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  • Electoral Reforms In India

    Electoral reform is welcome, but shouldn’t be selective

    op-ed snap | Polity | Mains Paper 2: Representation Of People’s Act

    Context

    The Election Laws (Amendment) Bill that seeks to link the electoral rolls with the Aadhaar database has been passed by both the Houses of the parliament.

    Three electoral reforms

    • A wide range of electoral reform proposals has been pending with the government, several of them for over two decades.
    • The three reforms — common electoral rolls for Vidhan Sabha and panchayat elections, extending the qualifying date for registration of young new voters, and linking of Aadhaar with electoral rolls — taken up by the Union Cabinet on December 15 are, therefore, significant.

    [1] Common electoral rolls

    • For years, the ECI has been advocating a common electoral roll for all elections.
    • Currently, separate electoral rolls are maintained for elections to the Lok Sabha, Vidhan Sabha and local government bodies (panchayats or municipal).
    • Role of ECI and SECs: There are two types of election management bodies in the country — the ECI that conducts the Lok Sabha and Vidhan Sabha elections and SECs that conduct panchayat and municipal elections.
    • The process for making electoral rolls is laid down in the Registration of Electors Rules, 1960.
    • The SECs have the option of either adopting the electoral rolls created by the ECI or preparing such rolls on their own.
    • Most prefer to use the rolls prepared by the ECI.
    • Some states, however, develop their rolls independently.
    • These are Uttar Pradesh, Uttarakhand, Madhya Pradesh, Kerala, Odisha, Assam, Arunachal Pradesh, Nagaland and the Union Territory of Jammu and Kashmir.
    • Considering that a voter for all three tiers of elected bodies is the same, why is it that she finds her name missing from one of the rolls, mostly the panchayat rolls?
    • This is particularly surprising when the officials responsible for making both these rolls are the same.
    • A common electoral roll is thus a logical solution. 

    Benefits of common electoral rolls

    • Tackling stuffing voters: A common experience has been the stuffing of bogus voters in the panchayat/municipal rolls.
    • Corrupt practices are proportionately higher in PRI polls.
    • Avoid the involvement of teachers in the non-teaching work: The process of making electoral rolls is usually done by the schoolteachers.
    • Their involvement in non-teaching work takes its toll.
    • Cost-saving: A common electoral roll will obviate the need for deploying them repeatedly, besides saving enormous costs.

    Suggestions for preparation of common electoral rolls

    • Issue joint instructions: The ECI and SECs can issue joint instructions for preparing the common rolls. The roll-making machinery stays the same.
    • Pilot studies may be conducted in random constituencies to identify the discrepancies between two sets of rolls and their reasons.

    What are the constitutional and legal changes required?

    • Amendment in Article 243K and 243ZA: The SECs derive their powers to supervise local body elections from Articles 243K and 243ZA of the Constitution.
    • Changes in State laws: All state governments would have to change their electoral laws to adopt ECI electoral rolls for local elections.

    [2] Eligibility date of new voters

    • According to Section 14(b) of the Representation of People Act of 1950, only those who have turned 18 on or before January 1 of the year are to be registered.
    • This implies that all those who turn 18 between January 2 and December 31 of a year must wait till the next year.
    • This technicality results in the exclusion of a large section of 18-year-olds.

    Suggestion by ECI on eligibility date

    • The ECI had sent a letter to the Law Ministry on November 4, 2013, which recommended the issuing of a voter card to an individual ideally on their 18th birthday, or updating voter rolls every month or quarter.
    • A committee of the Ministry of Law and Justice under Sushil Kumar Modi has proposed quarterly cut-off dates for voter registration — January 1, April 1, July 1 and October 1.

    [3] Aadhar linking

    • The proposal to link electoral rolls with Aadhaar was first mooted by the ECI in 2015 but work on it had to be stopped when the Supreme Court ruled that Aadhaar cannot be used except voluntarily for beneficiary-oriented schemes.
    • Benefits of linking: The linking will help in identifying duplicate voters, something that ECI has been desperately attempting for years using various “de-duplication” software with limited success.

