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

    What are Cloudbursts?

    Prelims Only | Enviro & Biodiversity | Mains Paper 1: Important Geophysical Phenomena

    At least eight people have died after a cloudburst occurred at the Amarnath Cave Shrine near Pahalgam in south Kashmir.

    What is a Cloudburst?

    • Cloudbursts are short-duration, intense rainfall events over a small area.
    • According to the IMD, it is a weather phenomenon with unexpected precipitation exceeding 100mm/h over a geographical region of approximately 20-30 square km.

    What causes Cloudburst?

    • A study published last year studied the meteorological factors behind the cloudburst over the Kedarnath region.
    • They analysed atmospheric pressure, temperature, rainfall, cloud water content, cloud fraction, cloud particle radius, cloud mixing ratio, total cloud cover, wind speed, wind direction, and relative humidity during the cloudburst, before as well as after the cloudburst.
    • The results showed that during the cloudburst, the relative humidity and cloud cover was at the maximum level with low temperature and slow winds.
    • It is expected that because of this situation a high amount of clouds may get condensed at a very rapid rate and result in a cloudburst.

    Impact of climate change

    • Several studies have shown that climate change will increase the frequency and intensity of cloudbursts in many cities across the globe.
    • As temperatures increase the atmosphere can hold more and more moisture and this moisture comes down as a short very intense rainfall for a short duration.
    • This results in flash floods in the mountainous areas and urban floods in the cities.
    • Also, there is evidence suggesting that globally short-duration rainfall extremes are going to become more intense and frequent.

    Try this PYQ

    Q.During a thunderstorm, the thunder in the skies is produced by the:

    1. meeting of cumulonimbus clouds in the sky
    2. lightning that separates the nimbus clouds
    3. violent upward movement of air and water particles

    Select the correct option using the codes given below:

    (a) 1 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) None of the above

     

    Post your answers here.

     

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  • Parliament – Sessions, Procedures, Motions, Committees etc

    Legal and constitutional framework to deal with split in political party

    op-ed snap | Polity | Mains Paper 2: Representation Of People’s Act

    Context

    The recent split in Shiv Sena and the subsequent political slugfest in Maharashtra has brought into focus the legal and constitutional framework to deal with issues when a party splinters and rival factions assert themselves as the recognised political party.

    Culture of functioning political parties in India

    • What is a political party? A political party is an organised group of citizens who hold common views on governance and act as a political unit that seeks to obtain control of government with a view to further the agenda and policy they profess.
    • Political parties maintain a continuous connection between the people and those who represent them either in government or in the opposition.
    • Political parties in India are extra-constitutional, but they are the breathing air of the political system.
    • There are reportedly 2,598 registered political parties, eight national parties and 50 state parties.
    • The regulation of these parties and elections in the country is a crucial segment of India’s constitutional imagination.
    • Yet, the proliferation of political parties also means that established parties splinter.
    • A battle ensues for recognition of one faction or group as the recognised political party and securing the party symbol.

    Legal and Constitutional framework

    • There is a legal and constitutional framework to deal with issues when a party splinters and rival factions assert themselves as the recognised political party.
    • Article 324 of the Constitution provides that the superintendence, direction and control of elections is vested in the Election Commission.
    • Conduct of Election Rules, 1961, Rule 5 specifies that the Commission shall specify the symbols that may be chosen by candidates at elections in parliamentary or assembly constituencies and the restrictions to which their choice will be subject.
    • Choice and allotment of symbol: The Election Symbols (Reservation and Allotment) Order 1968 provides for the choice and allotment of symbols in Parliamentary and Assembly constituencies and for recognition of political parties and matters connected.
    • Power to recognise party from splinter group: Paragraph 15 of this Order specifies that the Commission has the power to recognise as the party, from amongst splinter groups or rival sections.

