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Indian Ocean Power Competition

Significance of Indian Ocean Commission for India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : IOC and its member countries.

Mains level : Paper 2- How increasing cooperation with IOC could help India in its vision enshrined in SAGAR?

India got an observer status at IOC (Indian Ocean Commission) in March. This article discusses the significance of IOC in the Western Indian Ocean. The IOC is also significant for India as India’s leadership is made clear in SAGAR (Security and Growth for All in the Region) which is “consultative, democratic and equitable”. There are things that India need to learn from IOC like-“bottom-up regionalism” and there are things that India can contribute to IOC like its expertise. These issues are discussed here.

About Indian Ocean Commission (IOC)

  • Founded in 1982, the IOC is an intergovernmental organisation.
  • It comprises five small-island states in the Western Indian Ocean: the Comoros, Madagascar, Mauritius, Réunion (a French department), and Seychelles.
  • Though Réunion brings a major power, France, into this small-state equation, decisions in the IOC are consensus-based.
  • While France’s foreign policy interests are represented, the specifics of Réunion’s regional decision-making emerge from its local governance structures.
  • Over the years, the IOC has emerged as an active and trusted regional actor, working in and for the Western Indian Ocean and implementing a range of projects.

Maritime security by IOC and India’s interests

  • More recently, the IOC has demonstrated leadership in the maritime security domain.
  • Since maritime security is a prominent feature of India’s relations with Indian Ocean littoral states, India’s interest in the IOC should be understood in this context.
  • However, India has preferred to engage bilaterally with smaller states in the region.
  • The IOC is a cluster of small states which do not seek a ‘big brother’ partnership.
  • The IOC has its own regional agenda.
  • The IOC has made impressive headway in the design and implementation of regional maritime security architecture in the Western Indian Ocean.

MASE program and RMIFC to help maritime security

  • What is MASE program? The European Union-funded programme to promote Maritime Security in Eastern and Southern Africa and the Indian Ocean.
  • In 2012, the IOC was one of the four regional organisations to launch the MASE Programme
  • Under MASE, the IOC has established a mechanism for surveillance and control of the Western Indian Ocean with two regional centres.
  • RMIFC: The Regional Maritime Information Fusion Center (RMIFC), based in Madagascar, is designed to deepen maritime domain awareness by monitoring maritime activities and promoting information sharing and exchange.
  • The Regional Coordination Operations Centre (RCOC), based in Seychelles, will eventually facilitate joint or jointly coordinated interventions at sea based on information gathered through the RMIFC.
  • These centres are a response to the limitations that the states in the region face in policing and patrolling their often enormous Exclusive Economic Zones (EEZs).
  • They deliver an urgently needed deterrent against unabating maritime crime at sea.
  • Which was only partly addressed by the high-level counter-piracy presence of naval forces from the EU, the Combined Maritime Forces, and Independent Forces.
  • Seven states in the region have signed agreements to participate in this multilateral maritime security architecture, and once ratified, will provide its legal foundation.
  • Many major powers have expressed interest in accessing the RMIFC.

In 2013, a question based on the “strings of pearls” was asked by the UPSC. In 2014 question with respect to the  South China Sea and the freedom of navigation was asked. On similar lines, a question can be asked from the Western Indian Ocean region dealing with maritime security. Such a question would require information about IOC.

What India can learn from IOC?

  • The IOC’s achievements offer an opportunity for India to learn, and also to support.
  • The IOC style of ‘bottom-up regionalism’ has produced a sub-regional view and definition of maritime security problems and local ownership of pathways towards workable solutions.
  • A 2019 policy brief published by the IOC ‘Strengthening Maritime Security in the Western Indian Ocean’, sets out how the counter-piracy response off the coast of Somalia delivered unprecedented regional and international cooperation in the domain of maritime security.
  • However, it resulted in multiple players, the duplication of actions, and regional dependence on international navies.
  • The IOC has been seeking more sustainable ways of addressing maritime security threats in the region, with the RMIFC and RCOC as part of this response.
  • Its regional maritime security architecture is viewed locally as the most effective and sustainable framework to improve maritime control and surveillance and allow littoral States to shape their own destiny.
  • Moreover, with proper regional coordination, local successes at curbing maritime threats will have broader security dividends for the Indian Ocean space.

