Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Lessons to improve India-Pakistan relations
There is a sharp contrast between India’s relations with its neighbours two neighbours: Pakistan and Bangladesh. The article suggest drawing on the lessons from Indo-Bangladesh relations to mend Indo-Pak relations.
Indo-Bangladesh relations
- Prime Minister of India will travel to Dhaka this week to commemorate Bangladesh’s Declaration of Independence from Pakistan 50 years ago.
- From being one of the world’s poorest countries in 1972, Bangladesh is now racing to be in the world’s top 25 economies by the end of this decade.
- It is also a time for deeper reflection — on the inability of the region to come to a closure on the two Partitions of the subcontinent, the first in 1947 and the second in 1971.
- Delhi and Dhaka have started finding ways to overcome the tragedy of the Partition to chart a new course of bilateral and regional cooperation.
- Prime Minister Sheikh Hasina has provided strong leadership in advancing ties with India over the last decade and more.
- Recently the Indian government mobilised enough political support to get a boundary settlement agreement with Bangladesh approved by the Parliament.
- India also backed an international tribunal’s award resolving the maritime territorial dispute with Bangladesh.
- The steady improvement in bilateral relations over the last decade has reflected in growing trade volumes, expanding trans-border connectivity, mutual cooperation on terrorism, and widening regional cooperation.
Applying lessons from Indo-Bangladesh relations to Indo-Pak relations
- Positive changes in India’s relations with Pakistan have been elusive.
- Hopes have been rekindled by the agreement late last month between the two military establishments to a ceasefire on the border and to address each other’s concerns.
- Following are the lessons we can learn and apply productively to Indo-Pak relations
1) Importance of political stability
- First lesson is the importance of political stability and policy continuity that have helped Delhi and Dhaka deepen bilateral ties over the last decade.
- In contrast, the political cycles in Delhi and Islamabad have rarely been in sync.
- Pakistan’s mainstream civilian leaders have all supported engagement with India.
- In fact, it is the military that is yet to make up its collective mind.
2) Concerns for mutual security
- Cooperation in countering terrorism built deep mutual trust between Dhaka and Delhi.
- That trust helped deal with many complex issues facing the relationship.
- In the case of Pakistan, its army has sought to use cross-border terrorism as a political lever to compel India to negotiate on Kashmir.
- If sponsoring terror seemed a smart strategy in the past, it has now become the source of international political and economic pressure on Pakistan.
3) Depoliticise national economic interests
- Delhi and Dhaka have steadily moved forward on issues relating to trade, transit and connectivity by dealing with them on their own specific merits.
- Pakistan, on the other hand, has made sensible bilateral commercial cooperation and regional economic integration hostages to the Kashmir question.
- It is not clear if Pakistan is ready to separate the two and expand trade ties while talking to India on Kashmir.
Consider the question “The steady improvement in bilateral relations with Bangladesh over the last decade can offer valuable lessons to be applied to India-Pakistan relations. In light of this, examine the factors that India and Pakistan need to focus on to achieve improvement in bilateral relations.”
Conclusion
Both India and Pakistan need to recognise the importance of pursuing the national well being through regional cooperation. That is exactly what Bangladesh has done in the last decade.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Ken-Betwa Linking Project
Mains level: River interlinking
In the presence of PM and Jal Shakti Minister, the CMs of Madhya Pradesh and Uttar Pradesh have signed an agreement to implement the Ken Betwa Link Project (KBLP).
Must read:
Interlinking of rivers: Significance & Challenges
What is the Ken Betwa Link Project?
- The Ken-Betwa Link Project is the first project under the National Perspective Plan for the interlinking of rivers.
- Under this project, water from the Ken River will be transferred to the Betwa river. Both these rivers are tributaries of the river Yamuna.
- The project is expected to provide annual irrigation of 10.62 lakh hectares, drinking water supply to about 62 lakh people and also generate 103 MW of hydropower.
The Project has two phases:
- Under Phase-I, one of the components — Daudhan dam complex and its appurtenances like Low Level Tunnel, High Level Tunnel, Ken-Betwa link canal and Power houses — will be completed.
- While in the Phase-II, three components — Lower Orr dam, Bina complex project and Kotha barrage — will be constructed.
Regions benefitting from KBLP
- The project lies in Bundelkhand, a drought-prone region, which spreads across 13 districts of Uttar Pradesh and Madhya Pradesh.
- It will be of immense benefit to the water-starved region of Bundelkhand, especially in the districts of Panna, Tikamgarh, Chhatarpur, Sagar, Damoh, Datia, Vidisha, Shivpuri and Raisen of Madhya Pradesh and Banda, Mahoba, Jhansi and Lalitpur of Uttar Pradesh.
- It will pave the way for more interlinking of river projects to ensure that scarcity of water does not become an inhibitor to development in the country.
What about the Panna tiger reserve?
- Out of the 6,017 ha of forest area coming under submergence of Daudhan dam of Ken Betwa Link Project, 4,206 ha of the area lies within the core tiger habitat of Panna Tiger Reserve.
Previous examples of river-linking
- In the past, several river linking projects have been taken up. For instance, under the Periyar Project, the transfer of water from the Periyar basin to the Vaigai basin was envisaged.
- It was commissioned in 1895.
- Similarly, other projects such as Parambikulam Aliyar, Kurnool Cudappah Canal, Telugu Ganga Project, and Ravi-Beas-Sutlej were undertaken.
Recent developments on the interlinking of rivers in India
- In the 1970s, the idea of transferring surplus water from a river to a water-deficit area was mooted by the then Union Irrigation Minister Dr K L Rao.
- Rao, who himself was an engineer, suggested the construction of a National Water Grid for transferring water from water-rich areas to water-deficit areas.
- Similarly, Captain Dinshaw J Dastur proposed the Garland Canal to redistribute water from one area to another.
- However, the government did not pursue these two ideas further.
The National Perspective Plan
- It was in August, 1980 that the Ministry of Irrigation prepared a National Perspective Plan (NNP) for water resources development envisaging inter-basin water transfer in the country.
- The NPP comprised two components: (i) Himalayan Rivers Development; and (ii) Peninsular Rivers Development.
- Based on the NPP, the National Water Development Agency (NWDA) identified 30 river links—16 under the Peninsular component and 14 under the Himalayan Component.
- Later, the river linking idea was revived under the then Vajpayee Government.
Ken Betwa Link Project is one of the 16 river linking projects under the Peninsular component.
Clearances required for a river-linking project
- Generally, 4-5 types of clearances are required for the interlinking of river projects.
- These are Techno-economic (given by the Central Water Commission); Forest Clearance and Environmental clearance (Ministry of Environment & Forests); Resettlement and Rehabilitation (R&R) Plan of Tribal Population (Ministry of Tribal Affairs) and Wildlife clearance (Central Empowered Committee).
