January 2020
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Issues related to Economic growth

[op-ed of the day] Economic reforms are best done brick by boring brickop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- Economic reform-sudden or persistent and incremental, sustainable.


Context

Rather than big bang measures or a stealthy agenda, India can count on small but significant improvements.

Reforms only in crisis or by stealth

  • The accepted conventional wisdom is that economic reforms in India happen only in a crisis or by stealth.
  • Reforms in the crisis
    • Reforms of 1991 : The big example of the former are the 1991 reforms.
    • In 1991 the country faced a huge foreign exchange crisis, resulting partly from the fiscal profligacy of the previous decade.
    • 1999 telecom sector reforms: Another example is from 1999 when the telecom sector was in near bankruptcy, and that crisis led to the shift away from fixed fee for spectrum to revenue sharing.
    • The situation of no other choice: In both cases, there was considerable opposition to those reforms, but they were pushed through because the crisis left no other choice.
  • Reform by stealth: Other than a crisis, more often than not, it has been economic reform by stealth.
    • In the form of executive orders: These reforms are often in the form of an executive decision rather than legislation. Following are the examples of it-
    • Expansion of the list under licence: The expansion of the list of items under the Open General Licence for imports, which is a reform of protectionism, or the reduction in the set of industries reserved for small-scale businesses.
    • Electoral bond introduction: A more recent example of stealth reform was the insertion of an electoral bond scheme in the Finance Bill of 2018.
    • Advantages of going stealth: Reform by stealth offers the advantage of going in either direction.
    • In 2013, faced with a potential currency crisis, the Reserve Bank of India (RBI) quietly retracted the limits on the liberalized remittance scheme (LRS).
    • Problem with stealth reforms: Stealth reforms are introduced stealthily but when they do not yield the desired result they are rolled back unpredictably, increasing uncertainty in policies of the government.

Persistent, encompassing, creative incrementalism in reforms

  • The Economic Survey of 2015 pretty much ruled out Big Bang reforms in India, calling instead for “persistent, encompassing, creative incrementalism” on them.
  • This is the right mantra.
  • What incrementalism means: It implies continuity, not slowness, a sustainable speed that gives reforms predictability and stability. Following are its examples of it-
  • Reform in food subsidy: Example of incrementalism could be reforms that are being carried out in food subsidies.
    • First: Reduce the leakages of the subsidy to non-farmers.
    • Thus, when procurement is done, payments go directly to their Aadhaar-linked accounts.
    • This will lead to non-farmers getting eliminated,
    • Second-Pay subsidy only to the poor: It will lead to subsidy savings, allowing us to limit the subsidy only to poor farmers.
  • Sovereign gold bond scheme: The use of paper gold greatly reduces imports of the physical metal and outgoes of foreign exchange.
    • The sale of these bonds is being expanded, and they would eventually be everywhere, even at post offices.
  • Aggregate licence by RBI: The next example is from a new category called account aggregators licensed by RBI.
    • It allows users’ control over the digital data trail that their transactions generate, and they can monetize it or use it to enhance their creditworthiness.
    • This is an incremental reform with huge ramifications.

Conclusion

  • The reforms cited above are incremental, not a big bang, persistent but not slow, open and not by stealth, and finally, imaginative too, since they respond to real needs.
  • Effective reforms are those that are done brick by brick, the boring measures that chip away at everything that constrains high, inclusive and sustainable growth.

 

Foreign Policy Watch: India-China

[op-ed snap] The world from Raisina.op-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- India's foreign relation with 'Middle Power' countries-Prospects and opportunities.


Context:

As the world is moving from an era of predictability to an era of unpredictability led by the US and China, a new Middle Power coalition is the need of an hour.

The “Rising India” narrative and challenges

  • The narrative was scripted over the two post-Cold War decades, 1991 to 2011.
  • Narrative of plural secular democracy: It was based on the improving performance of the economy and India’s political ability to deal with many longstanding diplomatic challenges within a paradigm of realism.
  • Three successive prime ministers – scripted the narrative of India rising as a plural, secular democracy, as opposed to China’s rise within an authoritarian system.
  • Opening of new vistas: India’s improving economic performance had opened up new vistas for cooperation with major powers and neighbours.
  • New challenges to the narrative: Now the economy’s subdued performance and domestic political issues have created new challenges for Indian foreign policy.
    • The new approach to relations with India adopted by both President Donald Trump and President Xi Jinping has created a more challenging external environment.

