April 2020
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
27282930  

Iran’s Nuclear Program & Western Sanctions

Sanctions and pandemic: On America’s Iran policyop-ed of the day

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- The US sanction are adding to the woes of Iran in dealing with the covid-19 pandemic.


Context

The US has refused to ease the sanction on Iran even as it is struggling hard to control the spread of the virus.

Sanctions adding to the difficulties of Iran

  • Disregard to the humanitarian situation: America’s refusal to ease sanctions on Iran even when the West Asian country is struggling hard to contain the novel coronavirus spread with limited resources shows its total disregard for the humanitarian situation in the Islamic Republic.
  • Iran, the hardest hit by the pandemic in West Asia, has already seen 3,739 deaths and 62,589 infections.
  • Iran’s failure: To be sure, Iran failed on multiple fronts in the battle. The government was initially reluctant to enforce drastic restrictions on businesses, religious establishments and people.
  • As infections began spreading at an exponential pace, it was more than what Iran’s health-care system could handle.
  • Failures accentuated by sanctions: And during the crisis, the cash-strapped, isolated regime struggled to meet people’s needs. But what accentuated these failures are the American sanctions.
  • Last year, the sanctions, reimposed by President Trump after he unilaterally pulled the U.S. out of the Iran nuclear deal in 2018, shrank the country’s economy by 8.7%.
  • Oil price factor: The fall in oil prices and the pandemic have multiplied Iran’s woes.
  • The sanctions have also debilitated its ability to import even humanitarian goods.
  • Rejection by the US to ease sanctions: The U.S. rejected calls for easing sanctions, saying exports of these goods to Iran are already exempted. But it is not that easy.
  • Banks fearful of US action: Most global banks, fearing U.S. retaliation and legal consequences, stay away from doing business with Iran, which makes it difficult for the Islamic Republic to find a functional payment mechanism.
  • With the economy in dire straits, it also lacks the resources to make purchases.

Why should the US ease sanctions?

  • The U.S., which has the most number of COVID-19 infections, should be in a better position to understand Iran’s woes than any other country.
  • Despite the U.S. being the world’s largest economy, and home to a gigantic health-care industry, authorities there appear clueless on quick containment.
  • Learning from its own tragedy, Washington should have suspended or at least eased the sanctions on Iran, allowing the country to import food, medicines and other humanitarian goods without restrictions.
  • Such a decision would also have provided an opportunity to both countries — on the brink of a military conflict early this year — to resume diplomatic engagement.
  • It is still not too late for Mr Trump to take a humanitarian decision and turn it into a diplomatic opening.

What Iran should do?

  • The Iranian leadership should realise that this is not the time for America-bashing.
  • Focus on getting help: This is an hour of crisis, globally. Tehran’s focus should be on getting maximum help from abroad and beefing up its fight at home to save lives.
  • Supreme Leader Ayatollah Khamenei’s recent comment that Iran “has the capability to overcome any kind of crisis and challenges” is far removed from reality.

Conclusion

Iranians need help and the U.S. should reconsider its policy of punishing them, at least in this time of a pandemic. This could open the diplomatic channel for the further talk between both the countries.

Foreign Policy Watch: India-Japan

The wilting Sakuraop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- New avenues for cooperation between India and Japan.


Context

A resilient nation, Japan has risen from the ashes, phoenix-like, each time. It is now confronting COVID-19, which has wreaked havoc on global financial and economic systems and disrupted production, supply chains and markets.

The cruise ship incident and no reprieve to the Japanese from Covid-19

  • COVID-19 received a high-rating televised start in Japan with the cruise ship, Diamond Princess, steaming into Tokyo Bay with 3,711 passengers on board and quickly being quarantined.
  • Over the next month, with more than 700 cases of infection on-board, it remained the single-largest cluster outside China.
  • Gradually, as numbers swelled exponentially elsewhere and the incidence of new cases remained low locally, the Japanese went back to their ways, with holiday crowds celebrating the annual Hanami (sakura viewing) season in idyllic spots
  • It seemed as if the Japanese had dodged the bullet even as it delayed until April 3 the blocking of tourists from 70-odd countries, including China, which accounted for nearly 9.6 million tourists in 2019, one-third of the total.
  • With new infections mounting in recent days, the reprieve, it seems, was as ephemeral as the bloom of the sakura.

Postponing the Olympics

  • The biggest collateral damage of the fresh wave of COVID-19 infections in Japan is the belated decision to postpone the Tokyo Olympics to 2021.
  • It reminded the nation of the jinxed Olympics of 1940, which Japan was to host but fell victim to the Second Sino-Japanese War.
  • If the 1940 Olympics were intended to showcase Japan’s industrial and economic resurrection after the devastation of the 1923 Great Kanto earthquake, the 1964 Tokyo Olympics had symbolised the economic miracle in Japan after the ravages of the Second World War.
  • The 2020 Olympics, dubbed by Prime Minister Shinzo Abe as the “Recovery and Reconstruction Games”, were to demonstrate Japan’s mojo in the aftermath of the 2011 Triple Disaster.
  • Reports indicate that Japan has already spent $12.6 billion on the preparations for the Olympics.
  • Nikkei and Goldman Sachs estimate that the postponement of the games would easily set Japan back by another $5-6 billion.

Impact on economy

  • Recession in the world: The pandemic could not have come at a worse time. The IMF has confirmed that COVID-19 has pushed the global economy into a recession, potentially much worse than the one in 2009.
  • The Japanese economy now faces the daunting prospect of a sharp contraction, with the OECD Report for March 2020 forecasting its GDP growth at 0.2 per cent in 2020.
  • Even before the global pandemic struck, Japan was dealing with the adverse effects on consumer spending of the hike in consumption tax from 8 per cent to 10 per cent.
  • Dwindling demand from China, where Japan has huge economic stakes, can only worsen the regional economic outlook already strained by US-China trade friction.
  • Abe’s decision this week to declare a month-long state of emergency in Tokyo and six other prefectures, alongside the release of a gargantuan stimulus package worth nearly $1 trillion, including cash doles and financial support to households and businesses, may help turn the tide.
  • However, providing healthcare to a rapidly ageing population in the face of an abrupt disruption in the sizeable inward flow of foreign care-givers will prove a daunting challenge.
  • Meanwhile, several prefectures that depend heavily on tourism from China and the Republic of Korea have suffered deep losses.

Impact on Japan’s international commitments and initiatives

  • As one of the world’s richest countries, Japan can perhaps hope to cushion itself from such blows.
  • Whether the economic distress unleashed by COVID-19 also adversely impacts some of Japan’s commitments to its Official Development Assistance (ODA) or outlays for regional infrastructure and connectivity under flagship programmes such as the Expanded Partnership for Quality Infrastructure (EPQI), the Tokyo International Conference on African Development (TICAD) and the Indo-Pacific Business Forum, including the Blue Dot Network and LNG projects, remains to be seen.
  • This could well be true of the US too, in the context of the International Development Finance Corporation under the BUILD Act, aimed at countering China’s expanding writ across the region.

Implications for Indo-Pacific region

  • The pandemic could have broader implications for military postures in the Indo-Pacific.
  • As it was seen in the outbreak of the COVID-19 virus onboard the US Navy’s Theodore Roosevelt, which had sailed from San Diego in January for a scheduled Indo-Pacific deployment.
  • It is at the centre of a controversy involving the sacking of its captain and the vessel’s ill-advised port visit to Da Nang in Vietnam earlier in March despite the high risk of contagion.
  • Of course, China’s PLA Navy (PLAN) could well be grappling with similar problems out at sea but, unlike in the democratic world, these facts will be treated as “state secrets”.
  • Opportunity for China to further its influence: As China gradually recovers from the pandemic, relatively earlier and faster than the West, Beijing’s “charm offensive” and leveraging of its deep pockets may help it to further its geopolitical influence.
  • Its assistance to developing countries in mitigating the impact of COVID-19 will create new scope to proselytise its governance and development models.

