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Oil and Gas Sector – HELP, Open Acreage Policy, etc.

Sharp fall in oil prices is opportunity for India to increase stockpile

Note4Students

From UPSC perspective, the following things are important :

Prelims level: SPR

Mains level: Paper 3- Importance of SPR , issues with it and need for the diversification.

This article highlights the opportunity that the sharp drop in the oil prices presents to India. It also highlights several issues with India’s strategic petroleum reserves and suggests ways to deal with them. We have covered an article from livemint on the same topic in the past week.

Negative price in the international market for WTI crude oil

  • Oil prices continue to decline globally, with crude hitting multi-decade lows, as global demand evaporates.
  • Earlier last week, in unprecedented price action, the near-month contract for West Texas Intermediate (WTI) sweet crude oil dropped to -$37.63 a bbl.
  • A negative price has never before been registered for a major global crude oil benchmark.
  • The extreme price action is a signal that there is a global oil glut with few places to store oil.
  • Global oil markets have been severely disrupted.
  • While WTI does not feature in India’s basket, Brent Crude Oil, which does, is trading around $25 a barrel, the lowest in 18 years.

Price of oil: The silver lining of the future recovery

  • Even as India suffers from a lockdown, a silver lining for future recovery and reconstruction is the price of oil.
  • Given India’s growth aspirations and lack of self-sustaining oil production, a sharp reduction in oil prices is a bonanza.
  • Normally, reduced oil prices would translate into surplus for the consumers and a fiscal bonus for the government through increased tax collections.
  • However, given that the demand for petrol has slumped, those gains will not accrue right away.
  • Opportunity for India: India should look at this as an opportunity to strengthen its energy security by buying oil and filling up our Strategic Petroleum Reserves (SPR).
  • Considering that India was the third-largest consumer of energy in the world, as well as the third-largest importer of oil in 2018, we are particularly vulnerable to oil price fluctuations.
  • The dramatic reduction in oil prices offers a once-in-a-generation opportunity for us to fill up our reserves in an extremely cost-effective way.

India’s Strategic Petroleum Reserve (SPR) Programme

  • Currently, we do maintain an emergency stockpile of oil reserves: Under the existing Strategic Petroleum Reserves programme, India claims to have 87 days of reserves.
  • Out of this, refiners maintain 65 days of oil storage and the rest of the reserves are held in underground salt caverns maintained by Indian Strategic Petroleum Reserves Limited (ISPRL).
  • The existing and planned capacity for the underground reserves is 10 and 12 days of import cover for crude oil respectively.

Following point highlights the importance and various issues with India’s Strategic Petroleum Reserves (SPR). SPR plays an important role in India’s energy security.  A question based on its role may be asked by the USPC “Assess the importance of Strategic Petroleum Reserves for India and what are the issues associated with that need to be improved?”

Issues with the strategic reserves

  • First, capacity does not directly translate into utilisation, which is partly because oil is an expensive commodity most days of the year.
  • In 2019, the average closing price of a barrel of crude was $57.05.
  • In 2018, it was $64.90, and in 2017, U$50.84.
  • Of the existing 10 days of capacity, only about 50 per cent is utilised.
  • The second issue is with regard to the refinery holdings.
  • In India, the SPR arrangement between the oil refineries and the Union or state governments is not specified well, though most of the refineries that hold stock are publicly-owned companies.
  • In fact, a breakdown of which refineries hold SPR and in what form (crude or refined) or information about where they are located is not publicly available.

Need for transparency in relation to SPR

  • The first step, therefore, should be to introduce transparency and accountability in relation to the SPR.
  • The procedures, protocols and facts about Indian SPR storage require greater public and parliamentary scrutiny, just like India’s other strategic reserves (for instance, foreign exchange).
  • For this, there should be timely and reliable dissemination of information.
  • Instead, it is now shrouded in secrecy.
  • The ambiguity surrounding mobilisation process: The lack of transparency around our SPR holdings is compounded by the ambiguity surrounding the mobilisation process.
  • SPR reserves are meant to be used in emergencies, where time is likely to be of the essence.
  • The SPR mobilisation process could be made more efficient by laying out designated roles for different agencies to avoid redundancies in times of crisis.
  • There should be role and process clarity regarding SPR mobilisation.
  • For instance, to begin with, there should be clarity on who (or which agency) can define an emergency and therefore order a mobilisation.

Diversification of SPR

  • Further, in order to mitigate risks better, India should look to diversify its SPR holdings.
  • Diversification can be 1)Based on geographical location (storing oil either domestically or abroad), storage location (underground or overground) and 2) Product type (oil can be held in either crude or refined form).
  • Storage and transportation costs could be saved by diversifying geographically.
  • 3) Diversification could also be in the form of ownership — either publicly owned through ISPRL or by private oil companies, such as ADNOC of Abu Dhabi.
  • The private companies could fill up the SPR when prices are low and take advantage of price arbitrage.
  • This could achieve a degree of price stability and reduce the cost for India to buy such large quantities of oil.
  • The only requirement for this to work is to have a clear contract with the private companies about the mandatory minimum level of stock that they should preserve for use in emergency times.

Storing oil abroad

  • With oil dirt-cheap, if we can purchase more than we can store in our existing facilities, why not go abroad for more storage space?
  • For instance, one option could be to operationalise, modernise, and add to the oil tanking facilities at Trincomalee in Sri Lanka.
  • Another opportunity would be to enter into a strategic partnership with Oman (Ras Markaz) for oil storage.
  • Partnership with Oman would also help India avoid the potential bottleneck of the straits of Hormuz.
  • Geopolitical risk factor: Since many of these places could potentially be vulnerable to geopolitical risks, only a small part of India’s overall SPR strategy should involve storing abroad.

Conclusion

Energy is and will remain vital to India’s aspirations for growth. The sharp fall in the price of oil presents an opportunity for the Union government to increase its SPR stockpile and achieve a degree of energy security.

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Coronavirus – Health and Governance Issues

New global order in post-Covid-19 world

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much.

Mains level: Paper 2- Changes in the post-Covid-19 world in geopolitics and the geoeconomics.

The article discusses the changes that the world will experience in the global order in the aftermath of Covid-19. The major changes will be on the economic and geopolitical front. Various changes are discussed in the article. We have read some article on the same topic and the basic theme is the same. Role of China and the US, failure of the international institutions are some of the common themes.

Failure of international institutions

  • The existing international institutions such as the United Nations, the United Nations Security Council and the World Health Organization (WHO) are seen to have failed to measure up to the grave challenge posed by the pandemic.
  • The UN Security Council is under attack for being slow in dealing with a situation that appears, at least on the surface, far graver than any military threat in recent decades.
  • The WHO has been tarred with the charge of bias and of grossly underestimating the nature of the epidemic.
  • That prestigious global institution should have been singled out for attack at this time speaks volumes about the mood prevailing across the world.

Economic shock

  • There are many other aspects of the COVID-19 crisis that will drastically impact the globe.
  • Negative growth: On the economic front, the World Bank has already predicted negative growth for most nations. India’s growth forecast for the current fiscal year has been put at 5% to 2.8%.
  • Contraction of the economy and the loss of millions of jobs across all segments will further complicate this situation.

One of the most important factors that we realised in the corona crisis in the role of the state. Take note of this factor. A question can be asked on the role of the state, for ex. “The COVID-19 pandemic has brought into focus the important role of the state in our lives. comment.”

The important role of the state in focus

  • What is likely to change even more dramatically are certain other aspects relating to political management and security. Both terms are set to gain new meanings.
  • The role of the state as an enforcer of public goodwill almost certainly become greatly enhanced.
  • The dominant imperative would be to not put limits on the role of the state even where the situation may not be as grave as the present one.
  • Many pieces of legislation of yesteryears that had been relegated to the archives — they were perceived to be anachronistic in a modern democratic set-up — may get a new lease of life.
  • Some pieces of legislation such as the Disaster Management Act already reflect this reality today.
  • Other pieces of legislation could follow in its wake.
  • This trend is already becoming evident to some extent across the world. Europe has shown a willingness to sacrifice personal liberties in favour of greater state control.
  • Post COVID-19, the world may have to pay a heavy price in terms of loss of liberty. An omnipotent state could well become a reality.

