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  • Russian Invasion of Ukraine: Global Implications

    Food Security and Energy Crisis In The South Asian neighbourhood

    op-ed snap | Economics | Mains Paper 3: Inclusive Growth & Issues

    Central Idea

    • To be sure, the Ukraine-Russia conflict has thrown the energy markets into a crisis in several Global South nations. In addition, the supply cuts by edible-oil exporting countries, alongside the rise in fuel prices, have led to a surge in food prices, making food security a primary concern, especially for the vulnerable sections of society. In addition, China’s COVID-19 surge has dampened global economy, especially in BoB.

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    How the South Asian neighbourhood is in flux?

    • Sri Lanka and Pakistan: Sri Lanka and Pakistan are facing economic headwinds, with the former having gone through a full-blown economic collapse and the latter facing huge external debts, power shortages, and extreme inflation.
    • Bangladesh: The IMF sanctioned a precautionary loan of US $4.7 billion to Bangladesh amidst the precarious macroeconomic situation in the country, with high inflation and volatility of the Bangladeshi Taka.
    • Myanmar: A post-coup Myanmar sees a shutdown of businesses and a massive spike in unemployment.
    • Nepal: Nepal, too, sees widening trade deficits and declining foreign exchange reserves.

    How Russia-Ukraine war challenges Food security?

    • Russia-Ukraine war and the resulting food crisis: Ukraine and Russia play a significant role in the global food supply chains, further affecting low- and middle-income countries and vulnerable populations already grappling with hunger in the post-pandemic world.
    • Wheat suppliers: Since both countries exported more than one-third of the world’s wheat and barley, and about 70 percent of sunflower oil, governments around the world were severely hit as the war stopped exports of around 20 million tons of Ukrainian grain.
    • Agricultural commodities exports to Asia have dried up: An estimated 6 million tons of agricultural commodities were exported monthly to Asia, Africa, and the Middle East. As of June 2022, this number had dried up to a fifth of its original value.
    • Ripple effects on food prices and availability: According to the United Nations’ (UN) Food and Agriculture Organization (FAO), global food prices have risen by 20 percent. It further predicts a rise in the undernourished population to be between 7.6 to 13.1 million, because of the conflict situation and its ripple effects on food prices and availability.

    Sri Lanka: A case of Food security crisis

    • The economic meltdown in Sri Lanka wreaked havoc on the food security of the local population.
    • For Sri Lanka, the sudden switch to organic farming in 2021 worsened its trade performance in the agricultural sector.
    • The island nation had to import sugar, rice, and various other commodities, including intermediate goods in which the economy had had a previous surplus.
    • By 2022, the tea industry, which was a major commodity of exchange, incurred losses of approximately US $425 million, further worsening the economy’s foreign exchange situation.

    Energy crisis

    • Heavy on energy imports: The data analysis on energy imports shows that all the countries in Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation (BIMSTEC), especially India, Myanmar, and Bhutan, rely heavily on energy imports.
    • Fuel dependency makes the region highly vulnerable to external shocks: The trade dependency on fuel is a major curse for the region, making it highly vulnerable to exogenous macroeconomic shocks. The Russia-Ukraine conflict underscores the importance of nations having self-reliance regarding energy.
    • Absence of infrastructure and synchronisation in BIMSTEC Grid plan: Despite the BIMSTEC countries having developed a ‘Plan of Action for Energy Cooperation in BIMSTEC’ and also signed a MoU for the establishment of the BIMSTEC Grid Interconnection in August 2018, the absence of required infrastructure and adaptive power market, the lack of synchronisation of the grid system, the lack of financial policies, and other related issues have made progress in energy cooperation slow among the countries in the region.

    Bangladesh: In a tough spot

    • Unable to set in motion the transition to renewable energy, alongside heavy dependence on fuel imports, Bangladesh, especially, has been placed in a tough spot concerning energy security.
    • The Russia-Ukraine conflict has added more fuel to this fire. With energy prices climbing upwards and subsidy bills increasing, the fiscal balances and current account deficits have been worrisome for Bangladesh’s economy.
    • The government had to finally put in place some austerity measures. The domestic prices of diesel, kerosene, octane, and petrol were increased to achieve price parity with its neighbours such as India, China, and Nepal.

