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Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

Possibility of global recession?

op-ed snap | Economics | Mains Paper 3: Indian Economy,Issues relating growth and development, employment
Context
- There have recently been growing concerns about the global economy slipping into recession. These concerns were primarily triggered by the contraction of the US economy, observed in the first half of 2022. Negative growth in two consecutive quarters is commonly but not officially used as an indication of recession.
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Background: Status of the US economy
- First and second quarter of 2022: As reported by the Bureau of Economic Analysis (BEA), the US real Gross Domestic Product (GDP adjusted for inflation) decreased at an annual rate of 1.6 per cent and 0.6 per cent in the first and second quarters of 2022, respectively.
- Third quarter: In the third quarter, however, the US economy grew by 3.2 per cent, signalling a significant recovery.
- Fourth quarter: The latest BEA advance estimates show that the US real GDP increased at an annual rate of 2.9 per cent in the fourth quarter.
- Expansion of US economy a positive sign: Despite the slight decrease from the third quarter, the continued expansion of the US economy at the end of 2022 marks a positive sign, soothing concerns about a recession in 2023.
Economic recovery of the US economy
- Positive growth in fourth quarter: The positive growth in the fourth quarter can primarily be attributed to consumer spending, which increased by an annualised rate of 2.1 per cent, and private inventory investment that showed an upturn in 2022. Although a significant decline from the 5.9 per cent increase in 2021, the difference accounts for the enthused post-Covid economic recovery in 2021.
- The US labour market continues to remain robust: The unemployment rate was recorded at a low of 3.5 per cent in December 2022, matching the pre-pandemic levels. Also, the total non-farm payroll employment increased by 2,23,000 in December, exceeding the Dow Jones estimate of 2,00,000.
- Inflation has eased: While the labour market remains tight, US inflation has eased in the last few months. Consumer prices fell 0.1 per cent in December the largest month-over-month decrease since April 2020, due to reductions in motor vehicle and gasoline prices.
- Layoffs not yet translated into rise in jobless claims: Although not a perfect association, the decline in jobless claims in January shows that the mass layoffs in recent weeks, particularly in the tech sector, have not yet translated into a rise in claims, suggesting the possibility of finding new jobs.
- The reopening of China’s borders can have positive implications for the global economy: As China resumes its economic activities to pre-Covid levels by boosting growth, domestic consumption is expected to increase significantly. With the ease of trans-border movement and eventual increase in exports of consumer and industrial goods, global trade is expected to strengthen as well.
What is Recession?
- A recession is a significant decline in economic activity that lasts for months or even years.
- Experts declare a recession when a nation’s economy experiences negative GDP, rising levels of unemployment, falling retail sales, and contracting measures of income and manufacturing for an extended period of time.
- Recessions are considered an unavoidable part of the business cycle or the regular cadence of expansion and contraction that occurs in a nation’s economy.
Possibility of a global recession
- Elevated inflation continues to be a cause for global concern: Despite the fall in consumer prices, the headline CPI for the US showed an annual increase of 6.5 per cent in December 2022. In spite of the slow-paced increase in headline CPI, persistent elevation in core inflation excluding food and energy continues to be a major issue across economies.
- Interest Rate Hikes on the Horizon: Consequently, the central banks are expected to continue with interest rate hikes in the coming months. On an annualised level, the CPI inflation in Australia also jumped to 7.8 per cent in the 2022 fourth quarter, increasing the likelihood of respective interest rate hikes as well.
- China’s Impact on Commodity Prices: Moreover, an increase in China’s demand for goods post-reopening could drive up commodity prices, thereby creating an inflationary impact. For instance, China’s increased demand for natural gas would mean more competition with the European market, leading to higher commodity prices that can put further inflationary pressures on Europeans already dealing with high energy bills.
- Higher borrowing costs: Rising interest rates would incur even higher borrowing costs that could dampen consumer spending. While sectors sensitive to high borrowing costs such as housing and construction have slowed down significantly.
Conclusion
- Among the positive signs are the continued expansion of the US economy and the reopening of China’s borders. Rising inflation remains a cause for global concern. However, prevalence of mixed signals suggests that the onset and depth of a global recession in 2023 are not certain.
Mains question

Q. Highlight the current situation of global economies. Discuss if there’s a global recession in 2023?

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Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

