Note4Students
From UPSC perspective, the following things are important :
Prelims level: ESIS and EPF
Mains level: Paper 3- ESIS and EPF
The idea of welfare state
- Covid reminds us that a modern state is a welfare state as governments worldwide launched 1,600 plus new social protection programmes in 2020.
- Sustainable social security lies in raising India’s 138th ranking in country per-capita GDP.
- However, on the social security schemes, there is a case for three reforms to our biggest health insurance and pension schemes:
- These schemes are the Employee State Insurance Scheme (ESIS) and Employee Provident Fund (EPF).
Issues with ESIS
- The Employee State Insurance Scheme (ESIS) is India’s richest and biggest health insurance scheme with 13 crore people covered and Rs 80,000 crore in cash.
- Employers with more than 10 employees make a mandatory 4 per cent payroll deduction for employees earning up to Rs 21,000 per month.
- Despite covering roughly 10 per cent of India’s population, a recent working paper from Dvara Research suggests high dissatisfaction.
- The constraint is hardly resources: ESIC’s unspent reserves are larger than the Central government’s healthcare budgetary allocation.
Issues with EPF
- EPF is India’s biggest pension scheme with a Rs 12 lakh crore corpus and 6.5 crore contributors.
- Employers with more than 20 employees make mandatory 24 per cent payroll deductions for employees earning up to Rs 15,000 per month.
- It only covers 10 per cent of India’s labour force and 60 per cent of accounts and 50 per cent of registered employers are inactive.
- EPF offers poor service and pathetic technology despite employer-funded administrative costs that make it the world’s most expensive government securities mutual fund.
Updating the risk-sharing frameworks in society
- In a book titled What We Owe Each Other: A New Social Contract, Nemat Shafik suggests updating the risk-sharing framework in societies.
- This is because current structures are breaking up under the weight of changes in the role of women, longer careers, technology, globalisation, and much else.
- She suggests a more nuanced social security redistribution across time (the piggy bank function), incomes (the Robin Hood function), and financial burden-bearing (the state, individuals, or employers).
- In India, the answer lies in fixing the problems of EPF and ESIS.
Solution to the EPF and ESIS problems
- Both suffer from poor coverage, high costs, unsatisfied customers, metrics confused with goals, jail provisions, excessive corruption, low expertise, rude and unaccountable staff with no fear of falling or hope of rising, and no competition.
Let’s look at possible solutions.
1) Structure
- EPF and ESIS combine the roles of policymaker, regulator, and service provider.
- Splitting roles is a precondition for performance because goals, strategy, and skills are different.
- An independent policymaker horrified with only 6 lakh of India’s 6.3 crore enterprises covered would create competition.
- An independent regulator terrified by ESIS overcharging would frown on a claims ratio of less than 75 per cent.
- An independent service provider would invest heavily in technology, customer service, and human capital.
- Splitting roles would lead to the following benefits:
- 1) Competition from NPS for EPF.
- 2) Ending VIP opt-out by merging CGHS with ESIS,
- 3) Raising enforceability by making employee provident fund contribution voluntary.
- 4) Improving portability by de-linking accounts from employers.
- 5) Targeting universalisation by simultaneously ending minimum employer head-count and employee salary contribution thresholds while introducing absolute contribution caps.
- The Health and Finance Ministry would be logical homes for ESIS and EPF policy roles.
2) Governance
- The governing board of ESIS and EPFO have 59 and 33 members respectively.
- Such a large group can’t have meaningful discussions, make decisions, and exercise oversight.
- This governance deficit needs smaller boards (not more than 15), age limits, term limits, expertise, active sub-committees (HR, Investments, and technology) and real powers.
3) Leadership
- Health and pensions need complex skills developed over time.
- Yet, ESIS and EPF are led by generalist bureaucrats.
- Both organisations need professional chief executives.
- Philosopher Isaiah Berlin’s framing of the generalist vs specialist debate as hedgehogs (who know one thing) and foxes (who know many things) is important.
- A less generalist, non-transitory, and non-cadred chief executive would create a new tone-from-the-top around performance management, technology, and service outcomes.
