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December 2018

NITI Aayog’s Assessment

[op-ed snap] The shape of growth matters


Mains Paper 3: Economy | Indian Economy Issues relating to planning

From the UPSC perspective, the following things are important:

Prelims level: Strategy for New India @ 75

Mains level: Measuring India’s growth till date and formulating future plans according to the changing dynamics


NITI Aayog’s new development plan

  1. NITI Aayog recently released its ‘Strategy for New India @ 75’
  2. The strategy affirms that “policymaking will have to be rooted in ground realities” rather than economic abstractions
  3. The intent to change the approach to planning from preparations of plans and budgets to the creation of a mass movement for development in which “every Indian recognises her role and experiences the tangible benefits” is laudable
  4. The strategy emphasises the need to improve the implementation of policies and service delivery on the ground, which is what matters to citizens
  5. Its resurrection of the 15 reports of the Second Administrative Reforms Commission and recommendation that they must be implemented vigorously are welcome

Focus on employment led growth

  1. Employment and labour reforms, the second chapter in the strategy, have rightly been given the highest priority, which was not the case in the previous plans
  2. Overall growth is also emphasised by NITI Aayog: “Besides having rapid growth, which reaches 9-10 per cent by 2022-23, it is also necessary to ensure that growth is inclusive, sustained, clean and formalised
  3. The employment-generating capacity of the economy is what matters more to citizens than the overall GDP growth rate
  4. There is no joy for citizens if India is the fastest-growing economy and yet does not provide jobs and incomes
  5. The growth of industry and manufacturing is essential to create more employment, and to provide bigger opportunities to Indians who have been too dependent on agriculture so far
  6. Here, too, it is not the size of the manufacturing sector that matters but its shape. Labour-intensive industries are required for job creation
  7. If the manufacturing sector is to grow from 16% to 25% of the GDP, which the strategy states as the goal, with more capital-intensive industries, it will not solve the employment problem
  8. The strategy does say that labour-intensive industries must be promoted, but the overall goal remains the size of the sector
  9. The goal must be clearly set in terms of employment, and policies and measurements of progress set accordingly
  10. Indian statistical systems must be improved quickly to measure employment in various forms, formal as well as informal

Providing tax incentives 

  1. The strategy highlights the urgency of increasing the tax base to provide more resources for human development
  2. It also says financial investments must be increased to strengthen India’s production base
  3. Managing this trade-off will not be easy
  4. If tax incentives must be given, they should favour employment creation, not more capital investment

Increasing mid-level industries

  1. A big weakness in the Indian economy’s industrial infrastructure is that middle-level institutions are missing
  2. Rather than formalising small enterprises excessively, clusters and associations of small enterprises should be formalised
  3. Small enterprises cannot bear the burden of excessive formalisation — which the state and the banking system need to make the informal sector ‘legible’ to them
  4. Professionally managed formal clusters will connect the informal side of the economy with its formal side, i.e. government and large enterprises’ supply chains
  5. NITI Aayog’s plan for industrial growth has very rightly highlighted the need for strong clusters of small enterprises as a principal strategy for the growth of a more competitive industrial sector

Labour laws revamp

  1. It recommends complete codification of central labour laws into four codes by 2019
  2. While this will enable easier navigation for investors and employers through the Indian regulatory maze, what is required is a fundamental reorientation of the laws and regulations — they must fit emerging social and economic realities
  •  First, the nature of work and employment is changing, even in more developed economies
  1. It is moving towards more informal employment, through contract work and self-employment, even in formal enterprises
  2. In such a scenario, social security systems must provide for all citizens, not only those in formal employment
  3. Indeed, if employers want more flexibility to improve the competitiveness of their enterprises, the state will have to provide citizens the fairness they expect from the economy
  4. The NITI Aayog strategy suggests some contours of a universal social security system. These must be sharpened
  • Second, in a world where workers are atomised as individuals, they must have associations to aggregate themselves to have more weight in the economic debate with owners of capital
  1. Rather than weakening unions to give employers more flexibility, laws must strengthen unions to ensure more fairness
  2. Indeed, many international studies point out that one of the principal causes of the vulgar inequalities that have emerged around the world is the weakening of unions
  3. The NITI Aayog strategy mentions the need for social security for domestic workers too
  4. This will not be enforceable unless domestic workers, scattered across millions of homes, have the means to collectively assert their rights
  • Third, all employers in India should realise that workers must be their source of competitive advantage
  1. India has an abundance of labour as a resource, whereas capital is relatively scarce
  2. Human beings can learn new skills and be productive if employers invest in them
  3. Employers must treat their workers — whether on their rolls or on contract — as assets and sources of competitive advantage, not as costs

