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Women empowerment issues – Jobs,Reservation and education

The role of women in developing a knowledge economyop-ed of the day

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 1- Empowerment of women is necessary to achieve the aim of $5 trillion economy.


The role of women in developing a knowledge economy

Context

Indian economic success requires scientific skills that can foster a knowledge economy, the emergence of which depends on how gender-balanced the workforce is.

Half the scientific potential squandered

  • The requirement of the skilled workforce: A rapidly growing India requires a highly skilled technical workforce that is crucial for developing a knowledge economy.
    • Unfortunately, half the scientific potential of India—women in science—is squandered.
    • Women make up only 14% of the 280,000 scientists, engineers, and technologists in research and development institutions across the country, according to a recent study.
  • Several barriers in careers: Today, fewer women apply for or hold key scientific positions as several barriers prevent them from progressing in their careers, in comparison with their male counterparts.

Several unacknowledged factors that disadvantage women

  • There is widespread frustration experienced by women, who find it difficult if not impossible to fulfil their scientific potential.
    • Even today, several factors that disadvantage women are not acknowledged widely enough.
  • What are the difficulties faced by women: Peer-reviewed research reports have indicated that women-
    • Scientists earn less.
    • Have less prestige within departments.
    • Have less lab space.
    • Are offered inadequate jobs on graduating with science degrees and have more teaching responsibilities.
    • They also face greater difficulty in receiving grants and therefore apply for fewer grants in the first place.
  • Imperative to tackle issues: It is imperative to tackle these issues with vigour if India is to take its rightful place among developed nations.

Lack of informal networks

  • Women tend to lack access to informal networks that provide opportunities to work in high-profile projects.
    • Which include attending conferences abroad or on-the-job opportunities.
  • How it affects them? They lack the work experience that would enable them to rise up the ranks and provide access to the wide range of developmental models that could build the credibility they need to advance.

Importance of mentor

  • Performance assessment is now an integral part of an organization’s performance management systems, implemented as companies move away from the age-old concepts of training and skill development.
  • How mentors matters? Mentors often help build confidence as well as professional identity in protégés and offer access to developmental opportunities, allowing individuals to demonstrate their ability and gain trust.
    • Mentors keep information channels open and provide feedback on performance in crucial times.
    • It has been noted that almost every successful woman has had a mentor at some time.

How organizations work culture matters?

  • Unepathetic culture: Organizations often define success by the willingness of their employee to work for long hours and prioritize work over everything else—a “live to work” ideal, generally regarded as more masculine.
    • Group membership as criteria leads to discrimination: When women feel selected or assessed on the basis of group membership rather than their work record and abilities, they experience gender discrimination.
    • Women feel that an unempathetic culture is one of the most significant barriers to their advancement.
  • Gender bias as a major career obstacle: A study highlighted that only 3% of women surveyed regarded family responsibilities as their most serious career obstacle, while 50% cited gender bias.
    • Only 7% of female employees surveyed reported leaving the organization for family reasons, whereas 73% reported leaving because they saw limited opportunities.
    • Quit rate: The quit rates for women were significantly lower in organizations that provided better training and promotion opportunities.
  • The need for the employee-friendly policies: In recent years, we have witnessed an increase in the number of women with children who participate in the country’s paid workforce.
    • An organization’s culture has a significant impact on those who work within it.
    • Unfortunately, not many organizations have revised their work policies or employee expectations to enable women to strike a balance between their work and family responsibilities.
    • Flexible policies: For instance, the internet and telecom revolutions have enabled organizations to introduce employee-friendly policies such as Flexi-work hours and work-from-home that have significantly transformed workplace practices.

Way forward

  • Need for the realisation of the full potential of women: Science needs the best scientists, and a knowledge economy needs a gender-balanced workforce. This can only be attained by realizing the full potential of women.
  • Reach out to young girls: Apart from being wasteful and unjust, the under-representation of women in science threatens the goal of achieving excellence in the field. To tackle this, we must set an ambitious target of reaching out to 1 million young girls each year and encourage them to take up science and make a difference.
  • Convention of women: A national convention of women in science must be held annually, with a specific focus on discussing and building general awareness around the major challenges that women face.