    Consider the question “What are the concerns with linking of Aadhar and electoral rolls? Suggest the way forward.”

    Conclusion

    Any progress in addressing the vexed issue of electoral reform — even in a piecemeal manner — is welcome. The time has, however, come for the government to consider the 40-plus pending proposals, instead of selectively going for some reforms.

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  • Electoral Reforms In India

    In electoral reform bill’s passing, a missed opportunity

    op-ed snap | Polity | Mains Paper 2: Representation Of People’s Act

    Context

    The Election Laws (Amendment) Bill, 2021 was passed in the Lok Sabha recently. It seeks to link electoral rolls with the Aadhaar ecosystem.

    What are the concerns with linking of Aadhar with electoral roll?

    [1] Aadhar is not proof of citizenship

    • Aadhaar is not meant to be a citizenship proof but only a digital identity for all residents.
    • Residence of 182 days can make even a non-citizen eligible for an Aadhaar ID.

    [2] Aadhar is not address proof

    • According to public statements by several government functionaries, Aadhaar was only meant to be identity proof but not address proof.
    • Electoral roll is based on Aadhar: In contrast, the RER clearly stipulates address to be a key index for electoral rolls.
    • Different enrollment process: Moreover, the enrolment processes for voters’ lists and Aadhaar are completely different.
    • Whereas Aadhaar enrolment is based on production of existing documents and the “introducer system”, voter enrolments involve physical verification and “house visits” by a registration officer or representative.

    [3] No audit report on the efficacy of Aadhaar deduplication or on the authenticity of the Aadhaar database

    • Even the Supreme Court accepted the Unique Identification Authority of India’s (UIDAI) claims on the integrity of the Aadhaar database at face value without any scrutiny.
    • Risk of exclusion error: Using Aadhaar to clean the electoral rolls involved the risk of disenfranchisement, especially of the marginalised communities.
    • It is to be noted that there is ample publicly documented evidence of large-scale exclusion in PDS and welfare disbursal due to Aadhaar.

    [4] Conflict of interest

    • UIDAI is under government control: Maintenance of the voters’ lists is a primary responsibility of the ECI, which is an independent constitutional body, whereas Aadhaar is a government instrument and UIDAI is under government control.
    • Since the ECI has no control on either enrolment or deduplication in Aadhaar, it appears inappropriate — and a potential conflict of interest — to use Aadhaar for electoral rolls.
    • In particular, since Aadhaar is directly used for disbursal of welfare and direct benefit transfers, linking it with voter ID may provide a direct method for the government to influence and manipulate voters.

    [5] Risk of profiling and targeting of voters

    • Aadhaar is a ubiquitous ID that is used in a variety of applications.
    • Linking it with the voter ID will open up avenues for profiling and targeting of voters.
    • No audit for purpose limitation: This is of particular concern because neither the UIDAI nor the ECI have publicly audited architectures for purpose limitation and protection against insider attacks.
    • While profiling using public data is not illegal according to current laws, both the electorate and Parliament need to clearly understand the risks of such profiling.
    • It is far easier to win elections through digital analysis of electoral rolls than through attacking the electronic voting process, especially when election results are available at booth-level granularity
    • Both privacy and integrity of the electoral rolls are of paramount importance in the digital age, and the clear tension between the two makes the problem challenging.

    Way forward

    • Use of cryptography: The RER of 1960 clearly opted for transparency as a means to the integrity of the electoral rolls, thereby ensuring that all additions and deletions can be publicly audited.
    • However, with the possibility of digital processing of electoral data, the risks associated with such complete transparency have increased manifold.
    • Yet, there are several modern techniques from cryptography and computer science that may help mitigate the risks by enabling both privacy and public auditability.

