Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 3- How will India economy be impacted by the Covid-19?
Context
India is currently in the grip of dual shocks: Covid-19 and a financial one.
The supply and demand shock
- Containing outbreak at economic cost: Even as infection rates have tapered in China, they are rising elsewhere. Countries that have succeeded in containing it have done so at an economic cost, by quarantining people, implementing lockdowns and social distancing.
- This has resulted in a plateauing of new infection cases in China and South Korea, but they are still rising exponentially across Europe and the US.
- Supply shock: This is both a supply as well as demand shock. On the former, the impact is via disruptions in China-centred supply chains.
- Demand shock: But there is also a hit to final demand as infections spread across the rest of the world, hurting travel, tourism, hotels and local retail activity.
- Tightened financial condition: The correction in equity markets and wider credit spreads have tightened financial conditions, and both consumer and business confidence has faltered.
- Rising infections in Europe a big concern: Rising infections in Europe and the US are a big concern as both are large services-driven economies. Any pullback in their consumption demand will likely result in a demand shock for the rest of the world.
Global spillover of Covid-19
- Hitting economies in waves: One uncertainty pertains to how long this shock will last. There are no definite answers as of now. Covid-19 shocks are hitting economies in waves and countries are imposing lockdowns, one by one.
- Hence, instead of a synchronized global slump over one or two months, the economic impact is getting spread out.
- For example, supply chain disruptions and lockdowns in China are gradually easing, and we estimate that factories should be operating at full capacity by mid-April.
- Hit to travel and tourism to last till June: The hit to travel and tourism will last at least until June because even if the number of new infection cases eases, travellers will remain cautious initially.
- Demand in the US and Europe to remain low until April: Curtailment in discretionary demand due to social distancing in the US and Europe only started in March and will likely continue until April, if not longer.
- Global spillover to continue till May: The global spillovers of Covid-19 will likely be spread out over February and May, implying a weak first half of 2020.
- Whether the shocks last longer will depend on whether countries successfully contain infections.
- It also depends on the ability of countries to prevent spillover effects onto corporate balance sheets (more defaults) and the labour market (job losses).
- Global GDP to remain low in the first half: Global gross domestic product (GDP) growth in the first half of 2020 is likely to be weaker than during the global financial crisis of 2008-09, due to a sharp first-quarter decline in China, and weaker final demand in developed economies in the second.
What will be the impact on India?
- The economic hit to India will be felt through multiple channels.
- First, India is not a part of China-centric global value chains, but China accounts for a significant share of India’s imports (14%) and its production halt will hit India’s imports of
- primary and intermediate goods,
- disrupting domestic production,
- particularly in industries such as pharmaceuticals, auto, electronics, solar power and agriculture.
- Second, there will be a slowdown in international and domestic travel and tourism. India earns over 1% of GDP as foreign exchange earnings from tourism annually.
- Third, social distancing measures, along with the public fear factor will hit domestic retail activity as people avoid public places.
- Fourth, India will face the indirect effects of weaker global demand, tighter financial conditions and low confidence.
- Oil windfall offset: Even though lower oil prices are a boon, in the current environment any benefit from lower oil prices will be offset by other negatives.
- Domestic financial sector risk: Another big challenge for India relates to domestic financial sector risks.
- The spillover effect of Yes bank: Weak growth and financial stability concerns have been brewing for over a year now and the spillover effects of Yes Bank’s takeover are still reverberating through the system.
- The fallout of the shadow banking slowdown via potential stress for real estate developers and small and medium-sized enterprises is a risk.
- If the asset quality of both shadow banks and the banking sector deteriorate in the next few quarters, as is likely, then domestic credit conditions may stay tight, as the perceived risk premium could rise further.
- GDP growth rate: In this backdrop, the real activity could suffer. The GDP growth is expected to average around 4% year-on-year in the first half of 2020, with risks skewed to the downside.
- GDP growth in 2020-21 is unlikely to be more than 2019-20’s 5%.
Way forward
- An optimal policy response to Covid-19: The optimal policy response to is globally-coordinated public health safety and virus containment. India has taken some worthy decisions on this.
- Since Covid-19 will adversely impact service sectors like retail, hospitality, travel and civil aviation, the government’s fiscal policy response should be aimed well through measures such as tax relief and interest-free loans, particularly for small and medium enterprises.
- Liquidity easing and policy accommodation: On monetary policy, a combination of liquidity easing and policy accommodation would be needed beyond the moves already made.
- Macro-prudential steps such as lowering the counter-cyclical capital buffer for banks could be announced.
- Fixing the financial sector, though, would need a broader response, including a recognition of the full scale of the problem and then adequately recapitalising banks and shadow banks.
- Else, credit risk premia may stay elevated and credit growth may not pick up.
Conclusion
In all, the economic impact on India due to shocks emanating from Covid-19 could get compounded due to weak domestic balance sheets. The coming quarters call for close vigilance of credit risks and the prioritizing of financial stability.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Need to entrust the Human Right Commissions with more powers.
Context
The Madras High Court is to decide on whether the recommendations made by such panels are binding upon the state.
A fourth branch institution
- Enactment of the Act and its purpose: In 1993, the Indian Parliament enacted the Protection of Human Rights Act.
- Purpose: The purpose of the Act was to establish an institutional framework that could effectively protect, promote and fulfil the fundamental rights guaranteed by the Indian Constitution.
- To this end, the Act created a National Human Rights Commission, and also, Human Rights Commissions at the levels of the various States.
- What is fourth branch institution: The National and State Human Rights Commissions are examples of what we now call “fourth branch institutions.”
- According to the classical account, democracy is sustained through a distribution of power between three “branches” — the legislature, the executive, and the judiciary, with each branch acting as a check and a balance upon the others.
- The necessity of independent bodies: The complexity of governance and administration in the modern world has necessitated the existence of a set of independent bodies, which are charged with performing vital functions of oversight.
- Some of these bodies are constitutional bodies — established by the Constitution itself. These include, for instance, the Election Commission and the Office of the Comptroller and Auditor General.
- Others have been established under law: for example, the Information Commission under the Right to Information Act, and Human Rights Commissions under the Protection of Human Rights Act.
- HRC under scrutiny and criticism: In the two-and-a-half decades of their existence, however, the functioning of the Human Rights Commissions have come under scrutiny and criticism.
- There have been the usual critiques of the politicization of autonomous bodies, and selectiveness.
- Toothless: Even more than that, however, it has been alleged that for all intents and purposes, the Human Rights Commissions are toothless: at the highest, they play an advisory role, with the government left free to disobey or even disregard their findings.
Limitations of NHRC
- NHRC’s recommendations are not binding
- NHRC cannot penalize authorities who do not implement its orders
- JK is out of its jurisdiction
- NHRC jurisdiction does not cover human right violations by private parties
- 3/5 are judges, leading to more judicial touch to its functioning
- 2/5 are also not Human rights experts. Political appointments.
- Time limit is set to 1 year i.e. NHRC cannot entertain ca case older than 1 year
- Limited jurisdiction over violation by armed forces
- The act does not extend to J&K
- Vacancies are not filled on time. Most human rights commissions are functioning with less than the prescribed Members
- Fund crunch
- Overload and backlog. Too many complaints. Hence, in recent days, NHRC is finding it difficult to address the increasing number of complaints
- Bureaucratic style of functioning
What the case before Madras High Court will decide?
- Whether recommendations are mandatory or not: A Full Bench of the High Court will be deciding upon whether “recommendations” made by the Human Rights Commissions are binding upon their respective State (or Central) governments, or whether the government is entitled to reject or take no action upon them.
- What are the power of HRC under the act? Under the Protection of Human Rights Act, the Human Rights Commissions are empowered to inquire into the violations of human rights committed by state authorities, either upon petitions presented to them, or upon their own initiative.
- Powers of civil courts: While conducting these inquiries, the Commissions are granted identical powers to that of civil courts, such as the examining witnesses, ordering for documents, receiving evidence, and so on.