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Chin ethnic community
Mains level: Myanmar coup and its impact on India
Mizoram CM has expressed his sympathies for the people fleeing areas bordering Mizoram. These areas are inhabited by Chin communities who are ethnically Mizo.
Map reading: Note all NE states bordering Myanmar.
Who are the Chin communities?
- The Chin Hills, or the Indo-Chin hill ranges as they are often called, are a mountainous region in north-western Myanmar.
- At an elevation of 2100-3000 metres, this heavily- forested mountain region was the home of numerous tribes that fall under the Zo umbrella.
- The Zo people include all the tribes that come under the Chin-Kuki-Mizo ethnic group spread across Myanmar, India and Bangladesh.
- They include a host of tribes, sub-tribes and clans such as Chin, Kuki, Mizo, Zomi, Paitei, Hmar, Lushei, Ralte, Pawi, Lai, Mara, Gangte, Thadou etc.
Their ethnic origin
- Believed to have originated in China, the tribes migrated through Tibet to settle in Myanmar, and speak a group of the Tibeto-Burman languages.
- But constant feuds among clans of different tribes and their kings (chieftains), drove many of the clans westwards, towards Mizoram and some parts of Manipur, in the 17th century.
- Here the tribes set up new villages and colonies, but even with their new identities, they remain socially and emotionally tied with the Chin tribes of Myanmar.
- When British rule extended towards the Northeast, Mizoram was denoted an “excluded area” and remained outside the administration of the British, governed only by the Scheduled District Act.
Nature of the bond with Mizos
- While they are separated by a 510-km India-Myanmar border, they consider themselves “one people’’ despite past conflicts: the Indo-Chin people.
- Besides the shared ethnicity, what binds these two peoples together is a shared religion.
- Mizoram is predominantly Christian, as are the Chin people of Buddhist-majority Myanmar.
- Mizoram officials refer to the refugees’ status as a Christian minority people in seeking asylum for them, and also the fear of persecution by the junta.
- Rih Dil in Chin state, Myanmar, is a cultural and spiritual lake for the Mizos, deeply revered in folklore, shaping pre-Christian belief of traditional Mizo views of life after death.
How well are the two sides connected?
India’s Look East, Act East policy and greater interactions on the border have strengthened an already strong connection between the people on either side of the border.
- The Mizoram-Myanmar border is porous, with very little fencing, if any.
- While the latest influx has been driven by the coup, Myanmar residents have been crossing this open border for decades.
- It is understood that the actual number of refugees is much higher, with more arriving every day.
- In the early 20th century, Mizos from Champhai district and elsewhere migrated to Myanmar, setting up villages in the Kalay-Kabaw valley.
- Many are believed to have joined the Myanmar army for lucrative employment.
- Many Mizo families also migrated to Myanmar in 1966 and 1986, when the Mizo National Front sought secession from India, to escape counter-insurgency operations from the Indian government.
The Free Movement Regime
- The Mizo social fabric spans across the border, which now separates families.
- The two countries have an arrangement called the Free Movement Regime (FMR) that allows locals on either side to go up to 16 km on the other side and stay up to 14 days.
- Thousands regularly cross over on either side for work and to meet relatives, often unofficially and for extended periods.
- Marriages are often arranged across the border.
Trade dependency on Myanmar
- In border trade, Mizoram depends to a large extent on Myanmar for many essential commodities including beef, pork, good quality rice, fruits, and household utensils.
- Mizoram sends across items scarce in Myanmar such as medicines or fertilisers.
What is India’s policy on asylum seekers?
- India is not a signatory to the 1951 United Nations Convention and 1967 Protocol Relating to the Status of Refugees, and it does not currently have a national law on refugees.
- In 2011, the Centre circulated to all states and UTs a Standard Operating Procedure to deal with foreign nationals who claimed to be refugees.
- An illegal immigrant can be a foreign national who enters India on valid travel documents and stays beyond their validity or a foreign national who enters without valid travel documents.
- Cases can be justified on grounds of well-founded fears of persecution on account of race, religion, sex, nationality, ethnic identity, membership of a particular social group or political opinion.
- They can be recommended by states or UTs to the Home Ministry for a long-term visa (LTV) after due security verification.
Note: LTV-holders are allowed to take up private-sector employment and enrol in any academic institution.
What is happening in Mizoram right now?
- The Mizo Zirlai Pawl, the apex Mizo students body, on February 3 held a sit-in demonstration in Aizawl in solidarity with the people of Myanmar.
- Several Mizo village council authorities have issued letters and statements affirming their willingness to accommodate Chin refugees.
- The CM gave an assurance in the Assembly that the state government would be ready to provide assistance to civilians fleeing the Myanmar regime.
Way ahead
- With the swell of sympathy among Mizos for the fleeing Chin people and increasing pressure on the state government, it is unlikely that Mizoram will back down any time soon — unless the Centre devises a way out.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: RODTEP Scheme
Mains level: Not Much
The notification of benefit rates payable to exporters under the Remission of Duties and Taxes on Export Products (RODTEP) scheme is expected to take more time as it is facing ‘teething issues’.
Try this PYQ:
Q.Among the following, which one is the largest exporter of rice in the world in the last five years? (CSP 2019)
(a) China
(b) India
(c) Myanmar
(d) Vietnam
RODTEP Scheme
- RoDTEP is a scheme for Exporters to make Indian products cost-competitive and create a level playing field for them in the Global Market.
- It has replaced the current Merchandise Exports from India Scheme, which is not in compliance with WTO norms and rules.
- The new RoDTEP Scheme is a fully WTO compliant scheme.
- It will reimburse all the taxes/duties/levies being charged at the Central/State/Local level which are not currently refunded under any of the existing schemes but are incurred at the manufacturing and distribution process.
Why need such a scheme?
- The scheme was announced last year as a replacement for the Merchandise Export from India Scheme (MEIS), which was not found not to be compliant with the rules of the World Trade Organisation.
- Following a complaint by the US, a dispute settlement panel had ruled against India’s use of MEIS as it had found the duty credit scrips awarded under the scheme to be inconsistent with WTO norms.
Back2Basics: Merchandise Exports from India Scheme (MEIS)
- MEIS was launched with an objective to enhance the export of notified goods manufactured in a country.
- This scheme came into effect on 1 April 2015 through the Foreign Trade Policy and will be in existence till 2020.
- MEIS intended to incentivize exports of goods manufactured in India or produced in India.
- The incentives were for goods widely exported from India, industries producing or manufacturing such goods with a view to making Indian exports competitive.
- The MEIS covered almost 5000 goods notified for the purpose of the scheme.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Gandhi Peace Prize
Mains level: NA
The Culture Ministry has announced that Sheikh Mujibur Rahman and the late Sultan of Oman, Qaboos bin Said Al Said, would be awarded the Gandhi Peace Prize for 2020 and 2019 respectively.