Its high time to focus on Mental Health

op-ed snap | Governance | Mains Paper 2: Health & Education
Context
- Suicides rates in India are amongst the highest when compared to other countries at the same socio-economic level. According to WHO, India’s suicide rate in 2019, at 12.9/1,00,000, was higher than the regional average of 10.2 and the global average of 9.0. Suicide has become the leading cause of death among those aged 15–29 in India.
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Background: Mental Health
- While every precious life lost through suicide is one too many, it represents only the tip of the mental health iceberg in the country, particularly among young adults. Women tend to suffer more.
- Across the world, the prevalence of some mental health disorders is consistently higher among women as compared to men.
Prevalence of Mental ill-health
- The pandemic has further exacerbated the problem: Globally, it might have increased the prevalence of depression by 28 per cent and anxiety by 26 per cent in just one year between 2020 and 2021, according to a study published in Lancet.
- Increased among younger age groups: Again, the large increases have been noted among younger age groups, stemming from uncertainty and fear about the virus, financial and job losses, grief, increased childcare burdens, in addition to school closures and social isolation.
- Use of social media exacerbating the stress: Increased use of certain kinds of social media is also exacerbating stress for young people. Social media detracts from face-to-face relationships, which are healthier, and reduces investment in meaningful activities. More importantly, it erodes self-esteem through unfavourable social comparison.
Socio-economic implications of Mental ill-health
- People living in poverty are at greater risks: Mental ill health is a leading cause of disability globally and is closely linked to poverty in a vicious cycle of disadvantage. People living in poverty are at greater risk of experiencing such conditions.
- People experiencing mental health problems likely to fall in poverty: On the other hand, people experiencing severe mental health conditions are more likely to fall into poverty through loss of employment and increased health expenditure.
- Stigma and discrimination: Stigma and discrimination often further undermine their social support structures. This reinforces the vicious cycle of poverty and mental ill-health.
- Higher income inequality has high prevalence of ill mental ill health: Not surprisingly, countries with greater income inequalities and social polarization have been found to have a higher prevalence.
Approach to protect, promote and care for the mental health of people?
- Killing the deep stigma surrounding mental health issues: The first step should be killing the deep stigma which prevents patients from seeking timely treatment and makes them feel shameful, isolated and weak. Stigma festers in the dark and scatters in the light. We need a mission to cut through this darkness and shine a light.
- Making Mental health an integral part of public health programme: There is need to make mental health an integral part of the public health programme to reduce stress, promote a healthy lifestyle, screen and identify high-risk groups and strengthen interventions like counselling services. Special emphasis will need to be given to schools.
- Paying attention to highly vulnerable: In addition, we should pay special attention to groups that are highly vulnerable because of the issues such as victims of domestic or sexual violence, unemployed youth, marginal farmers, armed forces personnel and personnel working under difficult conditions.
- Creating a strong infrastructure for mental health care and treatment: Lack of effective treatment and stigma feed into each other. Currently, only 20-30 per cent of people with such disorders receive adequate treatment.
- Mental health services should be made affordable for all: Improved coverage without corresponding financial protection will lead to inequitable service uptake and outcomes. All government health assurance schemes, including Ayushman Bharat, should cover the widest possible range.
Why is the wide treatment gap?
- One major reason for a wide treatment gap is the problem of inadequate resources.
- Less than two per cent of the government health budget, which itself is the lowest among all G20 countries, is devoted to mental health issues.
- There is a severe shortage of professionals, with the number of psychiatrists in the country being less than those in New York City, according to one estimate.
- Substantial investments will be needed to address the gaps in the health infrastructure and human resources.
- Currently, most private health insurance covers only a restricted number of mental health conditions. Similarly, the list of essential medicines includes only a limited number of WHO-prescribed medications.
Conclusion
- We need an urgent and well-resourced whole of society approach to protecting, promoting and caring for the mental health of our people, like we did for the Covid pandemic. Brock Chisholm, the first Director General of WHO, famously said, “there is no health without mental health”.
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The Crisis In The Middle East

Israel-Palestinian violence on West Bank soars

IOCR | International Relations | Mains Paper 2: Important International Institutions
US has urged Israel and the Palestinians to ease tensions amid a spike in violence that has put the West Bank region on edge.

