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Archives: News

  • Civil Services Reforms

    Changes needed in lateral entry requirements

    It has been a while since the government introduced the provision of lateral entry into civil services. This article suggests the changes that need to be made in the system to attract the best talent and facilitating their success.

    Administrative reforms in India

    • The lack of administrative reform in India has frustrated many stakeholders for a long time.
    • One of the key focus areas of such reform is enabling lateral entry into an otherwise permanent system of administrators.
    • Eight professionals were recruited for joint secretary-level positions in various ministries.
    • Some other positions at the joint secretary and director-level have been advertised.

    Changes needed

    1) Entry requirements need to be relaxed

    • In the permanent system, IAS officers get promoted to joint secretary level after 17 years of service and remain at that level for ten years.
    • If similar experience requirements are used for lateral entry, it is unlikely that the best will join because in the private sector they rise to the top of their profession at that age.
    •  To attract the best talent from outside at the joint secretary level, entry requirements need to be relaxed so that persons of 35 years of age are eligible.

    2) Facilitating lateral entrants for success

    • There are many dimensions to this. For a start, there are several joint secretaries in each ministry who handle different portfolios.
    • If assigned to an unimportant portfolio, the chances of not making a mark are high.
    • A cursory look at the portfolios of the eight laterally-hired joint secretaries doesn’t suggest that they hold critical portfolios.
    • There must also be clarity in what precisely is the mandate for the lateral entrant.
    • To be disrupters, lateral entrants need to be able to stamp their authority on decision making.
    •  For this to happen, there need to be more lateral entrants at all levels in ministries.
    • In the functioning of government, there is a long chain in decision-making and a minority of one cannot override it.
    • Also, it requires an understanding of the system and an ability to work with the “permanent” establishment.
    • No training or orientation is provided for this.

    Consider the question “What are the advantages of lateral entry in the civil services? What are the challenges in the success of lateral entrants? Suggest the measures to improve it.”

    Conclusion

    Lateral entry, like competition in any sphere, is a good thing. But serious thinking is required on entry requirements, job assignments, number of personnel and training to make it a force for positive change. Some reform of the “permanent” system — particularly its seniority principle — may be a prerequisite.

  • e-Commerce: The New Boom

    How e-commerce marketplaces can drive MSME makeover

    Facilitating manufacturing through MSMEs

    • A significant major contributor to the India growth story is going to be manufacturing.
    • Manufacturing by small units, cottage units and MSMEs, if effectively facilitated, will be the game changer.
    • For MSMEs to be sustainable and effective, the need of the hour is not just better automation but also more channels for accessing greater markets and opportunities to become a part of the national and global supply chains.
    • E-commerce marketplaces are today the best possible enablers for this transformation at minimal cost, innovation and investment.

    Need to invest in digital transformation and technology

    • China captured the world market through the traditional method of having guilds and business centres.
    • Today, digital empowerment is the key differentiator.
    • Without that, our MSMEs will not be future ready.
    • E-commerce allows products even from hinterlands to get to the national market, thus, providing opportunities to artisans and small sellers from Tier-2/3 towns to sell online to customers beyond their local catchment.
    • By investing in supply chains, the e-commerce sector provides opportunities for MSMEs to partner them in supply and delivery networks.
    • Start-ups and young brands are also finding opportunities to build national brands and even going global.
    • This leads to additional income generation through multiple livelihood opportunities.
    • Many offline stores are also adopting e-commerce to leverage these opportunities and the traditional and modern retail models are moving towards more offline and online collaborations.

    Challenges in building robust e-commerce sector

    1) No GST threshold exemption

    • Sellers on e-commerce marketplaces do not get advantage of GST threshold exemption (of Rs 40 lakh) for intra–state supplies.
    • Online suppliers have to “compulsorily register” even though their turnover is low.
    • Offline sellers enjoy this exemption up to the turnover threshold of Rs. 40 lakh.

