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Foreign Policy Watch: India-Australia

Anchoring the ties with Australia the virtual way

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Mutual Logistic Support Agreement, AUSINDEX

Mains level : Paper 2- India-Australia relations.

India-Australia relations have been growing in depth and diversity. Though two countries have been collaborating in various areas there is still potential to be realised in many areas. This article discusses the India-Australia ties. The area in which the two countries are collaborating and scope to further it.

Relations with much potential

  • Mr. Modi convened a virtual multilateral summit to bring South Asia together to face the pandemic, and he also spoke online with G-20 leaders on similar issues.
  • On June 4, India will have its first virtual bilateral summit with Australia.
  • The convergence of interests and values has been patently obvious.
  • But the time has also come to translate that potential into reality.

So, let’s see how India and Australia are expanding the scope of cooperation

  • 1) The two countries have sought to reconstruct their increasingly turbulent regional geography in the Indo-Pacific and see the Quad (with Japan and the United States) as the most potent instrument to promote cooperation.
  • The Quad, not surprisingly has been causing apprehensions in Beijing.
  • 2) It is expected that the ‘Mutual Logistics Support Agreement’ will be signed during the summit.
  • That should enhance defence cooperation and ease the conduct of large-scale joint military exercises.
  • 3) Last April, Australia and India conducted AUSINDEX, their largest bilateral naval exercise.
  • And there are further developments on the anvil, including Australia’s permanent inclusion in the Malabar exercise with Japan.
  • 4) It may be prudent too for New Delhi and Canberra to elevate the ‘two plus two’ format for talks from the Secretary level to the level of Foreign and Defence Ministers.

Now, let’s look at the cooperation in areas that matter to the lives of the people of the countries-

1) Pandemic control through controlled adaptation:  Lesson from Australia

  • Australia is one of the few countries that has managed to combat COVID-19 so far through “controlled adaptation” by which the coronavirus has been suppressed to very low levels.
  • Two of the leaders of this great Australia-wide effort are Indian-born scientists.
  • There is much that the two Prime Ministers can share on this front.

2) Collaboration in  health, safe food and supply chains

  • In terms of health and safe food as well the supply chains that facilitate their delivery, there are important lessons to be learnt.
  • One of Australia’s richest businessman and first patron of the Australia-India Leadership Dialogue recently described the promise of DTC-CPG (direct to consumer; consumer packaged goods) which could transform global supply chains.
  • Here too there is much room for collaboration and new thinking.

3) Higher education

  • The recovery of Australia’s universities, most of which are publicly funded and many rank among the top in the world, is still in question.
  • But they are proving to be resilient and pioneers in distance and online learning.
  • Australian universities could well open earlier than most and emerge as a safer destination for quality education than their European or Ivy league counterparts.

Consider the question “India’s relations with Australia have of late acquired a dept and diversity which is visible in their cooperation in diverse areas. Comment.”

Conclusion

As India and Australia with shared values try to bring about fresh order in a turbulent world, the virtual summit, in this sense, could not have been better timed.

Foreign Policy Watch: India-China

China and the Rhineland moment in Hong Kong

Note4Students

From UPSC perspective, the following things are important :

Prelims level : G-7 countries, TPP

Mains level : Paper 2- US-China relations and implications for India

While the world is busy battling pandemic, China has embarked upon completing its pet project: stripping Hong Kong off its special status. This article explains the significance of China’s actions. And the options the U.S. could explore as a response to China’s move.

Tipping points in History

  • In 1911 Germany sparked an international crisis when it sent a gunboat into the Moroccan port of Agadir.
  • Winston Churchill wrote in his history of the First World War, “all the alarm bells throughout Europe began immediately to quiver.”
  • In 1936 Germany provoked another crisis when it marched troops into the Rhineland, in flagrant breach of its treaty obligations.
  • In 1946, the Soviet Union made it obvious it had no intention of honoring democratic principles in Central Europe, and Churchill was left to warn that “an iron curtain has descended across the Continent.”

Analogies: Not perfect, but not inapt, either.

  • Analogies between these past episodes and China’s decision this week to draft a new national security law on Hong Kong aren’t perfect.
  • First, Hong Kong is a Chinese port, not a faraway foreign one.
  • Second, Hong Kong’s people have ferociously resisted Beijing’s efforts to impose control, unlike the Rhineland Germans who welcomed Berlin’s.
  • And lastly, the curtailment of freedom that awaits Hong Kong is nothing like the totalitarian tyranny that Joseph Stalin imposed on Warsaw, Budapest and other cities.
  • But the analogies aren’t inapt, either.
  • Beijing has spent the better part of 20 years subverting its promises to preserve Hong Kong’s democratic institutions.
  • Now it is moving to quash what remains of the city’s civic freedoms through a forthcoming law that allows the government to punish speech as subversion and protest as sedition.
  • The concept of “one country, two systems,” was supposed to last at least until 2047 under the terms of the 1984 Sino-British Joint Declaration.
  • Now China’s rulers have been openly violating that treaty, much as Germany openly violated the treaties of Locarno and Versailles.

Rethink of the U.S. strategic approach to China

  • US administration has undertaken a sober rethink of it’s strategic approach to China.
  • The outlines of which are described in a new inter-agency document quietly released by the White House last week.
  • Gone from this new vision are the platitudes about encouraging China’s “peaceful rise” as a “responsible stakeholder” in a “rules-based order.”
  • Instead, Beijing is described, accurately, as a habitual and aggressive violator of that order.
  • It also describes China as a domestic tyrant, international bully and economic bandit that systematically robs companies of their intellectual property, countries of their sovereign authorities, and its own people of their natural rights.
  • A critic might note that this description of China’s behavior sounds a lot like Trump’s.
  • Sort of, except that the comparison trivializes the scale of China’s abuses and neglects the breadth and longevity of its challenge.

Why Now and what is the US response?

  • Beijing almost certainly chose this moment to strike because it calculated that a world straining under the weight of a pandemic and a depression lacked the will and attention to react.
  • On Friday, Trump said he would strip Hong Kong of its privileged commercial and legal ties to the U.S.
  • Issue with the move: That punishes the people of Hong Kong at least as much as it does their rulers in Beijing.

What’s a better course for the U.S.? A few ideas:

  • Sanction Chinese officials engaged in human-rights abuses in Hong Kong under the Global Magnitsky Act.
  • Upgrade relations with Taiwan and increase arms sales, including top-shelf weapons’ systems such as the F-35 and the Navy’s future frigate.
  • Re-enter the Trans-Pacific Partnership (TPP)agreement as a counter to China’s economic influence.
  • Publicly press all G-7 countries to stop doing business with telecom-giant Huawei as a meaningful response to the Hong Kong law.
  • Give every Hong Kong person an opportunity to easily obtain a U.S. residency card, even a passport.

Conclusion

If all this and more were announced now, it might persuade Beijing to pull back from the brink. In the meantime, think of this as  Rhineland moment with China — and remember what happened the last time the free world looked aggression in the eye, and blinked

Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Three thresholds in Industrial Disputes Act that need revision

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Industrial Disputes Act 1947

Mains level : Paper 2- Threshold limits in IDA and issues with it.

Sometimes the measures we come up with end up doing exactly the opposite of what they were supposed to do. This might be the case with some provisions in the Industrial Dispute Act. This article deals with 3 such provisions in the IDA. So, what are these provisions? How the issues caused by these provisions could be resolved? Read to know more…

How provisions of IDA could be detrimental?

  • What made so many migrants suddenly long for their village after lockdown?
  • The answer lies in our Industrial Disputes Act (IDA), the motherboard of our labour laws.
  • IDA has encouraged short-term employment, low skills and zero security.
  • It did this by setting up thresholds which disincentivised long-term commitment of workers to entrepreneurs and vice versa.
  • It also kept firms informal and unwilling to invest in human capital.
  • This is why when the lockdown happened, it turned into a migrant crisis.

Let’s look at  3 thresholds in IDA that are causing harm

  • 1) Hire more than 99 workers, and you will have to notify the government before you can fire any one of them.
  • 2) Hire more than 20 and you open yourself up to provident fund commitments and bonus payments.
  • 3) If you want to deny workers severance pay, never keep them continuously employed for more than 240 days.

So, how IDA ends up discouraging formalisation?

