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  • Coronavirus – Health and Governance Issues

    Public policy dilemma of choosing between lives and livelihood

    op-ed snap | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters

    This article deals with how the different sections of a society assign different weightage to the various factors they are faced with in life. In the case of Covid-19, one section of society which is well-off might care more about the possible loss of life while other section might end up attaching more weightage to the loss of livelihood than to the possible loss of life due to infection. The article discusses this issue in detail.

    Difference between risk and uncertainty

    • Since the days of Frank Knight, economists have differentiated between the two.
    • Risk has a known probability distribution.
    • For uncertainty, the probability distribution is unknwon.
    • COVID-19 makes us confront uncertainty, not risk.
    • For uncertainty, there is a subjective probability distribution, which can, and does, vary from individual to individual.

    So, how the subjective probability distribution is devised by a person?

    • Through information and experience, one already possesses.
    • There are various rationality assumptions used by economists. They are often violated.
    • Otherwise, behavioural economics wouldn’t have come into existence.
    • Typically, given a situation, when your decision doesn’t agree with someone else, you say they are being irrational.
    • However, with uncertainty, the problem may not be with rationality assumptions, but with differences in subjective probability distributions.

    Lack of data for various factors

    • Because of COVID-19, there is a certain risk of getting infected. Let’s call this the infection rate — total infections divided by the total population.
    • We don’t know this infection rate for India or for any other country for that matter.
    • No country has done universal testing.
    • No testing for random sample: No country has done universal testing for a proper random sample either.
    • The ICMR has told us more than 75 per cent of Indian patients will be asymptomatic.
    • Who do we test? Those who show symptoms, those who have been in contact with confirmed patients and those who suffer from severe respiratory diseases.
    • Most countries do something similar.
    • Sampling bias: In other words, when we work out an infection rate based on those tested, there is a sampling bias.
    • This isn’t a proper infection rate.
    • The only country where we have had something like a random sample is Iceland.
    • There, the infection rate was 0.8 per cent.
    • Data for death rate: There are similar caveats about the death rate.
    • If we mechanically divide the number of deaths by the number of confirmed cases for India, we will get a death rate just over 3 per cent.
    • The global figure is a little less than 7 per cent.
    • But neither of these is a death rate for the total population since only those with severe symptoms are included in infection numbers.
    • Three per cent or seven per cent are over-estimates.
    • In a controlled environment like Diamond Princess, death rate as a ratio of total passengers, and not those infected, was less than 0.4 per cent.
    • The true infection rate and true death rate are not alarming numbers.

    How the lack of data is reflected in subjective probability distribution?

    • There are slices in India’s population pyramid with rural/urban and other spatial differences too.
    • Consider two extreme types-type A and type B.
    • Type A, who are globalised in information access and morbidity.
    • Life expectancy is 80 plus and there are lifestyle diseases like diabetes and high blood pressure.
    • This co-morbidity increases possible death rates and thanks to globalised access to information, certainly increases perceptions about death rates, making them out to be higher than they are.
    • Some of them have fixed incomes, regardless of what happens to lockdown.
    • The high probability assigned to loss of life: In terms of maximising expected payoffs with a subjective distribution, high probability is attached to loss of life and low probability to loss of livelihood.
    • How type B forms a subjective probability?
    • Type B, someone whose life expectancy is 60, without a fixed income stream and whose health concerns are tuberculosis and water-borne diseases, not COVID-19.
    • Nor is access to information that globalised.
    • The high probability assigned to loss of livelihood: High subjective probability will be attached to loss of livelihood and low probability to death from COVID.
    • Both types reflect subjective probabilities. Neither is “irrational”.
    • The tension between the two: Type A would like the lockdown to continue indefinitely, until the long tail of the infection curve tapers off, perhaps beyond September.
    • Type B would like lockdown to be eased soon, with necessary restrictions in hotspots.
    • There is indeed tension between lives and livelihood.
    • Even if health outcomes and information access are like Type A, but income is contingent on growth, preferences might mirror Type B.

    The issues highlighted here can be broadly used in the various scenario where there is uncertainty involved and various stakeholders perceive the probable outcomes in entirely different ways. Various points here can be used to answer the question based on policy making.