Note the features of the award such as prize, the composition of jury etc.
Gandhi Peace Prize
- The International Gandhi Peace Prize, named after Mahatma Gandhi, is awarded annually by the Government of India.
- As a tribute to the ideals espoused by Gandhi, the GoI launched the International Gandhi Peace Prize in 1995 on the occasion of the 125th birth anniversary of Mahatma Gandhi.
- This is an annual award given to individuals and institutions for their contributions towards social, economic and political transformation through non-violence and other Gandhian methods.
Its features
- The award carries ₹1 crore (US$140,000) in cash, convertible in any currency in the world, a plaque and a citation.
- It is open to all persons regardless of nationality, race, creed or gender.
- A jury consisting of the PM of India, the Leader of the Opposition in the Lok Sabha, the Chief Justice of India, Speaker of the Lok Sabha and one other eminent person decides the awardees each year.
- Ordinarily, only proposals coming from competent persons invited to nominate are considered.
- However, a proposal is not taken as invalid for consideration by the jury merely on the ground of not having emanated from competent persons.
Information about the awardees
(1) Sheikh Mujibur Rahman (1920-1975)
- The Prize recognizes the immense and unparalleled contribution of Bangabandhu Sheikh Mujibur Rahman in inspiring the liberation of Bangladesh.
- It acknowledges the contribution in bringing stability to a nation born out of strife, laying the foundation for the close and fraternal relations between India and Bangladesh and promoting peace and non-violence in the Indian subcontinent.
(2)Sultan Qaboos Bin Said (1940-2020)
- Sultan Qaboos was a visionary leader whose twin policy of moderation and mediation in addressing international issues won him praise and respect across the globe.
- He played an important role in supporting peace efforts in various regional disputes and conflicts. H.M. Sultan Qaboos was the architect of the special ties between India and Oman.
- He had studied in India and always maintained a special relationship with India.
- Under his leadership, India and Oman became strategic partners and our mutually beneficial, comprehensive partnership strengthened and scaled newer heights.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Rythu Bandhu
Mains level: Paper 3- PM-KISAN and issues
The article highlights the challenge of exclusion error in the PM-KISAN and suggests measures to deal with the issue by drawing on the success of KALIA and Rythu Bandhu.
Exclusion in PM-KISAN
- Budget FY22 announced an allocation of Rs 65,000 crore to the PM-Kisan scheme.
- Since 2019, the PM-Kisan has been the largest component of the agriculture budget each year.
- The scheme is targeted at farmers who own cultivable land as per land records of the state.
- Unfortunately, this leaves out vulnerable sections such as tenant farmers, women farmers, tribal families and landless labourers.
- The exclusion is the result of the challenge of first identifying these people, since our existing systems do not formally recognise them as farmers.
The need to identify farmers
- Despite 73.2% of rural women engaging in agriculture, only 12.8% are reported to own land.
- Among tribal communities, of the 20 million tribal families, less than 2 million have received individual forest rights pattas; the rest are ‘invisible’ and left out of government safety nets.
- Landless agricultural labourers and tenant farmers account for close to 150 million people in rural India, and they too are not part of state land records.
- Although there are multiple welfare schemes for farmers, there is no standard government definition of a farmer.
- The 2007 MS Swaminathan Committee called out that the term ‘farmer’ would include any person actively engaged in growing crops and other agricultural commodities, and would include not only landholders, but also cultivators, labourers, sharecroppers, tenants and tribal families, amongst others.
Learning from KALIA and Rythu Bandhu
- Odisha has been a frontrunner in implementing an inclusive farmer welfare scheme, the KALIA.
- The KALIA provides an unconditional income support of Rs 12,500 to landless agricultural households and an annual Rs 10,000 to small and marginal land-owning farmers as well as tenant farmers.
- Odisha leveraged existing databases such as the Paddy Procurement Automation System, the Pradhan Mantri Fasal Bima Yojana and the National Food Security Act, and deployed close to 50,000 government staff at state, district and block levels to conduct extensive on-ground verification to identify eligible beneficiaries.
- Telangana took a different approach prior to rolling out the Rythu Bandhu Scheme, a direct benefit transfer scheme for land-owning farmers.
- The Rythu Bandhu Scheme targeted only land-owning farmers.
- But the state took on the onus of updating land records before implementing the scheme.
- The revenue and agriculture departments partnered to undertake a state-wide Land Records Updation Programme (LRUP).
- This shows that updating and digitising land records databasse is possible with focused efforts.
Way forward
- Instead of every scheme having its own farmer beneficiary database, the ideal solution would be to leverage the existing land records databases in every state.
- The design should ensure women’s names are not excluded.
- Implementation of the Forest Rights Act 2006 needs to be accelerated so that tribal families receive forest rights pattas and become part of the land records database.
- The next challenge is to build in incentives in the process to encourage the maintenance of the land record database, such that all future transactions such as sale, gift etc. are regularly updated to increase the reliability of the records.
Consider the question “How lack of definition of farmer leads to inclusion and exclusion errors in the schemes for farmers. Suggest the measures to deal with the issue.”
Conclusion
The pandemic, more so than anything else, has highlighted the need for the government to have robust social security mechanisms to reach the most vulnerable sections of the population, and making PM-Kisan more inclusive is an important step in that direction.
Source:
https://www.financialexpress.com/opinion/pm-kisan-income-support-to-farmers-needs-to-be-more-inclusive/2217436/
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: JCPOA
Mains level: Paper 2- Role IAEA can play in rescuing JCPOA
The article explains how IAEA could play an important role in finding a solution to the stalemate between the U.S. and Iran on JCPOA.
Issue of Iran’s return to JCPOA
- There is uncertainty between the U.S. and Iran on the Joint Comprehensive Plan of Action (JCPOA) as to whether Iranian compliance comes first or the lifting of sanctions by the U.S.
- In this context, the International Atomic Energy Agency (IAEA) is back on the stage to rescue the JCPOA.
- The U.S. tried to pressurise Iran by proposing a resolution in the IAEA Board of Governors meeting criticising Iranian non-compliance with the JCPOA and its alleged IAEA safeguards violations.
- This comes amidst rumours that Iran might withdraw from the Non-Proliferation Treaty (NPT).
Iran may follow Indian model on creating a deterrent
- Foreign Policy recently noted that Iranian society increasingly see the weapon not just as an ultimate deterrent but as a panacea for Iran’s chronic security problems and challenges to its sovereignty by foreign powers.
- If the stalemate continues on JCPOA, because of the U.S. pressure, public opinion may shift towards the Indian model of creating a deterrent and then seeking a special dispensation to avoid severe sanctions.
- But the risks involved in such a policy will be grave, including the possibility of military action by Israel.
