💥UPSC 2027,2028 Mentorship (April Batch) + Access XFactor Notes & Microthemes PDF

Archives: News

  • Foreign Policy Watch: India-China

    India needs an internationalism that is rooted in realism

    The article analyses India’s approach towards regional integration in Asian unity and internationalism and its consequences.

    Clash between internationalism and nationalism

    • Three current developments reveal the clash between grandiose internationalism and the intractable nationalism.
    • 1) India pulled out of the military exercise of the Shanghai Cooperation Organisation, which was to herald a new era of Eurasian unity.
    • Sharpening contradictions between India and China comes in the way of uniting such a large geopolitical space.
    • 2) Turkish President Recep Tayyip Erdogan’s claim to leadership of the Muslim world that has run into resistance from a large section of the Arab rulers.
    • 3) The tension between the globalism of the US foreign policy establishment and Donald Trump’s “America First” nationalism.

    Internationalism and threats to it

    • Western liberalism has had more power than anyone else to promote internationalism.
    • But the liberal internationalist effort at constructing supra-national institutions now faces big setbacks.
    • The greatest resistance to the liberal internationalist vision has not come within the US.
    • Trump channelled the American resentments against the globalist excesses of the Wall Street, Washington and the Silicon Valley.

    India’s nationalism

    • Indian nationalism was inevitably influenced by liberal internationalism, socialism, communism, pan-Islamism, pan-Asianism and Third-Worldism to name a few.
    • Both the Asian Relations Conference (Delhi 1947) and the Afro-Asian Conference (Bandung 1955) showed up the deep differences among the Asian elites.
    • India then turned its back on Asianism to claim the leadership of the broader Non-Aligned Movement.
    • After the Cold War, India re-embraced Asianism in the 1990s when it unveiled the Look East Policy.
    • India also joined the Asian regional institutions led by the Association of South-East Asian Nations.

    RCEP joining issue

    • Few could have anticipated that Delhi would walk out of one of the most consequential agreements negotiated by the ASEAN — the RCEP — that sought Asia-wide economic integration.
    • Delhi believed that the contradiction between India’s domestic commercial interests and a China-led Asian economic regionalism was irreconcilable.

    India’s approach toward Asian regionalism

    • Eurasian regionalism led by Moscow and Beijing is also facing tensions and there is deepening conflict between Indian and Chinese interests.
    • India’s diplomatic finesse on the SCO has become increasingly unsustainable after Chinese aggression in eastern Ladakh.
    • India underestimated the economic and political consequences of China’s rapid rise while seeking economic regionalism in East Asia and the multi-polar world with Russia and China.
    • India took a benign view of Chinese power and has been shocked to discover otherwise in 1962 and in 2020.

    Conclusion

    India today needs more internationalism, than less, in dealing with the Chinese power. But it must be an internationalism that is rooted in realism and tethered to India’s economic and national security priorities.

  • Climate Change Impact on India and World – International Reports, Key Observations, etc.

    Thinking of new recovery path

    Growth and environmental protection are not the polar opposites of each other. The article analyses the issue of balancing the two and using pandemic as an opportunity to evolve novel recovery path.

    Pandemic: opportunity to new recovery path

    • The pandemic presents an opportunity for us to think of a new recovery path, one that can decouple economic growth and environmental degradation.
    • It becomes more important as India sees opportunities on the global call to diversify the supply chain and its internal call for Atmanirbhar Bharat.
    • For that, we need to strengthen our production and manufacturing capabilities.

    Issue of regulatory infrastructure

    • Monitoring and implementing environmental regulations is the biggest challenge we face.
    • Take the municipal solid waste rules.
    • Two decades after the regulations came into effect, their status not in good shape.
    • A comparatively recent regulation, centred around Extended Producer Responsibility, has also posed challenges in monitoring and implementation.
    • In a recent ruling, the judiciary not only ruled against the industry but also blamed officials responsible for implementing the regulations.