    Balancing the differential individual preferences in public policy

    • One set of individuals imposes its choice on the rest.
    • Type A disproportionately influences policy.
    • This determination of aggregate preferences is a dynamic process.
    • Therefore, sooner or later, Type B contests this and as the lockdown is prolonged and livelihood costs mount, discontent surfaces, as it has across a range of countries.
    • There were also welfare economics notions that pre-dated social choice theory, such as compensation principles of Kaldor, Hicks and Scitovsky.
    • The point can be made using the two stereotypes. Specifically, Type A need to compensate Type B for their losses.
    • To state it starkly, livelihood losses suffered by Type B need to be compensated by the government through redistributive measures and this has to be financed by higher taxes imposed on Type-A.
    • The right question for the Type A is not whether they want the lockdown to continue, but whether they are willing to pay a COVID-tax to support lockdown extension.

    A question based on policy formation issues explained here can be framed, for ex. “Risk has a known probability distribution. For uncertainty, the probability distribution is unknown. COVID-19 makes us confront uncertainty, not risk. In this context, there is a debate between saving lives and saving livelihoods. In such a scenario, what can be the most probable solutions that public policy must delve into, in order to maintain the balance between this uncertainty and risk.”

    Conclusion

    Extending or ending the lockdown decision represent the public policy dilemma. Without a revival in growth, the tax-paying capacity of Type B is limited and with job losses, some Type As become Type Bs. The choice is starker.

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  • Coronavirus – Health and Governance Issues

    Stress test of leadership in pandemic

    op-ed snap | Governance | Mains Paper 2: Health & Education

    The article discusses the three stages involved in successfully dealing with the pandemic. In the next part, it goes on to explain the factors that determine the success or failure of the governments. In the last week, we read about the success story of Kerala and underlying reasons. This article is also written on similar lines.

    Stages in the pandemic response

    • Disease outbreaks, even global pandemics, are scarcely new. The playbook for dealing with them, therefore, is well understood and has been honed by practices and lessons gleaned from hard-fought battles.
    • A first stage is an early clear-eyed recognition of the incoming threat, and, in the case of COVID-19 at least, requires the unpalatable decision to lock down society.
    • Ideally, this is done with full consideration of how to support the most vulnerable members of society, especially in a country such as India, where so many survive hand-to-mouth.
    • This is a phase aimed at buying time, of flattening the epidemic curve, so that public health facilities are not overwhelmed.
    • And, for using this time, paid for by collective sacrifice, to secure the personal protective equipment (PPE) and medical supplies necessary to save lives.
    • The second phase of the pandemic response is slowly to ease the burden on the economy by permitting a measured return of business activity so that livelihoods and supply chains can be restored.
    • This stage can only be safely executed if accompanied by a war-footing expansion of testing capacity so that new infections can be identified and isolated at once, allowing contact tracing to be implemented by masses trained to do this crucial and painstaking work in communities across the country.
    • The final stage, which for COVID-19 seems a lifetime away, is a mass vaccination programme and then the full rebuilding of economic and social life.
    • None of this is easy, but, like an examination in a dreaded subject, one’s only hope is early and persistent preparation and, at crunch time, remembering the lessons learned.

    The above-mentioned stages are sort of a template that seems to have gained acceptance for dealing with the pandemic. A question based on it, like “What are the various stages involved in government’s response to deal with a pandemic?”

    Following three factors make the difference between successful and failed response

    1. Leadership problems in global politics

    • The defensive finger-pointing, opportunistic politicking and xenophobic posturing are shown by some leaders amid pandemic.
    • This is not a crisis that can be tackled without robust and multidimensional international cooperation between nations.
    • We are watching in real-time the benefits of intellectual collaboration that does not stop at national borders.
    • From the epidemiologists to the medical community identifying more effective treatments, to the research scientists racing to find a vaccine, we are benefiting from collaboration.
    • But the nationalistic turn in global politics over the past two decades has reduced investment in and undermined the legitimacy of the very institutions that facilitate international partnership at the very time they are needed most.
    • Prime Minister Narendra Modi did well to convene the leaders of the South Asian Association for Regional Cooperation (SAARC) nations in mid-March to discuss the possibility of a regional response.
    • But that video-conference call also highlighted that there have been no summit-level meetings of SAARC since 2014.
    • Similarly, United States President Donald Trump demanded that the U.S. end funding of the World Health Organization (WHO).
    • This not only endangers American lives by cutting off his own administration’s access to vital international data.
    • But also directly affects India which receives significant funding and expertise from WHO with ~10% of its overall WHO financing in 2019 coming directly from the U.S.