- These proceedings are deemed to be judicial proceedings, and they require that any person, who may be prejudicially affected by their outcome, has a right to be heard.
- Issue over the meaning of recommend: The controversy before the Madras High Court stems from the issue of what is to be done after the Human Rights Commission completes its enquiry, and reaches a conclusion that human rights have been violated.
- Section 18 of the Protection of Human Rights Act empowers the Human Rights Commission to “recommend” to the concerned government to grant compensation to the victim, to initiate prosecution against the erring state authorities, to grant interim relief, and to take various other steps.
- The key question revolves around the meaning of the word “recommend.”
- Opposite conclusion by different benches: The Full Bench of the Madras High Court is hearing the case because different, smaller benches, have come to opposite conclusions about how to understand the word “recommend” in the context of the Protection of Human Rights Act.
- According to one set of judgments, this word needs to be taken in its ordinary sense. To “recommend” means to “put forward” or to “suggest” something or someone as being suitable for some purpose.
- Ordinarily, a mere “suggestion” is not binding. Furthermore, Section 18 of the Human Rights Act also obligates the concerned government to “forward its comments on the report, including the action taken or proposed to be taken thereon, to the Commission”, within a period of one month.
- The argument, therefore, is that this is the only obligation upon the government.
- If indeed the Act intended to make the recommendations of the Commission binding upon the government, it would have said so: it would not simply have required the government to communicate what action it intended to take to the Commission (presumably, a category that includes “no action” as well).
Why ordinary meaning of recommend needs to be rejected?
- Argument against the ordinary meaning of “recommend”
- Ordinary meaning and meaning within the legal framework: The first is that there is often a gap between the ordinary meanings of words and the meanings that they have within legal frameworks.
- Legal meaning: Legal meaning is a function of context, and often, the purpose of the statute within which a word occurs has a strong influence on how it is to be understood.
- For example, the Supreme Court has held, in the past, that the overriding imperative of maintaining judicial independence mandates that “consultation” with the Chief Justice for judicial appointments (as set out under the Constitution) be read as “concurrence” of the Chief Justice (this is the basis for the collegium system).
- Recently, while interpreting the Land Acquisition Act, the apex court held that the word “and” in a provision had to be construed as “or”.
- Of course, there needs to be a good reason for interpretations of this kind.
- Constitutional commitment: This brings us to the purpose of the Human Rights Act, and the importance of fourth branch institutions.
- Ensure adequate realisation of constitutional commitment: As indicated above, the Human Rights Act exists to ensure the protection and promotion of human rights.
- To fulfil this purpose, the Act creates an institutional infrastructure, via the Human Rights Commissions.
- The Human Rights Commissions, thus, are bodies that stand between the individual and the state, and whose task is to ensure the adequate realisation of constitutional commitment to protecting human rights.
- Leaving decision with the state would defeat the purpose of the act: It stands to reason that if the state was left free to obey or disobey the findings of the Commission, this constitutional role would be effectively pointless, as whatever the Human Rights Commission did, the final judgment call on whether or not to comply with its commitments under the Constitution would be left to the state authorities.
- This, it is clear, would defeat the entire purpose of the Act.
- Past precedents: Indeed, in the past, courts have invoked constitutional purpose to determine the powers of various fourth branch institutions in cases of ambiguity.
- For example, the Supreme Court laid down detailed guidelines to ensure the independence of the Central Bureau of Investigation; various judgments have endorsed and strengthened the powers of the Election Commission to compulsorily obtain relevant details of candidates, despite having no express power to do so.
- It is therefore clear that in determining the powers of autonomous bodies such as the Human Rights Commission, the role those fourth branch institutions are expected to play in the constitutional scheme is significant.
- Powers of civil courts: And lastly, as pointed out above, the Human Rights Commission has the powers of a civil court, and proceedings before it are deemed to be judicial proceedings. This provides strong reasons for its findings to be treated — at the very least — as quasi-judicial, and binding upon the state (unless challenged).
- Indeed, very recently, the Supreme Court held as much in the context of “opinions” rendered by the Foreigners Tribunals, using very similar logic to say that these “opinions” were binding.
Conclusion
The crucial role played by a Human Rights Commission — and the requirement of state accountability in a democracy committed to a ‘culture of justification’ — strongly indicates that the Commission’s recommendations should be binding upon the state. Which way the Madras High Court holds will have a crucial impact upon the future of human rights protection in India.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 3- Using technology to deal with epidemics.
Context
Coronavirus crisis is an opportunity for India to build on domestic technological capabilities in artificial intelligence, big data analytics, life sciences and health technology in the private sector.
How a small tech company flagged Covid-19 outbreak?
- What does it do? A small tech company in Canada — BlueDot — was among first outside China to spot a new epidemic spreading out from Wuhan last December.
- BlueDot, founded in Canada by a medical scientist of South Asian origin, Kamran Khan, tracks the origin and transmission of infectious diseases around the world.
- How could they detect the outbreak in China? BlueDot did this by sifting through massive volumes of news reports and blogs by individuals, including health professionals flowing out of China.
- Data analytics and medical expertise combined: BlueDot combines “public health and medical expertise with advanced data analytics to build solutions that track, contextualise, and anticipate infectious disease risks”.
- Use of AI: BlueDot is one of the many technology firms leveraging artificial intelligence for business and policy purposes.
- Many governments are reaching out to tech companies to cope with the corona crisis.
- The state government of California has just hired BlueDot to help it deal with the challenge.
The growing role of technology in dealing with coronavirus
- Across the world, policymakers see a growing role for technology in identification, tracking, and treating the coronavirus.
- Alibaba and Tencent’s help in China: In China, the Communist Party roped in big tech companies like Alibaba and Tencent in the battle against the virus.
- Silicon valley’s help in the US: In the US, President Donald Trump has set aside his well-known distaste for Democrat-leaning Silicon Valley to tackle what he now calls a war-like emergency.
- India will need all the science and technology it can get hold of in overcoming the crisis that is bound to escalate by the day.
- An opportunity to do good: For the small tech startups in related areas, this is a moment to shine. For the large tech companies, this is a huge opportunity to deploy their immense capabilities to resolve the specific problems posed by the spread of the coronavirus.
- In rising to the occasion, they could fend off a lot of the recent negative criticism of their business practices and demonstrate that their commitment to “doing good” is not just empty rhetoric.
- A good business proposition: “Doing good” is also a sensible business proposition at this time.
- As governments desperately seek solutions to the crisis, the tech startups and established companies leverage the moment to scale up many technologies, develop new uses and markets.
How countries used technology to deal with the outbreak
- How China used technology? In China, as the government moved decisively after the delayed initial response, it turned to-
- the well-established mass surveillance system based on facial recognition technologies,
- sensing technologies to identify those with fever in public places and
- data from mobile phone companies to trace the people who might be infected, and limit the spread of the disease.
- China also developed a Health Code that uses data analytics to-
- identify and assess the risk of every individual in a targeted zone based on travel history and time spent in infected places.
- The individuals are assigned a colour code (red, yellow, or green) which they can access via popular apps to know if they ought to be quarantined or allowed in public.
- How Korea used technology? Many Asian democracies like South Korea have also turned to AI tools to contain the spread of the disease.
- How the US used technology? As it copes with the rapid spread of the coronavirus, the US had no option but to use surveillance to contain it.
- Partners in dealing with outbreak: Unsurprisingly, the big tech companies in the US, based on collecting and monetising massive amounts of data from individuals, have inevitably become partners for Washington.
- But the relationship between the government, corporations and individual citizens in the US is governed by a welter of laws.
- There is mounting pressure now to tweak these laws to manage the corona crisis.
- The US is also liberalising the regulations on the access to, and use of, patients’ health records.
Growing collaboration between science and the state
- The race between China and the US: Overarching these arguments is a race between the US and China to find new vaccines for the coronavirus.
- And, more broadly, for the mastery of new scientific capabilities — from artificial intelligence to health technologies.
- The competition, in turn, is promoting a more intensive alliance between science and the state in both nations.