Following are the changes in geo-economics and geo-politics that post-covid world would see.

Role of China under scrutiny

  • Far-reaching changes can also be anticipated in the realm of geo-economics and geopolitics. The world needs to prepare for a sea change.
  • One nation, viz. China, is presently seeking to take advantage of and benefit from the problems faced by the rest of the world in the wake of the epidemic.
  • Negligence on the part of China: China remains totally unfazed by the stigma that the current world pandemic owes a great deal to its negligence.
  • More importantly, it is seeking to convert its ‘failure’ into a significant opportunity.
  • This is Sino-centrism at its best, or possibly its worst.
  • China now seeks to benefit from the fact of its ‘early recovery’.
  • It wants to take advantage of the travails of the rest of the world, by using its manufacturing capability to its geo-economic advantage.
  • Seeking geopolitical advantage: Simultaneously, it seeks to shift from being a Black Swan (responsible for the pandemic), to masquerade as a White one, by offering medical aid and other palliatives to several Asian and African countries to meet their current pandemic threat.
  • In turn, it seeks to gain a geopolitical advantage by this action.

Hostile takeover bids by China

  • There are enough reports of China’s intentions to acquire financial assets and stakes in banks and companies across the world amid crisis.
  • Shares in HDFC: India seems to have woken up only recently to this threat after the Peoples’ Bank of China acquired a 1% stake in India’s HDFC.
  • Across the world, meanwhile, the clamour against China’s hostile takeover bids is becoming stronger.
  • Several countries apart from India, such as Australia and Germany, have begun to restrict Chinese foreign direct investment in companies and financial institutions in their countries.
  • These countries recognised the inherent danger of a possible Chinese hostile takeover of their critical assets.

China taking advantage of RCEP and Belt and Road initiative

  • Restricting hostile takeovers may not be adequate to checkmate China.
  • It is poised to dominate the Regional Comprehensive Economic Partnership (RCEP).
  • Which will enable China to exploit market access across the Association of Southeast Asian Nations, East Asian nations, Australia and New Zealand.
  • Together with its Belt and Road Initiative, China is ostensibly preparing the way for a China-centric multilateral globalisation framework.

The diminishing role of the US’s and Europe

  • The geopolitical fallout of this pandemic could be still more serious.
  • One distinct possibility is that COVID-19 would effectively put paid to the existing global order that has existed since the late 1940s.
  • The United States which is already being touted in some circles as a ‘failing’ state, will be compelled to cede ground.
  • Weakened economically and politically after COVID-19 has ravaged the nation, the U.S.’s capacity to play a critical role in world affairs is certain to diminish.
  • The main beneficiary of this geopolitical turnaround is likely to be China, a country that does not quite believe in playing by the rules of international conduct.
  • Weakened Europe: Europe, in the short and medium-term, will prove incapable of defining and defending its common interests, let alone having any influence in world affairs.
  • Role of Germany: Germany, which may still retain some of its present strength, is already turning insular.
  • Both France and the post-Brexit United Kingdom will be out of the reckoning as of now.

Problems in West Asia and the possible role of Israel

  • In West Asia, both Saudi Arabia and Iran are set to face difficult times.
  • The oil price meltdown will aggravate an already difficult situation across the region.
  • There may be no victors, but Israel may be one country that is in a position to exploit this situation to its advantage.

India: Economic and geopolitical challenges

  • In the meantime, the economic downturn greatly reduces India’s room for manoeuvre.
  • In South Asia, India faces the prospect of being isolated, with the Chinese juggernaut winning Beijing new friends and contacts across a region deeply impacted by the economic consequences of the COVID-19 pandemic.
  • Likewise, India’s leverage in West Asia — already greatly diminished — will suffer further.
  • With oil prices going down and the Indian expatriate community (who are among the hardest hit by this downturn) out on a limb.
  • Reduction in remittances: Many of the latter may seek repatriation back to the host country, substantially reducing the inflow of foreign funds to India from the region.

A question based on the changes in the global order in the post-pandemic world could be asked by the UPSC, for ex- “In the post-Covid-19 world, we are experiencing several changes. What are the changes in the geo-politics that are likely to affect India’s interests?”

Conclusion

In the post-Covid-19 world, we are about to see many changes on the economic and geopolitical front. India should prepare itself for the emerging challenges on various fronts.

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Judicial Reforms

Kesavananda Bharati Case (1973): The judgment that upheld basic structure of India’s constitution

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Features of Basic structure doctrine

Mains level: Basic structure doctrine

Exactly 47 years ago, the Supreme Court passed its landmark judgment in Kesavananda Bharati vs State of Kerala, considered among the most significant constitutional cases in India’s judicial history.

Major judgments of the Supreme Court are mentioned in the newscard. Aspirants are advised to memorize them all with thier key features. UPSC may ask a prelim question mentioning all these judgements and asking which of them are related/not related to the Amendments in the Constitution.  Right from the Shankari Prasad Judgment (1951) to the Ayodhya Judgement (2019), note down all important judgements.

Background

Amending  the Constitution

  • The Constitution of a country is the fundamental law of the land. It is based on this document that all other laws are made and enforced.
  • Under some Constitutions, certain parts are immune from amendments and are given a special status compared to other provisions.
  • Since the Indian Constitution was first adopted, debates have raged as to the extent of power that Parliament should have to amend key provisions.

Early years of Absolute Power

  • In the early years of Independence, the Supreme Court conceded absolute power to Parliament in amending the Constitution, as was seen in the verdicts in Shankari Prasad (1951) and Sajjan Singh (1965).
  • The reason for this is believed to be that in those initial years, the apex court had reposed faith in the wisdom of the then political leadership when leading freedom fighters were serving as Parliamentarians.
  • In subsequent years, as the Constitution kept being amended at will to suit the interests of the ruling dispensation, the Supreme Court in Golaknath (1967) held that Parliament’s amending power could not touch Fundamental Rights, and this power would be only with a Constituent Assembly.

Parliament could make any amendment

  • Article 13(2) reads, “The State shall not make any law which takes away or abridges the right conferred by this Part (Part-III) and any law made in contravention of this clause shall, to the extent of the contravention, be void.”
  • In both the cases, the court had ruled that the term “law” in Article 13 must be taken to mean rules or regulations made in exercise of ordinary legislative power and not amendments to the Constitution made in exercise of constituent power under Article 368.
  • This means Parliament had the power to amend any part of the constitution including Fundamental rights.

The tussle between Parliament and the judiciary

  • In the early 1970s, the government of then PM Indira Gandhi had enacted major amendments to the Constitution (the 24th, 25th, 26th and 29th) to get over the judgments of the Supreme Court in RC Cooper (1970), Madhavrao Scindia (1970) and the earlier mentioned Golaknath.
  • In RC Cooper, the court had struck down Indira Gandhi’s bank nationalization policy, and in Madhavrao Scindia it had annulled the abolition of privy purses of former rulers.

Background for the Kesavananda Bharati Case

  • All the four amendments, as well as the Golaknath judgment, came under challenge in the Kesavananda Bharati case.
  • Here, relief was sought by the religious figure Swami Kesavananda Bharati against the Kerala government vis-à-vis two state land reform laws.
  • Since Golaknath was decided by eleven judges, a larger bench was required to test its correctness, and thus 13 judges formed the Kesavananda bench.
  • Critics of the doctrine have called it undemocratic since unelected judges can strike down a constitutional amendment. At the same time, its proponents have hailed the concept as a safety valve against majoritarianism and authoritarianism.
  • Noted legal luminaries Nani Palkhivala, Fali Nariman, and Soli Sorabjee presented the case against the government.
  • The majority opinion was delivered by CJI S M Sikri, and Justices K S Hegde, A K Mukherjea, J M Shelat, A N Grover, P Jaganmohan Reddy, and H R Khanna. Justices A N Ray, D G Palekar, K K Mathew, M H Beg, S N Dwivedi, and Y V Chandrachud dissented.

