, it has seemed somewhat different.
    • For example, following the June 8 Monetary Policy Review the MPC highlighted inflation concerns, and voted in favour of raising the policy repo rate.
    • On the same day, a governor’s statement mentioned that the central bank will also remain focussed on the orderly completion of the government’s borrowing programme.
    • Confusion: The issuance of two such different statements can lead to confusion, especially as lowering inflation and lowering government bond yields are contradictory policy objectives.

    Why is communication so crucial? To influence inflation expectations!

    • If the public believes the central bank is committed to keeping inflation under control, then it will act accordingly.
    • Firms will moderate their price increases, fearing that large price rises will make them uncompetitive.
    • Meanwhile, workers will accept moderate wage increases, while investors will accept low interest rates on their bond purchases.
    • With everyone acting in this way, it will be easier for the central bank to ensure that inflation indeed remains low.
    • Anchored inflation expectations: If inflation expectations are well anchored, then it becomes relatively easy for the central bank to ensure that inflation returns to the target level before too long.

    2] Change in the Monetary Policy Corridor width during pandemic

    • Deciding the repo rate: The most important task of the MPC, enshrined in the RBI Act (Amended), 2016 that introduced IT, is to decide the repo rate, since this has long been the lynchpin of India’s monetary policy framework.
    •  Ever since the early 2000s, policy had aimed to keep overnight money market rates in a corridor, with the lower bound established by the reverse repo rate and the upper bound by the repo rate.
    • Since the width of this corridor was fixed, once the repo rate was decided, the reverse repo rate was automatically determined, and market overnight rates adjusted accordingly.
    • During the Covid-19 pandemic, the RBI constantly adjusted the reverse repo rate even as the MPC kept the repo rate unchanged.
    • As a result, the fixed width of the corridor was lost, and the MPC lost any role in determining interest rates.

    3] Introduction of policy instruments outside the remit of MPC

    • During pandemic, the RBI introduced a number of new policy instruments, again outside the remit of the MPC.
    • GSAP: It brought in the GSAP programme through which it pre-commited to buying a certain amount of dated government bonds in order to control their yields.
    • Variable reverse repo auctions: It then introduced variable reverse repo auctions, and more recently, replaced the reverse repo rate with the long-dormant standing deposit facility rate.
    • The rationale for this was not explained in the MPC statement.
    • All unconventional monetary policy announcements were kept outside the MPC statement.
    • This raised the questions about the role of the committee in deciding monetary policy actions at a crucial time like the pandemic.

    4] Intervention in the foreign exchange market

    • The RBI has been intervening in the foreign exchange market to manage the rupee.
    • Forex interventions by definition influence the domestic monetary base and inflation.
    • Yet the MPC in its monetary policy statements does not discuss either the exchange rate dynamics or the forex interventions.
    • Just as it does not discuss the RBI’s interventions in the bond market to lower the yields.

    Way forward

    • In its latest two statements, the MPC indicated that policy would now be focusing on bringing India’s inflation rate under control.
    • Clear policy framework: If the RBI is going to be successful in this endeavour, the first step must be to close the communication gap, by reintroducing a simple and clear policy framework and restoring the central role of the MPC.

    Conclusion

    The net result of all these actions is a potential loss of both clarity and credibility. The communication gap will need to be closed in order for the RBI to become successful in bringing inflation back to its 4 per cent target level.

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    Back2Basics: Monetary Policy Corridor

    • The Corridor in the monetary policy of the RBI refers to the area between the reverse repo rate and the MSF rate.
    • Reverse repo rate will be the lowest of the policy rates whereas Marginal Standing Facility is something like an upper ceiling with a higher rate than the repo rate.
    • The MSF rate and reverse repo rate determine the corridor for the daily movement in the weighted average call money rate.
    • As per the monetary policy of the RBI, ideally, the call rate should travel within the corridor showing a comfortable liquidity situation in the financial system and economy.

    What is GSAP?

    • The G-Sec Acquisition Programme (G-SAP) is basically an unconditional and a structured Open Market Operation (OMO), of a much larger scale and size.
    • G-SAP is an OMO with a ‘distinct character’.
    • The word ‘unconditional’ here connotes that RBI has committed upfront that it will buy G-Secs irrespective of the market sentiment.

  • Recruitment of 10 lakh people in “mission mode

    Context

    The government recently announced that 10 lakh government jobs will be provided over the next 18 months on a “mission mode”.