Conclusion
Social security — not a borrowing binge that steals from our grandchildren — can blunt structural and COVID inequality when combined with complementary policies like formalisation, financialisation, urbanisation, and better government schools. But a great place to start is three flick-of-pen, non-fiscal reforms at EPF and ESIS.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: FDI restrictions on e-commerce
Mains level: Paper 3- FDI in e-commerce
We need a comprehensive FDI policy on trade to take care of the needs of all the stakeholders. The article highlights the issues faced by the e-commerce sector in relation to the FDI policy.
E-commerce as an enabler
- With their efficient, quick and reliable logistics network, e-commerce platforms have nudged consumer behaviour patterns from an offline to an online shopping mode.
- During the pandemic, e-commerce emerged as an enabler in ensuring the availability of essentials to the masses.
- E-commerce is going to be increasingly important in the future of retail shopping in India and the world over.
- It is estimated to become a $100 billion industry by 2024, which was at $38.5 billion until 2017.
- The trend will continue to grow with the government’s impetus on digital literacy, also supported by the increasing penetration of internet and smartphone users.
- However, what the sector lacks is the bandwidth of operation.
Issues with FDI policy for e-commerce
- In addition to the FDI Policy/FEMA, other laws such as IT Act, Consumer Protection Act, and those pertaining to IP and copyright, regulate the e-commerce sector in India.
- Of these, the FDI policy plays an important role as massive investments are needed to build and strengthen the entire ecosystem of the e-commerce sector in the country.
- FDI policies on trade have evolved over time as policy-making was done from time to time mostly responding to the needs of the market coupled with political feasibility.
- Thus, FDI policy in cash and carry or wholesale B2B operations is different (100 per cent FDI allowed under automatic route) compared to highly restrictive FDI policy on retail B2C trade.
- Similarly, an artificial distinction was created between single-brand retail and multi-brand retail as opposition to multi-brand retail was strong: 100 per cent FDI is allowed under automatic route in single-brand retail whereas FDI regime in multi-brand retail is quite restricted.
- E-commerce is not allowed under FDI policy in multi-brand retail.
- The FDI policy on e-commerce is quite different as e-commerce platforms are allowed to work only as a marketplace with permission to provide certain specified services to sellers and buyers.
- However, FDI is allowed in the inventory model when these platforms sell fresh farm produce made in India.
- There is no specific policy on FDI in e-commerce for exports.
Need for comprehensive FDI policy for trade
- The rapid expansion of the retail, organised retail as well e-commerce sector in India in the coming years will create huge opportunities for all.
- The policies that have evolved over time need a relook to balance the interests of all in a win-win policy.
- Today, our small businesses employing an exceptionally large number of workers need to use e-commerce more and more to augment their sales.
- E-commerce provides them with the means to access a much bigger market without having to overly invest in marketing. This should include more and more foreign markets.
- Consumers have benefited enormously from e-commerce.
- Also, the harmonious working of online and offline retailers is essential.
- With GST and the drive towards digitisation, more small traders need to be enabled to make the transition and take advantage of the expanding opportunities.
Consider the question “Why e-commerce sector is important for the economy of a country? What are the issues the sector faces in India?”
Conclusion
Public policy on e-commerce needs to place an equal premium on the views and interests of all the stakeholders in the ecosystem to strengthen our domestic businesses and create many more jobs and livelihood opportunities in the country to fulfil the dreams of Atmanirbhar Bharat.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Factors making Naxal moment a complex security challenge
The article explains the issues with the two common themes adopted for explaining the Naxal movement in India.
Two approaches to explain Naxal movement
1) Root cause and alienation approach
- The recent attack in and around Tekulagudem village in Sukma district demonstrates the threat posed by Maoists.
- The post-incident analysis of such setbacks comes in two flavours.
- The most popular theory amongst our intelligentsia and media is the root cause and alienation approach.
- This approach states that it is the failure of the Indian state to provide economic development and social justice to the tribals living in these areas that has fuelled the Naxal movement and sustained it for five decades.
- As a prescription, a development-centric approach and negotiations are suggested as the way forward.
Issues with root cause and alienation approach
- There are several problems with this approach.