Conclusion

We must mobilize all our resources if India aims to be a $5 trillion economy. The gender imbalance in science and technology is a looming challenge and threatens to weaken our country’s competitive economic position. By addressing these concerns, we can empower and motivate more women to join scientific fields, unlock India’s full potential, and develop the country to become a knowledge economy.

Land Reforms

Supreme Court upholds 2018 order on land acquisitionPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Read the attached story

Mains level : Issues in land acquisition and dispensing fair compensation


  • The Supreme Court reaffirmed its February 2018 ruling on Section 24 on land acquisition compensation awards given by a three-judge bench led by Justice Arun Mishra in the Indore Development Authority.
  • It also has overruled an earlier co-ordinate Bench ruling in the Pune Municipal Corporation case of 2014 under the Right to Fair Compensation and Transparency in the Act of 2013.

What is the provision and why it needed interpretation?

  • The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 (2013 Act) replaced the Land Acquisition Act, 1894 (1894 Act).
  • The new Act provides for higher compensation to those deprived of land by the government for both public and private sector projects.
  • It also mandates consent of a majority of land-owners, and contains provisions for rehabilitation and resettlement.
  • Under Section 24(2) land acquisition made under the old law of 1894 lapses if the award of compensation had been made five years before the new Act came into force, but has not been paid.
  • In such cases, the process will have to be gone through afresh under the new Act, which mandates higher compensation.

Issue over compensation

  • There are cases in which farmers and other land-owners have refused the compensation, leading to delay in the government taking possession.
  • In this situation, the compensation amount is deposited in the government treasury. According to one interpretation, if this is done, the acquisition process is saved.
  • Then again, others contend that such cases will fall under the new Act because compensation has not been paid to the land-owners, and the lapsing clause in Section 24 should be applied.
  • If, through interpretation, a long-pending land acquisition process is closed under the old law and fresh acquisition proceedings started under the new one, the land-owners stand to benefit, but project proponents will have to pay higher compensation.
  • Therefore, the provision concerned is often a subject of litigation.

What happened in the case before the Supreme Court?

  • On January 24, 2014 the court ruled that the acquisition of a piece of land had “lapsed” because the compensation awarded had neither been paid to the landowners/persons interested nor deposited in the court.
  • The deposit of the compensation amount in the government treasury was held to be “of no avail” as it was not equivalent to the compensation being “paid”.
  • Based on this judgment, subsequent cases were decided on the same principle: acquisition that had taken place earlier than five years before the new Act commenced would lapse if compensation amount was not paid to the land-owners or, in cases in which the owners refused to accept compensation, deposited in court.

How was this precedent dealt with in another case in 2018?

  • The same question arose in Indore Development Authority vs. Shailendra. Another Bench did not accept the earlier Bench’s view.
  • On February 8, 2018, the majority, consisting of the first two judges, ruled that the acquisition would not lapse merely because the compensation amount was not deposited in court, but was instead deposited in the treasury.
  • It ruled that the past practice of more than a century, under which the amount was deposited in the treasury, was not taken into account by the earlier Bench.
  • Some provisions and orders that allowed this practice were not placed before that Bench. Further, the land acquisition in that particular case had been quashed by a High Court in 2008.
  • Since it was not a subsisting process, the question under Section 24(2), whether the acquisition lapsed because of non-payment of compensation or non-deposit in the court, did not arise at all.
  • On these grounds, Justice Mishra and Justice Goel overruled the earlier judgment and held that it was per incuriam, that is a verdict passed in disregard of law and, therefore, wrong.

What does the controversy mean for land-owners and project proponents?

  • A ruling that old acquisitions lapse for non-deposit of compensation will be more beneficial to land-owners and farmers as they stand to get higher compensation and rehabilitation and resettlement measures.
  • On the other hand, project proponents feel such an interpretation would mean that those who refused to take compensation, even after it had been fixed and the money deposited in the government treasury, would be taking advantage of their own wrong.