A closer win

  • By a 7-6 verdict, a 13-judge Constitution Bench ruled that the ‘basic structure’ of the Constitution is inviolable, and could not be amended by Parliament.
  • The basic structure doctrine has since been regarded as a tenet of Indian constitutional law.

The judgment in Kesavananda Bharati

  • The Constitutional Bench, whose members shared serious ideological differences, ruled by a 7-6 verdict that Parliament should be restrained from altering the ‘basic structure’ of the Constitution.
  • The court held that under Article 368, which provides Parliament amending powers, something must remain of the original Constitution that the new amendment would change.
  • The court did not define the ‘basic structure’, and only listed a few principles — federalism, secularism, democracy — as being its part.
  • Since then, the court has been adding new features to this concept.

‘Basic structure’ since Kesavananda

  • The basic structure doctrine was first introduced by Justice Mudholkar in the Sajjan Singh case (1965).
  • Major features were notably propounded by Justice Hans Raj Khanna in 1973.
  • The ‘basic structure’ doctrine has since been interpreted to include the supremacy of the Constitution, the rule of law, Independence of the judiciary, doctrine of separation of powers, federalism, secularism, sovereign democratic republic, the parliamentary system of government, the principle of free and fair elections, welfare state, etc.
  • An example of its application is SR Bommai (1994), when the Supreme Court upheld the dismissal of the governments by the President following the demolition of the Babri Masjid, invoking a threat to secularism by these governments.

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

How the ozone layer hole over Arctic closed?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Ozone, Polar Vortex

Mains level: Ozone hole healing

Recently the EU’s Copernicus Atmosphere Monitoring Service (CAMS) announced that a hole in the Arctic ozone layer, believed to be the biggest reported, has closed.

What healed the hole in the Ozone?

  • The ozone hole’s closing was because of a phenomenon called the polar vortex, and not because of reduced pollution levels due to Covid-19 lockdowns around the world.
  • The hole in the North Pole’s ozone layer, which was first detected in February, had since reached a maximum extension of around 1 million sq km.

Ozone hole

  • The ‘ozone hole’ is not really a hole — it refers to a region in the stratosphere where the concentration of ozone becomes extremely low in certain months.
  • Ozone, made up of three oxygen atoms, occurs naturally in small amounts.
  • Roughly 10 km to 40 km up in the atmosphere (the layer called the stratosphere), the ozone layer is sunscreen, shielding Earth from harmful ultraviolet radiation.
  • Manufactured chemicals deplete the ozone layer. Each spring over Antarctica (it now springs there), atmospheric ozone is destroyed by chemical processes.
  • This creates the ozone hole, which occurs because of special meteorological and chemical conditions that exist in that region.

The importance of the ozone layer

  • Ozone (chemically O3, a molecule of three oxygen atoms) is found mainly in the upper atmosphere, an area called the stratosphere, between 10 and 50 km from the earth’s surface.
  • Though it is talked of as a layer, ozone is present in the atmosphere in rather low concentrations.
  • Even at places where this layer is thickest, there are not more than a few molecules of ozone for every million air molecules.
  • They perform a very important function. By absorbing the harmful ultraviolet radiations from the sun, the ozone molecules eliminate a big threat to life forms on earth.
  • UV rays can cause skin cancer and other diseases and deformities in plants and animals.

Why this year’s hole was massive?

  • This year, the ozone depletion over the Arctic was much larger.
  • Scientists believe that unusual atmospheric conditions, including freezing temperatures in the stratosphere, were responsible.
  • Cold temperatures (below -80°C), sunlight, wind fields and substances such as chlorofluorocarbons (CFCs) were responsible for the degradation of the Arctic ozone layer.
  • Although Arctic temperatures do not usually fall as low as in Antarctica, this year, powerful winds flowing around the North Pole trapped cold air within what is known as the polar vortex.
  • By the end of the polar winter, the first sunlight over the North Pole initiated this unusually strong ozone depletion—causing the hole to form.

How long it will take for complete recovery?

  • As per the Scientific Assessment of Ozone Depletion data of 2018, the ozone layer in parts of the stratosphere has recovered at a rate of 1-3 per cent per decade since 2000.
  • At these projected rates, the Northern Hemisphere and mid-latitude ozone is predicted to recover by around 2030, followed by the Southern Hemisphere around 2050, and polar regions by 2060.

Also read: Polar Vortex

What’s causing extreme cold in US Midwest

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Cyber Security – CERTs, Policy, etc

What are Deep Fakes?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Deep Fake

Mains level: Cyber bullying and other threats posed by AI

Cybercrime officials in India have been tracking certain apps and websites that produce vulgar photographs of innocent persons using Artificial Intelligence (AI) algorithms. These images are then used to blackmail victims, seek revenge or commit fraud on social networking and dating sites.

The most notorious misuse of AI is knocking the door. The Deepfake is an application of Deep Learning (an axiom of AI and Machine Learning). UPSC may ask a mains question about the challenges posed by AI-based technology.

What is Deep Fake?

  • Cybercriminals use AI software — now easily available on apps and websites — to superimpose a digital composite (assembling multiple media files to make a final one) on to an existing video, photo or audio.
  • They are computer-generated images and videos.
  • Using AI algorithms a person’s words, head movements and expressions are transferred onto another person in a seamless fashion.
  • That makes it difficult to tell that it is a deepfake unless one closely observes the media file.

Threats posed

  • Because of how realistic deepfake images, audio and videos can be, the technology is vulnerable for use by cybercriminals who could spread misinformation to intimidate or blackmail people.
  • With real-time face tracking it is becoming easier to fabricate believable videos of people doing and saying things they never did.
  • There are rising cases of “revenge porn” i.e. creation of sexually explicit videos or images that are posted on the Internet without the consent of the subject as a way to harass them.

What are the catfish accounts?

  • Catfishing refers to the practice of setting up fictitious online profiles most often for the purpose of luring another into a fraudulent romantic relationship.
  • A “catfish” account is set up a fake social media profile with the goal of duping that person into falling for the false persona.

What can we do to protect yourself?

  • A basic check of their social media profiles, comments on the images and whether similar profiles exist could help determine if the person is genuine.
  • While it is not easy to keep track of who downloads or misuses the user images, the best way to protect is to ensure that we are using privacy settings on social media profiles.
  • If one feels his/her image has been used without prior permission, they could use freely available reverse image search tools to find images that are similar to yours.
  • One can also be mindful of who he/she is conversing with on the web.

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Modern Indian History-Events and Personalities

Who was Lord Basaveshwara?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Lord Basaveshwara and his philosophy

Mains level: Six schools of Indian Philosophy

Prime Minister has offered his homage to the 12th-century social reformer Basaveshwara on his birth anniversary.

Vaishnavism and Shaivism are the two most profound strands of Bhakti Movement in Indian history. Enlist all the Bhakti Saints and their theistic philosophy and teachings. Try to spot the minute differences between them.

Lord Basaveshwara

  • Basaveshwara or Basavanna was an Indian 12th-century statesman, philosopher, a poet and Lingayat saint in the Shiva-focussed Bhakti movement and a social reformer in Karnataka.
  • He lived during the reign of the Kalyani Chalukya/Kalachuri dynasty.
  • He was active during the rule of both dynasties but reached his peak of influence during the rule of King Bijjala II in Karnataka, India .

Founder of Lingayat cult

  • The traditional legends and hagiographic texts state Basava to be the founder of the Lingayats.
  • However, modern scholarship relying on historical evidence such as the Kalachuri inscriptions state that Basava was the poet-philosopher who revived, refined and energized an already existing tradition.

His Philosophy

  • Basava’s Lingayat theology was a form of qualified nondualism, wherein the individual Atman (soul) is the body of God, and that there is no difference between Shiva and Atman (self, soul).
  • Basava’s views finds places in Vedanta school, in a form closer to the 11th century Vishishtadvaita philosopher Ramanuja.

