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  • [Sansad TV] Perspective: Record FDI Inflow

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    Context

    • India rapidly emerges as a preferred investment destination with Foreign Direct Investment (FDI) inflows increasing 20-fold in the last 20 years.
    • Highest ever annual FDI inflow of 83.57 billion US Dollars were recorded in the Financial Year 2021-22.
    • This figure stood at 45.15 billion US Dollars.

    Major feats achieved this year

    • In terms of investor countries of FDI Equity inflow, Singapore is at the top with 27%, followed by the US with 18% and Mauritius with 16% for the FY 2021-22.
    • ‘Computer Software & Hardware’ has emerged as the top recipient sector of FDI Equity inflow during this period with around 25% share followed by Services Sector and Automobile Industry with 12% each.
    • With 53 % Karnataka has received the majority share of FDI equity in the `Computer Software & Hardware’ sector.

    Significance of rising FDI

    • This is a testament of India’s status among global investors.
    • It also signifies political, economic and social stability

    What is Foreign Direct Investment (FDI)?

    • An FDI is an investment in the form of a controlling ownership in a business in one country by an entity based in another country.
    • It is thus distinguished from a foreign portfolio investment by a notion of direct control.
    • FDI may be made either “inorganically” by buying a company in the target country or “organically” by expanding the operations of an existing business in that country.
    • Broadly, FDI includes “mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans”.
    • In a narrow sense, it refers just to building a new facility, and lasting management interest.

    Features of FDI

    • Any investment from an individual or firm that is located in a foreign country into a country is FDI.
    • Generally, FDI is when a foreign entity acquires ownership or controlling stake in the shares of a company in one country, or establishes businesses there.
    • It is different from foreign portfolio investment where the foreign entity merely buys equity shares of a company.
    • In FDI, the foreign entity has a say in the day-to-day operations of the company.
    • FDI is not just the inflow of money, but also the inflow of technology, knowledge, skills and expertise.
    • It is a major source of non-debt financial resources for the economic development of a country.

    FDI in India

    • Foreign investment was introduced in 1991 under Foreign Exchange Management Act (FEMA), driven by then FM Manmohan Singh.
    • Economic liberalisation started in India in the wake of the 1991 crisis and since then, FDI has steadily increased in the country.
    • India, today is a part of top 100-club on Ease of Doing Business (EoDB) and globally ranks number 1 in the Greenfield FDI ranking.

    There are two routes by which India gets FDI.

    1) Automatic route: By this route, FDI is allowed without prior approval by Government or RBI.

    2) Government route: Prior approval by the government is needed via this route. The application needs to be made through Foreign Investment Facilitation Portal, which will facilitate the single-window clearance of FDI application under Approval Route.

    • India imposes a cap on equity holding by foreign investors in various sectors, current FDI in aviation and insurance sectors is limited to a maximum of 49%.
    • In 2015 India overtook China and the US as the top destination for the Foreign Direct Investment.

    Sectors that come under the ‘ 100% Automatic Route’ category are

    • Agriculture & Animal Husbandry, Air-Transport Services (non-scheduled and other services under civil aviation sector)
    • Airports (Greenfield + Brownfield),
    • Asset Reconstruction Companies,
    • Auto-components, Automobiles,
    • Biotechnology (Greenfield),
    • Broadcast Content Services (Up-linking & down-linking of TV channels, Broadcasting Carriage Services,
    • Capital Goods, Cash & Carry Wholesale Trading (including sourcing from MSEs), Chemicals, Coal & Lignite, Construction Development,
    • Construction of Hospitals,
    • E-commerce Activities, Electronic Systems,
    • Food Processing, Gems & Jewellery, Healthcare, Industrial Parks, IT & BPM, Leather, Manufacturing, Mining & Exploration of metals & non-metal ores, Other Financial Services,
    • Pharmaceuticals, Plantation sector
    • Ports & Shipping, Railway Infrastructure, Renewable Energy, Roads & Highways,
    • Single Brand Retail Trading, Textiles & Garments,
    • Thermal Power,
    • Tourism & Hospitality and
    • White Label ATM Operations.