    Way ahead

    • Safeguard against food security crisis: It becomes imperative for regional groupings to set up safeguards against crises where their food security is affected by geopolitical events and domestic macroeconomic threats.
    • Food Bank for BIMSTEC: The idea of a food bank for the BIMSTEC countries modelled on the Association of Southeast Nations (ASEAN) Food Bank is a good start as it will aid in stabilising prices.
    • India urged to develop regional strategy and promoting millets: Recently, in November 2022, India hosted the second Agriculture Ministerial-level meeting of the BIMSTEC nations, where it urged the member countries to develop a regional strategy for transforming agriculture and promoting millets into the food systems.
    • Millets have potential to ameliorate food insecurity: Promotion and intra-regional trade of food items such as millets, where these countries have surplus production, can help ameliorate food insecurity to a large extent.
    • Self-reliance in energy: Overdependence on fuel will make the region more vulnerable and affect its financial stability. Therefore, developing a domestic energy market is critical for the region. This can be achieved by accelerating the green transition.
    • For instance: FDI from Japanese firms has constantly seen more impacts and spillovers in the Indian economy. If Japanese firms’ economies of scale and their potential in developing different green energy technologies could be fully utilised, it would reduce the regional dependence on China, which is currently the dominant player in the domain of solar energy.

    Conclusion

    • Regional economies have huge potential to invest in research for green transition technologies and sustainable agriculture which can help them have self-reliant energy and food markets respectively. Led by India, the Bay of Bengal region can lead the way in innovations in renewable forms of energy such as solar and wind.

    Mains Question

    Q. The South Asian neighbourhood is in flux. Discuss the major challenges and suggest a way ahead.

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  • Cyber Security – CERTs, Policy, etc

    Cyberattacks: India’s Opportunity To Conceptualize Global Cyber Security Framework

    op-ed snap | Security Issues | Mains Paper 3: Cyber Security

    Cyberattacks

    Central Idea

    • The past few weeks have highlighted the soft underbelly of our fast-expanding digital networks. Ransomwares have emerged as the most predominant of malicious cyberattacks. Here, the perpetrators demand hefty payments for the release of withheld data. Data show that over 75% of Indian organisations have faced such attacks, with each breach costing an average of ₹35 crore of damage.

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    Two recent ransomware attacks

    1. Ransomware attack on AIIMS: The first was the ransomware attack on the servers of India’s premium institute, the All-India Institute of Medical Sciences. Nearly 40 million health records were compromised and it took over two weeks for the systems to be brought online.
    2. BlackCat breached Solar Industries Ltd.: Soon afterwards, a ransomware gang, BlackCat, breached the parent company of Solar Industries Limited, one of the Ministry of Defence’s ammunition and explosives manufacturers, and extracted over 2 Terabyte of data.

    Cyberattacks

    What is mean by Cyber-attack?

    • Cyberattacks are unwelcome attempts to steal, expose, alter, disable or destroy information through unauthorized access to computer systems.
    • These attacks can target various entities such as governments, businesses, organizations, or individuals, and can have serious consequences such as theft of sensitive information, financial loss, reputational damage, or disruption of critical services.

    Who is behind cyberattacks?

    • Criminal organizations, state actors and private persons can launch cyberattacks against enterprises. One way to classify cyberattack risks is by outsider versus insider threats.
    1. Outsider threats: External cyber threats include; Organized criminals or criminal groups Professional hackers, like state-sponsored actors, Amateur hackers, like hacktivists
    2. Insider threats: Insider threats are users who have authorized and legitimate access to a company’s assets and abuse them either deliberately or accidentally. They include, Employees careless of security policies and procedures, Disgruntled current or former employees, Business partners, clients, contractors or suppliers with system access

    Growing vulnerability

    • There are malwares that could infect all kinds of computer systems: With the lines between the physical and digital realms blurring rapidly, every critical infrastructure, from transportation, power and banking systems, would become extremely vulnerable to the assaults from hostile state and non-state actors.
    • For instance; Cyber capabilities are also playing a pivotal role: As seen in the ongoing conflict in Ukraine, where electronic systems in warheads, radars and communication devices have reportedly been rendered ineffective using hacking and GPS jamming.
    • Cyber security breaches would only increase: With the introduction of 5G and the arrival of quantum computing, the potency of malicious software, and avenues for digital security breaches would only increase.
    • For instance: This year, cybercrimes are expected to cause damage worth an estimated $8 trillion worldwide.

    India’s cybersecurity architecture

    • CERT-In: In 2022, the Indian Computer Emergency Response Team (CERT-In), which is India’s cybersecurity agency, introduced a set of guidelines for organisations to comply with when connected to the digital realm. This included the mandatory obligation to report cyberattack incidents within hours of identifying them, and designating a pointsperson with domain knowledge to interact with CERT-In.
    • Draft Digital Personal Protection Bill, 2022: India’s draft Digital Personal Protection Bill 2022 proposes a penalty of up to ₹500 crore for data breaches.
    • Defence Cyber Agency (DCyA): Recently, India’s armed forces created a Defence Cyber Agency, capable of offensive and defensive manoeuvres. All Indian States have their own cyber command and control centres.
    • Cybercrime Co-ordination centre: The Indian Cybercrime Co-ordination Centre (I4C) established by the Ministry of Home Affairs, acts as a nodal point in the response against cybercrime by coordinating with state police forces across the country. It also co-ordinates the implementation of mutual legal assistance treaties (MLAT) with other countries.