Where is West Bank?
- The West Bank is a landlocked territory near the coast of the Mediterranean in Western Asia that forms the main bulk of the Palestinian territories.
- It is bordered by Jordan and the Dead Sea to the east and by Israel to the south, west, and north.
Point of discussion: Anti-Semitism
- Anti-Semitism (hatred against Jews) is an officially stated policy of many theocratic countries (created by divine orders of religion).
- This includes entire Arab world, the self-proclaimed caliphate ‘Turkiye’ and even Pakistan.
- Jews, the micro-minority religion of the world were denied access to their homeland.
What is the Israel-Palestine Conflict?
- The land to which Jews and Palestinians lay claim to was under the Ottoman Empire and then the British Empire in early 20th century.
- Palestinian people —the Arab people from the same area— want to have a state by the name of Palestine in that area.
- The conflict between Israelis and Palestinians is over who gets what land and how it’s controlled.
- Jews fleeing the persecution in Europe at the time wanted to establish a Jewish state on the land which they believe to be their ancient homeland.
- The Arab at the time resisted, saying the land was theirs. The land at the time was called Palestine.
- In 1917’s Balfour Declaration, the United Kingdom declared its support for the establishment of a “national home for the Jewish people” in Palestine.
- Arabs resisted it which led to violence.
Jews into West Bank: Arab hinterland in Israel
- Some 75,000 Jews migrated to Palestine from 1922-26 and some 60,000 Jews emigrated in 1935, according to a history published by the University of Central Arkansas.
- It adds that Palestinian Arabs demanded the UK to halt Jewish emigration, but the UK ignored such calls. There were violent incidents, leading to deaths of some 500 people.
- In 1923, the British Mandate for Palestine came into effect.
- The document was issued by the League of Nations, the failed predecessor of the United Nations (UN).
- The mandate gave the UK the responsibility for creating a Jewish national homeland in the region.
- In 1936, the UK government recommended the partition of Palestine into Jewish and Arab states.
How did the issue escalate?
- In 1947, Britain referred the issue of Palestine to the UN, which came up with a partition plan.
- It put up two proposals. One, two separate states joined economically —the majority proposal— and, two, a single bi-national state made up of autonomous Jewish and Palestinian areas, the minority proposal.
- The Jewish community approved of the first of these proposals, while the Arabs opposed them both.
Israel’s independence
- In May 1948, Israel declared its independence. This was eye-pricking development for Arabs.
- The Arab countries of Lebanon, Syria, Iraq, and Egypt invaded the newly-declared country immediately.
- When the war ended, Israel gained some territory formerly granted to Palestinian Arabs under the UN resolution in 1947.
- It also retained control over the Gaza Strip and the West Bank respectively.
Resolving the conflict

Ans. Two-state solution
- The two-state solution refers to an arrangement where Israeli and Palestinian states co-exist in the region.
- However, such a solution has not materialised over the decades.
- As outlined in the beginning and in the briefly explained roots of the conflict, the two-state solution means two separate states for Israelis and Palestinians.
Why it hasn’t worked out?

There are four main reasons why the two-state solution has not materialized by now:

[1] Borders
- There is no consensus as to how to draw the lines dividing the two proposed states.
- Many people say borders should have pre-1967 lines.
- In 1967 Israeli-Arab war, Israel captured Sinai Peninsula, Gaza Strip, West Bank, Old City of Jerusalem, and Golan Heights.
- Israel is not willing to give up these gains. It returned Sinai to Egypt in 1982.
- Moreover, there is the question of Israeli settlements in West Bank.
[2] Question of Jerusalem
- Both Israel and Palestinians claim Jerusalem as their capital and call it central to their religion and culture.
- The two-state solution typically calls for dividing it into an Israeli West and a Palestinian East, but it is not easy to draw the line — Jewish, Muslim and Christian holy sites are on top of one another.
- Israel has declared Jerusalem its ‘undivided capital’, effectively annexing its eastern half, and has built up construction that entrenches Israeli control of the city.
[3] Refugees
- A large number of Palestinians had to flee in the 1948 War.
- They and their descendants —numbering at 5 million— demand a right to return. Israel rejects this.
- The return of these people would end the demographic majority of Jews, ending the idea of Israel that’s both democratic and Jewish.
[4] Security
- Security concerns are also central to Israel as it’s constantly harassed by terrorist group Hamas that controls Gaza Strip.
- Hamas and other Islamist group in Gaza launch rockets into Israel time-to-time.
- Moreover, there are also concerns of Palestinians’ attack inside Israel.
- This year in March-April, at least 18 Israelis were killed in Palestinian attacks inside Israel.
- A total of 27 Palestinians were also killed in the period, including those who carried out attacks inside Israel. Palestinians too have their concerns.
- For Palestinians, security means an end to foreign military occupation.
Why the two-state solution is needed?
- Besides fulfilling the basic desire of both Jews and Arabs of their own states, supporters of two-state solutions say it must be backed because its alternatives are simply not workable.
- A single state merging Israel, West Bank, and Gaza would reduce Jews to a minority.
- At the same time, in such a state, Jews would be a significant minority which would mean that the Arab majority would be miffed.
Moral reasoning for a two-state solution
- It says that the aspirations of one person should not be overridden for others’ aspirations.
- It’s a struggle for collective rights between two distinct groups of people.
- Jews are the global micro-minority with a very small piece of land to exist.
- Depriving Israeli Jews of a Jewish state or Palestinians of a Palestinian state would represent a subordination of one group’s aspirations to someone else’s vision.
Way forward
- India opines that long-term peace in Israel and Palestine can be achieved only through a negotiated two-State solution leading.
- This can be done with the establishment of a sovereign, independent and viable State of Palestine living within secure and recognized borders.
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SC to hear plea against Electoral Bonds Scheme

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

bond

The Supreme Court is scheduled to examine whether petitions challenging the validity of electoral bonds scheme need to be referred to a Constitution Bench.

What is a Constitution Bench?

