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Archives: News

  • Foreign Policy Watch: India-Afghanistan

    Regional powers and the Afghanistan question

    Context

    A regional conclave of foreign ministers taking place in Dushanbe this week under the banner of the Shanghai Cooperation Organisation (SCO) should give us a sense of the unfolding regional dynamic on Afghanistan.

    SCO addressing challenges in Afghanistan

    • Geography, membership and capabilities make the SCO an important forum to address the post-American challenges in Afghanistan.
    • The SCO was launched 20 years ago by China and Russia to promote inner Asia stability. 
    • The current members of the SCO are China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Pakistan, and India.
    • The SCO has four observer states — Iran, Afghanistan, Mongolia and Belarus.
    • The idea of a regional solution to Afghanistan has always had much political appeal.
    • But divergent regional strategic perspectives limit the prospects for a sustainable consensus on Afghanistan.

    Implications of the US exit for the region

    • The quiet satisfaction in Moscow, Beijing, Tehran and Rawalpindi at the US’s exit from Afghanistan, however, is tinged by worries about the long-term implications of Washington’s retreat
    • Regional players have to cope with the consequences of the US withdrawal and the resurgence of the Taliban.
    • Neither Moscow nor Beijing would want to see Afghanistan becoming the hub of international terror again under the Taliban.
    • For China, potential Taliban support to the Xinjiang separatist groups is a major concern.
    • Iran can’t ignore the Sunni extremism of the Taliban and its oppressive record in dealing with the Shia, and Persian-speaking minorities.
    • Pakistan worries about the danger of the conflict spilling over to the east of the Durand Line, and hostile groups gaining sanctuaries in Afghanistan.

    Three factors that drive India’s Afghan policy

    • The US exit means a new constraint on Delhi’s ability to operate inside Afghanistan.
    • There is also the danger that Afghanistan under the Taliban could also begin to nurture anti-India terror groups.
    • If India remains active but patient, many opportunities could open up in the new Afghan phase.
    • Three structural conditions will continue to shape India’s Afghan policy.
    • One is India’s lack of direct physical access to Afghanistan.
    • This underlines the importance of India having effective regional partners.
    • Second, it remains to be seen if Pakistan’s partnership with China and the extension of the China Pakistan Economic Corridor into Afghanistan can address Pakistan’s inability to construct a stable and legitimate order in Afghanistan.
    • Third, the contradiction between the interests of Afghanistan and Pakistan is an enduring one.
    • While many in Pakistan would like to turn Afghanistan into a protectorate, Afghans deeply value their independence.
    • All Afghan sovereigns, including the Taliban, will inevitably look for partners to balance Pakistan.

    Way forward for India

    • India must actively contribute to the SCO deliberations on Afghanistan, but must temper its hopes for a collective regional solution.
    • At the same time, Delhi should focus on intensifying its engagement with various Afghan groups, including the Taliban, and finding effective regional partners to secure its interests in a changing Afghanistan.

    Conclusion

    India should pursue the regional solution to Afghanistan challenge after the US exit while increasing the engagement with the various players in Afghanistan including the Taliban.

  • Parliament – Sessions, Procedures, Motions, Committees etc

    Kongu Nadu region of Tamil Nadu

    A list of new Union Cabinet ministers issued has triggered a debate in political circles in Tamil Nadu, as well as on social media, by referring to ‘Kongu Nadu’, the informal name for a region in the western part of the state.

    Where is Kongu Nadu?

    • ‘Kongu Nadu’ is neither a place with a PIN code nor a name given formally to any region.
    • It is a commonly used name for part of western Tamil Nadu.
    • In Tamil literature, it was referred to as one of the five regions of ancient Tamil Nadu.
    • There were mentions of ‘Kongu Nadu’ in Sangam literature as a separate territory.
    • The name derives from Kongu Vellala Gounder, an OBC community with a significant presence in these districts.
    • The region includes prominent businesses and industrial hubs at Namakkal, Salem, Tirupur and Coimbatore.