  • Given these provisions in the IDA, entrepreneurs are reluctant to hire more than 99 workers for over 240 days.
  • The employers are naturally tempted to observe these thresholds and duck under the radar.
  • This is made easier by the fact that these thresholds mesh well with the fear that the middle-class — and upwards — have of a working-class takeover.
  • As a result, these thresholds have only encouraged the informal sector, where both unregistered labour and unregistered entrepreneurs dominate.
  • It has led to the proliferation of informal enterprises and low-skill workers.
  • In the first 15 years of this century itself, over half the increase in total employment has been that of contract workers.
  • This has also led to a phenomenal rise in MSMEs as the IDA has discouraged entrepreneurs from harbouring any ambitions to grow big and formal.
  • The MSMEs have, consequently, increased in number from 3.6 crore units in 2012 to about 6 crore today.
  • Since there are constraints on both the workforce size and duration of employment, upskilling and R&D naturally become early casualties.
  • India spends only 0.7 per cent of its GDP in R&D, one of the lowest in the world, while South Korea spends 4.2 per cent.

Contribution of MSME in GDP is not increasing

  • Over 94 per cent of MSMEs are in the Micro sector and their contribution to GDP is just not measuring up.
  • In 2012, MSMEs produced 37.54 per cent of our GDP.
  • But this number fell to 30.7 per cent in 2015, and in 2019 it decreased further to 29.7 per cent, though they are still working full throttle.
  • Yet, the lure to stay on the good side of the IDA thresholds is so compelling that even formal units are today outsourcing from the informal ones.
  • Over time, the IDA has succeeded in converting a large number of organised sector companies into strange, hybrid economic creatures, both fishy and foul.

But, how removal of the 3 thresholds will change the situation?

  • If the 3 mentioned thresholds are removed, every worker — regardless of factory size — is entitled to the same rights.
  • Likewise, every employer, regardless of factory size, can hire and fire workers.
  • There is greater freedom on both sides, but this freedom comes with a price that does not discourage either size or skills in an enterprise.
  • The worker can now be fired without notifying the government, but must be compensated with severance wages, regardless of the size of the firm.
  • Also, unlike the IDA, all the firms must have a formal dispute resolution board.
  • Now that the enterprises have been freed of the size threshold, entrepreneurs get no advantage in dwarfing their firms.
  • Other reforms can soon follow, such as allowing for workers’ representation in a firm’s supervisory board, as it happens in Germany.
  • Measures such as these create trust between employees and employers, and also remove the threatening spectre of a working-class strike.

Consider the question “Various provision of the Industrial Disputes Act which were enacted but with a different purpose now seems to place both the workers and employers in a disadvantageous position. In light of this statement, examine the issues with the threshold limits of the number of employees and number of employment days in the Industrial Disputes Act.”

Conclusion

In the ultimate analysis, the IDA does not produce winners, only losers. The workers remain skill-stunted and insecure, and the entrepreneurs, too, pull back from releasing their much-vaunted “animal spirits”. So, the IDA thresholds must go and not be merely fiddled with, as some states have done.


Back2Basics: Industrial Disputes Act 1947

  • The main purpose of the Industrial Disputes Act, 1947 is to ensure fair terms between employers and employees, workmen and workmen as well as workmen and employers.T
  • The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by negotiations.

Direct Benefits Transfers

How would Direct Benefit Transfer (DBT) of power subsidy work?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Read the attached story

Context

  • Punjab has been providing free power to the agriculture sector.
  • The new Electricity Amendment Bill 2020 has proposed providing subsidy on power to farmers through DBT, which is contrary to the prevailing ‘free power’ system in Punjab.

Free or subsidised power is being provided to millions of consumers in almost every state. Punjab is no exception but its free power scheme is. Other states can learn from the example of Punjab, here.

Practice questions for mains:

Q. Discuss the efficacy of Direct Benefit Transfer in power subsidy for farmers.

Punjab on knees

  • Before it submits suggestions regarding the Electricity Amendment Bill 2020, recently drafted by the Union Power Ministry to amend the Electricity Act 2003, a big challenge lies ahead for the Punjab government.
  • Under the garb of DBT, it is a move to stop the free power supply to them.

What is the current system of power subsidy for farmers in Punjab?

  • At present, Punjab is supplying free power to 14.16 lakh electricity-run tubewells of the agriculture sector which are getting power through 5,900 Agricultural Pumpset Feeders (APFs).
  • These APFs are metered and the Punjab Power Corporation charges the state government for consumed units recorded in metered APFs.

The Free Power Scheme

  • Farmers are getting power supply for their Kharif and Rabi crops from these feeders as per the recommendations of the Punjab Agriculture University (PAU), Ludhiana.
  • It is supplied for around eight hours every day in Kharif season and four hours on alternate days during Rabi crop season.
  • The state government pays around Rs 6,000 crore power subsidy bill to Power Corporation every year under the scheme to the farming sector.

What would change under the DBT allowed under the new Electricity Bill 2020?

  • Under DBT, farmers will have to pay the bill for the power consumed for agriculture purposes.
  • After that, they will get the subsidy in their bank accounts through DBT.
  • A meter would be installed on every individual tubewell.

Issues with Punjab farmer

  • Approximately the annual power bill will come to around Rs 46,000 to Rs 48,000, and farmers are required to pay a bill of Rs 4,000 per month.
  • In Punjab, 67 per cent of farmers come under the small and marginal categories with 1-2 hectares land.
  • Paying bills in advance is not possible for them due to debt.
  • If farmers don’t pay their bills, the department will disconnect their connection, which could lead to farmers’ agitation.

Can it work like DBT on LPG gas cylinders?

  • The bill suggests the subsidy be paid directly to consumers in cash on the pattern of LPG subsidy.
  • This proposal should be tried in a pilot project and if results are encouraging, only then it should be included in the amendment bill.
  • It is not feasible to provide meters on every pump set up across the country and then give cash subsidy every month after the consumer has paid the bill.

Punjab government’s own DBT scheme titled ‘Paani Bachao Paisa Kamao’ is also working here. How it is different from DBT under the new Bill?

  • The Punjab government’s scheme is a voluntary one.
  • The farmers who have adopted it need to get install a power meter on their tubewell but are not required to pay any power bill.
  • The main purpose of PBPK is to save groundwater by using it judiciously because, under the traditional system, several farmers are misusing the water by over-irrigating the crops due to free power available to them.

What do farmers’ organisations think of this?

  • Farmers’ organisations say that if the Punjab government agrees to this bill, they will fight it tooth and nail.
  • From where will poor farmers pay such heavy bills when they get an income after six months following the sale of their crop, they ask.
  • Anywhere in the world, the agrarian sector cannot run without the support of the government as it is the base of every human being who is dependent on farmers’ produce from his/her morning tea to dinner.

Back2Basics

[pib] Draft Electricity Act (Amendment) Bill, 2020

Electoral Reforms In India

Delimitation Commission for NE states and UTs

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Delimitation Commission

Mains level : Delimitation of constituencies

Lok Sabha speaker has nominated 15 MPs to assist the Delimitation Commission in redrawing the Lok Sabha and the Assembly constituencies of the northeastern states and the Union Territories.

Practice question for mains:

Q. What is the Delimitation of Constituencies? Discuss its significance.

What is Delimitation? Why is it needed?

  • Delimitation is the act of redrawing boundaries of Lok Sabha and state Assembly seats to represent changes in population.
  • In this process, the number of seats allocated to different states in Lok Sabha and the total number seats in a Legislative Assembly may also change.
  • The main objective of delimitation is to provide equal representation to equal segments of a population.
  • It also aims at a fair division of geographical areas so that one political party doesn’t have an advantage over others in an election.

Legal status

  • Delimitation is carried out by an independent Delimitation Commission (DC).
  • The Constitution mandates that its orders are final and cannot be questioned before any court as it would hold up an election indefinitely.

How is delimitation carried out?

  • Under Article 82, the Parliament enacts a Delimitation Act after every Census.
  • Once the Act is in force, the Union government sets up a DC made up of a retired Supreme Court judge, the Chief Election Commissioner and the respective State Election Commissioners.
  • The Commission is supposed to determine the number and boundaries of constituencies in a way that the population of all seats, so far as practicable, is the same.
  • The Commission is also tasked with identifying seats reserved for Scheduled Castes and Scheduled Tribes; these are where their population is relatively large.
  • All this is done on the basis of the latest Census and, in case of difference of opinion among members of the Commission, the opinion of the majority prevails.