Relation between IAEA and NPT
- The IAEA is neither the Secretariat of the NPT nor is it empowered to request States to adhere to it.
- . It does, however, have formal responsibility in the context of implementing Article III of the Treaty.
- At the broadest level, the IAEA provides two service functions under the NPT.
- 1) It facilitates and provides a channel for endeavours aimed at further development of the applications of nuclear energy for peaceful purposes.
- 2) It administer international nuclear safeguards, in accordance with Article III of the Treaty, to verify fulfilment of the non-proliferation commitment assumed by non-nuclear-weapon States party to the Treaty.
- The NPT assigns to the IAEA the responsibility for verifying, at the global level, through its safeguards system, that non-nuclear weapon States fulfil their obligations not to use their peaceful nuclear activities to develop any nuclear explosive devices of any kind.
How IAEA could play role in JCPOA
- Accordingly, the Iranian file could go back to the IAEA to start fresh negotiations to restrain Iran to remain within the permissible level of enrichment of uranium.
- This may mean going back to the pre-six nation initiative, when the IAEA could not certify that Iran was not engaged in weapon activities.
- With the experience of the JCPOA, any new arrangement has to ensure the following:
- 1) Iran must have sanctions relief.
- 2) The stockpile of enriched uranium should not exceed the limits established.
- 3) There should be guarantees that Iran will not violate the safeguards agreement.
- The test is whether these can be accomplished within the framework of the IAEA.
Way forward
- Since the IAEA is a technical body, its deliberations may be kept at the technical level.
- At the same time, since it is open for the IAEA to report to the Security Council for necessary action, the IAEA will have the necessary clout to insist on the implementation of the NPT and its additional protocol.
- A new avenue may open for Iran to continue its peaceful nuclear activities as permitted in the NPT.
Consider the question “Examine the role played by IAEA under NPT. How this role can help IAEA in breaking the ice between Iran and the U.S. on JCPOA?”
Conclusion
Thus, IAEA can play an important role in ending the statement JCPOA finds itself in and ensure compliance from Iran on JCPOA and lifting sanctions by the U.S.
Back2Basics: Article III of NPT
- This article provides for the application of safeguards to ensure that nuclear material in non-nuclear weapon states (NNWS) isn’t diverted to nuclear weapons or other nuclear explosive devices.
- NNWS must place all nuclear materials in all peaceful nuclear activities under IAEA safeguards.
- Each nuclear weapon state (NWS) will not provide nuclear materials or equipment to a NNWS without an IAEA safeguards agreement.
- The safeguards should comply with Article IV of the NPT, and should not hamper peaceful uses of nuclear technology or economic/technical development in general.
- Safeguards agreements can be concluded on an individual or group basis.
- After the entry into force of the NPT, state parties had 180 days to commence negotiation of a safeguards agreement. Currently, state parties must begin negotiations by the date they deposit their instruments of ratification or accession.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Factors driving FDI in India
The article explains the four factors that explain the FDI inflows in India.
India’s economic decade
- Almost every major global company is either contemplating or operating on the assumption that India is a key part of their growth story.
- Google, Facebook, Walmart, Samsung, Foxconn, and Silver Lake have been just a handful of the firms that made huge investments in Inda.
- As a result, India saw the fastest growth in Foreign Direct Investment (FDI) inflows among all the major economies last year.
- Meanwhile, India’s latest FDI totals still lags behind the highest tallies in other markets such as China and Brazil.
Issues faced by investors and factors driving investment
- Frequent shifts in the policy landscape and persistent market access barriers are standard complaints levied against India by the business community.
- The government’s push to build a “self-reliant” India has also rattled skittish investors and smaller companies that lack the resources to navigate on-the-ground hurdles.
- Still, investors recognise that doing business in India — or any emerging market — comes with inherent risks but that adaptation in approach is critical to success.
- Four core dynamics drive this calculus and explain why multinational companies are making India an essential part of their growth story.
4 Factors driving FDI in India
1) India’s population
- What India offers through its nearly 1.4 billion people and their growing purchasing power is uniquely valuable for multinationals with global ambitions.
- No other country outside of China has a market that houses nearly one in six people on the planet and a rising middle class of 600 million.
2) Shifting geopolitics
- Rising U.S.-China competition is forcing multinationals to rethink their footprints and production hubs.
- Savvy countries such as Vietnam have capitalised on this opportunity to great effect, but India is finally getting serious about attracting large-scale production and exports.
3) Digital connectivity
- Cheap mobile data have powered a revolution across India’s digital economy and connected an estimated 700 million Indians to the Internet.
- More than 500 million Indians still remain offline, this is a key reason why leading global tech companies are investing in India and weathering acute policy pressure.
- Domestic Indian companies have also demonstrated their ability to innovate and deliver high quality services at scale.
- The partnerships and FDI flows linking multinationals and Indian tech firms will continue to unlock shared market opportunities for years to come.
4) National resilience
- Despite facing the scourge of the novel coronavirus head on, India has managed the pandemic better than many of its western peers and restored economic activity even before implementing a mass vaccination programme.
- These are remarkable developments, and yet they speak to India’s underlying resilience even in the face of historic challenges.
Shared value creation
- Unlocking opportunities in the Indian market cannot take the form of a one-way wealth transfer.
- Companies need to demonstrate their commitment to India.
- Successful companies do this by placing shared value creation at the heart of their business strategy.
- They tie corporate success to India’s growth and development.
- They forge enduring partnerships and lasting relationships, elevate and invest in Indian talent, align products with Indian tastes, and ultimately tackle the hardest problems facing India today.
Consider the question “Despite the issues faced by the investors, India witnessed the fastest growth in the FDI inflows among all the major economies amid pandemic. In light of this, examine the factors driving the FDI in India.”
Conclusion
For leading companies with global ambitions and a willingness to make big bets, the rewards of investing in the Indian market are substantial and well worth pursuing.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Mizo-Mynmar ethnic ties
Mains level: Myanmar coup and its impact on India
India has sealed all entry points along the border with the southeast Asian neighbour and is closely monitoring to prevent any Myanmar nationals from entering the country.
Issue: Problem with refugees
- At least 1,000 people from the adjoining Chin State of Myanmar are said to have crossed over to Mizoram, fearing a military crackdown.
- The Mizoram government favours providing refuge to the Chins that are ethnically related to the majority Mizos in the State.
- However, the Ministry of Home Affairs has made it clear that “India is not a signatory to the 1951 UN Convention relating to the Status of Refugees and the 1967 Protocol theron”.
When did the refugees start arriving?
- Mizoram began feeling the heat a month after the military coup when three police personnel crossed over to Lungkawlh village in Serchhip district.
- The influx of Myanmar nationals was reported from Hnahthial, Champhai, Saitual and Serchhip districts.
