[op-ed snap] Too good to be true’

Mains Paper 2 : Health & Education |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Prospects and concerns with draft national education policy


CONTEXT

Draft National Education Policy – From the perspective of higher education, its main strength is that it has got its basics right — it appears to have a reasonable understanding of existing problems, and offers a plausible picture of possible solutions that may take us towards a better future. Indeed, the DNEP comes as a refreshing shock to academics long accustomed to policy documents that are rooted in a stubborn denial of basic ground realities.

Proposals

1.Liberal and holistic – The most overarching is the acknowledgement that all education is, and ought to be envisioned as, “liberal” and holistic.

2. Public education – There is a strong re-affirmation of the state’s commitment to public education, much needed at a time when privatisation has seemed to be the overriding objective of governments.

3. Autonomy – Also welcome is the explicit assurance that institutional autonomy is not just a polite term for financial abandonment.

4. Ad- hoc and contractual appointments –  Finally, the recognition that rampant resort to ad hoc and contractual appointments has crippled higher education and must be stopped immediately will surely bring relief to teachers’ organisations agitating tirelessly on this very issue.

5.Core Vision –  The core vision based on a tripartite division of higher education into teaching universities, research universities, and optimally-sized multi-disciplinary undergraduate colleges is sound. T

6.National Research Foundation – The diagnoses and prescriptions for the key areas of governance and regulation are workable as initial starting points, as is the plan to create a National Research Foundation separate from regulatory bodies.

Concerns with draft policy

  1. Discrimination  and Exclusion – 
  • It is deeply disappointing that the DNEP has evaded this issue, with the question of Under-Represented Groups (URGs) making no appearance outside school education.
  • Caste discrimination has long been an important issue in higher education, and has received intense public attention in recent times, from Rohith Vemula to Payal Tadavi.
  • Moreover, national statistics unambiguously establish that Persons with Disability and Muslims are by far the leading URGs in higher education.

2. Protecting public higher educational institutions from undue governmental interference

  •  The proposed institutional framework for higher education — with the National Education Commission chaired by the prime minister at its apex — clearly implies even more governmental control with significantly higher levels of centralisation than what is already the case.
  • The DNEP should have included — but does not — a forthright proposal for dealing with this unavoidable problem.

 

[op-ed snap] Faint glimmer: On revival in industrial activity

Mains Paper 3 : Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Data regarding revival in industrial activity


CONTEXT

The tentative revival in industrial activity must be built on through prudent policy support.

Background

Industrial activity in the new financial year appears to have started on a healthier note than the trend witnessed in the last quarter of the previous fiscal, the government’s latest quick estimates show.

  1. Industrial output – Industrial output rose 3.4% in April, buoyed by a generally broad-based revival that saw electricity, mining and even manufacturing post faster growth .

2. Manufacturing output – In fact, manufacturing output growth, which had decelerated sharply from the pace of 8.2% in October to a revised level of less than 0.1% in March, rebounded to a four-month high of 2.8%.

3. Positive growth – A look at the use-based classification reveals that all six segments were in positive territory, with only infrastructure and construction goods marking a slowdown from both the earlier year and March levels and providing cause for some concern.

4. Capital Goods – Hearteningly, capital goods, a sector that serves as a closely tracked proxy for business spending intentions, posted a 2.5% expansion, snapping three straight months of contraction.

To be sure, the growth even in this key area trails the pace of 9.8% that was reported in April 2018 by a wide margin, and it would be premature to celebrate the single reading until a more abiding trend emerges in the coming months.

Hiccups along the way

1.Rise in CPI –

  • Price gains measured by the Consumer Price Index (CPI) quickened to 3.05% in May, from April’s 2.99%, as prices of vegetables and pulses jumped by 23% and 10% respectively in urban areas, contributing to a bump-up in food inflation.
  • The Reserve Bank of India had last week flagged the risks to the inflation trajectory from factors including spikes in vegetable prices and international fuel prices and marginally raised its CPI inflation projection for the fiscal first half to a 3% to 3.1% range.
  • While the inflation reading remains below the RBI’s inflation threshold of 4%, policymakers would need to keep a close watch on price trends, especially as global energy prices continue to remain volatile amid heightened geopolitical tensions in West Asia and uncertainty on the demand outlook owing to the ongoing China-U.S. trade spat.