Present ruling

On Acquisition

  • The provision said that in such cases if the physical possession has not been taken “or” the compensation is not paid, the acquisition proceeding is “deemed to have lapsed”.
  • The court held that a land acquisition proceeding under Section 24(2) would only lapse if the authorities have neither taken physical possession nor paid the compensation due to the landowner for five or more years prior to January 1, 2014.
  • For this an “or” in the Section was “interpreted” as an “and”.
  • Further, the Bench held that Section 24(2) of the Act of 2013 does not give rise to a new cause of action to question the legality of concluded proceedings of land acquisition.

On compensation

  • The government if it so wishes would have to initiate “fresh acquisition proceedings” under the new Act of 2013 which provides for “fair-compensation”.
  • The judgment however said compensation would be considered paid if the amount is put in the Treasury.
  • There was no obligation that the amount should be deposited in the court in order to sustain the land acquisition proceedings under the 2013 Act.
  • Thus there is no lapse if possession has been taken and compensation has not been paid. Similarly, there is no lapse if compensation has been paid and possession not taken of the land.
Freedom of Speech – Defamation, Sedition, etc.

Foreign Funding of Public OrganizationsPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : FCRA

Mains level : Issues with foreign funding


The Central government cannot brand an organisation ‘political’ and deprive it of its right to receive foreign funds for using “legitimate forms of dissent” like bandh, hartal, road roko or jail ‘bharo’ to aid a public cause, the Supreme Court held.

Why such Judgement?

  • The verdict came on a petition filed by Indian Social Action Forum challenging certain provisions of the Foreign Contribution Regulation Act (FCRA), 2010 and the Foreign Contribution (Regulation) Rules of 2011.
  • Both of these confer the Centre with “unguided and uncanalised power” to brand organisations ‘political’ and shut down their access to foreign funds.
  • The FCRA 2010 prohibited acceptance and utilization of foreign contribution or foreign hospitality for any activities detrimental to the national interest, it the court said.
  • The FCRA and its Rules allowed the government to indulge in its whims and fancies to deprive organisations of their foreign contributions.
  • The terms used in the statute like ‘political objectives’, ‘political activities’, ‘political interests’ and ‘political action’ had no clarity.

Issues with FCRA

  • The provisions under challenge before the court included Section 5 (1) of the FCRA.
  • This provision allowed the Centre a free hand to decide whether a seemingly non-political organisation was actually political in nature. INSAF argued that Section 5(1) was vague and thus unconstitutional.
  • The Delhi High Court, which INSAF approached first, said the provision was “expansive” and not vague. The Supreme Court agreed with the High Court.
  • The next provision under the microscope was Section 5(4) of the FCRA.
  • INSAF said the provision did not exactly identify the authority before which an organisation could represent its grievance. But the apex court dismissed this contention.
  • INSAF had also challenged the various clauses of Rule 3 of the 2011 Rules. This provision identified the various types of ‘political’ activities for which/organisations whose foreign funding could be stopped by the government.

Foreign funds are permissible for non-political organizations

  • Any organisation which supports the cause of a group of citizens agitating for their rights without a political goal or objective cannot be penalized by being declared as an organisation of a political nature.
  • But the foreign funding pipeline could be cut if an organisation took recourse to these forms of protest to score a political goal, the court said.
  • It struck a similar balance in the cases of organisations of farmers, workers, students, youth based on caste, community, religion, language, etc.
  • It said their foreign funding could continue as long as these organisations worked for the “social and political welfare of society” and not to further “political interests”.

What about Political Organizations?

  • The court wholesomely agreed that organisations with avowed political objectives in its memorandum of association or bye laws cannot be permitted access to foreign funds.
  • Such organisations were clearly of a “political nature,” it concluded.

Why regulate foreign funding?

  • The purpose for which the statute prevents organisations of a political nature from receiving foreign funds is to ensure that the administration is not influenced by foreign funds.
  • Prohibition from receiving foreign aid, either directly or indirectly, by those who are involved in active politics is to ensure that the values of a sovereign democratic republic are protected.
  • On the other hand, such of those voluntary organisations which have absolutely no connection with either party politics or active politics cannot be denied access to foreign contributions.

