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  • Government Budgets

    Keep the wheels of economic recovery turning

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    Ahead of the Budget, the article discusses the status of Indian economy and suggests the measures to be adopted in the budget to speed up the recovery.

    Estimates of damages and signs of economic recovery

    • The first advance estimates of national income published on January 7 project a contraction of 7.7% for real GDP.
    • The Q2 GDP estimates published by the National Statistical Office had suggested an economic recovery in India.
    • An improvement in the rate of contraction from 23.9% in Q1 to 7.5% in Q2 was seen as the beginning of a sustained recovery.
    • The Ministry of Finance, in its Monthly Economic Review highlighted it as signifying a ‘V’ shaped recovery and as a reflection of the resilience and robustness of the Indian economy.
    • The Monetary Policy Statement of the Reserve Bank of India (RBI) released on December 4, 2020 also projects positive growth in the remaining quarters of the financial year.

    State of the economy before pandemic

    • Growth rate of the economy had collapsed from 8.2% in Q4 of 2017-18 to a mere 3.1% in Q4 of 2019-20, sliding continuously for eight quarters.
    • The policy stance against this backdrop was premised on the hope that private corporate investment will pick up momentum sooner than later.
    • The RBI did the heavy lifting through five consecutive lowering of repo rate along with liquidity infusion programmes.
    • However, monetary-fiscal linkages are crucial to catalyse the demand.

    Crucial role played by the RBI

    • While being cautious of inflation, the RBI has decided to continue the accommodative stance in its latest monetary policy to support growth.
    • The CPI inflation after crossing 7% has cooled off to 4.6% in December.
    • Still, the real interest rates remain very low.
    • The efficacy of the new monetary framework (NMF) — the agreement between the RBI and Government of India in February 2016 to adopt inflation targeting in India — will be reviewed in March 2021, and we flag the need for revising the framework.
    • The RBI is continuing its liquidity infusion programmes including the on-tap Targeted Long Term Repo Operations (TLTRO).
    • This programme announced on October 9, 2020 for five stressed sectors has been extended to 26 stressed sectors notified under the Emergency Credit Line Guarantee Scheme (ECLGS 2.0).
    • The RBI is also continuing its ‘operation twist’  with Open Market Operations (OMO) of ₹10,000 crore scheduled for December 17, 2020.
    • Nevertheless, the RBI Governor has rightly pointed out that the signs of recovery are far from being broad-based.

    Stimulus for targeted state intervention

    • According to the International Monetary Fund’s Fiscal Monitor Database of Country Fiscal Measures, the fiscal stimulus for India is 1.8% of GDP.
    • The IMF, in its Fiscal Monitor, highlights the need to scale up public investment to ensure successful reopening, boost growth and prepare economies for the future.
    • What we need is stimulus not based on “business cycle” but from the perspective of much needed targeted state interventions in public health, education, agriculture and physical infrastructure, and to redress widening inequalities.
    • As private final consumption expenditure is sluggish, contracting 26.7% and 11% in Q1 and Q2, respectively, a “fiscal dominance” is expected in India for sustained economic recovery.
    • However, India cannot afford fiscal stimulus at the rates of advanced economies, due to a lack of fiscal space.

    Way forward

    • Plummeting private corporate investment in India is a matter of concern.
    • The fear of financial crowding out emanating from high fiscal deficit is misplaced in the context of India.
    • Economic recovery will be determined by the degree of containment of the pandemic and the sustained macroeconomic policies.
    •  Any abrupt withdrawal of ongoing economic policy support, both by the monetary and fiscal authorities, will be detrimental to growth in times of the pandemic.
    • The fiscal rules at the national and subnational government levels need to be made flexible.

    Consider the question “Recovery of Indian economy battered by the pandemic has not been complete. Suggest the fiscal measure to be adopted by the government to speed up the recovery.”