    Background

    • The government recently announced it would recruit 10 lakh people in “mission mode” over the next one-and-a-half years.
    • The announcement came at a time when the unemployment rate for youth (aged 15-29 years) in urban areas has been hovering at over 20 per cent for the last several quarters.
    • According to the Quarterly Bulletin of Periodic Labour Force Survey (PLFS), the youth unemployment rate, according to current weekly status, stood at 20.8 per cent in urban areas during October-December 2021.
    • The annual PLFS report too shows that the overall youth unemployment rate, according to usual status (ps+ss), was at 12.9 per cent — 18.5 per cent in urban areas and 10.7 per cent in rural areas — during July-June 2020-21.

    Three takeaways from the announcement

    • One, the creation of employment is indeed a problem and can no longer be hidden from the public discourse.
    • Two, the private sector, especially modern sectors such as the service and manufacturing sectors, which are dominated by multinational companies, have not created many jobs.
    • Even if the Information Technology sector or the modern gig economy have created jobs, these are either very high-skilled jobs or low-skilled ones.
    • Three, the government in the Nehruvian scheme of development occupied an important place in the labour market.
    • The government is now forced to step in as persistently rising inflation, unemployment and underemployment threaten to politically affect it.

    Employment data and issues with it

    • Government is at present relying on the Employees’ Provident Fund Organisation/National Pension System/Employees’ State Insurance Scheme registrations and exits as indicators of the formal labour market.
    • This could be misleading as companies may be increasing registrations to cross the threshold to become eligible to fall under any of these.
    • Formalisation: Hence, this might be more a case of formalisation rather than employment generation.
    • Second, media reports show that more than 85% of those aspiring for those 10 lakh jobs could be consumed by existing vacancies in Central government departments (8,72,243).
    • The decline in PSU jobs: Third, 241 central public sector enterprises (CPSEs) have been shedding jobs in recent years.
    • The decline in quality of jobs: Even though the labour force and workforce participation rates have increased marginally, there is a decline in the quality of jobs, viz. there is a rise in the unpaid segment of the self-employed and a rise in the share of the agricultural sector in total employment over the last three Periodic Labour Force Surveys (43% to 47%).

    Role of the private sector

    • The private sector creates jobs in response to market forces and while taking into consideration radically altering technological developments.
    • We cannot avoid placing the government at the centre of employment creation beyond a certain point.
    • Projects in the modern private sector consume a lot of capital to generate very few jobs.
    • For instance, recently, there was a report that the Adani Group has invested ₹70,000 crore (or ₹700 million) in Uttar Pradesh to create merely 30,000 jobs.
    • Foreign Direct Investment, which at any rate is highly capital-intensive, goes mostly into the non-manufacturing sectors.

    Way forward

    • The government’s role in employment generation has entered into popular discourse and discussions on policy formation.
    • The government should play a significant role soon.
    • Government as principal employment generator: The government should re-establish its role as the principal employment generator through jobs in its ministries and CPSEs and through assured employment generation programmes like MGNREGA.

    Conclusion

    Employment is not merely about numbers and growth figures.  We need to concentrate on enabling the creation of decent work and a sustainable labour market to which India is committed as a member of the United Nations and the International Labour Organization.

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  • What is a ‘Black Swan’ Event?

    A study by the Reserve Bank of India (RBI) has spoken about the possibility of capital outflows to the tune of $100 billion (around Rs 7,80,000 crore) from India in case of a major global risk scenario or a “black swan” event.

    What is a ‘black swan’ event?

    • A black swan is a rare, unpredictable event that comes as a surprise and has a significant impact on society or the world.
    • These events are said to have three distinguishing characteristics –
    1. they are extremely rare and outside the realm of regular expectations
    2. they have a severe impact after they hit and
    3. they seem probable in hindsight when plausible explanations appear

    When did the term originate?

    • The black swan theory was put forward by author and investor Nassim Nicholas Taleb in 2001, and later popularised in his 2007 book – The Black Swan: The Impact of the Highly Improbable.
    • It is described as one of the 12 most influential books since World War II.
    • In his book, Taleb does not try to lay out a method to predict such events, but instead stresses on building “robustness” in systems and strategies to deal with black swan occurrences and withstand their impact.

    Behind the metaphorical name

    • The term itself is linked to the discovery of black swans.
    • Europeans believed all swans to be white until 1697, when a Dutch explorer spotted the first black swan in Australia.
    • The metaphor ‘black swan event’ is derived from this unprecedented spotting from the 17th century, and how it upended the West’s understanding of swans.

    When have such events occurred in the past?

    • Interestingly, Taleb’s book predated the 2008 global financial crisis – a black swan event triggered by a sudden crash in the booming housing market in the US.
    • The fall of the Soviet Union, the terrorist attack in the US on September 11, 2001, also fall in the same category.

    Is the Covid-19 pandemic a black swan event?