    2) Principal place of business issue

    • Today, the sellers, as in offline, are required to have a physical PPoB which, given the nature of e-commerce, is not practical.
    • The government would do well to simplify the “Principal Place of Business” (PPoB) requirement especially for online sellers by making it digital.
    • Replace physical PPoB with Place of Communication.
    • Eliminating the need for state specific physical PPoB requirement will facilitate sellers to get state-level GST with a single national place of business.

    3) Support MSMEs to understand e-commerce

    • MSMEs should be provided with handholding support to understand how e-commerce functions.
    • The government can collaborate with e-commerce entities to leverage their expertise and scale to create special on-boarding programmes.
    • These can be provided by state governments.
    • There is need to examine the existing schemes and benefits for MSMEs, which were formulated with an offline, physical market in mind.

    4) Build infrastructure

    • There is a need to build infrastructure — both physical and digital infrastructure is important for digital transformation.
    • The road and telecom network will facilitate access to the consumer and enable the seller from remote areas to enter the larger national market as well as the export market.
    • A robust logistic network and warehouse chains created by e-commerce platforms enable similar access and reach.
    • The National Logistics Policy should focus on e-commerce sector needs.

    5) Skilling policies for e-commerce sector

    • Dovetail the skilling policy and programmes with the requirements of the e-commerce sector to meet future demand of the sector.

    6) Steps to increase export via e-commerce

    • We need to take specific steps to increase exports via e-commerce.
    • There is a need to identify products that have potential for the export market, connect e-commerce with export-oriented manufacturing clusters, encourage tie-ups with sector-specific export promotion councils, leverage existing SEZs to create e-commerce export zones.
    • India Posts can play a significant role by creating e-commerce specific small parcel solutions at competitive rates, building a parcel tracking system, and partnering with foreign post offices to enable customs clearances.

    Way forward

    • There is an urgent need to create a consolidated policy framework for e-commerce exports.
    • Policies like the upcoming Foreign Trade Policy needs to be fully leveraged.
    • The Foreign Trade Policy should identify areas and include e-commerce export specific provisions in the revised policy that comes into effect in April this year.

    Consider the question “E-commerce marketplaces can help MSMEs in accessing greater markets and provide opportunities to become a part of the national and global supply chains. In light of this, examine the opportunities provided by e-commerce also mention the challenge the sector faces in India.” 

    Conclusion

    By facilitating and supporting e-commerce, we can leverage the potential of MSMEs in manufacturing which could help in the economic growth of the country by creating job opportunities.

  • Coal and Mining Sector

    Mines and Minerals (Development and Regulation) Amendment Bill, 2021

    The coal and Mines Minister has introduced the Mines and Minerals (Development and Regulation) Amendment Bill, 2021 in Lok Sabha to streamline the renewal of the auction process for minerals and coal mining rights.

    MMDR Amendment Bill, 2021

    The Bill seeks to amend the Mines and Minerals (Development and Regulation) Act, 1957.  The Act regulates the mining sector in India.

    (1) Removal of restriction on end-use of minerals

    • The Act empowers the central government to reserve any mine (other than coal, lignite, and atomic minerals) to be leased through an auction for a particular end-use (such as iron ore mine for a steel plant).
    • Such mines are known as captive mines.  The Bill provides that no mine will be reserved for particular end-use.

    (2) Sale of minerals by captive mines  

    • The Bill provides that captive mines (other than atomic minerals) may sell up to 50% of their annual mineral production in the open market after meeting their own needs.
    • The central government may increase this threshold through a notification.  The lessee will have to pay additional charges for mineral sold in the open market.

    (3) Auction by the central government in certain cases

    • Under the Act, states conduct the auction of mineral concessions (other than coal, lignite, and atomic minerals).
    • Mineral concessions include mining lease and prospecting license-cum-mining lease.
    • The Bill empowers the central government to specify a time period for completion of the auction process in consultation with the state government.
    • If the state government is unable to complete the auction process within this period, the auctions may be conducted by the central government.

    (4) Transfer of statutory clearances

    • Upon expiry of a mining lease (other than coal, lignite, and atomic minerals), mines are leased to new persons through auction.
    • The statutory clearances issued to the previous lessee are transferred to the new lessee for a period of two years.
    • The new lessee is required to obtain fresh clearances within these two years.
    • The Bill replaces this provision and instead provides that transferred statutory clearances will be valid throughout the lease period of the new lessee.