    Important case on recognition of faction

    • The classic case on recognition of a faction and accrual of the party symbol is Sadiq Ali v the Election Commission of India (1972). 
    • Here, the Supreme Court was confronted with the case of the Indian National Congress which had split into two factions.
    • The Commission ruled in favour of Congress (J) being the recognised political party and the case reached to the Supreme Court,
    • The SC relied on the figures presented to the Commission and found that a substantial majority of the members of the Congress in both its legislative wing as well as the organisational wing supported the Congress (J).
    • The SC concludes that “numbers have importance in a democratic system of government or political set up, and it is neither possible nor permissible to lose sight of them. Indeed, it is the view of the majority which in the final analysis proves decisive in a democratic set-up.”
    • It was also concludes that paragraph 15, which gives the Commission power to settle such disputes pertaining to symbols between factions of a party, is entirely legal, for this power accrues from Article 324 that creates the Commission and vests in it the power of superintendence over elections.

    Conclusion

    In India’s 72nd year as a constitutional democracy, the free and fair regulation of political parties by the Election Commission and the courts is a crucial part of our political success as a nation. The Supreme Court’s thoughtful judgment decades ago is a realisation of the importance accorded to judicial oversight of our political parties.

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  • Goods and Services Tax (GST)

    Impact of GST on inflation

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

    Context

    The monumental indirect tax reform, the Goods and Services Tax (GST), has completed five years in existence. The article analyses the impact of GST on inflation.

    Background

    • Before the implementation, it was said that it would be a boon to the economy in terms of higher revenue buoyancy, lower inflation, higher revenue, higher growth etc.
    • During the 12 months preceding GST implementation, the Consumer Price Index (CPI) inflation was 3.66%, while it increased to 4.24% post-GST in the next 12 months.
    •  A similar pattern was observed in Australia, New Zealand, and Canada.
    • An Australian Competition and Consumer Commission study showed that GST initially increases inflation.

    How GST can affect prices

    • In theory, implementing GST should not lead to a change in overall inflation.
    • The revenue-neutral rate (RNR) is calculated so that it would not cause higher inflation.
    • But revenue neutrality does not mean that prices would not go up or down in the economy.
    • This is because the weight of goods in the consumption basket and their contributions to indirect tax collections are not the same.
    • Importantly, the effect of GST on the prices of certain goods and services depends on the structure and design of taxation.
    • The RBI, in a 2017 report, showed that about half of the groups of items that GST covers are not in the CPI basket.
    • So, the effect of GST on prices was expected to be small.
    • Finally, prior to the GST implementation, it was expected that prices would go down because GST harmonises indirect tax rates and eliminates the cascading effect.
    • Thus, whether GST has any effect depends on how different factors affect each other.

    So, how can we ascertain whether GST has had an inflationary impact in India?

    • Inflationary impact can be assessed by turning to statistical modeling?
    • Statistical results provide us with an interesting picture of the impact of GST on price levels.
    • First, we look into the overall price index (CPI).
    • Here, the actual CPI growth in the study period is 4.61%, whereas the counterfactual estimate of inflation is 3.24%.
    • This implies that without the GST implementation, the CPI inflation would have been 3.24%.
    • This indicates that with the implementation of GST, CPI increased by 1.37 percentage points (pp).
    • Second,  CPI core inflation (which strips off volatile components such as food and fuel from the headline inflation) increased by 1.04pp in the post-GST period (actual inflation was 4.57%, counterfactual inflation was 3.53%).
    • Third, GST is found to have a significant positive impact on inflation of commodity groups such as paan, tobacco and intoxicants, clothing.

    What explains rise in inflation post GST?

    • Rise in tax rate of some goods: The rise in inflation post-GST implementation could be due to the rise in the tax rate of some goods and services, the inclusion of business activities that were not taxed earlier, or the market structure.
    • The average weighted GST rate was designed to be neutral, so it might not have contributed much to the observed higher inflation.
    • Coverage of business activities under GST not taxed earlier would result in higher prices since the firms would pass on the cost to the consumers.
    • Market power: There is another possibility which would cause result inflation after the GST implementation.
    • As Joseph Stiglitz opined, rising market power is bad for the economy as it raises economic inefficiency and inequality and lowers the economy’s resiliency.
    • Further, taking advantage of market power, it is possible that most firms would have passed the taxes to end consumers.
    • With the existence of market power, firms’ price includes a significant mark-up over marginal costs.
    • Some results point out the possibility of profiteering in select segments after GST.
    • To pre-empt this possibility, the government set up National Anti-profiteering Authority (NAA).