Relations with the US

  • New demands from the US: Each time New Delhi has tried to meet a US demand, Washington DC has come up with new demands.
  • US-China dispute resolution and effects for India: Any resolution of US differences with China, can only reduce whatever little bargaining clout India has.
  • Complaint at WTO: The US has, in fact, actively lodged complaints against India at the World Trade Organisation.
  • Geopolitical effects for India:  On the geopolitical side, US intervention in West Asia has always imposed an additional economic burden on India.

Relations with China

  • Consistent policy: There has been continuity and consistency in India-China policy over the past two decades, with some ups and downs.
  • Effects of power difference with China: As the bilateral power differential widens, China has little incentive or compulsion to be accommodative of Indian concerns, much less the interests
    • China never fails to remind India of the growing power differential between the two.
  • Building strength to deal with China: In dealing with China, India will have to, paraphrasing Deng Xiaoping, “build its strength and bide its time.

Russia’s focus

  • It will remain focused on Eurasian geopolitics.
  • It will also be concerned with the geo-economics of energy.
  • Implications for India: Both these factors define Russia’s relations with China, and increasingly, with Pakistan, posing a challenge for India.

 

Way forward in the relations with Pakistan

  • The government’s Pakistan policy has run its course.
    • It yielded some short-term results thanks to Pakistan’s efforts not to get “black-listed” by the Financial Action Task Force (FATF).
    • But the rest of the world is doing business with Pakistan, lending billions in aid.
  • The global community may increasingly accept future pleas from Pakistan that terror attacks in India are home-grown.
  • related to the situation in Kashmir or concerns about the welfare of Muslims, unless incontrovertible evidence to the contrary is offered.
  • The need for a new Pakistan policy: Backchannel talks should be resumed and visas should be given liberally to Pakistani intellectuals, media and entertainers to improve cross-border perceptions as a first step towards improving relations.

The Middle Powers and opportunities for India

  • What are the middle powers?  It is a mix of developed and developing economies, some friends of the US and other friends of China.
    • It is an amorphous group but can emerge into a grouping of the like-minded in a world of uncertainty capable of taming both the US and China.
    • A new Middle Powers coalition may be the need of the year.
  • Which countries can be part of it?  Germany, France, Japan, Australia, Brazil, Indonesia, Vietnam and perhaps South Korea. One could include Russia, Nigeria and South Africa also in this group.
  • Stakes involved but no influence: Like India, these countries have a stake in what the US and China do, but little influence over either.
  • What India can do? These countries which constitute the part of the Middle Powers should engage the attention of India’s external affairs minister.

Disruptive policies not an option

  • Adoption of disruptive approach: There is a view among some policy analysts that India too can adopt a “disruptive” approach as a clever tactic in foreign affairs.
    • Disruption is not an end in itself. It has to be a means to an end.
    • Powerful nations can afford disruption as tactics.
  • Unchanged strategic elements: The strategic elements defining Indian foreign policy in the post-Cold War era have not changed.
  • Not an option: India cannot risk such tactics without measuring the risk they pose to strategy.

Conclusion

With the changing geopolitical atmosphere particularly with respect to the US and Chiana, India needs to adopt a suitable approach to its foreign policy especially involving the Middle Powers.

 

 

Iran’s Nuclear Program & Western Sanctions

[op-ed snap] Iran’s tightropeop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- Events in the Middle East, especially involving Iran and its implications for India.


Context

In the aftermath of recent events, Iran needs a new compact to deal with the domestic crisis and also a framework to deal with the US.

The threat of “regime change” in Iran

  • The US policy-The temptation for a policy of “regime change” in Iran has never disappeared from the US policy towards Iran.
    • The policy is based on the hope that mounting external pressure and deepening internal dissent will combine to produce a “regime collapse” in Tehran.
    • US President has often insisted that he is not seeking to overthrow the clerical regime in Tehran led by Ayatollah Ali Khamenei.
    • The Us demands were an end to the nuclear and missile programmes, stop supporting terror in the region and end the interference in the internal affairs of its Arab neighbours.
  • Iran’s success in fending off these threats: Iran has been successful so far in fending off these external and internal challenges.
    • Iran has put down repeated mass uprisings and neutered attempts from within the elite to reform the system.

De-escalation of the tension after the war-like situation

  • Fear of escalation: The widespread assessment after the killing of Soleimani was that Iran would inevitably escalate the confrontation.
    • Tehran set up a token retaliation for domestic political consumption and quickly called for de-escalation.
  • The message of peace from the US: Trump also told the Iranian leaders that America “is ready to embrace peace with all who seek it”.

