💥Join UPSC 2027,2028 Mentorship (July Batch) + XFactor Notes & Microthemes PDF
Talk to Mentor

Civilsdaily

Login

Archives: News

  • Challenges federalism faces in India

    3 June 2021 | op-ed snap | Polity
    Mains GS2: Federalism

    The article highlights the challenges faced by the federalism in India in various domains and forms and suggests the ways to deal with these challenges.

    Growing tendency towards Centralisation

    • Moves to erode the powers of State governments are not new.
    • The Centre, on several occasions, has used its powers to dismiss or use the Governor to intimidate democratically elected governments.
    • During the Emergency, education was moved to the Concurrent list which was until then a State subject under the constitutional division of responsibilities.
    • However, the changes to federal relations at present are more systemic.
    • There has been increasing centralisation in resource allocations and welfare interventions.
    • After GST, the gap between the revenue that State governments are allowed to generate and the expenditure that they are expected to incur has been widening.
    • The Centre has been encroaching into domains under State government control through centrally sponsored schemes in sectors such as education and health.

    Three domains in which federalism faces challenges

    1) State-capital relation

    • At present there is growing trend towards centralising economic power in conjunction with political centralisation.
    • The consolidation and expansion of a few big business groups is taking place, probably at the expense of smaller players.
    •  On the one hand, the Centre has sought to insulate Indian big business from global competition by choosing not to enter into the Regional Comprehensive Economic Partnership (RCEP).
    • But the power of small businesses is eroded through support for GST and the call for a single national market.
    • So, big businesses are more likely to benefit from a removal of State-level barriers to trade at the expense of smaller regional players.

    2) Institutional transgression

    • Central institutions are increasingly weakening the policy levers of State institutions.
    • There are growing allegations of the misuse of institutions such as the Income Tax Department, the Enforcement Directorate and the National Investigation Agency are being used to intimidate opponents..
    •  Direct transfers to beneficiaries of welfare schemes bypassing States are also contributing to this dynamic.
    • The Centre is increasingly ignoring elected representatives of State governments, holding meetings with State secretaries and district collectors on issues that are primarily under State control.
    • Governors perform active administrative roles instead of their signatory roles.
    • To ensure national uniformity in educational institutions NEET was introduced in medical education.
    • But it subverts the affirmative action policies developed at the regional level in response to local.
    • In the domain of health, the Centre has now put State governments at a disadvantage in vaccine usage by fixing differential pricing for procuring vaccines.

    3) Socio-cultural foundations

    • Beside the legal-constitutional aspects of federalism, it is diversity in cultural foundation of regions that sustains Indian federalism.
    •  Markers of regional identities and regional socio-cultural practices are now interpreted as belonging to a pan-Indian Hindu tradition.

    Conclusion

    To stem this trend towards centralisation we need to provide more legal and constitutional safeguard to the States, strong regional political assertion and a strong federal coalition.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Tax Reforms

    Global minimum tax may help India but can cause international disagreements

    3 June 2021 | op-ed snap | Economics
    Mains GS3: Indian Economy

    The article deals with the issue of global minimum tax proposal floated by the US, challenges it faces and its implications for India.

    The US proposal for global minimum tax

    • In its recent proposal, the U.S. sought to impose a global minimum tax on foreign income earned by U.S. corporations.
    • The proposal is intended to disincentivise American companies from inverting their structures due to the increase in the U.S. corporate tax rate.
    • The U.S. is now discussing a floor of 15% for the minimum tax rate.
    • The proposal is similar to Pillar Two, except for the rate of the effective minimum tax.

    Similarity with Pillar Two Proposal

    • The Pillar Two proposal was the Organisation for Economic Co-operation and Development’s (OECD) plan to plug the remaining Base Erosion and Profit Shifting (BEPS) issues
    • It provide jurisdictions the right to “tax back” where other jurisdictions have either not exercised their primary taxing right or have exercised it at low levels of effective taxation.
    • For instance, if an Indian-headquartered multinational corporation (MNC) has an entity in Singapore or the Netherlands through which global operations are run, and its income from global operations is not taxed at an effective rate of 10% or 15%, then it can be taxed in India.
    • India has been part of the Pillar Two discussions and has not objected in principle to the proposal.