- Most of the refugees waded across the Tiau River that runs along much of Mizoram’s 510-km border with Myanmar.
Try answering this:
The cross-border movement of insurgents is only one of the several security challenges facing the policing of the border in North-East India. Examine the various challenges currently emanating across the India-Myanmar border. Also, discuss the steps to counter the challenges. (15 Marks)
Is this the first time this has happened?
- Extremism, counter-insurgency and sectarian violence have driven people out of Myanmar into India in the past as well.
- More than 1,200 Buddhists and Christians from Myanmar’s Arakan State had taken refuge in Mizoram’s Lawngtlai district in 2017.
- They fled their homes after the Myanmar Army clashed with the extremist Arakan Army.
- The refugees stayed back for more than a year. Thousands of Chins are said to be living in Mizoram for more than 40 years now.
How porous is the border?
Unlike India’s border with Pakistan and Bangladesh, much of the border with Myanmar is without any fence.
- The Assam Rifles personnel guard the border but a tough terrain comes in the way of maintaining airtight vigil.
- There have been calls to fence the border. Fencing the border would also help in checking the movement of extremist groups to and from Myanmar.
- Some are against the idea, insisting that a fence would make the “free movement” of border residents into each other’s country difficult.
- The two countries had in 2018 agreed to streamline the movement of people within 16 km of the border on either side.
Note: Myanmar has indefinitely stalled the agreement to streamline the free movement of people within 16 km along the border citing domestic issues.
Mizoram welcomes the refugees
- As a humanitarian gesture, the Mizoram government has issued a standard operating procedure (SOP) to Deputy Commissioners of border districts to facilitate the entry of refugees and migrants.
- The SOP stated that all Myanmar nationals entering Mizoram in connection with the political developments in the country shall be properly identified.
- The government said those facing a threat to their lives should be treated as refugees, given medical care, relief and rehabilitation and security.
Where do the Centre and Mizoram stand now?
- The SOP was revoked on March 6 after the Centre conveyed its displeasure to the State over the development.
- The State governments have no powers to grant “refugee status to any foreigner”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Helium and its practical uses
Mains level: Helium imports of India
India imports helium for its needs and with the U.S. appearing set to cut off exports of helium since 2021, the Indian industry stands to lose out heavily.
Helium is not just for balloons but it is the key ingredient for India’s high technology and the most sophisticated medical diagnosis.
Helium on Earth
- Helium is a chemical element with the symbol He and atomic number 2.
- It is a colourless, odourless, tasteless, non-toxic, inert, monatomic gas, the first in the noble gas group in the periodic table. Its boiling point is the lowest among all the elements.
Its discovery
- In 1906 a young Englishman by the name of Moris Travers arrived in Bangalore, to take up the position of the Director of Indian Institute of Science.
- Travers extracted helium in small quantity by heating up monazite sand abundantly available in Kerala beach, in a pioneering effort.
- Dutch physicist Kamerlingh Onnes liquefied Helium by cooling the gas to -270 degrees Celsius.
- It is known that Onnes collected helium gas from the springs of Bath in Baden Baden, Germany for his liquefaction experiment.
Helium in India
- India’s Rajmahal volcanic basin is the storehouse of helium trapped for billions of years, since the very birth of our Earth from the Sun.
- At present, researchers are mapping the Rajmahal basin extensively for future exploration and harnessing of helium.
Why India needs Helium?
- Every year, India imports helium worth Rs 55,000 crores from the U.S. to meet its needs.
- Helium is used in medicine, scientific research, for blimp inflation, party balloons as well as having welding applications.
- It finds many applications, mainly in magnetic resonance imaging (MRI) scans, in rockets and in nuclear reactors.
US monopoly in Helium
- The U.S. became the most important exporter of helium across the world.
- It was soon realized that the U.S. was also the biggest storehouse of helium.
- The US is now planning to switch off the export of helium from 2021.
- Qatar is a possible exporter but acute political and diplomatic wrangles have made Qatar unreliable.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Drift of Indian plate from Gondwanaland
Mains level: History of Indian Monsoon
Using leaf fossils, researchers have found that the Indian monsoon 25 million years ago resembled present-day Australia’s.
Try this PYQ:
Q.Which one of the following is the appropriate reason for considering the Gondwana rocks as the most important rock systems of India?
(a) More than 90% of limestone reserves of India are found in them
(b) More than 90% of India’s coal reserves are found in them
(c) More than 90% of fertile black cotton soils are spread over them
(d) None of the reasons given above is appropriate in this context
India’s drift
- About 180 million years ago, India separated from the ancient supercontinent Gondwana and took a long northward journey of about 9,000 km to join Eurasia.
- During this journey, the subcontinent moved from the southern hemisphere, crossed the Equator to reach its current position in the northern hemisphere.
- Due to these changing latitudes, it experienced different climatic conditions, and a new study has now tried to map these climatic variations using leaf fossils.
Clueless over the evolution of monsoon
- The evolution of the monsoonal climate in India is still debatable and not fully understood.
- Though recent data indicates that the monsoon system we experience now dates back to about 25 million years, it is still unclear how the climate was during its long voyage.
Indian research
- The researchers analysed the morphological characters of fossil leaves collected from Deccan Volcanic Province, East Garo Hills of Meghalaya, Gurha mine in Rajasthan and Makum Coalfield in Assam.
- The four fossil assemblages were found to be from four different geological ages.
- It has been observed from across the globe that plant leaf morphological characters such as apex, base and shape are ecologically tuned with the prevailing climatic conditions.
- The research applied this model to characterize the past monsoon from fossil leaves.
It’s finding
- The results indicated that the fossil leaves from India were adapted to an Australian type of monsoon and not the current Indian monsoon system during its voyage.
- The reconstructed temperature data show that the climate was warm (tropical to subtropical) at all the studied fossil sites with temperatures varying from 16.3–21.3 degrees C.
- All the fossil sites experienced high rainfall, which varied from 191.6 cm to 232 cm.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Lachit Borphukan
Mains level: Not Much
The Prime Minister (in an election campaign) has called 17th-century Ahom General Lachit Borphukan a symbol of India’s “atmanirbhar” military might.
Try this PYQ:
Q.What was the immediate cause for Ahmad Shah Abdali to invade and fight the Third Battle of Panipat:
(a) He wanted to avenge the expulsion by Marathas of his viceroy Timur Shah from Lahore
(b) The frustrated governor of Jullundhar Adina Beg khan invited him to invade Punjab
(c) He wanted to punish Mughal administration for non-payment of the revenues of the Chahar Mahal (Gujrat Aurangabad, Sialkot and Pasrur)
(d) He wanted to annex all the fertile plains of Punjab upto borders of Delhi to his kingdom
Who was Lachit Borphukan?