    2. The whole-of-the-government strategy

    • Pandemic response requires a whole-of-government strategy, for which political will and legitimate leadership are vital to convene and maintain.
    • Germany and Kerala provide two powerful though different examples of this in action.
    • In Germany, in spite of a high level of federalism that gives its States (Länder) a lot of power, Chancellor Angela Merkel’s ability to mobilise the entire system has allowed Germany to emerge as a success story in Europe.
    • In Kerala, State Chief Minister Pinarayi Vijayan convened a State response team at the earliest possible moment and has provided the full weight of his office in support of a coordinated public health strategy that has been accepted by the State’s citizens who have learned to trust the government in such situations.
    • Yet these two examples stand out in part for how rare they are.
    • Consider again the cautionary tale of the U.S. where some State Governors have yet to issue stay-at-home orders.

    3. The robust public health system

    • We are seeing first hand the consequences of starving public health systems of necessary funds and resources.
    • The comparative advantage of the private sector is efficiency; the need of the hour in pandemic response is redundancy, or, more precisely, excess capacity.
    • Most hospitals do not need invasive ventilators normally, just as they do not need vast stocks of PPE and extra intensive care units beds, but these are essential goods right now as we brace ourselves for a flood of sick patients into hospitals.
    • Watching the advanced health-care system of northern Italy buckle under the unimaginable pressures to which it was exposed over the past six weeks should be a cautionary tale for all countries that thought turning health care over to private actors was responsible governance. It is not.
    • Again, consider Kerala, which has consistently ranked at the top of State rankings for health expenditures.
    • Kerala has, a well-functioning local public health system capable of implementing the test-isolate-trace protocols critical for fighting COVID-19.

    Conclusion

    With the central role of leadership and governance underlined in the successful dealing with the pandemic, leadership across the world need to come together to coordinate at all levels in dealing with the problems that are not bound by any border.

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  • Government Budgets

    What is “Direct” Monetization of Deficit?

    | Economics | Mains Paper 3: Indian Economy

    With the economy stalled, there isn’t enough money in the market for the government to borrow. Can it ask the RBI to print more money? How does this process work, and what are the arguments against it? Let us see:

    Discuss the scope and feasiblity of “Direct” Monetization by the government for Deficit Financing as an option of the last resort.

    For more help, Click here

    What is “direct” monetisation of the deficit?

    • Imagine a scenario where the government deals with the RBI directly — bypassing the financial system — and asks it to print new currency in return for new bonds that the government gives to the RBI.
    • Now, the government would have the cash to spend and alleviate the stress in the economy — via DBT to the poor or starting social and capital expenditure etc.
    • In lieu of printing this cash, which is a liability for the RBI (recall that every currency note has the RBI Governor promising to pay the bearer the designated sum of rupees), it gets government bonds.
    • Such bonds are an asset for the RBI since such bonds carry the government’s promise to pay back the designated sum at a specified date.
    • And since the government is not expected to default, the RBI is sorted on its balance sheet even as the government can carry on rebooting the economy.

    What triggers a demand for direct monetization?

    1) Decline of Demand

    • With a nationwide lockdown, incomes have fallen and so have consumption levels.
    • In other words, the demand for consumer goods and services (say a haircut) in the economy has gone down.
    • What can be done to boost demand? People need to have money. But, of course, who will give them money.
    • From the highest-ranking CEOs to stranded workers, incomes have taken a huge hit, if not completely dried up.

    2) Moving ahead for a fiscal deficit

    • For its part, the RBI has been trying to boost the liquidity in the financial system. It has bought government bonds from the financial system and left it with money.
    • Most banks, however, are unwilling to extend new loans as they are risk-averse. Moreover, this process could take time.
    • The government’s finances were already overextended going into this crisis, with its fiscal deficit way over the permissible limit.
    • On top of that, if the government was to provide some kind of a bailout or relief package, it would have to borrow a huge amount. The fiscal deficit will go through the roof.

    3) No money in the market

    • There isn’t enough money in the market for the government to borrow.
    • Moreover, as the government borrows more from the market, it pushes up the interest rate.
    • Hence, the govt. is left with the only solution — the “direct” monetisation of government deficit.

    How is DM different form OMOs?

    • Direct monetization is different from the “indirect” monetizing that RBI does when it conducts the so-called Open Market Operations (OMOs) and/ or purchases bonds in the secondary market.