    Focus on implementation and monitoring

    •  In the long run, diluting regulatory norms will create more adverse impacts resulting in greater community upsurge.
    • The focus has to be to improve the system’s capabilities to monitor and implement regulatory requirements.
    • There needs to be greater transparency and accountability; there is no dearth of technology to facilitate this.
    • The intention and capacity to take action, rectify and diffuse is critical.
    • The right ecosystem between the industry, community and regulator is crucial.
    • If the three stakeholders remain isolated and get activated only in a crisis, we will not make any progress towards solving the issue.

    Way forward

    • We need to couple growth and environmental protection.
    • Environmental health will be the key enabler of socio-economic growth in the future.
    • Industry needs to realise that it is a part of an ecosystem and not at the centre of it.
    • Communities get impacted, either positively or negatively,  they need to empower themselves through education, so that they are not driven by the agenda of individuals with vested interests.
    • We have a challenge in implementing environmental regulations.
    • The community does not trust that the industry is meeting its compliance requirements, so, the regulatory system’s role is to improve this trust quotient.

    Conclusion

    As we plan our recovery past the pandemic, we have a good chance to create a new normal. We need to align towards a common cause and goals. We should not miss this chance.

  • Goods and Services Tax (GST)

    GST reforms and compensation issue

    The GST compensation issue raises the need for reform in the system. The article discusses this issue and suggests reform.

    Background

    • Three years ago, the Centre and the States of the Union of India struck a grand bargain resulting in GST.
    • The States gave up their right to collect sales tax and sundry taxes, and the Centre gave up excise and services tax. 

    Issue of compensation

    • Consent of the states was secured by a promise of reimbursing any shortfall in tax revenues for a period of five years.
    • This reimbursement was to be funded by a special cess called the GST compensation cess. 
    • The promised reimbursement was to fill the gap for an assured 14% year on year tax growth for five years.

    Why is the Centre denying GST compensation

    • As the economy battles a pandemic and recession, the tax collection has dropped significantly.
    • At the same time, expenditure needs are sharply higher at the State level.
    • Using an equivalent of the Force Majeure clause in commercial contracts, the Centre is abdicating its responsibility of making up for the shortfall in 14% growth in GST revenues to the states.

    Why Central government is wrong in denying the compensation

    •  1) The States do not have recourse to multiple options that the Centre has.[like sovereign bond or a loan against public sector unit shares from the Reserve Bank of India]
    • 2) The Centre can get loans at lower rates of borrowing from the markets as compared to the States.
    • 3) In terms of aggregate public sector borrowing, it does not matter for the debt markets, nor the rating agencies, whether it is the States or the Centre that is increasing their indebtedness.
    • 4) Fighting this recession through increased fiscal stimulus is basically the job of macroeconomic stabilisation, which is the Centre’s domain.
    • 5) Using the alibi of the COVID-19 pandemic causes a serious dent in the trust built up between the Centre and States.
    • It will weaken the foundation of cooperative federalism.

    Reforms needed

    • GST is a destination-based consumption tax, which must include all goods and services with very few exceptions.
    • That widening of the tax base itself will allow us to go back to the original recommendation of a standard rate of 12%, to be fixed for at least a five-year period.
    • Some extra elbow room for the States’ revenue autonomy could be allowed by States non VATable surcharges on a small list of “sin” goods.
    • In the long term there are many changes in consumption patterns, production configurations and locations, which cannot be anticipated and hence a static concept of Revenue Neutral Rate cannot be reference.
    • The commitment to a low and stable rate is a must.
    • We must recognise the increasing importance of the third tier of government. 
    • After 28 years of the 73rd and 74th Amendments, the local governments do not have the promised transfer of funds, functions and functionaries.
    • Of the 12% GST, 10% should be equally shared between the States and the Centre, and 2% must be earmarked exclusively for the urban and rural local bodies.
    • Fresh approach also calls for an overhaul of the interstate GST and the administration of the e-way bill.

    Consider the question “Discuss the issue related to GST compensation to the States by the Central government. Suggest the measures changes in the GST regime to deal with flaws.”

    Conclusion

    GST is a crucial and long-term structural reform which can address the fiscal needs of the future, strike the right and desired balance to achieve co-operative federalism and also lead to enhanced economic growth. The current design and implementation has failed to deliver on that promise. A new grand bargain is needed.