The shooting of a passenger jet and the aftermath 

  • The shooting of the jet:
    • The Ukrainian passenger jet was shot-down near Tehran killing all 176 passengers and crew on-board.
    • It included 82 Iranian nationals and many Canadian citizens of Iranian origin
  • After initial denial, Tehran was forced to accept responsibility for shooting down the plane.
  • The aftermath of the shooting of the plane
    • Protests: Soon after the confession, protests broke out against the government.
    • Demand for accountability: Iranians are angry at the attempt of the government to cover up initially and are demanding full accountability.

The general discontent of the people against the government

  • The latest round of protests must be seen as a continuation of those that have raged since the end of 2017.
  • Reasons for the discontent: Economic grievances, frustration with widespread corruption, demands for liberalising the restrictions on women and political opposition to the regime are the reasons.
  • Discontent against external adventures: There was also strong criticism of the government’s costly external adventures in the Middle East amidst the deteriorating economic conditions.
    • There is little love for the Revolutionary Guards, the principal face of state oppression.
  • External pressure: As the regime cracks down on the protests against the airliner shooting, the external pressures against Iran are only likely to mount.

Available option and their dangers

  • As sanctions squeeze the Iranian economy, the costs of regional overreach become apparent, and internal protests become persistent, Khamenei has few good options.
  • The option of the new political compact: Offering a new political compact to the people of Iran or a new framework to deal with the Arab neighbours and the US would seem reasonable goals.
    • But they involve considerable risk for the regime.
  • The option of pragmatism: All revolutionary regimes come to a point when they need to replace ideological fervour with pragmatism.
    • But the change from ideological fervour to pragmatism is also the time of the greatest vulnerability for the regime.

Conclusion

India as a friend of Iran will surely begin to debate if privately, the implications of the deepening regime crisis in Iran.

 

Police Reforms – SC directives, NPC, other committees reports

Explained: Commissionerate SystemExplainedPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Police Commissionerate System

Mains level : Read the attached story


The UP Cabinet has approved the Commissionerate system of policing for state capital Lucknow, and Noida.

The Police Commissionerate System

  • The system gives more responsibilities, including magisterial powers, to IPS officers of Inspector General of Police (IG) rank posted as commissioners.
  • Under the 7th Schedule of the Constitution, ‘Police’ is under the State list, meaning individual states typically legislate and exercise control over this subject.
  • In the arrangement in force at the district level, a ‘dual system’ of control exists, in which the Superintendent of Police (SP) has to work with the District Magistrate (DM) for supervising police administration.
  • At the metropolitan level, many states have replaced the dual system with the commissionerate system, as it is supposed to allow for faster decision-making to solve complex urban-centric issues.

Additional powers to Police

  • In this system, the Commissioner of Police (CP) is the head of a unified police command structure, is responsible for the force in the city, and is accountable to the state government.
  • The office also has magisterial powers, including those related to regulation, control, and licensing.
  • The CP is drawn from the Deputy Inspector General rank or above, and is assisted by Special/Joint/Additional/Deputy Commissioners.

Where is the system in force?

  • Previously, only four cities had the system: Kolkata, Mumbai, Hyderabad and Chennai.
  • However, with rapid urbanisation, states felt an increasing need to replicate the system in more places.
  • The sixth National Police Commission report, which was released in 1983, recommended the introduction of a police Commissionerate system in cities with a population of 5 lakh and above, as well as in places having special conditions.
  • Over the years, it has been extended to numerous cities, including Delhi, Pune, Bangalore and Ahmedabad. By January 2016, 53 cities had this system, a PRS study said.
  • Depending on its success, the policing system may gradually be implemented in other districts as well.
Ministry of External Affairs : Important Updates

Raisina Dialogue 2020Priority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Raisina Dialogue

Mains level : Raisina Dialogue and its impact on India's global profile


 

India`s annual global conference on geopolitics and geo-economics, Raisina Dialogue 2020 has began with the participation of over 100 countries.

Raisina Dialogue

  • The Raisina Dialogue is a multilateral conference committed to addressing the most challenging issues facing the global community.
  • It is jointly organised by the Ministry of External Affairs and the Observer Research Foundation.
  • Every year, global leaders in policy, business, media and civil society are hosted in New Delhi to discuss cooperation on a wide range of pertinent international policy matters.
  • The Dialogue is structured as a multi-stakeholder, cross-sectoral discussion, involving heads of state, cabinet ministers and local government officials, as well as major private sector executives, members of the media and academics.

This years’ agenda

  • The fifth edition of the Dialogue 2020 has been India`s contribution to global efforts to discover solutions, identify opportunities and provide stability to a century that has witnessed an eventful two decades.
  • This year`s Dialogue titled `Navigating the Alpha Century` is structured as a multi-stakeholder, cross-sectoral discussion, involving heads of states, cabinet ministers and local government officials as well as major private sector executives, members of the media and academics.