India-Japan relations

  • Japan-China relations: A high-profile casualty of the pandemic is Chinese President Xi Jinping’s long-pending visit to Tokyo.
  • But Japan’s “mask diplomacy” and generous assistance to China at the start of the pandemic augur well for Sino-Japanese ties, which have improved in recent years, their inveterate differences notwithstanding.
  • India visit by Japan: Abe’s postponed visit to India, earlier scheduled to take place at the end of 2019, will be hard to resurrect before the pandemic is completely under control.
  • Nevertheless, the fundamental convergence of interests and the extraordinary political capital invested in the relationship by both PM Modi and Abe in recent years ensures that the Special Strategic and Global Partnership between India and Japan will remain robust.
  • New vistas for India-Japan cooperation: The pandemic opens up new vistas for cooperation in healthcare, non-traditional security and global governance, including reform of the UN and affiliated bodies such as the WHO whose contributions in the battle against COVID-19 are moot.

How Japan tackled the pandemic so far?

  • So far, Japan had relied on its customary discipline and prevention methods, with an exhortation to the public to avoid the “three Cs” — closed spaces, crowded places and conversations at close proximity.
  • No lockdown: Japan has shied away from taking the bold approach that Modi took in announcing a 21-day nationwide lockdown.
  • The declaration of a state of emergency covering the megacities of Tokyo and Osaka and some prefectures would give local governors in the hardest-hit areas greater legal authority to impose curbs, albeit without the power to impose penalties.
  • Japan’s case-by-case approach to the reopening of schools by regional authorities has been criticised.
  • There have been calls for a strict lockdown before it is too late to avert the same fate as Italy, Spain and the US.
  • In a race to develop vaccine: With formidable scientific prowess at its disposal, Japan remains at the forefront in the race to develop a vaccine against COVID-19.

Conclusion

Prime Minister Abe is viewed by voters as a leader capable of taking bold decisions. If Abe’s administration overcomes the COVID-19 crisis despite the odds and succeeds in staving off a recession, there is every chance that the LDP might again amend its rules to grant him a fourth term. After all, it is not easy for any of his political rivals to step into his shoes in the middle of such a crisis.

Climate Change Impact on India and World – International Reports, Key Observations, etc.

Third mass bleaching of Great Barrier ReefPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Coral bleaching

Mains level : Coral reefs and their significance


A survey has found record sea temperatures had caused the third mass bleaching of the 2,300-kilometre Great Barrier Reef system in just five years.

What is Coral Bleaching?

  • When corals face stress by changes in conditions such as temperature, light, or nutrients, they expel the symbiotic algae zooxanthellae living in their tissues, causing them to turn completely white.
  • This phenomenon is called coral bleaching.
  • The pale white colour is of the translucent tissues of calcium carbonate which are visible due to the loss of pigment-producing zooxanthellae.

About Great Barrier Reef

  • The Great Barrier Reef is the world’s largest coral reef system composed of over 2,900 individual reefs and 900 islands.
  • It is stretched for over 2,300 kilometres over an area of approximately 344,400 square kilometres.
  • The reef is located in the Coral Sea, off the coast of Queensland, Australia.

Importance of Corals

Coral reefs are some of the most diverse and valuable ecosystems on Earth.

  • They support more species per unit area than any other marine environment, including about 4,000 species of fish, 800 species of hard corals and hundreds of other species.
  • This biodiversity is considered key to finding new medicines for the 21st century. Many drugs are now being developed from coral reef animals and plants as possible cures for cancer, arthritis, human bacterial infections, viruses, and other diseases.
  • Healthy coral reefs support commercial and subsistence fisheries as well as jobs and businesses through tourism and recreation.
  • Local economies receive billions of dollars from visitors to reefs through diving tours, recreational fishing trips, hotels, restaurants, and other businesses based near reef ecosystems.
  • Coral reef structures also buffer shorelines against 97 percent of the energy from waves, storms, and floods, helping to prevent loss of life, property damage, and erosion.
  • When reefs are damaged or destroyed, the absence of this natural barrier can increase the damage to coastal communities from normal wave action and violent storms.

Back2Basics

Coral Reefs

  • Coral reefs are built by and made up of thousands of tiny animals—coral “polyps”—that are related to anemones and jellyfish.
  • Polyps are shallow water organisms which have a soft body covered by a calcareous skeleton. The polyps extract calcium salts from sea water to form these hard skeletons.
  • The polyps live in colonies fastened to the rocky sea floor.
  • The tubular skeletons grow upwards and outwards as a cemented calcareous rocky mass, collectively called corals.
  • When the coral polyps die, they shed their skeleton on which new polyps grow.
  • The cycle is repeated for over millions of years leading to accumulation of layers of corals shallow rock created by these depositions is called reef.
Government Budgets

A different economic approachop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- How to balance the trade-off between the health of economy and public health.


Context

The Covid-19 pandemic and subsequent 21-day lockdown by India has forced us to resolve the public health versus economic health trade-off.

The debate over lockdown

  • No clear idea on number of lives saved: As it fights COVID-19 with its meagre healthcare resources, India has chosen to bring the economy to a near halt with no clear idea of how many lives can be saved in this manner.
  • What is going to be the cost of this decision? The 21-day lockdown will reduce the gross value added (GVA) during this period to near zero.
  • More than half the GVA is contributed by the unorganised sector.
  • A disproportionate burden of the economic cost has fallen on this large segment.
  • Debate: The suffering of the stranded migrant labourers has set off a debate: is the disruption and the economic pain justified?
  • Is it worth sacrificing the economy to save lives?
  • And at the core of such questions is a policy dilemma: should public health matter more than economic health?

So, what should be the policy objectives?

  • In time, a vaccine will become available. But the economy cannot remain shut until that happens.
  • A prolonged lockdown will extract a huge economic cost.
  • Therefore, the policy objective must be to find ways of ensuring that the lockdown ends early without compromising on public health.
  • Following are the policies that could ensure the twin objective of not ending lockdown without compromising on public health.

1 The policy of aggressive testing and isolation

  • The economic cost of combating COVID-19 can be reduced by combining aggressive testing and isolation, a strategy proposed by economist Paul Romer for the U.S.
  • For it to work, people must be tested in large numbers.
  • Those who test positive must be isolated. This will make it unnecessary for the rest of the population to stay home and it will allow the economy to restart.
  • After ending the lockdown too, testing of randomly selected people must go on in large numbers, so that those found infected can be isolated.
  • Eliminating the fear of isolation: The success of this will depend on eliminating the fears associated with isolation. Such fears can be reduced only if isolation facilities are good.

2 Ramp up the manufacturing capacity

  • The second precondition is the substantial ramping up of manufacturing capacities for medical-grade masks, gloves, gowns, ventilators, testing labs, etc.
  • This ought to be on a scale large enough for domestic use and, if possible, for exports for costs to be low.
  • The strategy calls for fully operational hospitals to be constructed in every district of the country in a matter of weeks.
  • Problem-solving of an unprecedented order will be required.
  • Recently, garment manufacturers in Coimbatore were asked to explore the possibility of re-purposing production lines to make masks.
  • There’s been no progress on this front, as the special-grade fabric required is difficult to source.
  • What about the funding? In normal times, governments wrestle with dilemmas such as whether to allocate the limited available tax money to education, health, public transport or a sop that could change the outcome of the next election in their favour.
  • But during a public health crisis, all resources must be used to ramp up healthcare capacities.