Implementation

  • The draft proposals of the DC are published in the Gazette of India, official gazettes of the states concerned and at least two vernacular papers for public feedback.
  • The Commission also holds public sittings.
  • After hearing the public, it considers objections and suggestions, received in writing or orally during public sittings, and carries out changes, if any, in the draft proposal.
  • The final order is published in the Gazette of India and the State Gazette and comes into force on a date specified by the President.

How often has delimitation been done in the past?

  • The first delimitation exercise in 1950-51 was carried out by the President (with the help of the Election Commission).
  • The Constitution at that time was silent on who should undertake the division of states into Lok Sabha seats.
  • This delimitation was temporary as the Constitution mandated redrawing of boundaries after every Census. Hence, delimitation was due after the 1951 Census.

Why more independence to DC?

  • Pointing out that the first delimitation had left many political parties and individuals unhappy, the EC advised the government that all future exercises should be carried out by an independent commission.
  • This suggestion was accepted and the DC Act was enacted in 1952.
  • DCs’ has been set up four times — 1952, 1963, 1973 and 2002 under the Acts of 1952, 1962, 1972 and 2002.
  • There was no delimitation after the 1981 and 1991 Censuses.

Why postponed till 2026?

  • Although the freeze on the number of seats in Lok Sabha and Assemblies should have been lifted after the 2001 Census, another amendment postponed this until 2026.
  • This was justified on the ground that a uniform population growth rate would be achieved throughout the country by 2026.
  • So, the last delimitation exercise — started in July 2002 and completed on May 31, 2008 — was based on the 2001 Census and only readjusted boundaries of existing Lok Sabha and Assembly seats and reworked the number of reserved seats.

Back2Basics: History of Delimitation in J&K

  • Delimitation of J&K’s Lok Sabha seats is governed by the Indian Constitution, but the delimitation of its Assembly seats (until special status was abrogated recently) was governed separately by its Constitution and J&K Representation of the People Act, 1957.
  • As far as the delimitation of Lok Sabha seats is concerned, the last DC of 2002 was not entrusted with this task. Hence, J&K parliamentary seats remain as delimited on the basis of the 1971 Census.
  • As for Assembly seats, although the delimitation provisions of the J&K Constitution and the J&K RP Act, 1957, are similar to those of the Indian Constitution and Delimitation Acts.
  • They mandate a separate DC for J&K. In actual practice, the same central DC set up for other states was adopted by J&K in 1963 and 1973.
  • While the amendment of 1976 to the Indian Constitution suspended delimitation in the rest of the country till 2001, no corresponding amendment was made to the J&K Constitution.
  • Hence, unlike the rest of the country, the Assembly seats of J&K were delimited based on the 1981 Census, which formed the basis of the state elections in 1996.
  • There was no census in the state in 1991 and no DC was set up by the state government after the 2001 Census as the J&K Assembly passed a law putting a freeze on fresh delimitation until 2026.

Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

‘Rozgar Setu’ Scheme for skilled workers

Note4Students

From UPSC perspective, the following things are important :

Prelims level : ‘Rozgar Setu’ Scheme

Mains level : Various employment measures

The Madhya Pradesh has announced the launch of the ‘Rozgar Setu’ Scheme to help secure employment for skilled workers who have returned.

State schemes are quite often seen in the news. They are very important from the prelims perspective:

Rytha Bandu (Telangana): Cash transfer scheme of Rs 5,000/acre, per season

KALIA (Krushak Assistance for Livelihood and Income Augmentation) Scheme (Odisha)

Mukhya Mantri Krishi Aashirwad Yojana (Jharkhand)

Krishak Bandhu Scheme (West Bengal)

‘Rozgar Setu’ Scheme

  • The ‘Rozgar Setu’ scheme to provide work to the maximum number of returned skilled workers.
  • After such workers requiring employment are identified, the government will contact factory and workshop owners and contractors overseeing infrastructure projects such as road and bridge construction.
  • This would fulfil the manpower requirement of industries as well as provide employment to workers during the COVID-19 pandemic.

Climate Change Impact on India and World – International Reports, Key Observations, etc.

Expansion of the Amery Ice Shelf

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Ice Shelves, Amery Ice Shelf

Mains level : Impact of climate changes

 

There would be a 24% increase in the expansion of the Amery Ice Shelf (AIS) boundaries in Antarctica by 2021 and another 24 per cent by 2026 from its 2016 positions, the National Centre for Polar and Ocean Research (NCPOR) in Goa has predicted.

Practice question for mains:

Q. Discuss the interrelation between Cryosphere and Climate change in context to the melting ice shelves in the Antarctic region.

Amery Ice Shelf (AIS)

  • The Amery Ice Shelf is a broad ice shelf in Antarctica at the head of Prydz Bay between the Lars Christensen Coast and Ingrid Christensen Coast.
  • It is part of Mac. Robertson Land.
  • The name “Cape Amery” was applied to a coastal angle mapped on February 11, 1931.
  • The AIS is one of the largest glacier drainage basins in the world, located on the east coast of Antarctica, at about 70ºS Latitude, 70ºE Longitude.
  • The AIS dynamics and mass balance help in understanding the changes in the global climate scenario.

Significance of the study

  • NCPOR observations revealed a critical cooling of the sea surface temperature, resulting in an advancement of the ice shelf by 88 per cent in the past 15 years.
  • These changes would contribute in a major way to climate variability.
  • The study clearly demonstrated the future dynamism of ocean heat fluctuation and Antarctic Amery ice shelf mass shifting-extent.

Back2Basics: Ice Shelves

  • The floating sheets of ice called ‘ice shelves’ play a multi-faceted role in maintaining the stability of a glacier. Ice shelves connect a glacier to the landmass.
  • The ice sheet mass balance, sea stratification, and bottom water formation are important parameters for the balancing of a glacier. Latent and sensible heat processes do play important roles here.
  • The insulation of ice shelves from atmospheric forcing is dependent on a temperature gradient that the ocean cavity beneath the ice shelves provides.
  • It is the pressure exerted by the ice shelves upon the ocean cavity that determines this temperature gradient.

Defence Sector – DPP, Missions, Schemes, Security Forces, etc.

Missile Park ‘AGNEEPRASTHA’

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Missile Park ‘Agneeprastha’

Mains level : NA

Foundation Stone for a Missile Park “AGNEEPRASTHA” was recently laid at INS Kalinga, Vizag.

Caution: Agneeprastha is a missile park of the eastern naval command of the Indian Navy. It has nothing to do with the Agni missiles.

Missile Park ‘Agneeprastha’

  • ‘Agneeprastha’ aims to capture glimpses of Missile History of INS Kalinga since 1981 till date.
  • The Missile Park has been set up with a replica of missiles and Ground Support Equipment (GSE) that showcase the evolution of missiles handled by the unit.
  • The exhibits have been created from scrap / obsolete inventory which have been reconditioned in-house.
  • The main attraction is P-70 ‘Ametist’, an underwater launched anti-ship missile from the arsenal of the old ‘Chakra’ (Charlie-1 submarine) which was in service with IN during 1988-91.
  • It will also provide a one-stop arena for motivation and stimulation of inquisitive minds regarding the missiles and related technologies, from school children to naval personnel and their families.

New Species of Plants and Animals Discovered

Species in news: Amaltas or Indian Laburnum

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Amaltas Tree

Mains level : NA

The Amaltas or Indian laburnum has begun blooming this summer.

Try this PYQ from CSP 2018:

Q. Why is a plant called Prosopis juliflora often mentioned in news?

(a) Its extract is widely used in cosmetics.

(b) It tends to reduce the biodiversity in the area in which it grows

(c) Its extract is used in the pesticides.

(d) None of the above

Amaltas Tree

  • The Amaltas (Cassia fistula linn), native to South-East Asia is one of the most widespread trees in India and South-East Asia, with their presence both in cities as well as in moist and dry forests.
  • It has drooping clusters of bright fragrant yellow flowers with five petals and characteristic cylindrical fruits.
  • The Amaltas is known by so many names — Indian Laburnum, Golden Shower, Purging Fistula, Pudding-pipe tree, Girmala, Rajbrikh, Alash, Kiar, Kirwara, Ali — showing us how common and loved it is.
  • It is both the national tree and the national flower of Thailand and is also the state flower of Kerala.