    Way forward

    •  NAA should monitor the prices of critical or essential goods and services to see the price impact of GST.
    • Similarly, the Competition Commission of India should observe anti-competitive producer behaviour that hurts consumers via excessive price increases.
    • These measures may ensure that producers do not take advantage of the GST.

    Conclusion

    Statistical results suggest that GST implementation has resulted in a decrease in inflation of food items and raised inflation of non-food items.

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  • RBI Notifications

    Why the criticisms of the RBI are misplaced

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

    Context

    All emerging markets (EMs), including India, are facing outflows of foreign portfolio investment as the US Fed tightens.

    Inflatioon and exchange rate

    • Exchange rate as response to capital flow: Canonical inflation targeting wants exchange rates to float as the correct response to capital flows.
    • Policy should respond to exchange rate fluctuations only after they affect inflation or output.
    • Any interest rate defence of the exchange rate would reduce the focus on inflation.
    • But most EMs intervene in foreign exchange (FX) markets in order to reduce volatility.
    • A research paper by Edward F Buffie and co-authors indicate that  FX intervention greatly enhances the efficacy of inflation targeting.
    • Two instruments for two targets work better than trying to do everything through the interest rate.
    • Excess depreciation of currency can raise inflation.
    • Other researches such as from the IMF, argues for the use of prudential capital flow management techniques and finds reserve accumulation and its use reduces risks and crises in EMs.

    Policies followed by RBI to reduce volatility

    • Not fully convertible: RBI’s sequenced approach to capital account convertibility, where, for example, debt inflows are only allowed as a percentage of domestic markets, saved it from the kind of interest rate volatility Indonesia experienced during the taper tantrum and is helping it now.
    • More liberalisation measures can be taken when needed.
    • India’s large foreign exchange reserves have allowed rupee depreciation to be lower than most other countries as the dollar strengthens.
    • The cost of holding foreign exchange: There are costs of holding large reserves and of too much intervention.
    • The central bank ends up supporting the US and not its own government borrowing and it sacrifices interest income.
    • But holding reserves and then not using them when required is the most costly.
    • Again use of multiple instruments can mitigate over-reliance on intervention.
    • Much research and recent experience suggest that all available instruments should be used to moderate volatility in nominal variables.

    Why increasing interest rates will be ineffective in reducing capital outflow

    •  A common suggestion is to raise policy rates to maintain a historical gap with US Fed rates.
    • But such an interest rate defence did not prevent outflows during the taper tantrum or in 2018 and only triggered a slowdown.
    • It forgets that interest-sensitive flows are only about 8 per cent of India’s foreign liabilities.
    • There have been no debt outflows in 2022 despite a narrowing interest differential.
    • Equity outflows also seem to be tapering.
    • Monetary tightening that dampens expectations of growth, induces more outflows as country risk-premiums rise.

    Issues with less intervention

    • Some want less intervention and more rupee depreciation in order to improve the current account deficit.
    •  But less intervention can lead to a chaotic fall and jittery markets as we saw in 2011.
    • It is best for policy to prevent over-depreciation due to global risks.
    • After about 4 per cent nominal depreciation, India’s real effective exchange rate against a basket of 40 countries is approaching 100.
    • That implies the real exchange rate is too depreciated since India has had relatively more structural reform and productivity growth.
    • Future corrections toward equilibrium will require a rise of the rupee.
    • High oil prices are a risk for India’s balance of payments, but multiple types of adjustments have the best chance of succeeding.

    Why sometimes policy changes are introduced as surprise?

    • Market participants want clear communication and no surprises for markets.
    • Forward guidance is an important part of inflation targeting. But when markets tend to overreact and are influenced more by the US than by Indian policy, the best way to introduce a policy change may be by surprise.
    • Thus markets had priced in excessive rate hikes after the US Fed began tightening.
    • The steep surprise hike in Indian repo rates prevented additional rate hikes from being priced in as domestic rate-rising began.

    Conclusion

    Inflation targeting is an art that requires skill, attention to context and an open mind.