    Sectors that come under up to 100% Automatic Route’ category are–

    • Infrastructure Company in the Securities Market: 49%
    • Insurance: up to 49%
    • Medical Devices:up to 100%
    • Pension: 49%
    • Petroleum Refining (By PSUs): 49%
    • Power Exchanges: 49%

    Sectors that come under the ‘up to 100% Government Route’ category are– 

    • Banking & Public sector: 20%
    • Broadcasting Content Services: 49%
    • Core Investment Company: 100%
    • Food Products Retail Trading: 100%
    • Mining & Minerals separations of titanium bearing minerals and ores: 100%
    • Multi-Brand Retail Trading: 51%
    • Print Media (publications/ printing of scientific and technical magazines/ specialty journals/ periodicals and facsimile edition of foreign newspapers): 100%
    • Print Media (publishing of newspaper, periodicals and Indian editions of foreign magazines dealing with news & current affairs): 26%
    • Satellite (Establishment and operations): 100%

    FDI prohibition

    There are a few industries where FDI is strictly prohibited under any route. These industries are

    • Atomic Energy Generation
    • Any Gambling or Betting businesses
    • Lotteries (online, private, government, etc.)
    • Investment in Chit Funds
    • Nidhi Company
    • Agricultural or Plantation Activities (although there are many exceptions like horticulture, fisheries, tea plantations, Pisciculture, animal husbandry, etc.)
    • Housing and Real Estate (except townships, commercial projects, etc.)
    • Trading in TDR’s
    • Cigars, Cigarettes, or any related tobacco industry

    Benefits offered by FDI

    • Employment generation: FDI boosts the manufacturing and services sector which results in the creation of jobs and helps to reduce unemployment rates in the country.
    • Economic growth: Increased employment translates to higher incomes and equips the population with more buying powers, boosting the overall economy of a country.
    • Human capital development: Skills that employees gain through training and experience can boost the education and human capital of a specific country. Through a ripple effect, it can train human resources in other sectors and companies.
    • Technology boost: The introduction of newer and enhanced technologies results in company’s distribution into the local economy, resulting in enhanced efficiency and effectiveness of the industry.
    • Increase in exports: Many goods produced by FDI have global markets, not solely domestic consumption. The creation of 100% export oriented units help to assist FDI investors in boosting exports from other countries.
    • Exchange rate stability: The flow of FDI into a country translates into a continuous flow of foreign exchange, helping a country’s Central Bank maintain a prosperous reserve of foreign exchange which results in stable exchange rates.
    • Improved Capital Flow: Inflow of capital is particularly beneficial for countries with limited domestic resources, as well as for nations with restricted opportunities to raise funds in global capital markets.
    • Creation of a Competitive Market: By facilitating the entry of foreign organizations into the domestic marketplace, FDI helps create a competitive environment, as well as break domestic monopolies.  
    • Climate mitigation: The United Nations has also promoted the use of FDI around the globe to help combat climate change

    Limitations created by FDI

    • Hindrance of domestic investment: Sometimes FDI can hinder domestic investment. Because of FDI, countries’ local companies start losing interest to invest in their domestic products.
    • Risk from political changes: Other countries’ political movements can be changed constantly which could hamper the investors.
    • Negative exchange rates: FDI can sometimes affect exchange rates to the advantage of one country and the detriment of another.
    • Higher costs: When investors invest in foreign counties, they might notice that it is more expensive than when goods are exported. Oftentimes, more money is invested into machinery and intellectual property than in wages for local employees.
    • Economic non-viability: Considering that FDI may be capital-intensive from the point of view of the investor, it can sometimes be very risky or economically non-viable.
    • Expropriation: Constant political changes can lead to expropriation. In this case, those countries’ governments will have control over investors’ property and assets.
    • Modern-day economic colonialism: Many third-world countries, or at least those with a history of colonialism, worry that foreign direct investment would result in some kind of modern-day economic colonialism, which exposes host countries and leave them vulnerable to foreign companies’ exploitation.
    • Poor performance: Multinationals have been criticized for poor working conditions in foreign factories.

    Recent amendments in 2020

    • The govt. has amended para 3.1.1 of extant FDI policy as contained in Consolidated FDI Policy, 2017.
    • In the event of the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, resulting in the beneficial ownership, such subsequent change in beneficial ownership will also require Government approval.

    The present position and revised position in the matters will be as under:

    Present Position

    • A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited.
    • However, a citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under the Government route.
    • Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment.

    Revised Position

    • A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited.

    [spot the difference]

    • However, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route.
    • Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment.