Way forward

  1. The shape of the development process matters more to people than the size of the GDP
  2. Development must be by the people (more participative), of the people (health, education, skills), and for the people (growth of their incomes, well-being, and happiness)
  3. How well India is doing at 75 must be measured by the qualities of development, as experienced by its citizens, along these three dimensions

Foreign Policy Watch: India-SAARC Nations

[op-ed snap] Being a good neighbour


Mains Paper 2: IR | India & its neighborhood- relations.

From the UPSC perspective, the following things are important:

Prelims level: SAARC

Mains level: Need for better regional integration in South Asia


Weak regional integration of India

  1. If South Asia is one of the world’s least integrated regions, India is one of the world’s least regionally-integrated major powers
  2. While there indeed are structural impediments (posed by both India and its neighbours) in fostering regional integration, the most significant handicap is New Delhi’s ideational disinclination towards its neighbourhood
  3. Successive regimes have considered the neighbourhood as an irritant and challenge, not an opportunity
  4. Seldom have India’s policies displayed a sense of belonging to the region or a desire to work with the neighbourhood for greater integration and cooperation

Neighbourhood policy shaky

  1. The Narendra Modi government’s neighbourhood policy began exceptionally well with Mr. Modi reaching out to the regional capitals and making grand foreign policy commitments
  2. But almost immediately, it seemed to lose a sense of diplomatic balance, for instance, when it tried to interfere with the Constitution-making process in Nepal and was accused of trying to influence electoral outcomes in Sri Lanka
  3. While India’s refugee policy went against its own traditional practices, it was found severely wanting on the Rohingya question and seemed clueless on how to deal with the political crisis in the Maldives
  4. While it is true that 2018 seems to have brought some good news from the regional capitals, it has less to do with our diplomatic finesse than the natural course of events there
  5. The arrival of an India-friendly Ibrahim Mohamed Solih regime in Male has brought much cheer, and the return of Ranil Wickremesinghe as Sri Lankan Prime Minister is to India’s advantage too
  6. Nepal has reached out to India to put an end to the acrimony that persisted through 2015 to 2017
  7. Bhutan, Myanmar and Bangladesh are also positively disposed towards India, though the relationship with Pakistan continues to be testy and directionless
  8. What this then means is that New Delhi has a real opportunity today to recalibrate its neighbourhood relations

Learnings from the past

  • India must shed its aggression and deal with tricky situations with far more diplomatic subtlety and finesse
  1. The manner in which it weighed down on Nepal in 2015 during the Constitution-making process is an example of how not to influence outcomes
  2. The ability of diplomacy lies in subtly persuading the smaller neighbour to accept an argument rather than forcing it to, which is bound to backfire
  • It must be kept in mind that meddling in the domestic politics of neighbour countries is a recipe for disaster, even when invited to do so by one political faction or another
  1. Preferring one faction or regime over another is unwise in the longer term
  • New Delhi must not fail to follow up on its promises to its neighbours
  1. It has a terrible track record in this regard
  • There is no point in competing with China where China is at an advantage vis-à-vis India
  1. This is especially true for regional infrastructure projects
  2. India simply does not have the political, material or financial wherewithal to outdo China in building infrastructure
  3. Hence India must invest where China falls short, especially at the level of institution-building and the use of soft power
  4. India could expand the scope and work of the South Asian University (SAU), including by providing a proper campus (instead of allowing it to function out of a hotel building) and ensuring that its students get research visas to India without much hassle
  5. If properly utilised, the SAU can become a point for regional integration
  • While reimagining its neighbourhood policy, New Delhi must also look for convergence of interests with China in the Southern Asian region spanning from Afghanistan to Nepal to Sri Lanka
  1. There are several possible areas of convergence, including counter-terrorism, regional trade and infrastructure development
  2. China and India’s engagement of the South Asian region needn’t be based on zero-sum calculations
  3. For example, any non-military infrastructure constructed by China in the region can also be beneficial to India while it trades with those countries
  4. A road or a rail line built by China in Bangladesh or Nepal can be used by India in trading with those countries

What India can do?