- Collaboration could accelerate the technological capabilities: The collaboration between science and the state during past crises led to a dramatic acceleration of technological capabilities.
- World War precedents: During the Second World War, science and the state got together to move nuclear physics from the lab to the battlefield.
- Cold War precedent: The Cold War between America and Russia promoted the development of space technology, microelectronics, communications and computing.
- Role of private entities: What marks out the current technological race between the US and China is the role of private and non-governmental entities.
- That might well be the missing link in India’s effort to beat the coronavirus.
Conclusion
- Opportunity for India: The current crisis, however, is also an opportunity for India to build on the existing domestic technological capabilities in the areas of artificial intelligence, big data analytics, life sciences, health technology in the private sector.
- India needs stronger private sector in science: In India, the state has dominated the development of science and its organisation. That was of great value in the early decades after Independence.
- Today, what Delhi needs is a stronger private sector in science and greater synergy with it in dealing with challenges like the corona crisis.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Various instruments of OMOs, OMOs
Mains level: Read the attached story
The Reserve Bank of India (RBI) has decided to infuse ₹10,000 crore liquidity in the banking system by buying government securities through open market operations (OMO).
What are Open Market Operations (OMOs)?
- OMOs are conducted by the RBI by way of sale and purchase of G-Secs to and from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis.
- When the RBI feels that there is excess liquidity in the market, it resorts to sale of securities thereby sucking out the rupee liquidity.
- Similarly, when the liquidity conditions are tight, RBI may buy securities from the market, thereby releasing liquidity into the market.
How and in what form can government securities be held?
- The public debt office (PDO) of RBI, acts as the registry and central depository for G-Secs.
- They may be held by investors either as physical stock or in dematerialized (demat/electronic) form.
- It is mandatory for all the RBI regulated entities to hold and transact in G-Secs only in dematerialized subsidiary general ledger or SGL form.
Types:
i) Physical form
- G-Secs may be held in the form of stock certificates. A stock certificate is registered in the books of PDO.
- Ownership in stock certificates cannot be transferred by way of endorsement and delivery.
- They are transferred by executing a transfer form as the ownership and transfer details are recorded in the books of PDO.
- The transfer of a stock certificate is final and valid only when the same is registered in the books of PDO.
ii) Demat form:
- Holding G-Secs in the electronic or scripless form is the safest and the most convenient alternative as it eliminates the problems relating to their custody, viz., loss of security.
- Besides, transfers and servicing of securities in electronic form is hassle free.
How are the G-Secs issued?
- G-Secs are issued through auctions conducted by the RBI.
- Auctions are conducted on the electronic platform called the E-Kuber, the Core Banking Solution (CBS) platform of RBI.
- The RBI, in consultation with the Government of India, issues an indicative half-yearly auction calendar which contains information about the amount of borrowing, the range of the tenor of securities and the period during which auctions will be held.
- The RBI conducts auctions usually every Wednesday to issue T-bills (Treasury Bills) of 91-day, 182-day and 364-day tenors.
- Settlement for the T-bills auctioned is made on T+1 day i.e. on a working day following the trading day. Like T-bills, CMBs are also issued at a discount and redeemed at face value on maturity.
- The tenor, notified amount and date of issue of the CMBs depend upon the temporary cash requirement of the Government. The tenors of CMBs are generally less than 91 days.
What is meant by repurchase (buyback) of G-Secs?
- Repurchase (buyback) of G-Secs is a process whereby the central government and state governments buy back their existing securities, by redeeming them prematurely, from the holders.
- The objectives of buyback can be the reduction of cost (by buying back high coupon securities), reduction in the number of outstanding securities and improving liquidity in the G-Secs market (by buying back illiquid securities) and infusion of liquidity in the system.
- The repurchase is also undertaken for effective cash management by utilising the surplus cash balances.
- The state governments can also buy back their high coupon (high-cost debt) bearing securities to reduce their interest outflows in the times when interest rates show a falling trend.
- States can also retire their high-cost debt pre-maturely in order to fulfil some of the conditions put by international lenders like Asian Development Bank, World Bank etc. to grant them low-cost loans.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Windrush Generation
Mains level: Windrush Scandal
The British government has apologised for its treatment of Britons of Caribbean origin, which were wrongly detained or deported for being illegal immigrants, after the publication of a devastating official report.
What is the scandal?
- The Windrush scandal is a 2018 British political scandal concerning people who were wrongly detained, denied legal rights, threatened with deportation, and, in at least 83 cases wrongly deported from the UK.
- Many of those affected had been born British subjects and had arrived in the UK before 1973, particularly from Caribbean countries as members of the “Windrush generation”.
- As well as those who were wrongly deported, an unknown number were wrongly detained, lost their jobs or homes, or were denied benefits or medical care to which they were entitled.
- A number of long-term UK residents were wrongly refused re-entry to the UK, and a larger number were threatened with immediate deportation by the Home Office.
- The scandal also prompted a wider debate about British immigration policy and Home Office practice.
Windrush Generation
- The Windrush generation is named after one of the many vessels that ferried some half a million people from the Caribbean islands to the U.K. in the late 1940s.
- The “Empire Windrush” ship had brought one of the first groups of West Indian migrants to the UK in 1948.
- The generation refers to migrants from the Caribbean Commonwealth who had come to the U.K. at a time when they had the right to remain indefinitely in Britain but had had their rights questioned under a toughened immigration regime.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Lipids, Non-polar compounds
Mains level: Not Much
A researcher from IIT Bombay is using biologically active lipid molecules as chemical biology tools to elucidate their biological disease-causing function.
About the research
- The research is focused to explore how lipids play critical roles in infectious diseases by intervening in cellular signaling, membrane trafficking, and protein function all of which are intimately involved in host-pathogen interplay.
- The research works with lipids from Mycobacteria tuberculosis (Mtb), which synthesizes atypical lipids predisposed on its surface to interact with the human host membrane.
- Using Mtb lipids as tools, the research elucidates a direct correlation between human host lipid membrane modification and modulation of associated signaling pathways by these exogenous Mtb lipids.
What are Lipids?
- A lipid is a biomolecule that is soluble in nonpolar solvents.
- Non-polar solvents are typically hydrocarbons used to dissolve other naturally occurring hydrocarbon lipid molecules that do not (or do not easily) dissolve in water, including fatty acids, waxes, sterols, fat-soluble vitamins (such as vitamins A, D, E, and K), monoglycerides, diglycerides, triglycerides, and phospholipids.
- The functions of lipids include storing energy, signaling, and acting as structural components of cell membranes.
- Lipids have applications in the cosmetic and food industries as well as in nanotechnology.
Role of Lipids
- Lipids are important components of living cells and are responsible for maintaining the integrity of our cell membrane, which allows nutrients and drugs to pass through the cell.
- These are commonly breached during infection and in diseases.
- Lipids play a major role in altering cell membrane properties modulating lipid and protein diffusion and membrane organization.
- Thus, changes in membrane properties control the proper functioning of cells and are harnessed by pathogens for their survival and infection.
- Lipids critically dictate the molecular interactions of drugs with membranes influencing drug diffusion, partitioning, and accumulation, thereby underpinning lipid-composition specificity.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: IUSSTF
Mains level: India-US collaboration in STEM
Indian students will undertake a research internship at Viterbi School of Engineering, University of Southern California, LA, USA under the IUSSTF Program.
What is IUSSTF?
- IUSSTF is an acronym for the Indo-U.S. Science and Technology Forum.
- It is established under an agreement between the Governments of India and the USA in March 2000.
- It is an autonomous bilateral organization jointly funded by both the Governments that promote Sci-Tech, Engineering and Innovation through substantive interaction among government, academia and industry.
- The Department of Science & Technology, Governments of India and the U.S. Department of States are respective nodal departments.
About Viterbi Program
- The Viterbi Program of IUSSTF was developed between IUSSTF and the Viterbi School of Engineering, University of Southern California (USC).
- This program is a part of the Government’s endeavour to encourage research and development amongst the bright young Indian minds to create long-term, sustainable, and vibrant linkages between India and the US.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Breach of privacy in sharing of call record data of citizens.