    Consider the question “The Election Laws (Amendment) Bill, 2021 enable the linking of electoral rolls with the Aadhaar ecosystem. What are the objectives of such linking and concerns raised against it?”

    Conclusion

    An electoral reforms bill at the onset of 2022 needed to explore and address these issues head-on.

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  • Women Safety Issues – Marital Rape, Domestic Violence, Swadhar, Nirbhaya Fund, etc.

    Karnataka’s Anti-Conversion Legislation

    | Indian Society | Mains Paper 1: Communalism, Secularism, Regionalism

    Amid opposition, the Karnataka Protection of Right to Freedom of Religion Bill, 2021, was introduced in the Assembly.

    What is the Bill about?

    • The Bill envisages stringent provisions for forced or induced conversions.
    • The government wants to prohibit conversion by:
    1. Misrepresentation
    2. Force
    3. Allurement
    4. Fraudulent means
    5. Marriage
    6. Coercion and undue influence

    Key features of the Bill

    (1) Filing of Complaints

    • Complaints of conversions can be filed by family members of a person who is getting converted, or any other person who is related to the person who is getting converted, or any person associated with the person getting converted.

    (2) Punishment and fines

    • The offense of conversion is cognisable and non-bailable and will attract a jail term of three to five years and a fine of ₹25,000 for people found violating the law.
    • There is a jail term of three to 10 years, and a fine of ₹50,000 for people converting minors, women and persons from the SC and ST communities.
    • The Bill also envisages a compensation of ₹5 lakh to victims of forced conversions.

    Do you know?

    Odisha was the first State to enact anti-conversion legislation, the Orissa Freedom of Religion Act, 1967. Madhya Pradesh enacted the same the following year.

    What about willful conversion?

    • Prior information: After the law comes into force, any person intending to convert to another religion will have to inform the district magistrate at least thirty days in advance.
    • Due inquiry of purpose: The person executing the conversion must also give a notice one month in advance, following which an inquiry will be conducted by the district magistrate through the police to establish the real intent of conversion.
    • Defying the conversion: Not informing the district magistrate will lead to the conversion being declared null and void.

    Impact of non-conformance

    • Not informing authorities will carry a prison term of six months to three years for persons who are converted and one year to five years for the persons carrying out the conversions.
    • After getting converted, the person has to again inform the district magistrate within 30 days after conversion and must appear before the district magistrate to confirm his/her identity.

    What happens once the Conversion is held valid?

    • Post conversion, the district magistrate has to inform revenue authorities, the social welfare, minority, backward classes and other departments of the conversion.
    • These authorities will, in turn, take steps with respect to the entitlements of the person in terms of reservations and other benefits.

    How many states have enacted the legislation?

    • Arunachal Pradesh, Chhattisgarh, Gujarat, Himachal Pradesh, Jharkhand, Madhya Pradesh, Odisha, Uttar Pradesh and Uttarakhand have laws restricting religious conversion.
    • Penalties for breaching the laws can range from monetary fines to imprisonment, with punishments ranging from one to three years of imprisonment and fines from ₹5,000 to ₹50,000.
    • Some of the laws provide for stiffer penalties if women, children, or members of Scheduled Castes or Scheduled Tribes (SC/ST) are being converted.
    • Some other States, including Manipur, are reportedly “considering similar laws.”

    How has Parliament handled anti-conversion bills?

    After independence, Parliament introduced a number of anti-conversion bills which were not enacted for want of majority approval.

    • In post-Independent India, the first Indian Conversion (Regulation and Registration) Bill, 1954, which sought to enforce “licensing of missionaries and the registration of conversion.”
    • This was followed by the introduction of the Backward Communities (Religious Protection) Bill, 1960, “which aimed at checking conversion of Hindus to ‘non-Indian religions’ .
    • Non-India religions included Islam, Christianity, Judaism and Zoroastrianism,.
    • The Freedom of Religion Bill in 1979, which sought “official curbs on inter-religious conversion.”