Famous works

  • Basavanna spread social awareness through his poetry, popularly known as Vachanaas.
  • Basavanna rejected gender or social discrimination, superstitions and rituals but introduced Ishtalinga necklace, with an image of the Shiva Liṅga to every person regardless of his or her birth.
  • As the chief minister of his kingdom, he introduced new public institutions such as the Anubhava Mantapa (or, the “hall of spiritual experience”) which welcomed men and women from all socio-economic backgrounds.

Back2Basics: Bhakti Movement

  • The Bhakti movement refers to the theistic devotional trend that emerged in medieval Hinduism.
  • It originated in eighth-century south India and spread northwards.
  • It swept over east and north India from the 15th century onwards, reaching its zenith between the 15th and 17th century CE.
  • It has traditionally been considered as an influential social reformation in Hinduism, and provided an individual-focused alternative path to spirituality regardless of one’s birth or gender
  • Salvation which was previously considered attainable only by men of Brahmin, Kshatriya and Vaishya castes, became available to everyone.

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Nuclear Diplomacy and Disarmament

World at the edge of a new nuclear arms race

Note4Students

From UPSC perspective, the following things are important :

Prelims level: CTBT, New START, INF etc.

Mains level: Paper 2- CTBT and reasons for India's decision to withdraw from the talks.

The focus of this article is on the possible revival of the nuclear arms race among the US, China and Russia. In this context, the purpose and present status of the CTBT, which was aimed at ending the nuclear arms race is also discussed. The article ends by predicting the beginning of new arms race and possible demise of the CTBT.

What were the findings of US compliance report?

  • State Department Report: In mid-April, a report was issued by the United States State Department on “Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments (Compliance Report).
  • Tests with low yields by China: The report raised concerns that China might be conducting nuclear tests with low yields at its Lop Nur test site.
  • And these tests are conducted in violation of its Comprehensive Nuclear-Test-Ban treaty (CTBT)
  • Violation by Russia: The U.S. report also claims that Russia has conducted nuclear weapons experiments that produced a nuclear yield and were inconsistent with ‘zero yield’ understanding underlying the CTBT.
  • Though it was uncertain about how many such experiments had been conducted by Russia.
  • Russia and China have rejected the U.S.’s claims.
  • New nuclear arms race: With growing rivalry among major powers the report is a likely harbinger of a new nuclear arms race.
  • The demise of CTBT: This new nuclear arms race would also mark the demise of the CTBT that came into being in 1996 but has failed to enter into force even after a quarter-century.

Background of the CTBT

  • Test ban-first step: For decades, a ban on nuclear testing was seen as the necessary first step towards curbing the nuclear arms race but Cold War politics made it impossible.
  • A Partial Test Ban Treaty was concluded in 1963 banning underwater and atmospheric tests but this only drove testing underground.
  • By the time the CTBT negotiations began in Geneva in 1994, global politics had changed. The Cold War had ended and the nuclear arms race was over.
  • The Union of Soviet Socialist Republics, or the USSR, had broken up and its principal testing site, Semipalatinsk, was in Kazakhstan (Russia still had access to Novaya Zemlya near the Arctic circle).
  • In 1991, Russia declared a unilateral moratorium on testing, followed by the U.S. in 1992.
  • By this time, the U.S. had conducted 1,054 tests and Russia, 715.
  • Negotiations were often contentious.
  • Eventually, the U.S. came up with the idea of defining the “comprehensive test ban” as a “zero yield” test ban that would prohibit supercritical hydro-nuclear tests but not sub-critical hydrodynamic nuclear tests.

Make note of the points mentioned under “entry-into-force” provision given below. The reasons for India’s withdrawal from the negotiation are important from the UPSC perspective.

“Entry-into-force” provision and India’s objections to it

  • Another controversy arose regarding the entry-into-force provisions (Article 14) of the treaty.
  • Why India withdrew from negotiations? After India’s proposals for anchoring the CTBT in a disarmament framework did not find acceptance, in June 1996, India announced its decision to withdraw from the negotiations.
  • Unhappy at this turn, the U.K., China and Pakistan took the lead in revising the entry-into-force provisions.
  • What is “entry-into-force” provision? The new provisions listed 44 countries by name whose ratification was necessary for the treaty to enter into force and included India.
  • India’s objection: India protested that this attempt at arm-twisting violated a country’s sovereign right to decide if it wanted to join a treaty but was ignored.
  • The CTBT was adopted by a majority vote and opened for signature.
  • Of the 44 listed countries, to date, only 36 have ratified the treaty.
  • Signed but not ratified: China, Egypt, Iran, Israel and the U.S. have signed but not ratified.
  • China maintains that it will only ratify it after the U.S. does so but the Republican-dominated Senate had rejected it in 1999.
  • Not signed, not ratified: In addition, North Korea, India and Pakistan are the three who have not signed.
  • All three have also undertaken tests after 1996; India and Pakistan in May 1998 and North Korea six times between 2006 and 2017.
  • The CTBT has therefore not entered into force and lacks legal authority.

An organisation to verify CTBT

  • Even though CTBT has not entered into force, an international organisation to verify the CTBT was established in Vienna with a staff of about 230 persons and an annual budget of $130 million.
  • Ironically, the U.S. is the largest contributor with a share of $17 million.
  • The Comprehensive Nuclear-Test-Ban Treaty Organisation (CTBTO) runs an elaborate verification system built around a network of over 325 seismic, radionuclide, infrasound and hydroacoustic (underwater) monitoring stations.
  • The CTBTO has refrained from backing the U.S.’s allegations.

The revival of the nuclear arms race

  • End of the unipolar world for the US: The key change from the 1990s is that the S.’s unipolar moment is over and strategic competition among major powers is back.
  • The U.S. now identifies Russia and China as ‘rivals’.
  • Its Nuclear Posture Review asserts that the U.S. faces new nuclear threats because both Russia and China are increasing their reliance on nuclear weapons.
  • The U.S., therefore, has to expand the role of its nuclear weapons and have a more usable and diversified nuclear arsenal.
  • The Trump administration has embarked on a 30-year modernisation plan with a price tag of $1.2 trillion, which could go up over the years.
  • Concerns of Russia and China: Russia and China have been concerned about the U.S.’s growing technological lead particularly in missile defence and conventional global precision-strike capabilities.
  • Russia has responded by exploring hypersonic delivery systems and theatre systems while China has embarked on a modernisation programme to enhance the survivability of its arsenal which is considerably smaller.
  • Cyber capabilities being increased: In addition, both countries are also investing heavily in offensive cyber capabilities.
  • The New Strategic Arms Reduction Treaty (New START) limits U.S. and Russian arsenals but will expire in 2021
  • And U.S. President Donald Trump has already indicated that he does not plan to extend New START.
  • Instead, the Trump administration would like to bring China into some kind of nuclear arms control talks.
  • But China has avoided such talks by pointing to the fact that the S. and Russia still account for over 90% of global nuclear arsenals.

Context of the US backtracking from negotiated agreements

  • Both China and Russia have dismissed the U.S.’s allegations.
  • They pointed to the Trump administration’s backtracking from other negotiated agreements such as the Iran nuclear deal or the U.S.-Russia Intermediate-Range Nuclear Forces (INF)
  • Tensions with China are already high with trade and technology disputes, militarisation in the South China Sea and most recently, with the novel coronavirus pandemic.
  • The U.S. could also be preparing the ground for resuming testing at Nevada.

In the context of the latest developments, a question can be asked by the UPSC, for ex- “In the light of the latest developments on the global platform which are pointing to the revival of the nuclear arms race, how far India’s decision to not sign the CTBT is justified?”

Conclusion

New rivalries have already emerged. Resumption of nuclear testing may signal the demise of the ill-fated CTBT, marking the beginnings of a new nuclear arms race. 


Back2Basics: What is “zero-yield test?”