    (5) Allocation of mines with expired leases

    • The Bill adds that mines (other than coal, lignite, and atomic minerals), whose lease has expired, may be allocated to a government company in certain cases.
    • This will be applicable if the auction process for granting a new lease has not been completed, or the new lease has been terminated within a year of the auction.
    • The state government may grant a lease for such a mine to a government company for a period of up to 10 years or until the selection of a new lessee, whichever is earlier.

    (6) Rights of certain existing concession holders

    • In 2015, the Act was amended to provide that mines will be leased through an auction process.
    • Existing concession holders and applicants have been provided with certain rights.
    • The Bill provides that the right to obtain a prospecting license or a mining lease will lapse on the date of commencement of the 2021 Amendment Act.
    • Such persons will be reimbursed for any expenditure incurred towards reconnaissance or prospecting operations.

    (7) Extension of leases to government companies

    • The Act provides that the period of mining leases granted to government companies will be prescribed by the central government.
    • The Bill provides that the period of mining leases of government companies (other than leases granted through auction) may be extended on payment of additional amount prescribed in the Bill.

    (8) Conditions for lapse of mining lease

    • The Act provides that a mining lease will lapse if the lessee: (i) is not able to start mining operations within two years of the grant of a lease, or (ii) has discontinued mining operations for a period of two years.
    • However, the lease will not lapse at the end of this period if a concession is provided by the state government upon an application by the lessee.
    • The Bill adds that the threshold period for lapse of the lease may be extended by the state government only once and up to one year.

    (9) Non-exclusive reconnaissance permit

    • The Act provides for a non-exclusive reconnaissance permit (for minerals other than coal, lignite, and atomic minerals).
    • Reconnaissance means preliminary prospecting of a mineral through certain surveys.
    • The Bill removes the provision for this permit.

    Why such a move?

    • The move would likely lead to greater transparency in the auction process.
    • There is a perception that states governments may in some cases prefer some bidders, and try to delay or cancel mining rights if their preferred bidders do not win mining rights.

    Could the amendment face legal challenges?

    • The amendment, if passed, was likely to face legal challenges particularly from state governments.
    • If an act is passed in which any state government’s discretionary power is taken away or their rights or benefits are infringed, it is likely to be challenged in the Supreme Court.

    (With inputs from PRS)

  • Disasters and Disaster Management – Sendai Framework, Floods, Cyclones, etc.

    [pib] Coalition for Disaster resilient Infrastructure (CDRI)

    The Prime Minister has recently addressed the third edition of the annual conference of the Coalition for Disaster resilient Infrastructure (CDRI).

    What is CDRI?

    • The CDRI is an international coalition of countries, UN agencies, multilateral development banks, the private sector, and academic institutions that aim to promote disaster-resilient infrastructure.
    • Its objective is to promote research and knowledge sharing in the fields of infrastructure risk management, standards, financing, and recovery mechanisms.
    • It was launched by the Indian PM Narendra Modi at the 2019 UN Climate Action Summit in September 2019.
    • CDRI’s initial focus is on developing disaster-resilience in ecological, social, and economic infrastructure.
    • It aims to achieve substantial changes in member countries’ policy frameworks and future infrastructure investments, along with a major decrease in the economic losses suffered due to disasters.

    Try this PYQ:

    Q.Consider the following statements:

    1. Climate and Clean Air Coalition (CCAC) to Reduce Short Lived Climate Pollutants is a unique initiative of G20 group of countries
    2. The CCAC focuses on methane, black carbon and hydrofluorocarbons.

    Which of the above statements is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

    Its inception

    • PM Modi’s experience in dealing with the aftermath of the 2001 Gujarat earthquake” as the chief minister led him to the idea.
    • The CDRI was later conceptualized in the first and second edition of the International Workshop on Disaster Resilient Infrastructure (IWDRI) in 2018-19.
    • It was organized by the National Disaster Management Authority (NDMA), in partnership with the UN Office for Disaster Risk Reduction (UNDRR), the UN Development Programme, the World Bank, and the Global Commission on Adaptation.