    Religious conversion: A Constitutionality check

    • Indian Constitution aspires toward tolerance of all religions and guaranteed that each person was “equally entitled to freedom of conscience and the right to freely profess, practice and propagate religion” (Article 25).
    • This formulation did not come without dispute; the word “propagate” was one of the most contested in the whole of Indian Constitution.

    Core issue: Prevalence of Inter-faith Marriage

    • India has the Special Marriage Act, 1954, which can be used by inter-faith/inter-community couples to get married.
    • The Act, however, requires an advance notice of 30 days to the magistrate before a couple is able to register their marriage.
    • When the parties are from different faiths, communities or castes, such a public notice can be, and has been, a great source of danger and harm from their family/community members.
    • Consequently, the only option exercised by the inter-faith couples is for one of them to convert to the religion of the other and get married.

    Issues with such laws

    The anti-conversion laws have been challenged on the ground that innocent persons were being booked under these Acts.

    • Patriarchal dominance: It is widely presumed that such conversions involve ‘coercion’ or ‘deceit’, and hence, Hindu women ought to be ‘protected’ from the danger of conversion.
    • Targeting minorities: These laws target Muslims and quoted instances of such inter-faith couples having been harassed by militant activists and state government authorities.
    • Freedom of Conscience: Women, it is clear, are being treated in a paternalistic way which assumes that they need protection at the cost of their right to make reasoned decisions about changing faith or choosing a friend or life partner.

    What about Incentivised Conversions?

    • There are many cases of incentivized conversions for the poor sections of society in exchange for a dignified social life.

    For them, the solution lies in addressing the root issues:

    1. Ending discrimination
    2. Providing high quality and free education to the poor and disenfranchised
    3. Improving access and quality of free health facilities and medicines
    4. Improving nourishment and
    5. Providing adequate employment opportunities to all

    Conclusion

    • Clearly, anti-conversion laws amount to discrimination and a violation of the right to equality.
    • However, inter-faith marriages should not be pre-conditioned with religious conversion. This certainly raises concerns for the majority of society.
    • Instead of pursuing this disastrous course, the government could work towards removing impediments to inter-faith marriages and eradicating the social stigma attached to such marriages.
    • The couples who wish to enter into an inter-faith alliance are enabled and protected.

     

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  • Banking Sector Reforms

    RBI proposes new norms for Capital Requirement for Banks

    | Economics | Mains Paper 3: Indian Economy

    The Reserve Bank of India (RBI) has proposed to replace existing approaches for measuring minimum operational risk capital requirements of banks with a new Basel-III standardized approach.

    What are Capital Requirements of a Bank?

    • Capital requirements are standardized regulations in place for banks and other depository institutions that determine how much liquid capital must be held of a certain level of their assets.
    • They are set to ensure that banks and depository institutions’ holdings are not dominated by investments that increase the risk of default.
    • They also ensure that banks and depository institutions have enough capital to sustain operating losses (OL) while still honoring withdrawals.

    Why need such a requirement?

    • An angry public and uneasy investment climate usually prove to be the catalysts for capital requirements provisions.
    • This is essential when irresponsible financial behavior by large institutions is seen as the culprit behind a financial crisis, market crash, or recession.

    What are the risks for a Bank?

    There are many types of risks that banks face.

    • Credit risk
    • Market risk
    • Operational risk
    • Liquidity risk
    • Business risk
    • Reputational risk
    • Systemic risk
    • Moral hazard

     What is Operational Risk?

    • ‘Operational risk’ refers to the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.
    • This has been defined by the Basel Committee on Banking Supervision I as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.
    • This definition includes legal risk, but excludes strategic and reputational risk.