The constitution bench is the name given to the benches of the Supreme Court of India.
The Chief Justice of India has the power to constitute a Constitution Bench and refer cases to it.
Constitution benches are set up when the following circumstances exist:

Interpretation of the Constitution: Article 145(3) provides for the constitution of at least five judges of the court which sit to decide any case “involving a substantial question of law as to the interpretation” of the Constitution of India.
President of India seeking SC’s opinion: When the President has sought the Supreme Court’s opinion on a question of fact or law under Article 143 of the Constitution. Article 143 of the Constitution provides for Advisory jurisdiction to the SC. As per the provision, the President has the power to address questions to the apex Court, that he deems important for public welfare.
Conflicting Judgments: When two or more three-judge benches of the Supreme Court have delivered conflicting judgments on the same point of law, necessitating a definite understanding and interpretation of the law by a larger bench.

The Constitution benches are set up on ad hoc basis as and when the above-mentioned conditions exist.
Constitution benches have decided many of India’s best-known and most important Supreme Court cases, such as:

K. Gopalan v. State of Madras (Preventive detention)
Kesavananda Bharati v. State of Kerala (Basic structure doctrine) and
Ashoka Kumar Thakur v. Union of India (OBC reservations) etc.

What are Electoral Bonds?

Electoral bonds are banking instruments that can be purchased by any citizen or company to make donations to political parties, without the donor’s identity being disclosed.
It is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India.
The citizen or corporate can then donate the same to any eligible political party of his/her choice.
An individual or party will be allowed to purchase these bonds digitally or through cheque.

About the scheme

A citizen of India or a body incorporated in India will be eligible to purchase the bond
Such bonds can be purchased for any value in multiples of ₹1,000, ₹10,000, ₹10 lakh, and ₹1 crore from any of the specified branches of the State Bank of India
The purchaser will be allowed to buy electoral bonds only on due fulfillment of all the extant KYC norms and by making payment from a bank account
The bonds will have a life of 15 days (15 days time has been prescribed for the bonds to ensure that they do not become a parallel currency).
Donors who contribute less than ₹20,000 to political parties through purchase of electoral bonds need not provide their identity details, such as Permanent Account Number (PAN).

Objective of the scheme

Transparency in political funding: To ensure that the funds being collected by the political parties is accounted money or clean money.

Who can redeem such bonds?

The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank.
Only the Political Parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent of the votes polled in the last General Election to the Lok Sabha or the State Legislative Assembly, shall be eligible to receive the Electoral Bonds.

Restrictions that are done away

Earlier, no foreign company could donate to any political party under the Companies Act
A firm could donate a maximum of 7.5 percent of its average three-year net profit as political donations according to Section 182 of the Companies Act.
As per the same section of the Act, companies had to disclose details of their political donations in their annual statement of accounts.
The government moved an amendment in the Finance Bill to ensure that this proviso would not be applicable to companies in case of electoral bonds.
Thus, Indian, foreign and even shell companies can now donate to political parties without having to inform anyone of the contribution.

Issues with the Scheme

Opaque funding: While the identity of the donor is captured, it is not revealed to the party or public. So transparency is not enhanced for the voter.
No IT break: Also income tax breaks may not be available for donations through electoral bonds. This pushes the donor to choose between remaining anonymous and saving on taxes.
No anonymity for donors: The privacy of the donor is compromised as the bank will know their identity.
Differential benefits: These bonds will help any party that is in power because the government can know who donated what money and to whom.
Unlimited donations: The electoral bonds scheme and amendments in the Finance Act of 2017 allows for “unlimited donations from individuals and foreign companies to political parties without any record of the sources of funding”.

Way ahead

The worries over the electoral bond scheme, however, go beyond its patent unconstitutionality.
The concern about the possibility of misuse of funds is very pertinent.
The EC has been demanding that a law be passed to make political parties liable to get their accounts audited by an auditor from a panel suggested by the CAG or EC. This should get prominence.
Another feasible option is to establish a National Election Fund to which all donations could be directed.
This would take care of the imaginary fear of political reprisal of the donors.

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Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

I&B Ministry issues advisory on private TV channels’ ‘Public Service Broadcasting’ Obligation

| Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters
The Information and Broadcasting Ministry clarified that the topics of national importance and social relevance embedded in the programs broadcast by private TV channels would qualify for “Public Service Broadcasting” Obligation.