    Conclusion

    The fiscal stimulus needs to continue in FY 2021-22 to speed up India’s recovery along with the measures suggested above.

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  • The right of life and environment

    op-ed snap | Polity | Mains Paper 2: Indian Constitution – historical underpinnings, evolution, features, amendments, significant provisions and basic structure

    The article highlights how climate change impacts the constitutional values and promises by affecting the vulnerable disproportionately and suggest the distinctly Indian paradigm of development.

    How democratic values are threatened by climate change

    • Over the last seven decades, India has made distinct progress, but many core development challenges persist and we are yet to fulfill our constitutional promise.
    • Climate change will only exacerbate existing inequalities through a range of cascading and coinciding crises.
    • These words from the Preamble — justice, liberty, equality, and fraternity — serve as reminders of the daunting path to achieving social democracy, especially in a warming world.
    • B R Ambedkar had said that to maintain democracy not merely in form, but also in fact it was essential not to be content with mere political democracy but to strive for social democracy as well.

    How climate change affects democratic values

    • Climate change is profoundly unjust.
    •  It will increasingly impinge upon our freedom of movement, and that it could deny equality of status and opportunity to millions of disadvantaged citizens like the forest-dwelling communities who have contributed least to the crisis and yet stand to be hit the hardest.
    • The evidence is clear that unless we rapidly move to reduce planet-warming greenhouse gas emissions, vast swathes of India could be inhospitable due to floods, droughts, heatwaves, and increasingly erratic and unpredictable monsoon rains.

    Call for action against climate change

    • The fraternity can particularly serve as a call to action for the powerful to direct their resources towards shaping India’s response to climate change and “assuring the dignity of the individual”, as framed in the Preamble.
    • Indian business and philanthropy can play a key role in building resilience by encouraging innovation, complementing the role of the state, and securing citizens’ legislated rights.
    • Climate philanthropy can help develop and pilot new solutions and inspire ambitious political action.
    • A plethora of opportunities are currently on the margins but could become mainstream drivers for the three key pillars of jobs, growth, and sustainability.
    • A distinctly Indian, climate-friendly development paradigm powered by clean energy could play an integral role in fostering social and economic justice by uplifting millions of Indians.
    • Our nation’s welfare depends on healing the broken relationship between a broken economy and a broken ecology.

    Constitutional mandate to protect the environment

    • The right to life enshrined in Article 21 is increasingly interpreted as a right to environment.
    • When this is read together with Articles 48A and 51A(g), there is a clear constitutional mandate to protect the environment that will only grow more important in the coming decades for citizens and the executive, legislature, and judiciary.
    • Central to these considerations is the need for a uniquely Indian climate narrative, one that is both by and for Indians.

    Consider the question “Our constitutional values must guide us to a distinctly Indian, climate-friendly development paradigm to fulfil the constitutional commitment to its citizens. Comment.”

    Conclusion

    India can build its own pathway to become a climate leader aiming to secure a future where both people and nature can thrive. Much of this work can be rooted in the constitutional framework that binds together millions of Indians despite their myriad differences — a framework that is progressive in scope and ambitious in vision.

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  • Back in news: DNA Bill, 2019

    Bills/Act/Laws | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters

    Noted Parliamentarians have filed a dissent to the Parliamentary Standing Committee’s report on DNA Technology (Use and Application) Regulation Bill 2019.

    Q. A statutory protection for private data is necessary for the enforcement of DNA Technology (Use and Application) Regulation Bill, 2019. Critically analyse.

    What is the news?

    • The finalized Draft Report recognizes the potential dangers of indexing the DNA profiles of non- convicts, especially convicts and suspects, it has still retained these objectionable provisions.
    • These MPs have claimed that the Bill does not take into account public concerns over privacy violations and targets Dalit, Muslims and Adivasis by way of DNA sample collection.
    • The fear is that the law could be used for caste or community-based profiling.

