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GS Paper: GS3

  • Why banks want inspection reports by RBI to be kept confidential?

    The contentious issue of whether banks should disclose inspection reports by the Reserve Bank of India (RBI) is back in the news once again after a division bench of the Supreme Court referred writ petitions filed by banks to another bench for reconsideration.

    What is RBI’s inspection on banks?

    • The Banking Regulation Act, 1949 empowers the Reserve Bank of India to inspect and supervise commercial banks.
    • These powers are exercised through on-site inspection and off-site surveillance.
    • RBI carries out dedicated and integrated supervision overall of credit institutions, i.e., banks, development financial institutions, and non-banking financial companies.
    • The Board for Financial Supervision (BFS) carries out this function.
    • Banks currently disclose the list of wilful defaulters and names of defaulters against whom they have filed suits for loan recovery.

    Note: CAMELS is an international rating system used by regulatory banking authorities to rate financial institutions, according to the six factors represented by its acronym. The CAMELS acronym stands for “Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity.”

    Why in news now?

    • In 2015, the Supreme Court had come down on the RBI for trying to keep the inspection reports and defaulters list confidential.
    • This was aimed for the public disclosure of such reports of the RBI, much against the wishes of the banking sector.
    • The SC had said the RBI has no legal duty to maximize the benefit of any public sector or private sector bank, and thus there is no relationship of ‘trust’ between them.
    • It added that the RBI was duty-bound to uphold the public interest by revealing these details under RTI.

    What is the issue?

    • The RBI was allowed to make such reports public following the Supreme Court order.
    • The SC had wanted full disclosure of the inspection report.
    • However, the court agreed that only some portions on bad loans and borrowers would be made public.
    • Banks have been refusing to disclose inspection reports and defaulters’ lists.

    Issues with report publication

    • Bank defamation: As banks are involved in dealing in money, they fear any adverse remarks — especially from the regulator RBI — will affect their performance and keep customers away.
    • Trust of the account holder: Banks are driven by the “trust and faith” of their clients that should not be made public.
    • The invalidity of RTI: On the other hand, private banks insisted that the RTI Act does not apply to private banks.
    • Right to Privacy: Banks also argued that privacy is a fundamental right, and therefore should not be violated by making clients’ information public.

    Why are banks against disclosing inspection reports?

    • Many feel that the RBI’s inspection reports on various banks, with details on alleged malpractices and mismanagement, can open up a can of worms.
    • As these reports have details about how the banks were manipulated by rogue borrowers and officials, banks want to keep them under wraps.
    • Obviously, banks don’t want inspection reports and defaulters’ lists to be made public as it affects their image.
    • Customers may also keep out of banks with poor track records.

    Try this PYQ now:

    Q.In the context of the Indian economy non-financial debt includes which of the following?

    1. Housing loans owed by households
    2. Amounts outstanding on credit cards
    3. Treasury bills

    Select the correct answer using the code given below:

    (a) 1 only

    (b) 1 and 2 only

    (c) 3 only

    (d) 1, 2 and 3

     

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  • RBI unveils Financial Inclusion Index

    The Reserve Bank of India (RBI) has announced the formation of a composite Financial Inclusion Index (FI-Index) to capture the extent of financial inclusion across the country.

    Financial Inclusion Index

    • The FI-Index will be published in July every year.
    • The index captures information on various aspects of financial inclusion in a single value ranging between 0 and 100, where 0 represents complete financial exclusion and 100 indicates full financial inclusion.
    • It has been conceptualized as a comprehensive index incorporating details of banking, investments, insurance, postal as well as the pension sector in consultation with the government and respective sectoral regulators.
    • It has been constructed without any ‘base year’ and as such it reflects cumulative efforts of all stakeholders over the years towards financial inclusion.

    Parameters of the index

    • The FI-Index comprises three broad parameters viz.,
    1. Access (35%),
    2. Usage (45%), and
    3. Quality (20%)
    • These parameters are the identification of the customer, reaching the last mile, and providing relevant, affordable and safe products.
    • The index is responsive to ease of access, availability and usage of services, and quality of services for all 97 indicators.

    This year’s highlight

    • The annual FI-Index for the period ended March 2021 stood at 53.9 compared with 43.4 for the period ended March 2017.