Context
In bypassing established protocol to seek call details of citizens en masse, the government violates SC guidelines.
What is the issue?
- Departure from stringent protocol: The Cellular Operators Association of India has reported mass requests from the government for mobile call detail records (CDRs).
- Which is a serious departure from the stringent protocol established by the UPA government following an uproar in 2013 after prominent politicians were found to be under unauthorised surveillance.
- Records of all customers: Records have been sought for all consumers on certain dates in parts of Delhi, Andhra Pradesh, Haryana, Himachal Pradesh, Jammu & Kashmir, Kerala, Odisha, Madhya Pradesh and Punjab.
- In the case of Delhi, records were sought for the last three days of campaigning before assembly elections, while the anti-CAA protests were at their peak.
- How the data was requested? Requests were delivered by local offices of the Department of Telecommunications, taking advantage of a condition in licences granted to operators, which permits the DoT to inspect their CDRs, which go back one year.
Breach of many requirements and norms
- A serious breach of privacy: These requests depart from established protocol and international expectations on multiple counts, and amount to a serious breach of privacy.
- What is the protocol for requesting CDR information? A CDR request is supposed to be sanctioned by the home secretary and handled by a police officer of the rank of SP or above,
- But in this case DoT offices were used.
- The requirement of informing magistrate was not fulfilled: The requirement to report CDR requests on a monthly basis to the district magistrate was not complied with.
- No reason was offered: Most importantly, no reason was offered for snooping on the traffic of citizens.
- Surveillance must be specific and purposive: It is generally understood that communications surveillance must be specific and purposive, and must not trespass on the privacy of the innocent.
- Invasion of privacy of all citizens: Indiscriminate mass surveillance of communications invades the privacy of all citizens to the detriment of public trust. In this case, it was for purposes which are not verifiably honourable, since the government has chosen not to reveal them.
Why the CDR data matters if it is metadata only?
- Combining CDR with other data gives more information: CDRs are all metadata and no content. They do not reveal any words uttered or messaged.
- But combining the metadata with phone location data reveals a lot about connections between specific people and the actions that they take.
- Multi-dimensional map of human activity: If data is available at scale, as was the case here, it is possible to build a multi-dimensional map of human activity, and correlate it with real events.
- This would disturb the balance of information power between the citizen and the state, and amount to a breach of privacy.
Conclusion
If the government needs CDR data for a legitimate purpose, it should have no objection to following the rule-book scrupulously. And if there is a reason for sidestepping protocol in a sensitive matter, it should explain why.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- India is unprepared for dealing with pandemics.
Context
India is unprepared for dealing with the outbreak of coronavirus.
Is India really faring better than the other countries?
- 45 days for first 100,000: Globally, it took roughly 45 days for the first 100,000 cases. It is likely to take nine days for the next 100,000.
- Death count: The global death count is now doubling every nine days and stands at 8,248, with 207,518 confirmed cases.
- That is how epidemics work — they gather steam as infected individuals go on to infect even more people. Confirmed cases in India, as of today stand at 169.
- It is much lower than in small countries such as Iceland (around 250). Could this really be the case that we have fared better than everyone else?
- Probably India is not performing better: Testing in India remains abysmally low. Only about 10 in a million people in India have been tested, compared to say nearly 120 in a million in Thailand or 40 per million in Vietnam.
- Why testing in not being done in India? The stated explanation is that the limited number of test kits are being conserved for when they are truly needed but when is the need greater than right now?
- There are probably shortages even in being able to procure adequate supplies given that many countries are seeking to buy the limited stocks.
- Importance of testing: Testing is the most important thing we could be doing right now.
- As the Director-General of the World Health Organization, said recently about the need for more testing, “You cannot fight a fire blindfolded.”
Avoiding undercounting
- Timely identification is essential to prevent secondary infection: We need to identify coronavirus-infected patients in a timely manner in order to increase our chances of preventing secondary infections.
- There is no shame in saying that we have far more cases than what we have detected so far.
- K.’s admitted undercounting: Even the United Kingdom, which has a far better health system than India, has admitted that it is probably undercounting its true infections by a factor of 12, and is likely have about 10,000 cases.
- Is it possible that India with 20 times their population has only 169 cases?
- Preparedness to deal with a higher number of cases: If widespread testing were to commence in India, the number of confirmed cases would likely climb to the thousands very quickly. This is something we have to be prepared for without panic or fear-mongering.
- Positive action: This is how epidemics move and the real numbers should spur us into positive action.
- Strict measures by the government: At some stage, it is possible that the government may have to put in place very strict measures on quarantining and closures, much like what China had to do to control the epidemic in Wuhan.
How prepared is India?
- There is not an easy answer to how worst things could go.
- Mutation or sensitivity of virus: If we escape the worst, either because this virus mutates to a less virulent form or because there is something about its temperature or geographical sensitivity that we know nothing about, then we should count our blessings.
- Viruses do mutate and generally to be less lethal.
- Projection from Europe: If the projections from Europe are applicable in India, our ‘namastes’ and clean hands notwithstanding, the prevalence in India would be upwards of 20%.
- In other words, we should expect to see about 200-300 million cases of COVID-19 infections and about four and eight million severe cases of the kind that are flooding hospitals in Italy and Spain at the moment.
- More importantly, these cases are projected to appear in just a two to the four-month window.
- In the current scenario, we are not ready.
- India has somewhere between 70,000 and 100,000 intensive care unit beds and probably a smaller number of ventilators.
- That is simply inadequate.
- What should be done? The next two weeks should be spent on planning for large, temporary hospitals that can accommodate such numbers. If we are lucky, we will not need them.
Unprepared for pandemics
- Catastrophic event with highest probability-Pandemic: This all sounds doomsday-like. But we have known for decades now that of all catastrophic events to befall humanity, between an asteroid hit and a nuclear war, a disease pandemic has always been the highest on our list of impact and probability.
- Not enough changes in preparedness: There were some changes after the Severe Acute Respiratory Syndrome (SARS) but not nearly enough.
- Pandemic preparedness always took a backseat to the crisis of the moment.
- And in fairness, there is truly no amount of preparation that can fully mitigate such an occurrence.
Conclusion
Things are about to get a lot worse. Let us hope that this brings out the best in us, and not the worst. Whether we know this or not, these events are just a dress rehearsal for the more challenging events such as climate change that are likely to be with us this century. And if we take care of each other, we will survive both these challenges with our humanity intact.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: AT-1 bonds.
Mains level: Paper 3- Issues involved in banking system and resolution process in case of failures.
Context
Resolving bank failure is tough but following a set of principles could achieve a fair and efficient outcome.
Key issues involved in the resolution
- Challenge in courts: Resolving Yes Bank’s failure is no easy task. Some bondholders are already challenging the restructuring plan of the Reserve Bank of India in court, and seem ready for a long-drawn battle.
- How much dilution is fair for existing shareholders to take?
- AT-1 Bonds issue: Should the value of the Additional Tier 1 (AT-1) bonds be written off entirely?
- As such issues become matters of policy discussion and address, we must not lose sight of some fundamental principles of resolving bank failures.
- Three of them should be on the top of the list: honour contracts, address market failure and protect systemic stability.
How honouring contracts matter for economy?
- For efficient outcomes: Honouring contracts is vital for achieving efficient outcomes between contracting parties such as lenders and borrowers, managers and shareholders, and insiders and outsiders.
- Shying away from entering a contract: If there is uncertainty over this fundamental principle, contracting parties will shy away from entering contracts in the first place.
- Lenders will be less willing to lend.
- Prospective minority shareholders will be less keen to buy shares in a company.
- Impact on allocative efficiency: This will ultimately compromise the economy’s allocative efficiency, or the market’s ability to deploy capital to its best use.
AT-1 bond issue
- Honouring contract in Yes banks resolution: There are several issues in the application of this principle in Yes Bank’s resolution.
- The most visible one concerns the decision of writing off its perpetual contingent, or AT-1, bonds.