  1. There needs to be better regional trading arrangements
  2. The reason why South Asia is the least integrated region in the world is because the economic linkages are shockingly weak among the countries of the region
  3. The lead to correct this must be taken by India even if this means offering better terms of trade for the smaller neighbours
  4. Several of India’s border States have the capacity to engage in trading arrangements with neighbouring counties
  5. This should be made easier by the government by way of constructing border infrastructure and easing restrictions on such border trade
  6. India prefers bilateral engagements in the region rather than deal with neighbours on multilateral forums
  7. However, there is only so much that can be gained from bilateral arrangements, and there should be more attempts at forging multilateral arrangements, including by resurrecting the South Asian Association for Regional Cooperation (SAARC)

Way forward

  1. India’s neighbourhood policy is at a critical juncture: while its past policies have ensured a steady decline in its influence and goodwill in the region, the persistent absence of a coherent and well-planned regional policy will most definitely ensure that it eventually slips out of India’s sphere of influence
  2. India must have a coherent and long-term vision for the neighbourhood devoid of empty rhetoric and spectacular visits without follow up

Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Mobile towers are harmless, says declassified CPCB report


Mains Paper 2: Governance | Issues relating to development & management of Social Sector/Services relating to Health, Education, Human Resources

From UPSC perspective, the following things are important:

Prelims level: ICNIRP, non-ionizing radiations

Mains level: Health issues raised by Telecom radiations


  • A recently-declassified study of the Central Pollution Control Board (CPCB) states that mobile towers do not have any negative effect on human health.

Details of the Report

  1. The study is one among several done in the previous decade by the CPCB, which had not been declassified since 2010.
  2. They have been published recently after the Supreme Court instructed to make public, all reports related to the impact of environmental pollution on health and the economy.
  3. The safety limits are prescribed by the International Commission on Non Ionizing Radiation Protection (ICNIRP).
  4. The report had said that there was no substantive or convincing evidence of cell phone radiation’s biological effects that could harm a person’s health.
  5. The ICNIRP standard uses the limit of 450 μW/cm2 (micro-watts per sq cm).

Effects of exposure to radiations

  1. However, the report does admit that the current exposure safety standards are purely based on the thermal effect while ignoring the non-thermal effects of radiation.
  2. In international standards, “thermal effect” of radiation refers to the heat that is generated due to absorption of microwave radiation which causes cellular and physiological changes in living beings.
  3. This effect may be responsible for genetic defects, effects on reproduction and development, central nervous system behavior and many similar serious health consequences.
  4. Non-thermal effects of radiation have been shown to be responsible for fatigue, irritability, headaches, nausea, loss of appetite, sleep disturbance, disruption and other psychological disorders, memory loss and difficulties in concentration.

New norms

  1. In 2015,the Department of Telecommunications had come up with new norms of radiation from mobile phone towers which came into force in September 2015.
  2. And the limits on power density from mobile phone towers were restricted to one-tenth of the existing limit.

North-East India – Security and Developmental Issues

[pib] North East Industrial Development Scheme


Mains Paper 3: Economy | Issues relating to planning, mobilization of resources, growth, development and employment

From UPSC perspective, the following things are important:

Prelims level: NEID Scheme

Mains level: Development projects in the NE


North East Industrial Development Scheme (NEIDS), 2017

  1. NEIDS has been launched to catalyse the industrial development in the North Eastern Region.
  2. It has come into force from 01.04.2017 and will remain in force up to 31.03.2022.
  3. It covers eligible industrial units in the manufacturing and service sectors Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim.
  4. The scheme provides:
  • Central Capital Investment Incentive (30% of the investment in plant & machinery with an upper limit of Rs. 5 crore),
  • Central Interest Incentive (3% interest on working capital for 5 years),
  • Central Comprehensive Insurance Incentive (Reimbursement of 100% insurance premium for 5 years),
  • Income Tax Reimbursement of centre’s share for 5 years,
  • GST reimbursement of Central Govt. share of CGST & IGST for 5 years,
  • Employment Incentive under which additional 3.67% of the employer’s contribution to EPF in addition to Govt. bearing 8.33% Employee Pension Scheme (EPS) contribution of the employer in PMRPY and
  • Transport incentive on finished goods movement by Railways (20% cost of the transportation), by Inland Waterways Authority (20% of the cost of transportation) & by air (33% of cost transportation of air freight).
  1. The Scheme does not envisage sanction of projects; rather, eligible units are registered after following due process.