    Global examples

    • Other countries are doing it to counter the economic crisis related to COVID-19.
    • In the UK on April 9, the Bank of England extended direct monetisation facility to the UK government even though the Governor of the Bank opposed the move till the last moment.

    Has India ever done this in the past?

    • Yes, until 1997, the RBI “automatically” monetized the government’s deficit.
    • In 1994, Manmohan Singh (former RBI Governor and then Finance Minister) and C Rangarajan, then RBI Governor, decided to end this facility by 1997.
    • Now, though, even Rangarajan believes that India would have to resort to monetising the deficit.

    Issues with Direct monetisation

    • Direct monetisation of the deficit is a highly contested issue.
    • Another former RBI Governor D Subbarao has said that there is no question that India must borrow and spend more in this crisis.
    • He regarded this as a moral and a political imperative.

    Issues: Inflationary practice

    • Ideally, this tool provides an opportunity for the government to boost overall demand at the time when private demand has fallen — like it has today.
    • But if governments do not exit soon enough, this tool also sows the seeds for another crisis. Here’s how:
    • Government expenditure using this new money boosts incomes and raises private demand in the economy. Thus, it fuels inflation.
    • A little increase in inflation is healthy as it encourages business activity. But if the government doesn’t stop in time, more and more money floods the market and creates high inflation.

    To what level should government debt be ideally limited?

    • While no ideal level of debt is set in stone, most economists believe developing economies like India should not have debt higher than 80%-90% of the GDP. At present, it is around 70% of GDP in India.
    • It should commit to a pre-determined amount of additional borrowing and to reversing the action once the crisis is over.
    • Only such explicitly affirmed fiscal restraint can retain market confidence in an emerging economy.
    • The other argument against direct monetizing is that governments are considered inefficient and corrupt in their spending choices — for example, whom to bail out and to what extent.

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  • President’s Rule

    Issues with nominated CM’s election

    | Polity | Mains Paper 2: Parliament & State Legislatures

    • Maharashtra CM is yet to be nominated to one of the seats reserved for the Governor’s nominee in the state Legislative Council.
    • His current term in office approaches its end with a looming constitutional crisis.

    The discretionary powers of the governor have been subjected to various debates this year. Be it Karnataka, Maharashtra, MP or erstwhile J&K (under Lt. Governor) or the UT of Delhi.

    CM without Election

    • Maha CM took oath in accordance with Article 164(4).
    • The article states that a Minister who for any period of six consecutive months is not a member of the Legislature of the State shall at the expiration of that period cease to be a Minister.
    • It follows that the Chief Minister must become part of the legislature before the said expiration of 6 months.

    Governors dilemma

    • A situation in which an individual who is not a member of the legislature becomes chief executive of the government is in itself fairly common.
    • But with the pandemic raging, a by-election cannot be held.
    • The only way to fulfil the requirement, therefore, is for a person to be nominated to the Upper House by the Governor.
    • If that does not happen, the Governor is obligated to make way for someone else to lead the coalition govt.
    • CM Uddhav Thackeray is likely to have had no problems becoming a member of the legislature had the pandemic not hit.

    What does the Judiciary have to say?

    • In S R Chaudhuri vs State of Punjab and Ors (2001), the Supreme Court had ruled that it would be subverting the Constitution to permit an individual, who is not a member of the Legislature.
    • Such a person should not be appointed a Minister repeatedly for a term of ‘six consecutive months’, without him getting himself elected in the meanwhile.
    • The practice would be clearly derogatory to the constitutional scheme, improper, undemocratic and invalid.

    Testing the nomination route

    • The nomination route for non-member Ministers is less common — but not unconstitutional.
    • In 1952, C Rajagopalachari was nominated as CM of Madras by Governor Sri Prakasa.
    • Under Article 171(5), the Governor can nominate “persons having special knowledge or practical experience in respect of. literature, science, art, co-operative movement and social service”.
    • Last month, the President nominated former Chief Justice of India Ranjan Gogoi to Rajya Sabha even though there were doubts about him meeting these prescribed qualifications.
    • Thackeray can be said to have a stronger claim in this regard — he is an ace wildlife photographer.
    • Moreover, as per the Allahabad High Court in Har Sharan Varma vs Chandra Bhan Gupta And Ors (February 15, 1961), even politics can be seen as ‘social service’.