    Is there any ground for the allegations about a planned bifurcation?

    • Unlike Telangana or Uttarakhand, there has never been demand or discussions about a separate Kongu Nadu in the modern political history of Tamil Nadu.
    • The debate, therefore, lacks any political or social context.

    Back2Basics: Sangam Age

    • The ‘Sangam’ describes a period from the sixth century BC to the third century AD encompassing today’s Tamil Nadu, Kerala, the southern parts of Karnataka and Andhra Pradesh, and northern Sri Lanka.
    • The Tamil Sangams or Cankams were assemblies of Tamil scholars and poets that, according to traditional Tamil accounts, occurred in the remote past.
    • It is named for scholarly congregations in and around the city of Madurai, located about 400 km southwest of Chennai.
    • It generally refers to a collection of poems, composed by Tamil poets, both men and women developed in the ancient Southern state of India.
    • It mostly deals with emotional and material topics such as love, war, governance, trade and bereavement.
  • Monsoon Updates

    What is lightning, and how does it strike?

    With the monsoon making a slow revival over several parts of India, except the northwest region, there is a rise in lightning-linked deaths.

    What is lightning?

    • Lightning is a very rapid — and massive — discharge of electricity in the atmosphere, some of which is directed towards the Earth’s surface.
    • These discharges are generated in giant moisture-bearing clouds that are 10-12 km tall.
    • The base of these clouds typically lies within 1-2 km of the Earth’s surface, while their top is 12-13 km away.
    • Temperatures towards the top of these clouds are in the range of minus 35 to minus 45 degrees Celsius.

    How does it strike?

    • As water vapour moves upward in the cloud, the falling temperature causes it to condense.
    • Heat is generated in the process, which pushes the molecules of water further up.
    • As they move to temperatures below zero degrees Celsius, the water droplets change into small ice crystals. They continue to move up, gathering mass — until they are so heavy that they start to fall to Earth.
    • This leads to a system in which, simultaneously, smaller ice crystals are moving up and bigger crystals are coming down.
    • Collisions follow and trigger the release of electrons — a process that is very similar to the generation of sparks of electricity.
    • As the moving free electrons cause more collisions and more electrons, a chain reaction ensues.
    • This process results in a situation in which the top layer of the cloud gets positively charged, while the middle layer is negatively charged.

    Making of the thunder

    • The electrical potential difference between the two layers is huge — of the order of a billion to 10 billion volts.
    • In very little time, a massive current, of the order of 100,000 to a million amperes, starts to flow between the layers.
    • An enormous amount of heat is produced, and this leads to the heating of the air column between the two layers of the cloud.
    • This heat gives the air column a reddish appearance during lightning. As the heated air column expands, it produces shock waves that result in thunder.

    How does this current reach the Earth from the cloud?

    • While the Earth is a good conductor of electricity, it is electrically neutral.
    • However, in comparison to the middle layer of the cloud, it becomes positively charged.
    • As a result, about 15%-20% of the current gets directed towards the Earth as well.
    • It is this flow of current that results in damage to life and property on Earth.
    • There is a greater probability of lightning striking tall objects such as trees, towers or buildings.
    • Once it is about 80-100 m from the surface, lightning tends to change course towards these taller objects.
    • This happens because air is a poor conductor of electricity, and electrons that are travelling through air seek both a better conductor and the shortest route to the relatively positively charged Earth’s surface.

    What precautions should be taken against lightning?

    • Lightning rarely hits people directly — but such strikes are almost always fatal.
    • People are most commonly struck by what are called “ground currents”.
    • The electrical energy, after hitting a large object (such as a tree) on Earth, spreads laterally on the ground for some distance, and people in this area receive electrical shocks.
    • It becomes more dangerous if the ground is wet (which it frequently is because of the accompanying rain), or if there is metal or other conducting material on it.
    • Water is a conductor, and many people are struck by lightning while standing in flooded paddy fields.
    • For the reasons given above, taking shelter under a tree is dangerous. Lying flat on the ground too can increase risks.
    • People should move indoors in a storm; however, even indoors, they should avoid touching electrical fittings, wires, metal, and water.