Back2Basics

FCRA

  • Government of India enacted the Foreign Contribution (Regulation) Act (FCRA) in the year 1976 with an objective of regulating the acceptance and utilization of foreign contribution.
  • The act was majorly modified in 2010 with several amendments because many NGOs were found using illegal use of foreign funding.
  • It is a consolidating act whose scope is to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies.
  • It aims to prohibit funding for any activities detrimental to the national interest and for matters connected therewith.
  • In 2016 license of about 20,000 NGOs were cancelled after reviewing their work.
Indian Ocean Power Competition

Indian Ocean CommissionIOCR

Note4Students

From UPSC perspective, the following things are important :

Prelims level : IOC

Mains level : Indian ocean security


India was accepted as an observer in the Indian Ocean Commission getting a seat at the table of the organization that handles maritime governance in the western Indian Ocean.

Indian Ocean Commission

  • The Indian Ocean Commission is an intergovernmental organization that was created in 1982 at Port Louis, Mauritius and institutionalized in 1984 by the Victoria Agreement in Seychelles.
  • The COI is composed of five African Indian Ocean nations: Comoros, Madagascar, Mauritius, Réunion (an overseas region of France), and Seychelles.
  • These five islands share geographic proximity, historical and demographic relationships, natural resources and common development issues.

Aims and Objectives of IOC

  • COI’s principal mission is to strengthen the ties of friendship between the countries and to be a platform of solidarity for the entire population of the African Indian Ocean region.
  • COI’s mission also includes development, through projects related to sustainability for the region, aimed at protecting the region, improving the living conditions of the populations and preserving the various natural resources that the countries depend on.
  • Being an organisation regrouping only island states, the COI has usually championed the cause of small island states in regional and international fora.

India and IOC

  • India’s entry is a consequence of its deepening strategic partnership with France as well as its expanding ties with the Vanilla Islands.
  • India had made the application to be an observer. The IOC has four observers — China, EU, Malta and International Organisation of La Francophonie (OIF).

Significance

  • For India, the importance of joining this organization lies in several things.
  • First, India will get an official foothold in a premier regional institution in the western Indian Ocean, boosting engagement with islands in this part of the Indian Ocean.
  • These island nations are increasingly important for India’s strategic outreach as part of its Indo-Pacific policy.
  • This move would enhance ties with France which is the strong global power in the western Indian Ocean.
  • It lends depth to India’s SAGAR (security and growth for all in the region) policy unveiled by PM Modi in 2015.
  • The move, India hopes, would lead to greater security cooperation with countries in East Africa.
Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

N95 maskPrelims Only

Note4Students

From UPSC perspective, the following things are important :

Prelims level : N95 Masks

Mains level : Coronovirus outbreak


In a new mandate to curb unnecessary demand, the Maharashtra Food and Drug Administration said that chemists cannot sell N95 masks without a doctor’s prescription. The FDA also warned that serious action would be taken against those who are found selling masks at high prices or hoarding them.

Why such a move?

  • Personal Protective Equipment (PPE) kits and N95 masks are being sold at very high prices in medical shops. The State has received many complaints about the same.
  • It has also been found that many are making bulk purchases and hording PPE kits and N95 masks.
  • Since the COVID-19 outbreak in China, shortage of PPE gear and masks has been reported from across the world.
  • While the Indian government has currently banned exports of N95 masks, the manufacturers are focussed on making other surgical marks to get good returns from exports.

N95 mask

  • A disposable N95 mask (respirator) is a safety device that covers the nose and mouth and helps protect the wearer from breathing in some hazardous substances.
  • An N95 respirator is designed to achieve a very close facial fit and very efficient filtration of airborne particles.
  • The ‘N95’ designation means that when subjected to careful testing, the respirator blocks at least 95 percent of very small (0.3 micron) test particles.
  • If properly fitted, the filtration capabilities of N95 respirators exceed those of face masks. However, even a properly fitted N95 respirator does not completely eliminate the risk of illness or death.
History- Important places, persons in news

Persons in news: Rajkumari Amrit KaurPrelims Only

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Amrit Kaur

Mains level : Not Much


 

 

Former PM Indira Gandhi and freedom fighter Rajkumari Amrit Kaur are mentioned in TIME magazine’s list of the 100 most powerful women who defined the last century in a new project that aims to feature those women who were “often overshadowed”.