    Pros of Capital Requirements

    • Ensure banks stay solvent, avoid default
    • Ensure depositors have access to funds
    • Set industry standards
    • Provide way to compare, evaluate institutions

    Unwanted consequences of such move

    • Raise costs for banks and eventually consumers
    • Inhibit banks’ ability to invest
    • Reduce availability of credit, loans

    Back2Basics: Basel Accords

    • They refer to the banking supervision Accords (recommendations on banking regulations)—Basel I, Basel II and Basel III—issued by the Basel Committee on Banking Supervision (BCBS).
    • They are called the Basel Accords as the BCBS maintains its secretariat at the Bank for International Settlements in Basel, Switzerland and the committee normally meets there.
    • These are a set of recommendations for regulations in the banking industry.
    • India has accepted Basel accords for the banking system.

    Let’s revise them:

    [1] Basel I

    • In 1988, BCBS introduced capital measurement system called Basel capital accord, also called as Basel 1.
    • It focused almost entirely on credit risk. It defined capital and structure of risk weights for banks.
    • The minimum capital requirement was fixed at 8% of risk-weighted assets (RWA).
    • RWA means assets with different risk profiles.
    • For example, an asset backed by collateral would carry lesser risks as compared to personal loans, which have no collateral. India adopted Basel 1 guidelines in 1999.

    [2] Basel II

    • In June ’04, Basel II guidelines were published by BCBS, which were considered to be the refined and reformed versions of Basel I accord.
    • The guidelines were based on three parameters, which the committee calls it as pillars:
    • Capital Adequacy Requirements: Banks should maintain a minimum capital adequacy requirement of 8% of risk assets.
    • Supervisory Review: According to this, banks were needed to develop and use better risk management techniques in monitoring and managing all the three types of risks that a bank faces, viz. credit, market and operational risks.
    • Market Discipline: This need increased disclosure requirements. Banks need to mandatorily disclose their CAR, risk exposure, etc to the central bank. Basel II norms in India and overseas are yet to be fully implemented.

    [3] Basel III

    • In 2010, Basel III guidelines were released. These guidelines were introduced in response to the financial crisis of 2008.
    • A need was felt to further strengthen the system as banks in the developed economies were under-capitalized, over-leveraged and had a greater reliance on short-term funding.
    • Also the quantity and quality of capital under Basel II were deemed insufficient to contain any further risk.
    • Basel III norms aim at making most banking activities such as their trading book activities more capital-intensive.
    • The guidelines aim to promote a more resilient banking system by focusing on four vital banking parameters viz. capital, leverage, funding and liquidity.

     

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  • Indian Army Updates

    Indian Army inducts Armoured Engineer Reconnaissance Vehicle (AERV)

    Prelims Only | Security Issues | Mains Paper 3: Indigenization Of Technology

    The first batch of next-generation indigenously designed Armoured Engineer Reconnaissance Vehicles (AERV) was inducted by the Indian Army.

    About AERV

    • AERV is indigenously designed and developed by DRDO and manufactured by the Pune unit of Bharat Electronics Limited.
    • It has more than 90% indigenous content.
    • It is a versatile BMP-IIK amphibious Infantry Combat Vehicle (ICV) fitted with instruments for water reconnaissance, land reconnaissance, navigation, and data backup.

    Unique capabilities of AERV

    • AERV is capable of measuring soil bearing capacity on riverbanks.
    • It works to determine if they are motorable for military vehicles on Go-No Go basis (critical parameters for bridge laying), dry and wet gaps in day and night conditions, slopes and height of river banks or canals.”
    • AERVs can navigate terrain using Military Grid Coordinate System, measure and plot underwater beds and water currents of rivers or canals.
    • They can store data from various instruments on Control Console for further analysis and decision-making.

     

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  • Wildlife Conservation Efforts

    Reintroduction of African Cheetahs in India

    Species | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    Kuno National Park in Madhya Pradesh was all prepped to welcome the African cheetahs — a project that has been a decade in the making — this year. The project has now been postponed, as the new coronavirus variant of concern omicron prompted travel restrictions.

    Confused over Leopard and Cheetah?