Features of Amaltas

  • This middle-sized deciduous tree is leafless only for a brief time, between March and May.
  • The new leaves are glossy, a trait that they lose on maturing, and are mostly bright green, though sometimes a rich copper too.
  • It flowers from April to June, partly alongside the emergence of new leaves, but it’s not uncommon to find the Amaltas in flower as late as September.
  • The bark is yellowish at first, slowly coarsens with age and turning dark grey.

Significance

  • The tree is mostly known to be ornamental and few know of its benefits as a medicinal plant, and one that’s loved by some mammals, bees, and butterflies.
  • The bark is used to make dye and the pulp in the fruit pod also serves as a strong purgative agent, which also helps animals that feed on it.
  • A medicinal preparation with the roots of the tree is used to cure leprosy and skin diseases and the leaves are used to get rid ulcers, in traditional medicine.

Foreign Policy Watch: India-Nepal

For a reset in India-Nepal relations

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Treat of Sugauli in 1816

Mains level : Paper 2- Indiao-Nepal relations and territorial dispute.

Over the past few years, we have been  witness to the deteriorating India-Nepal relations. Reserves of goodwill which India had accumulated is fast depleting in Nepal. The latest issue over the map is a new addition to the decline in relations. This article stresses the need for political maturity to find the solution to the complex issue of the underlying problem.

Need for the fundamental reset in relations between Indian and Nepal

  • The immediate provocation for the contention is the long-standing territorial issue surrounding Kalapani.
  • It is a patch of land near the India-Nepal border, close to the Lipulekh Pass on the India-China border.
  • However, the underlying reasons are far more complex.
  • Yet, Nepali Prime Minister K.P. Sharma Oli’s exploitation of the matter, by raising the banner of Nepali nationalism and painting India as a hegemon, is part of a frequent pattern.
  • Which indicates that relations between the two countries need a fundamental reset.

Let’s look at the historical background of the India-Nepal border

  • India inherited the boundary with Nepal, established between Nepal and the East India Company in the Treaty of Sugauli in 1816.
  • Kali river constituted the boundary, and the territory to its east was Nepal.
  • The dispute relates to the origin of Kali.
  • Near Garbyang village in Dharchula Tehsil of the Pithoragarh district of Uttarakhand, there is a confluence of different streams coming from north-east from Kalapani and north-west from Limpiyadhura.
  • The early British survey maps identified the north-west stream, Kuti Yangti, from Limpiyadhura as the origin.
  • But after 1857 changed the alignment to Lipu Gad, and in 1879 to Pankha Gad, the north-east streams, thus defining the origin as just below Kalapani.
  • Nepal accepted the change and India inherited this boundary in 1947.

More past events dealing with the LIpulech pass

  • The Maoist revolution in China in 1949, followed by the takeover of Tibet, created deep misgivings in Nepal.
  • So, India was ‘invited’ by Nepal to set up 18 border posts along the Nepal-Tibet border.
  • The westernmost post was at Tinkar Pass, about 6 km further east of Lipulekh.
  • In 1953, India and China identified Lipulekh Pass for both pilgrims and border trade. After the 1962 war, pilgrimage through Lipulekh resumed in 1981, and border trade, in 1991.
  • In 1961, King Mahendra visited Beijing to sign the China-Nepal Boundary Treaty that defines the zero point in the west, just north of Tinkar Pass.
  • By 1969, India had withdrawn its border posts from Nepali territory.
  • The base camp for Lipulekh remained at Kalapani, less than 10 km west of Lipulekh.
  • In their respective maps, both countries showed Kalapani as the origin of Kali river and as part of their territory.
  • After 1979, the Indo-Tibetan Border Police has manned the Lipulekh Pass.

So, when was the issue of the origin of Kali river raised?

  • After the 1996 Treaty of Mahakali -Kali river is also called Mahakali/Sarada further downstream-the issue of the origin of Kali river was first raised in 1997.
  • The matter was referred to the Joint Technical Level Boundary Committee that had been set up in 1981 to re-identify and replace the old and damaged boundary pillars along the India-Nepal border.
  • The Committee clarified 98% of the boundary, leaving behind the unresolved issues of Kalapani and Susta when it was dissolved in 2008.
  • It was subsequently agreed that the matter would be discussed at the Foreign Secretary level.
  • Meanwhile, the project to convert the 80-km track from Ghatibagar to Lipulekh into a hardtop road began in 2009 without any objections from Nepal.

Objections raised by Nepal to the new map released by India

  • The Survey of India issued a new political map (eighth edition) on November 2, 2019, to reflect the change in the status of Jammu and Kashmir as two Union Territories.
  • Nepal registered a protest though the map in no way had changed the boundary between India and Nepal.
  • However, on November 8, the ninth edition was issued.
  • The delineation remained identical but the name Kali river had been deleted.
  • Predictably, this led to stronger protests, with Nepal invoking Foreign Secretary-level talks to resolve issues.

New map released by Nepal and issues with it

  • A new map of Nepal based on the older British survey reflecting Kali river originating from Limpiyadhura in the north-west of Garbyang was adopted by parliament and notified on May 20.
  • On May 22, a constitutional amendment proposal was tabled to include it in a relevant Schedule.
  • The new alignment adds 335 sq km to Nepali territory, territory that has never been reflected in a Nepali map for nearly 170 years.

Following issue explains why there is need for rewriting the fundamental of India-Nepal relations

1. Nepali nationalism is being equated to anti-Indianism

  • Prime Minister Narendra Modi has often spoken of the “neighbourhood first” policy.
  • But the relationship took a nosedive in 2015 when India first got blamed for interfering in the Constitution-drafting in Nepal.
  • And then for an “unofficial blockade” that generated widespread resentment against the country.
  • It reinforced the notion that Nepali nationalism and anti-Indianism were two sides of the same coin.

2. China factor

  • In Nepali thinking, the China card has provided them the leverage to practise their version of non-alignment.
  • In the past, China maintained a link with the Palace and its concerns were primarily related to keeping tabs on the Tibetan refugee community.
  • With the abolition of the monarchy, China has shifted attention to the political parties as also to institutions like the Army and Armed Police Force.
  • Also, today’s China is pursuing a more assertive foreign policy and considers Nepal an important element in its growing South Asian footprint.

3. India has ignored the changing political narrative for long

  • The reality is that India has ignored the changing political narrative in Nepal for far too long.
  • India remained content that its interests were safeguarded by quiet diplomacy even when Nepali leaders publicly adopted anti-Indian postures.
  • Long ignored by India, it has spawned distortions in Nepali history textbooks and led to long-term negative consequences.
  • For too long India has invoked a “special relationship”, based on shared culture, language and religion, to anchor its ties with Nepal.
  • Today, this term carries a negative connotation — that of a paternalistic India that is often insensitive and, worse still, a bully.
  • The 1950 Treaty of Peace and Friendship which was sought by the Nepali authorities in 1949  is viewed as a sign of an unequal relationship, and an Indian imposition.
  • The purpose of the treaty was to continue the special links Nepal had with British India and it  provides for an open border and right to work for Nepali nationals
  • Yet, Nepali authorities have studiously avoided taking it up bilaterally even though Nepali leaders thunder against it in their domestic rhetoric.

Consider the question, “Examine the issues that have been testing the old ties between India and Nepal.”

Conclusion

The urgent need today is to pause the rhetoric on territorial nationalism and lay the groundwork for a quiet dialogue where both sides need to display sensitivity as they explore the terms of a reset of the “special relationship”. A normal relationship where India can be a generous partner will be a better foundation for “neighbourhood first” in the 21st century.

Foreign Policy Watch: India-Africa

Deepening India’s engagement with Africa amid pandemic

Note4Students

From UPSC perspective, the following things are important :

Prelims level : India-Africa Forum summit

Mains level : Paper 3- Scope to increase the ties between India and Africa amid covid pandemic.

Long thought to be the backwater of the world, Africa has been successful in shading its past image and emerge on the global stage as region hard to ignore. And countries across the world are vying to increase their engagement with the region. This article examines the scope for increasing the ties with the region amid the pandemic.

India’s association with African Union

  • Africa Day is observed every year on May 25 to commemorate the founding of the Organisation of African Unity, now known as the African Union.
  • India has been closely associated with it on account of its shared colonial past and rich contemporary ties.
  • The Manohar Parrikar Institute for Defence Studies and Analyses has hosted an Africa Day Round Table annually for the last four years in order to commemorate this epochal event.