    Other issues

    • The bill would not be a panacea to the problems of an inadequate criminal justice system, the MPs stressed.
    • He flagged the example of the United Kingdom, where the number of crimes solved by DNA evidence had been reducing even though the number of profiles in the system was going up.

    DNA Technology (Use and Application) Regulation Bill, 2019

    • The primary intended purpose for the enactment of the bill is for expanding the application of DNA-based forensic technologies to support and strengthen the justice delivery system of the country.
    • The utility of DNA based technologies for solving crimes, and identifying missing persons, is well recognized across the world.
    • Other aims include Speedier justice delivery and an Increased conviction rate.
    • Bill’s provisions will enable the cross-matching between persons reported missing and unidentified dead bodies found in various parts of the country, and also for establishing the identity of victims in mass disasters.
    • By providing for the mandatory accreditation and regulation of DNA laboratories, the Bill seeks to ensure the data remain protected from misuse or abuse in terms of the privacy rights of our citizens.
    • The Bill has two major components: the DNA databanks and the DNA Regulatory Board.

    Criticisms of the Bill

    Matter of Consent

    • Written consent is required from everyone for their DNA samples to be collected, processed, and included in the database except for those who have committed crimes with a punishment of 7+ years or death.
    • However, similarly, specific instruction is missing for the collection of DNA samples for civil matters.
    • Such matters include parentage disputes, emigration or immigration, and transplantation of human organs.
    • The Bill also doesn’t state that the consent has to be voluntary.

    Civil Disputes

    • It is not clear if DNA samples collected to resolve civil disputes will also be stored in the databank (regional or national), although there is no index specific for the same.
    • If they will be stored, then the problem cascades because the Bill also does not provide for information, consent, and appeals.
    • If a person’s DNA data has entered the databank, there is no process specified by which they can have it removed.
    • All of these issues together could violate the right to privacy.

    The authenticity of DNA Labs

    • There’s also the question of whether the DNA labs accredited by the Regulatory Board are allowed to store copies of the samples they analyze.
    • And if so, how the owners of those samples can ensure the data is safe or needs to be removed from their own indices.
    • It’s unclear if the Regulatory Board will oversee other tests performed at the accredited labs.
    • This could become necessary because, unlike one’s biometric data or PAN number, the human genome contains lots of information about every individual.

    Overreaching access to identity

    • So a test undertaken to ascertain a person’s identity by analyzing her DNA will in the process also reveal a lot of other things about that person, including information about their ancestry i.e. information that the individual has a right to keep private.
    • The Bill does not specify which parts of an individual’s DNA can be analyzed to ascertain their identity.
    • The more parts are subjected to analysis, the more conclusively a person’s identity can be established.
    • But this can’t be used as a license to parse more than is necessary because then the DNA lab is also likely to reveal more information than it has the right to seek.

    The way forward: Data protection

    • The bill can become oppressive without a robust data protection law.
    • Statutory protection for private data is critical because it provides a mechanism for enforcement of rights, grievance redressal, and independent oversight.
    • When the data being collected is as sensitive as DNA, it requires additional protection.

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  • Foreign Policy Watch: India-United States

    US-Russia to extend New START Treaty

    IOCR | International Relations | Mains Paper 2: Effect Of Policies & Politics Of World On India’S Interests

    The Russian lower house of Parliament, the Duma has ratified a new START nuclear treaty with the US.  Both countries had “agreed in principle” to extend the arms treaty by five years with Joe Biden swearing-in.

    The New START, INF and the Open Skies …. Be clear about the differences of these treaties. For example- to check if their inception was during cold war era etc.

    New START Treaty

    • The New Strategic Arms Reduction Treaty (New START) pact limits the number of deployed nuclear warheads, missiles and bombers and is due to expire in 2021 unless renewed.
    • The treaty limits the US and Russia to a maximum of 1,550 deployed nuclear warheads and 700 deployed missiles and bombers, well below Cold War caps.
    • It was signed in 2010 by former US President Barack Obama and then-Russian President Dmitry Medvedev.
    • It is one of the key controls on the superpower deployment of nuclear weapons.