    Answer this PYQ in the comment box:

    Q.During a thunderstorm, the thunder in the skies is produced by the:

    1. meeting of cumulonimbus clouds in the sky
    2. lightning that separates the nimbus clouds
    3. violent upward movement of air and water particles

    Select the correct option using the codes given below (CSP 2011):

    (a) 1 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) None of the above

  • International Space Agencies – Missions and Discoveries

    What is Suborbital Flight?

     

    Virgin Group founder Richard Branson became the first billionaire to fly to the edge of space and back, riding aboard his own Virgin Galactic spacecraft in a suborbital flight.

    What is Suborbital Flight?

    • When an object travels at a horizontal speed of about 28,000 km/hr or more, it goes into orbit once it is above the atmosphere.
    • Satellites need to reach that threshold speed in order to orbit Earth.
    • Such a satellite would be accelerating towards the Earth due to gravity, but its horizontal movement is fast enough to offset the downward motion so that it moves along a circular path.
    • Any object travelling slower than 28,000 km/hr must eventually return to Earth.
    • These are suborbital flights, because they will not be travelling fast enough to orbit Earth once they reach there.
    • Such a trip allows space travellers to experience a few minutes of “weightlessness”.

    Analogical example

    • For an analogy, consider a cricket ball thrown into the air.
    • Given that no human hand can give it a speed of 28,000 km/hr (about 8 m/sec), the ball will fly in an arc until its entire kinetic energy is swapped with potential energy.
    • At that instant, it will lose its vertical motion momentarily, before returning to Earth under the influence of gravity.
    • A suborbital flight is like this cricket ball, but travelling fast enough to reach the “edge of space”, and yet without enough horizontal velocity to go into orbit.
    • If an object travels as fast as 40,000 km/hr, it will achieve escape velocity, and never return to Earth.

    Why the buzz?

    • With Branson and Jeff Bezos kicking off private space flight, several companies are looking for customers wanting to go on suborbital or even orbital journeys.
    • At Branson’s Virgin Galactic, around 600 people have already paid deposits for tickets that are priced up to $250,000 (Rs 1.86 crore).
    • However, Bezos’s Blue Origin, which uses the reusable New Shepard rocket, is yet to announce commercialization plans, according to the BBC.
    • There is also excitement among scientists who want to use suborbital flights for microgravity research.
    • Such flights would be far less expensive than carrying experiments and people to the International Space Station.
    • Suborbital flights could also be an alternative to parabolic flights in airplanes that space agencies currently use to simulate zero gravity.

    Safety concerns

    • The Branson flight comes seven years after his company’s first rocket, called Enterprise, crashed during a test flight, killing one of the pilots on board.
    • The other survived after parachuting out.
    • The current rocket is also not certified by the US Federal Aviation Administration, which is prohibited to do so by law until 2023.
    • This is because the US government does not want to burden companies like Virgin Atlantic with regulations during their “learning” period, when they can innovate by trying out different designs and procedures.
    • Passengers who go on such trips need to sign “informed consent” forms, similar to the ones before going for skydiving or bungee jumping.
  • Blockchain Technology: Prospects and Challenges

    What is a Bitcoin Hardware Wallet and how it works?

    Last week, Twitter CEO announced his payments firm Square would soon build a hardware wallet to store bitcoin.

    Bitcoin Hardware Wallet

    • The wallet will be a type of plug-in device, much like a USB pen drive that stores, manages and secures a user’s crypto assets.
    • Each digital asset is linked to a cryptographic password called a ‘private key’ to allow users to access it.
    • This key safeguards cryptocurrencies from theft and unauthorized access.
    • The asset owner, with the help of a secure hardware wallet, can access the private key to buy and sell crypto assets from anywhere.
    • Most hardware wallets allow users to manage multiple accounts; some even allow users to connect to their Google or Facebook accounts.
    • Popular hardware wallets include Trezor, Ledger, KeepKey and Prokey.