Way forward

  • Investment in healthcare can resolve trade-off: Since the state of the lockdown is not a normal condition, the usual policy levers become ineffective.
  • Loan moratoriums and cash transfers can fend off bankruptcy and defaults for a few months and buy time on non-performing assets in banks.
  • But they cannot make good the GDP lost due to the economic shutdown because liquidity and cash released by monetary and fiscal policies cannot get transmitted to the real sector during an economic shutdown unless they are funnelled into the sector that is still active, which is healthcare.
  • If the public health sector can be the economy’s main engine for six months, the public health versus economic health trade-off can be resolved. The spread of COVID-19 will slow down.
  • The economic pain of combating the virus will reduce.
  • There will be jobs, including for low-skilled construction labourers. If planned and executed smartly, the severe health infrastructure deficit will get addressed.
  • Remove the price controls: Sadly, India’s economic policies for fighting COVID-19 are the opposite of what’s needed.
  • In a crisis, the first instinct of policymakers is to slap controls. Just about everything from masks to kits has been placed under price controls.
  • This has removed the incentive for private labs to ramp up capacities.
  • The government should fully subsidise testing: At zero MRP, more people with symptoms will come forward to get tested. Private labs will quickly ramp up capacities if they don’t have to worry about losses. The number of suppliers will increase. Costs will reduce. Private enterprise and technological innovations will come up with cheaper tests that produce results quicker.
Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

Delhi’s ‘5T’ war against virusPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : COVID-19 and its mitigation


Delhi CM has announced a “5T plan” created by his government to contain COVID-19 spread in Delhi. These five Ts are testing, tracing, treatment, teamwork and tracking-monitoring.

5Ts strategy

1)Testing

  • Testing when done on a mass scale enables the actual data of people affected by novel coronavirus.
  • Like South Korea, Delhi will be testing on a large scale.
  • Through rapid testing, the government will also be able to identify COVID-19 hotspots and take necessary action.

2)Tracing

  • The second T is tracing, which involves identifying and quarantining people who have come in contact with infected persons.
  • Delhi authorities are taking the help of police to trace whether the people who have been advised to self-quarantine are actually doing it or not.

3)Treatment

  • The third component is the treatment.
  • Serious patients who are suffering from heart diseases and patients above 50 years will be isolated in hospitals and the rest with minor symptoms will be kept in isolation in hotels and dharamshalas.

4)Teamwork

  • The fourth element of the five-point plan is teamwork and collective efforts are being made to fight the virus.
  • All State governments must learn from each other and work together.

5)Tracking and monitoring

  • The fifth T is tracking and monitoring.
  • The state should ensure that all these measures are in place and all the systems are functioning smoothly.

 

Also read:

‘Bhilwara Model’ for containment of coronavirus

Global Geological And Climatic Events

[pib] Ionospheric based monitoring of large earthquakesPIB

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Ionosphere, CIP

Mains level : Relation between atmosphere and seismic activity


Scientists of Indian Institute of Geomagnetism (IIG) an autonomous institution of the DST have extensively studied the signatures of recent large earthquakes into the ionosphere with an ambitious aim to derive the seismic source characteristics from the ionosphere.

CLAIMS

  • The research is a part of the interdisciplinary program ‘Coupled Lithosphere-Atmosphere- Ionosphere-Magnetosphere System (CLAIMS)’ of IIG.
  • CLAIMS focuses on energy transfer to the atmosphere during solid Earth processes such as earthquakes as well as tsunamis.

Key terms: Co-seismic Ionospheric Perturbations (CIP)

  • In general, the Earth crust uplift during an earthquake produces compressional (i.e. pressure) waves in the overlying atmosphere.
  • These waves propagate upward in the region of exponentially decreasing atmospheric neutral density, and thus, wave amplitude increase with atmospheric heights.
  • On arrival at ionospheric heights, the waves redistribute ionospheric electron density and produce electron density perturbations (disruption) known as CIP.

Objective of CLAIMS

  • The spatial distribution of near field co-seismic Ionospheric perturbations (CIP) associated with this event could reflect well the ground deformation pattern evolved around the epicentre.
  • These CIPs were derived using the Global Positioning System (GPS) measured Total Electron Content (TEC).
  • The CIP distribution was estimated at Ionospheric piercing point (IPP) altitude.

Other factors affecting CIP

The major effective non-tectonic forcing mechanisms at ionospheric altitudes are the-

  1. orientation between the ambient geomagnetic field and seismic induced neutral wave perturbations.
  2. orientation between the moving satellite line of sights and the wave perturbations.
  3. ambient ionospheric electron density gradient.

Back2Basics

Ionosphere

  • The ionosphere is the ionized part of Earth’s upper atmosphere, from about 60 km to 1,000 km altitude.
  • It is a region that includes the thermosphere and parts of the mesosphere and exosphere.
  • It is ionized by solar radiation.
Genetically Modified (GM) crops – cotton, mustards, etc.

[pib] Biofortified Carrot ‘Madhuban Gajar’PIB

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Madhuban Gajar

Mains level : Bio-fortification and its benefits


 

Madhuban Gajar

  • It is a biofortified carrot variety with high β-carotene and iron content developed by Shri Vallabhhai Vasrambhai Marvaniya, a farmer scientist from Junagadh district, Gujarat.
  • The variety is being cultivated in more than 1000 hectares of land in Gujarat, Maharashtra, Rajasthan, West Bengal, Uttar Pradesh during the last three years.
  • It is a highly nutritious carrot variety developed through the selection method with higher β-carotene content (277.75 mg/kg) and iron content (276.7 mg/kg) dry basis.
  • It is used for various value-added products like carrot chips, juices, and pickles.
  • This carrot variety possesses a significantly higher root yield (74.2 t/ha) and plant biomass (275 gm per plant) as compared to check variety.
Innovation Ecosystem in India

[pib] “Samadhan” ChallengePIBPrelims Only

Note4Students

From UPSC perspective, the following things are important :

Prelims level : SAMADHAN Challenge

Mains level : NA


 

A mega online challenge – SAMADHAN – has been launched to test the ability of students to innovate.

“Samadhan” Challenge

  • The Innovation Cell of the Ministry of HRD and All India Council for Technical Education in collaboration with Forge and InnovatioCuris has launched this online challenge.
  • Under the challenge, the students and faculty will be motivated for doing new experiments and new discoveries and provide them with a strong base leading to spirit of experimentation and discovery.
  • The students participating in this challenge will search and develop such measures that can be made available to the government agencies, health services, hospitals and other services for quick solutions to the Coronavirus epidemic and other such calamities.
  • Apart from this, through this challenge, work will be done to make citizens aware, to motivate them, to face any challenge, to prevent any crisis and to help people get livelihood.
Food Procurement and Distribution – PDS & NFSA, Shanta Kumar Committee, FCI restructuring, Buffer stock, etc.

Farmers are at their wits’ endop-ed of the day

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- What will be the impact of the corona crisis on agriculture and food security?


Context

As global trade falls and supply disruptions persist, a prolonged lockdown will adversely affect food security.

Fears of food crisis and impact of COVID-19 on agriculture

  • The COVID-19 pandemic has led to global concerns on the state of agriculture and food security.
  • Warning of food crisis: On the one hand, the Food and Agriculture Organization (FAO) has warned of a “food crisis” if countries do not protect vulnerable people from hunger and malnourishment.
  • On the other, farmers face a stalemate as they are unable to work on their land, earn remunerative prices and gain access to markets.
  • We can try to understand the impact of COVID-19 on agriculture with three questions.
  • One, does the world have enough food to feed its people?
  • Two, is food available at affordable prices?
  • Three, how are farmers coping with the lockdown?

Food stocks and prices in the world

  • Cereal stock in the world: According to the FAO, as on April 2, 2020, the total stock of cereals in the world was about 861 million tonnes. This translates to a stocks-to-use ratio (SUR) — i.e., the proportion of consumption available as stocks — of 30.7%.
  • The FAO considers this “comfortable”. The SURs for wheat, rice and coarse grains were 35.3%, 35.1% and 26.9%, respectively.
  • Variation among nations: World stocks are different from national stocks. About 52% of the global wheat stocks is held by China, and about 20% of the global rice stocks is held by India.
  • Rice importers may suffer: If the major holders of global stocks decide to turn precautionary and stop exporting, and if the lockdown is prolonged, countries dependent on rice imports will suffer.
  • Restriction on wheat export: Kazakhstan, a major wheat exporter, has banned exports. Russia, the largest wheat exporter, is expected to restrict its exports.
  • Restriction on rice export: Vietnam, the third-largest rice exporter, has stopped its exports, which will reduce the global rice exports by 15%.
  • If India and Thailand too ban exports, the world supply of rice will sharply fall.
  • In March 2020, the Philippines and the European Union, major rice importers, had inventories of rice enough to feed their populations for about three months.
  • Others, however, had inventories to hold on for about one month only. If the lockdown continues beyond a month, these countries will face food shortages.