How India can contribute?

  • Nearly all littoral states in the Western Indian Ocean need assistance in developing their maritime domain awareness and in building capacity to patrol their EEZs.
  • All would benefit from national information fusion centres that can link to those of the wider region.
  • With its observer status, India will be called upon to- 1. Extend its expertise to the region. 2. Put its satellite imagery to the service of the RMIFC. 3. Establish links with its own Information Fusion Centre.
  • As a major stakeholder in the Indian Ocean with maritime security high on the agenda, India will continue to pursue its interests and tackle maritime security challenges at the macro level in the region.
  • However, as an observer of the IOC, a specific, parallel opportunity to embrace bottom-up regionalism presents itself.
  • There are those in the Western Indian Ocean who are closely watching how India’s “consultative, democratic and equitable” leadership will take shape.

Conclusion

India, with its principles of leadership made clear in SAGAR has an opportunity to learn from and partner with IOC to reinforce the maritime security in the Western Indian Ocean.

Coronavirus – Economic Issues

Fiscal empowerment of States

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Ways and means advances, limit on the states for borrowing.

Mains level : Paper 3- Discuss the ways to ensure that the States do not face lack of resource in fight against Covid-19?

The article elaborates on the central role played by the States in the fight against Covid-19. The article emphasises the role that States can play in the implementation of the various measures to tackle the epidemic and economic revival of the country. It also highlights the lack of resources at the States’ disposal and reasons for the lack such as revenue loss in the lockdown and lower devolution by the Central Government. In the end, there is a suggestion to increase the borrowing limit of the States’.

Time to relax fiscal constraints on the States

  • The speed of economic revival will depend on how long it will take to revive economic activities and the volume of stimulus through public spending the government is able to provide.
  • It now appears that the lockdown will be lifted in stages and the recovery process will be prolonged.
  • The country is literally placed in financing a war-like situation.
  • The government will have to postpone the fiscal consolidation process for the present, loosen its purse strings and finance its deficits substantially through monetisation.
  • This is also the time for the government to announce relaxation in the States’ fiscal deficit limit to make them effective participants in the struggle.

The following points highlight the importance of States in dealing with the crisis. The federal structure of India comes to the fore here. The UPSC can aks question on this theme, for example, “Discuss the important role played by the States in dealing with the Covid-19 and how it underscores the federal character of the Indian polity?”

The important role played by the States

  • Prioritise health spending: It is also important for the States to realise the importance of health and prioritise spending on health-care services.
  • Being closer to the people, the States have a much larger responsibility in fighting this war.
  • Public health, as well as public order, are State subjects in the Constitution.
  • Acts invoked for lockdown: Some States were proactive in dealing with the COVID-19 outbreak by involving the Epidemic Diseases Act, 1897, even before the Government of India declared a universal lockdown invoking the Disaster Management Act, 2005.
  • Of course, the Centre under Entry 29 of the Concurrent List has the powers to set the rules of implementation which states, “Prevention of the extension from one State to another of infectious or contagious diseases or pests affecting men, animals or plants”.
  • Implementation at the ground level: While Central intervention was done to enable, “consistency in the application and implementation of various measures across the country”, the actual implementation on the ground level will have to be done at the State level.
  • Furthermore, States are better informed to decide the areas and activities where relaxations should be done as the coronavirus curve is flattened.
  • Coordination: Hopefully, there will be better coordination between the Union and State governments instead of claiming credit and apportioning blame.

Covid-19 has made clear the neglect and poor state of health in India. The UPSC can frame the question based on the health infrastructure and expenditure on it. The question can be framed on the following lines “Covid-19 has highlighted India’s lack of preparedness and the poor health infrastructure in the country. What are the reasons for it? Give suggestions to improve it.”

Neglect of the health-care sector in the country

  • The pandemic has underlined the historical neglect of the health-care sector in the country.
  • Expenditure on health as a percentage of GDP: The total public expenditures of Centre and States works out to a mere 3% of GDP.
  • In 2017-18, in per capita terms, the public expenditure on medical and public health varied from an abysmal ₹690 in Bihar and ₹814 in Uttar Pradesh to the highest of ₹2,092 in Kerala.
  • The centrally sponsored scheme, the National Health Mission, is inadequately funded, micromanaged with grants given under more than 2,000 heads and poorly targeted.
  • The focus of “Ayushman Bharat” has been to advocate insurance rather than building wellness centres.