    How is it different from a software wallet?

    • Cryptocurrency keys can be stored in two kinds of wallets – software and hardware.
    • Software wallets are like smartphone apps that digitally store private keys.
    • Most software wallets don’t charge users to store private keys but may collect a commission for trading via the app.
    • These wallets can be vulnerable to malware.
    • Hardware wallets and physical devices act like cold storage for confidential keys. The passwords are protected by a PIN, making it difficult for hackers to extract private keys as the information is not exposed to the Internet.

    The upsides of a hardware wallet

    • Hardware wallets are said to be convenient as they can be connected to trading exchanges to complete transactions.
    • Hardware wallets are often stored in a protected microcontroller and cannot be transferred out of the device, making them secure.
    • Their isolation from the Internet also mitigates the risk of the assets being compromised. Moreover, it does not rely on any third-party app.

    Limitations

    • Since the wallet is in physical form, the device could be stolen or destroyed.
    • They could be used by malicious actors to steal confidential data.
    • The device can also be expensive as compared to software wallets.
    • Some hardware wallets can also have complex features, making it difficult for first-timers to understand.

    Answer this PYQ in the comment box:

    Q.With reference to “Blockchain Technology”, consider the following statements:

    1. It is a public ledger that everyone can inspect but which no single user controls.
    2. The structure and design of block chain is such that all the data in it are about crypto currency only.
    3. Applications that depend on basic features of blockchain can be developed without anybody’s permission.

    Which of the statement given above is/are correct?

    (a) 1 only

    (b) 2 only

    (b) 1 and 2 only

    (d) 1 and 3


    Back2Basics: Cryptocurrencies

    • A cryptocurrency is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of a computerized database.
    • It uses strong cryptography to secure transaction records, control the creation of additional coins, and verify the transfer of coin ownership.
    • It typically does not exist in physical form (like paper money) and is typically not issued by a central authority.
    • Cryptocurrencies typically use decentralized control as opposed to centralized digital currency and central banking systems.
  • RBI Notifications

    Retail Direct Scheme for G-Secs

    The RBI has announced a scheme under which retail investors will be allowed to open retail direct gilt accounts (RDG) directly with the central bank.

    Retail Direct Scheme

    • The scheme is a one-stop solution to facilitate investment in government securities (G-secs) by individual investors.
    • Under RDG schemes, accounts can be opened through a dedicated online portal, which will provide registered users access to primary issuance of government securities and to NDS-OM.

    What is a gilt account?

    • A “Gilt Account” means an account opened and maintained for holding Government securities, by an entity or a person including ‘a person resident outside India’ with a “Custodian” permitted by the RBI.

    About Government Securities

    • These are debt instruments issued by the government to borrow money.
    • The two key categories are:
    1. Treasury bills (T-Bills) – short-term instruments which mature in 91 days, 182 days, or 364 days, and
    2. Dated securities – long-term instruments, which mature anywhere between 5 years and 40 years

    Note: T-Bills are issued only by the central government, and the interest on them is determined by market forces.

    Why G-Secs?

    • Like bank fixed deposits, g-secs are not tax-free.
    • They are generally considered the safest form of investment because they are backed by the government. So, the risk of default is almost nil.
    • However, they are not completely risk-free, since they are subject to fluctuations in interest rates.
    • Bank fixed deposits, on the other hand, are guaranteed only to the extent of Rs 5 lakh by the Deposit Insurance and Credit Guarantee Corporation (DICGC).