Stocks with India and output projections

  • India’s foodgrain output is projected to be about 292 MMT in 2019-20.
  • Stock with FCI: On March 1, 2020, the total stock of wheat and rice with the Food Corporation of India (FCI) was 77.5 MT.
  • Buffer stock norms: The buffer norms for foodgrain stocks — i.e., operational stock plus strategic reserves — is 21.04 MT.
  • Similarly, for pulses, India had a stock of 2.25 MT in mid-March 2020.
  • In both cases, the rabi harvest is slated to arrive in April 2020, and the situation is expected to ease further.

Price fluctuation of food in the world

  • Fall in demand and supply and price fluctuation: There is always an element of uncertainty on how prices will behave if both demand and supply fall together.
  • Prices in different markets fluctuate considerably given differences in the extent of production, stocks, arrivals and supply disruptions.
  • According to the FAO, the world food price index fell by 4.3% and world cereal price index fell by 1.9% between February and March 2020 due to the weakening demand for food and the sharp fall in maize prices owing to poor demand for biofuels.
  • Price rise in Western economies: Retail prices of rice and wheat have been rising in the Western economies in March 2020.
  • The major reasons identified are panic buying by households, export restrictions by countries and continuing supply chain disruptions.
  • Retail prices of beef and eggs have also been rising.

Demand and price fluctuation in India

  • WPI and CPI for food in India were rising from mid-2019 onwards, reflecting a rise in vegetable prices, especially onion prices.
  • January and February 2020 saw a moderate fall in these indices, but vegetable prices have remained high.
  • If food prices rise due to the lockdown, it will be on top of an already rising price curve.
  • However, unlike in the West, food prices in India have not risen after the lockdown.
  • While supplies have declined, demand has fallen too. This is because there has been a sharp fall in the consumption of foodgrains and vegetables. Similarly, the consumption of milk has fallen by 10-12%.

The crisis in the harvesting and marketing of the crops

  • Harvesting and marketing of crops are in crisis across India, because of-
  • Disruptions in the procurement of foodgrains by government agencies.
  • Disruptions in the collection of harvests from the farms by traders.
  • Shortage of workers to harvest the rabi crops.
  • Shortage of truck drivers.
  • Blockades in the transport of commodities.
  • Limited operations of APMC mandis; and
  • Shutdowns in the retail markets.

Conclusion

The world and India have adequate food stocks. But as global trade shrinks and supply disruptions persist, a prolonged lockdown will adversely affect food security in many countries. Concurrently, farmers face acute labour shortages, falling farmgate prices and lack of access to input/output markets. It is unclear who is benefiting, but farmers, workers and the poor are at their wits’ end.

Foreign Policy Watch: India-SAARC Nations

Preparing for SAARC 2.0op-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- Revival of SAARC is the need of the hour amid corona crisis.


Context

A tweet by Prime Minister Narendra Modi resulted in the first-ever virtual summit of SAARC leaders on March 15. What has happened to this innovative exercise in health diplomacy since then?

The follow-up after the video-conference of SAARC members

  • Considering that SAARC has been dormant for several years due to regional tensions, it is worth stressing that the fight against COVID-19 has been taken up in right earnest through a series of tangible measures.
  • First, all the eight member-states were represented at the video conference — all at the level of head of state or government, except Pakistan.
  • The Secretary-General of SAARC participated. They readily agreed to work together to contain the virus and shared their experiences and perspectives.
  • SecondIndia’s proposal to launch a COVID-19 Emergency Fund was given positive reception.
  • Within days, all the countries, except Pakistan, contributed to it voluntarily, bringing the total contributions to $18.8 million. Although it is a modest amount, the spirit of readily expressed solidarity behind it matters.
  • Third, the fund has already been operationalised. It is controlled neither by India nor by the Secretariat.
  • It is learnt that each contributing member-state is responsible for approval and disbursement of funds in response to requests received from others.
  • Fourth, in the domain of implementation, India is in the lead, with its initial contribution of $10 million.
  • It has received requests for medical equipment, medicines and other supplies from Bhutan, Nepal, Afghanistan, Maldives, Bangladesh and Sri Lanka.
  • Many requests have already been accepted and action has been taken, whereas others are under implementation.
  • Fifth, a follow-up video-conference of senior health officials was arranged on March 26.
  • The agenda included issues ranging from specific protocols dealing with the screening at entry points and contact tracing to online training capsules for emergency response teams.
  • Technical cooperation: Steps are now underway to nurture technical cooperation through a shared electronic platform as also to arrange an exchange of all useful information among health professionals through more informal means.

Is the fund sufficient to deal with the grave threat?

  • So far, South Asia has not exactly borne the brunt of the pandemic.
  • Of the total confirmed cases in the world that stood at 12,89,380 on April 6 (according to the Johns Hopkins Coronavirus Resources Center), SAARC countries reported only 8,292 cases, representing 0.64%.
  • Reasons of lower spread not known: Whether the low share is due to limited testing, a peculiarity of the strain of the virus, people’s unique immunity, South Asia’s climate, decisive measures by governments, or just good fortune is difficult to say.
  • But it is evident that India’s imaginative diplomacy has leveraged the crisis to create a new mechanism for workable cooperation.
  • It will become stronger if the crisis deepens and if member-states see advantages in working together. Seven of the eight members already do.

Is it the sign of revival of SAARC?

  • To conclude that SAARC is now returning to an active phase on a broad front may, however, be
  • In the backdrop of political capital invested by New Delhi in strengthening BIMSTEC and the urgings it received recently from Nepal and Sri Lanka to resuscitate SAARC, India’s foreign minister said that India had no preference for a specific platform.
  • But India was fully committed to the cause of regional cooperation and connectivity.
  • The challenge facing the region is how to relate to a country which claims to favour regional cooperation, while working against it.
  • Clearly, India has little difficulty in cooperating with like-minded neighbours, as it showed by forging unity in the war against COVID-19.
  • This is diplomatic resilience and leadership at its best.

Conclusion

Given the grave threat posed by the pandemic and other benefits that the multilateral platforms such as SAARC offers Both New Delhi and its friendly neighbours need to start preparing themselves for SAARC 2.0.

WTO and India

Between nationalism and globalismop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- Is the globalisation past its peak? what will be the impact of corona crisis on the globalisation?


Context

Although all world leaders have acknowledged the global imperative in dealing with the virus, they have put the nation first without much consideration to the collective action.

The middle path between extreme globalisation and hyper-nationalism

  • ‘Nation first’ approach: Although all world leaders have acknowledged the global imperative in dealing with the virus, they have put the nation first. Are all nations now for themselves? Not so fast.
  • Sovereignty is certainly back. Solidarity is under stress, but not dead. The drift is towards a middle path between extreme globalism and hyper-nationalism.
  • The last few decades have seen the growing awareness of “global problems” like climate change and the need for “global solutions”.
  • Lack of collective action: The corona pandemic certainly adds to that consciousness. But as in the case of climate change, collective action is not easy to come by.

Closing of the borders and the idea of a “borderless world”

  • One of the first steps most governments took during the current crisis was to shut down their borders.
  • The idea of a “borderless world” had gained much acceptance in recent years but is now under serious questioning.
  • For example, how the US, Canada and Europe are outbidding each other in buying medical material from China.
  • They are ready to pay a hefty premium if Chinese suppliers break from an earlier commitment.
  • Nations banning medicines: Meanwhile, many nations, including India, have banned the export of much-needed medicines and equipment to combat the virus.
  • Washington, which initially criticised other countries for limiting exports of essential drugs, has had no option but to go down that path as the toll from coronavirus rose rapidly.
  • Donald Trump is angry with 3M, one of the leading American producers of masks, for exporting to other nations at a time of huge domestic shortfall.
  • The US ban on exports of medical supplies came just days after the G-20 affirmed that its member states “will work to ensure the flow of vital medical supplies, critical agricultural products, and other goods and services across borders”.