  • Second-generation bioethanol: It is time to launch it headlong

    India has been promoting 2G bioethanol to achieve its E20 target.

    What is Bioethanol?

    • Biomass has always been a reliable source of energy.
    • Cultivated biomass has begun to be used to generate bioethanol.
    • They are categorised as first (1G), second (2G) and third-generation (3G), based on the source of raw material used for bioethanol production.

    Its types

    • 1G bioethanol: Raw materials required are corn seeds and sugarcane; both are food sources. There is not enough food for everyone; so the use of 1G is a major concern. However, some countries have enough raw materials to manufacture 1G.
    • 2G bioethanol: It can be produced using inedible farm waste left over after harvest. Corn cobs, rice husks, wheat straw and sugarcane bagasse can all be transformed into cellulose and fermented into ethanol that can then be mixed with conventional fuels.
    • 3G bioethanol: Algae grown in wastewater, sewage or saltwater can be used to produce bioethanol. Water used for human consumption is not required. The benefit of 3G is that it does not compete with food. Nevertheless, economic viability remains a critical issue.

    Ethanol blending in India

    • India currently blends approximately 8.5 per cent ethanol with petrol.
    • It is estimated that ethanol production in India will triple to approximately 10 billion litres per year by 2025.
    • The 2G plant will play a major role in making bioethanol available for blending.
    • In addition to reducing agricultural waste incineration, it can also help meet the goal of converting waste into energy.

    Moves for production

    • The first 2G ethanol biorefinery is being set up at Bathinda, Punjab.
    • Hindustan Petroleum Corporation Ltd (HPCL) plans to set up four 2G ethanol plants that will convert agricultural waste into biofuel, reducing toxic air pollution in northern India.
    • Additionally, HPCL has plans to build four plants to produce ethanol using grains, such as surplus maize, surplus rice and damaged grain.

    Innovations in this field

    • An Indian company has filed a patent for loop reactor technology.
    • It is a long, serpentine tubular reactor, in which fermentable sugars are converted to ethanol with the help of brewer’s yeast.
    • This sparked an idea to come up with reactive pipeline technology, wherein the pipeline connects the sugar factories where the ethanol is produced to the blending depot at the closest oil manufacturing companies.
    • Reactive pipeline technology is poised to be a game-changer for sugar factories and grain-based distilleries since uninterrupted raw material supply is a major challenge.

    Benefits offered by ethanol blending

    (1) Energy security

    • The Union government has emphasized that increased use of ethanol can help reduce the oil import bill.
    • India’s net import cost stands at $551 billion in 2020-21. It is estimated that the E20 program can save the country $4 billion (Rs 30,000 crore) per annum.

    (2) Emission reduction

    • Use of ethanol-blended petrol decreases emissions such as carbon monoxide (CO), hydrocarbons (HC) and nitrogen oxides (NOx), the expert committee noted.
    • Higher reductions in CO emissions were observed with E20 fuel — 50 per cent lower in two-wheelers and 30 per cent lower in four-wheelers.

    Some issues to be addressed

    (1) Fuel efficiency

    • There is an estimated loss of six-seven per cent fuel efficiency for four-wheelers and three-four per cent for two-wheelers when using E20, the committee report noted.
    • These vehicles are originally designed for E0 and calibrated for E10.

    (2) Recalibrating engines

    • The use of E20 will require new engine specifications and changes to the fuel lines, as well as some plastic and rubber parts due to the fuel’s corrosive nature.
    • The engines, moreover, will need to be recalibrated to achieve the required power, efficiency and emission-level balance due to the lower energy density of the fuel.

    Conclusion

    • The country’s target of 20 per cent ethanol blending in petrol (E20) by 2025 can play a key role in reducing crude oil imports and bolstering India’s energy independence.
    • But India may miss an earlier goal set by him in 2015 — of reducing crude oil import dependency 10 per cent by 2022.
    • The target is far from being met and the country’s import dependency is only increasing.
    • The country’s target of 20 per cent ethanol blending in petrol (E20) by 2025 can play a key role in reducing crude oil imports and bolstering India’s energy independence.

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    Back2Basics: EBP Programme

    • Ethanol Blended Petrol (EBP) programme was launched in January 2003 for the supply of 5% ethanol blended petrol.
    • The programme sought to promote the use of alternative and environment-friendly fuels and to reduce import dependency for energy requirements.
    • OMCs are advised to continue according to priority of ethanol from 1) sugarcane juice/sugar/sugar syrup, 2) B-heavy molasses 3) C-heavy molasses and 4) damaged food grains/other sources.