    How Global Minimum Tax would benefit India?

    • The proposal, along with the increased tax bill for U.S. companies, may benefit the Indian revenue department.
    • The State of Tax Justice report of 2020 notes that India loses over $10 billion in tax revenue due to the use of offshore structures, particularly through investments made by Indian residents through Mauritius, Singapore and the Netherlands.
    • This is supported by the overseas direct investment (ODI) data from 2000 to 2021 published by the Reserve Bank of India.
    • Start-ups and large Indian conglomerates commonly use offshore structures for conducting global operations.
    • Revenue from such operations is often retained offshore and not repatriated to India.
    • Tax advantages incentivise such structures, due to which taxes on such income are not paid in India.
    • Once these proposals are implemented, Indian companies would have to pay additional taxes on their offshore structures to the extent that the effective rate of tax is lower than the global minimum tax rate.

    Challenges

    • Lack of consensus: Several countries have taken a different approach to the rate of global minimum tax.
    • While France and Germany have expressed support, the EU has raised concerns regarding the high rate proposed by the United States.
    • Tax sovereignty issue: Countries have stated that the proposal infringes upon their tax sovereignty and that the fight against unfair tax competition should not become a fight against competitive tax systems.

    Consider the question “What are the factors that led to the demand of global minimum corporate tax? What will be its implications for India?” 

    Conclusion

    As economies struggle amid the COVID-19 pandemic, the necessity of encouraging trade and economic activity should be prioritised over disagreements on tax allocations. A tax-related trade war or entrenchment of unilateral levies may further harm both global and national economies.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • FDI in Indian economy

    What explains the surge in FDI inflows?

    2 June 2021 | | Economics
    Mains GS3: Indian Economy

    The article analyses the factors contributing to the claim of 10% rise in total Foreign Direct Investment in 2020-21 and its impact on economy.

    Making sense of increased FDI

    • Total foreign direct investment (FDI) inflow in 2020-21 is $81.7 billion, up 10% over the previous year, reported a recent Ministry of Commerce and Industry press release.
    •  The short press release highlighted industry and State-specific foreign investment figures without detailed statistical information.
    • The Reserve Bank of India (RBI) bulletin, which was released a week earlier, has the details.

    What explains increased gross inflows

    • The gross inflow consists of (i) direct investment to India and (ii) repatriation/disinvestment.
    • The disaggregation shows that direct investment to India has declined by 2.4%.
    • Hence, an increase of 47% in “repatriation/disinvestment” entirely accounts for the rise in the gross inflows.
    • In other words, there is a wide gap between gross FDI inflow and direct investment to India.
    • Similarly, measured on a net basis (that is, “direct investment to India” net of “FDI by India” or, outward FDI from India), direct investment to India has barely risen (0.8%) in 2020-21 over the last year.
    • What then accounts for the impressive headline number of 10% rise in gross inflow?
    • It is almost entirely on account of “Net Portfolio Investment”, shooting up from $1.4 billion in 2019-20 to $36.8 billion in the next year.
    • That is a whopping 2,526% rise.
    • Further, within the net portfolio investment, foreign institutional investment (FIIs) has boomed by an astounding 6,800% to $38 billion in 2020-21, from a mere half a billion dollars in the previous year.
    • This explains the surge in gross FDI inflows which is entirely on account of net foreign portfolio investment.

    How FDI is different from FII

    • FDI inflow, in theory, is supposed to bring in additional capital to augment potential output (taking managerial control/stake).
    • In contrast, foreign portfolio investment, as the name suggests, is short-term investment in domestic capital (equity and debt) markets to realise better financial returns.
    • But the conceptual distinctions have blurred in official reporting, showing an outsized role of FDI and its growth in India.

    How FPI distorted equity markets?

    • The deluge of FII inflow did little to augment the economy’s potential output.
    • It added a lot of froth to the stock prices.
    • When GDP has contracted by 7.3%  in 2020-21 on account of the pandemic and the economic lockdown, the BSE Sensex nearly doubled from about 26,000 points on March 23, 2020 to over 50,000 on March 31, 2021.
    • BSE’s price-earnings (P-E) multiple — defined as share price relative to earnings per share — is among the world’s highest, close behind S&P 500 in the U.S.