  • This means that the agreement prohibits all nuclear explosions that produce a self-sustaining, supercritical chain reaction of any kind whether for weapons or peaceful purposes.
  • The decision not to include a specific definition of scope in the Treaty was a deliberate decision by the negotiating parties, including the United States, made to ensure that no loopholes were created by including a highly technical and specific list of what specific activities were and were not permitted under the Treaty.
  • A thorough review of the history of the Treaty negotiation process, as well as statements by world leaders and the negotiators of the agreement, shows that all states understand and accept the CTBT as a “zero-yield” treaty.

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Coronavirus – Economic Issues

The universal delivery of food and cash transfers by the state amid Covid-19

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much.

Mains level: Paper 2- Provision and suggestions to reduce the impact of corona crisis on the poor.

This focus of this article is on the universal delivery of food and cash transfer amid corona pandemic. There are some estimates of the cost of universal cash transfer and food delivery in the article and suggestion to ensure universal delivery.

Universal food and cash delivery is needed

  • The immediate need for universal food and cash delivery is by now obvious and urgent.
  • Across the country, there are reports of people — migrant workers, local workers, peasants, pastoralists, fisherpeople, vendors, ragpickers, and the destitute — facing extreme hardship, even starvation, because their livelihoods have been extinguished by the lockdown.
  • These have created further an unprecedented humanitarian crisis, as millions of households with depleted savings have no way to access food and other basic necessities over the coming weeks.
  • The threat of infection from COVID-19 makes even harder their coping mechanisms.
  • In these dire circumstances, it is essential for the state to directly provide the basic means of survival to anyone who needs it.
  • This must be in both cash and kind. Food access is the most important.
  • But because of the closure of economic activity and the absence of any livelihood opportunity, this must be combined with cash transfers to tide over this period and the immediate aftermath.
  • Food transfers must be provided for at least six months, and cash transfers for at least three months, though these can be extended depending on the period of lockdown.
  • Because of the severity of the crisis and the high probability of widespread hunger and descent into poverty, these transfers must be universal, made available to every person who needs them, without relying on exclusionary criteria, existing lists or biometric identification.

The points mentioned below give us the ideal of food-grain stocks with India. And there are also the estimates of how much would be required if we decide to go for universal delivery of food. The data given below is important from Mains perspective.

How much will be the cost of universal food delivery?

  • Consider first free universal provisioning of 10 kg of grain (wheat or rice) per person per month.
  • This is likely to be availed of by at most around 80 per cent of the population.
  • With an estimated population of 1.3 billion, providing this for six months would require 62.4 million tonnes of grain.
  • This is a maximal estimate — the actual requirement would be lower.
  • Stocks with the FCI: The FCI is currently holding 77 million tonnes of foodgrain stocks, compared to buffer stock norms of 24 million tonnes.
  • It is expected to procure another 40 million tonnes from the current rabi harvest.
  • It could easily release and allow the free distribution of foodgrain of 5 million tonnes and still have foodgrain stocks of 54.5 million tonnes, if the expected rabi procurement targets are met.
  • Cost of storing grains: Furthermore, it is costly for the FCI to store this grain. The current costs of storage are estimated to be Rs 5.60 per kilogramme per year or Rs 2.80 for six months.
  • This means that by releasing 4 million tonnes to feed the hungry of India over the next six months, the FCI would actually be saving Rs 17,472 crore, assuming that these idle stocks would have persisted.
  • But even if these were sold, the costs are the revenue that would have been earned.
  • This is difficult to estimate but by using Finance Minister’s estimates in Budget we get a (maximal) figure of Rs 1,17,000 crore.

Cost of universal cash transfer

  • In addition, a proposed cash transfer of Rs 7,000 per month for three months to every household, assuming again that 80 per cent of households would receive this.
  • With five persons per household, this expenditure would be Rs 4,36,800 crore.
  • The two transfers together amount to Rs 5,53,800 crore, or around 9 per cent of currently estimated GDP.

Financing the expenditure through fiscal deficit

  • This sum of Rs. 5,53,800 is not a forbidding sum.
  • A great part of the responsibility to make these resources available vests with the Union government.
  • But whatever taxes are introduced in a supplementary budget that has become unavoidable, the expenditure incurred has to be financed immediately through a fiscal deficit.
  • Given the massive deflationary pressures and a complete collapse of economic activity, there is a strong case for financing the additional public expenditure through deficit financing or borrowing directly from the RBI.
  • This is required both for coping with the pandemic and for softening the blow of the lockdown.

Following two suggestions are important suggestions for the delivery of food and cash in case we don’t have reliable data.

How to ensure universal delivery of food?

  • The question arises of how universal delivery of these food and cash transfers is to be ensured.
  • Existing lists are inadequate for the purpose because they significantly underestimate and exclude those who should be beneficiaries.
  • For example, at least 100 million people are excluded from access to food under the National Food Security Act based on the 2011 Census.
  • The most effective way of dealing with the food emergency is to provide food delivery at doorsteps or neighbourhood collection points to anyone who asks for it, with a simple marker such as the indelible ink used during elections to serve as the indicator of receipt.

How to endure universal delivery of cash?

  • For cash transfers, the matter is more complicated.
  • In rural India, MGNREGA job cards and pensions cover most households and allow bank payments.
  • The urban poor include migrants, contract and casual workers mostly in small and medium enterprises, daily wagers, domestic workers, self-employed persons like street vendors, sex workers and ragpickers, and the destitute including homeless people.
  • But there is no comprehensive record of the urban poor because the state has instituted no effective mechanisms to secure labour rights or social security rights to most urban workers.
  • The urban poor build and service the city, surviving without rights and a hostile or indifferent state.
  • The legally-mandated registration of inter-state migrants and construction workers in practice excludes most because their employers with the connivance of the state don’t wish to be bound to secure their rights.
  • The humanitarian emergency created by the pandemic and lockdown entails universal cash transfers again to every adult who presents herself to designated officials in decentralised offices.
  • For those who have accessible bank accounts, the funds can be credited to these accounts.
  • For others, the Odisha system, whereby pensions are disbursed as cash in hand at pre-specified times, maybe a useful model to follow.
  • This also can be adopted with indelible ink as proof of receipt.

Employment schemes after cash transfers

  • The income transfers must quickly give way to an expanded rural employment guarantee scheme, and a new urban employment programme.
  • These urban employment programs include caregiving and building water supply, sanitation and shelter for the urban poor.
  • Private hospitals also need to be nationalised at least for the duration of the pandemic.

Conclusion

The working and poor people should not be made to bear the burden of the pandemic. There is a need for a bold resolve, by central and state governments, to literally reach the last person, rural or urban, with the food and cash they require to survive with dignity.

 

 

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Coronavirus – Economic Issues

East India will require heavy investment to tide over the post-Covid loss of livelihood

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Consumption expenditure.

Mains level: Paper 3- The lack of employment opportunities is one the biggest challenges facing eastern states and Covid-19 pandemic has made it the pressing issue. What are the reasons for the problem? Suggest the ways to deal with the problem.

The article discusses the issue of migrant labourers and the problems eastern states could face due to the return of labourers and the lack of employment opportunities in these states. The return of migrant labourers may lead to the mechanisation in the states where they worked. A relief-cum-stimulus package at least 5% of the GDP is suggested by the author.

IMF’s projections for the economy

  • The IMF’s projections for GDP growth for this year seem to be either in the negative or below 2 per cent for almost all major countries of the G-20 group.
  • India could do a little better compared to the other BRICS nations, but its growth will most likely be below 2 per cent.
  • This, of course, is under an optimistic scenario.
  • Many experts reckon that India could also go into negative GDP growth this year if it does not reboot the economy properly and in time.

The problem of collapse in demand

  • The Centre and the Reserve Bank of India are trying to remove all roadblocks so that factories and farms can resume operations.
  • The focus is largely on the supply side — how to ease restrictions and how to increase liquidity in the system for resuming production.
  • It may not take too long as the real problem is the collapse in demand.
  • And that demand may not pick up easily as the virus is likely to stay with us for quite some time.
  • We could have lockdowns again if there is a surge in infection.
  • This will surely limit our travel and restrict our shopping for non-essentials.
  • However, there is one demand that can easily revive — that of food.

Why food demand matters?