    Have you heard about “Bluebugging”?

    • It is a form of hacking that lets attackers access a device through its discoverable Bluetooth connection.
    • Once a device or phone is blue-bugged, a hacker can listen to the calls, read and send messages and steal and modify contacts.
    • It started out as a threat for laptops with Bluetooth capability. Later hackers used the technique to target mobile phones and other devices.

    Limitations In India’s cybersecurity infrastructure

    • Lack of tools to identify: Most organisations lack the tools to identify cyberattacks, let alone prevent them.
    • Scarcity of cybersecurity professional: India also faces an acute scarcity of cybersecurity professionals. India is projected to have a total workforce of around 3,00,000 people in this sector in contrast to the 1.2 million people in the United States.
    • Private sector participation is limited: Most of our organizations are in the private sector, and their participation remains limited in India’s cybersecurity structures.

    Global understanding is essential

    • International cooperation is critical: With most cyberattacks originating from beyond our borders, international cooperation would be critical to keep our digital space secure. It would also be a cause which would find resonance abroad.
    • Cybersecurity treaties: India has already signed cybersecurity treaties, where the countries include the United States, Russia, the United Kingdom, South Korea and the European Union.
    • Multinational frameworks are there but there is no truly global framework: Even in multinational frameworks such as the Quad and the I2U2 (which India is a member of) there are efforts to enhance cooperation in cyber incident responses, technology collaboration, capacity building, and in the improvement of cyber resilience. Yet, there is no truly global framework, with many operating in silos.
    • UNGA established two processes on ICT: The United Nations General Assembly establish two processes on the issues of security in the information and communication technologies (ICT) environment.
    • The Open-ended Working Group (OEWG), comprising the entire UN membership, established through a resolution by Russia.
    • The other is the resolution by the U.S., on the continuation of the Group of Governmental Experts (GGE), comprising 25 countries from all the major regions.
    • Differ vastly on many aspects of Internet: The two antagonistic permanent members of the UN Security Council, counted among India’s most important strategic partners, differ vastly on many aspects of the Internet, including openness, restrictions on data flow, and digital sovereignty. Amidst the turbulent current world events, these UN groups would struggle to have effective dialogues.

    Conclusion

    • The G-20 summit this year in India, which will see participation by all the stakeholders driving the global levers of power, is a rare opportunity to bring together domestic and international engagement groups across the spectrum, and steer the direction of these consultations. India could make an effort to conceptualize a global framework of common minimum acceptance for cybersecurity. This would be one of the most significant contributions made by any nation towards collective security in modern times.

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  • Capital Markets: Challenges and Developments

    SEBI approval to launch Social Stock Exchange

    Prelims Only | Economics | Mains Paper 3: Mobilization Of Resources

    The National Stock Exchange (NSE) has received final approval from the Securities and Exchange Board of India (SEBI) to set up a Social Stock Exchange (SSE) as a separate segment of the NSE.

    What is a Social Stock Exchange?

    • Social Stock Exchange (SSE) is a platform that connects social enterprises with investors who are looking for social impact along with financial returns.
    • Social enterprises are organizations that prioritize social impact over profits.
    • SSE aims to provide these organizations with access to capital markets and raise awareness about social investment opportunities.

    Who can get listed for SSEs?

    • Any social enterprise, Non-Profit Organisation (NOPs) or For-Profit Social Enterprises (FPEs), that establishes its primacy of social intent can get registered or listed on the Social Stock Exchange segment.
    • Eligible NPOs can begin by registering on the SSE segment.
    • After onboarding, NPOs can initiate the fund mobilization process by issuing instruments such as Zero Coupon Zero Principal (ZCZP) via a public issue or private placement.
    • Currently, the regulations have prescribed a minimum issue size of Rs 1 crore and a minimum application size for the subscription of Rs 2 lakhs for ZCZP issuance.

    How will SSE work?

    • The SSE will be a separate segment on the NSE, where social enterprises can list their securities.
    • These securities will be available for trading to investors who are interested in social impact investing.
    • The SSE will also provide a range of services such as capacity building, impact measurement, and reporting to help social enterprises improve their operations and measure their social impact.

    Benefits of SSE

    • For social enterprises, SSE will provide access to capital markets and help them raise funds for their social projects.
    • For investors, SSE will provide a platform to invest in social enterprises and contribute to social impact.
    • SSE will also create a transparent marketplace where investors can assess the social impact of their investments.