    FDI inflow’s contribution to domestic output

    • As Figure below shows, between 2013-14 and 2019-20, the ratio of net FDI to GDP has remained just over 1% (left-hand scale), with no discernible rising trend in it.
    • The proportion of net FDI to gross fixed capital formation (fixed investment) is range-bound between 4% and 6%.
    • These stagnant trends are evident when the economy’s fixed investment rate — gross fixed capital formation to GDP ratio — has plummeted from 31.3% in 2013-14 to 26.9% in 2019-20 (right-hand scale).
    • Thus, FDI inflow’s contribution to domestic output and investment remains modest.

    Conclusion

    The flood of FIIs has boosted stock prices and financial returns. These inflows did little to augment fixed investment and output growth.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    Growth of farm sector during COVID-19 Pandemic

    2 June 2021 | | Agriculture
    Mains GS3: Indian Economy

    2020-21 saw the Indian economy register its worst-ever contraction since Independence and also the first since 1979-80. There has been recording economic contraction, however, the farm sector actually grew by 3.6%.

    Growth in Farm Sector

    There are two main reasons why agriculture didn’t suffer the fate of the rest of the economy last year.

    (1) Better monsoon and yields

    • 2019 and 2020, by contrast, were above-normal monsoon years, with the country receiving an area-weighted rainfall.
    • It led to the filling of reservoirs and recharging of groundwater tables and aquifers, unlike after the deficient monsoons of 2014 and 2015 and the near-deficient one of 2018.
    • Not surprisingly, 2019-20 and 2020-21 produced back-to-back bumper harvests.

    (2) Ease during lockdowns

    • The second reason had to do with agriculture being exempted from the nationwide lockdown that followed the first wave of Covid-19.
    • Lockdown restrictions only spared PDS ration shops and other stores selling food, groceries, fruits & vegetables, milk, meat and fish, animal fodder, seeds and pesticides.
    • But within days, an addendum was issued, extending the lifting of curbs to fertilizer outlets, all field operations by farmers and farmworkers, intra- and inter-state movement of agricultural machinery, sale of produce in wholesale mandis and procurement.

    Inherent resilience of India’s farm sector

    • Simply put, farmers made sure they did not waste a good monsoon, finding ways to even mobilize harvesting and planting labor during peak lockdown.
    • The inherent resilience and adaptability of rural economic actors — meant that the farm sector was relatively insulated from lockdown-imposed supply-side

    What were the issues faced?

    • The problems agriculture encountered due to the lockdown had more to do with the demand
    • The closure of hotels, restaurants, roadside eateries, sweetmeat shops, hostels, and canteens — and no wedding receptions and other public functions — resulted in a collapse of out-of-home consumption.
    • This was demand destruction not from rising prices — “movement along the demand curve”.
    • Instead, it was from forced consumption reduction, translating into lower demand for farm produce even at the same price — “a leftward shift in the demand curve”.

    Various successes

    (1) Success of MSP procurement

    • MSP procurement was effective largely in crops and regions where the institutions undertaking such operations — be it the Food Corporation of India, NAFED, Cotton Corporation of India or even cooperative dairies.
    • These all were active and could stem price declines during the period of demand destruction.
    • Such intervention wasn’t possible in non-mainstream produce (vegetables, fruits, poultry, fish, flowers, spices, etc) and regions (maize in Bihar), where the corresponding institutional mechanisms were non-existent.
    • The demand situation improved, though, with the gradual lifting of lockdown restrictions and also the recovery in global agri-commodity prices.

    (2) MGNREGA

    • While agriculture grew amid an unprecedented economic contraction, 2020-21 was also notable for the record person-days of employment generated under MGNREGA.
    • This flagship employment scheme was yet another source of liquidity infusion and, again, a pre-existing program that the government could deploy to support rural incomes during a crisis.
    • Rural consumption, in turn, provided some cushion to the economy and preventing a bad situation from turning much worse.

    Prospects for this Year

    The one obvious difference between now and last year is Covid-19 cases. Covid’s impact on agriculture per se would depend on the spread, intensity, and duration of the infection.