    A reset to Trumps policies

    • In February 2020, the US withdrew from the 1987 Intermediate-Range Nuclear Forces Treaty (INF), accusing Moscow of violating the agreement.
    • Russian then had proposed a one-year extension without conditions of the last major nuclear arms reduction accord, the New START Treaty between Russia and the U.S.
    • If it had fallen, it could have been the second nuclear weapons treaty to collapse under the leadership of Trump.

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  • Zoonotic Diseases: Medical Sciences Involved & Preventive Measures

    Why do Viruses mutate?

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    SARS-CoV-2 variants have emerged independently in several countries, and research published over the past week indicates that the virus is changing more quickly than was once believed.

    Try this PYQ:

    Q.H1N1 virus is sometimes mentioned in the news with reference to which one of the following diseases?

    (a) AIDS

    (b) Bird flu

    (c) Dengue

    (d) Swine flu

    Mutation of Virus

    • Mutation, an alteration in the genetic material (the genome) of a cell of a living organism or of a virus that is more or less permanent and that can be transmitted to the cell’s or the virus’s descendants.
    • Like all life, viruses carry a genetic code in the form of nucleic acids — either DNA or RNA.
    • When cells multiply, the DNA within them replicates as well, to make copies for the new cells.
    • During replication, random errors are introduced into the new DNA, much like spelling errors when we write.
    • While the errors in DNA virus genomes can be corrected by the error-correcting function of cells in which they replicate, there are no enzymes in cells to correct RNA errors.
    • Therefore, RNA viruses accumulate more genetic changes (mutations) than DNA viruses.

    Effect of mutation on the virus

    • Evolution requires not just mutations, but also selection.
    • While most mutations are deleterious to the virus, if some allow a selective advantage — say better infectivity, transmission, or escape from immunity — then the new viruses out-compete the older ones in a population.
    • The mutations can be synonymous (silent) or non-synonymous (non-silent); the latter also changes an amino acid (protein building block) at that position in the coded protein.

    Mutations in COVID

    • As of January 26, about 29,000 infections are attributed to UK variants from 63 countries, many due to local transmission.

    Why is it harmful?

    • Viruses with mutations within the receptor-binding domain (RBD) of the Spike protein have the most potential to evade antibodies that develop as a result of natural infection or vaccination.
    • The RBD binds the cellular receptor allowing the virus to infect cells, and anti-RBD antibodies neutralize the virus.
    • Such mutations were recently found in variant viruses that emerged in the UK, South Africa and Brazil.

    Testing of mutation

    • Indirect tests are done in laboratories to assess if an emerging variant might escape antibodies developed after natural infection or vaccination.
    • Serum (the blood components that contain antibodies) from recovered patients or vaccinated people, and antibodies are known to neutralize the original virus, are tested.
    • Serial dilutions of the serum or antibodies are separately mixed with a fixed amount of the original and variant viruses, and the mixture is added to cells in culture.
    • After a period of incubation, cells are washed and stained. Cells infected and killed by viruses multiplying within them appear as clear zones (plaques) on a dark background.
    • The effectiveness of serum or antibody is expressed as an inhibitory concentration (IC) or plaque reduction neutralisation titer (PRNT) value.
    • The IC50 or PRNT50 value is the reciprocal dilution of serum or antibody that neutralises 50 per cent viruses in the sample.

    India’s response

    • Only the UK variant viruses have so far been reported from India — and that too, in travellers.
    • There is no reported local transmission, but considering its increased infectivity, this is likely to happen.
    • The evidence so far suggests that current vaccines would still protect against the UK variant, even if with reduced efficacy.
    • The evidence at this time, though of concern, does not indicate that current vaccines are failing.
    • But this has to be watched carefully, and all efforts made to limit transmission between people, which drives mutations and the emergence of variants.