- Write off: According to the original agreement, these additional tier-1 (AT-1) bonds are indeed supposed to be written off at a time like this.
- And this write-off need not happen before the common equity value goes down to zero.
- The entire idea behind these perpetual contingent bonds is to improve a bank’s capitalization if its common equity value falls below a certain threshold, but does not hit zero.
- Counter argument: These bondholders and some commentators are arguing that writing off those bonds will be a big blow to India’s bond market.
- Moral hazard problem: This is just the opposite of the truth. Not writing them off in accordance with the original contract will create a severe moral hazard problem.
- What incentive would any bondholder have to correctly price and monitor these banks in the future?
- Market discipline would die a quick death, and the bond market will suffer in the long run.
- What the resolution process should do? Therefore, the resolution process should honour the contract and write off the entire value of Yes Bank’s AT-1 bonds.
Dealing with critical market failures
- Second core principle: The second core principle in this resolution should be to tackle some critical market failures that led here.
- Several observers have pointed out the failure of board oversight, promoter negligence and reckless lending at the bank.
- Vital market failure in the purchase of AT-1 bonds by retail investors: Indeed, these issues must be addressed. But there seems to be another vital market failure hidden in this crisis: the purchase of AT-1 bonds by retail investors.
- Why AT-1 bonds are complex? AT-1 bonds are “information-sensitive” instruments, which means that the value of these instruments is extremely sensitive to information on the firm’s fundamentals.
- Complex financial security: They are very complex financial securities. Understanding the risk and reward associated with these securities and valuing them properly is not an easy task even for the best of market professionals.
- Retail investors are certainly not suited to buy this product. Still, several of them ended up holding Yes Bank AT-1 bonds in their asset portfolios.
- Demand deposits and market failure: Banking theory relies on the idea that demand deposits are information-insensitive instruments.
- Hence, a retail investor can place deposits in a bank without worrying about understanding the real risks borne by it. Government-backed deposit insurance makes deposits even more liquid and riskless.
- Hence, retail investors should hold regular deposits in a bank, and not complex securities like AT-1 bonds.
- Where is the market failure involved? If such bonds are sold to them without proper disclosure of the associated risks, then it amounts to a serious market failure.
- Way forward: This market failure must be corrected.
- Holding investment advisors to higher standards of fiduciary responsibility is one way of doing so.
- Prohibiting retail investors from investing in such securities is another critical step to prevent such a market failure.
Way forward to carry out the resolution process
- Restitution of value to retail investors: Meanwhile, the resolution process could consider partial or full restitution of value to retail investors in Yes Bank’s AT-1 bonds, if these products were indeed mis-sold to them.
- Large professional investors should be treated differently: But such a rescue must not extend to large professional investors who willingly bought these bonds for higher returns.
- One mechanism to do this could be to create a separate fund for retail investors with investments capped at a certain point.
- Or, their AT-1 investments up to a specific limit could be converted into a simple deposit contract. The legal hurdles may be insurmountable.
- However, in principle, those who mis-sold these products to retail investors should be required to compensate them.
- Conflict in two principles: Sometimes, these principles can come into direct conflict with each other.
- If the resolution allows retail investors in those AT-1 bonds to recover their investments, it would go against the “honour the contract” principle, but it would address the “market failure” issue.
- Ensuring systemic stability: How should we reconcile this conflict? That’s where the third principle comes in: ensuring systemic stability.
- After all, the regulator’s main objective is to restore the market’s faith in the country’s financial system.
- While this is not an easy task, protecting the capital and confidence of small investors can go a long way in restoring their faith in the banking system.
Conclusion
Resolving bank distress is never an easy job. But honouring contracts, addressing market failure and ensuring systemic stability can together go a long way in achieving a fair and efficient outcome.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Discretionary powers of the Supreme Court
Mains level: Executie and Judiciary
The Supreme Court has removed a Minister against whom disqualification petitions were pending before the Speaker since 2017.
- The court invoked its discretionary powers under Art. 142 of the Indian Constitution.
What is Article 142?
- Article 142 of the Constitution empowers the Supreme Court to pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it.
- Any decree so passed or orders so made shall be enforceable throughout the territory of India.
- The phrase ‘necessary for doing complete justice’ encompasses a power of equity which is employed when the strict application of the law is inadequate to produce a just outcome.
- The power under Article 142 can be exercised when the SC has to decide difficult cases where adequate laws may not exist, or existing laws may not be adequate, in order to deliver complete justice.
Scope and limitations
- Supreme Court in State of Punjab v Rafiq Masih (2014) has opined that- Article 142 of the Constitution of India is supplementary in nature and cannot supersede the substantive provisions, though they are not limited by the substantive provisions in the statute”.
- Article 212 of the Constitution bars courts from inquiring into proceedings of the Legislature.
- In this case, however, prompted by the fact that the Speaker’s conduct has been called into question on several occasions, the court invoked Article 142.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Supplementary grants
Mains level: Various grants in Parliament
Supplementary Grants
Lok Sabha recently held voting on supplementary demands for grants for Jammu and Kashmir and passed the proposals on voice vote.
What are Supplementary Grants?
- The additional grant required to meet the required expenditure of the government is called Supplementary Grants.
- When grants, authorised by the Parliament, fall short of the required expenditure, an estimate is presented before the Parliament for Supplementary or Additional grants.
- These grants are presented and passed by the Parliament before the end of the financial year.
- When actual expenditure incurred exceeds the approved grants of the Parliament, the Ministry of Finance and Ministry of Railways presents a Demand for Excess Grant.
How it works?
- The Comptroller and Auditor General of India bring such excesses to the notice of the Parliament.
- The Public Accounts Committee examines these excesses and gives recommendations to the Parliament.
- The Demand for Excess Grants is made after the actual expenditure is incurred and is presented to the Parliament after the end of the financial year in which the expenses were made.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Flexi Fare System
Mains level: Not Much
During the eight months period from 1st July 2019 to 29th February 2020, approximately 28.93 Lakh berths remained vacant in Rajdhani, Shatabdi and Duronto type trains having Flexi fare.
What is Flexi Fare System?
- The flexi-fare scheme was introduced by the IRCTC in 2016 for the 142 “premium trains” such as Shatabdi, Rajdhani, and Duronto (now Vande Bharat Exp. as well).
- Under this dynamic pricing system, the base fare increases by 10% with every 10% of berths sold, with a limit set at 1.5 times the original price.
- The scheme was applicable to all classes, except AC first class and executive class. The pricing system is still in force.
Reasons for flexi fares:
- Indian Railways run about 12900 passenger trains per day and the railways is losing around more than 40% of what they spend on passenger trains.
- The trains like Rajdhani are the ones in which the elite class prefers to travel. So, some revenue can be garnered from them.
- The cost of service is almost double of what is being charged from the passengers.
- Freight business is already very expensive in India as compared to other countries in the world. Therefore, a further increase in this area is not feasible.
Issues with the system
- After the introduction of Flexi-fares, the railways lost 700,000 passengers in just 11 months while the additional revenue earned as a result of the scheme was ₹ 552 crore.
- While drawing upon the fundamentals of dynamic pricing, what Indian Railways failed to introduce was a simple principle that Flexi-fares work ways, hikes, and declines.
- The railways model just focused on increasing fares with no provision for a decrease in price when demand is low.
- While half of the decision-makers in the Railway Board support it, half of them oppose it stating that what the railways require is an increase in ticket prices across the board.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: GreenCo Rating System
Mains level: Not Much
The Union Ministry of Railways has informed about the applications of Greenco Ratings on Workshops and Production Units of Indian Railways.
GreenCo Ratings
- GreenCo Rating is the “first of its kind in the World” holistic framework that evaluates companies on the environmental friendliness of their activities using life cycle approach.
- Implementation of GreenCo rating provides leadership and guidance to companies on how to make products, services and operations greener.
- It is developed by Confederation of Indian Industry’s (CII) Sohrabji Godrej Green Business Centre.
- It has been acknowledged in India’s Intended Nationally Determined Contribution (INDC) document, submitted to UNFCCC in 2015.