Who was Amrit Kaur?

  • Amrit Kaur was the first woman in independent India who joined the Cabinet as the Health Minister and remained in that position for 10 years.
  • Born into the Kapurthala royal family, she was educated in Oxford and returned to India in 1918, and began to be drawn towards the work and teachings of MK Gandhi.

Her contributions

  • Before taking up the position of a Health Minister, Kaur was Mahatma Gandhi’s secretary.
  • During these 10 years, she founded the Indian Council for Child Welfare.
  • She also laid the foundation of the All India Institute of Medical Sciences (AIIMS) and Lady Irwin College in Delhi in the following years.
  • Apart from joining the nationalist freedom struggle, Kaur also began work on a number of other social and political issues such as the purdah system, child marriage and the Devadasi system.
  • She passed away in 1964, at the age of 75.

Role in the freedom struggle

  • In 1936, hoping that more women would join the freedom struggle, Gandhiji invited her.
  • In the following years, as Kaur started interacting with other freedom fighters such as Gopal Krishna Gokhale and Mahatma Gandhi, she gave up her princely comforts and began to discipline herself by responding to the Gandhian call.
  • When the civil disobedience movement took off in the 1930s, Kaur dedicated her life to it.
  • Kaur was jailed after the Quit India movement and carried to the jail a spinning wheel, the Bhagwat Gita and the Bible.
  • Further, while Kaur advocated for equality, she was not in favour of reservations for women and believed that universal adult franchise would open the doors for women to enter into the legislative and administrative institutions of the country.
  • In light of this, she believed that there was no place left for reservation of seats.
Forest Conservation Efforts – NFP, Western Ghats, etc.

[pib] Person in news: Gaura DeviPIB

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Gaura Devi and her contributions in Chipko Movement

Mains level : Chipko Movement


 

 

Union HRD Minister along with senior women officers of the Ministry planted a sapling in memory of Gaura Devi, Chipko Activist in New Delhi.

Gaura Devi

  • Gaura Devi was born in 1925 in a village named Lata in the state of Uttarakhand. She moved to a nearby village named Reni by the Alaknanda River.
  • She was elected to lead the Mahila Mangal Dal (Women’s Welfare Association) in the wake of the Chipko movement. The organization worked on the protection of community forests.

Her contributions in Chipko Movement

  • Gaura Devi came to notice in 1974 when she was told that local loggers were cutting the trees.
  • The men of Reni village had been tricked out of the village by news that the government was going to pay out compensation for land used by the army.
  • She challenged the men to shoot her instead of cutting down the trees and she described the forest with her maika (mother’s house).
  • They managed to halt their work by hugging the trees despite the abuse of the armed loggers.
  • They kept guard of the trees that night and over the next three or four days other villages and villagers joined the action. The loggers left leaving the trees.

Impact

  • After this incident, the Uttar Pradesh Government established a committee of experts to investigate the issue of felling of trees, and the lumber company withdrew its men from Reni.
  • The committee stated that the Reni forest was an ecologically sensitive area and that no trees should be felled there.
  • Thereafter the government of Uttar Pradesh placed a 10-year ban on all tree-felling in an area of over 1150 km².
Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

[pib] Quantum coin or ‘qubit’ and Entanglement TheoryPIB

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Qubit, Quantum Entanglement

Mains level : Quantum Computing and its applications


Researchers from Raman Research Institute (RRI), an autonomous institution under the Dept. of Science & Technology, have devised a new test for fairness of quantum coin or ‘qubit’ using entanglement theory. The Qubit is the basic unit of information in a quantum computer.

Entanglement Theory

  • It is a special type of correlation that exists in the quantum world with no classical counterpart.
  • The researchers from RRI made use of this quantum resource to arrive at a test for fairness of a quantum coin (a qubit).
  • Their strategy, which makes use of entanglement, enables better discrimination between quantum states. Such advantage is valuable in quantum sensors.
  • This work is a significant contribution to the domain of quantum state discrimination, which is an essential aspect of quantum information science.
  • It brings out the crucial role of entanglement in improving our ability to discriminate quantum states.
  • In this work the researchers concretely implemented the theoretical idea on the simulation facility of the IBM quantum computer.