    The most common difference between these two animals is the patterns on their coat. At first glance, it may look like they both have spots, but in actual fact, a leopard has rosettes which are rose-like markings, and cheetahs have a solid round or oval spot shape.

    About Asiatic Cheetah

    • Cheetah, the world’s fastest land animal was declared extinct in India in 1952.
    • The Asiatic cheetah is classified as a “critically endangered” species by the IUCN Red List, and is believed to survive only in Iran.
    • It was expected to be re-introduced into the country after the Supreme Court lifted curbs for its re-introduction.
    • From 400 in the 1990s, their numbers are estimated to have reached to 50-70 today, because of poaching, hunting of their main prey (gazelles) and encroachment on their habitat.

    Why reintroduce Cheetahs?

    • Reintroductions of large carnivores have increasingly been recognized as a strategy to conserve threatened species and restore ecosystem functions.
    • The cheetah is the only large carnivore that has been extirpated, mainly by over-hunting in India in historical times.
    • India now has the economic ability to consider restoring its lost natural heritage for ethical as well as ecological reasons.

    Why was the project halted?

    • The court was worried whether the African cheetahs would find the sanctuary a favorable climate as far as the abundance of prey is concerned.
    • Those who challenged the plan argued that the habitat of cheetahs needed to support a genetically viable population.

    Try this PYQ:

    Q. Consider the following:

    1. Black necked crane

    2. Cheetah

    3. Flying squirrel

    4. Snow leopard

    Which of the above are naturally found in India?

    (a) 1, 2 and 3 only

    (c) 2 and 4 only

    (b) 1, 3 and 4 only

    (d) 1, 2, 3 and 4

     

    Post your answers here:

     

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  • J&K – The issues around the state

    Impact of Reorganisation Act on Ladakh’s autonomy

    op-ed snap | Polity | Mains Paper 2: Federalism

    Context

    The article deal with the impact of the passage of the Jammu and Kashmir Reorganisation Act of 2019 on Ladakh’s autonomy or participatory democracy.

    What has changed?

    • Hill Councils: The Autonomous Hill Development Councils of Leh and Kargil read along with the framework of J&K’s special status and its bicameral legislative system gave Ladakh autonomy and participatory democracy.
    • The Hill Councils had the powers over land in Ladakh while the majority of the bigger concerns regarding land remained protected under Article 370 and J&K’s robust land protection laws.
    • Power to recruit the officers: Gazetted officers were recruited through the State Public Service Commission.
    • The District Service Selection Board made recruitments at the district level.
    • But today, there is no Public Service Commission in Ladakh and the Hill Councils’ power to make recruitments at the district level has also been affected by the Lieutenant Governor (LG)’s presence.
    • No law to protect the jobs: Technically, there also exists no law in Ladakh now that protects the land or even the jobs.
    • Loss of representation: the Reorganisation Act has taken away the six seats of the Members of Legislative Assembly and the Legislative Council and wakened the functioning of the Hill Councils.
    • The only elected representation from Ladakh outside of Ladakh is a lone MP.

    Conclusion

    Steps need to be taken to address the issues related to the lack of representation in Ladakh in the wake of the passage of the Reorganisation Act of 2019.

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  • India is keeping an eye on Central Asia

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Context

    The government is inviting the leaders of the five Central Asian countries — Tajikistan, Uzbekistan, Turkmenistan, Kazakhstan and Kyrgyzstan — as guests for Republic Day on January 26.

    Significance of Central Asian region for India

    • Return of Taliban in Afghanistan: The Taliban takeover in Afghanistan has made Central Asia a region where great contestations for influence are unfolding.
    • There is a growing awareness that for leveraging influence in Kabul and harvesting that influence in the form of material gains, a firm footing in Central Asia is a prerequisite.
    • Economic dimension: Given the vast untapped mineral wealth of the region encompassing the five Central Asian countries and Afghanistan — estimated to be worth a few trillion dollars — there is a significant economic dimension to the unfolding saga.
    • Geopolitical angle: Washington hopes to create in Central Asia a vector of its Indo-Pacific strategy to contain China and Russia. At the same time, governments in Moscow and Beijing are circling the wagons.