    • Rural areas were mostly unaffected by the pandemic’s first wave.
    • Farm-related activities could, then, go on relatively unhindered, which government policy, whether to do with lockdown or public procurement, also facilitated.
    • That situation has changed with the second wave and rising share of rural districts in total cases, even without factoring in the higher probability of underreporting in these places.

    What next?

    • While fear of the virus may induce precautionary behavior and economic growth, it is unlikely to affect normal agricultural operations.
    • And if last years’ experience is any guide, the adaptability of farmers and myriad rural economic agents should not be underestimated.

    (1) The first factor to be considered is the monsoon. The good news this time is that there is no El Niño.

    • There are increasing chances of a La Niña — El Niño’s counterpart that is associated with above-normal rains and lower temperatures in India — for the autumn and winter months.
    • El Nino is the abnormal warming of the tropical central and eastern Pacific Ocean surface waters, resulting in increased evaporation and cloud-formation activity around South America and away from Asia.

    (2) Uncertainty is prices

    • Global prices — be it of wheat, maize, soybean, palm oil, sugar, skimmed milk powder or cotton — have scaled multi-year highs in the recent period, helping India’s agri-commodity exports.
    • But export demand alone cannot sustain prices, especially in a scenario where job and income losses, accelerated post the pandemic that has severely dented domestic purchasing power.
    • Diesel prices alone have gone up by over a third in the last year; so have that of most non-urea fertilizers.

    Way forward

    • The real challenge for Indian agriculture and farmers will be on the demand side.
    • That is specifically going to come from declining real incomes and particularly affecting demand for milk, pulses, egg, meat, fruits, vegetables and other protein/micronutrient-rich foods.
    • While rising rural wages and overall incomes is what propelled the demand for these foods in the past — in turn, contributing to dietary and cropping diversification — the ongoing slide presents a frightening proposition.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

    Lawsuit against 5G and the debate around

    2 June 2021 | | Science and Technology
    Mains GS3: GS3-15.Science and Technology- Developments and their Applications and Effects in Everyday Life.

    A notable actor has filed a lawsuit in the Bombay High Court against the 5G telecom technology up-gradation, trial runs for which have started in India now.

    What is 5G technology?

    • 5G or fifth generation is the latest upgrade in the long-term evolution (LTE) mobile broadband networks.
    • It mainly works in 3 bands, namely low, mid and high-frequency spectrum — all of which have their own uses as well as limitations.

    Issues with the rollout

    • However, 5G and its rollout in many countries have been hampered due to fears over health concerns even some conspiracy theories as well, which have tried to link it with the coronavirus among other things.
    • The recent lawsuit is asking questions around the overall impact of 5G and low intensity radiofrequency (RF) electronic magnetic field (EMF) radiation on human health, and its environmental impact as well.
    • These concerns, while not yet proven, have been raised by various scientists before too.

    Arguments raised in the lawsuit

    • It has stated that the ‘radiation’ it will emit will be “extremely harmful and injurious to the health and safety of the people”.
    • While using wireless devices one is in a constant dilemma about “RF radiation from wire-free gadgets and network cell towers”.
    • There is sufficient reason to believe that the radiation is extremely harmful and injurious to the health and safety of the people.
    • It wants the concerned department to certify that 5G technology is safe for humans and also animals and birds.

    Why is 5G essential?

    • 5G promises to revolutionize mobile broadband and is a big generational leap over the existing 4G technology.
    • This new technology will be capable of not just ensuring fast internet on our phones, but also help power IoT (Internet of Things) networks to run connected cars and homes smarter.
    • It will also support the streaming of rich media.

    Rollout status in India

    • 5G has not yet been rolled out in India though some companies have been given a trial spectrum to test 5G technology in the country.
    • Once this is over, it is expected that networks will go live with the 5G bands by the end of this year.
    • The 5G rollout is expected to gather pace in the country by 2022.

    Fear around the impact of 5G radiation on human health

    • The claim is that the more powerful 5G waves will emit more radiation and cause harm to humans as well as other living beings.
    • Also, 5G will require more towers in order to ensure better connectivity, and since it will power more than just our smartphones, it will increase human exposure to such radiation in general.
    • This is an extension of the idea that cellular towers, which emit low-level RF-EMF radiation, are in general damaging our bodies.
    • But radiation from cellphone towers, mobile phones, WiFi routers is typically called non-ionizing radiation like radio waves, microwaves, and optical radiation.
    • RF fields have been classified by WHO’s International Agency for Research on Cancer (IARC) as possibly carcinogenic to humans (Group 2B).