    Its diplomatic significance

    • The CDRI is the second major coalition launched by India outside of the UN, the first being the International Solar Alliance.
    • Both of them are seen as India’s attempts to obtain a global leadership role in climate change matters and were termed as part of India’s stronger branding.
    • India can use the CDRI to provide a safer alternative to China’s Belt and Road Initiative (BRI) as well.
  • Interstate River Water Dispute

    What is Rule Curve of a river?

    The Supreme Court has warned the Tamil Nadu Chief Secretary against the failure to give information on the rule curve for Mullaperiyar dam.

    Do you know?

    The Mullaperiyar dam is located in Kerala on the river Periyar but is operated and maintained by the neighbouring state of Tamil Nadu.

    What is the Rule Curve?

    • A rule curve or rule level specifies the storage or empty space to be maintained in a reservoir during different times of the year.
    • Here the implicit assumption is that a reservoir can best satisfy its purposes if the storage levels specified by the rule curve are maintained in the reservoir at different times.
    • It decides the fluctuating storage levels in a reservoir.
    • The gate opening schedule of a dam is based on the rule curve.
    • It is part of the “core safety” mechanism in a dam.

    Why such a move?

    • During the high-voltage hearing, the Tamil Nadu government blamed Kerala for delaying the finalization of the rule curve for the 123-year-old dam.
    • Kerala government has accused Tamil Nadu of adopting an “obsolete” gate operation schedule dating back to 1939.

    About Mullaperiyar Dam

    • Mullaperiyar Dam is a masonry gravity dam on the Periyar River in the Indian state of Kerala.
    • It is located on the Cardamom Hills of the Western Ghats in Thekkady, Idukki District of Kerala.
    • It was constructed between 1887 and 1895 by John Pennycuick and also reached an agreement to divert water eastwards to the Madras Presidency area (present-day Tamil Nadu).
    • It has a height of 53.6 m from the foundation, and a length of 365.7 m.
    • The Periyar National Park in Thekkady is located around the dam’s reservoir.
    • The dam is built at the confluence of Mullayar and Periyar rivers.
  • Wildlife Conservation Efforts

    Project RE-HAB

    The forest authorities intend to mitigate human-elephant conflict by installing bee boxes along the periphery of the forest and the villages under the Project RE-HAB.

    On similar lines, try this PYQ:

    Q.The term ‘M-STrIPES’ is sometimes seen in the news in the context of:

    (a) Captive breeding of Wild Fauna

    (b) Maintenance of Tiger Reserves

    (c) Indigenous Satellite Navigation System

    (d) Security of National Highways

    Project RE-HAB

    • Project RE-HAB stands for Reducing Elephant-Human Attacks using Bees. It is an initiative of the Khadi and Village Industries Commission (KVIC).
    • It intends to create “bee fences” to thwart elephant attacks in human habitations using honeybees.
    • Bee boxes have been placed on the ground as well as hung from the trees.
    • The boxes are connected with a string so that when elephants attempt to pass through, a tug causes the bees to swarm the elephant herds and dissuade them from progressing further.
    • This idea stems from the elephants’ proven fear of the bees.

    Areas covered by the project

    • The pilot project was launched at four locations around Chelur village in the Kodagu district of Karnataka.
    • These spots are located on the periphery of Nagarahole National Park and Tiger Reserve, known conflict zones.

    Benefits offered

    • The biggest advantage of Project RE-HAB is that it dissuades elephants without causing any harm to them.
    • It is extremely cost-effective as compared to various other measures such as digging trenches or erecting fences.
  • Government Budgets

    State budgets belies the hopes of public-spending-led recovery

    The article highlights the trends emerging from the State budgets which dashes the hopes of public-spending led economic recovery.

    State-level budget trends

    • Over the past few weeks, several state governments have presented their budgets for the financial year 2021-22.
    • The states, put together, account for a larger share of general government spending than the Centre.
    • States’ spending stance is pivotal to the hopes of a government spending-led economic recovery.