Quantum coins

  • By repeated trials, one can determine the fairness of a classical coin with a confidence which grows with the number of trials.
  • A quantum coin can be in a superposition of heads and tails.
  • Given a string of qubits representing a series of trials, one can measure them individually and determine the state with a certain confidence.
  • The team has shown that there is an improved strategy which measures the qubits after entangling them, which leads to a greater confidence.

Significance

  • This is a significant contribution to quantum state discrimination, an essential aspect of quantum information science which is expected to influence quantum sensing.
  • The domain of Quantum Information and Quantum Computing Technology is a growing area of research which is expected to influence Data Processing, which in turn, plays a central role in our lives in this Information Age.
  • For instance, bank transactions, online shopping and so on crucially depend on the efficiency of information transfer.
  • Thus the recent work on quantum state discrimination is expected to be valuable in people’s lives in the current era.
Foreign Policy Watch: India-Iran

The diplomatic costop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- Changing India-Iran relations.


Context

The CAA and violence in Delhi have started to take its toll on India’s secular foreign policy.

The US and other’s reaction to the situation in India

  • Trump visit to India: President Trump referred to India as a democracy which was peaceful and tolerant. He lauded freedom, rule of law, liberty and protection of human dignity, adding graphically that where India had the holy Ganges, it also had the Golden Temple and Jama Masjid.
    • Assurance to the critics at home: He thereby cleverly reassured critics at home, especially in the US Congress, that he was not ignoring the values the two great democracies shared.
    • However, as the situation in Delhi spun into violence the next day, in an untutored media interaction at the US ambassador’s residence, he ducked questions about the CAA or Delhi riots, nonchalantly remarking it was “up to India” to deal with it.
    • This may have brought comfort to the Indian government but the world at large differed.
  • Response from the other countries: Delhi had already exchanged angry words with Malaysia, Turkey and even Indonesia over their varied critique of India’s handling of its Muslim minority when Iran joined the issue.

Iran’s response to violence in India

  • Condemnation by foreign ministers: Iranian Foreign Minister Javad Zarif condemned the “wave of organised violence against Indian Muslims”, adding that “Iran has been a friend of India”.
    • India’s foreign ministry summoned the Iranian ambassador to protest the inappropriateness of the minister’s remark.
  • The reaction by the Iranian Supreme Leader: Soon after, Supreme Leader Ali Khamenei found the time, in the middle of the COVID-19 outbreak, to excoriate the Indian government.
    • Adding insult to injury, he appended #IndianMuslimsInDanger.
  • No reaction on China problems: A facile response, can be that Iran is being hypocritical as it has not expressed remorse over the Chinese repression of Uyghurs.
  • The difference in India’s importance to China: China is a veto-wielding member of the UN Security Council, which also sustains the Iranian economy despite US sanctions. On the other hand, India has a Shia population second only to that of Iran.

Relations with Iran

  • Two consulates in India: There are two Iranian consulates in India in Hyderabad and Mumbai. Iran seeks the third one in Lucknow.
    • Qom also hosts many Shia students, particularly from the Kargil region.
  • Historic links between the two countries: After Humanyun’s exile in Iran (1530-40) before recovering the Indian throne, the Persian language and culture fired the cultural renaissance at the Mughal court.
    • Religio-cultural heritage importance: India is important for Iran for its religio-cultural heritage, unlike China, which is needed for transactional and strategic reasons.
  • Two interrelated questions flow from this reasoning:
    • 1. What is Iran’s importance for India and the trajectory of India-Iran relations over the last two decades?
    • 2. And why is Iran adopting this sharp tone over what the Indian government argues is an internal matter?
  • Convergence in the relations: The closest India-Iran strategic convergence began in the 1990s, particularly after Kabul fell to the Taliban in 1996. These ties blossomed under reformist Iranian President Mohammad Khatami and Indian Prime Minister Atal Bihari Vajpayee.
  • Tehran Declaration: In 2001, the two signed the Teheran Declaration. Khatami in his opening remarks said that Iran always admired India’s secular credentials and Vajpayee had maintained that tradition.
    • In 2003, Khatami was the chief guest at India’s Republic Day and a New Delhi Declaration was issued.
  • Deterioration in relations and impact of India-US relation: The relationship began to slip as Iran’s clandestine nuclear programme and assistance from Pakistan’s rogue scientist A Q Khan was uncovered in mid-2003.
    • Impact of India-US closeness: Concomitantly, India was drawing closer to the US and negotiating a nuclear cooperation agreement.
    • The US used the nuclear issue to cause a cleavage as Indian and Iranian interests began seriously diverging.
    • Taliban factor: In any case, the Taliban had been ejected from Afghanistan and US troops literally surrounded Iran, having in 2003 overthrown Saddam Hussein. Geo-strategy trumped diplomacy.