    Layman understandings over such radiations

    • There’s no doubt that radiation at very high levels, also referred to as ionizing radiation, heats up our tissue and can eventually lead to cancer.
    • This applies to medical devices such as a CT-scan machine or X-ray machine, which emit high-level ionizing radiation.
    • That’s exactly why doctors don’t recommend that you go get a CT scan for every health issue because it does increase unnecessary exposure to radiation.
    • But there are increasing concerns that our smartphones, other WiFi-ready devices such as laptops, and mobile phone towers which also emit low-level RF radiation are damaging our bodies given the constant exposure.

    What WHO has to say?

    • On its page on 5G, the World Health Organization (WHO) says “no adverse health effect has been causally linked with exposure to wireless technologies.”
    • But it also states that “only a few studies have been carried out at the frequencies to be used by 5G.”
    • Given the growing concerns, the WHO is conducting “a health risk assessment from exposure to radio frequencies, covering the entire radiofrequency range, including 5G.”
    • This study will be published by 2022.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Air Pollution

    International Nitrogen Initiative (INI)

    2 June 2021 | IOCR | Environment
    Mains GS1: GS1-14.Important Geophysical phenomena such as earthquakes, Tsunami, Volcanic activity, cyclone etc.,

    The United Nations (UN) Sustainable Development Goals (SDGs) are the main focus of the eighth triennial conference of the International Nitrogen Initiative (INI) being held virtually this week.

    International Nitrogen Initiative

    • INI is an international program, set up in 2003 under the sponsorship of the Scientific Committee on Problems of the Environment (SCOPE) and from the International Geosphere-Biosphere Program (IGBP).
    • The key aims of the INI are to:
    1. optimize nitrogen’s beneficial role in sustainable food production, and
    2. minimize nitrogen’s negative effects on human health and the environment resulting from food and energy production.

    Answer this PYQ in the comment box:

    Q.Which of the following adds/add nitrogen to the soil?

    1. Excretion of Urea by animals
    2. Burning of coal by man
    3. Death of vegetation

    Select the correct answer using the code given below:

    (a) 1 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2, and 3

    Why nitrogen?

    • Reactive nitrogen compounds like NOx, ammonia and the greenhouse gas nitrous oxide impact air, water and soil quality, health, biodiversity and climate change, among others.
    • These compounds are lost from fertilizers, manures, and sewage as well as from fuel burning in transport and industry.
    • Assessing and managing them sustainably will be crucial to achieving the 17 UN SDGs targeted for 2030.

    Also read:

    [Burning Issue] Nitrogen Pollution in India

    Back2Basics: Nitrogen Pollution

    • While nitrogen is the dominant gas in the atmosphere, it is inert and doesn’t react.
    • However, when it is released as part of compounds from agriculture, sewage and biological waste, nitrogen is considered reactive.
    • It may be polluting and even exert a potent greenhouse gas effect.
    • Nitrous oxide (N2O) is 300 times more potent than carbon dioxide but isn’t as prevalent in the atmosphere.
    • Other than air pollution, nitrogen is also linked to the loss of biodiversity, the pollution of rivers and seas, ozone depletion, health, economy, and livelihoods.
    • Nitrogen pollution is caused, for example, by emissions from chemical fertilizers, livestock manure and burning fossil fuels.
    • Gases such as ammonia (NH3) and nitrogen dioxide (NO2) contribute to poor air quality and can aggravate respiratory and heart conditions, leading to millions of premature deaths across the world.
    • Nitrate from chemical fertilizers, manure, and industry pollute the rivers and seas, posing a health risk for humans, fish, coral, and plant life.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Child Rights – POSCO, Child Labour Laws, NAPC, etc.

    Child labour in India

    2 June 2021 | op-ed snap | Governance
    Mains GS2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections

    The article highlights the risk posed by pandemic to the gains made by India on reducing the child labour in India.