Economy and pandemic

  • The World Bank in its April report, assessed that the COVID-19 outbreak has sparked off the Sub-Saharan Africa (SSA) region’s first recession in 25 years.
  • Growth is expected to plummet to between -2.1 and -5.1 per cent in 2020, from a modest 2.4 per cent in 2019.
  • With high rates of HIV, malaria, diabetes, hypertension and malnourishment prevalent, a large number of Africans were already faced with a health and economic crisis.
  • The steep decline in commodity prices has spelt disaster for the economies of Nigeria, Zambia and Angola.

Need for financial support

  • Precarious fiscal positions have ruled out any major governmental stimulus.
  • Public debt has mounted.
  • According to the World Bank, the SSA region paid $35.8 billion in total debt service in 2018.
  • Which is 2.1 per cent of regional gross domestic product (GDP).
  • Together, African countries have sought a $100 billion rescue package.
  • This rescue package includes a $44 billion waiver of interest payment by the world’s 20 largest economies.
  • The IMF’s debt service relief of $500 million is meant for 25 countries of which 19 are in Africa, but that is a drop in the bucket.
  • It is clear that without outside support, Africa will find it very difficult to meet the challenge.

Why the increased interest in engagement with Africa?

  • Africa’s rich natural resources, long-term economic potential, youthful demography and influence as a bloc of 54 countries in multi-lateral organisations is apparent.
  • Many have an eye for economic opportunities, including in energy, mining, infrastructure and connectivity. 
  • Japan hosted the 7th Tokyo International Conference for African Development (TICAD) in August 2019.
  • Russia hosted the first-ever Russia-Africa Summit last year.
  • Brazil, home to the largest population of people of African descent outside of Africa, has also sought to develop closer ties.
  • Cuba has sent medical teams to help Africa.

Chinese Bonhomie with the region

  • China’s engagement of Africa, as elsewhere, is huge but increasingly regarded as predatory and exploitative.
  • Its annual trade with Africa in 2019 stood at $208 billion, in addition to investments and loans worth $200 billion.
  • Traditionally, China’s participation in infrastructure projects has been astonishing.
  • Having famously built the 1,860 km Tanzania-Zambia railway line in 1975, and the Addis Ababa-Djibouti and Mombasa-Nairobi lines more recently, China is now eyeing to develop the vast East Africa Master Railway Plan.
  • It is also developing the Trans-Maghreb Highway, the Mambilla Hydropower Plant in Nigeria, the Walvis Bay Container Terminal in Windhoek and the Caculo Cabaca Hydropower project in Angola.
  • At the Forum for China-Africa Cooperation (COCAC) in 2018, China set aside $60 billion in developmental assistance.
  • And it was followed by a whopping $1 billion Belt and Road (BRI) Infrastructure Fund for Africa.
  • China has followed up with robust health sector diplomacy in the wake of the pandemic.
  • But its image has been tarnished by defective supplies of PPE gear and discriminatory behaviour against Africans in Guangzhou.
  • This also led to an embarrassing diplomatic row.

India’s relations with Africa

  • In the last few years, India’s relations with Africa saw a revival.
  • India-Africa trade reached $62 billion in 2018 compared to $39 billion during 2009-10.
  • After South Asia, Africa is the second-largest recipient of Indian overseas assistance with Lines of Credit (LOC) worth nearly $10 billion (42 per cent of the total) spread over 100 projects in 41 countries.
  • Ties were boosted at the India Africa Forum Summit (IAFS) in 2015.
  • 40 per cent of all training and capacity building slots under the ITEC programme have traditionally been reserved for Africa.
  • Approximately 6,000 Indian soldiers are deployed in UN peace-keeping missions in five conflict zones in Africa.
  • Bilateral cooperation includes solar energy development, information technology, cyber security, maritime security, disaster relief, counter-terrorism and military training.
  • India has also launched several initiatives to develop closer relations, including the first-ever India Africa Defence Ministers conclave in February this year on the margins of the Defence Expo 2020.
  • India provides about 50,000 scholarships to African students each year.
  • The huge Indian diaspora is a major asset.
  • India had planned to host the Fourth India Africa Forum Summit in September this year.
  • However, the COVID-19 pandemic may cause it to be delayed.

India’s support amid covid pandemic

  • India has already despatched medical assistance to 25 African countries.
  • PM Modi has had a telephonic talk with President Cyril Ramaphosa of South Africa who is the current chairperson of the African Union, and separately others such as the presidents of Uganda and Ethiopia.
  • India could consider structuring a series of virtual summits in zonal groups with African leaders across the continent over the next few months.
  • That could both provide a platform for a cooperative response to the pandemic and also serve as a precursor to the actual summit in the future.
  • The Ministry of External Affairs has already extended the e-ITEC course on “COVID-19 Pandemic: Prevention and Management Guidelines for Healthcare Professionals” to healthcare workers in Africa.
  • The Aarogya Setu App and the E-Gram Swaraj App for rural areas for mapping COVID-19 are technological achievements that could be shared with Africa.
  • Since the movement of African students to India for higher education has been disrupted, India may expand the e-VidyaBharti (tele education) project to establish an India-Africa Virtual University. Agriculture and food security can also be a fulcrum for deepening ties.
  • With the locust scourge devastating the Horn of Africa and the pandemic worsening the food crisis, India could ramp up its collaboration in this sector.
  • India could also create a new fund for Africa and adapt its grant-in-aid assistance to reflect the current priorities.
  • This could include support for new investment projects by Indian entrepreneurs especially in the pharmaceutical and healthcare sectors in Africa.

Time for Quad Plus to propose cooperation with African countries

  • Both India and Japan share a common interest in forging a partnership for Africa’s development.
  • It is time for the Quad Plus, in which the US, India, Japan and Australia have recently engaged other countries such as the ROK, Vietnam, New Zealand, Israel and Brazil, to exchange views and propose cooperation with select African countries abutting the Indian Ocean.
  • After all, the Indo-Pacific straddles the entire maritime space of the Indian Ocean.

Consider the 2015 question asked by the UPSC “Increasing interest of India in Africa has its pros and cons. Critically examine”

Conclusion

The pandemic is a colossal challenge but it may create fresh opportunities to bring India and Africa closer together.

Foreign Policy Watch: India-China

India-China confrontation: Not a standalone event

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Hong Kong, Taiwan location in the map

Mains level : Paper 2- India-China relation and tension over border dispute

The recent India-China standoff in Ladakh points to a larger picture of the Chinese agenda of regional dominance. The US-China tension has proved to be the backdrop against which the Ladakh standoff is playing out. This article suggests that this standoff is not a standalone event. It could well be a trigger for domino effect.

What the intensification of tension between India-China suggests?

1) China is feeling threatened

  • An authoritarian regime whose legitimacy rests primarily on its economic performance is faced with a situation where growth is expected to plummet.
  • It is a sign that Beijing is increasingly feeling beleaguered.
  • In response, it has embarked on a strategy of brinkmanship with several goals in mind.
  • External adventurism, when cloaked in the garb of ultra-nationalism, can shore up a regime’s legitimacy at home.

2) It could be a move to divert the attention of the world

  • Simultaneously, it can act as a diversionary measure to escape international criticism for Beijing’s attempt to cover up the spread of the coronavirus.
  • Many countries hold China responsible for the huge cost in human lives and suffering as well as the unprecedented economic distress.
  • In the face of such criticism, the Chinese regime is increasingly using jingoistic jargon to build up domestic support.
  • President Xi Jinping’s recent speech to the PLA is an outstanding example of this strategy.
  • He exhorted the Chinese armed forces to “prepare for war” in order to “resolutely safeguard national sovereignty” and “the overall strategic stability of the country”.
  • This is a sign that the Communist Party of China (CPC) feels increasingly threatened both domestically and externally.

Let’s look at the deterioration of the US-China relations

  • China’s relations with the U.S. have been going downhill almost since the beginning of the Donald Trump presidency.
  • Washington has periodically imposed economic sanctions on China and Beijing has retaliated in kind.
  • Trade talks have faltered because of growing protectionist sentiments in the U.S. and Chinese inability to adequately respond to them.
  • The chipping away at Hong Kong’s autonomous status by Beijing and the suppression of the pro-democracy movement in Hong Kong has led to severe criticism by the U.S. administration and in the Congress.
  • Differences over the issue of Taiwan have added to tensions, with China viewing the U.S. as the primary impediment preventing Taiwan’s integration.
  • The Trump administration has significantly increased support to Taiwan with arms sales that have added to China’s concern.