- GreenCo rating is applicable to both manufacturing facilities and service sector units.
- The rating is implemented at unit or facility level. The unit or facility has to be in operation for a minimum period of 3 years. In case of new plants/ facilities minimum 2 years operation is required.
Utility
It helps the industrial units in identifying and implementing various possible measures in terms of energy conservation, material conservation, recycling, utilization of renewable energy, GHG reduction, water conservation, solid and liquid waste management, green cover etc.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Nano-composites and its applications
Mains level: Not Much
A group of scientists at the International Advanced Research Centre for Powder Metallurgy & New Materials (ARCI) have developed a process for size-selective deposition of nanocomposite coatings which can reduce friction of these dynamic systems.
What are Nanocomposites?
- Nanocomposite coatings are formed by mixing two or more dissimilar materials at nanoscale to improve the physical, chemical and physicochemical properties of the new materials.
- The scientists have found that nickel tungsten-based coatings with infusion of particular sized Silicon Carbide (SiC) submicron particles using a pulsed electroplating can provide an excellent combination of wear and corrosion resistance.
Applications
- Many aerospace, defence, automobile, space devices need to reduce friction, wear, and tear to enhance the life of components.
- Lubricating these dynamic systems add to the cost, complexity, and weight of these systems.
- The coating could help in reducing the friction of such devices.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: PFZ
Mains level: Application based initiaitives by ISRO
The Indian National Centre for Ocean Information Services (INCOIS), Hyderabad has reported that Oceansat Satellite data from ISRO are used to prepare the PFZ advisories on the potential rich fishing areas and provide to the sea faring fishermen in all states.
Potential Fishing Zone (PFZ)
- This is the first advisory service started by INCOIS. The backbone of this service is the real-time data for ocean color and SST provided by the OCEANSAT and NOAA respectively.
- This service was started because there was a need to identify the potential fishing zones to help the fishermen to get better catch while they were at the sea.
- This service was started by the Ministry of Earth Sciences with the help of the Department of Space and several institutions under the Ministry of Agriculture.
How it works?
- This service makes use of parameters such as sea surface temperature and chlorophyll content provided by NOAA-AVHRR and Oceancolor satellites.
- Features such as oceanic fronts, Meandering Patterns, Eddies, Rings, Up Welling areas etc. are identified sites for fish accumulation.
- These features can easily be identified from Sea Surface Temperature and Chlorophyll data.
- The availability of Chlorophyll from OCEANSAT and MOdDIS has further enriched these advisories in the recent years.
- Hence, PFZ advisories have helped the fishing community to locate the fishing zones with accuracy.
Special advisories for fisherman
- Another feature of PFZ service is the generation of species-specific advisory to enable the fishermen folk to distinguish between the exploited and under-exploited species in the potential fishing zones.
- This enables them to have sustainable fishery management by targeting only the under-exploited species in the fishing zones.
- This approach enables them to avoid fishing the over-exploited species over and over again.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 3- Suggestions to avoid next global financial crisis.
Context
Although we could not have predicted it, Covid-19 was not the reason, but just the trigger for the ongoing financial crash as all we needed was the proverbial straw to break the finance sector’s back
Economic sudden stop
- Not just any trigger: Covid-19 was not just any trigger as it gave birth to the concept of the economic “sudden stop.” When the global equity markets dropped on 31 January 2020 following the WHO declaration of the Public Health Emergency of International Concern, El-Erian (2020) warned the investors on 2 February 2020 that they should snap out of the “buy the dip” mentality.
- Pointing out two vulnerabilities, namely structurally weak global growth and less effective central banks, he introduced the concept of “sudden stop” economic dynamics.
- What is sudden stop? It can be considered as an abrupt onset of a deep recession.
- Supply and demand shock: In the case of Covid-19, it is a sudden stop of economic activity resulting in supply and demand shocks to the global economy as major cities in infected countries, more than 100 and counting, are put on lockdown.
- And, add to that the deepening oil price war between Russia and Saudi Arabia.
- On 8 March 2020 in New York, the futures markets opened and oil futures (both Brent and WTI) are trading about 21% down, gold is above $1,700 per ounce, and all United States (US) equity index futures are trading about 4% down.
- Long terms treasury yield at historical lows: What is worse is that with the long-term US Treasury yields at their historical lows (10-year yield below 0.5% and 30-year yield below 1%), the capital markets are frozen (not to mention many oil projects that will go bust at these prices).
Disorderly non-financial private sector debt leading to dire consequences
- A disorderly global non-financial private sector debt deleveraging, which is likely to lead to deep global debt deflation, followed by a recession (and possibly a depression).
- Which could result in creating financial and economic instabilities, and further tensions in international relations with dire consequences for emerging and developing countries, not to mention developed countries.
- Difference in developed and developing countries debts: While in developed and high-income developing countries, the non-financial private sector is more over-indebted, in middle-income and low-income developing countries, the public sector is more over-indebted.
- Impact on developed economies: Given that the global non-financial private sector debt deleveraging has already started, the public sector debts of the developed and high-income developing countries will also go up and the governments’ ability to rescue their economies will also decline in these countries.
- Impact on funding for climate change: Furthermore, this will severely constrain the governments’ ability to spend on climate change-related projects to address the potentially catastrophic effects for many years to come, diminishing our hopes to make the necessary investments and innovations to address the now existential climate crisis on time will diminish.
- The corona factor: The measures we have to take to control the spread of Covid-19 before a cure is found will further challenge the financial system, as people stop earning an income and businesses go bankrupt.
Way forward
- Three authorities solution: In the suggested framework, there would be three authorities to maintain a deposit account at the central bank in each country
- 1. A deleveraging authority for leverage reduction.
- 2. Lastenausgleich (based on German Currency Reforms) authority for capital levies.
- 3. Climate authority for financing needs in developing national climate plans.
- These national authorities should be globally coordinated through the appropriate United Nations agencies.
- Control the three authorities: The Lastenausgleich authority would be under the finance ministry, whereas the deleveraging and climate authorities would be not-for-profit corporations promoted by the government.
- Capitalisation issue: The government would capitalise the deleveraging and climate authorities by the Treasury-issued zero-coupon perpetual bonds.
- The deleveraging authority would then sell its equalisation claims to the central bank in exchange for an increased balance in its deposit account at the bank, while the climate authority would wait until the deleveraging concludes.
- Further, the climate authority would not be allowed to open deposit accounts to its borrowers to ensure that it would be a pure financial intermediary, not a bank.
- Framework: Assuming that a globally agreed-upon debt reduction percentage that would bring the global non-financial sector leverage well under 100% is determined and that all countries agree to act simultaneously, the framework is as follows
- (i) the financial institutions comprising the banks and non-bank financial institutions (NBFIs) write down all the loans and debt securities on both sides of their balance sheets by the required percentage;
- (ii) the deleveraging authority compensates the banks and NBFIs for the loss if any; and
- (iii) the deleveraging authority pays each qualified resident their allocated amount less than the debt relief if any.
- If an NBFI gain after the above debt reduction, it should owe equalisation liabilities to the deleveraging authority of its jurisdiction.
- Note that as all debts mean all debts, public sector debts will also be written down by the same percentage except the official debts of the sovereigns that fall out of the scope of our proposed framework and should be handled by other means.
- After deleveraging: After deleveraging the balance of the deleveraging authority account at the central bank goes down whereas the total balance of the bank accounts (reserves) at the central bank goes up by the total payment made by the deleveraging authority.
- Hence, the base money goes up by the total payment of the deleveraging authority.
- Since NBFIs and residents cannot maintain deposit accounts at the central bank, they have to be paid through a bank which creates deposits for the NBFIs and residents against reserves.
- Hence, the broad money goes up by the amount of the payment to the NBFIs and residents.
- Issue of multi-currency balance sheet: One issue is that in many countries, the bank and NBFI balance sheets are multi-currency balance sheets.
- However, the deleveraging authority payments are in domestic currency, which may create currency risk for some banks and NBFIs.