    The role of the Governor

    • It has been argued that Section 151A of The Representation of the People Act, 1951, prohibits the filling of a vacancy if “the remainder of the term of a member in relation to a vacancy is less than one year”.
    • However, this cannot be a reason for the Governor to refuse nomination — because the bar is in respect of by-election to fill a vacancy, not nomination.
    • Of course, the Governor could argue that he is not obligated under the Constitution to act swiftly on the advice of the Council of Ministers; also, why should he nominate Thackeray only to save his chief ministership.

    A new issue for debate

    • It is important to note the extraordinary context — India is currently battling a health emergency of the kind not seen in the history of the republic.
    • Political uncertainty is the last thing that Maharashtra, which has the highest coronavirus caseload and death toll by far in the country, needs at this moment.

    The question of discretion

    • What are the limits to the Governor’s discretion in nominations is the matter of discussion now.
    • In Biman Chandra Bose vs Dr H C Mukherjee (1952) the Calcutta HC rejected the plea that none of the nine nominated members to the legislature fulfilled the required criteria and held that the Governor cannot use his discretion in nominating members to the Council.
    • He has to go by the aid and advice of the Council of Ministers.
    • Article 163(1) of the Constitution makes it clear that the Governor must follow the recommendations of the Council of Ministers in all situations “except in so far as he is by or under this Constitution required to exercise his functions or any of them in his discretion”.

    Case in Maharashtra

    • It can be argued that government is bound by the advice of the CoM only in executive matters as defined in Article 162 and since the nomination of members is not an executive power, he can act in his discretion.
    • However, it must be noted that under Article 169, while Parliament has the power to abolish or create a Legislative Council, it can pass such a law only after the state Assembly has passed a resolution to that effect.
    • Thus, the legislative power of the Assembly can be inferred from this provision.

    Also read:

    https://www.civilsdaily.com/news/role-of-governor-in-state-govt-formation/

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  • Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

    No 100% quota for Scheduled Areas

    SC Judgements | Polity | Mains Paper 2: Indian Constitution – historical underpinnings, evolution, features, amendments, significant provisions and basic structure

    • A Constitution Bench of the Supreme Court held it unconstitutional to provide 100% reservation for tribal teachers in schools located in Scheduled Areas across the country.
    • The Bench was answering a reference made to it in 2016 on whether 100% reservation is permissible under the Constitution.

    Reservation in India is a system of affirmative action by the State that provides representation for historically and currently disadvantaged groups in Indian society in education, employment and politics. The 10% EWS quota this year has raised the inevitability for a possible mains question.

    No 100% quota

    • The apex court held that it is an obnoxious idea that tribals only should teach the tribals.
    • Merit cannot be denied in toto by providing reservation observed the judgement.
    • Citizens have equal rights, and the total exclusion of others by creating an opportunity for one class is not contemplated by the founding fathers of the Constitution of India.

    Invoking Indira Sawhney judgment

    • The court referred to the famous Indira Sawhney judgment (Mandal case- Indra Sawhney v. Union of India 1992), which caps reservation at 50%.
    • The court held that 100% reservation is discriminatory and impermissible.
    • The opportunity of public employment is not the prerogative of few.
    • A 100% reservation to the Scheduled Tribes has deprived SCs and OBCs also of their due representation.

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  • Land Reforms

    SWAMITVA Scheme to map rural inhabited lands

    Schemes | Governance | Mains Paper 2: Government Scheme/Policies

    The Prime Minister has launched the Swamitva Scheme and e-Gramswaraj Portal & mobile app as a portal to prepare and plan Gram Panchayat Development Plans.

    Swamitva Scheme

    • SWAMITVA stands for Survey of Villages and Mapping with Improvised Technology in Village Areas.
    • Under the scheme, the latest surveying technology such as drones will be used for measuring the inhabited land in villages and rural areas.
    • The mapping and survey will be conducted in collaboration with the Survey of India, State Revenue Department and State Panchayati Raj Department under the Ministry of Panchayati Raj.
    • The drones will draw the digital map of every property falling in the geographical limit of each Indian village.
    • Property Cards will be prepared and given to the respective owners.

    Benefits

    • The scheme will create records of land ownership in villages and these records will further facilitate tax collection, new building plan and issuance of permits.
    • It will enable the government to effectively plan for the infrastructural programs in villages.
    • It would help in reducing the disputes over property.

    What is e-Gramswaraj Portal?