- First, it ignores the ideological foundations of the movement, specifically its rejection of India’s Constitution and democracy.
- Second, it fails to see that social and economic deprivation is not unique to the jungles of Chhattisgarh.
- Third, it doesn’t account for the possibility that while alienation and deprivation may help in igniting the spark of revolution, once lit the flames draw oxygen from many sources.
- Fourth, the role of external forces in fomenting and sustaining this movement is deliberately underplayed.
- Fifth, the grubby ground reality of the praxis of revolution is conveniently swept under the carpet.
- The organised extortion racket from all economic stakeholders in the Naxal-affected areas by our alienated revolutionaries seldom gets talked about.
- Sixth, the extensive ideological, financial and logistical ecosystem that provides sustenance to these revolutionaries in the jungle is seldom acknowledged.
2) Leadership issue
- According to this view, our tactical failures against the Maoists are entirely due to the poor quality of leadership provided by the Indian Police Service.
- The when, where, how of a setback simply don’t matter.
- When in doubt, identify the first IPS officer in the chain of command and hoist him on the petard of tactical incompetence.
- This view completely ignores the many successes of IPS leadership in counterinsurgency operations in Punjab, Andhra Pradesh, Uttar Pradesh and most recently in Odisha.
- Even in the Northeast and Jammu and Kashmir, where the Indian Army provides the backbone of the counterinsurgency grid, the police forces of the respective states and their IPS leadership play a crucial role in gathering intelligence and in executing operations.
- So, the failures and setbacks in the Naxal areas of Chhattisgarh need to be placed in perspective.
Way forward
- The fact that the Indian state has adopted a broad policy of economic development, military restraint and gradual attrition and rejected indiscriminate violence in the Naxal theatre is the democratically prudent and morally just course of action.
- This hasn’t dissuaded Maoist sympathisers from gaining international attention through relentless propaganda against our security forces.
- However, such attacks also help in exposing their true nature and hardening public resolve against them.
- \We have enough examples of successful, police led CI Ops in our country.
- Why we are not able to replicate these successes in Chhattisgarh is a matter of larger political issues, well beyond the narrow scope of operational tactics and individual lapses of police leadership.
- Not just the politics, the geography and demography of the Naxal-affected areas, make it an even more complex challenge of internal security.
Consider the question “What are the factors that make Naxal movement a persistent threat to India’s internal security? ”
Conclusion
Not just the politics, the geography and demography of the Naxal-affected areas, make it an even more complex challenge of internal security.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Agri exports
Mains level: Paper 3- Agri exports
Consistent trade surplus in agricultural products
- India has consistently maintained trade surplus in the agricultural products over the years.
- The export of Agri and allied commodities during Apr, 2020 – Feb,2021 were Rs. 2.74 lakh Crore as compared to Rs. 2.31 Crore in the same period last year indicating an increase of 18.49%.
- The imports of Agri and allied commodities during April, 2020 – Feb, 2021 were Rs. 1.41lakh Crore as compared to Rs. 1.37 lakh Crore in the same period last year witnessing a slight increase of 2.93%.
Commodities that posted positive growth
- India has witnessed tremendous growth of 727 % for Wheat export.
- On specific demand from countries, NAFED has exported 50,000 MT wheat to Afghanistan and 40,000 MT wheat to Lebanon under G2G arrangement.
- Country has witnessed significant growth of 132% in export of (Non-Basmati) Rice.
- Export of Non-Basmati Rice has gone up from Rs 13,030 crores in 2019-20 to Rs 30,277 crores in 2020-21.
- This increase in exports is on account of multiple factors, mainly being India capturing new markets namely, Timor-Leste, Papua New Guinea, Brazil, Chile, and Puerto Rico.
- Exports were also made to Togo, Senegal, Malaysia, Madagascar, Iraq, Bangladesh, Mozambique, Vietnam, Tanzania Rep and Madagascar.
- India also enhanced export of Soya meals by 132%. Soya meal has gone up from Rs 3087 crores in 2019-20 to Rs 7224 crores in 2020-21.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Epithelial cell
Mains level: Paper 2-Oxygen requirement in covid patients
How Covid-19 leads to shortness of breath?