  • What is RoDTEP Scheme?

    The Centre has notified the rates and norms for the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme asserting that it would put ‘direct cash in the pockets of exporters’ soon.

    RoDTEP Scheme

    • RoDTEP is a scheme for Exporters to make Indian products cost-competitive and create a level playing field for them in the Global Market.
    • It has been kicked in from January 2021, replacing the earlier Merchandise and Services Export Incentive Schemes (MEIS and SEIS) that were in violation of WTO norms.
    • The new RoDTEP Scheme is a fully WTO compliant scheme.
    • It will reimburse all the taxes/duties/levies being charged at the Central/State/Local level which are not currently refunded under any of the existing schemes but are incurred at the manufacturing and distribution process.

    Answer this PYQ:

    Q.With reference to the international trade of India at present, which of the following statements is/are correct?

    1. India’s merchandise exports are less than its merchandise imports.
    2.  India’s imports of iron and steel, chemicals, fertilizers and machinery have decreased in recent years.
    3.  India’s exports of services ye more than its imports of services.
    4.  India suffers from an overall trade/current account deficit.

    Select the correct answer using the code given below:

    (a) 1 and 2 only

    (b) 2 and 4 only

    (c) 3 only

    (d) 1, 3 and 4 only

     

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    Why need such a scheme?

    • The scheme was announced last year as a replacement for the Merchandise Export from India Scheme (MEIS), which was not found not to be compliant with the rules of the World Trade Organisation.
    • Following a complaint by the US, a dispute settlement panel had ruled against India’s use of MEIS as it had found the duty credit scrips awarded under the scheme to be inconsistent with WTO norms.

    Coverage of the scheme

    • It covers about 75% of traded items and 65% of India’s exports.
    • To enable zero-rating of exports by ensuring domestic taxes are not exported, all taxes, including those levied by States and even Gram Panchayats, will be refunded under the scheme.
    • Steel, pharma, and chemicals have not been included under the scheme because their exports have done well without incentives.

    Back2Basics: Merchandise Exports from India Scheme (MEIS)

    • MEIS was launched with an objective to enhance the export of notified goods manufactured in a country.
    • This scheme came into effect on 1 April 2015 through the Foreign Trade Policy and was in existence till 2020.
    • It intended to incentivize exports of goods manufactured in India or produced in India.
    • The incentives were for goods widely exported from India, industries producing or manufacturing such goods with a view to making Indian exports competitive.
    • The MEIS covered almost 5000 goods notified for the purpose of the scheme.

  • The message from the IPCC report

    Context

    The Intergovernmental Panel on Climate Change (IPCC) recently released the Working Group I contribution to the Sixth Assessment Report (AR6). It is the first of four that the Panel will issue over the next one and a half years.

    What does the report say?

    • Global surface temperature is now higher by 1.07oC since the pre-industrial era.
    • The impact of climate change on the atmosphere, oceans and land is unmistakably of human origin and this impact is picking up pace.
    • Carbon dioxide is the dominant source of warming.
    • Aerosols contribute to reducing the impact of warming by other greenhouse gases, by almost a third.
    • Methane reduction, while needed overall, is particularly significant only as part of the endgame as the drastic reduction of aerosols actually leads to an increase in warming.
    • The report expectedly projects an increase in climate extremes due to global warming, with heatwaves, extreme rainfall events and occurrence of extreme sea levels all expected to intensify and be more frequent.
    • A major finding of the report is that air pollution reduction and steep climate change mitigation are not complementary goals but require independent efforts over the short and medium-term
    • With the inclusion of the Indian Institute of Tropical Meteorology’s Earth System Model among the climate models used in AR6, India too has joined the climate modelling fraternity.