    • E Gram Swaraj portal is the official portal of central govt for the implementation of Swamitva scheme.
    • By visiting this portal people can check their Panchayat profile easily. It will also contain the details of ongoing development works and the fund allocated for them.
    • Any citizen can create his or her account on the portal and can know about the developmental works of villages.
    • The user of E Gram Swaraj portal can also access all work of the Ministry of Panchayati Raj.
    • This single interface will help speed-up the implementation of projects in rural areas from planning to completion.

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  • Modern Indian History-Events and Personalities

    Qissa Khwani Bazaar massacre and the Khudai Khidmatgars

    | | Mains Paper 1: Modern Indian History

    • Qissa Khwani Bazaar is a renowned market place in the city of Peshawar.
    • Before the Partition, the marketplace was also the site of a massacre perpetrated by British soldiers against non-violent protesters of the Khudai Khidmatgar movement on April 23, 1930.

    We can expect a possible mains question inspired from this newscard. The question could be like- “Discuss the role of Abdul Ghaffar Khan and his Khudai Khidmatgar in infusing the Gandhian principle of non-violence in the Frontiers of India “.

    The Red Shirts:  Khudai Khidmatgars

    • The Khudai Khidmatgar was a non-violent movement against the British occupation of the Indian subcontinent led by Abdul Ghaffar Khan, a Pashtuns freedom fighter, in the North-West Frontier Province.
    • Over time, the movement acquired a more political colour, leading to the British taking notice of its growing prominence in the region.
    • Following the arrest of Khan and other leaders in 1929, the movement formally joined the Indian National Congress after they failed to receive support from the All-India Muslim League.
    • Members of the Khudai Khidmatgar were organised and the men stood out because of the bright red shirts they wore as uniforms, while the women wore black garments.

    Why did the massacre happen?

    • Abdul Ghaffar Khan and other leaders of the Khudai Khidmatgar were arrested on April 23, 1930 by British police after he gave a speech at a gathering in the town of Utmanzai in the North-West Frontier Province.
    • A respected leader well-known for his non-violent ways, Khan’s arrest spurred protests in neighbouring towns, including Peshawar.
    • Protests spilled into the Qissa Khwani Bazaar in Peshawar on the day of Khan’s arrest. British soldiers entered the market area to disperse crowds that had refused to leave.
    • In response, British army vehicles drove into the crowds, killing several protesters and bystanders. British soldiers then opened fire on unarmed protestors, killing even more people.
    • Historical records suggest the British attempted to deploy the Garhwal Regiment against the civilians in the marketplace, but two platoons of this respected regiment refused to shoot at unarmed protesters.
    • In retaliation, British officials court-martialled the platoon members with upto eight years of imprisonment.

    Aftermath of the massacre

    • The British ramped up the crackdown on Khudai Khidmatgar leaders and members following the Qissa Khwani Bazaar massacre.
    • In response, the movement began involving young women in its struggle against the British, a decision in line with tactics adopted by revolutionaries across undivided India.
    • Women were able to move undetected with more ease than men.
    • According to accounts by Khudai Khidmatgar activists, the British subjected members of the movement to harassment, abuse and coercive tactics adopted elsewhere in the subcontinent.
    • This included physical violence and religious persecution. Following the recruitment of women in the movement, the British also engaged in violence, brutality and abuse of women members.

    Khudai Khidmatgars  gets wasted into history

    • British adopted their tactic of sowing divisions on religious grounds in the North-West Frontier Province as well, in an attempt to weaken the Khudai Khidmatgar.
    • In a move that surprised the British government, in August 1931, the Khudai Khidmatgar aligned themselves with the Congress party, forcing the British to reduce the violence they were perpetrated on the movement.
    • The Khudai Khidtmatgar opposed Partition, a stance that many interpreted as the movement not being in favour of the creation of the independent nation of Pakistan.
    • Post 1947, the Khudai Khidmatgar slowly found their political influence decreasing to such an extent that the movement and the massacre 90 years ago in the Bazaar has been wiped out from collective memory (of Pakistan).

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  • International Space Agencies – Missions and Discoveries

    Unified Geologic Map of the Moon

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

    The first-ever digital, unified, global, geological map of the moon was released virtually by the  United States Geological Survey (USGS), NASA and the Lunar Planetary Institute.