U.S.-China rivalry in South-China Sea

  • Above all, the U.S.-China rivalry in the South China Sea acts as the potential flashpoint that may well lead to a shooting war.
  • So far, it has been careful that these moves do not trigger a serious confrontation with the U.S.
  • Washington has a strong interest in preventing China from asserting control over the South China Sea as maintaining free access to this waterway is important to it for economic reasons.
  • It also has defence treaty obligations to the Philippines, which has vigorously contested Chinese territorial claims.
  • Further, China’s control of the South China Sea would be a major step toward replacing the U.S. as the foremost power in the Indo-Pacific region.

India-China relation questions have been the leitmotif in the UPSC papers. Just the theme of the question changes. Consider 2017 question “China is using its economic relations and positive trade surplus as a tool to develop potential military power status in Asia. In light of this statement, discuss its impact on India as her neighbour.”

Conclusion

Increased Chinese adventurism could result in an escalation of U.S.-China confrontation in the South China Sea. If that happens, the India-China face-off in Ladakh could become part of a much larger “great game”, with the U.S. trying to preserve the status quo and China attempting to change it to further its objective of regional dominance at the U.S.’s expense. The current India-China crisis should, therefore, be seen in its proper context and not as an isolated event.

FDI in Indian economy

Foreign direct investment (FDI) in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : FDI

Mains level : Features of India's FDI Policy

The FDI in India grew by 13% to a record of $49.97 billion in the 2019-20 financial years, according to official data.

Get aware with the recently updated FDI norms. Key facts mentioned in this newscard can make a direct statement based MCQ in the prelims.

Ex. FDI source in decreasing order: Singapore – Mauritius – Netherland – Ceyman Islands – Japan – France

Data on FDI

  • The country had received an FDI of $44.36 billion during April-March 2018-19.
  • The sectors which attracted maximum foreign inflows during 2019-20 include services ($7.85 billion), computer software and hardware ($7.67 billion), telecommunications ($4.44 billion), trading ($4.57 billion), automobile ($2.82 billion), construction ($2 billion), and chemicals ($1 billion).
  • Singapore emerged as the largest source of FDI in India during the last fiscal with $14.67 billion investments.
  • It was followed by Mauritius ($8.24 billion), the Netherlands ($6.5 billion), the U.S. ($4.22 billion), Caymen Islands ($3.7 billion), Japan ($3.22 billion), and France ($1.89 billion).

What is FDI?

  • An FDI is an investment in the form of a controlling ownership in a business in one country by an entity based in another country.
  • It is thus distinguished from a foreign portfolio investment by a notion of direct control.
  • FDI may be made either “inorganically” by buying a company in the target country or “organically” by expanding the operations of an existing business in that country.
  • Broadly, FDI includes “mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans”.
  • In a narrow sense, it refers just to building a new facility, and lasting management interest.

FDI in India

  • Foreign investment was introduced in 1991 under Foreign Exchange Management Act (FEMA), driven by then FM Manmohan Singh.
  • There are two routes by which India gets FDI.

1) Automatic route: By this route, FDI is allowed without prior approval by Government or RBI.

2) Government route: Prior approval by the government is needed via this route. The application needs to be made through Foreign Investment Facilitation Portal, which will facilitate the single-window clearance of FDI application under Approval Route.

  • India imposes a cap on equity holding by foreign investors in various sectors, current FDI in aviation and insurance sectors is limited to a maximum of 49%.
  • In 2015 India overtook China and the US as the top destination for the Foreign Direct Investment.

Back2Basics

Amendment in the FDI Policy for curbing opportunistic takeovers/acquisitions of Indian companies

Foreign Policy Watch: India-Pakistan

India-Pak cooperation against Locusts Attack

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Locusts invasion

Mains level : Locusts invasion and its threats

As another locust swarm comes from Pakistan, the spotlight is again on the India-Pakistan dynamic that has come into play.

Do you know?

The Food and Agricultural Organization (FAO) believes locusts have decimated close to 70,000 hectares of crops in Kenya, 30,000 hectares in Ethiopia and 42,000 hectares of crops in the state of Rajasthan.
Just so you can perhaps assess the kind of damage we are talking about here. A large swarm can eat as much as about 35,000 people in one day 😀 !

What are Locusts?

  • The desert locust (Schistocerca gregaria) is a short-horned grasshopper that is innocuous while it is in a “solitary phase” and moving about independently.
  • These winged insects differ from normal hoppers and become dangerous only when their populations build up rapidly and the close physical contact in crowded conditions triggers behavioural changes.
  • They, then, enter the “gregarious phase”, by grouping into bands and forming swarms that can travel great distances (up to 150 km daily), while eating up every bit of vegetation on the way.
  • If not controlled at the right time, these insect swarms can threaten the food security of countries.

India reaches out to Pak

  • The Ministry of External Affairs said that it has reached out to Pakistan for cooperation, and is awaiting their response.
  • Despite the ups and downs in the bilateral relationship, cooperation on the locust warning system has survived the wars, terrorist attacks, and political turmoil.

History of outbreaks in India

  • Records suggest that since the beginning of the 19th century, there have been at least eight “outbreaks” in India from 1812 to 1889, and a ninth in 1896-1897.
  • According to the history of the Locust Warning Office published by the UN Food and Agriculture Organization (FAO), there were “serious invasions” of locusts in India every few years during the 1900s.
  • A “five-year invasion” from 1926 to 1931 is estimated to have damaged crops worth Rs 2 crore (about $100 million at today’s prices).
  • The princely states and provinces had their own structures to deal with this, but there was no coordination.

The Locust Warning Organization (LWO)

  • After the 1926-32 “invasion”, the British Indian government-sponsored a research scheme, starting in 1931, which led to the permanent Locust Warning Organization (LWO) in 1939.
  • It had its headquarters in New Delhi and a substation in Karachi.
  • In 1941, a conference of princely states in desert areas and provinces affected by locusts was held.
  • Its role was expanded in 1942, and in 1946 a bureaucratic structure was put in place.

Beginning of cooperation

  • Iran too suffered locust attacks, in 1876, and in 1926-1932.
  • Apparently the first case of collaboration between countries in the region occurred in 1942 when a delegation from India helped with locust control work in southwest Persia.
  • Over the next two years, Indian help was also provided to Oman and Persia.
  • This was followed by the first conference within the region on Desert Locust, which was held in Tehran in 1945 and involved Iran, India, Saudi Arabia and Egypt.
  • A second conference took place in 1950 also in Tehran with Pakistan participating.

Bringing in Pakistan

  • In the 1950s, India and Iran cooperated and Pakistan provided two aircraft for locust surveys in Saudi Arabia.
  • Following another attack during 1958-61, a decision was taken to group Iran, Afghanistan, Pakistan and India together and the FAO Desert Locust commission was formed in 1964.
  • The commission held annual sessions skipped in 1965 and 1999 but held in 1971.
  • Even in the last six years when the relationship between India and Pakistan has deteriorated, it has been held in 2014, 2016 and 2018.
  • The meetings are attended by locust control experts, with no diplomats.

India and Pakistan

  • In 1977, the two countries began to meet on the border.
  • From 1991 to 2003, special border surveys took place during the summer, undertaken by locust control officers in their respective countries.
  • Joint border meetings have taken place every year since 2005 till 2019, except in 2011. This has been despite every diplomatic strain; including the 26/11 Mumbai attacks.
  • Arrangements are made in advance and protocols are followed for crossing the border.
  • While politics and diplomacy is kept out of the technical discussions, locust control authorities feel that one of the more difficult challenges faced by the commission is that of “insecurity and sensitivities” in the region.

Also read:

Risk of Early Locusts Attacks: A new concern

Try this:

Q. Time and again normal ocean cycles got more pronounced or disrupted, resulting in all kinds of unintended consequences, like an ever-increasing domino effect of locust attacks in Asia and the Indian Sub Continent. We need to understand these links if we are to plan effectively for climate change mitigation and adaptation. Discuss. (250W)

Digital India Initiatives

[pib] Instant PAN through Aadhaar based e-KYC

Note4Students

From UPSC perspective, the following things are important :

Prelims level : PAN

Mains level : Income tax reforms in India

The Union Finance Ministry has launched the facility for instant allotment of (Permanent Account Number) PAN.

Try this question from CSP 2018:

Q.) Consider the following gatemen.