    About the net-zero emission targets

    •  The report’s clear message is that reaching net zero was not the determining factor for the world to limit itself to a 1.5oC , or 2oC, or indeed any specific temperature increase.
    • The report is clear that it is the cumulative emissions in reaching net zero that determine the temperature rise.
    • India’s Ministry for Environment, Forest and Climate Change was quick to note this point about net zero in a statement, adding that “historical cumulative emissions are the cause of the climate crisis that the world faces today”
    • The limitations of the remaining carbon budget for 1.5oC are so stringent — a mere 500 billion tonnes of carbon dioxide for an even chance of keeping to the limit — that they cannot be met by promises of net-zero 30 years from now.
    • Equally, the disconcerting finding is that the world is set to cross the 1.5oC limit within 10-15 years.

    Implications for India

    •  India has contributed less than 5% of global cumulative emissions to date, with per capita annual emissions a third of the global average.
    • India is also the only nation among the G20 with commitments under the Paris Agreement that are even 2oC warming-compatible.
    • India needs its development space urgently to cope with the future, one where global temperature increase may be closer to 2oC.
    • Even if India completely stops its emission which is 3 billion tonnes in carbon dioxide equivalent terms, for the next 30 years, with others’ emissions remaining the same, will buy the world less than two years of additional time for meeting the Paris Agreement temperature goals.

    Way forward

    • Equity: Focusing on definite cumulative emission targets keeping equity and historical responsibility in view,
    • Immediate reduction by developed countries: Immediate emission reductions by the developed countries with phase-out dates for all fossil fuels.
    • Investment: Massive investment in new technologies and their deployment,
    • Climate finance: a serious push to the mobilisation of adequate climate finance is the need of the hour.

    Conclusion

    This is the message that the IPCC report has sent to this year’s climate summit and the world. The message is a dire warning, all the stakeholders should heed the warning.

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  • Startup ecosystem can help India become powerhouse of global economy

    Context

    With 62 per cent of the population in the working-age group and 54 per cent below the age of 25, we have the advantage of leveraging the skill and ability of our youth to drive the nation forward through productive output and innovation.

    Significance of startup ecosystem in the country

    • In 2021 alone, Indian startups have so far raised upward of $20 billion in funding.
    • Today, India is home to more than 40,000 startups and is building a robust tech and internet infrastructure.
    • The last decade-and-a-half has witnessed a significant change in the landscape — from the founding of new startups, to global investor interest, to the advances made in infrastructure and policies.
    • Global investors too are realising the potential upside in India’s huge, under-penetrated market as the country steadily makes a place for itself as a leading R&D hub for many Silicon Valley companies.
    • Amid the Covid-19 pandemic, Indian startups have rapidly innovated to provide indigenous, tech-enabled solutions to combat challenges from testing kits and ventilators to remote monitoring, and preventive technologies, as well as innovations in supply chain management, logistics, and education.

    Factors driving startup economy in India

    • The steady rise of Indian IT companies in the 2000s, a large talent pool of a skilled workforce, increased expendable income, and rising capital inflows have collectively contributed in large part.
    • Young generation: Moreover, the ability of the young generation to take risks, move fast, and disrupt things without fear, has become our biggest asset today.
    • Increasing internet use: In the next five years and likely to have an estimated 850 million internet users by 2030, the country stands at the cusp of unprecedented economic growth.

    How it helps economy

    • The proliferation of this startup economy has brought with it new business opportunities, innovation, tech-centric approaches and job creation across sectors.
    • A mature startup ecosystem, with seasoned entrepreneurs and technology-led solutions, paves the way for innovation and expanding its global footprint.
    • While value creation lies at the centre of entrepreneurship, Indian startups are also taking big strides in building synergies and partnerships with global entities, further demonstrating the evolution of the startup ecosystem and its appetite for innovation, collaboration and disruption.
    •  In fact, one of the paradigm shifts brought about through technology during the pandemic has been systemic shift to online education and remote learning at scale.
    • Solutions built by Indian startups saw widespread adoption not just domestically but also on a global scale, firmly establishing the country as a cornerstone of tech and innovation in the world.

    Suggestions

    • Educations and reskilling: In order to transition beyond the current capabilities and achieve the demographic dividend, education, and reskilling, and upskilling of our workforce is crucial.
    • Policy environment: Apart from the domestic policy environment, the global environment and technological advances are also changing, and it is imperative that India is prepared for this revolution.
    • Foster entrepreneurship: Apart from policy-level decisions that promote entrepreneurship, the onus is also on India’s corporate sector to foster entrepreneurialism, and create synergies to build impactful technology solutions, sustainable and resource-efficient growth.
    • Inclusion and sustainability: As country stands at the cusp of unprecedented economic growth, speed, inclusion, and sustainability are key elements in this mission.
    • Tap the potential of rural and semi-urban India: The collective future efforts of the public and private sectors to improve physical and digital connectivity will also help unlock the untapped potential of rural and semi-urban India to truly lead Industry 4.0 and beyond.
    • Focus on goals of national importance: In view of achieving this transformation at scale, the Indian startup ecosystem must focus on developing solutions that allow businesses in key sectors to meet goals of national importance.