    Suggestions for India

    • India needs to work on an intricate network of relationships with the regional states while remaining mindful of the “big picture”.
    • Delhi’s non-aligned mindset needs to be turned into a strategic asset to navigate its long-term interests.
    • India’s membership of the BRICS and SCO will help.
    • Cooperation of  Russia and China: The deepening of the traditional Indo-Russian mutual understanding has injected dynamism into Delhi’s regional strategy on the whole.
    •  It is bound to have a calming effect on India’s tensions with China.
    • Delhi cannot have an effective Central Asia strategy without the cooperation of these two big powers.
    • Regional connectivity: India can use the card of regional connectivity to stimulate partnerships.
    • The time may have come to reopen the files on the TAPI and IPI gas pipeline projects. Both involve Pakistan.
    • Normalisation of India-Russia ties: Russia is well-placed to act as guarantor and help build both these pipelines, while China too will see advantages in the normalisation of India-Pakistan ties.

    New geoeconomic partnership

    • Recently concluded third meeting of the India-Central Asia Dialogue in Delhi served a purpose to sensitise the Central Asian interlocutors that it attaches primacy to geoeconomics.
    • But India will have a challenge on its hands to flesh out the “4Cs” concept that External Affairs Minister S Jaishankar presented at the event — commerce, capacity enhancement, connectivity, and contact being the four pillars of a new geoeconomic partnership.
    • The key areas are transit and transport, logistics network, regional and international transport corridors, free trade agreements, manufacturing industry and job creation.
    • They ought to be front-loaded into India’s Central Asian strategy.
    • Certainly, the EAEU integration processes must be speeded up.

    Consider the question “With changing geopolitical scenario, India’s stake in Central Asia has drastically increased. In the context of this, examine India’s outreach efforts toward the region and the challenges it faces in it.”

    Conclusion

    A host of new possibilities open up if India’s initiative on Central Asia runs on a parallel track with an improvement in relations with China.

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  • What rising inequality means

    op-ed snap | Economics | Mains Paper 3: Inclusive Growth & Issues

    Context

    In the aftermath of Covid-19 pandemic, evaluating the state of inequality serves as an eye-opener on the income/wealth divides prevailing across regions.

    Income and wealth inequality in the world

    • The top 10% of the global population share 52% of the total income, while the bottom half survives with a mere 8.5% of it.
    • This leaves the 40% in the middle with 40% of the income.
    • This distribution shows the tendency of a rising middle class with lower disparity in income, but it also shows that the status of the poor is worsening day by day.
    • Inequality of wealth: In terms of wealth, the top 10% of the global population own 76% of the total wealth, while the bottom 50% share a mere 2%.
    • Some additional features of this exposition of inequality also relate to imbalance of women’s share in income as well as the ecological inequities indicated by the differential carbon emission levels.

    Factors responsible for rising inequality

    [1]  Absence of effective measures of redistribution

    • Inequality varies across regions. It is moderate in Europe and sharp in Africa.
    •  The top 10% have an income share of 36% in Europe vis-à-vis the top 10% with a share of 58% of the total income in West Asia and North Africa.
    • Measures for redistribution: This disparity shows that worsening inequalities are avoidable with appropriate measures in place.

    [2] The absence of measures discouraging undue accumulation

    • Kuznet’s curve not follower everywhere: While there is an argument in literature that inequalities are a manifestation of the average level of income, as explained by the Kuznets’ theory, the prevailing pattern across countries does not follow the same.
    • Average income level is poor predictor of inequality: The average income levels seem to be poor predictors of the levels of inequality, with high-income countries such as the U.S. having higher levels of inequality as against countries such as Sweden, which have moderate levels of inequality.
    • Similar contradictions are also seen when we contrast middle-income nations such as Brazil, India and China as against Malaysia and Uruguay.
    • Hence, emerging inequalities are not necessarily an outcome of rising levels of income in the post-liberalisation era, but a depiction of poor redistributive policies towards discouragement of accumulation by governments with due sensitivity towards inequalities.