1. Aadhaar card can be used as a proof of citizenship or domicile.

2. Once issued, the Aadhaar number cannot be deactivated or omitted by the Issuing Authority.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Can’t you expect a similar question based on PAN card? If not , go through this newscard.

What is a Permanent Account Number?

  • A PAN is a ten-character alphanumeric identifier, issued in the form of a laminated “PAN card”, by the Income Tax Department.
  • It is issued to any “person” who applies for it or to whom the department allots the number without an application.
  • A PAN is a unique identifier issued to all judicial entities identifiable under the Indian Income Tax Act, 1961.
  • The income tax PAN and its linked card are issued under Section 139A of the Income Tax Act.
  • It is issued by the Indian Department under the supervision of the Central Board for Direct Taxes (CBDT) and it also serves as an important proof of identification.
  • It is also issued to foreign nationals (such as investors) subject to a valid visa, and hence a PAN card is not acceptable as proof of Indian citizenship.

Uses of PAN

  • The primary purpose of the PAN is to bring a universal identification to all financial transactions and to prevent tax evasion by keeping track of monetary transactions.
  • The PAN is mandatory when filing income tax returns, tax deduction at source, or any other communication with the IT Department.
  • PAN is also steadily becoming a mandatory document for opening a new bank account, a new landline telephone connection / a mobile phone connection, purchase of foreign currency, bank deposits above ₹50,000, purchase and sale of immovable properties, vehicles etc.

Why it is in the news?

  • A PAN is necessary for filing income tax returns.
  • This facility is now available for those PAN applicants who possess a valid Aadhaar number and have a mobile number registered with Aadhaar.
  • The allotment process is paperless and an electronic PAN (e-PAN) is issued to the applicants free of cost.

International Space Agencies – Missions and Discoveries

Starman Suits in Demo-2 Mission

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Demo 2 Mission

Mains level : Not Much

NASA’s SpaceX Demo-2 test flight has now been rescheduled for May 31, due to weather conditions. Apart from the test flight itself, what’s getting attention are the spacesuits that the astronauts will wear while travelling in the SpaceX capsule, called Crew Dragon.

Try this question from CSP 2014:

Q. Which of the following pair is/are correctly matched?

Spacecraft Purpose
1. Cassini-Huygens Orbiting the Venus and transmitting data to the Earth
2. Messenger Mapping and investigating the Mercury
3. Voyager 1 and 2 Exploring the outer solar system

Select the correct answer using the code given below.

a) 1 only

b) 2 and 3 only

c) 1 and 3 only

d) 1, 2 and 3

The SpaceX spacesuit

  • The so-called “Starman suits” the astronauts will wear on the Demo-2 mission have been designed by a famous Hollywood costume designer.
  • The SpaceX spacesuits are different from other spacesuits typically worn by astronauts because of their sleek design and are being described as resembling a tuxedo.
  • These spacesuits are meant to be lighter and more flexible, are equipped with touchscreen gloves, have vents that allow astronauts to be cooler while maintaining pressure inside the suit, and have an incorporated helmet and visor.
  • The helmets of these suits are 3D printed with touchscreen-sensitive gloves and the suit is all in one piece, customised for the wearer.

How are launch-and-entry spacesuits different from EMUs?

  • The SpaceX suits are only meant to be worn inside the space shuttle and are not suitable for carrying out spacewalks.
  • Spacesuits for spacewalks, called Extravehicular Mobility Units (EMUs), are heavier than launch-entry suits (LES) and are already present aboard the ISS.
  • While inside the spacecraft, the atmosphere can be controlled, to explore and work in space, humans require that they take their environment with them because there are atmospheric pressure and no oxygen to sustain life.
  • Such spacesuits – EMUs are worn for spacewalks or extravehicular activities (EVA) conducted outside a space shuttle.
  • These provide astronauts with oxygen supply and protect them against extreme temperatures, radiation and space dust.

Back2Basics

Demo-2 Mission by SpaceX

Innovations in Biotechnology and Medical Sciences

Species in news: Super mushroom “Cordyceps militaris”

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Cordyceps militaris

Mains level : NA

A university in Assam has developed a fungal powder to help people boost their immunity to disease.

Try this question from CSP 2019:

Q.) Recently, there was a growing awareness in our country about the importance of Himalayan nettle (Girardinia diversifolia) because it is found to be a sustainable source of

(a) anti-malarial drug

(b) bio-diesel

(c) pulp for paper industry

(d) textile fibre

A similar question related to Cordyceps militaris can be asked. UPSC may ask whether it is a Fungi, Algae, a Moss or a Lichen.

Cordyceps militaris

  • The powder is from a parasitic but rare “super mushroom” called Cordyceps militaris.
  • The militaris underwent powdering through lyophilisation or freeze-drying at –80°C.
  • The earth has more than 400 species of Cordyceps, a fungus parasitic on insects as well as other fungi.
  • Often referred to as a super mushroom, Cordyceps known for its anti-ageing, anti-viral, energy and immunity-boosting effect.
  • Natural Cordyceps is hard to get and if dried, costs at least ₹8 lakh per kg.

New Species of Plants and Animals Discovered

Species in news: Asian Koel

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Asian Koel

Mains level : NA

Asian Koel, the state bird of Puducherry, is now breeding across Delhi-NCR.

For such species, related question, always focus on their habitat, endemic area, IUCN/Wildlife Protection Acr status.

Another caution: Imp birds in the news that are almost “Least Concerned” eg. Amur Falcon (Nagaland), Asian Koel

Asian Koel

IUCN status: Least Concerned

  • The Asian Koel (Eudynamys scolopaceus) is a member of the cuckoo order of birds, the Cuculiformes.
  • It is found in the Indian Subcontinent, China, and Southeast Asia.
  • It forms a superspecies with the closely related black-billed koels, Indian cuckoos, and Pacific koels which are sometimes treated as subspecies.
  • The Asian Koel like many of its related cuckoo kin is a brood parasite that lays its eggs in the nests of crows and other hosts, who raise its young.

Key Features

  • Sexual dimorphism is evident, where males are a glossy black with a greenish sheen to their bodies and females are brown with white dots on their wings and heavy streaking on their head and throat.
  • Both sexes have strong long greenish bills and captivating ruby-red eyes.
  • In the bird world, the males are generally more pleasant looking than the females, considering they woo females.

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

Understanding the monetisation of deficit

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Relation between bond yield

The RBI could finance the government debt by buying bonds from the secondary market. Or it could directly finance the debt. And both could stoke inflation. But, do they carry the same inflation risk. The answer is an unambiguous ‘No’. So, how monetisation of debt is different from Open Market Operation by the RBI? Read the article to know…

What is Monetised deficit?

  • The Monetised Deficit is the extent to which the RBI helps the central government in its borrowing programme.
  • In other words, monetised deficit means the increase in the net RBI credit to the central government, such that the monetary needs of the government could be met easily.

What monetisation of deficit mean (and doesn’t mean)

  • Monetisation of the deficit does not mean the government is getting free money from the RBI.
  • If one works through the combined balance sheet of the government and the RBI, it will turn out that the government does not get a free lunch.
  • But it does get a heavily subsidised lunch.
  • That subsidy is forced out of the banks.
  • And, as in the case of all invisible subsidies, they don’t even know.

So, is the RBI monetising the debt?

  • It is not as if the RBI is not monetising the deficit now; it is doing so.
  • It is doing so indirectly by buying government bonds in the secondary market through what are called open market operations (OMOs).
  • Note that both monetisation and OMOs involve printing of money by the RBI.
  • But there are important differences between the two options that make shifting over to monetisation a non-trivial decision.

Historical context of the monetisation of debt: An agreement

  • In the pre-reform era, the RBI used to directly monetise the government’s deficit almost automatically.
  • That practice ended in 1997 with a landmark agreement between the government and the RBI.
  • It was agreed that henceforth, the RBI would operate only in the secondary market through the OMO route.
  • The implied understanding also was that the RBI would use the OMO route not so much to support government borrowing.
  • So, the RBI uses OMO as liquidity instrument to manage the balance between the policy objectives of supporting growth, checking inflation and preserving financial stability.

So, what were the outcomes of the agreement?