    Child labour in India

    • A Government of India survey (NSS Report No. 585, 2017-18) suggests that only 79.6%. of the children in the age group of 14-17 years are attending educational institutions (formal and informal).
    • The Census of India 2011 reports 10.1 million working children in the age group of 5-14 years.
    • Out of whom 8.1 million are in rural areas mainly engaged as cultivators (26%) and agricultural labourers (32.9%).
    • UNESCO estimates based on the 2011 Census record 38.1 million children as “out of school” i.e.18.3% of total children in the age group of 6-13 years.
    • A Rapid Survey on Children (2013-14), jointly undertaken by the Ministry of Women and Child Development and UNICEF, found that less than half of children in the age group of 10-14 years have completed primary education.

    How policies and initiatives helped reduce child labour in India (2001-11)

    • Child labour in India decreased in the decade 2001 to 2011.
    • Policy interventions such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005, the Right to Education Act 2009 and the Mid Day Meal Scheme have paved the way for children to be in schools along with guaranteed wage employment (unskilled) for rural families.
    • Efforts towards convergence of government schemes is also the focus of the implementation of the National Child Labour Project.
    • Ratifying International Labour Organization Conventions Nos. 138 and 182 in 2017, the Indian government further demonstrated its commitment to the elimination of child labour.
    • The Ministry of Labour and Employment-operated online portal allows to share information and coordinate on child labour cases at the national, State and local levels for effective enforcement of child labour laws.

    Challenges ahead

    • The economic contraction and lockdowns have worsened the situation, posing a real risk of backtracking the gains made in eliminating child labour.
    • With increased economic insecurity, lack of social protection and reduced household income, children from poor households are being pushed to contribute to the family income.
    • With closure of schools and challenges of distance learning, children may drop out leaving little scope for return unless affirmative and immediate actions are taken.
    • As many schools and educational institutions are moving to online platforms for continuation of learning, the ‘digital divide’ is a challenge that India has to reconcile within the next several years.
    • The NSS Report titled ‘Household Social Consumption on Education in India’ suggests that in 2017-18, only 24% of Indian households had access to an Internet facility.
    • The Annual Status of Education Report (ASER) 2020 survey highlights that a third of the total enrolled children received some kind of learning materials from their teachers during the reference period (October 2020) as digital mode of education was opted for.

    Way forward

    •  It is through strategic partnerships and collaborations involving government, employers, trade unions, community-based organisations and child labour families that we could make a difference building back better and sooner.
    • We need a strong alliance paving our way towards ending child labour in all its forms by 2025 to achieve Sustainable Development Goal 8.7.

    Consider the question “What are the policy measures and programmatic intervention implemented to reduce the child labour in India. How Covid-19 threatens the gains made on reducing the child labour?”

    Conclusion

    To deal with the child labour challenge, we need the right level of commitment among all the relevant stakeholders and the right mix of policy and programmatic interventions are present.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Coronavirus – Health and Governance Issues

    COVID diplomacy 2.0, a different order of tasks

    2 June 2021 | op-ed snap | International Relations
    Mains GS2: GS2-18.Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

    The article highlights the contrast in India’s diplomacy during the first wave of the pandemic and the second wave. It also discusses the challenges ahead for India.

    India’s diplomatic structure in two Covid waves

    •  In the past month, the focus for the Ministry of External Affairs (MEA) and Missions abroad has shifted.
    • During the first wave of the pandemic, focus was on coordinating exports of COVID-19 medicines, flights to repatriate Indians abroad through the ‘Vande Bharat Mission’ after the lockdown, and then exporting vaccines worldwide- ‘Vaccine Maitri’.
    • After the second wave, Covid Diplomacy 2.0 has a different order of tasks, both in the immediate and the long term.
    • The immediate imperative was to deal with oxygen and medicine shortages that claimed the lives of thousands.
    • The Ministry of External Affairs has had to deal with internal health concerns while galvanising help from abroad for others.
    • Despite difficulties, the Ministry of External Affairs has completed the task of bringing in supplies in a timely manner, and with success.