- Backed by the central banks, the globally coordinated national deleveraging authorities should stand ready to intervene to avoid potential crises.
- Condition to spend on climate bonds: The authorities would require their domestic banks and other financial institutions to spend an internationally agreed-upon percentage of their newly found money, if any, after the deleveraging on the interest-bearing, finite-maturity bonds the national climate authorities would issue.
- Since the promoter of the climate authority is the government, the bonds of the climate authority would have the same credit with the government bonds, and the central bank would accept the climate authority bonds in its open market operations.
- Climate authority bonds as reserves: Therefore, the climate authority bonds would be the main tool to manage the reserves and deposits created through the equalisation claims.
- In addition, the climate authority bonds could be used for the greening of the financial system through the investment of foreign exchange reserves of the central banks proposed by the Bank of International Settlements (BIS 2019).
- Progressive wealth tax collection: Lastly, equipped with a “globally coordinated wealth registry” (Stiglitz et al 2019), the Lastenausgleich authorities would collect progressive wealth taxes from the owners of real and non-debt financial assets for the equalisation of burdens.
- While a part of these taxes could be used to retire some of the equalisation claims and the corresponding reserves and deposits created in the deleveraging process, another part could be transferred to the climate authorities, and the rest could be spent in the interests of the society.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Requirement of cooling off period for accepting the government office post-retirement by the judges to ensure the independence of judiciary.
Context
It has been recently announced that the President has nominated former Chief Justice of India, Ranjan Gogoi, to the Rajya Sabha. However, the time has come for us to ask a difficult question: Should judges stop accepting post-retirement jobs offered by the government, at least for a few years after retiring, because accepting such posts could undermine the independence of the judiciary?
The issue of post-retirement employment of the judges
- Retirement age of judges: Unlike federal judges in the US, judges in India do not hold office for life. They remain in office until they reach the retirement age — 65 for Supreme Court judges and 62 for high court judges.
- Protection against arbitrary removal: These judges do not hold their offices at the “pleasure” of the President. In other words, they cannot be arbitrarily removed by the government once they are appointed, and can only be impeached by a supermajority of both houses of Parliament “on the ground of proved misbehaviour or incapacity”.
- Difficult impeachment process: The impeachment process is a very difficult one and never in the history of independent India has a judge been impeached, though attempts have sometimes been made to do so. Judges, therefore, enjoy security of tenure while holding office, which is essential for maintaining judicial independence.
- How retirement of judges could undermine judicial independence? The retirement of judges threatens to undermine judicial independence.
- This is because some judges — not all — are offered post-retirement employment by the government. It is often feared that a judge who is nearing retirement could decide cases in a manner that pleases the government in order to get a favourable post-retirement position.
Not an unprecedented move
- Former CJI Gogoi is certainly not the first retired judge to be appointed to political office.
- In 1952, Justice Fazl Ali was appointed the Governor of Orissa, shortly after retiring from the Supreme Court.
- In 1958, Chief Justice M C Chagla resigned from the Bombay High Court in order to become India’s Ambassador to the US at Prime Minister Nehru’s invitation.
- In April 1967, Chief Justice Subba Rao resigned from the Supreme Court to contest elections for President.
- In 1983, Justice Baharul Islam resigned from the Supreme Court to contest as a Congress (I) candidate for a Lok Sabha seat, after ruling in favour of Bihar’s Congress (I) chief minister, Jagannath Mishra, in a controversial case where Mishra had been accused of criminal wrongdoing and misuse of office.
- In more recent times, Chief Justice P Sathasivam was appointed the Governor of Kerala. There are many other such examples.
Why restrictions about employment were not included in the Constitution?
- The Constitution provides that a retired Supreme Court judge cannot “plead or act in any court or before any authority within the territory of India”.
- Constituent assembly debate: In the Constituent Assembly, K T Shah, an economist and advocate, suggested that high court and Supreme Court judges should not take up an executive office with the government, “so that no temptation should be available to a judge for greater emoluments, or greater prestige which would in any way affect his independence as a judge”.
- However, this suggestion was rejected by B R Ambedkar because he felt that the “judiciary decides cases in which the government has, if at all, the remotest interest, in fact, no interest at all”.
- Government is the largest litigant in the courts: In Ambedkar’s time, the judiciary was engaged in deciding private disputes and rarely did cases arise between citizens and the government. “Consequently”, said Ambedkar, “the chances of influencing the conduct of a member of the judiciary by the government are very remote”.
- This reasoning no longer holds today because the government is one of the largest litigants in the courts.
Question of independence of the judiciary
- The question of constitutional propriety: In the words of India’s first Attorney General, M C Setalvad, all this raises “a question of constitutional propriety” relating to the independence of the judiciary.
- After all, could the government not use such tactics to reward judges who decide cases in its favour?
- Public perception of compromised judiciary: Further, if a judge decides highly controversial and contested cases in favour of the government and then accepts a post-retirement job, even if there is no actual quid pro quo, would this not lead to the public perception that the independence of the judiciary is compromised?
Law Commission recommendations
- In its 14th report in 1958, the Law Commission noted that retired Supreme Court judges used to engage in two kinds of work after retirement:
- Firstly, “chamber practice” (a term which would, today, mean giving opinions to clients and serving as arbitrators in private disputes).
- Secondly, “employment in important positions under the government”.
- The Law Commission frowned upon chamber practice but did not recommend its abolition.
- Ban on post-retirement government employment: It strongly recommended banning post-retirement government employment for Supreme Court judges because the government was a large litigant in the courts.
- The Commission’s recommendations were never implemented.
Conclusion
It is about time that we start expecting the judges of our constitutional courts to follow CJI Hidayatullah’s excellent example in which he had accepted government job only after the cooling period of several years.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Opportunity for India to assume global leadership in dealing with the COVID-19 pandemic
Context
A leadership role by India in mobilising world collaboration would be in keeping with its traditional activism globally.
Challenges and two aspects associated with it.
- The COVID-19 pandemic has brought out in sharp relief the compelling reality that has been staring us in the face for the past several years.
- This reality has two aspects.
- First aspect: That most challenges confronting the world and likely to confront it in the future are cross-national in character. They respect no national boundaries and are not amenable to national solutions.
- Second aspect: These challenges are cross-domain in nature, with strong feedback loops.
- A disruption in one domain often cascades into parallel disruptions in other domains.
- For example, the use of chemical fertilizers and toxic pesticides may promote food security but have injurious health effects, undermining health security.
- Whether at the domestic or the international level, these inter-domain linkages need to be understood and inform policy interventions. The UN Sustainable Development Goals (SDGs) reflect this awareness.
Rise in nationalism
- Need for multilateral approach: The intersection of cross-national and cross-domain challenges demand multilateral approaches.
- They require empowered international institutions of governance.
- Underlying these must be a spirit of internationalism and solidarity, a sense of belonging to common humanity.
- Moving in the reverse direction-Rise of nationalism: Over the past decade and more, the world has been moving in the reverse direction. There has been an upsurge in narrow nationalism, an assertion of parochial interests over the pursuit of shared interests and a fostering of competition among states rather than embracing collaboration.
- The global challenge of COVID-19: COVID-19 has brought these deepening contradictions into very sharp relief. This is a global challenge which recognises no political boundaries. It is intimately linked to the whole pattern of large-scale and high-density food production and distribution.
- Health crisis turned into economic crisis: It is a health crisis but is also spawning an economic crisis through disrupting global value chains and creating a simultaneous demand shock. It is a classic cross-national and cross-domain challenge.
How countries are dealing with COVID-19 and possible outcomes
- No coordination at the international level: But interventions to deal with the COVID-19 crisis are so far almost entirely at the national level, relying on quarantine and social distancing. There is virtually no coordination at the international level.
- Blame game at the international level: We are also seeing a blame game erupt between China and the United States which does not augur well for international cooperation and leadership.
- The hopeful outcome of international cooperation: While this is the present state of play, the long-term impact could follow alternative pathways.