    Retail investors and G-Secs

    • Small investors can invest indirectly in g-secs by buying mutual funds or through certain policies issued by life insurance firms.
    • To encourage direct investment, the government and RBI have taken several steps in recent years.
    • Retail investors are allowed to place non-competitive bids in auctions of government bonds through their Demat accounts.
    • Stock exchanges act as aggregators and facilitators of retail bids.
  • Case for an anti-discrimination law

    Context

    “Silent segregation” on the grounds of marital status, gender, sexual orientation or eating preferences are followed in several housing societies and residents’ associations. Legal remedies are needed for its victims.

    Issue of the prevalence of discrimination on various grounds

    • The recent Pew Research Center Report has confirmed that a substantial number of Indians prefer not to have a person from a different religious community as their neighbour.
    • The absence of a proper legal recourse for those who suffer from housing discrimination only makes matters worse.
    • Social prejudice against members of the LGBTQIA+ community in the country remains strong, despite Section 377 of the Indian Penal Code was read down by the Supreme Court of India.
    • In April, the Supreme Court, in Patan Jamal Vali vs State of Andhra Pradesh, recognised intersectional discrimination.
    • It is discrimination on the basis of the intersection of personal characteristics, such as that faced by Dalit women as Dalits, as women and in the unique category of Dalit women.
    • Discriminatory practices may also be indirect in nature, whereby policies that seem neutral and not expressly targeted at a particular group, still cause a disproportional adverse impact on disadvantaged sections of society.

    Why Article 15(1) is not enough

    • Article 15(1) of the Constitution of India prohibits the state from discriminating against individuals on basis of certain protected characteristics such as religion, race, caste, sex and place of birth.
    • But it does not bar private individuals or institutions from doing what the state is not permitted to.
    • Nor does it expressly list ethnicity, linguistic identity, nationality, marital status, sexual orientation, disability, physical appearance and other personal characteristics as prohibited grounds of discrimination.

    We need a comprehensive anti-discrimination legal framework

    • A comprehensive anti-discrimination legal framework is required to fill the existing legal lacunae.
    • India is one of the few liberal democracies without such a framework.
    • The Sachar Committee, in 2006, recognised the need for an anti-discrimination law.
    • This was further reiterated by the Expert Group on Equal Opportunity Commission headed by Prof. N.R. Madhava Menon.

    Way forward

    • The States can lead the way, by enacting anti-discrimination laws in their respective jurisdictions.
    • States have a vital role in strengthening our right to equality.
    • The State legislature can use its powers under Entry 8 of List III in the Seventh Schedule to the Constitution to enact an anti-discrimination law.
    • And if States take the initiative, the demand for a national anti-discrimination law to cover services and institutions under the domain of the Union government will be reignited.
    • The law should have provisions that prohibit employers, landlords, traders, service providers, private persons performing public functions, and public authorities, from discriminating.
    • Law should prohibit discrimination on grounds of caste, race, ethnicity, descent, sex, gender identity, gender expression, pregnancy, sexual orientation, religious identity, tribe, disability, linguistic identity, HIV-status, nationality, marital status, dietary preference, skin tone, physical appearance, place of residence, place of birth, age or analogous characteristics which are beyond the control of an individual or those that constitute a fundamental choice.
    • The law should also balance the anti-discrimination mandate with other rights guaranteed by the Constitution.
    • The anti-discrimination mandate can be restricted in pursuance of a legitimate objective.
    • Affirmative-action provisions can be included whereby public authorities are obliged to progressively realise diversification of their workforces.

    Consider the question “Article 15(1) of the Constitution of India prohibits the state from discriminating against individuals on basis of certain protected characteristics. But it does not bar private individuals or institutions from doing what the state is not permitted to. In light of this, discuss the need for anti-discrimination law in India and its provisions.”

    Conclusion

    We must recognise that anti-discrimination law is not a panacea for the problems of inequality and social prejudice that are deeply rooted in our society. Nevertheless, it is a necessary step — an idea whose time has come.