Globalisation and related ideas under stress

  • A testing time for two ideas: The problem is not that governments are being hypocritical. They are simply trapped in a crisis that is testing two important assumptions that guided the world in the last three decades.
  • One is that globalisation, with its long and transborder supply chains, generates prosperity through economic efficiency.
  • The second was that economic globalisation based on the dispersal of production will serve the interests of all nations.

Opposition to globalisation in the West

  • The new objections to economic globalisation are not coming from the traditional champions of sovereignty in the East and the South, but the West.
  • It was North America and Europe that had preached the virtues of unhindered economic
  • They also championed the idea of globalism that will transcend national sovereignty in terms of both institutions and values.
  • New converts to nationalism and sovereignty began to appear in the West well before corona crisis.
  • Brexit to take control own borders: Britain walked out of the European Union claiming the need to “take back control” of its borders.
  • Storming the White House against all predictions in 2016, Trump has sought to push Washington away from the trinity of America’s post-war political commitments-to open borders, free trade, and multilateralism.
  • Globalisation and corona crisis: For Trump and his team, the corona crisis is confirmation of the dangers of excessive globalisation.
  • This argument is finding some resonance in Europe.
  • Addressing workers at a factory that makes masks in France, President Emmanuel Macron echoed the same feelings.

Arguments against globalisation

  • An argument against efficiency: The efficiency argument of the globalists has been countered in the West by many who say societies are not merely economic units; they are also political and social communities.
  • The disadvantage to working people: While expansive globalisation has helped generate super-profits for the capital, it has put the working people at an increasing disadvantage.
  • Uneven distribution of benefits: The uneven distribution of the benefits from the dispersal of production and free movement of labour has undermined political support for economic globalisation in the West.
  • Role of China: Reinforcing this downward trend is the belief that China is misusing global economic interdependence for unilateral political advantage.
  • There were indeed strategic consequences to China’s emergence as the world’s factory.
  • After all, China is not a passive territory; it is an ancient civilisation with ambitions of its own.

Future of globalisation and the role of China

  • The peak of expansive globalisation is over: While economic interdependence among nations can’t be eliminated, we might be past the peak of expansive globalisation and hyper-connectivity.
  • Many countries are likely to move to the diversification of external production, short supply chains and stockpiles of essential materials to limit vulnerability during times of crises.
  • China-West relations may change: The palpable anger against China in the US and beyond, for keeping the world in the dark about the spread of the coronavirus, has been magnified by Beijing’s “mask diplomacy” and political triumphalism after it got in control of the situation in Wuhan.
  • This anger is bound to translate into long-term changes in the relations between China and the West and some rearrangement of multilateral mechanisms.

Conclusion

Out of this restructuring new international coalitions are likely to emerge. Even as world leaders put their own respective nations first, they will also explore new forms of solidarity. Like the instinct for self-preservation, solidarity too is part of human nature.

Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

‘Bhilwara Model’ for containment of coronavirusPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Bhilwara Model

Mains level : Agressive strategies to contain covid-19 spread


Bhilwara in Rajasthan was one of the early hotspots of the COVID-19 outbreak. The government responded with extraordinarily aggressive measures — and the ‘Bhilwara model’. The success of the model is attributed to the fact that Bhilwara, which was the first district in Rajasthan to report most number of covid cases has now reported only one positive case since March 30.

What is the Bhilwara Model?

  • The Bhilwara COVID-19 containment “model” refers to the steps taken by the administration in Rajasthan’s Bhilwara district to contain the disease, after it emerged as a hotspot for coronavirus positive cases.
  • Bhilwara district was among the most-affected places in India during the first phase of the COVID-19 outbreak.
  • The measures taken by the state govt. included imposing a curfew in the district which also barred essential services, extensive screening and house-to-house surveys to check for possible cases.
  • It went for detailed contact tracing of each positive case so as to create a dossier on everybody they met ever since they got infected.

What did the administration do as part of the containment strategy?

  • The “Bhilwara model” of tackling COVID-19 cases involves, simply, “ruthless containment”.
  • Within three days of the first positive case the district health administration in Bhilwara constituted nearly 850 teams and conducted house-to-house surveys at 56k houses and of 280k people.
  • Thousands were identified to be suffering from influenza-like illness (ILI) symptoms and were kept in home quarantine.
  • Intense contact tracing was also carried out of those patients who tested positive, with the Health Department preparing detailed charts of all the people whom they had met since being infected.
  • The state also took the help of technology, using an app to monitor the conditions of those under home quarantine on a daily basis along with keeping a tab on them through GIS.
  • The administration backed up the surveys by imposing a total lockdown on the district, with the local police ensuring strict implementation of the curfew.
  • The patients were treated with hydroxychloroquine (HCQ), Tamiflu and HIV drugs.

What were the challenges the administration faced in imposing these extraordinary measures?

  • The biggest challenge that the administration faced was containing the rising number of cases after the initial outbreak.
  • The doctors of the private hospital who had tested positive had come into contact with numerous people including the staff and patients who visited the private hospital during the period when the doctors were already infected.
  • Some of these patients had come from other states and after the first case of COVID-19 was detected.
  • The government also had an uphill task ahead of them assembling the teams of doctors, auxiliary nurse and midwives and nursing students who went to conduct the house-to-house surveys.
  • Owing to the fact that Bhilwara, a thriving textile city with an estimated population of 30 lakh, it was also a difficult task for the government to strictly impose the curfew uniformly in all areas.
Judicial Reforms

What is Open Court System?Priority 1SC Judgements

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Open Courts, Art. 142

Mains level : Transparency in judicial functioning


The Supreme Court has invoked its extraordinary Constitutional powers under Article 142 to step away from the convention of open court hearings. It deemed all restrictions imposed on people from entering, attending or taking part in court hearings as lawful in the wake of the COVID-19 pandemic.

What are Open Courts?

  • The Open court principle requires that court proceedings presumptively be open and accessible to the public and to the media.
  • Open courts are normal court where proceedings of the court are conducted where every person is allowed to watch the proceedings of the court.
  • There are instances where it is not practical to accommodate persons other than parties to the proceedings. Therefore, such proceedings are held in camera.
  • This means that the proceedings are held in a closed room where the public will not have access to watch the proceedings.
  • In criminal cases like rape, it is necessary to protect the identity and modesty of the victim.

Why did the Supreme Court deter Open Court’s norm?

  • A Bench led by CJI said these restrictions were in tune with the social distancing norms and best public health practices advocated to contain the contagion.
  • The court made it clear that public health takes precedence over conventions.
  • Every individual and institution is expected to cooperate in the implementation of measures designed to reduce the transmission of the virus.
  • Open court hearings would mean a congregation of large number of people. This would prove detrimental to the fight against the virus.

Conclusion

  • Access to justice is fundamental to preserve the rule of law in the democracy envisaged by the Constitution of India.
  • The challenges occasioned by the outbreak of COVID-19 have to be addressed while preserving the constitutional commitment to ensuring the delivery of and access to justice to those who seek it..

Way forward

  • Indian courts have been proactive in embracing advancement in technology in judicial proceedings.
  • Judiciary can bank on video-conferencing technologies in the wake of this unprecedented and extraordinary outbreak of a pandemic.

Back2Basics

Article 142 of the Indian Constitution

  • Article 142 allows the Supreme Court to pass any order necessary to do “complete justice” in any case.
  • It supplements the powers already conferred upon the Supreme Court under the Constitution to guarantee that justice is done and in doing so the Court is not restrained by lack of jurisdiction or authority of law.
  • The phrase ‘complete justice’ engrafted in Article 142(1) is the word of wide interpretation to meet situations created by legal errors or result of operation of statute law or law.
  • Thus Article 142 is conceived to give the apex court the powers to meet the situations which cannot be effectively tackled by existing provisions of law.

Also read: 

Supreme Court invokes Special Powers under Art. 142

Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

MPLADS funds suspended over COVID-19 crisisGovt. SchemesPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : MPLADS

Mains level : MPLADS and its implementation


The Union Cabinet gave its nod to the temporary suspension of MPLAD Funds during 2020-21 and 2021-22 in view of the adverse impact of the outbreak of COVID-19 in India.