Significance of the dialogue

  • The Raisina Dialogue has acquired an enviable global profile uniting the best strategic thinkers of the world.
  • The synergies and collaborations in the Raisina Dialogue represent India`s deliberative ethos, as well as its international credibility and convening power.
  • The Dialogue has grown along with India`s diplomatic profile and will set the tone for its intensive diplomatic engagement this year.
Urban Transformation – Smart Cities, AMRUT, etc.

Fastest growing cities in IndiaPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Various keywords mentioned

Mains level : Urbanization in India


 The Economist has put Malappuram at the top of the “Top ten fastest-growing cities” in the world.

Anomalies in the data

  • The total fertility rate (TFR, the number of children a woman is likely to have in the childbearing age of 15-49) in Kerala is 1.8 as per NITI Aayog data from 2016 — below the replacement rate of 2.1.
  • Another Kerala city, Thrissur, is No. 13, and the capital Thiruvananthapuram is No. 33 on the UN list.
  • Tiruppur in Tamil Nadu — which has an even lower TFR of 1.6 — is No. 30.
  • Surat in Gujarat (TFR of 2.2) is No. 27. There is no representation on the list from high population growth states like Bihar and UP.

What does “fastest growing” refer to? How is a “city” defined?

  • The list based on data from the UN Population Division refers to “urban agglomerations” (UA), which are extended areas built around an existing town along with its outgrowths — typically villages or other residential areas or universities, ports, etc., on the outskirts of the town.
  • The Census defines a UA as “a continuous urban spread consisting of a town and its adjoining urban outgrowths or two or more physically contiguous towns together”.
  • The NCT of Delhi is a UA that includes the Municipal Corporation of Delhi (MCD) and New Delhi Municipal Council (NDMC) areas, as well as 107 “Census towns” — erstwhile surrounding villages where more than 75% of the population is now engaged in non-agricultural pursuits.

A pace of urbanization

  • The Economist has listed the rate at which the populations of the UAs are expected to increase between 2015 and 2020.
  • Since data on India and many other countries were not available for 2015 (the last Census in India was in 2011), the UN report used projections of UAs’ populations — estimates based on past population growth data.
  • The rate of growth between 2015 and 2020 thus calculated provides a measure of the pace of urbanisation.

How does urban population grow?

  • Urban populations can grow when the birth rate exceeds the death rate when workers migrate to the city in search of jobs; when more areas get included within the boundaries of the city; or when existing rural areas are reclassified as urban.
  • The low fertility rate in Kerala means the increase in the population of Malappuram and other cities is not because women are having more children; rather it is because more villages are being transformed into towns, and city borders are expanding.
  • According to the Census definition, an urban area is either a census town (CT) or a statutory town (ST). An ST is any place with a municipal corporation, municipal council, or cantonment board.
  • A CT can be a village with “urban characteristics” — a population more than 5,000, population density more than 400 people per sq km, and with more than 75% of the population not engaged in agriculture for their livelihood.
  • When a village becomes a CT, its population is included in the urban population of the district.

Could migration have caused the increase?

  • Migration can either increase or decrease the population of a town.
  • Kerala sees both emigration — migration from the state to other places — and immigration — the migration of workers to the state.
  • Also the remittances that emigrants send allow the residents of villages to move away from agriculture, which changes the status of a village to census town.

Why these cities are growing so fast?

  • These cities are seeing rapid urbanisation, and the main reason is the inclusion of new areas in the UA’s limits.
  • In 2001, there were two municipal corporations within the UA of Malappuram. In 2011, the number of municipal corporations had doubled to four, and an additional 37 CTs were included within Malappuram.
  • The population of the UA (excluding the residents of the outgrowths) increased almost 10 times in the same period — from 1,70,409 to 16,99,060 — obviously because of the inclusion of existing urban areas in the town.
  • Similarly, Kollam UA grew from one municipal corporation in 2001 to 23 CTs, one municipal corporation, and one municipal council in 2011.
  • Its population increased by 130%, even though the population of the original ST of Kollam actually decreased by 4%.

Why is this not seen elsewhere in India?

  • In Kerala, urbanisation is driven by a move away from agriculture, which leads to a change in a village’s Census classification status.
  • This is evident from the large number of CTs that were included in the UAs of the state since the last Census. On the other hand, except Delhi, the more populous cities in the North had fewer CTs in 2011.
  • While the pace of urbanisation has been slower in the North, some unnaturally high increases in the population can be expected after the 2021 Census — because in some cases, villages on the peripheries were brought within the administrative boundaries of the cities.