    Unified Geologic Map of the Moon

    • The UGM will serve as a blueprint for future human missions and a source of research and analysis for the educators and the general public interested in lunar geology.
    • The map is a ‘seamless, globally consistent, 1:5,000,000-scale geologic map’.
    • The mapped surface features of the moon included crater rim crests, buried crater rim crests, fissures, grabens, scarps, mare wrinkle ridges, faults, troughs, rilles, and lineaments.

    How it was prepared?

    • The researchers built on the original digital renovation of the six maps comprising of the near, central far, east, west, north and south sides that was released in 2013.
    • The final map consists of 43 geologic units across the entire lunar surface, broken down into groups based on characteristics like materials of craters, basins, terra, plains and volcanic units.
    • Data from NASA’s Apollo Missions were used to come up with the map.

    Its’ significance

    • The moon’s South Pole is especially interesting because the area is much larger than the North Pole and there could be a possibility of the presence of water in these permanently shadowed areas.
    • Further, the South Pole region also contains the fossil record of the early Solar System.
    • These present and future moon missions’ success can be further helped by the digital map of the moon.
    • The Chandrayaan 2, an active mission also targets the Lunar South Pole for exploration.

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  • Innovations in Biotechnology and Medical Sciences

    Reverse Vaccinology and its benefits

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

    The Tamil Nadu Dr. MGR Medical University has developed a vaccine candidate against SARS-CoV-2 through ‘reverse vaccinology’.

    A definition based prelims question can be expected on Reverse Vaccinology. Ex. Which of the following statements best describes ‘Reverse Vaccinology’?

    Reverse Vaccinology

    • Reverse vaccinology is an improvement on vaccinology that employs applied bioinformatics.
    • The basic idea behind it is that an entire pathogenic genome can be screened using bioinformatics approaches to find genes.
    • Some traits that the genes are monitored for may indicate antigenicity.
    • Those genes are filtered for desirable attributes that would make good vaccine targets such as outer membrane proteins.
    • Once the candidates are identified, they are produced synthetically and are screened in animal models of the infection.
    • Since then, it has been used on several other bacterial vaccines.

    Benefits

    • Earlier researchers had to do a viral culture in the laboratory to develop a vaccine, and this was time-consuming.
    • The major advantage for reverse vaccinology is finding vaccine targets quickly and efficiently.
    • Traditional methods took decades to unravel pathogens and antigens, diseases and immunity
    • With ‘reverse vaccinology’ scientists know what molecules make the genomic sequence.

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  • Capital Markets: Challenges and Developments

     Indian Debt market, that never was

    | Economics | Mains Paper 3: Indian Economy

    India’s bond market suffers from several issues. This article discusses such issues, and also highlights the recent positive trends seen in the debt market owing to several steps taken by the government.

    The Indian debt market, primarily of the fixed-income variety, can be broadly classified into:

    • 1. Money Market
    • Where the borrowing is for a tenor of less than a year.
    • Different types of money market instruments: Inter-Bank Term Money, repo transactions, Certificate of Deposits, Commercial Papers, T-Bills, etc. are some of the money market instruments.
    • Through these instruments, short term requirement of funds is met by banks, institutions and the state and central governments.
    • 2. Bank and Corporate Deposits
    • Bank fixed deposits (FDs) have been popular and widely subscribed to, as the feeling of no-default-risk.
    • Corporate deposits are FDs issued by a company (non-bank).
    • 3. Government Securities
    • G-Secs are sovereign-rated debt papers, issued by the government with a face value of a fixed denomination.
    • 4. Corporate & PSU Bond Market
    • Corporate bonds are issued by public sector undertakings (PSUs) and private firms.
    • These bonds are issued for a wide tenor between 1 year – 15 years.
    • These bonds carry a different risk profile and hence will have associated rating.

    Debt market plays a significant role in the economy of a country. But India’s debt market suffers from shallowness. Some of the steps taken by the government to improve the situation have been showing positive trends. In the light of this development, the UPSC can frame a direct question, for ex. “What are the factors responsible for the shallowness of the debt market in India? Suggest ways to increase the depth of the debt market in India.”

    What are the problems of India’s debt market?