NITI Aayog’s Assessment

[pib] NITI Aayog releases Second Delta Ranking under the Aspirational Districts Programme


Mains Paper 2: Governance | Government policies and interventions for development in various sectors

From UPSC perspective, the following things are important:

Prelims level:  Delta Ranking 2018

Mains level:  Aspirational District Programme


  • NITI Aayog will release the Second Delta Ranking of the Aspirational Districts Programme (ADP) .

Delta Ranking

  1. The ranking will measure the incremental progress made by districts.
  2. The districts have been ranked in a transparent basis on parameters across Health & Nutrition, Education, Agriculture & Water Resources, Financial Inclusion & Skill Development, and Basic Infrastructure through key performance indicators.
  3. The rankings are based on the data that is publicly available through the Champions of Change Dashboard, which includes data entered on a real-time basis at the district level.
  4. The rankings, for the first time, will also factor in inputs from household survey conducted by NITI Aayog’s knowledge partners, namely, TATA Trusts and the Bill and Melinda Gates Foundation (BMGF).
  5. The first Delta ranking for the Aspirational Districts was released in June 2018.

Performance in 2018

  1. Virudhunagar district in Tamil Nadu has shown the most improvement overall, followed by Nuapada district in Odisha, Siddarthnagar in Uttar Pradesh, Bihar’s Aurangabad and Koraput in Odisha.
  2. These districts have championed the development narrative in fundamental parameters of social progress.
  3. Nagaland’s Kiphire district, Jharkhand’s Giridih, Chatra in Jharkhand, Hailakandi in Assam, and Pakur in Jharkhand have shown least improvement.


Aspirational District Programme

  1. The Aspirational Districts Programme (ADP) is a essential retreat from India’s previous development strategies in its ownership, scope, and scale based on “One-size-fits-all” approach.
  2. 115 districts were chosen by senior officials of the Union government in consultation with State officials on the basis of a composite index of the following:
  • deprivation enumerated under the Socio-Economic Caste Census,
  • key health and education performance indicators and the state of basic infrastructure
  1. A minimum of one district was chosen from every State.
  2. The areas under the programme that have been targeted for transformation are education, health and nutrition, agriculture and water resources, financial inclusion, basic infrastructure and skills.
  3. There is no financial package or large allocation of funds to this programme
  4. Its aim is to leverage the resources of the several government programmes that already exist but are not always used efficiently.

Human Rights Issues

Sex workers, lawyers seek to amend language of anti-trafficking Bill


Mains Paper 2: Governance | Mechanisms, laws, institutions & Bodies constituted for the protection & betterment of these vulnerable sections

From UPSC perspective, the following things are important:

Prelims level: Trafficking of Persons (Prevention, Protection and Rehabilitation), 2018, Bill

Mains level: Human Trafficking and other associated crimes.


  1. The National Network of Sex Workers (NNSW) has raised concerns over the Trafficking of Persons (Prevention, Protection and Rehabilitation), 2018, Bill.
  2. The proposed law aims to criminalise all adult sex work.
  3. It doesn’t make any clear distinction between the victims of sexual exploitation or human trafficking and persons who voluntarily opt to provide sex to make a living.
  4. It has been observed that sex workers had not wanted to be ‘rescued’.

Legal Status of Prostitution in India

  1. Voluntary adult sex work is not illegal in India under certain circumstances, such as when a woman provides the service in her own home without any solicitation.
  2. The primary law on trafficking for the purpose of sexual exploitation is the Immoral Traffic (Prevention) Act (ITPA), 1986.
  3. It punishes offences including procuring a person for the purpose of prostitution, living on the earnings of prostitution of another person and keeping or using a brothel.