Is it good for the economy?

  • Urbanisation leads to the growth of cities, which are sites of infrastructure like universities, hospitals, and public transport facilities.
  • There are more opportunities for the youth, which is why they attract young people and entrepreneurs.
  • In India, people moving to cities leave behind (to some extent) caste and class divisions that dominate life in the villages, and can hope to climb up the social ladder.
  • However, unplanned urbanisation can be “exclusionary”, making it difficult for migrants to live there given the high cost.
  • Unregulated housing, lack of reliable public transport, and longer commutes within these towns puts a strain on the meagre resources of migrants.
Road and Highway Safety – National Road Safety Policy, Good Samaritans, etc.

Integrated Road Accident Database (IRAD)Prelims Only

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Integrated Road Accident Database (IRAD)

Mains level : Need to curb Road fatalities in India


The government has launched a central accident database management system that will help in analysing causes of road crashes and in devising safety interventions to reduce such accidents in the country.

Integrated Road Accident Database (IRAD)

  • The IT tool, known as the IRAD has been developed by the IIT-Madras and will be implemented by the National Informatics Centre.
  • The project costs ₹258 crore and is being supported by the World Bank.
  • The system will be first piloted in the six States with highest fatalities from road crashes — Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu and Uttar Pradesh.
  • The IRAD will be improved on the basis of the learnings from the trial, following which it will be rolled out across the country.

How it works

  • The IRAD mobile application will enable police personnel to enter details about a road accident, along with photos and videos, following which a unique ID will be created for the incident.
  • Subsequently, an engineer from the Public Works Department or the local body will receive an alert on his mobile device.
  • He or she will then visit the accident site, examine it, and feed the required details, such as the road design.
  • Data thus collected will be analysed by a team at IIT-M, which will then suggest if corrective measures in road design need to be taken.
  • Road users will also be able to upload data on road accidents on a separate mobile application, which is expected to go live.

Why need such a database?

  • India sees the largest number of road fatalities in the world.
  • More than 1.5 lakh people lost their lives in road crashes in the country in 2018, according to government data.
  • Of the total people killed in road crashes in 2018, 48% were between 18 years and 35 years old, and more than 60% of such fatalities were due to overspeeding.
Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

Virtual human’ NEONPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NEON

Mains level : Applications of AI


NEONs are being called the world’s first artificial humans. They look and behave like real humans, and could develop memories and emotions — though from behind a 4K display.

NEON

  • Star Labs is headed by India-born scientist Pranav Mistry who underlines that what was showcased at CES was the product of just four months’ work.
  • The company says NEONs are computationally created virtual humans — the word derives from NEO (new) + humaN.
  • For now, the virtual humans can show emotions when manually controlled by their creators.
  • But the idea is for NEONs to become intelligent enough to be fully autonomous, showing emotions, learning skills, creating memories, and being intelligent on their own.
  • Star Labs thinks they can be “friends, collaborators, and companions”, but all that is a few years away.

How does it work?

There are two core technologies behind his virtual humans.

  • First, there is the proprietary CORE R3 technology that drives the “reality, real time and responsiveness” behind NEONs.
  • It is the front-end reality engine that is able to give you that real expression.
  • The company claims CORE R3 “leapfrogs in the domains of Behavioral Neural Networks, Evolutionary Generative Intelligence and Computational Reality”, and is “extensively trained” on how humans look, behave and interact.
  • But in the end, it is like a rendition engine, converting the mathematical models to look like actual humans.
  • The next stage will be SPECTRA, which will complement CORE R3 with the “spectrum of intelligence, learning, emotions and memory”.
  • But SPECTRA is still in development, and is not expected before NEONWORLD 2020 later this year.

How could NEONs be used?

  • NEONs are the interface for technologies and services.
  • They could answer queries at a bank, welcome you at a restaurant, or read out the breaking news on television at an unearthly hour.
  • This form of virtual assistance would be more effective, for example, while teaching languages, as NEONs will be capable of understanding and sympathizing.

How are they different from Virtual Assistants?

  • Virtual Assistants now learn from all the data they are plugged into. NEONs will be limited to what they know and learn.
  • Their leaning could potentially be limited to the person they are catering to, and maybe her friends — but not the entire Internet.
  • They will not be an interface for you to request a song, rather they will be a friend to speak to and share experiences with.
  • Currently, its developer doesn’t want NEONs to have collective memory, or to share data among themselves.