Economic revival by the States

  • Besides protecting lives and livelihoods, States will have to initiate and facilitate economic revival, and that too would require substantial additional spending.
  • Hand holding small and medium enterprises which have completely ceased production, providing relief to farmers who have lost their perishable crops and preparing them for sowing in the kharif season are other tasks that require spending.
  • In fact, States have been proactive. Kerala came out with a comprehensive package allocating ₹20,000 crores to fight the pandemic.
  • Almost all States have taken measures to provide food to the needy besides ramping up health-care requirements.

Lack of resources and revenue loss suffered by the States

  • While the requirement of States for immediate expenditures is large, they are severely crippled in their resources.
  • In the lockdown period, there has virtually been no economic activity and they have not been able to generate any revenue from State excise duty, stamp duties and registration fees, motor vehicles tax or sales tax on high-speed diesel and motor spirit.
  • The revenue from Goods and Services Tax is stagnant and compensation on time for the loss of revenue has not been forthcoming.
  • As the recovery process will be staggered, it is doubtful whether tax revenues will register any positive growth in 2020-21.
  • Not surprisingly, the State has decided to monetise land through auctions to get money besides regularising unauthorised constructions by paying high fees.

Lower tax devolution from the Centre

  • The position regarding tax devolution from the Centre is even more precarious.
  • To begin with, the tax devolution in the Union Budget estimate is lower than the Commission’s estimate by ₹70,995 crores.
  • In fact, the Budget estimate for 2020-21 itself is a huge overestimate when seen against the 11-month actual collections in 2019-20.
  • The required growth to achieve the Budget estimate is 33.3% over the annualised actual collection.
  • The projections are that the growth of nominal GDP in 2020-21 will be just about 4%.
  • And if the tax revenue increases by the same rate, devolution to the States would be lower by ₹2.2-lakh crore than the Finance Commission’s estimate.
  • This results in a loss of ₹9,173 crores for Tamil Nadu, ₹9,000 crores for Andhra Pradesh, ₹8,000 crores for Karnataka, ₹4,671 crores for Telangana, and ₹4,255 crores for Kerala.
  • Supplementary report by the Finance Commission: There is a strong case for the States to go back to the Finance Commission with a request to make and give a supplementary report.

Of late, the poor fiscal health of the States has been in the news. Following are some of the factors that are responsible for it. A question can be asked with relation to this problem like “The States are facing fiscal constraints owing to the lack of revenue. What are the reasons for it? What are the options available to help the States to deal with such a situation?”

Problems faced by the States in raising resources

  • There is only a limited scope for expenditure switching and reprioritisation now.
  • Limited space for borrowing: Their borrowing space too is limited by the fiscal responsibility and budget management limit of 3% of Gross State Domestic Product (GSDP).
  • High yield no the State bonds: Faced with an acute fund crunch, Kerala floated 15-year bonds but was faced with a huge upsurge in the yield to 8.96%.
  • Increase in the WMA limit: The announcement by the Reserve Bank of India on the increase in the limit of ways and means advances by 60% of the levels prescribed in March 31 could help States to plan their borrowing better.
  • But that is too little to provide much relief.

Conclusion

It is important for the Central government to provide additional borrowing space by 2% of GSDP from the prevailing 3% of GSDP. This is the time to fiscally empower States to wage the COVID-19 war and trust them to spend on protecting lives, livelihoods and initiate an economic recovery.

Coronavirus – Economic Issues

Super-power rivalries exacerbated by coronavirus pandemic offer India an opportunity

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3-What economic measures and reforms are needed to deal successfully with the crisis.

The article discusses three fronts on which actions are required viz- health, economy and geopolitics. How much the global economy is going to be affected? how the US-China rivalry would affect the recovery? what the lack of global coordination means? all such questioned are discussed here.  It also suggests actions that India should take to deal with the crisis.