The US-Iran relation cycle

  • The nuclear deal with Iran: Iran-US relations also went through a cycle, with President Barack Obama recalibrating US policy towards the Gulf and West Asia.
    • Countering ISIS: Calculating that without Iran, ISIS could not be countered, the US in 2015 endorsed the nuclear deal that P-5 and Germany negotiated to end the nuclear stand-off.
  • Missing warmth of the 1990s: Although India-Iran relations after that returned to near normal as most US sanctions were lifted, the warmth of the 1990s was missing.
    • Iran was now beginning to extend its influence and role across Iraq and West Asia.
  • Maximum Pressure strategy of the US: President Donald Trump in 2016 reversed US policy and since then “maximum pressure” has been applied on Iran via tightened sanctions.
  • India’s engagement with Saudi Arabia and UAE: PM Modi also moved more forthrightly to engage Saudi Arabia and the UAE.
  • The fallout of the US strategy reversal: A fallout of the US policy reversal has been an exacerbation of not only the Shia-Sunni split but a Sunni-Sunni split as Qatar and Turkey are with Iran.

Changing polity and increasing influence in the neighbourhood

  • Conservatives elected to power: In Iran’s parliamentary election on February 28, extremely conservative members have been elected, the moderates having been vetoed by the Guardians Council earlier.
    • Turnout was a low 43 per cent, due partly to fear of the coronavirus.
  • Increasing influence in the neighbourhood: Iran is even more isolated, though determined to resist US demands, due to communications being curtailed due to the virus.
    • Relations with the Taliban: It has good working relations with the Taliban and converging interests to see that US troops exit the region.
    • The friendly government in Baghdad: Iran is battling to ensure a friendly government in Baghdad, despite the killing of Major General Qasem Soleimani, by keeping militias aligned to it in play.

Conclusion

  • Perception of India: Khamenei’s tweet reflects the perception that India is in the US-Saudi-Emirati corner and of little use as long as Trump is president.
    • Growing closeness Abu Dhabi, Riyadh and Ahmedabad would have led Iran to this conclusion.
  • Leveraging India’s dependence: In the Islamic world, Iran by publicly defending Indian Muslims embarrasses the silent Saudis.
    • It also calculates that India needs access to Afghanistan through Chabahar to assist the Ghani government or influence developments there.

 

Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

Monetary policy can’t combat the COVID-19 impactop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- Is expansionary monetary policy enough to deal with the impact of COVID-19?


Context

Central banks the world over are devising the strategies to deal with the impact of COVID-19 on their economies.

How the Central banks are responding?

  • US Fed’s response: The huge 50 basis points cut in rates by the U.S. Federal Reserve to lift economic sentiment hit by COVID-19 has disrupted central banking worldwide.
  • Pressure on other Central banks to follow suits: Even as analysts debate whether a monetary policy response is a right strategy, central banks across the world are feeling the pressure to follow suit to the largest rate cut by the Fed since 2008.
  • How banks are responding? Central banks of Australia and Malaysia have cut rates already while others such as the Bank of Japan, Bank of England and the European Central Bank are contemplating joining the caravan.

How the RBI is responding?