     

     

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  • Freedom of Speech – Defamation, Sedition, etc.

    Section 153A: its use and misuse

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

    153

    Central idea: A politician was recently arrested under Section 153A of IPC for the alleged use of objectionable words against the Prime Minister.

    Section 153A: What the law says

    • Section 153A of the Indian Penal Code (IPC) penalises “promoting enmity between different groups on grounds of religion, race, place of birth, residence, language, etc., and doing acts prejudicial to maintenance of harmony”.
    • This is punishable with imprisonment up to three years, or with fine, or with both.
    • The provision was enacted in 1898 and was not in the original penal code.
    • At the time of the amendment, promoting class hatred was a part of the English law of sedition, but was not included in the Indian law.

    Charges laid for remarks against PM

    The FIR mentioned the use of Sections-

    • 153B(1) (Making imputations, assertions prejudicial to national integration);
    • 295A (Deliberate and malicious acts, intended to outrage religious feelings of any class by insulting its religion or religious beliefs);
    • 500 (Defamation); and
    • 504 (Intentional insult with intent to provoke breach of the peace).

    Conviction rates under Section 153A

    • Data from the National Crime Records Bureau (NCRB) show that the rate of conviction for Section 153A is very low.
    • In 2020, 1,804 cases were registered, six times higher than the 323 cases in 2014.
    • However, the conviction rate in 2020 was 20.2%, suggesting that the process often becomes the punishment.

    Issues with the law

    • Hate speech laws have been invoked under regimes of all parties to crack down on criticism of public functionaries and to arrest individuals.
    • The invocation of Section 153A is often criticized for restricting free speech and misusing the legal processes for political purposes.

    Safeguards against misuse

    • Given that the provisions are worded broadly, there are safeguards against its misuse.
    • For example, Sections 153A and 153B require prior sanction from the government for initiating prosecution.
    • But this is required before the trial begins, and not at the stage of preliminary investigation.
    • To curb indiscriminate arrests, the Supreme Court laid down a set of guidelines in its 2014 ruling in Arnesh Kumar v State of Bihar.
    • As per the guidelines, for offenses that carry a sentence of fewer than seven years, the police cannot automatically arrest an accused before investigation.

     

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  • Judicial Pendency

    What is a Caveat in Judiciary?

    Prelims Only | Polity | Mains Paper 2: Executive & Judiciary

    Recently, the Supreme Court bench reprimanded a law student for filing a caveat in a petition seeking menstrual leave for female students and working women across Indian institutions.

    What is a Caveat?

    • In common parlance, a caveat refers to “warning” or “caution”.
    • However, legally it connotes a “formal notice requesting the court to refrain from taking some specified action without giving prior notice to the person lodging the caveat.”
    • The person lodging the caveat is called a “caveator”.
    • The provision was inserted by the Amendment Act of 1976 after the Law Commission’s recommendation by Section 148A of the Civil Procedure Code (CPC).
    • However, the term is not expressly defined anywhere except in the Calcutta High Court’s 1978 ruling.

    Who can fill the Caveat?

    • Any person has a right to lodge a caveat in a Court.
    • Any person claiming a right to appear before the Court on the hearing of such application may lodge a caveat in respect thereof.
    • The caveator or the person lodging is also required to serve a notice of the caveat by “registered post” to the person on whose plea they are lodging the application

     

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  • Innovations in Biotechnology and Medical Sciences

    CCR5-delta 32 Gene Transplant: Permanent cure of HIV

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

    hiv

    Central idea: This article discusses recent developments in the field of HIV research that have led to the possibility of a cure for the disease.

    What is HIV/AIDS?

    • HIV (human immunodeficiency virus) is a virus that attacks cells that help the body fight infection, making a person more vulnerable to other infections and diseases.
    • First identified in 1981, HIV is the cause of one of humanity’s deadliest and most persistent epidemics.
    • It is spread by contact with certain bodily fluids of a person with HIV, most commonly during unprotected sex, or through sharing injection drug equipment.
    • If left untreated, HIV can lead to the disease AIDS (acquired immunodeficiency syndrome).
    • The human body can’t get rid of HIV and no effective HIV cure exists.

    Present treatment of HIV

    • However, by taking HIV medicine (called antiretroviral therapy or ART), people with HIV can live long and healthy lives and prevent transmitting HIV to their sexual partners.
    • In addition, there are effective methods to prevent getting HIV through sex or drug use, including pre-exposure prophylaxis (PrEP) and post-exposure prophylaxis (PEP).

    What is the new breakthrough?