    How inequality hurts government finances

    • This prevailing pattern of wealth concentration and differential levels of income around the world has also resulted in rich nations having poor governments.
    • Such a situation has two underpinnings: one, governments have a limited capacity to act on inequality aversion measures and two, private interests overshadow the distributional fairness of wealth. 

    Way forward

    • Focus also needs to be placed on reducing disparities in capability domains like education and differential endowments (tangible and intangible) that have the potential to sustain inequalities.

    Consider the question “How rising income and wealth inequality could harm us in various ways? What are the factors responsible for the rising inequality? Suggest the way forward.”

    Conclusion

    The rising levels of income and wealth need to be addresses by policy measures and reducing disparity in capacity domains.

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  • Roads, Highways, Cargo, Air-Cargo and Logistics infrastructure – Bharatmala, LEEP, SetuBharatam, etc.

    How the new Warehousing Policy will transform India’s logistics

    | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    In order to reduce transportation and logistic cost, the union government along with the National Highway Authority of India (NHAI) is working on warehouse policy.

    What are Warehouses?

    • A warehouse is a building for storing goods.
    • Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc.
    • They are usually large plain buildings in industrial parks on the outskirts of cities, towns, or villages.

    Objectives of the New Warehousing Policy

    • Logistics boost: The new policy is aimed at improving logistics throughout the country.
    • Supply chain management: The modern warehouses will house cold-storage chains and will be able to store all kinds of cargo—wet and dry.
    • De-congesting cities: These facilities are expected to come up outside city centres so that large trucks carrying the cargo do not need to enter the city to unload their goods.
    • Fuel efficiency: This will also help boost bulk carrying capacity and save fuel.
    • Curbing air pollution: The idea is to minimize pollution and traffic congestion in major cities.

    Who will frame and implement the policy?

    • NHAI: The policy will be framed by the National Highways Authority of India (NHAI). It will also be the implementing agency.

    How?

    • Through Land Banks: There are land banks along the highways and expressways of the country with the NHAI.
    • PPP mode: Tenders will be floated for such land parcels, inviting private players to develop warehousing zones in PPP mode on a revenue-sharing basis or for a fixed fee.

    What will be the impact on logistic costs?

    • Logistics cost-saving: Warehousing zones will help cut India’s logistics cost, which is 14%-16% of gross domestic product (GDP), compared to 8%-10% of GDP in China and 12%-13% in the US.
    • Establishment of MMLPs: The warehousing zones and multi-modal logistics parks (MMLPs) are being set up by the NHAI.
    • FMCG sector boost: This will help Fast-moving consumer goods (FMCG) firms,  steel and cement makers stock inventory near major hubs.

    How will MMLPs aid warehousing policies?

    • Integration of multi-modal transport includes the development of 35 MMLPs.
    • The MMLPs are aimed at fostering inter-modal connectivity through dedicated railway lines and access from highways to provide connectivity to an airport or a seaport or an inland waterway terminal.
    • The aim is to:
    1. Remove deficiencies related to logistics
    2. Draw the associated costs down, and
    3. Strategically integrate highway projects and other connectivity initiatives

    Why such move?

    Ans. E-commerce boom

    • The e-commerce sector has been driving the demand for logistics and warehousing across global markets.
    • It has emerged as the most prominent driver of Indian warehousing market volumes along with the third party logistics sector.
    • This sector’s share in transactions has grown from 18% in FY17 to 31% in FY21.
    • The Indian market is on the verge of its next phase of growth with domestic groups such as Tatas and Reliance entering the business.
    • Thus far, Amazon.com Inc. and Walmart Inc. have driven the market.

     

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