What is the news?
- The Ministry had earlier issued the guidelines on November 9 last year.
- Following consultations with the stakeholders, it has now come up with the advisory.
Content on National Importance: Key Guidelines for TV channels
- The obligations are under the “Guidelines for Uplinking and Downlinking of Television Channels in India, 2022” to telecast such contents for 30 minutes every day.
- The time for which the public service broadcasting content is telecast in between commercial breaks shall not be accounted for the 12-minute limit for commercial breaks.
- The time for the content shall be accounted cumulatively on monthly basis i.e. 15 hours per month.
- Broadcasters have the liberty to modulate their content.
Themes of National Interest
- The relevant content embedded in the programs may be accounted for public service broadcasting.
- However, it should be done in a manner that the overall objective of the public service broadcasting may be achieved.
- The content could include the themes of:
1. Education and spread of literacy
2. Agriculture and rural development
3. Health and family welfare
4. Science and technology
5. Welfare of women
6. Weaker sections of society
7. Protection of environment and cultural heritage and
8. National integration
Provisions for voluntary compliance
- Other subjects: The above list is indicative and could be extended to include similar subjects such as water conservation, disaster management, etc.
- Self-certification: The advisory seeks to achieve the objective of public service broadcasting by the private TV channels through voluntary compliance and self-certification.
- Repeat telecast: As advised, the content can be shared between the broadcasters and telecast repeatedly on one or several TV channels.
- Common e-platform: Such platform can also be developed as a repository of relevant videos or textual content from various sources for access and use.
Rationale behind
- Social responsibility: The government has argued that since “airwaves/ frequencies are public property” they “need to be used in the best interest of the society”.
- Creating awareness: The role of mass media, especially the new channels plays a vital role in reshaping public opinion.
Ensuring compliance
- Once the guidelines are implemented, the Ministry will monitor the channels for the broadcast of this content. In case non-compliance is observed in the Ministry’s view, an explanation will be sought.
- If a channel continues to be non-compliant, more steps can be taken based on specific advisories that will be issued from time to time, and on a case-to-case basis.
Exemptions
- Sports channel: The guidelines specify exceptions where it may not be feasible, such as in the case of sports channels, etc.
- Wildlife channels: The exemption may also apply to wildlife channels and foreign channels, besides live telecasts in the case of sports channels.
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Finance Commission – Issues related to devolution of resources

Process to set up 16th Finance Commission set to kick off soon

| Economics | Mains Paper 3: Indian Economy
The Centre will soon kick off the process to set up the Sixteenth Finance Commission, with the Finance Ministry likely to notify the terms of reference.

What is the Finance Commission?
- The Finance Commission (FC) was established by the President of India in 1951 under Article 280 of the Indian Constitution.
- It was formed to define the financial relations between the central government of India and the individual state governments.
- The Finance Commission (Miscellaneous Provisions) Act, 1951 additionally defines the terms of qualification, appointment and disqualification, the term, eligibility and powers of the Finance Commission.
- As per the Constitution, the FC is appointed every five years and consists of a chairman and four other members.
- Since the institution of the First FC, stark changes in the macroeconomic situation of the Indian economy have led to major changes in the FC’s recommendations over the years.
Constitutional Provisions

Several provisions to bridge the fiscal gap between the Centre and the States were already enshrined in the Constitution of India, including Article 268, which facilitates levy of duties by the Centre but equips the States to collect and retain the same.

Article 280 of the Indian Constitution defines the scope of the commission:
1. Who will constitute: The President will constitute a finance commission within two years from the commencement of the Constitution and thereafter at the end of every fifth year or earlier, as the deemed necessary by him/her, which shall include a chairman and four other members.
2. Qualifications: Parliament may by law determine the requisite qualifications for appointment as members of the commission and the procedure of selection.
3. Terms of references: The commission is constituted to make recommendations to the president about the distribution of the net proceeds of taxes between the Union and States and also the allocation of the same among the States themselves. It is also under the ambit of the finance commission to define the financial relations between the Union and the States. They also deal with the devolution of unplanned revenue resources.
Important functions
- Devolution of taxes: Distribution of net proceeds of taxes between Center and the States, to be divided as per their respective contributions to the taxes.
- Grants-in-aid: Determine factors governing Grants-in-Aid to the states and the magnitude of the same.
- Augment states fund: To make recommendations to the president as to the measures needed to augment the Fund of a State to supplement the resources of the panchayats and municipalities in the state on the basis of the recommendations made by the finance committee of the state.
- Any financial function: Any other matter related to it by the president in the interest of sound finance.
Members of the Finance Commission
- The Finance Commission (Miscellaneous Provisions) Act, 1951 was passed to give a structured format to the finance commission and to bring it to par with world standards.
- It laid down rules for the qualification and disqualification of members of the commission, and for their appointment, term, eligibility and powers.
- The Chairman of a finance commission is selected from people with experience of public affairs. The other four members are selected from people who:
1. Are, or have been, or are qualified, as judges of a high court,
2. Have knowledge of government finances or accounts, or
3. Have had experience in administration and financial expertise; or
4. Have special knowledge of economics
Key challenges for 16^th FC
- Overlap with GST council: A key new challenge for the 16th FC would be the co-existence of another permanent constitutional body, the GST Council.
- Conflict of interest: The GST Council’s decisions on tax rate changes could alter the revenue calculations made by the Commission for sharing fiscal resources.
- Feasibility of recommendations: Centre usually takes the Commission’s recommendations on States’ share of tax devolution and the trajectory for fiscal targets into account, and ignores most other suggestions.
Major outstanding recommendations
- Creating a Fiscal Council: The 15th FC has suggested creating a Fiscal Council where Centre and States collectively work out India’s macro-fiscal management challenges, but the government has signalled there is no need for it, he pointed out.
- Creating a non-lapsable fund for internal security: The centre accepted to set up a non-lapsable fund for internal security and defense ‘in principle’, its implementation still has to be worked out.
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Foreign Policy Watch: India-Pakistan