    • Doctors selected a donor carrying two copies of a CCR5-delta 32 genetic mutation – a mutation that is known to make the carriers almost immune to HIV.
    • The CCR5-delta 32 genetic mutation is a rare genetic mutation that affects the CCR5 gene, which is involved in the immune system’s response to infection.
    • The mutation causes a deletion of 32 nucleotides in the gene, resulting in a truncated or shortened version of the CCR5 protein.
    • This truncated protein is not able to function normally, and people with this mutation are largely resistant to HIV infection.

    How has the CCR5-delta 32 mutation been used in HIV research?

    • Researchers have been studying the CCR5-delta 32 mutation as a potential avenue for developing an HIV cure.
    • One approach involves using gene editing technologies like CRISPR to induce the mutation in HIV-positive individuals, effectively making their immune cells resistant to HIV infection.
    • Another approach involves bone marrow transplantation from donors with the CCR5-delta 32 mutation.

    What are the risks associated?

    • Gene editing technologies like CRISPR are still in their early stages, and there are concerns about the safety and effectiveness of these methods.
    • Additionally, bone marrow transplantation is a complex and risky procedure that is not feasible for all HIV-positive individuals.
    • Finally, it is important to note that not all HIV infections are caused by the CCR5 strain of the virus, and therefore the use of the CCR5-delta 32 mutation as an HIV cure would not be effective for all cases of HIV.

    Prevalence of HIV/AIDS in India

    • As per the India HIV Estimation 2019 report, the estimated adult (15 to 49 years) HIV prevalence trend has been declining in India since the epidemic’s peak in the year 2000 and has been stabilizing in recent years.
    • In 2019, HIV prevalence among adult males (15–49 years) was estimated at 0.24% and among adult females at 0.20% of the population.
    • There were 23.48 lakh Indians living with HIV in 2019.
    • Maharashtra had the maximum at 3.96 lakh followed by Andhra Pradesh (3.14 lakh) and Karnataka.
    • ART is freely available to all those who require and there are deputed centres across the country where they can be availed from.

     

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  • R&D Expenditure And The Perils of Inadequate Data

    op-ed snap | Economics | Mains Paper 3: Government Budgeting,Issues relating growth and development, employment

    Central Idea

    • India’s research and development (R&D) expenditure-GDP ratio of 0.7% is very low when compared to major economies and is much below the world average of 1.8%. The main reason is the low investment in R&D by the corporate sector.

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    Overview: Spending’s on R&D in India

    • While the corporate sector accounts for about two-thirds of gross domestic expenditure on R&D (GERD) in leading economies, its share in India is just 37%. There is evidence, however, suggesting that India’s GERD data are an underestimate.
    • A 2022 infobrief of the National Science Foundation (NSF) of the United States on Foreign R&D by U.S.-based multinational corporations (MNCs) shows a spend of $9.5 billion (₹649.7 billion) on R&D in India in 2018, which increased to $9.8 billion (₹690.2 billion) in the following year.
    • There are MNCs from other leading countries also spending on R&D in India.
    • But the latest Research and Development Statistics, published by the Department of Science and Technology (DST) in 2020, has provided an estimate of ₹60.9 billion R&D spending in 2017-18 by foreign MNCs, which is only about 10% of what U.S. firms have reported to have spent in India on R&D.

    What is Gross Domestic Expenditure On R&D (GERD)?

    • Gross domestic spending on R&D is defined as the total expenditure (current and capital) on R&D carried out by all resident companies, research institutes, university and government laboratories, etc., in a country.
    • It includes R&D funded from abroad, but excludes domestic funds for R&D performed outside the domestic economy.
    • This indicator is measured in USD constant prices using 2015 base year and Purchasing Power Parities (PPPs) and as percentage of GDP.
    • It is often used as an indicator of a country’s level of innovation and technological progress.

    Issues with the current system

    • NSTMIS compiles GERD data: The National Science and Technology Management Information System (NSTMIS) of the DST is the agency that compiles GERD statistics in India.
    • Challenge is to collect data from private sector: It is easier to gather the information on R&D by the government sector, the higher education sector and public sector enterprises. The challenge lies in collecting data from the private corporate sector.