Why suspend MPLAD?

  • The consolidated amount of MPLAD Funds for 2 years – Rs 7,900 crores – will go to Consolidated Fund of India.
  • The Cabinet has also approved an ordinance to reduce the salaries, allowances and pensions of Members of Parliament (MPs), including the Prime Minister, by 30 per cent for one year.
  • The amount so collected would be utilized in the fight against coronavirus.

What is the MPLAD scheme?

  • The Members of Parliament Local Area Development Scheme (MPLADS) is a programme first launched during the Narasimha Rao Government in 1993.
  • It was aimed towards providing funds for developmental works recommended by individual MPs.

Funds available

  • The MPs then were entitled to recommend works to the tune of Rs 1 crore annually between 1994-95 and 1997-98, after which the annual entitlement was enhanced to Rs 2 crore.
  • The UPA government in 2011-12 raised the annual entitlement to Rs 5 crore per MP.

Implementation

  • To implement their plans in an area, MPs have to recommend them to the District Authority of the respective Nodal District.
  • The District Authorities then identify Implementing Agencies which execute the projects.
  • The respective District Authority is supposed to oversee the implementation and has to submit monthly reports, audit reports, and work completion reports to the Nodal District Authority.
  • The MPLADS funds can be merged with other schemes such as MGNREGA and Khelo India.

Guidelines for MPLADS implementation

  • The document ‘Guidelines on MPLADS’ was published by the Ministry of Statistics and Programme Implementation in June 2016 in this regard.
  • It stated the objective of the scheme to enable MPs to recommend works of developmental nature with emphasis on the creation of durable community assets based on the locally felt needs in their Constituencies.
  • Right from inception of the Scheme, durable assets of national priorities viz. drinking water, primary education, public health, sanitation and roads, etc. should be created.
  • It recommended MPs to works costing at least 15 per cent of their entitlement for the year for areas inhabited by Scheduled Caste population and 7.5 per cent for areas inhabited by ST population.
  • It layy down a number of development works including construction of railway halt stations, providing financial assistance to recognised bodies, cooperative societies, installing CCTV cameras etc.
Capital Markets: Challenges and Developments

Euro Zone ‘Coronabonds’Prelims Only

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Coronabonds, Eurozone

Mains level : Not Much


The coronavirus pandemic has revived the acrimonious debate between euro zone countries about jointly issuing debt through instruments called Coronabonds.

Coronabonds

  • Coronabonds are proposed debt instruments amongst EU member states, with the aim of providing financial relief to Eurozone countries battered by the coronavirus.
  • They aim to meet healthcare needs and address the deep economic downturn that is set to follow.
  • The funds would be mutualised and supplied by the European Investment Bank, with the debt taken collectively by all member states of the European Union.
  • The euro zone jointly issues debt through its bailout fund, the European Stability Mechanism, which borrows on the market against the security of its paid-in and callable capital provided by euro zone governments.

Back2Basics

What is Eurozone?

  • The Eurozone officially called the euro area is a monetary union of 19 of the 27 European Union (EU) member states which have adopted the euro as their common currency and sole legal tender.
  • The monetary authority of the Eurozone is the Eurosystem.
  • It consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.
Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

[pib] Centre for Augmenting WAR with COVID-19 Health Crisis (CAWACH)PIB

Note4Students

From UPSC perspective, the following things are important :

Prelims level : CAWACH

Mains level : Not Much


Department of Science & Technology has approved setting up of a Centre for Augmenting WAR with COVID-19 Health Crisis (CAWACH).

What is CAWACH?

  • CAWACH will help to address various challenges faced by country due to severe impact of COVID-19.
  • CAWACH will identify up to 50 innovations and startups that are in the area of novel, low cost, safe and effective ventilators, respiratory aids, protective gears, novel solutions for sanitizers, disinfectants, diagnostics, therapeutics, informatics and any effective interventions to control COVID-19.
  • The CAWACH’s mandate will be to extend timely support to potential startups by way of the requisite financial assistance and fund deployment targeting innovations that are deployable in the market within next 6 months.
  • The Society for Innovation and Entrepreneurship (SINE), a technology business incubator at IIT Bombay supported by DST has been identified as the Implementing Agency of the CAWACH.
  • It will provide access to pan India networks for testing, trial and market deployment of these products and solutions in the identified areas of priority COVID-19 solutions.
Government Budgets

A niggardliness that is economically unwarrantedop-ed of the day

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Fiscal deficit and its relation with inflation, CAD etc.

Mains level : Paper 3- Should India consider a package to ease the sufferings inflicted by the covid-19 even at the cost of large fiscal deficit?


Context

The Centre can afford to step up its COVID-19 assistance to a higher scale; fiscal deficit is no worry.

Comparison with the US

  • Unemployment benefit in the US: In the United States, for instance, where the lockdown has raised the number of persons filing unemployment claims from 2.8 lakh to 6.6 million in a matter of days, those affected can fall back on unemployment benefit.
  • Comparison of packages: The US government has approved a package of ameliorative steps costing roughly 10% of that country’s GDP to cope with the crisis.
  • In India by contrast, the Finance Minister’s package comes to less than 1% of its GDP; and much of it is just a repackaging of already existing schemes.
  • New expenditure comes to just a little over half of the ₹1.7-lakh crore earmarked for the package.
  • Migrant workers are not the beneficiary: Besides, none of the steps will help the migrant workers; not even the larger foodgrain ration which in principle could, because most of them would have ration cards back home rather than in the places where they stay.

What can be done?

Consider the cash transfer

  • Many economists and civil society activists had suggested a cash transfer of ₹7,000 per month for a two-month period to the bottom 80% of households to tide over the crisis, in addition to enhanced rations of foodgrains and the inclusion of certain other essential commodities within the ration basket.
  • The cost of their proposed cash transfers alone would come to ₹3.66-lakh crore, which is more than 10 times the cash transfers provided in the Finance Minister’s package.
  • Providing assistance on the scale proposed by civil society organisations is necessary; it will no doubt pose logistical problems, but not financial problems.
  • Two possible effects of cash transfer: Even if all of it is financed through a fiscal deficit for the time being, the economic implications of such an enlarged deficit would not be forbidding.
  • These implications can manifest themselves in two ways: one is through inflation, and the other by precipitating a balance of payments problem. Let us consider each of these.

   Effect of cash transfer on inflation

  • As long as supplies of essential commodities are plentiful and these are made available through the Public Distribution System to the vast majority of the people so that they are insulated against the effects of inflation, any inflation per se should not be a matter of great concern. This is the case in India at present.
  • Foodgrain stocks with the FCI: The supply of the most essential of goods, food grains, is plentiful. Currently, there are 58 million tonnes of foodgrain stocks with the government, of which no more than about 21 million tonnes are required as buffer-cum-operational stocks.
  • This leaves a surplus of 37 million tonnes which can be used for distribution as enhanced ration, or for providing a cushion against inflation.
  • The rabi crop is supposed to be good; as long as it is safely harvested, this would further boost the government’s food stocks.
  • Rise in demand of other commodities: Likewise, the supplies of other essential commodities which consist of manufactured goods and where output has been demand-constrained all along will get boosted in response to higher demand; and in special cases, imports may have to be resorted to.
  • There is in short no reason to think that inflation of a worrisome magnitude will follow if the fiscal deficit is increased.
  • What about the multiplier effect? There is an additional factor here. The increase in total demand caused by an initial increase in demand, which is financed by a fiscal deficit, is a multiple of the latter.
  • Now in a situation like the present, when even if the lockdown is lifted social distancing and restrictions on social activities will continue, the value of the multiplier will be lower than usual.
  • People, in short, would hold on to purchasing power to a much greater extent than usual because of the continuing restrictions on demand, which would act as an automatic anti-inflationary factor.
  • Of course, there will be shortages of some less essential commodities and also hoarding on account of such shortages. But since these shortages will be expected to be temporary, a result of the pandemic unlikely to last long, there will be a damper on hoarding.