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  • Historical and Archaeological Findings in News

    Expedition to Ram Setu

    India Mapping | History | Mains Paper 1: Arts & Culture

    In possibly a first, Indian scientists will undertake a scientific expedition to date the chain of corals and sediments forming the Ram Setu.

    Try this PYQ:

    Q.Which of the following have coral reefs?

    1. Andaman and Nicobar Islands
    2. Gulf of Kachchh
    3. Gulf of Mannar
    4. Sunderbans

    Select the correct answer using the code given below:

    (a) 1, 2 and 3 only

    (b) 2 and 4 only

    (c) 1 and 3 only

    (d) 1, 2, 3 and 4

    Ram Setu

    • Also known as Adam’s bridge, Ram Setu is a 48-km long bridge-like structure between India and Sri Lanka.
    • It finds mention in the Ramayana but little about its formation is known or proven, scientifically.

    What is the underwater archaeological project at Ram Setu?

    • The National Institute of Oceanography (NIO) will undertake a three-year scientific project.
    • The idea is to see whether Ram Setu is a man-made structure or not.
    • The most important aspect of the project is to establish its age, scientifically.
    • The explorers will apply a number of scientific techniques while attempting to date the Ram Setu, study its material composition, outline the sub-surface structure along with attempting to excavate remnants or artefacts, if any, from the site.
    • Once it is known, the information can be verified and co-related with its mention in the Ramayana and similar scriptures.

    How is the project planned?

    • An initial survey will make use of underwater photographs to check if any habitation remains inundated in the area. A geophysical survey will be performed to understand the structure.
    • Over the years, several kinds of depositions, including sand, have covered the actual structure. Initially, only physical observation, and no drilling, will be done.
    • NIO operates two oceanographic vessels – RV Sindhu Sankalp (ability to go up to and remain 56 metres underwater) and RV Sindhu Sadhana (ability to go up to and remain 80 metres underwater).
    • For collecting core samples at greater depths and for bathymetry purposes, Sindhu Sadhana will be deployed for the Ram Setu project.

    Two of the planned tests:

    1. Side-scan SONAR — Will provide bathymetry which is similar to studying the topography of a structure on land. Soundwaves signals will be sent to the structure which will provide an outline of the physical structure of the Ram Setu.
    2. Silo seismic survey – Mild earthquake-like tremor shocks will be sent at shallow depths close to the structure. These energized shockwaves are capable of penetrating into the structure. The reflected or refracted signals will be captured by instruments that will provide sub-surface structure.

    Significance of such exploration

    • India has a vast coastline of over 7,500 kilometres.
    • Oceans are a treasure trove of the past records — climate, evolutionary changes of the underwater fauna, coastal lives, habitations, settlements and civilizations.
    • Of these, the sea-level changes remain the most significant of all with respect to climate studies.
    • History has records of sailors who set out on unknown voyages to later discover new lands and islands.
    • They ventured into deep seas even before the advent of the Global Positioning System (GPS).
    • Using such underwater exploration studies, scientists say that it is possible to trace numerous ship-wreckages and remains from the past.
    • Studies of ship wreckage, artefacts or remains could reveal a lot of information.

    Recently a 60000 YO submerged forest was explored off the Alabama coast in the USA.

    Has India undertaken underwater archaeological explorations?

    • A part of Dwarka, along with coastal Gujarat, is underwater, confirming the sea-level rise.
    • The NIO has been studying this site, and so far, traced large amounts of scattered stones which were retrieved at the depth between three to six metres beneath.
    • Stone anchors, too, were found at the site, suggesting it to be part of an ancient harbour.
    • In the past, NIO had initiated studies to trace the missing shore temples of Mahabalipuram in Tamil Nadu.
    • Presently, several ship wreckage studies, including the one-off the Odisha coast, are going on.