Many unknowns than knowns about Covid-19

  • The virus currently has many more unknowns than knowns.
  • We don’t know for sure how it spreads, whether people can get re-infected, whether it is mutating, whether the hot weather kills it, and what the real fatality rate is.
  • We don’t know for sure how far we are from an anti-viral.
  • We know that we are at least 18 months away from having a vaccine that works and is available at scale.
  • Till an anti-viral is found, economic activity will be constrained, and this will affect people, industries and countries in disparate ways.

The extent of damage to the global economy

  • Loss of ten trillion dollars: The global economy is set to lose close to ten trillion dollars because of the “self-induced coma” it has been put into — to use Paul Krugman’s evocative phrase.
  • Loss of effectiveness of monetary policy: The preceding global financial crisis (GFC) has exhausted the efficacy of monetary tools.
  • In addition, corporates globally are leveraged to the tune of $12 trillion.
  • The slump in demand: The accompanying oil price collapse, beginning due to a spat between producers Saudi Arabia and Russia have been compounded by a precipitous slump in demand.
  • The Chinese economy can’t help as it did during the GFC, as it is hemmed in itself.
  • Even if it could, there is too much global suspicion of China to allow it to do so. So, countries will largely be on their own.

Tensions between the US and China

  • The tensions between the US and China have escalated into a full-scale superpower crisis after the virus spread.
  • Since 2010, there has been great concern in the US about China’s rise.
  • China’s muscular foreign policy together with its aggressive stance on multiple issues, most importantly on technology and technology standards, has created conflict.
  • The coronavirus is spreading in the US in an election year and smashing its economy.
  • The virus infected over three-quarter of a million people in the country and killed more than 40,000.
  • After this, China could be seen as enemy number one in the US.

No global coordination

  • No wonder then that at a time when the world yearns for global coordination, there is almost none — in healthcare responses and economic coordination.
  • Multilateral agencies, especially the WHO and UN, suffer a complete loss of credibility.
  • India needs to chart its own course in these turbulent times.
  • If India takes the requisite actions it may come out well.

Following suggestions are important from the UPSC perspective. The suggestions deals with three fronts-health, economic and geopolitics.

How India could come out of the crisis?

  • India needs to act at three levels — health, economic and geopolitical.

1. Actions at the health level

  • The Union Ministry of Health and Family Welfare has done well to stem the spread of the infection.
  • It has sensitised the public, introduced the concept of social distancing and isolation in the most challenging situations.
  • Now it must test at scale and isolate.

2. Actions at the economic level

  • Indians cannot afford to stay locked much longer.
  • We are too poor and too many of us live on a day-to-day basis — not even on a paycheck to paycheck basis.
  • Economic activity will be subdued in the near-term, but it must be “unlocked”.
  • The current IMF projections suggest that India will have the highest growth rate in the world this year.
  • Oil prices have collapsed, really helping our balance of payments.
  • Our food stocks are plentiful, the rabi crop has been good, and the prognosis for the monsoon is positive.
  • Low inflationary pressure: This, together with the fact that aggregate demand is down, will dampen inflationary impulses.
  • The “new RBI” has acted boldly and strongly.
  • It has taken prompt actions to reduce rates, increase liquidity, adjust prudential norms, allow moratoriums, and protect financial entities.
  • Indian is better placed: The weakened rupee will help our exports and with a debt to GDP ratio of about 73 per cent, along with better growth prospects, India is relatively better placed than several other countries.
  • We should, therefore, not unduly worry about our credit rating. This both allows and actually requires the government to act on the fiscal front.
  • The government needs to implement the following four steps to spur the economy.
  • (1) It should do so by “printing money” given the moderated inflation
  • (2) It needs to provide additional direct benefit transfers of Rs 2,000 every month for three months to Jan Dhan accounts, together with foodgrains release from the FCI, to the tune of around Rs 65,000 crore, to alleviate people’s miseries.
  • (3) It needs to protect MSMEs directly by providing them working capital (with an RBI backstop) and, like in the UK, provide 80 per cent of the salary to employees of the “GST-paying MSMEs” for six months.
  • (4) It needs to launch a massive public works programme outside the Budget as suggested by the chairman of CII’s National Committee of Infrastructure and PPP, Vinayak Chatterjee.
  • This fund should be earmarked for infrastructure and a quarter of its budget should be set aside for strengthening and upgrading primary health centres.
  • The allocation should not be less than Rs 200,000 crore.
  • Push through pending reforms: The government should take advantage of the crisis to push through much needed pending reforms in agriculture-especially those pertaining to APMC), power-pricing and discoms, banks-government ownership at 30 per cent and bad banks.
  • Revenue from private gold: Given the paucity of tax revenues, the government could also consider having the PM making an appeal for private gold from people and temples.
  • It could target 1,000 tonnes of gold worth $30 billion and offer a five per cent tax-free return repayable ($1.5 billion a year) after 10 years, in rupees or gold.