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    Back2Basics: Real Effective Exchange Rate

    • The real effective exchange rate (REER) is the weighted average of a country’s currency in relation to an index or basket of other major currencies.
    • The weights are determined by comparing the relative trade balance of a country’s currency against that of each country in the index.
    • An increase in a nation’s REER is an indication that its exports are becoming more expensive and its imports are becoming cheaper.
    • It is losing its trade competitiveness.

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  • Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

    Explained: Sub-categorizing OBCs

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

    The Centre has extended the tenure of The Commission to Examine Sub-categorisation of Other Backward Classes (OBCs) headed by Justice G Rohini, former Chief Justice of Delhi High Court.

    Why in news?

    • The Commission, constituted nearly five years ago, has got 10 extensions so far.
    • It now has a deadline until January 31 next year to submit its report.

    Who are the OBCs?

    • Other Backward Class is a collective term used to classify castes which are educationally or socially disadvantaged.
    • It is one of several official classifications of the population of India, along with General Class, Scheduled Castes and Scheduled Tribes (SCs and STs).
    • The OBCs were found to comprise 55% of the country’s population by the Mandal Commission report of 1980, and were determined to be 41% in 2006.

    What is the Sub-Categorization of OBCs?

    • The idea is to create sub-categories within the larger group of OBCs for the purpose of reservation.
    • OBCs are granted 27% reservation in jobs and education under the central government.
    • This has been a legal debate for other reservation categories too.
    • In September last year, a Constitution Bench of the Supreme Court reopened the debate on sub-categorization of SCs and STs for reservations.

    Establishment of Rohini Commission

    • Only a few affluent communities among the over 2,600 included in the Central List of OBCs have secured a major part of the reservation.
    • Sub-categories within OBCs would ensure “equitable distribution” of representation among all OBC communities.
    • It was to examine this that the Rohini Commission was constituted on October 2, 2017.

    What is the Commission’s brief?

    It was originally set up with three terms of reference:

    1. To examine the extent of inequitable distribution of benefits of reservation among the castes or communities included in the broad category of OBCs
    2. To work out for a scientific approach for sub-categorization within such OBCs
    3. To take up the exercise of identifying the respective castes or communities or sub-castes or synonyms in the Central List of OBCs
    4. To study the various entries in the Central List of OBCs and recommend correction of any repetitions, ambiguities, inconsistencies and errors of spelling or transcription.

    When was it meant to submit its report?

    • At the time it was set up, the Commission was given 12 weeks to submit its report, but has since been given 10 extensions.
    • There is a lot of work to be done.
    • The NCBC until December 2020, over Rs 1.92 crore had been spent on the Commission including salary, consultant fees and other expenses.

    What progress has it made so far?

    • The Commission is ready with the draft report on sub-categorization.
    • Among the challenges it has faced, one has been the absence of data for the population of various communities to compare with their representation in jobs and admissions.
    • The Commission proposed for a all-India survey to estimate caste-wise population of OBCs.
    • Since then the government has been silent on this, whereas groups of OBCs have been demanding enumeration of OBCs in the Census.

    What have its findings been so far?

    • In 2018, the Commission analysed the data of 1.3 lakh central jobs given under OBC quota over the preceding five years.
    • It examined OBC admissions to central higher education institutions, including universities, IITs, NITs, IIMs and AIIMS, over the preceding three years.

    The findings were:

    1. 97% of all jobs and educational seats have gone to just 25% of all sub-castes classified as OBCs;
    2. 95% of these jobs and seats have gone to just 10 OBC communities;
    3. 983 OBC communities — 37% of the total — have zero representation in jobs and educational institutions;
    4. 994 OBC sub-castes have a total representation of only 2.68% in recruitment and admissions.

    Conclusion

    • Thus it is visible that a small chunk of communities is enjoying almost the entire OBC reservation.
    • Hence it is a cause of worry and needs due cognizance at a larger level.

     

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  • Forest Conservation Efforts – NFP, Western Ghats, etc.

    Forest Rights Act 2006

    Bills/Act/Laws | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    The Odisha government is chasing an ambitious target of completing the implementation of the Forest Rights Act (FRA) by granting all kinds of rights mandated under the historic Act by 2024.

    What is Forest Rights Act (FRA)?