    • Wholesale market: The Indian debt market is largely a wholesale market.
    • It is a wholesale market in a sense that a majority of institutional investors comprises of mainly banks, financial institutions, mutual funds, EPFO, insurance companies and corporates.
    • The concentration of these large players has resulted in the debt markets being fairly skewed, evolving into a wholesale & bilaterally-priced trades.
    • Lack of retail sell and transparency: It also lacks the retailness and the contractual transparency that the Indian capital markets have been able to build in the past 2 decades.
    • Skewed towards G-secs: Structurally, the debt market remains firmly skewed towards government securities (G-secs).
    • Also, the largest investor group in the G-secs market are the banks, due to their regulatory requirement to invest in SLR.
    • Low and unstable trading in the corporate bond market: The Indian corporate bond market has low & unstable trading volumes.
    • Sadly, the corporate bond market remains largely about top-rated financial and public sector issuances.
    • The domestic debt managers have forgotten that the logic of the business of finance is “to price the risk”.

    Regulation and comparison with other countries

    • RBI regulates money markets & G-secs.
    • SEBI regulates the Corporate debt market & bond markets.
    • The domestic debt market in India amounts to about 67% of GDP.
    • The size of India’s corporate bond market is a mere 16% of GDP — compared with 46% in Malaysia, and 73% in South Korea.

    The recent positive trend in the debt market

    • In the past few years, the domestic corporate bond market had seen increasing volumes, largely due to financial investments going into it, including retail participation.
    • Also, the banks had ceded space to NBFCs over past many years.
    • This is because banks found it easier to buy securitisation pools to achieve their PSL targets rather than develop competencies that NBFCs had built-in serving affinity groups, in smaller cities & towns.
    • And post the ILFS crisis, the markets have started shunning non-banks again.
    • Policy initiative by the government: The various policy initiatives undertaken in the last few years would take time to fructify and to stabilise.
    • These include the IBC, SEBI’s bond market policies, RBI’s large borrower framework for enhancing credit supply.
    • Some of these have already seen changes/addendums to the original draft, with the intent being to course-correct, for the stability of the markets.

    Roll over of debt papers in India

    • We have seen liquidity problems in our markets every few years.
    • The concept of “roll-over” of debt paper was usual as our markets did not build long term papers.
    • With the ILFS slowdown, it was easy for name-calling on “ALM mismatch” concept.
    • Not much had been anyways done before and later to address the availability of debt to reduce the Asset-to-Liability mismatches.
    • Also, we have played it safe so far by even lending for large infra projects with shorter paper and hoped to roll it over at the end of the debt term.

    Conclusion

    This is the time that our regulators need to work along with the various governments, especially the states, for smoother ironing of fiscal hiccups and use this to redress any structural glitches. It’s time that there is actual intent to deepen the domestic debt market and to listen to the industry about their requirements.

    Back2Basics: What is ASM?

    • Banks’ primary source of funds is deposits, which typically have short- to medium-term maturities.
    • They need to be paid back to the investor in 3-5 years.
    • In contrast, banks usually provide loans for a longer period to borrowers.
    • Home loans, for instance, can have a tenure of up to 20 years.
    • Providing such loans from much shorter maturity funds is called an asset-liability mismatch.
    • It creates risks for banks that need to be managed.
    • The most serious consequences of asset-liability mismatch are interest rate risk and liquidity risk.
    • Because deposits are of shorter maturity they are repriced faster than loans.
    • Every time a deposit matures and is rebooked if the interest rates have moved up the bank will have to pay a higher rate on them.
    • But the loans cannot be repriced that easily. Because of this faster adjusting of deposits to interest rates asset-liability mismatch affects net interest margin or the spread banks earn.

    Priority Sector Lending (PSL)

    • Priority Sector Lending is an important role given by the (RBI) to the banks for providing a specified portion of the bank lending to few specific sectors like agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low-income groups and weaker sections etc.

    Roll over of debt

    • When debt becomes due there is a need to either repay the principal or alternatively, to enter into a new agreement.
    • Structurally, funds from the second debt are used to repay the first debt.
    • Then you repay the second debt as required. Quite often these new terms will be agreed with the initial lender.
    • In essence, you’re ‘rolling’ the repayment obligation from one period into the next.
    • This all leads to rollover risk, which is the risk you that you won’t be able to find anyone willing to lend the value of the outstanding debt and/or offer a comparable rate as the first principle repayment obligation approaches.
    • This may be due to either movement in the borrowers perceived credit status and/or changes to the broader credit environment.
    • This was a key theme during the financial crisis of 2007 – 2008.
    • The reasons for refinancing may include the above, but also other themes such as debt consolidation (which doesn’t directly imply a change to the debt term).

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