3. Actions at the geopolitical level

  • India can come out ahead if we act now.
  • Super-power rivalries will create opportunities to replace China as a major supplier to the US and Japan.

Conclusion

The battle to deal with the corona disaster has to be fought on many fronts. India must form a strategy and act on various front i.e. health, economic and geopolitical- to be victorious at the end.

Monetary Policy Committee Notifications

Monetary Policy Committee (MPC) to meet 5x this Fiscal

Note4Students

From UPSC perspective, the following things are important :

Prelims level : MPC and its various tools

Mains level : Not Much

The rate-setting Monetary Policy Committee (MPC) will be meeting five times in FY21, against seven in FY20.

Monetary Policy tools are all-time favourites of UPSC. Kindly go through the link given in the Back2Basics section.

Monetary Policy Committee (MPC)

  • The Monetary Policy Committee (MPC) is a committee of the RBI, which is entrusted with the task of fixing the benchmark policy interest rate (repo rate) to contain inflation within the specified target level.
  • The RBI Act, 1934 was amended by Finance Act (India), 2016 to constitute MPC to bring more transparency and accountability in fixing India’s Monetary Policy.
  • The policy is published after every meeting with each member explaining his opinions.
  • The committee is answerable to the Government of India if the inflation exceeds the range prescribed for three consecutive months.
  • Suggestions for setting up a Monetary policy committee is not new and goes back to 2002 when YV Reddy committee proposed to establish an MPC, then Tarapore committee in 2006, Percy Mistry committee in 2007, Raghuram Rajan committee in 2009 and then Urjit Patel Committee in 2013.

Composition and Working

  • The committee comprises six members – three officials of the RBI and three external members nominated by the Government of India.
  • The meetings of the Monetary Policy Committee are held at least 4 times a year and it publishes its decisions after each such meeting.
  • The Governor of RBI is the chairperson ex officio of the committee.
  • Decisions are taken by a majority with the Governor having the casting vote in case of a tie.
  • They need to observe a “silent period” seven days before and after the rate decision for “utmost confidentiality”.

Back2Basics

Monetary Policy tools and Money Supply in India

 

Also read:

How reverse repo rate became benchmark interest rate in the Indian economy?

Social Media: Prospect and Challenges

What is ‘Milk Tea Alliance’?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : ‘Milk Tea Alliance’

Mains level : Chinese assertion in the Indo-China region

The ‘Milk Tea Alliance’ is an informal term coined by social media users which are highly trending these days.

The term though in news without any institutional backing is gaining popularity. It clearly shows the public outrage against Chinese agressiveness in Taiwan and Hong-Kong.

What is the ‘Milk Tea Alliance’?

  • Thai social media users began calling for the sovereignty of Taiwan and Hong Kong, extending support to the two countries.
  • This spurred social media users from other Southeast Asian countries to join the call, in a rejection of China’s influence in the region for its own diplomatic and economic gains.
  • The ‘Milk Tea Alliance’ is an informal term coined by social media users because in the region, tea is consumed in many nations with milk, with the exception of China.
  • Memes were formed showing flags of the countries in the “Milk Tea Alliance” with China as a lone outsider.

What started this online war?

  • The online battle started with a Thai twitter post that questioned whether coronavirus had emerged in a laboratory in Wuhan.
  • There were some related tweets by pro-Taiwanese and Hong Kong people.
  • Pro-China social media users then began attacking Thailand for being a “poor” and “backward” nation and also hurled insults at the Thai king and the Thai prime minister.