- One, the more hopeful outcome would be for countries to finally realise that there is no option but to move away from nationalistic urges and embrace the logic of international cooperation through revived and strengthened multilateral institutions and processes.
- The depressing outcome of intense nationalist trends: The other more depressing consequence may be that nationalist trends become more intense, countries begin to build walls around themselves and even existing multilateralism is further weakened.
- Institutions such as the United Nations and the World Health Organization which are already marginalised may become increasingly irrelevant.
- There could be a return to autarkic economic and trade policies and an even deeper and more pervasive anti-globalisation sentiment.
- Depression decade ahead: Unless there is a conscious effort to stem this through a reaffirmation of multilateralism, we are looking at a very depressing decade ahead.
- This is when the world needs leadership and statesmanship, both in short supply.
- Contrast with the financial crisis: This is in contrast to the U.S.-led response to the global financial and economic crisis of 2008 when the G-20 summit was born and a coordinated response prevented catastrophic damage to the global economy.
Leadership role for India
- Is there a role here for India which is a key G-20 country, the world’s fifth-largest economy and with a long tradition of international activism and promotion of rule-based multilateralism?
- In this context, Prime Minister Narendra Modi’s remarks at the recent Economic Times Global Business Summit are to be welcomed.
- While speaking of the COVID-19 crisis, he said, “Like today, the world is facing a huge challenge in the form of Corona Virus. Financial institutions have also considered it a big challenge for the financial world. Today, we all have to face this challenge together. We have to be victorious with the power of our resolution of ‘Collaborate to Create’.”
- He went on to observe that while the world today is “inter-connected, inter-related and also interdependent”, it has “not been able to come on a single platform or frame a Global Agenda, a global goal of how to overcome world poverty, how to end terrorism, how to handle Climate Change issues.”
- From “Equal distance” to friendship with all: Modi lauded government’s policy of seeking friendship with all countries as contrasted from the earlier policy of non-alignment. He seemed to suggest that non-alignment was a defensive policy which advocated “equal distance from every country”.
- Now, he claimed, India was still “neutral” — presumably meaning non-alignment — “but not on the basis of distance but on the basis of friendship”.
- He cited India’s friendship with Iran and Saudi Arabia, and with the U.S. as well as Russia.
India’s foreign policy
- Non-alignment: Mr Modi may wish to distinguish his foreign policy from that of his predecessors, but what he describes as its “essence” is hardly distinguishable from the basic principles of Indian foreign policy since Nehru.
- Non-alignment was not defensive: India’s non-alignment was anything but defensive. The international peace-keeping contribution that the Prime Minister referred to has its origins in Nehru’s sense of international responsibility.
- Friendship with all: India has always professed its desire to have friendly relations with all countries but has been equally firm in safeguarding its interests when these are threatened.
- Mutually beneficial partnership: India’s non-alignment did not prevent it from forging strong and mutually beneficial partnerships with major countries.
- The India-Soviet partnership from 1960-1990 is an example just as the current strategic partnership with the U.S. is.
- Foreign policy rooted in a civilisational sense: The foreign policy of his predecessors had been rooted in India’s civilisational sense, its evolving place in the international system and its own changing capabilities.
- Their seminal contributions should be acknowledged and built upon rather than proclaim a significant departure.
Move in line with traditional foreign policy
- The Prime Minister’s plea for global collaboration to deal with a densely interconnected world is in line with India’s traditional foreign policy.
- Move in keeping with traditional activism on a global scale: A leadership role in mobilising global collaboration, more specifically in fighting COVID-19 would be in keeping with India’s traditional activism on the international stage.
- Commendable SAARC move: The Prime Minister has shown commendable initiative in convening leaders of the South Asian Association for Regional Cooperation nations for a regional collaborative effort on COVID-19.
- International initiative: This should be followed by an international initiative, either through the G-20 or through the U.N.
Way forward
- Reformed and Strengthened U.N. should be India’s agenda: The Prime Minister made no reference to the role of the U.N., the premier multilateral institution, as a global platform for collaborative initiatives. There may have been irritation over remarks by the UN Secretary-General on India’s domestic affairs and the activism displayed by the UN Commissioner for Human Rights on the Citizenship (Amendment) Act controversy.
- The U.N. Secretary General’s statement on India’s domestic affairs and activism by UN Secretary-General on India’s domestic affairs should not influence India’s long-standing commitment to the U.N. as the only truly inclusive global platform enjoying international legitimacy despite its failings.
- If one has to look for a “single platform” where a Global Voice could be created, as the Prime Minister suggested, surely a reformed and strengthened U.N. should be on India’s agenda.
- Opportunity for India in the pandemic: The COVID-19 pandemic presents India with an opportunity to revive multilateralism, become a strong and credible champion of internationalism and assume a leadership role in a world that is adrift. The inspiration for this should come from reaffirming the wellsprings of India’s foreign policy since its Independence rather than seeking to break free.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Polymerase Chain Reaction Test
Mains level: Coronovirus outbreak and its mitigation
The diagnosis of COVID-19 can be done with the Polymerase Chain Reaction (PCR) Test which is explained as under:
The PCR Test
- It uses a technique that creates copies of a segment of DNA. ‘Polymerase’ refers to the enzymes that make the copies of DNA.
- Kary Mullis, the American biochemist who invented the PCR technique, was awarded the Nobel Prize for Chemistry in 1993.
- The ‘chain reaction’ is how the DNA fragments are copied, exponentially — one is copied into two, the two are copied into four, and so on.
- However, SARS-COV-2 is a virus made of RNA, which needs to be converted into DNA. For this, the technique includes a process called reverse transcription.
- A ‘reverse transcriptase’ enzyme converts the RNA into DNA. Copies of the DNA are then made and amplified.
- A fluorescent DNA binding dye called the “probe” shows the presence of the virus. The test also distinguishes SARS-COV-2 from other viruses.
Various Stages:
1) Collection and transport
- Testing centre takes swabs from nasal cavities and back of the throat (pharynx), and puts samples in a “virus transport medium”, which contains balanced salts and albumin to prevent the virus from disintegrating.
- Sample is then transported in cold storage to the testing lab.
2) Extraction of viral RNA
- Coronaviruses have large single-stranded RNA genomes.
- Testing lab extracts the RNA from the samples, using commercially available kits.
3) Putting THE RNA in THE PCR mix
- Extracted RNA is added to a polymerase chain reaction (PCR) mix.
- This includes the ‘master mix’, which contains a ‘reverse transcriptase’ enzyme that converts the RNA into DNA.
- Master Mix contains Taq polymerase, the enzyme that creates copies of the DNA, nucleotides, as well as other elements such as magnesium — an ion of which is needed to amplify the DNA.
- The PCR mix also contains ‘reagents’ such as ‘primers’ and ‘probes’.
- Primers are particular strands of DNA that are designed to bind with the DNA that is to be copied; probes are used to detect the specific sequence in the DNA sample.
- Finally, the PCR mix consists of a “housekeeping” gene — a normal human gene (RNAse P) that is used to ensure that samples were properly collected, and RNA extracted.
4) Amplification of the viral DNA
- Sample, in its PCR mix, is put into tubes or plates, which are then put in a thermal cycler machine that is used to conduct the PCR process.
- First, the RNA is converted into DNA. Then the process of copying the genes starts.
- The thermal cycler heats and cools the mixture with the sample, alternating between three temperatures — for melting the DNA to separate the two strands.
- The thermal cycler runs 30-40 such cycles in order to amplify the DNA to check for the virus.
5) Testing against controls
- Amplified DNA is tested against a positive control, which usually consists of genes of the virus cloned into plasmid, and a negative control, which is a ‘known’ sample that has tested negative for the virus earlier.
- RNase P should show amplification, positive control should be positive, negative control should be negative, and then whatever result you get for the specimen, is the correct result.
- In order for a test to be valid before the result is released, certain ‘validity criteria’ have to be met.
- If the housekeeping gene (RNase P) is positive, positive control is positive, negative control is negative, and the sample does not show any PCR positive result, the sample is declared negative.
- If the PCR result is positive, the patient has COVID-19.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now