Indus Waters Treaty (IWT) and the disputes

op-ed snap | International Relations | Mains Paper 2: India & Its Neighborhood – Relations
Context
- India’s January 25 notice to Islamabad seeking modification of the 1960 Indus Waters Treaty is the fallout of a longstanding dispute over two hydroelectric power projects on the western rivers the fully operational Kishenganga on the Jhelum, and Ratle on the Chenab.
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What is Indus Water Treaty (IWT)?
- The Indus Waters Treaty is a water-distribution treaty between India and Pakistan, brokered by the World Bank signed in Karachi in 1960.
- According to this agreement, control over the water flowing in three eastern rivers of India the Beas, the Ravi and the Sutlej was given to India.
- The control over the water flowing in three western rivers of India the Indus, the Chenab and the Jhelum was given to Pakistan.
Basis of the treaty
- Equitable water-sharing: Back in time, partitioning the Indus rivers system was inevitable after the Partition of India in 1947.
- Empathizing the Partition: The sharing formula devised after prolonged negotiations sliced the Indus system into two halves.
- Water does not recognize borders: Underlying the treaty is the principle that water does not recognise international boundaries and upper riparians have a responsibility to lower riparians.
What is the issue?
- Pakistan’s objection: The Kishenganga was constructed after the Permanent Court of Arbitration in The Hague ruled in India’s favour. But Pakistan continues to object to this and the Ratle dam.
- Delhi sought to modify: Delhi, reportedly, has sought to modify the treaty after Pakistan refused intergovernmental negotiations on the matter.
- Stages for resolving disputes: While that is the first stage provided under the treaty for resolving disputes, the next is the request to the World Bank by the aggrieved party for the appointment of a neutral expert. A court of arbitration is constituted as the last resort.
Significance of the treaty
- Testimonial to peaceful coexistence: It is a treaty that is often cited as an example of the possibilities of peaceful coexistence that exist despite the troubled relationship. The IWT is the only agreement between India and Pakistan that has stood the test of time, through wars and terrorism.
- Survived many hostilities: It has survived 3 crucial wars.
- Most successful bilateral treaty: It is internationally regarded as an example of successful conflict resolution between two countries otherwise locked in a hostile relationship.
India and Pakistan’s POV
- While the treaty does provide for modification from time to time, it has to do so by means of a duly ratified treaty concluded for that purpose between the two Governments.
- More likely, the issue will fester and grow into another active pressure point in India-Pakistan relations.
- On the Pakistani side, accusations are made with increasing frequency that India has turned off the water, and on this side, the view is growing that India was been too generous in the IWT.
- Prime Minister Narendra Modi’s remark in the aftermath of the 2016 Uri attack that “blood and water cannot flow together”, even though how this threat might be implemented is not clear as it would be plain dangerous to build big dams to stop the western rivers from flowing across the LoC in a seismologically active region.
Conclusion
- Using water as a weapon is never a good idea. It would be so much better for both countries to treat the IWT as an instrument for collaboration on climate action in the fragile Himalayan region.
Mains question

Q. What is Indus water treaty? Discuss the significance of IWT and highlight some of the issues.

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Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

Layoff and the conditions for retrenchment

op-ed snap | Economics | Mains Paper 3: Issues relating growth and development, employment
Context
- Last year, around 1,60,000 workers in the tech industry were laid off globally. In contrast, in just this month alone some 60,000 tech workers have been laid off till now. On the back of a gloomy global economic outlook and prospects of a possible recession, tech firms across the world from US-based giants like Alphabet, Amazon and Meta to early-stage startups have engaged in large-scale retrenchments.
What is means by Lay-Off?
- A layoff is the temporary or permanent termination of employment by an employer for reasons unrelated to the employee’s performance.
- Employees may be laid off when companies aim to cut costs, due to a decline in demand for their products or services, seasonal closure, or during an economic downturn.
- When laid off, employees lose all wages and company benefits but qualify for unemployment insurance or compensation (typically in USA).
Inflation after strong recovery of the global economy: Two factors
- Outpaced demand: Buoyed by extraordinary pandemic relief support to households, aggregate demand in advanced economies outpaced supply.
- Supply chain disruption as a result of Russia- Ukraine war: the armed conflict between Russia and Ukraine caused supply-chain disruptions, leading to global inflationary pressures for food and fuel. In response, the US Federal Reserve has rapidly hiked rates.
Layoff drive in India
- Lay-offs in India: As multinational firms seek to cut their payroll figures worldwide, this lay-off drive has made its way to India as well.
- Impact on Indian workers: Indian workers, including expatriates and local employees, in both the traditional IT sector and the tech-based startup sector have been affected.
- Slowdown in funding in 2022: Despite a strong start, funding in India began to slow down in 2022, with third-quarter funding falling to a two-year low.
- Rising interest rates and cost of capital: Rising interest rates have meant that the cost of capital has increased and venture capitalists have to be more selective about how they deploy funds in this funding winter.
- Restructuring and cost-cutting for Indian tech startups: Indian tech startups are under pressure to cut costs and restructure their businesses in search for profitability. As a result, startups, including unicorns have engaged in broad-based retrenchments.
Retrenchment conditions according to Industrial Disputes Act
- One month notice with reasons is must: Employers must give a one-month notice with reasons for retrenchment to workers who have been in continuous service for at least a year.
- Must provide compensation: Employers must give retrenchment compensation.
- Notice shall be served: A notice in the prescribed manner must be served on the appropriate government.
- Principle of last come first go shall be followed: Employers must follow the principle of last come, first go while retrenching employees.
Concerns for contract workers
- Employers often skirt legal requirements by asking for voluntary resignations to remain outside the scope of retrenchment provisions.
- In any case, these mandates only apply to non-managerial employees; managerial employees are governed by their employment contracts.
- There are no similar protections available to gig or contract workers.
Conclusion
- Even as India seeks to lead a digital and technologically-driven world, it is important to note that the tech sector is not immune to harsh macroeconomic realities. It is crucial for the government and private sector to work together to mitigate the impact of layoffs on workers and to ensure that the industry continues to grow and create opportunities for all.
Mains question