Core of the Issue

  1. Enforcement agencies often conflate trafficking with voluntary sex work and abuse the provisions of the law to evict sex workers from their houses.
  2. It is this experience that has stoked fears among sex workers about the new Bill, which is aimed at curbing “physical and other forms of trafficking”.
  3. They are urging lawmakers to revisit the language used in the Bill and to ensure that the legislation provides built-in safeguards.
  4. Their key demand is that the Bill should explicitly exclude adult persons voluntarily engaged in sex work.
  5. Certain offences in the Bill were “clearly directed” at sex workers and that these definitions needed to be reworded to remove all ambiguity.

Must seek consent

  1. Sex workers also demand that the consent of a person rescued from trafficking should be a mandatory requirement before a decision is taken to send him or her to a rehabilitation centre.
  2. Clause 4 in Section 17 of the Bill, allows the dismissal of a victim’s application for release if the Magistrate is of the opinion that such application has not been made voluntarily.
  3. With such provisions the current bill will become a tool in the hands of law enforcement agencies to victimize and harass sex workers.

Ensuring dignity to sex workers

  1. The Supreme Court had appointed a Panel for recommendations on rehabilitation of sex workers.
  2. The report recommended community-based rehabilitation through a multi-stakeholder board comprising representatives from the sex worker’s community, a doctor, a lawyer and officials of the State government.
  3. This body would examine educational, training and employability needs of women and help them access these. The panel recommended a scheme to provide interest free loans to enable a woman to set up a business as well.
  4. The panel also proposed a slew of measures to ensure dignity of life for those who want to remain in sex work such as providing them a ration card, right to education for their children as well as crèches and day-time and night-time care centres.
  5. The panel recommended that even when victims of trafficking were being rescued it was important to let them choose whether they wanted to reunite with their families or preferred community-based rehabilitation.

What is expected from the Law?

  1. The recommendations submitted to the Central government through the Supreme Court don’t find any mention in the proposed law.
  2. Activists said that while the law focuses a lot on surveillance and policing, there is very little in terms of the welfare of a survivor of trafficking apart from the provision of her rehabilitation in a shelter, and these are also weak.
  3. The Bill also doesn’t provide a mechanism to ensure monitoring and accountability of shelter homes or revocation of licences or punishment for those running the centres in case of non-compliance.

Way Forward: Imbibing best practices

  1. Partnership between sex workers and anti-human trafficking units to root out exploitative practices is essential.
  2. This is a model that activists cite as success stories such as in the country’s largest red-light district of Shonagachi in West Bengal.
  3. Here, a self-regulatory body of sex workers is operating since 2001 helps in tracking entry of minors and in identifying traffickers.
  4. This model has also been emulated in Sangli in Maharashtra where the anti-human trafficking unit has collaborated with workers to rescue minors and prevent trafficking.

e-Commerce: The New Boom

Centre tighten norms for e-commerce companies for sale of products


Mains Paper 3: Economy | Changes in industrial policy & their effects on industrial growth

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Analysis of Draft e-commerce policy


  • Tightening norms for e-commerce firms having foreign investment, the government has barred online marketplaces from selling products of companies where they hold stakes and banned exclusive marketing arrangements that could influence product price.
  • The decision comes against the backdrop of several complaints being flagged by domestic traders on heavy discounts being given by e-commerce players to consumers.

Protecting domestic interests

  1. The revised norms are aimed at protecting the interest of domestic players, who have to face tough competition from e-retailers having deep pockets from foreign investors, the Ministry said.
  2. The revised policy on foreign direct investment in online retail, issued by the Commerce and Industry Ministry, said that these firms have to offer equal services or facilities to all its vendors without discrimination.
  3. The policy would be effective from February 2019.

What are the Rules?

  1. Inventory of a vendor will be deemed to be controlled by e-commerce marketplace entity if more than 25 per cent of purchases are from the marketplace entity or its group companies.
  2. An entity having equity participation by e-commerce or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity.
  3. E-commerce marketplace entity “will not mandate” any seller to sell any good “exclusively” on its platform “only”.
  4. Any service like logistics provided by e-commerce companies to vendors in which they have direct or indirect equity participation or common control stake should be fair and non-discriminatory.
  5. These services include logistics, warehousing, advertisement, marketing, payments, financing etc.

Impact of the Rules

  1. The move would completely prevent influencing prices by e-commerce players.
  2. This will also ensure better enforcement of FDI guidelines in e-commerce companies.