    Conclusion

    Coupled with the nation’s focus on strengthening digital infrastructure in healthcare and education, and boosting employment in manufacturing, there is little doubt that India@100 will be a powerhouse of the global economy.

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  • Positive Pay System for high-value cheques

    Banks have been informing customers about making mandatory, the positive pay system, a process of reconfirming the key details of high-value cheques.

    What is the Positive Pay System?

    • The Positive Pay System, developed by the National Payments Corporation of India, is a process of reconfirming the key details of large value cheques.
    • Under this system, a person issuing the high-value cheque submits certain essential details of that cheque like date, name of the beneficiary/payee amount etc. to the drawee bank.
    • The details can be submitted through electronic means such as SMS, mobile app, internet banking, ATM etc.
    • The details are cross-checked while issuing the cheque and any discrepancy is flagged.

    Try answering this PYQ:

    Q.Which one of the following links all the ATMs in India? (CSP 2018)

    (a) Indian Banks’ Association

    (b) National Securities Depository Limited

    (c) National Payments Corporation of India

    (d) Reserve Bank of India

    (Note: You need to sign-in to answer this PYQ)

    [wpdiscuz-feedback id=”vno3efazhv” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

    What is the limit on the amount for the system?

    • RBI has told banks to enable the facility for all account holders issuing cheques for amounts of ₹50,000 and above.
    • It has also been said that while availing of the facility is at the discretion of the account holder, banks may consider making it mandatory in case of cheque values of ₹5 lakh and above.

    Why is this system important for customers?

    • Some banks have been telling customers that if the details of large-value cheques are not pre-registered, the cheque will be returned.
    • On issuance of a high-value cheque, customers should ensure that details are provided within the timeframe prescribed by the banks for hassle-free clearance.
    • RBI has said only cheques that are registered in the Positive Pay System will be accepted under the dispute resolution mechanism.
    • Customers would get an SMS on whether the cheque is accepted or rejected for any reason.

    What are the details of the cheque that must be submitted?

    • Account number, cheque number, date of the cheque, amount, transaction code, beneficiary name, MICR CODE.

    How can these details be submitted?

    • These details can be submitted through the respective bank’s website, internet banking, or mobile banking.
    • In case a customer does not use electronic banking services, they can submit the details by visiting bank branches.

  • [pib] Revamped National Gene Bank

    The Union Agriculture Minister has inaugurated the world’s second-largest refurbished gene bank at the National Bureau of Plant Genetic Resources.

    National Gene Bank

    • The National Gene Bank was established in the year 1996 to preserve the seeds of Plant Genetic Resources (PGR) for future generations.
    • It has the capacity to preserve about one million germplasm in the form of seeds.
    • Presently it is protecting 4.52 lakh accessions, of which 2.7 lakh are Indian germplasm and the rest have been imported from other countries.
    • National Bureau of Plant Genetic Resources is meeting the need of in-situ and ex-situ germplasm conservation through Delhi Headquarters and 10 regional stations in the country.

    Key facilities provided

    • The NGB has four kinds of facilities to cater to long-term as well as medium-term conservation namely:
    1. Seed Gene bank (- 18°C),
    2. Cryo gene bank (-170°C to -196°C),
    3. In-vitro Gene bank (25°C), and
    4. Field Gene bank
    • It stores different crop groups such as cereals, millets, medicinal and aromatic plants, and narcotics, etc.

    What is the latest update?

    • This is the world’s second-largest gene bank located in the national capital.
    • It has the capacity to preserve about one million germplasm in the form of seeds.
    • Presently, it is protecting 4.52 lakh accessions, of which 2.7 lakh are Indian germplasm and the rest have been imported from other countries.