2. Monsson Dependence – And while the monsoon is forecast to be normal this year, the actual rainfall and its spatial distribution will have a significant bearing on agricultural output and food prices. A fiscally prudent budget, with incentives to support the nascent industrial recovery, would surely tick several boxes at one go.

Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

What SCO summit means for India’s global and regional interests

Mains Paper 2 : India & Its Neighborhood - Relations |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : SCO

Mains level : Read the attached story


News

  • PK Modi has departed for the Kyrgyz capital Bishkek to attend a summit of the Shanghai Cooperation Organisation (SCO).

Shanghai Cooperation Organisation (SCO)

  • After the collapse of the Soviet Union in 1991, the then security and economic architecture in the Eurasian region dissolved and new structures had to come up.
  • The original Shanghai Five were China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan.
  • The SCO was formed in 2001, with Uzbekistan included. It expanded in 2017 to include India and Pakistan.
  • Since its formation, the SCO has focused on regional non-traditional security, with counter-terrorism as a priority:
  • The fight against the “three evils” of terrorism, separatism and extremism has become its mantra.
  • Today, areas of cooperation include themes such as economics and culture.

India’s entry to the SCO

  • India and Pakistan both were observer countries.
  • While Central Asian countries and China were not in favour of expansion initially, the main supporter — of India’s entry in particular — was Russia.
  • A widely held view is that Russia’s growing unease about an increasingly powerful China prompted it to push for its expansion.
  • From 2009 onwards, Russia officially supported India’s ambition to join the SCO. China then asked for its all-weather friend Pakistan’s entry.

How does membership of the SCO help India?

 [I] Counter-terrorism

  • These sit well with the SCO’s main objective of working cooperatively against the “three evils”.
  • India wants access to intelligence and information from SCO’s counter-terrorism body, the Tashkent-based Regional Anti Terror Structure (RATS).
  • A stable Afghanistan too is in India’s interest, and RATS provides access to non-Pakistan-centred counter-terrorism information there.

[II] Connectivity

  • Connectivity is important for India’s Connect Central Asia policy. Energy cooperation dominates its interest – and it’s in China’s neighbourhood.
  • But India will also have to deal with an assertive China, which will push its Belt and Road Initiative during the summit.
  • SCO membership also bolsters India’s status as a major pan-Asian player, which is boxed in the South Asian paradigm.

Geopolitics and play out for India

  • The US’ power struggle with China, exit from the Iran nuclear deal JCPOA which affected India’s oil imports from Iran and adversarial attitude towards Russia which delayed India’s defence purchase like S-400.
  • While US’s stance against Islamabad after the Pulwama attack was evidence of its support to New Delhi, India has had a strained relationship with China after the Doklam stand-off, followed by attempts to reset relations in Wuhan.

A cause of worry for US

  • In the SCO, India’s sitting down with less-than-free regimes, Russia and China has always had the West worried.
  • India, however, has always been tactful in not aligning with these countries on governance issues.

How does it play out in the India-Pakistan or India-China relationship?

  • In the absence of the SAARC summit, the SCO summit gives an opportunity for Indian and Pakistani leaders to meet informally, on the sidelines.
  • Both sides have the obligation not to bring in bilateral disputes, but can cooperate on issues of mutual interest and importance.
  • Signing off on joint counter-terrorism exercises will be a new form of engagement between the two militaries.
  • With China, it is yet another opening, like the BRICS summit last year, to bring down tensions, and ahead of the next informal summit in October in India.

Way Forward

  • What draws India to SCO is the “Shanghai spirit”, which emphasises harmony, non-interference in others’ internal affairs, and non-alignment.
  • The bottom-line is that it helps India keep all options open in terms of international partnerships.
Foreign Policy Watch: India-SCO

Chandrayaan-2 Mission

Mains Paper 3 : Awareness In The Fields Of It, Space, Computers, Robotics, Nano-Technology, Bio-Technology |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Chandrayan 1, 2

Mains level : Prospects of the ISRO mission



News

  • The ISRO will finally launch the much-awaited Chandrayaan-2 mission to the moon.
  • The mission will be launched on July 15, and its lander and rover will touch down on the moon’s surface either on September 5 or 6.