Q. Layoffs have been frequently reported in the news recently. In this context, briefly explain the term layoffs and discuss the factors contributing to them? Highlight the impact of layoffs in India.

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Citizenship and Related Issues

Census: A prerequisite for economic development

op-ed snap | Governance | Mains Paper 1: Population & Associated Issues
Context
- India aspires to be a $10 trillion economy by 2035. To achieve this, conducting population Census, due in 2021 but postponed indefinitely because of Covid, is necessary. Such data is essential for planning at the village or block level to usher in economic and social development, ensure better governance, and increase the transparency of public schemes and programmes.
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What is a census?
- It is nothing but a process of collecting, compiling, analysing, evaluating, publishing and disseminating statistical data regarding the population.
- It covers demographic, social and economic data and is provided as of a particular date.
What is the purpose?
- To collect the information for planning and formulation policies for Central and the State Governments.
- The census tells us who we are and where we are going as a nation.
- It helps the government decide how to distribute funds and assistance to states and localities.
- The census data is widely used by National and International Agencies, scholars, business people, industrialists, and many more.
Why conducting a Census has become a prerequisite for economic development?
- Lack of complete civil registration system: Since many states (and districts) lack a complete civil registration system with a full count of birth and death data, demographers face enormous challenges in providing population counts at the district level. In several instances, estimates tend to be far off the mark, especially for newly formed districts and states.
- Changing pattern of migration: migration data collected in the Census has great implications for economic activities and social harmony. As India progresses economically, the pattern of migration has been changing in unprecedented ways. The migration pattern in India in the present decade is very different from what the data in Census 2001 and 2011 suggest. Hence, in the absence of updated data, it is difficult to draw conclusions about migration in India.
- Other surveys does not provide comprehensive data: The Census counts everyone across regions, classes, creeds, religions, languages, castes, marital status, differently-abled populations, occupation patterns etc. Most national-level surveys such as NFHS and NSSO do not have representative data at the population subgroup level, unlike the former. The existence of numerous faiths and languages as well as the expansion or extinction of such communities will be known only via population Census.
In the absence of it how demographers collect data?
- Estimates using past census information: In the absence of updated data, demographers estimate the annual population count at the district level using past Census information for the intercensal or postcensal period. Say, to estimate the population of a district in India in the year 2015, they use the district-level population growth rate between the 2001 and 2011 Census.
- Such estimates are fair for maximum of 10 years: Such demographic exercises give reasonably fair estimates when the year of population estimation is within the range of a maximum of 10 years. Beyond this period, estimations can be erroneous, particularly at the district level due to dynamic patterns of population components, among them fertility, mortality and migration.
- Assumptions based model in faster demographic transition: Many districts of India are experiencing a faster demographic transition with varying fertility and mortality rates. So, using the growth rate of 2001-2011 for the period after 2021 becomes more of an assumption-based model than a model that reflects empirical reality. Covid-19 further makes the situation complex as it impacts the fertility and mortality situation in the country.
Demand for caste census in India
- India’s population has since increased three-fold to 1.21 billion in 2011.
- Experts believe the economic status of the dominant OBC castes have improved in the past 80 years and certain castes have not benefited as much.
- So, the new caste census is required to measure the economic and social well-being of all castes.
History and a Way ahead
- India has a long history of conducting Census without interruption from 1881 with the rare exception of Assam in 1981 and Jammu Kashmir in 1991 due to socio-political unrest and secessionist movements.
- Conducting it regular at the national and sub-national levels has been a matter of pride for India.
- It has to be continued until India achieves a fool-proof civil registration system and a dynamic National Population Register.
Conclusion
- Conducting the population Census is a mammoth task, of course. Full involvement of the government system is necessary to organise it. But the it is necessary since it forms the basis of all the plans and programmes that the government wants to implement. Postponing the it has immediate and long-term negative consequences for India. The government and other stakeholders should take urgent steps to conduct the Census as early as possible.
Mains question

Q. What is census? Why conducting a Census has become a prerequisite for economic development and also discuss the impact of delayed census.