  • The NSSO survey of consumption expenditures for 2011-12 revealed that about 45 per cent of the total expenditure of an Indian household is on food.
  • For the poor, the NSSO reckoned, this figure was about 60 per cent.
  • We do not have information about the consumption patterns in 2020, guess is that about 35-40 per cent of the expenditure of an Indian household is on food and for a poor household, this figure is around 50 per cent.
  • Herein, lies the scope to reboot the economy.

Labour shortage and mechanisation

  • The sudden announcement of the nationwide lockdown gave labours no time to go back to their families.
  • They lost their jobs and incomes and having spent whatever little savings they had, these workers have been reduced to penury.
  • The Centre and states, despite their best efforts, have not managed to address the problem of hunger of these workers.
  • Even civil society has not managed to bridge the gap.
  • The migrant labourers may well have lost their trust in the state, and once the lockdown is lifted, most of them are likely to rush back to their families in villages.
  • And, it could be some time before they are back in the cities — that is, if they return at all.
  • So, farms and factories, especially the MSMEs in the relatively developed states of western, southern and north-western India are likely to face labour shortages for many months, perhaps years.
  • This could lead to more mechanisation of farms and factories in these states.
  • In Punjab, for example, most of the wheat harvesting is already done by combined harvesters.
  • Now even paddy harvesting could be done by mechanised harvesters.

The double challenge for states which are home to migrants

  • However, eastern Uttar Pradesh, Bihar, Jharkhand, West Bengal, and Odisha, from where much of the migrant labour comes, will face a double challenge.
  • Their agriculture, with tiny farm holdings, is already saddled with a large labour force — this comprises 45 to 55 per cent of the total labour force of these states.
  • Non-farm income from wages and salaries, through migrant labour, was an important source of income for households in these states.
  • This is now severely hit. In all probability, the per capita rural incomes of these states could shrink, at least in the short run.
  • This could lead to poverty and increase hunger and malnutrition.
  • How does one then reboot the economy and also address hunger and malnutrition?

The lockdown and the subsequent plight of the migrant labourers brought to the fore uneven development in the country. The points mentioned below suggest the ways to address this problem. A question based on this issue could be asked by the UPSC, for ex- “The issue of migrant labourers amid Covid-19 pandemic highlighted the uneven development in the country. In this context, state the reasons which led to the uneven development of various regions of the country. Suggest ways to address the problem”.

The requirement of a special investment package for eastern states

  • A special investment package — like the Marshall Plan of USA in 1948 — for the eastern belt of India is required.
  • Investment should be used to build better infrastructure, agri-markets and godowns, rural housing, primary health centres, schools and enhances people’s skills.
  • The package will go a long way to revive the economy and augment the incomes of the migrant workers.
  • Rising incomes will generate more demand for food as well as manufactured products, giving a fillip to the growth engines of agriculture as well as the MSME sector.
  • Building better supply chains for food directly from farm-to-fork, led by the private sector, will enhance the export competitiveness of agriculture.
  • It will also ensure a higher share of farmers in the consumers’ rupee.
  • Long-term demand-driven growth: Such broad-based development in a relatively underdeveloped region of the country will lay the foundations of a long-term, demand-driven, growth of the industry in India.
  • The all India relief package of Rs 1.7 lakh crore announced by the central government earlier, which is about 0.8 per cent of the country’s GDP, is too small to reboot the economy.

Conclusion

If India has to bounce back quickly, it needs a much bigger relief cum stimulus package — certainly not below 5 per cent of GDP. And, it should focus more on the eastern belt, where the issue is that of survival.


Back2Basics: Marshall Plan, 1948

  • The Marshall Plan, also known as the European Recovery Program, was a U.S. program providing aid to Western Europe following the devastation of World War II.
  • It was enacted in 1948 and provided more than $15 billion to help finance rebuilding efforts on the continent.
  • The brainchild of U.S. Secretary of State George C. Marshall, for whom it was named, it was crafted as a four-year plan to reconstruct cities, industries and infrastructure heavily damaged during the war and to remove trade barriers between European neighbours – as well as foster commerce between those countries and the United States.

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Contention over South China Sea

What’s behind diplomatic tensions in the South China Sea?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Spratly and Parcel Islands- Their location

Mains level: South China Sea dispute

In the middle of the global coronavirus pandemic, China has been busy increasing its presence in the South China Sea.

The dispute

  • In the past few years, China has stepped up military aggression and has created artificial islands for military and economic purposes in the South China Sea.
  • This has drawn criticism from neighbouring countries and other western powers.
  • Soon after, Chinese and Australian warships also entered the fray.
  • Following the arrival of American warships, regional observers expressed concern that the US’s presence may only serve to heighten tensions.
  • The US has no territorial claims in the South China Sea but is known to send its naval force into the waters each time there are provocative developments in the waters, particularly angering China.

Map observations in the South China Sea are must-dos for the CSE aspirants. UPSC often toggles in the Middle East,  West and Central Asian region. This year we can expect a different region for a  map-based question.

Why in news now?

China’s advent for islands

  • This past week, Beijing unilaterally renamed 80 islands and other geographical features in the area, drawing criticism from neighbouring countries who have also laid claim to the same territory.
  • The focus of Chinese acquisitory attention is the two disputed archipelagos of the Spratly Islands and the Paracel Islands in the middle of the South China Sea waters.
  • They lie between the territory of Vietnam and the Philippines.
  • If the dispute were to aggravate, Asia-Pacific researchers believe it could have serious consequences for diplomatic relations and stability in the region.

What is the Spratly Islands dispute about?

  • There has been an ongoing territorial dispute between China, Taiwan, Vietnam, the Philippines, and Malaysia concerning the ownership of the Spratly Islands archipelago and nearby geographical features like corals reefs, cays etc.
  • Since 1968, these nations have engaged in varying kinds of military occupation of the islands and the surrounding waters, with the exception of Brunei, that has contained its objections to the use of its maritime waters for commercial fishing.
  • Although the Spratly Islands are largely uninhabited, there is a possibility that they may have large reserves of untapped natural resources.
  • However, due to the ongoing dispute, there have been few initiatives to explore the scale of these reserves.

Quest for Oil

  • Over the years, US government agencies have claimed that there is little to no oil and natural gas in these islands, but these reports have done little to reduce the territorial dispute.
  • In the 1970s, oil was discovered in neighbouring islands, specifically off the coast of Palawan. This discovery ramped up territorial claims by these countries.

What is the Paracel Islands dispute about?

  • The Paracel Islands dispute is slightly more complex. This archipelago is a collection of 130 islands and coral reefs and is located in the South China Sea, almost equidistant from China and Vietnam.
  • Beijing says that references to the Paracel Islands as a part of China sovereign territory can be found in 14th century writings from the Song Dynasty.
  • Vietnam on the other hand, says that historical texts from at least the 15th century show that the islands were a part of its territory.
  • These islands also find mention in records starting from the 16th century by explorers who led expeditions to the East.
  • Colonial powers of the French-Indochina further accelerated the tensions with regard to the Paracel Islands due to their colonial policies in the 20th century.
  • By 1954, tensions had dramatically increased between China and Vietnam over the archipelago.

What is the most recent dispute about?

  • Recent China established new administrative districts on both Spratly and Paracel Islands.
  • It also renamed those 80 islands, reefs and other geographical features around the two archipelagos with Chinese names.
  • The last time China had unilaterally engaged in a similar initiative was in 1983 where 287 geographical features had been renamed in the disputed chain of islands.

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Right To Privacy

What are the concerns around the AarogyaSetu app?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Aarogya Setu App

Mains level: Privacy issues with the app

  • Recently the AarogyaSetu app — for pan-India use was launched as the main contact tracing technology endorsed by the Central government.
  • Soon it became one of the most downloaded apps globally and has crossed the 75 million mark.
  • However, there are concerns for more transparency on the inner workings of an app that seeks the personal details of millions.

RIght to Privacy is a very much contested topic for GS. The Aarogya Setu app which has a lot more to offer, is under the radar due to underlying vacuum of Privacy Law in India.