    5 Broad trends from the state budgets

    • The broad state-level budget trends are based on 11 states that account for a little over 60 per cent of India’s GDP.

    1) Offsetting the additional spending by Centre

    • There is a collapse in states’ revenues and transfers from the Centre.
    • Along with it, there is a “reluctance” among some states to borrow more to spend.
    • Thus, the aggregate level spending by these states in 2020-21 will end up being lower than what they had budgeted for before the onset of the pandemic.
    • The revised estimates peg their total expenditure to decline by around 6 per cent in 2020-21 from their budget estimates.
    • If these trends were to hold for the other states as well, then it would imply that the additional spending by the central government, over and above its budget estimate is likely to be offset by the decline in spending by states.

    2) From revenue surplus to revenue deficit

    • This year, states which typically run revenue surpluses will run revenue deficits.
    • The collapse in revenues meant that states that usually borrow to finance capital expenditure have had to borrow to finance their recurring expenditure (revenue expenditure) as well.
    • As a consequence, capital spending by states has been cut sharply.
    • States, though, expect the situation to reverse in the coming fiscal year, with most projecting a return to revenue surpluses even as the Centre will continue to run revenue deficits.
    • This anomaly is unlikely to be resolved unless the root cause of the situation — the nature of the fiscal compact between the Centre and the states — is addressed.

    3) Reluctance by states to borrow

    • The Centre had raised the ceiling on their market borrowings from 3 to 5 per cent of GSDP.
    • Of this 2 percentage point increase in the borrowing limit, part was unconditional while the remaining was subject to fulfilling Centre-mandated reforms.
    • As per ICRA’s estimate, 17 states qualified based on the One Nation One Ration Card reforms, 15 qualified based on the ease of doing business reforms, seven partially completed power sector reforms, while six had completed the urban local body reforms.
    • But, it is only the low-income states of Bihar, Rajasthan and Madhya Pradesh with already stretched finances that seem to have availed the additional borrowing space.
    • The high-income states of Gujarat, Maharashtra and Karnataka, all of whom had greater fiscal headroom going to the crisis, and were better placed to borrow more and spend, have not done so.

    4) Aggressive fiscal consolidation

    • As is the case with the Centre, states have, remarkably, budgeted for aggressive fiscal consolidation next year.
    • The average fiscal deficit across these states is expected to fall by more than 1 percentage point of GSDP, more than twice the decline recommended by the 15th finance commission.

    5) Ambitious revenue assumptions

    • The aggressive consolidation next year is expected to be achieved not by expenditure compression, as is the case with the Centre, but by significant revenue enhancement.
    • However, some revenue assumptions are quite ambitious, to say the least — some states have pegged their GST and VAT collections to grow far in excess of 30 per cent in 2021-22.
    • A deterioration in fiscal marksmanship will mean that expenditure in the coming fiscal year will also end up being lower than what has been budgeted for.

    Consider the question “The pandemic has upended the States’ fiscal space, which is evident in their budgets. In light of this, examine the trends emerging from the budgets of the States and their implications for the economy.”

    Conclusion

    Subdued general government spending during these tumultuous years heightens the risks to economic recovery. Considering the possibility of the economy exiting from this period with lower medium-term growth prospects, there is a strong case for greater government spending during these years.

  • Banking Sector Reforms

    India should abandon its suspicion of digital currency

    The article discusses the advantages of central bank digital currency which could combine the advantages of both fiat money and cryptocurrency.

    India’s suspicion of the cryptocurrencies

    • In 2018, the Reserve Bank of India prohibited regulated entities from providing services to anyone who deals with or settles trades in any virtual currency.
    • This was effectively banning Bitcoin trading in the country.
    • The Supreme Court lifted this restriction in 2020.
    • There were rumours earlier this year that a new law was in the works that would make it a crime to possess, issue, mine, trade or transfer crypto assets in India.

    Thinking of digital currencies as asset not currency

    • There are concerns over the speculative nature of cryptocurrencies.
    • There are also law enforcement concerns around how digital currencies make it hard for the police to track down criminals.
    • One of the most important attributes of a currency is that it should be a stable store of value, and Bitcoin is anything but.
    • To deal with this difficulty, it will be helpful to think of digital currencies as just another asset—the digital equivalent of a scarce commodity that, like gold, certain collectors prize.