Effect of cash transfer on deficit

  • The price rise of non-rationed commodities: If inflationary expectations are strong and persistent, then the prices of non-rationed commodities may rise sharply for speculative reasons.
  • How the government can prevent the price rise? But the government can prevent such expectations, by adopting measures such as bringing down petro-product prices, taking advantage of the collapse of world oil prices.
  • A larger fiscal deficit, therefore, need not cause disquiet on account of inflation.
  • Balance of payment issue: On the balance of payments front, the worry associated with a larger fiscal deficit is financial flight caused by frightened investors.
  • Some financial flight is already happening, with the rupee taking a fall.
  • Rush to dollar: This flight is not because of our fiscal deficit but because, whenever there is panic in financial markets, the tendency is to rush to dollars, even though the cause of the panic may lie in the United States itself.
  • Using foreign exchange reserves: India has close to half a trillion dollars of foreign exchange reserves. These can be used, up to a point, to check the flight from the rupee to the dollar.
  • Restriction on capital outflow: If the flight nonetheless persists, then India will have a legitimate reason for putting restrictions on capital outflows in the context of the pandemic.

Way forward

  • The Centre must not worry about its fiscal deficit; and since the State governments will bear a substantial expenditure burden on account of the pandemic.
  • The Centre must make more resources available to the states.
  • The centre should raise their borrowing limits, perhaps double their current limits as a general rule, apart from negotiating the magnitude of fiscal transfers it should make towards them.

Conclusion

If the hardships of the people are not ameliorated through larger government expenditure, because of the fear that the larger fiscal deficit required for it would frighten finance into fleeing, then the privileging of finance over people would have reached its acme.

 

Hunger and Nutrition Issues – GHI, GNI, etc.

Let no one go hungryop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2-How steps government must take to ensure that the stranded labour are not left without food.


Context

The impact of the lockdown, effected from midnight of March 24, has been particularly severe on migrant workers. The state must utilise FCI stock for those who have ration cards and those who don’t.

India’s labour force and impact of lockdown on it

  • Nearly one-fifth of India’s labour force consists of internal migrants.
  • As per the 2011 census, a quarter of the urban population consists of migrants.
  • These tend to be predominantly male, from the less developed northern states, in the lower-income strata, and dependent on daily wages or precarious livelihoods.
  • The impact of the lockdown has been particularly severe on migrant workers.
  • Uncertainty and reverse migration: Due to uncertainty over the duration of the lockdown, and about their own livelihoods and food security, the lockdown has led to massive reverse migration from cities back to villages.
  • Further, due to the absence of train and bus services, many of these workers took to simply walking back.
  • The ground reality of inadequate preparation or insufficient provision means that neither their anxiety nor plight is assuaged.
  • Migrant workers tend to depend on public eating places or community arrangements for food.
  • Under a lockdown, there is simply no choice for them, except to depend on the government’s efforts or charitable organisations.

Utilising the grain stocks with the FCI

  • The government has a large stock of wheat and rice procured over the last three years.
  • Stock in excess of buffer norm: The buffer norm for April 1 is 21.4 million tonnes, against which the country had about 7 million tonnes on March 1: This comprises 27.5 million tonnes of wheat and 50.2 million tonnes of rice.
  • In most districts of India, the Food Corporation of India and state agencies have a storage capacity of more than the three months requirement of the public distribution system.
  • The warehouses are spread across all the districts in every state.
  • The government has already announced that an additional quantity of five kg of foodgrains will be provided, free of cost, to all ration card holders for the next three months.
  • Most of the unorganised labour and families migrating back from their place of work will probably have their ration cards in the villages itself.
  • So, it should not be much of a problem for them to find food during the period of lockdown.

What should the state do to feed those who do not have ration cards

  • For those who do not have ration cards in the villages, it is the right time to use this extra stock of foodgrains.
  • Using school and Anganwadi infrastructure: In villages, primary schools have facilities for cooking mid-day meals for children. Some Anganwadi also have this facility. This infrastructure can be used to provide cooked meals to those who do not have ration cards in the villages.
  • The government can easily offer to meet their requirement of wheat and rice over the next three weeks and panchayats can be asked to meet a part of the expenditure required to purchase vegetables, spices and cooking oil.
  • The village panchayats which take up such a feeding programme must be provided Rs 20 per person per day from State Disaster Relief Fund for the expenditure on vegetables, cooking oil, spices, which are not covered by the PDS.
  • In some villages, the local community may also be willing to help the panchayats to feed such people.
  • Efforts must also be made by the panchayats to raise donations in kind from the local community for rabi pulses like chana (chickpea), masoor (lentil), matar (field pea) which are available in plenty in pulse-growing states.

How to feed those who are stuck in the cities

  • A number of labourers and self-employed: In urban areas, as per the Periodic Labour Force Survey, there were about 6 crore casual labourers and four crore self-employed persons in 2017-18.
  • Even after the reverse migration to villages, there would still be millions of them who are stuck in cities at their place of work.
  • These are people who do not have any savings or source of income which can sustain them during the period of the lockdown. These people living in slums, in the poorer areas of cities, are in need of urgent assistance for food, at least for the next three weeks.
  • The most distressed at present are those stuck in the cities, or who have been walking hundreds of kilometres to reach their homes in small towns and villages.
  • Allocating funds form relief funds: The district collectors should be allocated funds from the State Disaster Relief Fund to provide them with food and open all community buildings en route for them.
  • Engaging various players: The states must engage NGOs, factories and charities including religious organisations to raise funds for meeting the expenditure on milk, eggs, cooking oil and vegetables, and even soaps and sanitisers.
  • More than 67,000 NGOs are registered with the Niti Aayog on their NGO Darpan platform — which was created to bring about a greater partnership between the government and the voluntary sector and to foster transparency, efficiency and accountability.
  • This is the time to use such a platform.
  • The Centre can easily provide free rice and wheat to the NGOs from its stock and the NGOs can provide cooked meals in urban areas for the next three weeks.
  • For one crore individuals, for three weeks, the government needs to provide just about 75,000 tonnes of rice. Since the milling of wheat would be difficult due to the closure of flour mills, only rice can be provided at this stage.

Conclusion

The rabi harvest is expected to be a bumper one. The utilisation of the FCI stock — for not only the ration card holders but also the non-ration cardholders, and for providing food to the poor stuck in urban areas — is the most appropriate use of the foodgrain stock with the government. This is urgent and must be done.

Oil and Gas Sector – HELP, Open Acreage Policy, etc.

Oil in a post-Covid worldop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- Oil war in international oil market and implications for India.


Context

In the post-COVID world, India will, once again, confront the challenge of oil and gas supply security. We should, therefore, ask: What will be the landscape of the petroleum sector, post-COVID? And what should India do now to prepare for an uncertain and contingent energy future?

Oil war and the death knell of OPEC

  • The concept of MAD (Mutually Assured Destruction) deterred the nuclear powers during the Cold War. It has had no such effect on the oil powers.
  • Implications of the decision of Saudi Arabia and Russia: At a time when the virus had pushed the global economy into recession, Russia and Saudi Arabia took a set of decisions last month that knocked the economic props from under the oil market.
  • What were the reasons behind the decisions: The Saudis decided to flood the market to hold onto market share and the Russians accepted the consequent decline in prices to push the US shale industry to the wall.
  • Future of OPEC: Both may achieve their objectives but they have sounded the death knell of OPEC and possibly that of the oil industry as well.

Two reasons for the decline in the oil prices

  • Today, the price of oil, at just above $30/bbl , is at its lowest in a decade, and volatile downwards. The average price in 2019 was $64/bbl.
  • The reason is two-fold.
  • One, the Saudis have ramped up production from 9.8mbd (before the March meeting) to in excess of 12 mbd today.
  • Two, there has been an unprecedented COVID-induced crash in demand. This is because of the lockdown of the two main drivers of oil consumption — transportation and industry.
  • It is estimated that oil consumption in the current quarter will fall by approximately 25 mbd.
  • This is almost as much as OPEC’s production.
  • The Saudis and Russia may still come to an understanding that rallies the price.
  • There will be three major implications for the oil-producing countries.