- The year was 1671 and the decisive Battle of Saraighat was fought on the raging waters of the Brahmaputra.
- On one side was Mughal Emperor Aurangzeb’s army headed by Ram Singh of Amer (Jaipur) and on the other was the Ahom General Lachit Borphukan.
- He was a commander in the Ahom kingdom, located in present-day Assam.
- Ram Singh failed to make any advance against the Assamese army during the first phase of the war.
- Lachit Borphukan emerged victorious in the war and the Mughals were forced to retreat from Guwahati.
Lachit Diwas
- On 24 November each year, Lachit Divas is celebrated statewide in Assam to commemorate the heroism of Lachit Borphukan.
- On this day, Borphukan has defeated the Mughal army on the banks of the Brahmaputra in the Battle of Saraighat in 1671.
- The best passing out cadet of National Defence Academy has conferred the Lachit gold medal every year since 1999 commemorating his valour.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: History of Delhi
Mains level: Delhi sultanate
The Union government has recently formed a committee to popularize the legacy of 11th-century Tomar king, Anangpal II.
Revision: Delhi Sultanate and their contemporaries
Who was Anangpal II?
- Anangpal II, popularly known as Anangpal Tomar, belonged to the Tomar dynasty that ruled parts of present-day Delhi and Haryana between the 8th and 12th centuries.
- The capital of Tomars changed many times from being initially at Anangpur (near Faridabad) during the reign of Anangpal I (who founded the Tomar dynasty in the 8th century), to Dhillikapuri (Delhi) during the reign of Anangpal II.
- The Tomar rule over the region is attested by multiple inscriptions and coins, and their ancestry can be traced to the Pandavas (of the Mahabharata).
- Anangpal Tomar II was succeeded by his grandson Prithviraj Chauhan, who was defeated by the Ghurid forces in the Battle of Tarain (present-day Haryana) after which the Delhi Sultanate was established in 1192.
His connection with Delhi
- Anangpal II is credited to have established and populated Delhi during his reign in the 11th century.
- He was instrumental in populating Indraprastha and giving it its present name, Delhi.
- The region was in ruins when he ascended the throne in the 11th century, it was he who built Lal Kot fort and Anangtal Baoli.
- He was the founder of Dhillikapuri, which eventually became Delhi.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Jaapi, Xorai and Gamosa
Mains level: NA
As the polling date draws closer, decorative jaapis (field hats), hand-woven gamosas and bell-metal xorais are making frequent appearances in Assam.
Primarily used to felicitate important people and guests, these important symbols of Assamese identity and culture are abundantly seen in political campaigns across the state.
Jaapi
- The jaapi is a conical hat made of bamboo and covered with dried tokou (a palm tree found in rainforests of Upper Assam) leaves.
- It is most often used in official functions to felicitate guests.
- The landscape of rural Assam features a more utilitarian version, which farmers wear to protect themselves from the harsh weather, both sun and rain, while working in the fields.
- The first possible recorded use of jaapi dates back to the Ahom-era buranjis, or chronicles. Kings and ministers would wear them then.
Gamosa
- The Gamosa, which literally translates to a cloth to wipe one’s body, is omnipresent in Assam, with wide-ranging uses.
- It can be used at home as a towel (uka gamosa) or in public functions (phulam/floral gamosa) to felicitate dignitaries or celebrities.
- The popularity of the gamosa has now traveled beyond Assam and is often used by a number of public figures.
- It was during the anti-foreigner Assam Agitation of the early 1980s, when Assamese nationalism reached its crescendo, that the gamosa assumed a new role.
Xorai
- Made of bell-metal, the xorai — essentially a tray with a stand at the bottom, with or without a cover — can be found in every Assamese household.
- While it is primarily used as an offering tray during prayers, or to serve tamale-paan (betel-nut) to guests, a xorai is also presented along with the jaapi and gamosa while felicitating someone.
- The bulk of xorais in Assam are made in the state’s bell metal hub Sarthebari in Bajali district.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Vehicle scrapping policy
Mains level: Paper 3- Advantages of scrapping policy to steel industry
The article explains the advantages of the vehicle scrapping policy announced in the Budget FY22.
Greenhouse gas contribution steel industry
- Steel industry uses carbon as the main reducing agent as also as a fuel for steel production.
- GHG emissions of the Indian steel industry is 2.0-2.8 tonnes of CO2 per tonne of crude steel, against global average of 1.8 tonne of CO2.
Scrapping policy
- Two seminal announcements have been made in Budget FY22, viz. introduction of vehicle scrapping policy and doubling ship-breaking capacity to 9 million tonnes per year.
- This will minimise dependence on import of scrap and cause a reduction of the GHG footprint of iron & steel.
Producing steel using scrap
- Most steel-producing countries are trying to bring down emissions by shifting from iron-ore-based production to scrap-based production.
- This route can bring CO2 emissions down to below 0.5 tonne of CO2 per tonne of steel.
- Although most steel-producing countries are using Electric Arc Furnaces (EAF) for scrap-based production, in India, both EAF and Induction Furnaces (IF) are used.
- The main CO2 load in EAF-based steel production doesn’t come from the off-gas but from producing the electricity used in melting of the scrap.
- Thus, this can be further reduced if renewable power is used as a source of electricity.
Saving in forex spending
- Availability of ferrous scrap in India is very limited—around 25 million tonnes annually from domestic sources.
- In 2018-19 and 2019-20, the country imported nearly 6.5 million tonnes of scrap each year and thus large forex spending was incurrred.
- With the announcement of vehicle scrapping policy, steel industry can expect enhanced indigenous availability of ferrous scrap.
Strengthening the resource efficiency and circular economy
- The quality of the steel produced is dependent upon the quality of input material and hence any improvement made in ensuring quality of scrap will have marked influence on the steel produced.
- This shall strengthen the process of resource efficiency & circular economy as considerable natural resources shall be conserved with significant reduction in emission and it will help in moving towards a sustainable steel industry.
Consider the question “Discuss the advantages of vehicle scrapping policy announced by the government in Budget FY 22.”
Conclusion
The announcement of the vehicle scrapping policy couldn’t have come at a better time for steel industry in India, as well since the country lacks desired quality of coking coal and natural gas is also imported.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India's nuanced approach to Quad
The article discusses the outcomes of the recently concluded first Quad Summit in the context of India.
Message to China after Quad summit
- The first Learders’ Summit of the Quadrilateral Framework was held on March 12.
- This Summit conveyed a three-pronged message to China:
- 1) Under the new U.S. President, “America is back” in terms of its desire to play a leading role in other regions.
- 2) It views China as its primary challenger for that leadership.
- 3) The Quad partnership is ready to mount a counter-challenge, albeit in “soft-power” terms at present, in order to do so.