    Various policy initiatives

    The government has taken plenty of initiatives to attract FDI in India:

    • The government has amended rules of the Foreign Exchange Management Act (FEMA), allowing up to 20% FDI in the insurance company LIC through the automatic route.
    • The Government of India is considering easing scrutiny on certain FDI from countries that share a border with India.
    • The implementation of measures like PM Gati Shakti, single window clearance and GIS-mapped land bank are expected to push FDI inflows in 2022.
    • The government is likely to introduce at least three policies as part of the Space Activity Bill in 2022. This Bill is expected to clearly define the scope of foreign FDI in the Indian space sector.
    • In September 2021, the Union Cabinet announced that to boost the telecom sector, they’ll allow 100% FDI via the automatic route in, up from the previous 49%.
    • In August 2021, the government amended the Foreign Exchange Management (non-debt instruments) Rules, 2019, to allow the 74% increase in FDI limit in the insurance sector.

  • Use of statecraft for long-term solutions to security problems

    Context

    In many countries, both the authorities and security agencies are beginning to acknowledge the importance of resorting to statecraft as a vital adjunct to the role played by the security agencies.

    The important role of statecraft in security

    •  Statecraft involves fine-grained comprehension of inherent problems; also an ability to quickly respond to political challenges.
    • It further involves strengthening the ability to exploit opportunities as they arise, and display a degree of political nimbleness rather than leaving everything to the security agencies.
    • It entails a shift from reposing all faith in the security establishment to putting equal emphasis on implementation of policies and programmes.
    • Two prime examples which provide grist to the above proposition are the prevailing situation in Jammu and Kashmir and the continuing problem involving Maoists.
    • The need to use statecraft to deal with quite a few other internal security problems — some of which have lain dormant for years — is also becoming more manifest by the day.

    Security issues in various regions

    • Jammu and Kashmir: While Jammu and Kashmir has been a troubled region ever since 1947, the situation has metamorphosed over the years.
    • No proper solution has emerged to a long-standing problem.
    •  Irrespective of the reasons for the latest upsurge in violence, what is evident is that Jammu and Kashmir has again become the vortex of violence.
    • Evidently, the doctrine of containment pursued by the Jammu and Kashmir police and security agencies is not having the desired effect.
    • In Jammu and Kashmir today, as also elsewhere, there is no all-in-one grand strategy to deal with the situation.
    • The missing ingredient is statecraft which alone can walk in step with the changing contours of a long-standing problem.
    • Punjab: The recent discovery of ‘sleeper cells’ in the Punjab clearly indicates the potential for the revival of a pro-Khalistan movement — which once ravaged large parts of the Punjab.
    • While pro-Khalistani sentiment is present in pockets in the United Kingdom and in Europe, it has not been in evidence in India for some time.
    • Hence, the recent attack by pro-Khalistan elements on the headquarters of the Punjab Police Intelligence wing in Mohali was a rude shock to the security establishment.
    • The incident is a reminder that militancy in the Punjab has not been permanently extinguished, and will need deft statecraft to nip it in the bud.
    • North-east: In India’s North-east, more specifically in the States of Assam and Nagaland, there are again incipient signs of trouble which, for the present, may need use of statecraft rather than the security forces. 
    • In Assam, the United Liberation Front of Asom–Independent (ULFA-I) is trying to revive its activities after a long spell of hibernation.
    • Likewise in Nagaland, where the National Socialist Council of Nagalim (I-M) has recently initiated a fresh push for a solution of the ‘Naga political issue’, the situation is pregnant with serious possibilities.
    • Both instances merit the use of statecraft so that the situation does not get out of hand.
    • South India: In the South, intelligence and police officials appear concerned about a likely revival of Liberation Tigers of Tamil Eelam (LTTE)-sponsored activities in Tamil Nadu.
    • This stems from a possible revival of LTTE-sponsored militancy in Sri Lanka following the recent economic crises and uncertainty there.
    • This situation again needs deft statecraft to prevent a resurgence of the past.

    Conclusion

    India faces several challenges today, but the answer to this is neither grand strategy nor grand simplifications nor resort to higher doses of security. A properly structured set of policies, having liberal doses of statecraft in addition to a proper set of security measures, is the best answer to India’s needs, now and in the future.