    • The symbiotic relationship between forests and forest-dwelling communities found recognition in the National Forest Policy, 1988.
    • The policy called for the need to associate tribal people in the protection, regeneration and development of forests.
    • The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, was enacted in this regard.
    • It aimed to protect the marginalised socio-economic class of citizens and balance the right to environment with their right to life and livelihood.

    Provisions of the 2006 Act

    • The Act recognizes that tribal and other traditional forest-dwelling communities would be hard put to provide documentary evidence for their claims.
    • Rule 13 of the Act, therefore, stipulates that the Gram Sabhas should consider more than one evidence in determining forest rights.
    • The rule sanctions a wide range of evidence, including “statements by village elders”, “community rights” and “physical attributes such as houses, huts and permanent improvements made to land such as levelling, bunds and check dams”.

    Why in news now?

    • The forest rights claims of these tribes and forest-dwellers are mostly rejected by the States.
    • Being poor and illiterate, living in remote areas, they do not know the appropriate procedure for filing claims.
    • The gram sabhas, which initiate the verification of their claims, are low on awareness of how to deal with them.

    Why are forest rights important for tribals?

    • Aimed at undoing the “historic injustice” meted out to forest-dependent communities due to curtailment of their customary rights over forests, the FRA came into force in 2008.
    • It is important as it recognises the community’s right to use, manage and conserve forest resources, and to legally hold forest land that these communities have used for cultivation and residence.
    • It also underlines the integral role that forest dwellers play in the sustainability of forests and in the conservation of biodiversity.
    • It is of greater significance inside protected forests like national parks, sanctuaries and tiger reserves as traditional dwellers then become a part of management of the protected forests.

     

    Try answering this PYQ

    Q.Under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, who shall be the authority to initiate the process for determining the nature and extent of individual or community forest rights or both?

    (a) State Forest Department

    (b) District Collector/Deputy Commissioner

    (c) Tahsildar/Block Development Officer/Mandal Revenue Officer

    (d) Gram Sabha

     

    Post your answers here.

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

    Derecho: A storm that turned the sky green in the US

    Prelims Only | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    States of Nebraska, Minnesota and Illinois in the US were hit by a storm system called a Derecho which turned the skies green.

    What is a Derecho?

    • A derecho is a widespread, long-lived, straight-line windstorm that is associated with a band of rapidly moving showers or thunderstorms.
    • The name comes from the Spanish word ‘la derecha’ which means ‘straight’.
    • Straight-line storms are those in which thunderstorm winds have no rotation unlike a tornado.
    • Being a warm-weather phenomenon, a derecho generally – not always – occurs during summertime beginning May, with most hitting in June and July.
    • However, they are a rare occurrence as compared to other storm systems like tornadoes or hurricanes.

    Why does the sky turn green during the derecho?

    • Severe thunderstorms result in a ‘green sky’ due to light interacting with the huge amount of water they hold.
    • The big raindrops and hail scatter away all but the blue wavelengths due to which primarily blue light penetrates below the storm cloud.
    • This blue then combines with the red-yellow of the afternoon or the evening sun to produce green.

    Are there different types of derechos?

    They fall into three categories – progressive, serial and hybrid.

    1. Progressive derecho is associated with a short line of thunderstorms that may travel for hundreds of miles along a relatively narrow path. It is a summer phenomenon.
    2. Serial derecho, on the other hand, has an extensive squall line – wide and long – sweeping across a large area. It usually occurs during spring or fall.
    3. Hybrid derecho are that ones have the features of both progressive and serial derechos.

    Where do derechos usually occur?

    • They mostly occur across central and eastern parts of the United States.
    • Derechos have also been documented elsewhere across the world.
    • In 2010, Russia witnessed its first documented derecho.
    • They have also swept through Germany and Finland, and more recently in Bulgaria and Poland.

     

     

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  • Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

    Who are the Pasmanda?

    Prelims Only | Indian Society | Mains Paper 1: Salient features of Indian Society

    In a political conclave in Hyderabad, PM made a special mention for the Pasmanda muslim community and their social upliftment.

    Who are the Pasmanda Muslims?