- Shortness of breath occurs because of the way Covid-19 affects the patient’s respiratory system.
- When a person inhales, the tiny air sacs in the lungs — alveoli — expand to capture this oxygen, which is then transferred to blood vessels and transported through the rest of the body.
- Respiratory epithelial cells line the respiratory tract.
- Their primary function is to protect the airway tract from pathogens and infections, and also facilitate gas exchange.
- And the SARS-CoV-2 coronavirus can infect these epithelial cells.
- To fight such infection, the body’s immune system releases cells that trigger inflammation.
- When this inflammatory immune response continues, it impedes the regular transfer of oxygen in the lungs.
- Simultaneously, fluids too build up.
- Both these factors combined make it difficult to breathe.
- Low levels of oxygen triggered by Covid-19 are inflammatory markers, which include elevated white blood cell counts and neutrophil counts.
Does a patient always show Covid symptoms when their oxygen levels drop?
- No.
- According to the FAQs on Covid-19 from AIIMS e-ICUS, sudden deaths have been reported at presentation to the emergency department, as well as in hospital.
- AIIMS has said that the reasons that have been proposed include a sudden cardiac event, preceding “silent hypoxia” that went unnoticed, or due to a thrombotic complication such as pulmonary thromboembolism.
- In silent hypoxia, patients have extremely low blood oxygen levels, yet do not show signs of breathlessness.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: World Press Freedom Index
Mains level: Paper 2- Freedom of press in India
Where India stands on freedom of press
- India is ranked at 142 out of 180 countries on the World Press Freedom Index 2021.
- India at142th position is same as last year, after it had consistently slid down from 133 in 2016.
- In the South Asian neighbourhood, Nepal is at 106, Sri Lanka at 127, Myanmar (before the coup) at 140, Pakistan at 145 and Bangladesh at 152.
- The index is published by the international journalism not-for profit body, Reporters Without Borders (RSF).
- China is ranked 177, and is only above North Korea at 179 and Turkmenistan at 178.
What the report said about India
- The report released on Tuesday stated that India shares the “bad” classification with Brazil, Mexico and Russia.
- RSF has highlighted that the “campaigns are particularly violent when the targets are women”.
- Further, it said that criminal prosecutions are meanwhile “often used to gag journalists critical of the authorities” with sections for sedition also used.
- Speaking about the larger Asia-Pacific region, the report mentioned that “instead of drafting new repressive laws in order to impose censorship, several of the region’s countries have contented themselves with strictly applying existing legislation that was already very draconian – laws on ‘sedition,’ ‘state secrets’ and ‘national security’.”
- The report has also highlighted throttling of freedom of expression on social media, and specifically mentioned that in India the “arbitrary nature of Twitter’s algorithms also resulted in brutal censorship”
Measures adopted by India to improve ranking
- The Indian government has been concerned about its low rankings in such international indices, and had last year started studying them to understand how to improve.
- Soon after the index was released last year, Union Minister for Information and Broadcast had tweeted on May 2: “Media in India enjoy absolute freedom.”
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 224A
Mains level: Paper 2- Appointment of retired judges in the High Court under Article 224A
Appointment of retired judges under Article 224A
- The Supreme Court cleared the way for appointment of retired judges as ad-hoc judges in High Courts under Article 224A of the Constitution.
- The court ruled that the Chief Justice of a High Court may initiate the process of recommending a name if the number of judges’ vacancies is more than 20 per cent of the sanctioned strength.
- The court said the appointments can follow the procedure laid down in the Memorandum of Procedure for appointment of judges.
- The move will help to deal with mounting backlog of cases.
- Since the nominees have been judges before, the need to refer the matter to the IB or other agencies would not arise, shortening the time period.
Back2Basics: About Article 224A
- It allows the Chief Justice of a High Court to allow a retired judge of any High Court to sit and act as the judge of the High Court for that State.
- Previous consent of the President is necessary.
- The acting retired judge would be entitled to such allowances as the President may by order determine and have all the jurisdiction, powers and privileges of, but shall not otherwise be deemed to be, a Judge of that High Court.