  • Foreign Policy Watch: India-Japan

    Supply Chain Resilience Initiative (SCRI)

    With COVID-19 and trade tensions between China and the US threatening supply chains or actually causing bottlenecks, Japan has mooted the Supply Chain Resilience Initiative (SCRI) as a trilateral approach to trade, with India and Australia as the other two partners.

    Q.Discuss the efficacy of the idea of Supply Chain Resilience Initiative (SCRI) initiaited by Japan.

    What is Supply Chain Resilience (SCR)?

    • In the context of international trade, SCR is an approach that helps a country to ensure that it has diversified its supply risk across a clutch of supplying nations instead of being dependent on just one or a few.
    • Unanticipated events whether natural or man-made that disrupt supplies from a particular country or even intentional halts to trade, could adversely impact economic activity in the destination country.

    What is Japan proposing?

    • The pandemic has brought into sharp focus the assembly lines which are heavily dependent on supplies from one country.
    • While Japan exported $135 billion worth of goods to China in 2019, it also imported $169 billion worth from the world’s second-largest economy, accounting for 24% of its total imports.
    • So, any halt to supplies could potentially impair economic activity in Japan.
    • In addition, the U.S.-China trade tensions have caused alarm in Japanese trade circles for a while now.
    • If the world’s two largest economies do not resolve their differences, it could threaten globalisation as a whole and have a major impact on Japan.
    • It is heavily reliant on international trade both for markets for its exports and for supplies of a range of primary goods from oil to iron ore.

    Japan eyeing India as a partner for the SCRI

    • Japan is the fourth-largest investor in India with cumulative FDIs touching $33.5 billion in the 2000-2020 periods.
    • It accounts for 7.2% of inflows in that period, according to quasi-government agency India Invest.
    • Imports from Japan into India more than doubled over 12 years to $12.8 billion in FY19. Exports from India to the world’s third-largest economy stood at $4.9 billion that year, data from the agency showed.
    • It is a clear reflection that the two countries are unlikely to allow individual cases to cloud an otherwise long-standing and deepening trade relationship.

    Where does Australia stand?

    • Australia, Japan and India are already part of another informal grouping, the Quadrilateral Security Dialogue, or the Quad, which includes the U.S.
    • Media reports indicate that China has been Australia’s largest trading partner and that it counts for 32.6% of Australia’s exports, with iron ore, coal and gas dominating the products shipped to Asia’s largest economy.
    • But relations including trade ties between the two have been deteriorating for a while now.
    • China banned beef imports from four Australian firms in May and levied import tariffs on Australian barley.

    India’s stand to gain or lose

    • Following the border tensions, partners such as Japan have sensed that India may be ready for dialogue on alternative supply chains.
    • Earlier, India would have done little to overtly antagonize China. But an internal push to suddenly cut links with China would be impractical.
    • China’s share of imports into India in 2018 stood at 14.5%. It supplies dominate segments of the Indian economy.
    • Sectors that have been impacted by supply chain issues arising out of the pandemic include pharmaceuticals, automotive parts, electronics, shipping, chemicals and textiles.
    • Over time, if India enhances self-reliance or works with exporting nations other than China, it could build resilience into the economy’s supply networks.
  • Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

    What is Carbon-14 (C14) Battery?

    A California-based company has made a self-charging battery, which can run for 28,000 years on a single charge, by trapping carbon-14 (C14) nuclear waste in artificial diamond-case.

    Try this PYQ:

    Q.The known forces of nature can be divided into four classes, viz. gravity, electromagnetism, weak nuclear force and strong nuclear force. With reference to them, which one of the following statements is not correct?

    (a) Gravity is the strongest of the four

    (b) Electromagnetism act only on particles with an electric charge

    (c) Weak nuclear force causes radioactivity

    (d) Strong nuclear force holds protons and neutrons inside the nuclear of an atom.

    What is C14?

    • Carbon-14 (14C), or radiocarbon, is a radioactive isotope of carbon with an atomic nucleus containing 6 protons and 8 neutrons.
    • There are three naturally occurring isotopes of carbon on Earth: carbon-12, which makes up 99% of all carbon on Earth; carbon-13, which makes up 1%; and carbon-14, which occurs in trace amounts.
    • Its presence in organic materials is the basis of the radiocarbon dating method pioneered by Willard Libby and colleagues (1949) to date archaeological, geological and hydrogeological samples.