    Difference between working of banks and cryptocurrencies

    • Our financial system relies on banks to record transactions.
    • It is a ‘permissioned’ ledger system in that only trusted intermediaries-registered banks under the supervision of the central bank-can make changes to the ledgers to certify that a given transaction has been completed.
    • Cryptocurrencies, on the other hand, are ‘permissionless’ systems that need no intermediary.
    • Instead of a centralized ledger, transactions are recorded on a distributed database.
    • A purely permissionless system has no need of banks.

    Role of banks in maintaining financial health

    • Central banks are not just intermediaries managing the great big financial ledger of the country, they are responsible for its financial health.
    • To perform this function, they need to be able to take money out of the system when required or put money back into economic circulation.
    • None of this is possible in a purely permissionless system.

    Advantages of digitally native currencies

    • Digitally native currencies are programmable and capable of being incorporated into smart contracts, offering various opportunities for innovative digital solutions.
    • Since they can be directly allotted to citizens who don’t have a bank account, they are ideal for financial inclusion.
    • Being digitally auditable, transactions can be audited, reducing the scope for illicit activity.
    • The challenge is one of integrating the best that digital currencies have to offer into the traditional financial paradigm.

    Central bank digital currencies as an alternative

    • CBDCs are a completely re-engineered form of money that use a distributed ledger as their underlying technology layer, but are backed by suitable amounts of monetary reserves, just like normal fiat currency.
    • Many countries have been toying with the idea of a central bank digital currency (CBDC).
    • They are run by central banks along with select financial entities responsible for managing the distributed ledger.
    • The best CBDCs will converge the best of both worlds—the programability and security of cryptocurrencies and the reserve-backed stability of fiat currency.
    • Several countries are already testing this concept.

    How central bank digital currency differs from cryptocurrency? What are its advantages?”

    Conclusion

    Banning technology has never made it go away. Instead, let’s make an effort to better understand it, and having done so, do all we can to create the digital currency our country needs.

  • Foreign Policy Watch: India-United States

    A robust economic relationship between India and U.S.

    The article outlines the potential for India-U.S. collaboration in certain ares of trade which will bring many gains.

    India-U.S. bilateral trade

    • In the five years to 2019, bilateral trade grew at a CAGR of 7.7% per year to $146 billion.
    • If we assume the same rate of growth, the $500 billion target will be achieved by 2036.
    • To ensure this, the CAGR would need to be set at 11.9%.
    • This is doable if the right policy actions are taken.

    Areas of collaboration

    1) Healthcare exchanges

    • A collaborative response to the pandemic would contribute to global containment of the virus.
    • Business partnerships are already taking place in the supply chain.
    • As India becomes the hub of global vaccine distribution, building confidence in the Indian IPR regime, reviving the U.S.-India Health Dialogue, and mutually recognising standards and approvals will help drive healthcare exchanges.

    2) Improving the macro trade architecture

    • The macro trade architecture can be strengthened with a broad trade agreement focusing on resolving the low-hanging fruit.
    • The U.S.-India Trade Policy Forum meetings can be revived along with a cross-sector track-2 group to look at convergence on issues such as market access.
    • There is potential for flexibility from both sides for restoring the Generalised System of Preferences.
    • The two countries should consider initiating discussions on a free trade agreement.

    3) Trade in services

    • Recent regulations in the U.S. have impacted labour mobility which can be addressed through immigration reforms for employment-based visa backlogs and smooth and timely processes.
    • The MoU on labour cooperation signed in 2011 could be updated in line with India’s recent labour regulatory changes.
    • This may also be a good time to reconsider a totalisation agreement pertaining to social security, given that both have already entered into such agreements with many of the same partner countries.

    4) Defence industry ties

    • Defence industry ties can be stepped up in coordination with industry.
    • A defence dialogue including the private sectors of both sides could help in co-production and co-development in the defence and aerospace sectors.