    • The word Pasmanda is derived from the Persian language meaning ‘left behind’.
    • The Pasmanda community comprise of Dalits and Backward Muslims who are fighting a different social battle inside the society.
    • This community has its stronghold in Uttar Pradesh where the Pasmandas account for around 75% of the total Muslim population.
    • In fact, 85% of the total population of Muslims in the country is known as Pasmanda.
    • It is believed that the so-called untouchable Hindu converts are categorised as Pasmanda.

    A caste system in minorities

    • The caste system is applicable to Asian Muslims in the same way as it is applicable in the Indian society.
    • Among the South Asian Muslims including those living in India, 15% are considered upper class or upper caste, called Ashraf.
    • The remaining 85% Muslims known as Arzal and Ajlaf are considered to be Dalit and backward. Arzal means degraded.

    Why political parties are focusing on them?

    • If reports are to be believed then the creamy section of the Muslim society looks down upon them.
    • They are backward and oppressed economically, socially and educationally. This oppressed section among Muslims is called Pasmanda in India.

    A social movement in making

    • Actually the Pasmanda movement in India is 100 years old. A Muslim Pasmanda movement had emerged in the second decade of the last century.
    • After this, in the 90s in India, two big organisations were formed in favour of the Pasmanda Muslims.
    • This was the All India United Muslim Front, whose leader was Ejaz Ali.
    • Apart from this, Ali Anwar of Patna founded an organisation named All India Pasmanda Muslim Merej.
    • However, both are termed as non-Islamic by Muslim religious leaders.
    • All the small organisations of Pasmanda Muslims are mostly found in Uttar Pradesh, Bihar, Jharkhand and West Bengal.

     

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  • Important Judgements In News

    A ‘no’ to pharma freebies

    op-ed snap | Governance | Mains Paper 2: Executive & Judiciary

    Context

    The judgment by a two-judge Bench of the Supreme Court dismissed the Special Leave Petition by Apex Laboratories to claim deduction on freebies given to doctors.

    About the case

    •  In the said case, the company was giving out freebies to doctors in order for them to create awareness about a health supplement it was manufacturing called Zincovit.
    • Prohibited by the law: Upholding a decision by the Madras High Court, the Bench said that the act of pharmaceutical companies giving freebies to doctors is clearly ‘prohibited by the law’.
    • Further, it cannot be claimed as a deduction under Section 37(1) of the Income Tax Act, 1961.
    • The judge said that in the process of interpretation of the law, it is the responsibility of the court to discern the social purpose which the specific provision subserves.
    •  Invoking the principle of implied condition, the Court relied on the precedents in the case of P.V. Narasimha Rao (1998) 4 SCC 626 under the Prevention of Corruption Act, and Jamal Uddin Ahmad (2003) 4 SCC 257 under the Representation of the People Act.

    Immoral practice

    • Breach of trust: Laying emphasis on the fiduciary relationship between doctor and patient, the Court noted that a doctor’s prescription is considered as the final word on medication by the patient even if the cost of such medication is unaffordable.
    • In a situation where such trust is reposed in doctors, having prescriptions manipulated by the lure of freebies is immoral.
    • Driving up the cost of medicine: The Court was conscious that the cost of such freebies is factored in the cost of medicines sold, in turn driving up their prices and perpetuating a publicly injurious cycle.
    • This fact was taken note of by the Parliamentary Standing Committee on Health and Family Welfare in its 45th report, dated August 4, 2010.
    • Report from the US: In its elaborate judgment, the Supreme Court bench also took note of a report issued by the United States Department of Health and Human Services Office called “Savings Available Under Full Generic Substitution of Multiple Source Brand Drugs in Medicare Part D”.
    • Here, it was stated that the beneficiaries could have saved over $600 million in out-of-pocket payments had they been dispensed generic equivalent drugs.
    •  In the U.S., by the reason of the Physician Payments Sunshine Act 2010 also known as Section 6002 of the Affordable Care Act (ACA) of 2010, the law compels the manufacturers of drugs, devices, biologic and medical supplies to report to the Centers for Medicare and Medicaid Services, on three broad categories of payments or transfers of value.