    There are two key factors that make the official R&D estimates grossly inadequate

    1. The method used for identification of R&D performing firms does not capture all the R&D performing firms.
    • NSTIMS uses DSIR and Prowess to identify R&D units: A study found only 11% of 298 firms receiving foreign investment (2004-16) for R&D were registered with DSIR. Prowess covers only 3.5% of currently active registered enterprises in India. Leading enterprises in new technology areas may not be listed in both databases, such as SigTuple Technologies.
    • The DSIR list may not have many of the actual R&D performers for two reasons: Firms which consider government incentives as not attractive enough or that are sensitive about sharing critical information with the DSIR may not be inclined to register themselves with the DSIR. 2. It may be difficult for R&D firms in services such as software and R&D services to meet the requirement of having separate infrastructure for R&D to distinguish it from their usual business. In fact, many of the R&D performing enterprises in new technology areas may come under the services category.
    1. The survey conducted by the NSTMIS is the key source of R&D statistics of India
    • Data from Secondary sources works only if firms disclose their R&D spending: If firms don’t respond to the survey, data is collected from secondary sources like annual reports and Prowess. Some firms don’t report R&D spending despite their technology activities, patents and innovators. They may not feel obliged to report accurately to Indian regulatory authorities.
    • For instance: A review of the documents submitted to the Ministry of Corporate Affairs (MCA) by some R&D-oriented firms shows that there are firms which do not report any spending on R&D in spite of their declarations that suggest that they are engaged in activities of technology development, adoption and adaptation.

    What is to be done?

    • Short term measure: the NSTMIS should use the patents granted data, both in India and the U.S., in addition to its current method to identify R&D performing enterprises.
    • Mandatory disclosure: Annual R&D estimates can be prepared from mandatory disclosures that the enterprises are required to make to the MCA.
    • Technologies can be employed to ensure compliance and proper reporting: In order to ensure compliance and proper reporting, technologies can be used like in the case of revamped income-tax return forms where various sections are interlinked.
    • Spending data should be made an essential component of ESG: Additionally, proper disclosure of information to regulatory agencies, including R&D spending data, should be made an essential component of the environmental, social and governance (ESG) ranking of enterprises.

    Conclusion

    • Concrete data on R&D spending is crucial as it helps to identify areas needing investment, promotes economic growth, informs policymaking decisions, tracks progress, and evaluates policy effectiveness in promoting innovation and technological development. Transforming India’s R&D statistics to truly reflect the R&D ecosystem calls for short-term and medium-term measures.

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  • Monetary Policy Committee Notifications

    Repo Rate Hike: Impact Should be Considered Before Making Decisions

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    Rate

    Central Idea

    • In its last meeting, held just a few days after the Union budget, the monetary policy committee (MPC) of the RBI had voted to raise the benchmark repo rate by 25 basis points. The MPC noted that calibrated action was warranted to break the persistence in core inflation. This surprise uptick in inflation is likely to complicate the policy choices before the MPC members when it meets next in the first week of April.

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    What is Basis points we often hear about?

    • A basis point is a unit of measurement used to express changes in interest rates, bond yields, and other financial indicators.
    • One basis point is equal to one-hundredth of a percentage point, or 0.01%.
    • For example, If the Reserve Bank of India (RBI) raises the repo rate by 25 basis points, it means that the interest rate has increased by 0.25%.

    What it indicates?

    • If the Reserve Bank of India (RBI) keeps raising the repo rate by basis points, it is an indication that the central bank is tightening its monetary policy stance to manage inflationary pressures in the economy.

    Back to basics: Monetary Policy Committee (MPC)

    • Committee of RBI to fix the benchmark policy: The Monetary Policy Committee (MPC) is a committee of the RBI, which is entrusted with the task of fixing the benchmark policy interest rate (repo rate) to contain inflation within the specified target level.
    • To bring transparency and accountability: The RBI Act, 1934 was amended by Finance Act (India), 2016 to constitute MPC to bring more transparency and accountability in fixing India’s Monetary Policy.
    • Policy is published after discussion: The policy is published after every meeting with each member explaining his opinions.
    • Answerable to GOI: The committee is answerable to the Government of India if the inflation exceeds the range prescribed for three consecutive months.

    What is Inflation?

    • Inflation is an increase in the level of prices of the goods and services that households buy. It is measured as the rate of change of those prices.
    • Typically, prices rise over time, but prices can also fall (a situation called deflation).

    The current trends of Inflation

    • Rise in retail inflation: Retail inflation, as measured by the consumer price index, rose to 6.52 per cent in January, up from 5.72 per cent in December, reversing the declining trend seen in the preceding months.
    • Much of the surge was driven by food inflation: The consumer food price index rose to 5.94 per cent, up from 4.19 the month before, driven largely by cereals.
    • Price pressure remain across the economy: Inflation remained elevated in clothing and footwear, household goods and services, personal care effects and education, signalling that price pressures remain fairly broad-based across the economy.