  • First line of economic defence: With monetary policy turning out to be thede facto first line of economic defence against the ill-effects of the virus, the focus in India has turned to the Reserve Bank of India’s response.
  • Hope of rate cut: Yields on 10-year government securities fell by as much as 0.12% in the hope of a rate cut by the RBI and they stayed soft.
  • But what are the central bank’s options?
    • No unilateral rate adjustment: Unlike other countries, the legal framework in India after the setting up of the Monetary Policy Committee (MPC) is such that the RBI cannot unilaterally adjust rates.
    • The MPC will have to meet and deliberate on the situation before the call to cut rates is taken and such a call will have to be based on an assessment of inflation in the economy.

Is a rate cut the right response?

  • Impact of the virus on the supply side: The first-order impact on the global economy of the spreading virus is a disruption to trade and to global supply chains.
    • With China being the factory of the world, the clampdown in that country has already disrupted supplies of products ranging from cell phone components to bulk drugs and auto components.
    • Factory lines across the world could freeze as supply chains get disrupted.
  • Limits of Monetary policy to deal with the supply-side problem: Monetary policy is excellent to address demand shocks but is a blunt tool when it comes to addressing supply-side issues.
    • Where to spend? People may be encouraged to spend more due to a rate cut but what will they spend on if products go scarce, travel convulses and public spaces such as movie theatres and malls become no-go areas?
  • The rate cut will boost the sentiments only: A rate cut can, at best, help to boost sentiment but that again will be transient as the market’s reaction after the Fed rate cut proves.
    • Expansionary monetary policy cannot improve the situation: The Swedish central bank’s deputy governor Anna Breman has rightly questioned the logic of a rate cut as a response to the coronavirus impact pointing out that an expansionary monetary policy cannot improve the situation.
  • How the RBI might respond? The sentiment being what it is, the RBI may find itself under increasing pressure to act. Given the MPC constraint, it may well choose to do what it did in the February monetary policy– unleash other weapons in its armoury to give the same effect as a rate cut.
    • Thus, we may well see the central bank announcing another tranche of long-term repo operation, akin to the ₹1 lakh crore that it announced in February.
    • That will mean that banks will gain access to three-year funds at the repo rate of 5.15%, much lower than the market rate.
    • And then, there’s Operation Twist which the RBI employed to good effect in December, softening rates at the long end of the yield curve.

Would any of these measures yield any response?

  • Doubtful results: It’s doubtful if any of these measures can address the hit to economic growth. The virus has undoubtedly surfaced at a very wrong time for the Indian economy which is showing hesitant signs of a return to growth.
  • Which sectors will be impacted the most? The impact will be felt on more than one front. Industries such as pharmaceuticals, electronics and automobiles could be headed for trouble given their high dependence on Chinese inputs.
  • Government’s response: While the government is said to be formulating a response, including the possibility of airlifting supplies, the practicality of this solution needs to be watched as also its impact on costs for the industries concerned.

Impact on exports and offsetting factor of oil import

  • The biggest problem: The bigger problem could be from a fall in exports, which accounts for 20% of the GDP.
  • Which exporters would feel the heat? If the developed world tips into recession due to the virus, exporters of products ranging from petroleum and textiles to leather and gems and jewellery will feel the heat.
  • Oil offset due to fall in oil prices: The offsetting factor, of course, will be a lower oil import bill due to the sharp fall in oil prices. This may also have a benevolent effect on inflation.
  • But there will be other headaches for the central bank if the developed world embarks on monetary expansion. The RBI will be faced with the challenge of staunching inflows of hot money coming in search of the higher returns available in India.

Conclusion

  • Hot money concern for RBI: There will be other headaches for the central bank if the developed world embarks on monetary expansion. The RBI will be faced with the challenge of staunching inflows of hot money coming in search of the higher returns available in India.
  • Opportunity in the crisis: As with every crisis, there’s also an opportunity here. Economic growth is bound to suffer in the short-term but there could be long-term spin-offs if domestic industry and government get their acts right.
    • Supply chains can be localised through fresh investments and India can bid to be an alternative to China in the global value chain.
  • India can be an option to China for global supply chain: The COVID-19 crisis has only underlined in red the lesson that global corporations learnt when trade war broke out between the U.S. and China- the global supply chain needs alternative options to China. India is eminently qualified to assume that role. If only our policymakers and industrialists rise up to the challenge.