Background

  • The Chandrayaan-2 mission has taken a long way coming, considering that its predecessor, Chandrayaan-1, an Orbiter mission, had been sent way back in 2008.
  • According to the original schedule, Chandrayaan-2 was to be launched in 2012 itself in a collaborative mission with the Russian space agency, Roskosmos, which was to provide the lander module.
  • The Russians, however, withdrew from the missions after their similarly-designed lander for another mission developed problems in 2011.
  • That left ISRO to design, develop and build the lander on its own, something it has not done earlier, which has led to considerable delay from the original schedule.

A sequel to Chandrayaan-1

  • The Chandrayaan-1 mission which was launched in October 2008 was ISRO’s first exploratory mission to the moon, in fact to any heavenly body in the space.
  • That mission was designed to just orbit around the moon and make observations with the help of the instruments on board.
  • The closest that Chandrayaan-1 spacecraft came to the moon was in an orbit 100 km from its surface.
  • Chandrayaan-2 is a logical progression on Chandrayaan-1. It is a more sophisticated mission designed to pack in a whole lot of science.

The Moon Impact Probe

  • For largely symbolic reasons, though, the Chandrayaan-1 mission did make one of its instruments, called Moon Impact Probe, or MIP.
  • It was a 35-kg cube-shaped module with the Indian tricolour on all its sides, to crash-land on the moon’s surface.
  • ISRO claims that while on its way, MIP had sent data that showed evidence for the presence of water on the moon.
  • Unfortunately, those findings could not be published because of anomalies in calibration of the data.
  • The confirmation for water had come through another onboard instrument, the M3 or Moon Mineralogy Mapper that had been put by NASA.

Chandrayaan-2: India’s first lander mission

  • Chandrayaan-2 consists of an Orbiter, Lander and Rover, all equipped with scientific instruments to study the moon.
  • The Orbiter would once again watch the moon from a 100-km orbit, while the Lander and Rover modules will separate and make a soft-landing on moon’s surface.
  • ISRO has named the Lander module as Vikram, after Vikram Sarabhai, the pioneer of India’s space programme, and the Rover module as Pragyaan, meaning wisdom.
  • Once on the moon, the rover, a six-wheeled solar-powered vehicle, will detach itself from the lander, and would slowly crawl on the surface, making observations and collecting data.

Tasks to be accomplished

  • The mission will be equipped with two instruments, and its primary objective would be to study the composition of the moon’s surface near the landing site, and determine its abundance of different elements.
  • The 1471-kg lander, which will remain stationary after touching down, will carry three instruments that will mainly study the moon’s atmosphere.
  • One of the instruments will also look out for seismic activity on lunar surface.
  • While the lander and rover are designed to work for only 14 days (1 lunar day), the Orbiter, a 2379-kg spacecraft with seven instruments on board, would remain in orbit for a year.
  • It is equipped with different kinds of cameras to take high-resolution 3D maps of the surface.
  • It also has instruments to study the mineral composition on the moon and the lunar atmosphere, and also to assess the abundance of water.

Chandrayaan-2 to enter uncharted territory

  • With Chandrayaan-2, India will become only the fourth country in the world to land a spacecraft on the moon.
  • So far, all landings, human as well as non-human, on the moon have been in areas close to its equator.
  • That was mainly because this area receives more sunlight that is required by the solar-powered instruments to function.
  • Earlier this year, in January, China landed a lander and rover on the far side of the moon, the side that is not facing the earth. This was the first time that any landing had taken place on that side.
  • The Chinese mission, Chang’e 4, was designed to function for three lunar days has outlived its mission life and entered its fifth lunar night.

What differentiates Chandrayaan 2 with others?