- This Article was not part of the Constitution of India, 1950. It was inserted by the Constitution (Fifteenth Amendment) Act, 1963.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 217 of Indian Constitution
Mains level: Paper 2- SC sets timeline to Centre to clear names recommended by the Centre
Why the timeline
- The Supreme Court laid down a timeline for the Centre to clear names recommended by the High Court Collegiums.
- The Bench noted that there are almost 40% vacancies in the High Courts, with many of the larger High Courts working under 50% of their sanctioned strength.
- Against the sanctioned strength of 1,080 High Court Judges, 664 have been appointed but 416 vacancies remain.
- The Bench rejected the contention that laying down a timeline “would be contrary to” certain “observations made in the Third Judges case”, saying the “observations” referred to “deal with the judicial review of a particular appointment and not such aspects of the appointment process like delay”.
The timeline
- The Intelligence Bureau (IB) should submit its report/ inputs within 4 to 6 weeks from the date of recommendation of the High Court Collegium, to the Central Government.
- It would be desirable that the Central Government forward the file(s)/ recommendations to the Supreme Court within 8 to 12 weeks from the date of receipt of views from the State Government and the report/ input from the IB.
- It would be for the Government to thereafter proceed to make the appointment immediately on the aforesaid consideration and undoubtedly, if Government has any reservations on suitability or in public interest, within the same period of time it may be sent back to the Supreme Court Collegium with the specific reasons for reservation recorded.
- If the Supreme Court Collegium, after consideration of the aforesaid inputs, still reiterates the recommendation(s) unanimously…, such appointment should be processed and appointment should be made within 3 to 4 weeks.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Currency watchlist
Mains level: Paper 3-Currency watchlist of the US and RBI's role
Why was India put on the currency watchlist by the US
- The U.S. Treasury Department had recently retained India in a watchlist for currency manipulators submitted to the U.S. Congress.
- It cited higher dollar purchases (close to 5% of the gross domestic product) by the Reserve Bank of India (RBI).
- Another trigger for the inclusion in the currency watchlist is a trade surplus of $20 billion or more.
What is India’s position
- India had a steady holding pattern of forex reserves ‘with ups and downs’ based on market-based transactions that central banks may undertake.
- The central bank’s activity in the foreign exchange market has been perfectly balanced and completely legitimate within the accepted monetary policy mandate of central banks across the world.
- It is a mandate of the central bank to provide stability in the currency as a result of which central banks buy and sell foreign currency.
- Our overall reserves have been fairly steady at $500 bn to $600 bn.
- We are not accumulating reserves like China.
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The Council of the European Union approved conclusions on a European Union strategy for cooperation in the Indo-Pacific.
Aim:
- To reinforce its strategic focus, presence and actions in the Indo-Pacific region.
- To contribute to regional stability, security, prosperity and sustainable development at the time of “rising challenges and tensions in the region.”
Rationale:
- The current dynamics in the Indo-Pacific have given rise to:
- Intense geopolitical competition
- Increasing tensions on trade and supply chains
- Challenges in technological, political and security areas
- Issues related to Human rights
- As per the EU, these developments threaten the stability and security of the region and beyond, directly impacting on its interests.
Strategy by European Union:
- Increased cooperation in the Indo-Pacific
- Commitment to uphold democracy, human rights, the rule of law and respect for international law.
- Promote effective rules-based multilateralism
- Support for ASEAN (Association of South East Asian Nations)
- Work to mitigate economic and human effects of the COVID-19 pandemic
- Support open and fair environment for trade and investment
- Tackling climate change and supporting connectivity with the EU
- Conclude free trade agreements with Australia, Indonesia and New Zealand
- Take steps towards the Comprehensive Agreement on Investment with China
- Deepen economic relations with India
- Develop partnerships in the areas of security and defence
- Address maritime security, malicious cyber activities, disinformation, emerging technologies, terrorism, and organised crime
- Extend the geographic scope of its CRIMARIO (Critical Maritime Routes) IIactivities from the Indian Ocean into South and Southeast Asia to contribute to safer sea lanes of communication with the EU.
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