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  • Police Reforms – SC directives, NPC, other committees reports

    What is the ‘Top 25’ drive initiated by Mumbai police?

    States | Governance | Mains Paper 2: Civil Service

    The Mumbai police have started a drive titled ‘Top 25’ aimed at keeping under check history-sheeters and those they believe could create trouble.

    Preventive detention laws in India have come to be associated with gross and frequent misuse.

    What is the ‘Top 25’ drive of the Mumbai police?

    • The Mumbai police commissioner has asked all police stations in the city to make a list of the “top 25” criminals and ask them to sign a bond of good behavior failing which they would have to pay a fine.
    • The aim is to rein in criminal elements and those the police believe could create a law and order problem in the city.
    • While this practices that is termed “chapter proceedings” has been followed in the past, the amount a person would usually forfeit was around Rs 10,000 – Rs 15,000.
    • Now, the amount has been raised up to Rs 50 lakh.

    How is the police calculating the surety amount now?

    • The police are now going through the bank details and tax returns of the person and the surety amount is set in accordance with the annual income of the offender or his family.
    • The police believe that the threat of having to pay a high amount will act as a deterrent and that a few thousand as surety amount did not have the desired effect.

    What are Chapter Proceedings?

    • Chapter proceedings are preventive actions taken by the police if they fear that a particular person is likely to cause law and order trouble.
    • These proceedings are unlike punitive action taken in case of an FIR with an intention to punish.
    • Here, the police can issue notices under sections of the Code of Criminal Procedure to ensure that the person is aware that creating a nuisance could result in action against him.
    • Recently, the Mumbai police initiated chapter proceedings against an extremely chauvinistic news reporter and media head.

    Rights of the accuse

    • On receiving such notice, a person can appeal before the courts.
    • In fact, in the past, courts have come down strongly against chapter proceedings in some cases.
    • In 2017, while striking down a notice issued to the owner of a bar, the Bombay High Court said: “chapter proceedings cannot be initiated on the basis of an incident of trivial nature”.

    Back2Basics: Arrest vs. Preventive Detention

    An ‘arrest’ is done when a person is charged with a crime. An arrested person is produced before a magistrate within the next 24 hours. In case of preventive detention, a person is detained as he/she is simply restricted from doing something that might deteriorate the law and order situation.

    • Article 22 of the Indian Constitution provides safeguards against the misuse of police powers to make arrests and detentions.
    • Clause (2) of Article 22 reads that every person who is arrested and detained in custody shall be produced before the nearest magistrate within a period of twenty-four hours of such arrest excluding the time necessary for the journey.
    • Clause (4) of the article states that no individual can be detained for more than 3 months unless a bench of High court judges or an Advisory board decides to extend the date.
    • Clause (5) states that the detained individual should be made aware of the grounds he/she has been detained (in pursuance of the order) and should provide him/her with an opportunity of making a representation against the case.
    • Parliament may by law prescribe the circumstances under a person may be detained for a period longer than three months under any law.

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  • Oil and Gas Sector – HELP, Open Acreage Policy, etc.

    [pib] International Energy Agency (IEA)

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

    The Framework for Strategic Partnership between the International Energy Agency (IEA) members and India was signed yesterday to strengthen mutual trust and cooperation & enhance global energy security, stability and sustainability.

    Try this MCQ:

    Q.The Global Energy Transition Index recently seen in news is released by:

    a) International Energy Agency (IEA)

    b) World Economic Forum (WEF)

    c) International Renewable Energy Agency (IRENA)

    d) International Solar Alliance

    International Energy Agency

    • The IEA is a Paris-based autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis.
    • It was initially dedicated to responding to physical disruptions in the supply of oil, as well as serving as an information source on statistics about the international oil market and other energy sectors.
    • At the end of July 2009, IEA member countries held a combined stockpile of almost 4.3 billion barrels of oil.
    • They are required to maintain total oil stock levels equivalent to at least 90 days of the previous year’s net imports.
    • The IEA acts as a policy adviser to its member states but also works with non-member countries, especially China, India, and Russia.
    • The Agency’s mandate has broadened to focus on the “3Es” of effectual energy policy: energy security, economic development, and environmental protection.