    Dealing with vaccine shortage

    • Companies manufacturing AstraZeneca and Sputnik-V are stretched as far as future production is concerned.
    • The Chinese vaccines are out of consideration given bilateral tensions.
    • So, it is clear that India is looking to the U.S. to make up the shortfall.
    • This could be done in the following ways:
    • 1) Requesting the U.S. to share a substantial portion of its stockpile of AstraZeneca.
    • The U.S. government is holding up its AstraZeneca exports until its own United States Food and Drug Administration approves them.
    • 2) Asking the US to release more vaccine ingredients which are restricted for exports.
    • 3) To buy more stock outright from the three U.S. manufacturers, Pfizer, Moderna and Johnson & Johnson, and to encourage production in India of these vaccines.
    • Production of Johnson & Johnson single-dose vaccines in India, as had been announced during the Quad summit, will take some time.
    • The U.S. companies seem set on getting both an indemnity waiver from India as well as Emergency Use Authorisation prior to supplying them.
    • The Government may also need to make a change to its publicly announced policy that States in India will need to negotiate purchases directly, as the U.S. manufacturers want centralised orders, with payments up-front.

    2) Patent waiver

    • The promise of patent waivers, from India’s joint proposal at the World Trade Organization (WTO) will not reap early benefits.
    • Even though it has received support from world leaders such as the U.S., Russia and China.
    • Many countries including Japan, Australia, Brazil and EU are still holding out on the idea of freeing up intellectual property rights on vaccines for three years.
    • That could ultimately hold up proceedings at the WTO, as it works by consensus.

    3) Diplomatic fallout of vaccine collapse

    • The Government has defended its decision to export more than 66 million vaccines doses to 95 countries between January and April this year.
    • All exports were stopped as soon as cases in India began to soar.
    • Both India’s neighbours and partners in Africa as well as global agencies depending on India for vaccines have been left in the lurch by the Government’s failure to balance its vaccine budget.
    • For example, once India completed delivery of the first batch, of 550,000 Covishield doses, Bhutan completed the administration of the first dose to 93% of its population in a record 16 days.
    • Two months later, Bhutan does not have any vaccines to complete the second dose and has been left requesting other countries for vaccines.
    • It is no surprise that each of India’s neighbours has now sought help from China and the U.S. to complete their vaccination drives.

    4) Tracing virus pathways

    • India, as one of the worst pandemic-hit countries, must be at the forefront of demanding accountability on the origin of the virus.
    • The World Health Organisation (WHO) which studied “pathways of emergence” of SARS-CoV2 in Wuhan, listed four possibilities:
    • 1) Direct zoonotic transmission.
    • 2) An intermediate host.
    • 3) Cold chain or transmission through food.
    • 4) A laboratory incident.
    • China appears adamant on blocking these studies.
    • Even the U.S. appears to have dragged its feet on a conclusive finding, possibly because the U.S. National Institutes of Health had funded some of the Wuhan Institute’s research.

    Way forward on virus pathways

    • India must call for a more definitive answer and also raise its voice for a stronger convention to regulate any research that could lead, by accident or design, to something as the current pandemic.
    •  It is necessary to revamp the 1972 Biological Weapons Convention to institute an implementation body to assess treaty compliance, and build safer standards for the future.

    Consider the question “How different was the impact of two Covid-19 waves on India’s diplomacy? What are the challenges India faces in the near future in dealing with the fallout of the pandemic?”

    Conclusion

    With its seat at the UN Security Council as non-permanent member and its position on WHO’s Executive Board, India could seek to regain the footing it has lost over the past few months of COVID-19 mismanagement, by taking a lead role in ensuring the world is protected from the next such pandemic.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • New Species of Plants and Animals Discovered

    Species in news: Litoria Mira

    2 June 2021 | Species | Environment
    Mains GS3: GS3-18.Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment.

    A species of frog lives in the rainforests of New Guinea that appears to be made from chocolate — just like the magical sweets popular in the wizarding world of J K Rowling’s Harry Potter.

    Litoria mira

    • The cocoa-colored frogs have turned out to be a new species — and an addition to our knowledge of the animal kingdom.
    • It has a well-known relative — the common green tree frog of Australia called Litoria cerulean.
    • Litoria Mira can be distinguished from all other Litoria by its unique combination of moderately large size, webbing on hand, relatively short and robust limbs, and a small violet patch of skin on the edge of its eyes.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    Explained: India’s GDP fall, in perspective

    1 June 2021 | | Economics
    Mains GS3: Indian Economy

    India’s Gross Domestic Product (GDP) contracted by 7.3% in 2020-21.