    C14 battery

    • The battery works by generating electricity on its own from a shower of electrons as a result of radioactive decay scattered and deposited in the artificial diamond-case.
    • The battery can be used in electric vehicles, mobile phones, laptops, tablets, drones, watches, cameras, health monitors and even sensors.
    • It is also said to be extremely safe and tamper-proof as it is coated with a non-radioactive diamond which prevents radiation leaks.

    Best example of nuke waste recycling

    • It is estimated that 33 million cubic metres of global nuclear waste will cost over $100 billion to manage and dispose of.
    • And a lot of this waste is graphite that is one of the higher risks of radioactive waste and one of the most expensive and problematic waste to store.

    Its applications

    • The company says its battery can be used to powerhouses, and that any excess electricity generated can be sold to the grid.
    • As the new battery need not be replaced, it can be installed in hard to reach places like pacemakers and implants, where a regular change of battery is not possible.
    • Another area of use is space electronics. The battery is said to power space equipment in rockets.
    • It can power the electrical needs of space crafts, like providing power to cockpits and assisting launch into the upper atmosphere.
  • Historical and Archaeological Findings in News

    Renati Chola Era Inscription

    A rare inscription dating back to the Renati Chola era has been unearthed in a remote village of Kadapa district of Andhra Pradesh.

    Try this PYQ:

    Q.In the context of the history of India, consider the following pairs:

    Term: Description

    1. Eripatti: Land revenue from which was set apart for the maintenance of the village tank
    2. Taniyurs: Villages donated to a single Brahmin or a group of Brahmins
    3. Ghatikas: Colleges generally attached to the temples

    Which of the pairs given above is/are correctly matched?

    (a) 1 and 2

    (b) 3 only

    (c) 2 and 3

    (d) 1 and 3

    Who are the Renati Cholas?

    • The Telugu Cholas of Renadu (also called as Renati Cholas) ruled over Renadu region, the present-day Kadapa district.
    • They were originally independent, later forced to the suzerainty of the Eastern Chalukyas.
    • They had the unique honour of using the Telugu language in their inscriptions belonging to the 6th and 8th centuries.
    • The earliest of this family was Nandivarman (500 AD) who claimed descent from the family of Karikala and the Kasyapa gotra.
    • He had three sons Simhavishnu, Sundarananda and Dhananjaya, all of whom were ruling different territories simultaneously.
    • The family seems to have had its origin in Erigal in the Tunmkur district, situated in the border between Pallava and Kadamba regions.

    About the inscription

    • The inscription so found was engraved on a dolomite slab and shale.
    • The inscription was written in archaic Telugu which is readable in 25 lines — the first side with eleven lines and the remaining on the other side.
    • It was assigned to the 8th Century A.D. when the region was under the rule of Chola Maharaja of Renadu.
    • The inscription seems to throw light on the record of a gift of six Marttus (a measuring unit) of land gifted to a person Sidyamayu, one of the Brahmins serving the temple at Pidukula village.
    • It says the people who safeguard this inscription for future generations will acquire the status of conducting Aswamedha Yajna and those destroying it will incur sin equivalent to causing death in Varanasi.
  • Foreign Policy Watch: India-Russia

    Exercise Kavkaz 2020

    India has turned down Russia’s invitation to participate in the multilateral defence exercise Kavkaz 2020.

    Go through the list for once. UPSC may ask a match the pair type question asking exercise name and countries involved.

    https://www.civilsdaily.com/prelims-spotlight-defence-exercises/

    Exercise Kavkaz 2020

    • The Kavkaz 2020 is also referred to as Caucasus-2020.
    • The exercise is aimed at assessing the ability of the armed forces to ensure military security in Russia’s southwest, where serious terrorist threats persist and preparing for the strategic command-staff drills.
    • The main training grounds that will be involved are located in the Southern Military District.
    • The invitation for participation has been extended to at least 18 countries including China, Iran, Pakistan and Turkey apart from other Central Asian Republics part of the SCO.

    Why didn’t India participate?