  • Chandrayaan-2 will make a landing at a site where no earlier mission has gone, near the South pole of the moon.
  • It is a completely unexplored territory and therefore offers great scientific opportunity for the mission to see and discover something new.
  • Incidentally, the crash-landing of the MIP from the Chandrayaan-1 mission had also happened in the same region.
  • The south pole of the moon holds the possibility of the presence of water, and this is one aspect that would be probed meticulously by Chandrayaan-2.
  • In addition, this area is also supposed to have ancient rocks and craters that can offer indications of history of moon, and also contain clues to the fossil records of early solar system.
ISRO Missions and Discoveries

Arctic Kelps: Underwater forests in the Arctic

Mains Paper 3 : Conservation, Environmental Pollution & Degradation, Eia |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Kelps

Mains level : Impact of climate change on the underwater ecosystem of the Arctic



News

  • Climate change is altering marine habitats such as kelp forests on a global scale.
  • In Western Australia, eastern Canada, southern Europe, northern California and eastern United States, kelps are disappearing due to warming temperatures.

Arctic Kelp Forests

  • Kelp is a type of large brown seaweed that grows in shallow, nutrient-rich saltwater, near coastal fronts around the world.
  • They occur on rocky coasts throughout the Arctic. The longest kelp recorded in the Arctic in Canada was 15 metres, and the deepest was found at 60-metre depth (Disko Bay, Greenland).
  • Kelps function underwater in the same way trees do on land. They create habitat and modify the physical environment by shading light and softening waves.
  • The underwater forests that kelps create are used by many animals for shelter and food.
  • More than 350 different species – up to 100,000 small invertebrates – can live on a single kelp plant, and many fish, birds and mammals depend on the whole forest.
  • Kelp forests also help protect coastlines by decreasing the power of waves during storms and reducing coastal erosion.

What makes Kelps special?

  • Many find it surprising that marine plants can grow so well in harsh Arctic environments. Kelps have adapted to the severe conditions.
  • These cool water species have special strategies to survive freezing temperatures and long periods of darkness, and even grow under sea ice.
  • In regions with cold, nutrient-rich water, they can attain some of the highest rates of primary production of any natural ecosystem on Earth.

Threats to Kelps

  • Coastal conditions in the Arctic are changing dramatically and the region is warming faster than the rest of the world, but these changes could actually be good for kelp.
  • In Canada, Alaska, Greenland, Norway and Siberia, permafrost soils that have been frozen for thousands of years are receding by half a metre per year.
  • Thawing permafrost and crumbling Arctic coasts are dumping sediments into coastal waters at alarming rates, which blocks light and could limit plant growth.
  • The run-off from melting glaciers will also lower salinity and increase turbidity, which impacts young kelp.

Importance of Kelps

  • Kelp forests throughout the world play an important role in coastal economies, supporting a broad range of tourism, recreational and commercial activities.
  • Kelp is making its way onto the plates of North Americans, and the kelp aquaculture industry is growing at a rate of seven per cent per year for the last 20 years globally.
  • Kelp is a coveted food source in many countries which is full of potassium, iron, calcium, fibre and iodine.
Climate Change Impact on India and World – International Reports, Key Observations, etc.

Cabinet approves ratification of OECD’s multilateral convention to check tax evasion

Mains Paper 3 : Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : BEPS

Mains level : Impact of BEPS on Indian economy


News

  • The Cabinet approved ratification of a multilateral convention to implement OECD’s project on checking tax evasion.
  • The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS) was signed by the then Finance Minister Arun Jaitley in Paris on June 7, 2017.

Base erosion and profit shifting (BEPS)

  • Firms make profits in one jurisdiction, and shift them across borders by exploiting gaps and mismatches in tax rules, to take advantage of lower tax rates and, thus, not paying taxes to in the country where the profit is made.
  • BEPS refers to this corporate tax planning strategies to “shift” profits from higher–tax jurisdictions to lower–tax jurisdictions.
  • The OECD has considered ways to revise tax treaties, tighten rules, and to share more government tax information under the BEPS project.