  • Foreign Policy Watch: India-Japan

    Strategic cooperation between India, Italy and Japan can ensure a free Indo-Pacific

    Context

    Recently, Mr. Draghi, Italy’s Prime Minister described Chinese competitive practices as “unfair” and invited the EU to be franker and more courageous in confronting Beijing on various issues. Against this backdrop, a trilateral partnership between India-Japan-Italy could play important role in the Indo-Pacific region.

    India’s growing centrality in Indo-Pacific strategic architecture

    • Countries that share similar values and face similar challenges are coming together to create purpose-oriented partnerships.
    • In the context of the Indo-Pacific, the challenges posed by China’s assertive initiatives clash with a region lacking multilateral organisations capable of solving problems effectively.
    • But as a new pushback against China takes shape and as Indian foreign policy becomes strategically clearer, there is new momentum to initiatives such as the Quad.

    India-Italy-Japan trilateral partnership

    • Recently, Italy has also begun to signal its intention to enter the Indo-Pacific geography.
    • It has done so by seeking to join India and Japan in a trilateral partnership.
    • Italy has become more vocal on the risks emanating from China’s strategic competitive initiatives.
    • On the Indian side, there is great interest in forging new partnerships with like-minded countries interested in preserving peace and stability in the Indo-Pacific.
    • The responsibility of keeping the Indo-Pacific free and open, and working for the welfare of its inhabitants falls on like-minded countries within and beyond the region.

    Potential of trilateral partnership

    • Their compatible economic systems can contribute to the reorganisation of the global supply chains that is now being reviewed by many players as a natural result of the Chinese mismanagement of the COVID-19 pandemic.
    •  At the security level, the well-defined India-Japan Indo-Pacific partnership can easily be complemented by Italy.
    • At the multilateral level, the three countries share the same values and the same rules-based world view.

    The way forward for trilateral cooperation

    • The Italian government must formulate a clear Indo-Pacific strategy that must indicate its objectives.
    • But Rome must go beyond that in defining and implementing, at the margins of the EU’s common initiatives, its own policy with respect to the Indo-Pacific.
    • The India, Italy and Japan trilateral initiative can be a forum to foster and consolidate a strategic relationship between these three countries, and specifically expand India-Italy bilateral relations.
    • A trilateral cooperation can be the right forum for India and Italy to learn more from each other’s practices and interests and consolidate a strategic dialogue that should include the economic, the security and the political dimensions.
    •  To consolidate the trilateral cooperation in this field, the three countries need to define a common economic and strategic agenda.

    Conclusion

    A clear political will is needed from all sides, and Italy, in particular, should recognise its interests in playing a larger role towards the maintenance of a free and open Indo-Pacific. Robust India-Italy strategic ties can be the first step towards the realisation of this goal.

  • Alternative Dispute Resolution Mechanism – NCA, Lok Adalats, etc.

    Arbitration in India: Issues

    Context

    Plagued by delays and rising costs, arbitration in India needs urgent attention. The pandemic has only worsened the situation.

    Issues with arbitrations process in India

    • Arbitrations in India suffers from rising costs and sluggish proceedings.
    • Arbitration proceedings are often dragged on by lawyers on either side filing misconceived applications at various stages of the proceedings.
    • Litigants, too, at times contribute to this delay with their stubbornness in not conceding a loss or defeat.
    • The courts have narrowed down the scope of judicial interference under Section 34 of the Arbitration and Conciliation Act.
    • The very limited recourse for setting aside an arbitral award under the Act invariably means that it will be upheld, even if it appears unfair or illogical.
    • The aggrieved party may well be stuck with the award and precluded forever from challenging it.
    • Arbitration hearings are generally held in camera, and decisions are usually not publicly accessible, giving rise to doubts about impartiality and fairness.
    • Arbitration proceedings have become more complex with time.
    • The Supreme Court, in Guru Nanak Foundation v. Rattan Singh and Sons, had expressed disappointment against the procedural delays and tardiness in the resolution of disputes through arbitration.
    • Even the clauses providing for fees of the arbitrators and fixed timelines for disposal are often disregarded by the players
    • The inevitable consequence of these drawbacks is a slow departure of the biggest litigant, the government, from the arbitration spectrum.
    • A sector that is dominated by approvals, protocols and scrutiny, uncertainty about the budget outlay towards arbitrations and unexpected delays in disposal does not inspire confidence and detracts from the sanctity of the process.