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Intellectual Property Rights in India

National IPR Policy: Discussing the rights of all the stakeholders

op-ed snap | Economics | Mains Paper 3: Intellectual Property Rights
Context
- In May 2016, the then Department of Industrial Policy and Promotion (now known as the Department for Promotion of Industry and Internal Trade) under the Ministry of Commerce released the 32-page National IPR Policy. The overall purpose of this document was to spell out the government’s comprehensive vision for the IPR ecosystem in the country towards shaping a more innovative and creative Bharat.
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What is a Patent?
- A patent is an exclusive set of rights granted for an invention, which may be a product or process that provides a new way of doing something or offers a new technical solution to a problem.
Know the basics: Intellectual Property rights (IPR)
- IPR refers to the legal rights that protect an individual’s or company’s creations and inventions (such as inventions, literature, music, and symbols) from being used or copied by others without permission.
- IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create.
- By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish.
Three important objectives of National IPR policy document
- Strong and effective IPR laws: Under the head Legal and Legislative Framework, the goal was to have strong and effective IPR laws, which balance the interests of right owners with larger public interest.
- Modernise and strengthen IPR administration: Under Administration and Management, the objective was to modernise and strengthen service-oriented IPR administration; and
- Strengthening adjudicatory mechanism: Under Enforcement and Adjudication, the focus was to strengthen the enforcement and adjudicatory mechanisms for combating IPR infringements.
Changes in IPR ecosystem so far
- Structural and legislative changes: Over the last six years, the IPR ecosystem in this country has witnessed both structural and legislative changes.
- Intellectual Property Appellate Board (IPAB): IPAB was dissolved in April 2021 as part of tribunal reforms, and its jurisdiction was re-transferred to high courts.
- Dedicated IP Division: This was followed by the establishment of dedicated IP benches the IP Division by the Delhi High Court, arguably the country’s leading court on the IPR front, for speedier disposal of IPR disputes.
- IP friendly environment: Such measures, one presumes, are intended to convey to investors and innovators that Bharat is an IP-savvy and even IP-friendly jurisdiction without compromising on national interest and public health commitments.
- For instance: This is evident from the very same National IPR Policy which, among other things, expressly recognises the contribution of the Indian pharmaceutical sector in enabling access to affordable medicines globally and its transformation to being the pharmacy of the world.
What are the concerns?
- Patent-friendliness, rather patentee-friendliness: It appears that the patent establishment of the country has drawn a very different message it has gone on an overdrive to prove its patent-friendliness, rather patentee-friendliness, in the pharmaceutical sector at the expense of public health and national interest respectively.
- Evergreening of patents on critical drugs: Evergreening patents on drugs which relate to treatment of diabetes, cancers, cardiovascular diseases and other serious conditions continue to be granted to pharmaceutical innovator companies by the Indian Patent Office.
- Enforcements at the expense of statutory rights: Worse, they are regularly enforced through courts at the expense of the statutory rights of generic manufacturers and to the detriment of patients.
- Unavailability of affordable drugs: The delayed entry of generic versions of off-patent drugs affects adversely the availability of affordable medicines to patients in a lower middle-income country such as Bharat where most middle-class families and below are only a hospital-visit away from dipping into their hard-earned savings.
Way ahead
- It must be understood that IP legislations such as the Patents Act do not exist for the sole benefit of IP right owners.
- Patent bargain is in which the society is expected to benefit from dynamic innovation-based competition between market players.
- Clearly, there are four stakeholders under the Patents Act the society, government, patentees and their competitors.
- Each of these stakeholders has rights under the statute which makes all of them right owners.
- To interpret, apply and enforce the Act to the exclusive benefit of patentees, and that too evergreening patentees, is to abridge and reduce to a naught the legitimate rights of other stakeholders, leading to sub-optimal and worse, anti-competitive market outcomes.
Conclusion
- It is one thing to operate under the understandable belief that Bharat needs to add layers to its IPR ecosystem to attract investment. However, it is entirely another to equate IPR-sensitivity with a pro-patentee position at the expense of public health obligations and long-term national interest. Make in India must be reconciled with Atmanirbhar Bharat, and in the event of conflict between the two, the latter must prevail for Bharat to retain its position as the pharmacy of the world.
Mains question

Q. What is Intellectual property rights? Discuss the changes taken place in India’s IPR ecosystem so far and highlight the concerns.

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