1. Budgetary crisis

  • Every major oil-exporting country will face a budgetary crisis.
  • Qatar has the most robust balance sheet of all OPEC members. But it still needs an oil price of around $40/bbl to balance its books.
  • Algeria has the weakest. It needs an excess of $100/bbl.
  • Saudi Arabia is at the Algerian end of the spectrum requiring a price of around $80/bbl.
  • Abundant foreign reserves: This does not mean these countries are about to go financially belly up. Most of them, the Gulf producers, in particular, have abundant sovereign reserves.
  • But what it does mean is they will be hard-pressed to sustain their social and economic commitments.
  • They will have to cut back on subsidies, raise taxes and the citizens will be required to tighten their belts.
  • What India should do? India should build into its oil supply plans with the likelihood of civil strife in these countries.

2. Reconfiguration of the oil industry will take place

  • Already, at current prices, a large number of companies are finding it difficult to cover their cash costs and have been forced to cut production and shutter operations.
  • At even lower prices, they will become bankrupt.
  • Whatever the final outcome, one fact is clear. Those that survive the carnage will have substantially slimmed balance sheets and reduced valuations.
  • Exxon’s market capitalisation has, for instance, halved over the past month.
  • Implication for India: Against this backdrop, we should drop the expectation of international interest in BPCL. Or for that matter ME investment into India.
  • Ratnagiri refinery: The $40-billion Ratnagiri refinery project by Saudi Aramco and UAE will certainly not see the light of day.
  • We should also expect a drop in the intensity of domestic exploration.

3. Behavioural changes and uncertainties

  • The world, post-COVID will be different from the world pre-COVID. Behaviours will shift and these will deepen uncertainties.
  • “Social distancing” may change the dynamics of “shared mobility”.
  • Teleporting may reduce business travel.
  • Heightened awareness of the porosity of national boundaries may accelerate the push towards decarbonisation? These uncertainties will push the petroleum market deeper into no man’s land.

Way forward for India

  • Whatever be the shape of the post- COVID international petroleum market, India will be dependent on it to secure its domestic energy requirement. The question should, therefore, be asked. What should the decision-makers do today to respond to such a contingent and uncertain future?
  • 1. Increase the strategic reserves: It should fill the oil caverns with strategic reserves. Prices may fall further but rather than bottom fish, it should leverage the availability of capacity to secure discounted supplies.
  • The world has run out of storage capacity and producers may pay premium dollar to find space for their unsold cargoes.
  • 2. Reduce the dependency and risk: India should increase its imports of gas (LNG ) from Australia, Africa and the US.
  • This will reduce the political risks of dependency on oil supplies from the Middle East.
  • Gas is also now economically competitive. The landed price of LNG is low enough to kick-start some of the stranded gas-based power plants.
  • 3. Increase operational efficiency of oil companies: It should unthread the “patchwork quilt of authority” exercised by bureaucrats, regulators and politicians, which today stifles management and operational efficiency of the petroleum companies.
  • 4. Integrated energy policy: India should create an institutional basis for an integrated energy policy. If there is one message we must internalise from COVID, it is the importance of collaboration and coordination.
Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

Restarting the economy after lockdownPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Read the attached story


  (This newscard is the excerpt from an article published in the TOI, authored by former RBI governor Raghuram Rajan. It discusses a series of reformative measures to boost our economy once the lockdown restrictions are eased.)

Context

  • Economically speaking, India is faced today with perhaps its greatest emergency since Independence.
  • The global financial crisis in 2008-09 was a massive demand shock but our financial system was largely sound, and our government finances were healthy.
  • None of this is true today as we fight the coronavirus pandemic.
  • With the right resolve and priorities, and drawing on India’s many sources of strength, it can beat this virus back and even set the stage for a much more hopeful tomorrow.

To begin with: 21 day Lockdown

  • The immediate priority, of course, is to suppress the spread of the pandemic through widespread testing, rigorous quarantines, and social distancing.
  • The 21-day lockdown is a first step, which buys India time to improve its preparedness.
  • The government is drawing on our courageous medical personnel and looking to all possible resources – public, private, defence, retired – for the fight, but it has to ramp up the pace manifold.
  • It will have to test significantly more to reduce the fog of uncertainty on where the hotspots are, and it will have to keep some personnel and resources mobile so that they can be rushed to areas where shortages are acute.

Restarting with caution

  • The 21 day lockdown is about a week ahead to get lifted. It is hard to lockdown the country entirely for much longer periods, so we should also be thinking of how we can restart certain activities.
  • Restarting requires better data on infection levels, as well as measures to protect those returning to work.
  • Healthy youth, lodged with appropriate distancing in hostels at the workplace, maybe ideal workers for restarting.

Pacing up manufacturing

  • Since manufacturers need to activate their entire supply chain to produce, they should be encouraged to plan on how the entire chain will reopen.
  • The administrative structure to approve these plans and facilitate movement for those approved should be effective and quick – it needs to be thought through now.

Most crucial: Ensuring workforce sustenance

  • In the meantime, policymakers need to ensure that the poor and non-salaried lower middle class who are prevented from working for longer periods can survive.
  • Direct transfers to households may reach most but not all, as a number of commentators have pointed out.
  • Furthermore, the quantum of transfers seems inadequate to see a household over a month.
  • The state and Centre have to come together to figure out quickly some combination of public and private participation and DBTs that will allow needy households to see through the next few months.
  • We have already seen one consequence of not doing so – the movement of migrant labour. Another will be people defying the lockdown to get back to work if they cannot survive otherwise.

Gearing up for fiscal shocks

  • Our limited fiscal resources are certainly a worry. However, spending on the needy at this time is a high priority use of resources, the right thing to do as a humane nation.
  • This does not mean that we can ignore our budgetary constraints, especially given that our revenues will also be severely affected this year.
  • Unlike the US or Europe, which can spend 10% more of GDP without fear of a ratings downgrade, we already entered this crisis with a huge fiscal deficit, and will have to spend yet more.
  • A ratings downgrade coupled with a loss of investor confidence could lead to a plummeting exchange rate and a dramatic increase in long term rates in this environment, and substantial losses for our financial institutions.

Channelizing expenditures

  • So we have to prioritise, cutting back or delaying less important expenditures, while refocusing on immediate needs.
  • At the same time, to reassure investors, the government could express its commitment to return to fiscal rectitude.
  • The govt. must back up its intent by accepting the setting up of an independent fiscal council and setting a medium term debt target, as suggested by the NK Singh committee.

Boosting up Industries

1) MSMEs

  • Many MSMEs already weakened over the last few years, may not have the resources to survive.
  • We need to think of innovative ways in which bigger viable ones, especially those that have considerable human and physical capital embedded in them, can be helped.
  • SIDBI can make the terms of its credit guarantee of bank loans to SMEs even more favourable, but banks are unlikely to want to take on much more credit risk at this point.
  • The government could accept responsibility for the first loss in incremental bank loans made to an SME, up to the quantum of income taxes paid by the SME in the past year.

2) Large industries

  • Large firms can also be a way to channel funds to their smaller suppliers. They usually can raise money in bond markets and pass it on.
  • Banks, insurance companies, and bond mutual funds should be encouraged to buy new investment-grade bond issuances, and their way eased by the RBI.
  • The government should also require each of its agencies and PSUs, including at the state level, to pay their bills immediately, so that private firms get valuable liquidity.

Looping in everyone’s participation

  • The government should call on people with proven expertise and capabilities, of whom there are so many in India, to help it manage its response.
  • It may even want to reach across the political aisle to draw in members of the opposition who have had experience in previous times of great stress like the global financial crisis.
  • If, however, the government insists on driving everything from the PMO, with the same overworked people, it will do too little, too late.

Conclusion

  • Globally, it is said that India reforms only in crisis.
  • Hopefully, this otherwise unmitigated tragedy will help us see how weakened we have become as a society, and will focus our politics on the critical economic and healthcare reforms we sorely need.