    RBI’s Upper tolerance limit for inflation

    • Highest level of inflation that can be tolerated: The upper tolerance limit for inflation set by the Reserve Bank of India (RBI) is the highest level of inflation that the RBI will tolerate before taking action to bring inflation back within its target range.
    • RBI’s limit: The target range is defined in terms of the Consumer Price Index (CPI) inflation and the RBI has set an upper tolerance limit of 6% and a lower tolerance limit of 2% with a central target of 4%. This means that the RBI aims to keep CPI inflation within the range of 2-6%, with a target of 4%.
    • Tools to contain inflation: If inflation exceeds the upper tolerance limit of 6%, the RBI is required to take steps to bring inflation back within the target range. The RBI uses a variety of monetary policy tools to control inflation, including adjusting the policy interest rate, changing reserve requirements for banks, and using open market operations to manage liquidity in the financial system.

    Conclusion

    • Monetary policy experts Varma and Goyal suggest pausing to observe the impact of previous tightening before taking further action. Despite a cumulative 250 basis point increase, inflation is still expected to remain above the 6% target. The full impact of previous tightening should be considered before making any decisions.

    Mains Question

    Q. What is upper threshold of the RBI’s inflation targeting framework? Discuss the impact of policy interest rate hikes on the economy.

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  • Anti Defection Law

    Anti-defection Law and The Loopholes

    op-ed snap | Polity | Mains Paper 2: Parliament & State Legislatures

    defection

    Central Idea

    • On February 17, the Election Commission of India (ECI) allotted the name ‘Shiv Sena’ and the party’s Bow and Arrow symbol to Maharashtra Chief Minister Eknath Shinde’s faction, in effect recognizing it as the original party founded by Babasaheb Thackeray.  Strengthening Anti-defection law becomes relevant again.

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    Background: The most dramatic and unique political crisis

    • Division in the party: The political crisis in Maharashtra began last year after a group of 40 of the 55 Sena MLAs walked out of the Maha Vikas Aghadi (MVA) alliance under the leadership of Mr. Shinde, which caused a division in the party.
    • Fight of Name and Symbol: Both the Uddhav Thackeray and Shinde sides staked claim to the party name and symbol, each claiming to represent the real Shiv Sena.
    • The ECI said that it had based its decision on a test of majority: It said the group of MLAs supporting the Shinde faction got nearly 76% of the votes polled for the 55 winning Shiv Sena candidates in the 2019 Maharashtra Assembly elections, while the Uddhav Thackeray faction got 23.5% of votes.

    Exam Spotlight

    • The crisis has thrown the spotlight once again on the anti-defection law, whose purpose is to prevent political defections.

    What is Anti-defection Law?

    • Tenth Schedule: The Anti-Defection Law under the Tenth Schedule of the Constitution punishes MPs/ MLAs for defecting from their party by taking away their membership of the legislature.
    • Power to the speaker: It gives the Speaker of the legislature the power to decide the outcome of defection proceedings.
    • 52nd Amendment Act, 1985: It was added to the Constitution through the Fifty-Second (Amendment) Act, 1985 when Rajiv Gandhi was PM. The law applies to both Parliament and state assemblies.

    What was the need to have this law then?

    1. Vies in favour
    • Defection was recognized as an evil that needed to be curbed: Defections cause destabilization and lead to governments falling, which can have negative impacts on the country’s political and economic stability.
    • Law helps to stabilise party system: The law helps to stabilize party systems by consolidating control of the party leadership instead of relying on ideological cohesion or ownership by constituent legislators.
    1. Views against it
    • Law would curb freedom of opinion of the representatives: Some people thought that the law would curb freedom of speech and affect the free exercise of opinion by the members of the legislature who are elected by the people.
    • Undermines the representative system of democracy: The law effectively does away with the representative system of democracy in India by framing democracy as a contest between factions rather than a system of representation and accountability.
    • Limiting the ability of legislators: The law consolidates power in the hands of the party leadership, potentially limiting the ability of individual legislators to represent their constituents’ interests.

    How the law is faring today?

    • Recent events shows that the law needs to be tightened: The kinds of defections which used to take place before the passing of this law are not taking place now. But recent events show that this law needs to be tightened.
    • Third paragraph of tenth schedule was deleted: A little tightening was done earlier by doing away with a split, that is, paragraph three of the Tenth Schedule of the Constitution. It had said, if there is a split in a particular party, and one-third of the legislators move along with the breakaway group, they will not be disqualified. So, split was a defence against disqualification.
    • No authoritative interpretation of the law: there is a very disturbing trend, which is to interpret paragraph four (decision on questions as to disqualification on ground of defection) in a particular way, because there is no authoritative declaration of law from the Supreme Court on the exact application of it.
    • No timeline fixed for the Speaker: In the 10th Schedule currently, there is no timeline fixed for the Speaker to determine the issue and the purpose of this anti-defection law is defeated.