AarogyaSetu App

  • The App enables people to assess themselves the risk of their catching the Corona Virus infection.
  • It is designed to keep track of other AarogyaSetu users that a person came in contact with and alert him or her if any of the contacts tests positive for COVID-19.
  • It achieves this using the phone’s Bluetooth and GPS capabilities.
  • Once installed in a smartphone through an easy and user-friendly process, the app detects other devices with AarogyaSetu installed that come in the proximity of that phone.
  • The app can then calculate the risk of infection based on sophisticated parameters if any of these contacts has tested positive.
  • The personal data collected by the App is encrypted using state-of-the-art technology and stays secure on the phone till it is needed for facilitating medical intervention.

Issues with the app

  • The AarogyaSetu app faces the same issue as every other contact tracing technology that has come up during the pandemic period — it is people dependent.
  • It needs widespread usage and self-reporting to be effective.
  • Given that any number of total users will be a subset of smartphone owners in India, and there are bound to be variations in the levels of self-reporting, the efficacy is not bulletproof.
  • The terms of use of the app also say as much, distancing the government from any failure on the part of the app in correctly identifying COVID-19 patients.

Are there privacy concerns?

  • First of all, the app exists in the privacy law vacuum that is India.
  • With no legislation that spells out in detail how the online privacy of Indians is to be protected, AarogyaSetu users have little choice but to accept the privacy policy provided by the government.
  • The policy goes into some detail on where and how long the data will be retained, but it leaves the language around who will have access to it vague.
  • As per the policy persons carrying out medical and administrative interventions necessary in relation to COVID-19” will have access to the data.
  • This suggests interdepartmental exchanges of people’s personal information and is more excessive than countries like Singapore and even Israel.

Technical issue

  • Beyond the legal loopholes, there are technical loopholes as well.
  • The unique digital identity in AarogyaSetu is a static number, which increases the probability of identity breaches.
  • The abundance of data collected is also potentially problematic.
  • AarogyaSetu uses both Bluetooth as well as GPS reference points, which could be seen as overkill whereas other apps such as TraceTogether make do with Bluetooth.

Other issues

  • Experts emphasise that automated contact tracing is not a panacea.
  • They caution against an over-reliance on technology where a competent human-in-the-loop system with sufficient capacity exists.

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Gravitational Wave Observations

GW190412: The first merger of two black holes with unequal masses

Note4Students

From UPSC perspective, the following things are important :

Prelims level: General Relativity, Black Holes, Black Holes merger

For the first time since it started functioning, the gravitational wave observatories at LIGO scientific collaboration have detected a merger of two unequal-mass black holes.

This newscard contains few basic terms that one must know-

Gravitational waves

General Relativity

Black Holes

GW190412

  • The event, dubbed GW190412, was detected nearly a year ago, and this is almost five years after the first-ever detection of gravitational-wave signals by these powerful detectors.
  • Subsequent analysis of the signal coming from the violent merger showed that it involved two black holes of unequal masses coalescing.
  • One of them was some 30 times the mass of the Sun and the other which had a mass nearly 8 times the solar mass.
  • The actual merger took place at a distance of 2.5 billion light-years away.

Significant feature observed

  • The detected signal’s waveform has special extra features in it when it corresponds to the merger of two unequal-sized black holes as compared with a merger of equal-sized black holes.
  • These features make it possible to infer many more things about the characters such as- a more accurate determination of the distance from the event, the spin or angular momentum of the more massive black hole and the orientation of the whole event with respect to viewers on Earth.
  • While the mass of the black hole bends the space-time close to it, the spin or angular momentum of this inscrutable object drags the nearby space-time, causing it to swirl around, along with it.
  • Hence both these properties are important to estimate.

Confirmed General Relativity

  • An Indian team consisting of researchers verified the consistency of the signal with the prediction of General Relativity.
  • The existence of higher harmonics was itself a prediction of General Relativity.

Must refer for an easy and illustrated understanding of General Relativity-

 

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Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

The Curie Family and its Nobel legacy

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Radioactivity

Mains level: NA

This newscard is inspired by an article published in the DTE which talks about a family which has received a total of four Nobel prizes, the highest won by a single-family.

Last year in 2019 CSP, there was a question on pure Biology about Hepatitis and its variants. With such news trending, we can expect a core chemistry or physics based question coupled with a slight Current Affairs blend.

The ‘Nobel’ family

  • On April 20, 1902, Marie and Pierre Curie successfully isolated radioactive radium salts from pitchblende, a mineral, in a laboratory in Paris, France.
  • They were inspired by French physicist Henri Becquerel’s 1896 experiment on phosphorescence or the phenomenon that allows certain objects to glow in the dark.
  • They were able to find traces of two radioactive elements—polonium (Element 84) and radium (Element 88).
  • Curie shared the 1903 Nobel with her fellow researcher Pierre Currie and Becquerel for their combined work on radioactivity.

Important facts

  • In 1903, Marie Curie received the Nobel Prize in Physics making her the world’s first woman to win the prize.
  • In 1911, she created history again by becoming the first woman to have won two Nobel awards.
  • The 1911 Nobel Prize in Chemistry was awarded to Marie after she managed to produce radium as a pure metal. This proved the new element’s existence beyond doubt.
  • However, this was not the last Nobel for the Curie family.
  • The 1935 Nobel in Chemistry went to Irène Curie and her husband and co-researcher Frédéric Joliot for their joint work on the artificial creation of new radioactive elements.
  • The Curies have received a total of four of Nobel prizes, the highest won by a single-family. They also have the unique distinction of having three Nobel-prize winning members in the family.

Birth of Radioactivity

  • While delivering a lecture at the Royal Academy of Sciences in Stockholm, Sweden in 1911, Curie shared some critical details about “radioactive elements” and the phenomenon called “radioactivity”.
  • She also spoke about the chemical properties of radium, the new element that was about a million times more radioactive than uranium.
  • Radium in solid salts was about 5 million times more radioactive than an equal weight of uranium.

Back2Basics: Radioactivity

  • Radioactivity refers to the particles which are emitted from nuclei as a result of nuclear instability.
  • It is the process by which an unstable atomic nucleus loses energy by radiation.
  • The most common types of radiation are called alpha, beta, and gamma radiation, but there are several other varieties of radioactive decay.
  • Radioactive decay rates are normally stated in terms of their half-lives, and the half-life of a given nuclear species is related to its radiation risk.
  • Examining the amounts of decay products makes possible radioactive dating.

Its applications

  • Medical use: Many diseases such as cancer are cured by radiotherapy. Sterilization of medical instruments and food is another common application of radiation.
  • Scientific use: Alpha particles emitted from the radioisotopes are used for nuclear reactions.
  • Industrial use: Radioisotopes are used as fuel for atomic energy reactors. Also used in Carbon dating.

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Roads, Highways, Cargo, Air-Cargo and Logistics infrastructure – Bharatmala, LEEP, SetuBharatam, etc.

Rohtang Pass and its location

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Various passes in news, BRO

Mains level: NA

The Border Roads Organisation (BRO) has opened the Rohtang Pass, three weeks in advance, for transporting essential supplies and relief materials to Lahaul and Spiti districts of Himachal Pradesh.

 Rohtang Pass

  • It is a high mountain pass (elevation 3,980 m) on the eastern Pir Panjal Range of the Himalayas around 51 km from Manali.
  • It connects the Kullu Valley with the Lahaul and Spiti Valleys of Himachal Pradesh, India.
  • The pass lies on the watershed between the Chenab and Beas basins.
  • On the southern side of this pass, the Beas River emerges from underground and flows southward and on its northern side, the Chandra River, a source stream of the river Chenab, flows westward.

Another pass in new:

Sela Pass Tunnel Project

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Indian Air Force Updates

Exercise Pitch Black 2020

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Exercise Pitch Black 2020

Mains level: NA

Australia has informed India that their premier multilateral air combat training exercise Pitch Black 2020 scheduled in July has been cancelled due to the COVID-19 situation.