    Way forward

    • Keeping the price under control: Even though the Drug Price Control Order and Drugs and Cosmetics Act are there on the statute book, there is hardly any action to keep the sale price of medicines under control with due and proper investigation into their so-called research and development costs and keeping their profit margins within a prescribed limit.
    • The law should be amended to compel the manufacturer of drugs to sell at the verified genuine cost, that also factors in a reasonable profit margin for each product by bringing manufacturers, both foreign or domestic, under the control of the MCI or any other equivalent body.
    • This must be at a uniform rate throughout the country; further, classified life saving drugs should be sold at cost only or even at subsidised rates.

    Conclusion

    This judgment can also go far. It should be debated and applied to other unethical practices and expenditure out of public funds.

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  • Russian Invasion of Ukraine: Global Implications

    Asia seeking to diversify its security partnerships

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Context

    For the first time, the prime ministers of Australia, Japan, and New Zealand as well as the president of South Korea participated in a NATO summit.

    How Ukraine war revived NATO

    • More than a decade ago — in 2010 — when NATO agreed on a strategic doctrine, it was discussing it with its Russian partners.
    • There was no reference to China in the 2010 strategic concept.
    • At that time, the West was trying to deepen ties with Russia and build expansive economic cooperation with China
    • In unveiling a new strategic conception for the alliance in the wake of the war in Ukraine, NATO has declared Russia “the most significant and direct threat to Allies’ security and to peace and stability in the Euro-Atlantic area”.
    • Not ignoring the threat from China: NATO has declared that China’s “stated ambitions and coercive policies challenge our interests, security and values.”
    • The last few months have seen a closing of ranks in NATO that is now determined to cope with the Russian threat.
    • Germany — which has long sought good political and commercial relations with Russia — has agreed to raise its defence spending and do more for European security.
    • Sweden and Finland have ended their historic neutrality and decided to join NATO.
    • The US is doubling down on its military commitments to Europe.
    • The last few decades of peace and prosperity in Europe and Asia had enormously increased the influence of Russia and China in their neighbourhoods.
    • But the imperial ambitions of both — rooted in a profound misreading of their leverage — have produced a massive geopolitical backlash.
    • Consolidation of old alliances: Rather than sharpen the contradiction between the US and its regional allies, Russian and Chinese actions have helped consolidate old alliances and gave birth to new security coalitions.

    Why small  European countries seek alliances and how it applies to Asia as well

    • Small countries seek alliances when their fears of more powerful neighbours become acute.
    • Russia’s invasion has sent countries on Moscow’s western flank looking for NATO cover.
    • Most Central European states don’t want to rely purely on a European response to the Russian challenge.
    • They suspect France and Germany are more likely to accommodate Moscow at their expense than stand up to Russia.
    • For the Central Europeans, it is the US that offers a real balance against Russia.
    • It should not be too difficult for India to understand why some Asian countries are turning to NATO.
    • After all, India’s own turn to the Quad was a direct consequence of Chinese actions on the disputed bilateral frontier.

    How China’s expansionist policies are reshaping Asian security landscape

    • Way back in 2007 — when India conducted a mere joint naval exercise with the US, Japan, Australia and Singapore — Beijing called it a precursor to an “Asian NATO”. 
    • Australia and New Zealand are a bit further away but are deeply tied to the Chinese economy.
    • For those like Japan, who face a direct threat from China, “Ukraine could well be about the future of Asian security”.
    • What has happened in case of Ukraine created fear in Asian, at a moment when China has become so much more powerful than its neighbours.
    • Improving national capability: Creation of more sophisticated national military capabilities has been the first priority of some of Beijing’s neighbours.
    • Resolution of differences: Resolving mutual differences and strengthening security cooperation — for example between Japan and South Korea — has been another.
    • Alliance with US: Boosting bilateral alliances with the US is yet another.
    • Diversification of security partnership: Even as nations in the region reboot ties with the US, Asia is also seeking to diversify its security partnerships.
    • Engagement with Europe: This has led to greater Asian engagement with Europe as well as the creation of new Indo-Pacific regional institutions – including the Quad, and the AUKUS.

    Conclusion

    Thanks to the egregious expansionism of Russia and China, the strategic integration of the Asian and European geopolitical theatres has now begun. Whether they like it or not, all countries in Europe and Asia will have to deal with the consequences.

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