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  • 31st May 2022 | Prelims Daily with Previous Year Questions

    [WpProQuiz 1022]

    [WpProQuiz_toplist 1022]

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  • Pak delegation in India for Indus Water Treaty talks

    A five-member Pakistani delegation has arrived in India for talks over the ongoing water dispute under the Indus Water Commission between the two countries.

    Why in news?

    • India is building 10 hydro plant projects to cut excess water into Pakistan.
    • Pakistan is expected to raise the projects being constructed by India under the Indus treaty.

    What is Indus Water Treaty?

    • 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.
    • The sharing formula devised after prolonged negotiations sliced the Indus system into two halves.
    • Equitable it may have seemed, but the fact remained that India conceded 80.52 percent of the aggregate water flows in the Indus system to Pakistan.
    • It also gave Rs 83 crore in pounds sterling to Pakistan to help build replacement canals from the western rivers.
    • Such generosity is unusual of an upper riparian.
    • India conceded its upper riparian position on the western rivers for the complete rights on the eastern rivers.
    • Water was critical for India’s development plans.

    What were the rights accorded to India?

    • The treaty allowed India to use western rivers water for limited irrigation use and unrestricted use for power generation, domestic industrial and non-consumptive uses such as navigation, floating of property, fish culture, etc.
    • It lays down precise regulations to build any water or hydel projects.
    • India has been given the right to generate hydroelectricity through run-of-the-river projects on the western rivers subject to specific criteria for design and operation.
    • The pact also gives the right to Pakistan to raise objections to designs of Indian hydroelectric projects on the western rivers.

    Significance of the treaty

    • It is a treaty that is often cited as an example of the possibilities of peaceful coexistence that exist despite the troubled relationship.
    • It has survived 3 crucial wars.
    • It may be listed among the most successful international treaties as it has withstood the test of time.

    Why has the treaty survived?

    • It is for India’s generosity on Pakistan for sharing waters of its own rivers.
    • India has refrained from weaponizing waters. Pakistan cannot survive without this treaty.
    • About 80% of Pakistan’s agriculture depends on Indus and the riparian rivers waters.
    • Backtracking on the treaty could affect India’s stand as global reliable partner who disrespects bilateral agreements.

    A tacit nerve of terroristan

    • Responding to state sponsor of terrorism by Pakistan, India can escalate a water war , which can kill the crippling economy of Pakistan.
    • If India wants, it can either flood or drought-starve Pakistan by not obligating to this treaty.

    Need for a rethink

    • But PM Modi’s words equally hold relevance that “Blood and waters cannot flow together”.
    • There is no reason to believe that India could start a water war with Pakistan on humanitarian grounds.
    • Floods and droughts will starve ordinary Pakistanis while their politicians would still live in luxury.

    Way forward

    • The role of India, as a responsible upper riparian abiding by the provisions of the treaty, has been remarkable.
    • However, India needs to rethink or re-negotiate this treaty.
    • Just like water affects ordinary Pakistanis, so does terrorism affects Indians.

     

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  • Unicorn boom in India

    Prime Minister has praised India’s startup ecosystem as he highlighted that the country has reached a landmark figure of 100 unicorns with a valuation of more than $300 billion.

    What is a Unicorn Startup?

    • Unicorns are privately held, venture-capital-backed startups that have reached a value of $1 billion.
    • The valuation of unicorns is not expressly linked to their current financial performance.
    • This is largely based on their growth potential as perceived by investors and venture capitalists who have taken part in various funding rounds.

    Some of the successful Indian unicorns:

    • Lenskart
    • Cred
    • Meesho
    • PharmEasy
    • Licious
    • Grofers etc.

    When was the term first used?

    • American venture capitalist Aileen Lee is credited with coining the term in 2013.
    • It was used to emphasize the rarity of the emergence of such startups.

    Unicorn boost in India

    • The growth of Unicorns in India has been phenomenal in the past two years.
    • From 17 Unicorns in 2018 the number went up to 38 in 2020 and it’s 71 and counting in 2021.
    • Many of these unicorns, which have cumulatively raised more than 9 billion dollars till date, have also seen a surge in valuations.

    Features of a unicorn Start-up

    To be a unicorn is no cakewalk and each unicorn today has its own story with a list of features that worked in its favour.