    Greater role play

    • The latter has focused on mitigating climate change.
    • The IEA has a broad role in promoting alternate energy sources (including renewable energy), rational energy policies, and multinational energy technology co-operation.

    Why need a partnership with IEA?

    • This partnership will lead to an extensive exchange of knowledge and would be a stepping stone towards India becoming a full member of the IEA.
    • India and the IEA members will work as Energy Security, Clean & Sustainable Energy, Energy Efficiency, Enhancing petroleum storage capacity in India, Expansion of gas-based economy in India, etc.

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  • Foreign Policy Watch: United Nations

    Pursuing national interests, at the UN high table

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

    The article highlights India’s challenges at the UNSC in its 2 year stint.

    India’s agenda at the UNSC

    • India’s two-year non-permanent stint at the UNSC should be viewed as a once-in-a-decade opportunity to clearly identify and pursue its national interests regionally and globally.
    • India’s entry into the UNSC coincides with the emergence of a new world order.
    • Under new world order, there is systemic uncertainty, little care for global commons, absence of global leadership, the steady division of the world into rival blocs, pursuit of narrow national interests.
    • Efforts by Biden administration in the United States may go on to ameliorate some of the harsh impact of this global order.
    • The UNSC has also reached a point wherein its very relevance is in serious doubt.
    • India too is no longer an ardent believer in the fantastical claims about a perfect world at harmony with itself, nor is it a timid observer in global geopolitics.
    • India’s pursuit of its interests at the UNSC should, therefore, reflect its material and geopolitical limitations, and its energies should be focused on a clearly identified agenda.

    Factors determining India’s agenda at the UNSC

    1) Rivalry with China

    • India’s tenure at the UNSC comes in the wake of its growing military rivalry with China.
    • China’s opposition to having India chair the Counter-Terrorism Committee (CTC) in 2022 was a precursor to the things to come ahead.
    • The next two years will be key to ensure checking further Chinese incursions along the Line of Actual Control and building up enough infrastructure and mobilising sufficient forces in the forward areas.

    2) Relations with Russia

    • Greater Indian alignment with the West at the UNSC, an unavoidable outcome, could, however, widen the growing gulf between Russia and India.
    • It might not be possible for India to sit on the fence anymore.
    • Fence sitting would bring more harm than goodwill in an international system where battlelines are sharpening by the day.

    3) Terrorism issue

    • Terror is likely to be a major focus for India at the UNSC.
    • External Affairs Minister’s statement at the UNSC Ministerial Meeting on the 20th Anniversary of Security Council Resolution 1373 and the establishment of the Counter Terrorism Committee has set the stage for New Delhi’s approach on the issue.
    • India recently assumed the chair of the Taliban sanctions committee which assumes significance given the fast-moving developments in Afghanistan.
    • India must formulate its policy towards terrorism with far more diplomatic finesse and political nuance especially given that it is chairing the Taliban sanctions committee while courting the very same Taliban.

    4) Coalition of like-minded states and setting the agenda for next decade

    • India should use the forum and its engagement there to build coalitions among like-minded states and set out its priorities for the next decade — from climate change to non-proliferation.
    • India should use its bargaining power at the UNSC to pursue its national interests in other forums and domains as well.
    • India’s UNSC strategy should involve shaping the narrative and global policy engagement vis-à-vis — the Indo-Pacific.
    • Given India’s centrality in the Indo-Pacific region and the growing global interest in the concept, New Delhi would do well to take it upon itself to shape the narrative around it.
    • In doing so, it should, through the UNSC and other means, court Moscow once again and assuage its concerns about the Indo-Pacific.