    • While it is learned that China has confirmed its participation, Pakistan is also likely to send its troops for the exercise.
    • In the response communicated to Russia, New Delhi cited Covid-19 as the official reason to skip ‘Exercise Kavkaz 2020’.
    • The move comes in the backdrop of a border standoff with China in eastern Ladakh.

    Earlier instances

    • Exercise Tsentr last year had the participation of India, Pakistan and all Shanghai Cooperation Organisation (SCO) member-nations.
    • India had participated in SCO peace mission exercise in 2018, and in 2019, for the first time, was involved in a strategic command and staff exercise as part of Exercise Tsentr.
  • Historical and Archaeological Findings in News

    [pib] Historic City of Hampi

    The Ministry of Tourism organised their latest webinar titled Hampi- Inspired by the past; Going into the future under Dekho Apna Desh Webinar series.

    Try this PYQ:

    Q.Building ‘Kalyaana Mandapas’ was a notable feature in the temple construction in the kingdom of-

    (a) Chalukya

    (b) Chandela

    (c) Rashtrakuta

    (d) Vijayanagara

    Facts about Hampi

    • Its name is derived from Pampa which is the old name of the Tungabhadra River on whose banks the city is built.
    • In 1336 CE, the Vijayanagara Empire arose from the ruins of the Kampili kingdom.
    • It grew into one of the famed Hindu empires of South India that ruled for over 200 years.
    • The Vijayanagara rulers fostered developments in intellectual pursuits and the arts, maintained a strong military and fought many wars with sultanates to its north and east.
    • They invested in roads, waterworks, agriculture, religious buildings and public infrastructure.
    • The site used to be multi-religious and multi-ethnic; it included Hindu and Jain monuments next to each other.
    • The buildings predominantly followed South Indian Hindu arts and architecture dating to the Aihole-Pattadakal styles.
    • The Hampi builders also used elements of Indo-Islamic architecture in the Lotus Mahal, the public bath and the elephant stables.

    Major attractions

    • One of the major attractions of Hampi is the 15th Century Virupaksha temple which is one of the oldest monuments of the town.
    • The main shrine is dedicated to Virupaksha, a form of Lord Shiva.
    • Hemkunta Hill, south of the Virupaksha temple contains early ruins, Jain temples and a monolithic sculpture of Lord Narasimha, a form of Lord Vishnu.
    • At the eastern end, there is the large Nandi in stone; on the southern side is the larger than life Ganesha.
    • Large single stone carvings seem to have been the fashion of the day in Hampi, for there is a large image of Narasimha (6.7m high), the half-lion half-man incarnation of God, as well as a huge linga.
  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    Despite the messaging, it is still advantage China

    The article examines whether India has been proving a favourable alternative to China or not.

    Is India becoming alternate supply source and investment destination?

    • Despite media reports and strong messaging from Washington, fewer U.S. companies than predicted might quit China.
    • Companies focused on the Chinese domestic market rather than as a base for exports will likely remain, at least for now.
    • Those that do leave may not choose India as a relocation destination.
    • Many U.S. companies with experience working with China are not convinced that India has China’s established industrial base and expertise.
    • They also see other Asian countries as more competitive.

    India’s strengths

    • Democracy: India’s identity as a democratic “un-China” is one of its strongest selling points.
    • Strong IPR: There is no threat of stealing of intellectual property rights.
    • No coercive tactics: Foreign companies in India are not subject to coercive tactics as in China.
    • Institutions: India’s open and vibrant press, an independent judiciary, and other advantages of democratic governance also provide a contrast to China.
    • Domestic market:India’s well-off domestic market also attracts foreign investors.

    Why China is a favoured destination

    • China offers many advantages, such as a manufacturing infrastructure and skill level that allows innovations to move quickly from prototype to product.
    • China’s specialised industrial zones are massive, collocating companies, factories, logistics, and even research and universities.

    Way forward

    1) Focus on the States

    • India can start by focusing development in those Indian States that have already demonstrated the ability to produce and export in key sectors.
    • Foreign capital could also greatly increase infrastructure funds beyond government spending alone.
    • India might also usefully build up new industrial centres with an eye to geography. [for instance-linking the southeast of the country to supply chains in Southeast Asia]

    2) Focus on the policy framework

    • India should take two great steps-
    • 1) Reduce the number of investments needing approval by the Centre.
    • 2)To increase intra-Ministry coordination on foreign direct investment policies.
    • The same coordination could be extended to the appointment of a high-level official or body in the Prime Minister’s Office.
    • This will ensure that all proposed economic policy changes are consistent with the goal of attracting foreign investment.