    Conclusion

    • People are principal stakeholders in a democracy; parties are merely the institutional intermediaries. Democracy needs stable parties, but controlling legislators removes their representative role. Need of the hour is to fix the loopholes in the system because the continuous cycle of instability adversely affects the people, who are the primary stakeholders in a democracy and suffer the most.

    Mains Question

    Q. The events of spilt within the political are rising posing a challenge to the Anti defection law In this backdrop discuss the need of Anti defection law?

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  • Aadhaar Card Issues

    60% of India’s voters linked Aadhaar to voter ID: RTI

    | Governance | Mains Paper 2: Representation Of People’s Act

    aadhaar

    Central idea: An RTI query has revealed that around 60% of Indian voters have linked their Aadhaar cards with their voter ID cards.

    Benefits of Aadhaar linking

    • Voter uniqueness: The move to link Aadhaar and voter ID cards was introduced to prevent electoral fraud and ensure unique identity of each voter.
    • Curb bogus votes: It is expected to help prevent multiple voting, impersonation, and bogus voting, which have been a concern in the past.
    • Facilitate migrant voting: There have been migrant workers who may have been registered more than once on the electoral rolls in different constituencies or for persons registered multiple times within the same constituency.

    Is the linking of Aadhaar with one’s Voter ID mandatory?

    • In December 2021, Parliament passed the Election Laws (Amendment) Act, 2021 .
    • It states that the electoral registration officer may require voters to furnish their Aadhaar numbers to verify Authencity of voters list.
    • This was to amend the Representation of the People Act, 1950 and Section 23(4) was inserted in the RP Act.

    Why was such linking proposed?

    The preference to use Aadhaar for verification and authentication, both by the state and private sector, stems from few reasons:

    • Increase in UID-holders: First, at the end of 2021, 99.7% of the adult Indian population had an Aadhaar card.
    • Most versatile document: This coverage exceeds that of any other officially valid document such as driver’s licence, ration cards, PAN cards etc. that are mostly applied for specific purposes.
    • Reliable source of authentication: Since Aadhaar allows for biometric authentication, Aadhaar based authentication and verification is considered more reliable, quicker and cost efficient when compared to other IDs.

    Issues with mandatory linking: Puttaswamy judgment highlights

    • Puttaswamy judgment: The above reasons do not suffice the mandating of Aadhaar except in limited circumstances as per the Puttaswamy judgment.
    • The indispensability of the purpose: It needs to be considered whether such mandatory linkage of Aadhaar with Voter ID would pass the test of being “necessary and proportionate” to the purpose of de-duplication which is sought to be achieved.
    • Constitutional ambiguity: In Puttaswamy, one of the questions that the Supreme Court explored was whether the mandatory linking of Aadhaar with bank accounts was constitutional or not.
    • Against informational autonomy: It is the right to privacy which would allow a person to decide which official document they want to use for verification and authentication.

    Other judicial observations: Lal Babu Hussein (1995) Case

    • The Supreme Court had held that the Right to vote cannot be disallowed by insisting only on four proofs of identity.
    • The voters are entitled to rely on any other proof of identity and obtain the right to vote.

    What are the operational difficulties?

    • Aadhaar is not a citizenship proof: The preference to Aadhaar for the purposes of determining voters is puzzling as Aadhaar is only a proof of residence and not a proof of citizenship.
    • Excluding non-citizens is not easy: Verifying voter identity against this will only help in tackling duplication but will not remove voters who are not citizens of India from the electoral rolls.
    • Estimate of error rates in biometric based authentication: This certainly differs. As per the UIDAI in 2018, Aadhaar based biometric authentication had a 12% error rate.
    • Disenfranchisement of existing voters: Errors have led to the disenfranchisement of around 30 lakh voters in AP and Telangana before the Supreme Court stalled the process of linkage.

    Key concern: Right to Privacy

    • Some civil societies has highlighted that linking of the two databases of electoral rolls and Aadhaar could lead to the linkage of Aadhaar’s “demographic” information with voter ID information.
    • This could lead to violation of the right to privacy and surveillance measures by the state.
    • This would leave the EC with the option of verifying its information only through door-to-door checks.
    • There is a lack of enforceable data protection principles that regulate how authentication data will be used.

    Way Forward

    • Address privacy and security concerns: There should be strict measures in place to ensure the safety of personal information and prevent data breaches.
    • Provide alternative authentication: The government should provide alternative methods of identity verification. This will help ensure that no citizen is disenfranchised due to the lack of an Aadhaar card.
    • Regular monitoring and evaluation: The government should regularly monitor and evaluate the effectiveness of the linking of Aadhaar and voter ID cards in preventing electoral fraud.

     

     

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