    Tap to read more about:

    National Income Determination, GDP, GNP, NDP, NNP, Personal Income

    GDP contraction

    There are two ways to view this contraction:

    1. One is to look at this as an outlier — after all, India, like most other countries, is facing a once-in-a-century pandemic — and wish it away.
    2. The other way would be to look at this contraction in the context of what has been happening to the Indian economy since the regime change.

    Impact of the new regime

    Let’s look at the most important ones.

    (1) Gross Domestic Product

    • Contrary to perception advanced by the Union government, the GDP growth rate has been a point of growing weakness for the last 5 of these 7 years.
    • The GDP growth rate steadily fell from over 8% in FY17 to about 4% in FY20, just before Covid-19 hit the country.
    • The economy was already struggling with massive bad loans which were further deteriorated by demonetization and the GST regime.

    (2) GDP per capita

    • Often, it helps to look at GDP per capita, which is total GDP divided by the total population, to better understand how well-placed an average person is in an economy.
    • At a level of Rs 99,700, India’s GDP per capita is now what it used to be in 2016-17 — the year when the slide started.
    • As a result, India has been losing out to other countries. A case in point is how even Bangladesh has overtaken India in per-capita-GDP terms.

    (3) Unemployment rate

    • This is the metric on which India has possibly performed the worst.
    • First came the news that India’s unemployment rate, even according to the government’s own surveys, was at a 45-year high in 2017-18 — the year after demonetization and GST.
    • Then in 2019 came the news that between 2012 and 2018, the total number of employed people fell by 9 million — the first such instance of total employment declining in independent India’s history.
    • As against the norm of an unemployment rate of 2%-3%, India started routinely witnessing unemployment rates close to 6%-7% in the years leading up to Covid-19.
    • The pandemic, of course, made matters considerably worse.
    • What makes India’s unemployment even more worrisome is the fact that this is happening even when the labor force participation rate — which maps the proportion of people who even look for a job — has been falling.

    (4) Inflation rate

    • After staying close to the $110-a-barrel mark throughout 2011 to 2014, oil prices (India basket) fell rapidly to just $85 in 2015 and further to below (or around) $50 in 2017 and 2018.
    • On the one hand, the sudden and sharp fall in oil prices allowed the government to completely tame the high retail inflation in the country, while on the other, it allowed the government to collect additional taxes on fuel.
    • But since the last quarter of 2019, India has been facing persistently high retail inflation.
    • Even the demand destruction due to lockdowns induced by Covid-19 in 2020 could not extinguish the inflationary surge.

    (5) Fiscal deficit

    • The fiscal deficit is essentially a marker of the health of government finances and tracks the amount of money that a government has to borrow from the market to meet its expenses.
    • Typically, there are two downsides of excessive borrowing:
    1. One, government borrowings reduce the investible funds available for the private businesses to borrow (this is called “crowding out the private sector”); this also drives up the price (that is, the interest rate) for such loans.
    2. Two, additional borrowings increase the overall debt that the government has to repay. Higher debt levels imply a higher proportion of government taxes going to pay back past loans. For the same reason, higher levels of debt also imply a higher level of taxes.

    On paper, India’s fiscal deficit levels were just a tad more than the norms set, but, in reality, even before Covid-19, it was an open secret that the fiscal deficit was far more than what the government publicly stated.

    (6) Rupee vs dollar

    • The exchange rate of the domestic currency with the US dollar is a robust metric to capture the relative strength of the economy.
    • A US dollar was worth Rs 59 when the government took charge in 2014.
    • Seven years later, it is closer to Rs 73. The relative weakness of the rupee reflects the reduced purchasing power of the Indian currency.

    What’s the outlook on growth?

    • The biggest engine for growth in India is the expenditure by common people in their private capacity.
    • This “demand” for goods accounts for 55% of all GDP.
    • The private consumption expenditure has fallen to levels last seen in 2016-17.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

Join the Community

Join us across Social Media platforms.