    Way forward

    • India’s pursuit of its national interest at UNSC must also be tempered by the sobering fact that the UNSC is unlikely to admit new members any time soon, if ever at all.
    • A glance at the recent debates on UNSC reforms and the state of the international system today should tell us that bending over backwards to please the big five to gain entry into the UNSC will not make a difference.

    Consider the question “What agenda should India pursue at the UNSC in its two year non-permanent stint? What are the challenges in pursuing such agenda?”

    Conclusion

    India must focus its energies on what it can achieve during the short period that it would be in the UNSC rather than what it wishes happened.

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  • Government Budgets

    What are Off-Budget Borrowings?

    | Economics | Mains Paper 3: Government Budgeting

    Finance Minister is all set to present the Union Budget 2021 on February 1st with all eyeing on off-budget borrowings to reduce Fiscal Deficit.

    Try this PYQ:

    With reference to the Union Government, consider the following statements:

    1. The Department of Revenue is responsible for the preparation of Union Budget that is presented to the Parliament.
    2. No amount can be withdrawn from the Consolidated Fund of India without the authorization from the Parliament of India.
    3. All the disbursements made from Public Account also need authorization from the Parliament of India.

    Which of the statements given above is/are correct?

    (a) 1 and 2 only

    (b) 2 and 3 only

    (c) 2 only

    (d) 1, 2 and 3

    What are off-budget borrowings?

    • Off-budget borrowings are loans that are taken not by the Centre directly, but by another public institution that borrows on the directions of the central government.
    • Such borrowings are used to fulfill the government’s expenditure needs.
    • Such borrowings are a way for the Centre to finance its expenditures while keeping the debt off the books — so that it is not counted in the calculation of fiscal deficit.
    • But since the liability of the loan is not formally on the Centre, the loan is not included in the national fiscal deficit. This helps keep the country’s fiscal deficit within acceptable limits.
    • As a result, a CAG report of 2019 pointed out that this route of financing puts major sources of funds outside the control of Parliament.

    Eyes on fiscal deficit

    • One of the most sought after details in any Union Budget is the level of fiscal deficit.
    • It is essentially the gap between what the central government spends and what it earns. In other words, it is the level of borrowings by the Union government.
    • This number is the most important metric to understand the financial health of any government’s finances.
    • As such, it is keenly watched by rating agencies — both inside and outside the country. That is why most governments want to restrict their fiscal deficit to a respectable number.
    • One of the ways to do this is by resorting to “off-budget borrowings”.

    How much would the borrowings be?

    • According to the last Budget documents, in the current financial year, the Centre was set to borrow Rs 5.36 lakh crore.
    • However, this figure did not include the loans that public sector undertakings were supposed to take on their behalf or the deferred payments of bills and loans by the Centre.

    How are off-budget borrowings raised?

    • Issuance of Bonds: The government can ask an implementing agency to raise the required funds from the market through loans or by issuing bonds.
    • Utilizing savings: For example, the food subsidy is one of the major expenditures of the Centre. In the Budget presentation for 2020-21, the government paid only half the amount budgeted for the food subsidy bill to the Food Corporation of India. The shortfall was met through a loan from the National Small Savings Fund.
    • Borrowing: Other PSUs have also borrowed for the government. For instance, public sector oil marketing companies were asked to pay for subsidized gas cylinders for PM Ujjwala Yojana beneficiaries in the past.
    • Bank sources: Public sector banks are also used to fund off-budget expenses. For example, loans from PSU banks were used to make up for the shortfall in the release of fertilizer subsidy.

    Its implications

    • Given the various sources of off-budget borrowing, the true debt is difficult to calculate.
    • For instance, it was widely reported that in July 2019, just three days after the presentation of the Budget, the CAG (cumulative aggregate growth) pegged the actual fiscal deficit for 2017-18 at 5.85% of GDP instead of the government version of 3.46%.

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