    • Taleb does not agree with those who believe it to be one.
    • Rather, he called it a “white swan”, arguing that it was predictable, and there was no excuse for companies and governments not to be prepared for something like this.
    • While the outbreak of any pandemic is difficult to individually predict, the possibility of one occurring and having a major impact on systems around the world was known and documented.

     

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  • single-use plastic

    The Centre has banned the use of ‘single-use plastic’ from July 1.

    What is the news?

    • The Ministry for Environment, Forest and Climate Change had issued a gazette notification last year announcing the ban, and has now defined a list of items that will be banned from next month.
    • The manufacture, import, stocking, distribution, sale and use of suc plastic, including polystyrene and expanded polystyrene, commodities shall be prohibited with effect from the 1st July, 2022.

    What is Single-Use Plastic?

    • As the name suggests, it refers to plastic items that are used once and discarded.
    • Single-use plastic (SUP) has among the highest shares of plastic manufactured and used — from packaging of items, to bottles (shampoo, detergents, cosmetics), polythene bags, face masks, coffee cups, cling film, trash bags, food packaging etc.
    • It accounts for a third of all plastic produced globally, with 98% manufactured from fossil fuels.
    • SUP also accounts for the majority of plastic discarded – 130 million metric tonnes globally in 2019 all of which is burned, buried in landfills or discarded directly into the environment.
    • On the current trajectory of production, it has been projected that single-use plastic could account for 5-10% of greenhouse gas emissions by 2050.

    SUPs in India

    • India features in the top 100 countries of single-use plastic waste generation – at rank 94 (the top three being Singapore, Australia and Oman).
    • With domestic production of 11.8 million metric tonnes annually, and import of 2.9 MMT, India’s net generation of single-use plastic waste is 5.6 MMT, and per capita generation is 4 kg.

    What are the items being banned?

    • According to the Plastic Waste Management Rules, 2016, there is also a complete ban on sachets using plastic material for storing, packing or selling gutkha, tobacco and pan masala.
    • The items on which the Central Pollution Control Board (CPCB) have announced a ban are earbuds; balloon sticks; candy and ice-cream sticks; cutlery items including plates, cups, glasses, forks, spoons, knives, PVC banners measuring under 100 microns among others.
    • The Ministry had already banned polythene bags under 75 microns in September 2021, expanding the limit from the earlier 50 microns.
    • From December, the ban will be extended to polythene bags under 120 microns.
    • The ban is being introduced in phases to give manufacturers time to shift to thicker polythene bags that are easier to recycle.
    • While manufacturers can use the same machine for 50- and 75-micron bags, the machinery will need to be upgraded for 120 microns.

    Why these items?

    • The choice for the first set of SUPs items for the ban was based on difficulty of collection, and therefore recycling.
    • The enemy is not that plastic exists per se, but that plastic exists forever in the environment.
    • When plastic remains in the environment for long periods of time and does not decay, it turns into microplastics – first entering our food sources and then the human body, and this is extremely harmful.
    • These items are difficult to collect, especially since most are either small, or discarded directly into the environment – like ice-cream sticks.
    • It then becomes difficult to collect for recycling, unlike the much larger items.
    • The largest share of SUP is that of packaging – with as much as 95% of single use belong to this category – from toothpaste to shaving cream to frozen foods.
    • The items chosen are of low value and of low turnover and are unlikely to have a big economic impact, which could be a contributing reason.

    How will the ban be enforced?

    • The ban will be monitored by the CPCB from the Centre, and by the State Pollution Control Boards (SPCBs) that will report to the Centre regularly.
    • Directions have been issued at national, state and local levels — for example, to all petrochemical industries — to not supply raw materials to industries engaged in the banned items.
    • Directions have also been issued to SPCBs and Pollution Control Committees to modify or revoke consent to operate issued under the Air/Water Act to industries engaged in SUP items.
    • Last week, the CPCB issued one-time certificates to 200 manufacturers of compostable plastic and the BIS passed standards for biodegradable plastic.

    What if violation occurs?

    • Those found violating the ban can be penalised under the Environment Protection Act 1986 – which allows for imprisonment up to 5 years, or a penalty up to Rs 1 lakh, or both.
    • Violators can also be asked to pay Environmental Damage Compensation by the SPCB.
    • In addition, there are municipal laws on plastic waste, with their own penal codes.

    How are other countries dealing with single-use plastic?

    • Bangladesh became the first country to ban thin plastic bags in 2002.
    • New Zealand became the latest country to ban plastic bags in July 2019.
    • China issued a ban on plastic bags in 2020 with phased implementation.
    • As of July 2019, 68 countries have plastic bag bans with varying degrees of enforcement.
    • Vanuatu and Seychelles have banned plastic straws outright.

     

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