  • The outcomes of that agreement were historic.
  • Since the government started borrowing in the open market, interest rates went up.
  • HIgh interest rates incentivised saving and thereby spurred investment and growth.
  • Also, the interest rate that the government commanded in the open market acted as a critical market signal of fiscal sustainability.
  • Importantly, the agreement shifted control over money supply, and hence over inflation, from the government’s fiscal policy to the RBI’s monetary policy.
  • The India growth story that unfolded in the years before the global financial crisis in 2008 when the economy clocked growth rates in the range of 9 per cent was at least in part a consequence of the high savings rate and low inflation which in turn were a consequence of this agreement.

What is the reasoning for jeopardising the hard-won gains of agreement?

  • The Fiscal Responsibility and Budget Management Act as amended in 2017 contains an escape clause.
  • Escape clause permits monetisation of the deficit under special circumstances.
  • What is the case for invoking this escape clause?
  • The case is made on the grounds that there just aren’t enough savings in the economy to finance government borrowing of such a large size.
  • Bond yields would spike so high that financial stability will be threatened.
  • The RBI must therefore step in and finance the government directly to prevent this from happening.

No, the situation is not so grim-Look at the bond yields

  • There is no reason to believe that we are anywhere close to the above-mentioned situation.
  • Through its OMOs, the RBI has injected such an extraordinary amount of systemic liquidity that bond yields are still relatively soft.
  • In fact the yield on the benchmark 10 year bond which was ruling at 8 per cent in September last year has since dropped to just around 6 per cent.
  • Even on the day the government announced its additional borrowing to the extent of 2.1 per cent of GDP, the yield settled at 6.17 per cent.
  • That should, if anything, be evidence that the market feels quite comfortable about financing the enhanced government borrowing.

Why worry about monetisation if OMO also leads to inflation?

The following four issues make clear the difference in OMO and monetisation

1. Issue of RBI’s control over monetary policy

  • Both monetisation and OMOs involve expansion of money supply which can potentially stoke inflation.
  • If so, why should we be so wary of monetisation?
  • Because although they are both potentially inflationary, the inflation risk they carry is different.
  • OMOs are a monetary policy tool with the RBI in the driver’s seat, deciding on how much liquidity to inject and when.
  • In contrast, monetisation is, and is seen, as a way of financing the fiscal deficit with the quantum and timing of money supply determined by the government’s borrowing rather than the RBI’s monetary policy.
  • If RBI is seen as losing control over monetary policy, it will raise concerns about inflation.
  • That can be a more serious problem than it seems.

2. Credibility of RBI on curbing inflation

  • India is inflation prone.
  • Note that after the global financial crisis when inflation “died” everywhere, we were hit with a high and stubborn bout of inflation.
  • In hindsight, it is clear that the RBI failed to tighten policy in good time.
  • Since then we have embraced a monetary policy framework and the RBI has earned credibility for delivering on inflation within the target.
  • Forsaking that credibility can be costly.

3. Yield on bond could shoot up anyway

  • If, in spite of above problems, the government decides to cross the line, markets will fear that the constraints on fiscal policy are being abandoned.
  • Perception in the market will be that the government is planning to solve its fiscal problems by inflating away its debt.
  • If that occurs, yields on government bonds will shoot up, the opposite of what is sought to be achieved.

4. Monetisation is not inevitable yet

  • What is the problem that monetisation is trying to solve?
  • There are cases when monetisation — despite its costs — is inevitable.
  • If the government cannot finance its deficit at reasonable rates, then it really doesn’t have much choice.
  • But right now, it is able to borrow at around the same rate as inflation, implying a real rate (at current inflation) of 0 per cent.
  • If in fact bond yields shoot up in real terms, there might be a case for monetisation, strictly as a one-time measure.
  • We are not there yet.

Consider the question asked in 2019, “Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your argument.”

Conclusion

Though OMO and monetisation both leads to inflation, the issues with monetisation have far-reaching consequences. Also, the situation we are in doesn’t yet warrant monetisation which should be seen as a last resort.

Back2Basics:  Open Market operation

  • OMOs are conducted by the RBI by way of sale and purchase of G-Secs to and from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis.
  • When the RBI feels that there is excess liquidity in the market, it resorts to sale of securities thereby sucking out the rupee liquidity.
  • Similarly, when the liquidity conditions are tight, RBI may buy securities from the market, thereby releasing liquidity into the market.

 

 

Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

Alleviating the farmers’ pain

Note4Students

From UPSC perspective, the following things are important :

Prelims level : APMC Act, ECA

Mains level : Paper 3- Reforms in agri-marketing and amendment in ECA and APMC Acts.

The article discusses the recently announced reforms in the agri-marketing. The legal changes promised are expected to deal with problems farmer face in selling their products and a law dealing with contract farming. These legal reforms are expected to increase farmers’ income.

Some of the issues faced by the farmers

  • If any class of economic agents of our country has been denied the constitutional right of freedom of trade, it is farmers.
  • They don’t have the freedom of selling their produce even in their neighbourhood.
  • Remunerative price is still a mirage for them.
  • Their farm incomes are at the mercy of markets, middlemen and money lenders.
  • For every rupee that a farmer makes, others in the supply chain get much more.
  • Both farmers and consumers are the sufferers of the exploitative procurement and marketing of farm produce.
  • The public investments in irrigation and other infrastructure has increased.
  • The institutional credit and minimum support price given over the years has been increasing.
  • Yet, farmers are shackled when it comes to selling their produce.

Restriction on the farmers: Echoes from the past

  • This exploitation of farmers has its roots in the Bengal famine of 1943, World War II, and the droughts and food shortages of the 1960s.
  • The Essential Commodities Act, 1955, and the Agricultural Produce Market Committee (APMC) Acts of the States are the principle sources of violation of the rights of farmers to sell their produce at a price of their choice.
  • These two laws severely restrict the options of farmers to sell their produce.
  • Farmers continue to be the victims of a buyers’ market.
  • This is the principal cause of their exploitation.
  • Renowned farm scientist M.S. Swaminathan has for long argued for the right of farmers to sell their produce as they deem fit.

Balancing the interest of consumers and the farmers

  • Given the economic disparities in the country, the interests of consumers need to be protected.
  • But that should not happen at the cost of the producers of the very commodities that the consumers need.
  • For various reasons, a balance in this regard could not be struck.
  • The restrictive trade and marketing policies being practised with respect to agricultural prices have substantially eroded the incomes of farmers.

Let’s have a look at a study on agricultural policies in India

  • A study on agricultural policies in India by the Indian Council for Research on International Economic Relations-Organisation for Economic Co-operation and Development (2018), co-authored by the renowned farm economist Ashok Gulati, was published with startling revelations.
  • It concluded that the restrictions on agricultural marketing amounted to ‘implicit taxation’ on farmers to the tune of ₹45 lakh crore from 2000-01 to 2016-17.
  • This comes to ₹2.56 lakh crore per year.
  • No other country does this.

Reforms to remove the hurdles in farmer getting remunerative price

  • Recently announced package has approximately ₹4 lakh crore support for farming and allied sectors, aimed at improving infrastructure and enhancing credit support.
  • But the most welcome feature of this package is the firm commitment to rewriting the Essential Commodities Act and the APMC laws.
  • The revision of these restrictive laws is long overdue and will remove the hurdles that farmers face in getting a remunerative price for their produce by giving them more options to sell.
  • This long-awaited revision needs to be undertaken with care and responsibility so that no space or scope is left for farmers to be exploited yet again.
  • While allowing several buyers to directly access the produce from the farmers, a strong and effective network of Farm Producers’ Organisations should be created to enhance the bargaining power of farmers.
  • This will ensure that individual farmers are not exploited.
  • An effective law on contract farming is also the need of the hour.
  • Law on contract farming will secure incomes of farmers besides enabling private investments.
  • Yet another unique feature of this package has been its comprehensiveness towards improving the incomes of farmers through a range of activities.
  • A study by the National Institute of Agricultural Extension Management has revealed that of the 3,500 farmers’ suicides examined, there was no farmer who had supplementary incomes from dairy or poultry.
  • The huge support to animal husbandry and fisheries in the stimulus package underlines the need for diversifying the income sources of farmers.

Consider the question “The APMC Acts of the has been blamed for poor price realisation by the farmers. Recently announced reforms promise to do away with such issues in the APMC Act. In light of this, examine the issues with APMC Acts and how the promised reforms are expected to resolve such issues.”

Conclusion

It is time to allow our farmers to sell their produce anywhere for their benefit. All stakeholders should be taken on board while revising restrictive agri-marketing laws.