    Conclusion

    A policy framework that is transparent, predictable, and provides increased consultations with existing and potential foreign company stakeholders before introducing new Indian economic policies, will play a crucial role in determining India’s foreign investment outlook.

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

    Implications of World Bank halting ‘Doing Business’ report for India

    India’s ranking in the World Bank’s ‘Ease of Doing Business’ index has improved spectacularly. However, the World Bank recently halted its publication and announced decision to review and assess data changes for last five years.

    Background

    • Citing irregularities of data for a few countries, the World Bank halted its annual publication ‘Doing Business’ report.
    • It will conduct a systematic review and assessment of data changes that occurred subsequent to the institutional data review process for the last five Doing Business reports.

    Why India should be concerned

    • Through improved ranking India sought to attract investments to achieve the targets set for ‘Make in India’.
    • India’s success in boosting its ease of doing business ranking is spectacular, to 63rd rank in 2019, up from the 142nd position in 2014.
    • Policymakers celebrated it to signal India’s commitment to “minimum government and maximum governance”.
    • The World Bank decision to audit the ‘Doing Business’ report for the last five years may soon cause discomfort by shining a spotlight on the sharp rise in India’s ranking.
    • Study at the Center for Global Development found that the improvement in India’s ranking was almost entirely due to methodological changes.
    • During the same period, however, Chile’s global rank went down sharply, from 34th position in 2014 to 67th in 2017.
    • The contrasting experience of Chile and India casts doubts on not just the country-level data but also the changes in underlying methodologies.

    Does ease of doing business have predictive power?

    • While India’s rank drastically improved, it has meant nothing on the ground.
    • The share of the manufacturing sector has stagnated at around 16-17% of GDP, and 3.5 million jobs were lost between 2011-12 and 2017-18.
    • Annual GDP growth rate in manufacturing fell from 13.1% in 2015-16 to zero in 2019-20, as per the National Accounts Statistics.
    • India’s import dependence on China has shot up.
    • In case of Russia, ease of doing business rank jumped from 120 in 2012 to 20, but without becoming a magnet for investment inflows.
    • China, on the contrary, attracted one of the highest capital inflows but its ease of doing business ranking was low and hovered between 78 and 96 for the years between 2006 and 2017.

    Other flaws in the Index

    • The Indicators used for the index are de jure (as per the statute), not de facto (in reality).
    • The data for computing the index are obtained from larger enterprises in two cities, Mumbai and Delhi, by lawyers, accountants and brokers — not from entrepreneurs.
    • The World Bank’s own internal watchdog, the Independent Evaluation Group, in its 2013 report, has widely questioned the reliability and objectivity of the index.
    • The World Bank conducts a global enterprise survey collecting information from companies.
    • There is no correlation between the rankings obtained from ease of doing business and the enterprise surveys.

    Lack of theoretical basis: Major flaw

    • There is little in any major strand of economic thought which suggests that minimally regulated markets for labour and capital produce superior outcomes in terms of output and employment.
    • Economic history shows rich variations in performance across countries and policy regimes, defying simplistic generalisations.
    • Such simplistic basis is used under a seemingly scientific garb of the quantitative index to the disadvantage of workers.
    • To meet the ease of doing business targets, safety standards of factories are compromised.
    • For instance, in 2016, the Maharashtra government abolished the annual mandatory inspection of steam boilers under the Boilers Act of 1923 and the Indian Boilers Regulation 1950.
    •  However, no factory has complied with self-certification or submitted the third party certification.

    Consider the question “Examine the issues with the World Bank’s ‘Ease of Doing Business Index’?  What are its implications for India?”

    Conclusion

    It is time the World Bank rethinks its institutional investment in producing the ‘Doing Business’ report. India should do some soul searching as to why the much trumpeted rise in global ranking has failed miserably on the ground.

Join the Community

Join us across Social Media platforms.