Coronavirus – Health and Governance Issues

[pib] ‘COVID India Seva’ platform for citizen engagement on COVID-19

Note4Students

From UPSC perspective, the following things are important :

Prelims level : COVID India Seva

Mains level : Coronovirus outbreak and its mitigation

The Union Ministry of Health & Family Welfare has launched the COVID India Seva platform to establish a direct channel of communication with millions of Indians amid the pandemic.

We can take this initiative as an example while answering mains questions like – “India’s fight against Coronavirus pandemic is a public movement at large. Discuss.”

COVID India Seva

  • This initiative is aimed at enabling transparent e-governance delivery in real-time and answering citizen queries swiftly, at scale, especially in crisis situations like the ongoing COVID-19 pandemic.
  • Through this, people can pose queries @CovidIndiaSeva and get them responded to in almost real time.
  • @CovidIndiaSeva works off a dashboard at the backend that helps process large volumes of tweets, converts them into resolvable tickets, and assigns them to the relevant authority for real-time resolution.
  • The dedicated account will be accessible to people be it local or national in their scope.
  • The Ministry will respond to broader queries and public health information. This does not require the public to share personal contact details or health record details.

North-East India – Security and Developmental Issues

Daporijo Bridge and its significance

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Daporijo bridge and its location

Mains level : Border disputes with China

A key bridge over the Subansiri River in Arunachal Pradesh close to the Line of Actual Control (LAC) was constructed by the Border Roads Organisation (BRO) in record 27 days.

North-East has seen the construction of a series of bridges by BRO in recent times post-Doklam standoff. Make a note of all such bridges and the corresponding rivers over which they are built.

 Daporijo Bridge

  • This Bridge is one of the two over River Subansiri which connect Daporji in North Subansiri dist. with rest of state.
  • This and the other bridge at Tamin sustaining more than 600 villages and troops strength of around 3000 personnel manning the LAC which includes disputed Areas of Asaphila and Maza.
  • All supplies, rations, constructional material and medicines pass over this bridge.
  • The new bridge now can withstand 40 tonnes of weight allowing a safe passage for heavier vehicles catering for the requirements of the Indian Army as well as future infrastructure development requirements.

Significance

  • India has speeded up the construction of critical infrastructure in its northeast in the past half a dozen years including airports, railways and roads with an eye on China that has motorable roads right up to the border.
  • Arunachal Pradesh was the scene of the 1962 India-China border conflict that ended badly for India. China on its parts claims all of the state as “Southern Tibet.”
  • Of the 3488 km long Line of Actual Control with China 1126 lies with Arunachal Pradesh alone.
  • The two countries are yet to demarcate their border with the two sides patrolling the LAC but reporting incursions by the other side since the frontier is not clearly marked.

Festivals, Dances, Theatre, Literature, Art in News

Festival in news: Thrissur Pooram

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Thrissur Pooram

Mains level : NA

For the first time since its inception, Thrissur Pooram, considered as mother of all poorams in Kerala, has been cancelled earlier this month.

Note the cultural terms in the newscard. As the name itself suggests the state of celebration, it very unlikely to be asked in the ‘fest-state’ format.  Rather UPSC can ask – “The  terms X, Y, Z …. are associated with which of the following reknown festival?”

Thrissur Pooram

  • Thrissur Pooram is an annual Hindu festival held in Kerala.
  • It is held at the Vadakkunnathan Temple in Thrissur every year on the Pooram day – the day when the moon rises with the Pooram star in the Malayalam Calendar month of Medam.
  • It is the largest and most famous of all poorams.
  • Thrissur Pooram was the brainchild of Raja Rama Varma, famously known as Sakthan Thampuran, the Maharaja of Cochin (1790–1805).

Actual course of the festival

  • The Pooram is centred on the Vadakkunnathan Temple, with all these temples sending their processions to pay obeisance to the Shiva, the presiding deity.
  • The Pooram officially begins with a flag hoisting ceremony (Kodiyettam).
  • All the participating temples of Thrissur Pooram are present for the ceremony, and there is a light firework to announce the commencement of the festival.
  • The seventh day of the pooram is the last day. It is also known as “Pakal Pooram”.