    Way forward

    • Arbitrators have endeavoured to simplify the proceedings by limiting the pleadings, insisting on written arguments, reducing the number of sittings and laying down a schedule for various milestones.
    • Some restraint is needed from all quarters to bring its wheels back on the tracks. These are:
    • A small check on the arbitral fees and timelines.
    • Careful drafting of arbitration clauses.
    • Stringent procedural safeguards to curb delays.
    • Expeditious disposal of the court proceedings and legislative intent towards all of the above.

    Consider the question “What are the issues faced by the arbitration in India? Suggest the measures to deal with these issues.” 

    Conclusion

    Arbitration still has the inherent potential and characteristics to outperform other modes of dispute resolution, but for that to happen, some changes are a must.

  • New Ministry of Cooperation should enable people to leverage community networks

    Context

    India now has a Ministry of Cooperation that aims to strengthen the country’s cooperative movement. This is an opportune moment to look at the movement’s history, examine the potential of cooperatives and analyse the challenges they face.

    Development of Farmer Producer Companies in India

    • India’s significant tryst with dairy cooperatives began in the 1950s with the success of what we know today as Amul.
    • The nation took note of this initiative and the National Dairy Development Board was set up in 1965.
    • However, the expansion wasn’t working the way it had been envisaged.
    • The need for a new model was felt soon as cooperatives outside Anand were not holding regular and proper elections.
    • Their accounts were not audited.
    • As a result, a committee was set up in the Company Affairs Ministry to allow farmers to set up companies.
    • The Farmer Producer Companies (FPCs) would run on the principle of “one share one vote” and the essence of cooperatives would not be diluted.
    • The Parliamentary Committee looked into the Bill to give legal backing to FPCs, with this, the Companies Act (Second Amendment), 2002 became law.

    Funding the FPCs

    • The existing funding vehicles were designed to cater to cooperatives, not FPCs
    •  Around 2010, the Boston Consulting Group (BCG) had been commissioned to develop a plan for restructuring NABARD.
    • As a result, the restructured NABARD had a special window for FPCs.

    Community-based cooperatives

    •  The Cheliya community set up a chain of Hearty Mart “cooperative” supermarkets in villages in Gujrat using the franchise model.
    •  Just as the network of Charotar Patels that Kurien relied on in the case of Amul —Cheliya community have played a key role in the spread of the model.
    • The idea of leveraging the community network was tried in some parts of the country in the context of re-imagining economic infrastructure.
    • To deal with the electricity board failures, a distribution company was run on a community basis.
    • This model has, in fact, worked in places like Kanpur, even Kerala.

    Social cooperatives

    • The concept of social cooperatives builds on the idea of communities creating infrastructure by using local material and family labour.
    • These can be the village tank, paving the village road — with or without MGNREGA — finishing the last-mile construction of a canal network or even keeping watch on the contractor.
    • The pandemic seems to have increased the significance of community effort.
    • Reducing vaccine hesitancy, providing food to those waiting outside hospitals and, most importantly, looking after orphaned children are imperatives crying out for the cooperative model.

    Way forward for new Ministry of Cooperatives

    •  Keeping in mind social needs while using resources is a large part of the solution to our current predicament.
    • The pandemic will not follow the laws of corporate finance, cooperation has a lot to speak for itself, the new ministry should take this message.
    • The new work-from-home model will create several problems as well as offer opportunities.
    • The new ministry is a recognition of the needs of our times.
    • But it should not be just about pumping in money. 

    Conclusion

    This is the time to design models that help those who help themselves. We will wait expectantly to see how the new ministry works.

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