    5) Stepping up engagement of SMEs

    • Five, engagement of small and medium enterprises (SMEs) can be stepped up.
    • Smaller U.S. companies can find significant new opportunities for investments in India and sourcing from India.
    • A U.S.-India SME CEOs Forum can be set up to catalyse such partnerships.

    6) Clean energy and climate change

    • The U.S.-India Strategic Energy Partnership should be geared towards joint investments in industrial decarbonisation, carbon dioxide removal and green hydrogen.
    • The programmes of Partnership to Advance Clean Energy Research, Partnership to Advance Clean Energy Deployment and Promoting Energy Access through Clean Energy must be relaunched.

    7) Digital economy partnership

    • India has proved its ability in this space with new opportunities opening up in robotics, space, AI and electric vehicles.
    • It is also important to disseminate information on India’s IPR regime improvements and work towards taking India off the U.S. Trade Representative IPR priority watchlist.

    8) Other areas

    • Other opportunities in the bilateral economic relationship include education, innovation and R&D, and agricultural trade and technology.

    Conclusion

    A closer economic partnership would bring gains to both sides in terms of GDP, employment, and productivity, given the complementary natures of their economies.

  • Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

    Responsible and ethical AI

    The article highlights the challenges and opportunities offered by the Artificial Intelligence and suggests the ways to deal with them.

    AI as a part of our life

    • AI is embedded in the recommendations we get on our favourite streaming or shopping site; in GPS mapping technology; in the predictive text that completes our sentences when we try to send an email or complete a web search.
    • And the more we use AI, the more data we generate, the smarter it gets.
    • In just the last decade, AI has evolved with unprecedented velocity.

    How AI could help us

    • AI has helped increase crop yields, raised business productivity, improved access to credit and made cancer detection faster and more precise.
    • It could contribute more than $15 trillion to the world economy by 2030, adding 14% to global GDP.
    • Google has identified over 2,600 use cases of “AI for good” worldwide.
    • A study published in Nature reviewing the impact of AI on the Sustainable Development Goals (SDGs) finds that AI may act as an enabler on 134 of all SDG targets.

    Concerns with AI

    • Yet, the study in Nature also finds that AI can actively hinder 59 — or 35% — of SDG targets.
    • AI requires massive computational capacity, which means more power-hungry data centres — and a big carbon footprint.
    • AI could compound digital exclusion.
    • Many desk jobs will be edged out by AI, such as accountants, financial traders and middle managers.
    • Without clear policies on reskilling workers, the promise of new opportunities will in fact create serious new inequalities.
    • Investment is likely to shift to countries where AI-related work is already established widening gaps among and within countries.
    • AI also presents serious data privacy concerns. 
    • We shape the algorithms and it is our data AI operate on.
    • In 2016, it took less than a day for Microsoft’s Twitter chatbot, “Tay”, to start spewing egregious racist content, based on the material it encountered.

    Way forward

    • Without ethical guard rails, AI will widen social and economic schisms, amplifying any innate biases.
    • Only a “whole of society” approach to AI governance will enable us to develop broad-based ethical principles, cultures and codes of conduct.
    • Given the global reach of AI, such a “whole of society” approach must rest on a “whole of world” approach.
    • The UN Secretary-General’s Roadmap on Digital Cooperation is a good starting point.
    • This approach lays out the need for multi-stakeholder efforts on global cooperation.
    • UNESCO has developed a global, comprehensive standard-setting draft Recommendation on the Ethics of Artificial Intelligence to Member States for deliberation and adoption.
    • Many countries, including India, are cognisant of the opportunities and the risks, and are striving to strike the right balance between AI promotion and AI governance.
    • NITI Aayog’s Responsible AI for All strategy, the culmination of a year-long consultative process, is a case in point.

    Consider the question “What are the ways in which Artificial Intelligence in helping humanity? What are the concerns with the promotion and the governance of AI?”

    Conclusion

    Chellenging part starts where principles meet reality that the ethical issues and conundrums arise in practice, and for which we must be prepared for deep, difficult, multi-stakeholder ethical reflection, analyses and resolve. Only then will AI provide humanity its full promise.

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