- For both Japan and Australia the outcomes of the summit, both in terms of the “3C’s”working groups established on COVID-19 vaccines, Climate Change and Critical Technology and in terms of this messaging to the “4th C” (China) are very welcome.
4 Outcomes of Quad Summit for India
- For India the outcomes of the Quad Summit need more nuanced analysis.
1) COVID-19 Vaccine
- India is not only the world’s largest manufacturer of vaccines (by number of doses produced, it has already exported 58 million doses to nearly 71 countries.
- It is also manufacturing a billion doses for South East Asia (under the Quad), over and above its current international commitments.
- India has also planned to vaccinate 300 million people as originally planned by September.
- All this comes down to total 1.8 billion doses which will require a major ramp up in capacity and funding, and will bear testimony to the power of Quad cooperation, if realised.
- However, the effort could have been made much easier had India’s Quad partners also announced dropping their opposition to India’s plea at the World Trade Organization.
- India had filed the plea along with South Africa in October 2020, seeking waiver from certain provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights for the prevention, containment and treatment of COVID-19.
2) Climate change
- On climate change, India has welcomed the return of the U.S. to the Paris accord.
- Mr. Biden has promised to restart the U.S.’s funding of the global Green Climate Fund, which Mr. Trump ended.
- India still awaits a large part of the $1.4 billion commitment by the U.S. to finance solar technology in 2016.
- Mr. Biden might also consider joining the International Solar Alliance, which the other Quad members are a part of, but the U.S.
3) Critical technology
- India will welcome any assistance in reducing its dependence on Chinese telecommunication equipment and in finding new sources of rare-earth minerals.
- India would oppose Quad partners weighing in on international rule-making on the digital economy, or data localisation.
- Such a move had led New Delhi to walk out of the Japan-led “Osaka track declaration” at the G-20 in 2019.
4) Dealing with China
- On this issue, it is still unclear how India can go on the Quad’s intended outcomes.
- While India shares the deep concerns and the tough messaging set out by the Quad on China, especially after the year-long stand-off at the Line of Actual Control (LAC) and the killings at Galwan that India has faced, it has demurred from any non-bilateral statement on it.
- India is the only Quad member not a part of the military alliance that binds the other members.
- India is also the only Quad country with a land boundary with China.
- And it is the only Quad country which lives in a neighbourhood where China has made deep inroads.
- Indian officials are still engaged in LAC disengagement talks and have a long way to go to de-escalation or status quo ante.
3 long term impacts on strategic planning
- The violence at the LAC has also left three long-term impacts on Indian strategic planning:
- First, the government must now expend more resources, troops, infrastructure funds to the LAC and ensure no recurrence of the People’s Liberation Army April 2020 incursions.
- Second, India’s most potent territorial threat will not be from either China or Pakistan, but from both i.e. “two-front situation”.
- Third, that India’s continental threat perception will need to be prioritised against any maritime commitments the Quad may claim, especially further afield in the Pacific Ocean.
Consider the question “The Quad’s ideology of a “diamond of democracies” can only succeed if it does not insist on exclusivity in India’s strategic calculations given that India shares a special place among the Quad members when it comes to its relationship with China. Comment”
Conclusion
Despite last week’s Quad Summit, India’s choices for its Quad strategy will continue to be guided as much by its location on land as it is by its close friendships with fellow democracies.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GHI
Mains level: Poverty and Hunger
Union Minister of State for Agriculture has questioned the methodology and data accuracy of the Global Hunger Index (GHI) report, which has placed India at 94th (out of 107 countries) rank in 2020.
About GHI
- GHI is a peer-reviewed annual report, jointly published by Concern Worldwide, an Ireland-based humanitarian group, and Welthungerhilfe, a Germany-based NGO.
- It is designed to comprehensively measure and track hunger at the global, regional, and country levels.
- It says the aim of publishing the report is to trigger action to reduce hunger around the world.
- According to the GHI website, the data for the indicators come from the United Nations and other multilateral agencies, including the World Health Organisation and the World Bank.
Various indicators used
- UNDERNOURISHMENT: the share of the population that is undernourished (that is, whose caloric intake is insufficient);
- CHILD WASTING: the share of children under the age of five who are wasted (that is, who have low weight for their height, reflecting acute undernutrition);
- CHILD STUNTING: the share of children under the age of five who are stunted (that is, who have low height for their age, reflecting chronic undernutrition); and
- CHILD MORTALITY: the mortality rate of children under the age of five (in part, a reflection of the fatal mix of inadequate nutrition and unhealthy environments).
What is the concern?
- India was ranked below countries such as Nepal, Bangladesh and Myanmar when it was among the top 10 food-producing countries in the world.
Actual scenario
- The Comprehensive National Nutrition Survey (CNNS) compiled in 2017-18 showed an improvement of 4%, 3.7% and 2.3% in wasted, stunted and malnourished children respectively.
- The first-ever CNNS was commissioned by the government in 2016 and was conducted from 2016-18, led by the Union Health Ministry, in collaboration with the UNICEF.
- The findings were published in 2019. CNNS includes only nutrition data, whereas NFHS encompasses overall health indicators.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not Much
Mains level: Vehicle Scrappage Policy
Auto majors have welcomed the new vehicle scrappage policy rolled out by Union Minister for Road Transport and Highways, saying it would encourage people to replace old vehicles while boosting the sector.
Under the policy, those choosing to voluntarily scrap their old vehicles will get financial incentives from the government and the automaker.
Vehicle Scrappage Policy: Key Highlights
- Personal vehicles older than 20 years and commercial vehicles older than 15 years will have to undergo a fitness test at the government registered ‘Automated Fitness Centres’.
- Vehicles that fail to pass the test will be declared as ‘end-of-life vehicles’, which would mean that the vehicle would have to be recycled.
- This will pave the way for older vehicles to be scrapped.
- In case, the vehicles pass the test, owners will have to pay a hefty fee for re-registration.
- According to the new policy, the re-registration fee would be hiked around eight times for personal vehicles, and around 20 times for commercial vehicles.
What Are Automated Fitness Centres?
- Every vehicle will have to go under a mandatory fitness test at the automated fitness centres.
- The government aims to have at least 718 centres across the country.
- These centres will test the vehicle’s emission, and braking and other safety components as prescribed by Central Motor Vehicle Rules, 1989.
- Appointments to these centres will have to be booked online and the fitness report will be electronically generated.
Change in Fee Structure
- The government has increased the fee for renewal and grant of fitness certificate of older vehicles up to 20 times.
- Here is the new fee structure for personal vehicles older than 15 years:
- Two-wheelers – Rs 1,000
- Three-wheeler/quadricycles – Rs 3,500
- Cars – Rs 7,500
(Do not worry about the data. It is the state PSCs which may ask such information)
For commercial vehicles:
- Passenger motor vehicles – Rs 10,000
- Heavy goods/large motor vehicles – Rs 12,500
Benefits for buyers
- In case you decide to scrap your old vehicle at the registered scrapping centres, you will get approximately 4-6 per cent of the value of the vehicle’s ex-showroom price.