All-time generic question seeking ‘match the pairs’ can be asked from the news as such.  Click here for more exercises.

 Ex Pitch Black 2020

  • Exercise Pitch Black is a biennial warfare exercise hosted by the Royal Australian Air Force (RAAF).
  • The aim of the exercise is to practice Offensive Counter Air (OCA) and Defensive Counter Air (DCA) combat, in a simulated war environment.
  • In the last edition of Pitch Black in 2018, the IAF for the first time participated with its Su-30MKI fighters, one C-130 and one C-17 transport aircraft.
  • It provided a unique opportunity for an exchange of knowledge and experience with these nations in a dynamic warfare environment.
  • The next edition of Pitch Black is scheduled in 2022.

India’s defence relation with Australia

  • The defence and strategic engagement with Australia have steadily gone up in recent years especially on the bilateral front with naval cooperation at the forefront.
  • The bilateral naval exercise AUSINDEX early last year saw the participation of the largest Australian contingent ever to India with over 1,000 personnel.
  • The Mutual Logistics Support Agreement (MLSA) has been long pending and is expected to be concluded soon as well as a broader maritime cooperation agreement including the Maritime Domain Awareness (MDA) to elevate the existing strategic partnership.
  • Australia recently made a pitch for trilateral cooperation among India, Australia and Indonesia to identify new ways that our three countries can collaborate to be the best possible custodians of the Indian Ocean.

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Coronavirus – Economic Issues

Lockdown with a human face: Immediate focus should be on alleviating hardships of poor, vulnerable groups

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much.

Mains level: Paper 3- What measures are necessary to revive the economy after corona crisis?

The article deals with the policy response to the crisis. Reducing the pain inflicted on the poor and vulnerable section should be the priority. The size and nature of the stimulus package is also discussed in the article.

The dilemma of lives Vs. livelihood

  • As the coronavirus spreads, severe dilemmas haunt policymakers.
  • Testing of lockdown? Even the scientific community is confused and does not seem to know whether the South Korean model of more intensive testing is preferable to the European model of a complete lockdown.
  • The economic crisis that we are facing today is very different from any crisis that we have encountered recently.
  • This is the first economic crisis in recent memory to have been triggered by a non-economic factor — a pandemic.
  • A lockdown essentially amounts to limited economic activity and this results in throwing temporary workers and daily wage earners out of employment.
  • Migrant labour falls in this category.
  • According to the 2011 census, the number of migrant workers under the category, “migrants for work/employment” was 41.42 million.
  • This number must have grown substantially by now.
  • The impact of the lockdown has fallen very heavily on the poor and vulnerable groups.
  • We need to bear this in mind while evolving the strategy to combat the virus.

Expenditure during the pandemic

  • First, medical and healthcare expenditure, which includes the money spent on extension of hospital facilities, employment of additional medical and healthcare workers, costs of testing on a much wider scale and the purchase of accessories like personal protection equipment, ventilators and testing kits.
  • The expenditure under this category is a “must” and there can be no compromise on it.
  • The length of the battle will decide the cost.
  • Second, the expenditure involved in taking care of the people thrown out of employment, and other vulnerable sections of the population.
  • Third, stimulation expenditure aimed at restarting the economy. Here, the financial system presided over by the RBI will play an important role. But the government also has a role.

Two issues to consider while deciding on the lockdown

  • The “life” versus “livelihood” dilemma pertains to the lockdown policy.
  • A tight lockdown over an extended period may save lives by curtailing the progress of the virus.
  • But at the same time, it places several segments of society under severe hardship.
  • With the lack of economic activity, many will go hungry.
  • In this context, the government must look at two issues.
  • First, it must consider to the extent to which the lockdown can be relaxed while keeping in mind the priority of restricting the spread of the virus.
  • The government has recently announced some relaxations.
  • This is a welcome step. However, it must keep this concern under continuous consideration. It must explore other options on the medical front as well.
  • For example, will more testing make it possible to reduce restrictions?
  • Second, if the lockdown is a “compulsion”, we need to pay adequate attention to the plight of people who have been affected adversely.
  • The government had earlier announced certain measures to help some segments of society.
  • With the lockdown being extended, it is necessary to raise the levels of relief, and also cover segments of society not covered earlier — migrant labour, for example.

The following points about the stimulus package are appearing repeatedly in most of the article on economic damage to the economy. They are also relevant from the UPSC perspective. A question based on it,  like “What steps were taken by the government to revive the Indian economy in the aftermath of the corona crisis?” can be asked.

What should be the nature of the stimulus package?

  • There is much talk about a “stimulation package” to revive the economy.
  • The financial system will have to lead the charge.
  • Additional expenditure: Expectations regarding additional expenditures by the government vary from 2 per cent of the GDP to 5 per cent of the GDP.
  • Normal sources of financing will not be adequate to meet this order of expenditure.
  • Many analysts felt that the figure of 3.5 per cent of the GDP as the fiscal deficit, indicated in the budget for 2020-21, would be exceeded.
  • The pandemic will necessitate an increase in expenditure.
  • Moreover, with the decline in economic activity, revenues will also go down.
  • The revenue projections were made on the assumption that the nominal income growth would be 10 per cent.
  • But this is unlikely to be achieved. The nominal income growth is likely to be 7 per cent, at best.
  • Given the increase in expenditures and the slowdown in revenue collection, the borrowing programme will exceed significantly over what was indicated in the budget.
  • The monetisation of debt is inevitable and it will have its own consequences.
  • Provisions for states: The brunt of the expenditures will be borne by the state governments and therefore, the Centre must allocate additional resources to them.
  • They may also be allowed additional borrowing above 3 per cent of the state domestic product.

What will be the overall growth rate for India?

  • In the first quarter of 2020-21, the GDP growth rate will be negative.
  • Agricultural performance during the year could be the same as in 2019-20 as the rainfall is expected to be normal.
  • The developed world may go through a recession over the year.
  • Thus the external sector may not be of much help.
  • It is quite possible for the economy to have a V-type recovery from the second quarter of 2020-21.
  • On that assumption, the overall growth rate for the year can be 3 per cent. This is an optimistic estimate.

Conclusion

To return to the present, the focus of the government has to be two-fold. It must act vigorously to contain the virus, explore the possible alternatives to complete lockdown. Second, it must take all actions to provide adequate help to the poor and the needy including the migrant workers. Lockdown, as necessary, must be with a human face.

 

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Coronavirus – Health and Governance Issues

Public policy dilemma of choosing between lives and livelihood

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much.

Mains level: Paper 2- Policy making and balancing the conflicts between various stakeholders.

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

Difference between risk and uncertainty

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

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

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

Lack of data for various factors

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

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

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

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

Balancing the differential individual preferences in public policy

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

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

Conclusion

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

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Coronavirus – Health and Governance Issues

Stress test of leadership in pandemic

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much.

Mains level: Paper 2- Do you agree with the view that coordination at global level was lacking in fight against Covid-19?

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

Stages in the pandemic response

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

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

Following three factors make the difference between successful and failed response

1. Leadership problems in global politics

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

2. The whole-of-the-government strategy

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

3. The robust public health system

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

Conclusion

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

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Government Budgets

What is “Direct” Monetization of Deficit?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: “Direct” monetisation of the deficit

Mains level: Various tools for deficit financing and their feasiblity

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

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

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What is “direct” monetisation of the deficit?

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

What triggers a demand for direct monetization?

1) Decline of Demand

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

2) Moving ahead for a fiscal deficit

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

3) No money in the market

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

How is DM different form OMOs?

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

Global examples

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

Has India ever done this in the past?

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

Issues with Direct monetisation

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

Issues: Inflationary practice

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

To what level should government debt be ideally limited?

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

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President’s Rule

Issues with nominated CM’s election

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Discretionary powers of Governor

Mains level: Read the attached story

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

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

CM without Election

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

Governors dilemma

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

What does the Judiciary have to say?

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

Testing the nomination route

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

The role of the Governor

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

A new issue for debate

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

The question of discretion

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

Case in Maharashtra

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

Also read:

Role of Governor in State govt. formation

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