About the convention

  • The Multilateral Convention is an outcome of the OECD/G20 Project to tackle  BEPS which is resorted to by MNCs through tax planning strategies by exploiting gaps and mismatches in tax rules.
  • It helps them artificially shift profits to low or no-tax locations, resulting in little or no overall corporate tax being paid.
  • Post this convention, 90 countries have now implemented the automatic exchange of financial account and tax information.
  • The Convention enables all signatories to meet treaty-related minimum standards that were agreed as part of the BEPS package.

Impact

  • The Convention will modify India’s treaties in order to curb revenue loss through treaty abuse and base erosion and profit shifting strategies.
  • It will ensure that profits are taxed where substantive economic activities generating the profits are carried out and where value is created.
Tax Reforms

Jalan panel defers report on RBI surplus funds

Mains Paper 3 : Indian Economy |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Economic Capital of RBI

Mains level : Issue over transfer of surplus funds of RBI


News

  • A committee under former RBI governor Bimal Jalan considering guidelines for transfer of the central bank’s surplus funds to the government delayed submitting its report after lack of consensus.

Bimal Jalan Committee

  • The committee was appointed in December 2018 to review the Economic Capital Framework (ECF) for the RBI after the Finance Ministry advised the central bank to transfer surplus funds to the government.
  • The RBI has over Rs 9.6 lakh crore surplus capitals.
  • The panel has been entrusted with the task of reviewing the best practices followed by central banks worldwide in making assessment and provisions for risks.

Issue over surplus transfers

  • The government and the RBI under its previous governor Urjit Patel had been at loggerheads over the Rs 9.6 lakh crore surplus capital with the central bank.
  • The finance ministry was of the view that the buffer of 28 per cent of gross assets maintained by the central bank is well above the global norm of around 14 per cent.

What is Economic Capital?

  • Banks and financial institutions are faced with long-term future uncertainties that they intend to account for.
  • Economic capital (EC) is the amount of risk capital that a bank estimates in order to remain solvent at a given confidence level and time horizon.
  • The concept of economic capital has gained significance especially after the global financial crisis in 2008.
  • The crisis exposed many central banks in the world to multiple risks, which forced many of them US Federal Reserve, Bank of England and European Central Bank to pump in liquidity.
  • They tempted to buy securities and expand their balance sheets to boost confidence in the financial system and to ensure that critical institutions did not collapse.

Balance sheet of Central Banks

  • The balance sheet of central banks is unlike that of the institutions that it regulates or supervises.
  • They are not driven by the aim of boosting profits given their public policy or public interest role.
  • Their aim is primarily ensuring monetary and financial stability and maintaining confidence in the external value of the currency.
  • Central banks do make money or the profits earned by issuing currency which is passed on to the owner of the central bank, the government.
  • But they are typically conservative and the crisis prompted a review of the capital buffers that central banks and commercial banks needed.

Potential Risks to Central Banks

  • Traditionally, central banks have been factoring in risks such as credit risk when there could be a potential default by an entity in which there has been an investment or exposure.
  • There is also interest rate risk when interest rates either move up or slide, depending on the price of which securities or bonds held by a central bank or banks can be impacted.
  • Besides, there is operational risk when there is a failure of internal processes.
  • To measure these risks, both quantitative and qualitative methods are typically used.

The RBI proposal

  • RBI holds a huge pile of foreign exchange reserves, and as the lender of last resort it described as contingent risks arising from its public policy role in fostering monetary and financial stability.
  • In 2015, the RBI discussed this and put in place a draft Economic Capital Framework, or ECF.
  • The rationale for such a capital framework was that there were increased risks to its balance sheet.
  • RBI sought for an adequate capital buffer, critical not only to achieving its objectives, but also to ensuring the credibility of the central bank.

Concerns of RBI

  • RBI pointed out that a weak balance sheet could force the central bank to rely more on excessive seigniorage (profit made by issuing currency) income, which would run in conflict to its price stability mandate.
  • A compelling reason for RBI to build large capital buffers is to try and preempt a situation where they have to approach their governments for putting up their capital for recapitalization.
  • That is seen by them as an erosion of their operational independence.
  • The sovereign governments themselves are under fiscal strain.
  • This strengthens the case for ex-ante capitalization (based on forecasts) than ex-post capitalization i.e. better to build a capital framework way ahead of a crisis.
RBI Notifications