- The ex-showroom price is the cost of the vehicle, excluding the charges paid for registering the vehicle at RTO and insurance.
- Moreover, if you buy a new vehicle you will be given a flat 5 per cent discount on presenting a scrapping certificate.
- Registration fees will also be waived on the purchase of a new vehicle.
Obtaining a Scrapping Certificate
- Old vehicle owners will be able to formally scrap their registered vehicles at the automated scrapping centres.
- These centres will be linked with the Vahan database of the transport ministry.
- After you scrap your vehicle with the government registered agency, you will be provided with the scrapping certificate.
- You will then be eligible for the benefits proposed under the scheme.
Implementation
Tentative timeline for the new rules:
- Rules for fitness tests and government scrapping centres to come into effect – 1 October 2021
- The scrapping of government and PSU vehicles above 15 years of age to start – 1 April 2022
- Fitness testing for heavy commercial vehicles – 1 April 2023
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: MPC
Mains level: Paper 3- Analysing the performance of inflation targeting policies in India
The article analyses the success of the inflation targeting mechanism in India and its impact on the growth of the economy.
Background of the inflation targeting policy in India
- It has been three decades since inflation targeting was first adopted in New Zealand and subsequently by 33 other countries.
- India adopted it in 2016.
- The primary goal of inflation targeting was to contain inflation at around 4 per cent, within the allowable range of 2 to 6 per cent.
- The RBI has announced a formal review of the policy instrument now.
- At the first meeting of the RBI Monetary Policy Committee in October 2016, it was also formally announced that the MPC considered a real repo rate of 1.25 per cent as the neutral real policy rate for the Indian economy.
- By a neutral real policy rate, the RBI meant a policy rate consistent with growth at potential (i.e. growth at full employment).
Has inflation targeting worked in India
- The evaluation of IT must provide answers to the following two questions:
- Did inflation decline post the adoption of inflation targeting and what was the role of IT in the decline in inflation?
- Was the adoption of inflation targeting associated with the policy of the highest real repo rates in India — ever — for almost three years 2017-2019?
- The answer is yes to the latter, but it also needs to be acknowledged that high real repo rates were the primary cause of the GDP growth decline in India from 8 per cent to 5 per cent.
Need to take into account the global context of inflation
- An interesting feature of the Indian defence of inflation targeting is that very few take into account the global context of inflation in which the decline in inflation has occurred in India.
- A research paper by Balasubramanian, Bhalla, Bhasin and Loungani at ORF evaluates inflation targeting in a global context and separately for Advanced Economies (AEs) and Emerging Economies (EES).
- Some facts from the paper are the following.
- First, the annual median inflation in AEs has been consistently low, so low that many central banks have official campaigns to raise the inflation rate.
- One conclusion might be that IT succeeded beyond anyone’s dreams in these economies.
- But attributing this decline in inflation to IT would be erroneous.
- Inflation is global and price-taking by millions of producers in the world means that no one producer or one country can influence the price of any item.
- Oil has ceased to be a factor in global inflation, at least post the mid-1980s.
- The lowest inflation in Indian history occurred during 1999-2005, averaged only 3.9 per cent.
- The average median rate among EM targetters during 2000-04 was 4 per cent, and among the non-targeting countries was 3.8 per cent.
Did fiscal deficit play role in inflation targeting
- In 2003, India passed the FRBM act to control fiscal deficits and inflation.
- There is precious little evidence, either domestically or internationally, about fiscal deficits affecting inflation.
- For three consecutive years preceding the FRBM announcement, the consolidated Centre plus state deficits registered 10.9 per cent(in 2001), 10.4 and 10.9 per cent.
- For the seven-year 1999-2005 period, consolidated fiscal deficits averaged 9.4 per cent of GDP.
- Yet, that these years represented the golden period of Indian inflation — without FRBM and without IT.
Cost of inflation targeting in India
- There are also costs to inflation targeting in India.
- It led to higher real policy rates, in the mistaken belief that high policy rates affect the price of food, oil, or anything else.
- But high real rates affect economic growth, by affecting the cost of domestic capital in this ultra-competitive world.
- It is very likely not a coincidence that potential GDP growth, as acknowledged by RBI, was reached just before the MPC took over decision making in September 2016.
- Since then there was a steady increase in real policy rates, and a steady decline in GDP growth.
Consider the question “How far has the inflation targeting mechanism been successful in India? Give reasons in support of your argument.”
Conclusion
So, in the inflation targeting mechanism has not been successful in containing the inflation though there had a cost associated with it which we paid in the form of growth.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SAAMAR campaign
Mains level: Various facets of hunger and malnutrition in India
The Jharkhand government has announced the launch of the SAAMAR campaign to tackle malnutrition in the state.
We can expect an MCQ like:
Q.SAAMAR campaign sometimes seen in news is related to:
() Bovine health
() Mother and Child Health
() Non-communicable diseases
() None of these
SAAMAR
- SAAMAR is an acronym for Strategic Action for Alleviation of Malnutrition and Anemia Reduction.
- The campaign aims to identify anaemic women and malnourished children and converge various departments to effectively deal with the problem in a state where malnutrition has been a major problem.
- Every second child in the state is stunted and underweight and every third child is affected by stunting and every 10th child is affected by severe wasting and around 70% of children are anaemic NFHS-4 data.
Features of the scheme
- Although existing schemes are there, seeing the current situation, the intervention was required with a ‘different approach to reduce malnutrition.
- SAAMAR has been launched with a 1000 days target, under which annual surveys will be conducted to track the progress.
- It talks of convergence of various departments such as the Rural Development Department and Food and Civil Supplies and engagement with school management committees, gram sabhas among others and making them aware of nutritional behaviour.
- Most importantly, the campaign, as per the note, also tries to target Primarily Vulnerable Tribal Groups.
Outlined strategy under the scheme
- To tackle severe acute malnutrition children, every Anganwadi Centres will be engaged to identify these children and subsequently will be treated at the Malnutrition Treatment Centres.
- In the same process, the anaemic women will also be listed and will be referred to health centres in serious cases.
- All of these will be done by measuring Mid-Upper Arm Circumference (MUAC) of women and children through MUAC tapes and Edema levels.
- Angawadi’s Sahayia and Sevika will take them to the nearest Health Centre where they will be checked again and then registered on the portal of State Nutrition Mission.
Why need such a scheme?
- The state government runs various schemes under Child Development Schemes, National Nutrition Mission among others to deal with the situation, but it is not enough.
- Dealing with malnutrition in the state monitoring has been an important concern due to the lack of doctors or health care workers.
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