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    Also read:

    Svalbard Global Seed Vault

  • Species in news: Slender Loris

    The Kadavur hills in central Tamil Nadu’s Karur district are home to the Kadavur Reserve Forest. These forests are home to the shy and reclusive slender loris, a species of primate.

    Slender Loris

    • Slender loris (Loris tardigradus) is secretive and has nocturnal habits. It usually travels from the canopy of one tree to another. But, at times, it also comes down to bushes at the ground level to feed.
    • It is also found in the adjoining forest areas on the eastern, southern and western slopes of the Kadavur hills.
    • It sleeps by day in the foliage or in a hole or crevice. It comes out at dusk in search of prey.
    • They are fond of lantana berries and also eat insects, lizards, small birds, tree frogs, tender leaves and buds.
    • They are usually solitary but sometimes found in pairs.

    Conservation

    • The slender loris has been listed as ‘Endangered’ by the International Union for the Conservation of Nature.
    • It has been brought under Schedule I of the Wild Life (Protection) Act, 1972 in order to provide the highest level of legal protection.

    Threats

    • As it is believed that these animals have some medicinal properties, they are captured and sold.
    • Since there is great demand for keeping these animals as pets, they are illegally smuggled.
    • Habitat loss, electrocution of live wires, and road accidents are other threats that have caused its populations to dwindle.

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  • Learning from China

    Context

    As we look back on our own journey after independence and feel proud of our achievements, wisdom lies in also looking around to evaluate how other nations have performed, especially those which started with a similar base or even worse conditions than us.

    How India’s neighbouring countries have performed?

    • Independent India has done better than Pakistan if measured on a per capita income basis:
    • Comparison with Pakistan: India’s per capita income stood at $1,960 (in current PPP terms, it was $6,460) in 2020, as per the IMF estimates, while Pakistan’s per capita income was just $1,260 (in PPP terms $5,150).
    • Comparison with Bangladesh: Bangladesh, whose journey as an independent nation began in 1971, had a per capita income of $2,000 (though $5,310 in PPP terms), marginally higher than India, and certainly much higher than Pakistan in 2020.
    • Comparison with China: The real comparison of India should be with China, given the size of the population of the two countries and the fact that both countries started their journey in the late 1940s.
    • By 2020, China’s overall GDP was $14.7 trillion ($24.1 trillion in current PPP terms), competing with the USA at $20.9 trillion.
    • India, however, lags way behind with its overall GDP at $2.7 trillion ($8.9 trillion in PPP terms).
    • The quality of life, however, depends on per capita income in PPP terms, with the USA at $63,420, China at $17,190 and India at $6,460.

    What made the difference between India and China?

    • India adopted a socialist strategy while China took to communism to provide people food, good health, education, and prosperity.
    • China, having performed dismally on the economic front from 1949 to 1977, started changing track to more market-oriented policies, beginning with agriculture.
    • Agriculture reforms: Economic reforms that included the Household Responsibility System and liberation of agri-markets led to an annual average agri-GDP growth of 7.1 percent during 1978-1984.
    • Reform in the non-Agri sector: Success in agriculture reforms gave political legitimacy to carry out reforms in the non-agriculture sector.
    • Manufacturing revolution: The success of reforms in agriculture created a huge demand for manufactured products, triggering a manufacturing revolution in China’s town and village enterprises.
    • Population control measures: China adopted the one-child norm from 1979-2015.
    • As a result, its per capita income grew much faster.
    • India’s attempts to control its population succeeded only partially and very slowly.
    • India’s sluggish performance when compared to China raises doubts about its flawed democratic structure that makes economic reforms and implementation of policy changes more challenging, unlike China.

    Way forward for India

    • Liberating agri-markets is part of the reform package that China followed. That’s the first lesson.
    • Increase purchasing power of rural areas: Even for manufacturing to grow on a sustainable basis, we have to increase the purchasing power of people in rural areas.
    • This has to be done by raising their productivity and not by distributing freebies.
    • Investment in various areas: Increasing productivity requires investments in education, skills, health and physical infrastructure, besides much higher R&D in agriculture, both by the government as well as by the private sector.
    • Create institutional setup: This requires a different institutional setup than the one we currently have.

    Conclusion

    India’s sluggish performance when compared to China raises doubts about its flawed democratic structure that makes economic reforms and implementation of policy changes more challenging, unlike China. But India has lessons to learn from China.