    The few pointers that are commonly seen across all the unicorns is as under:

    • Disruptive innovation: Mostly, all the unicorns have brought a disruption in the field they belong to. Uber, for example, changed the way people commuted.
    • ‘Firsts’: It is seen that unicorns are mostly the starters in their industry. They change the way people do things and gradually create a necessity for themselves.
    • High on tech: Another common trend across unicorns is that their business model runs on tech. Uber got their model accepted by crafting a friendly app.
    • Consumer-focused: Often, theirgoal is to simplify and make things easy for consumers and be a part of their day-to-day life.
    • Affordability: Keeping things affordable is another key highlight of these startups. Spotify, for example, made listening to music easier to the world.
    • Privately owned: Most of the unicorns are privately owned which gets their valuation bigger when an established company invests in it.
    • *Mostly software based: A recent report suggests that 87% of the unicorns’ products are software, 7% are hardware and the rest 6% are other products & services.

    Entrepreneurship today is ‘survival-driven’ self-employment, formed out of necessity, as well as opportunity motivated, largely because poverty and lack of formal employment opportunities rear their ugly head in striving economies.

    Reasons for sudden success

    • COVID pandemic: The pandemic accelerated adoption of digital services by consumers helping start-ups and new-age ventures that typically build tech-focused businesses delivering an array of offerings to customers.
    • Boost in online services: Many Indians who had traditionally been subscribers of brick-and-mortar businesses moved online and explored a host of services ranging from food delivery and edu-tech to e-grocery.
    • Work-from-home culture: This added significant numbers to start-ups’ user base and expedited their business expansion plans and attracting investors.

    Inherent challenges to Start-ups in India

    • Financial scarcity: Availability of finance is critical for the startups and is always a problem to get sufficient amounts.
    • Lack of Infrastructure: There is a lack of support mechanisms that play a significant role in the lifecycle of startups which include incubators, science and technology parks etc.
    • Regulatory bottlenecks: Starting and exiting a business requires a number of permissions from government agencies. Although there is a perceptible change, it is still a challenge.
    • Compliance hurdles: For example, earlier Angel tax, which stands removed no, falls under corruption and bureaucratic inefficiencies.
    • Low success rate: Several startups fail due to shifting away the focus on the fundamentals of business grows.
    • Lack of an Innovative Business Model: To be successful a start-up must be innovative. Unfortunately, Indian startups are less innovative than startups elsewhere.
    • Non-competitive Indian Markets: Too many startups serving too few consumers are saturating the Indian market.  Most startups serve the fraction of Indians who live in urban India.
    • Digital divide: The majority of Indians who live in rural areas and small towns remain untouched by most startups.

    Various initiatives by the Govt.

    There are numerous government initiatives to assist start-ups:

    • MUDRA Scheme: Through this scheme, start-ups get loans from the banks to set up, grow and stabilize their businesses.
    • SETU (Self-Employment and Talent Utilization) Fund: Government has allotted Rs 1,000 Cr in order to create opportunities for self-employment and new jobs mainly in technology-driven domains.
    • E-Biz Portal: It is India’s first government-to-business portal that integrates 14 regulatory permissions and licenses at one source.
    • Credit Guarantee Fund: launched by the GoI to make available collateral-free credit to the micro and small enterprise sector.
    • Fund of Funds for Start-ups (FFS): 10,000 Rs corpus fund established in line with the Start-up India action plan under SIDBI for extending support to Start-ups.
    • Tax Sops: Tax exemption on Capital gain tax, Removal of Angel tax, Tax exemption for 3 years and Tax exemption in investment above Fair Market Value.

    Roadmap for the future success of start-ups

    Start-ups can judiciously take cues from unicorns in understanding the ecosystem and building a business model that adds value while being sustainable.

    • New-age startups should devise a customer-centric business model.
    • Through proper branding and strategy, they should make sure that this value proposition reaches the end-user.
    • What brings startups closer to success is the execution and customer acquisition strategy, where all the action occurs.
    • Notably, technology (rather deep-technology) has played a key role in the making of pioneer business models.

    Attracting venture capitalists

    • VCs are actively looking for investment opportunities in early-stage startups.
    • They possess the selection ability to effectively screen startups having a higher potential to succeed.
    • VCs primarily look for a mindset alignment with promoters and companies where they, as investors, can add value by leveraging their industry experience, expertise, network and reputation.

    Conclusion

    • The current economic scenario in India is in expansion mode.  Indian Startups are now spread across the length and breadth of the entire country.
    • The word ‘unicorn’ has come a long way from just being a mythological creature to a regular feature in business and finance discussions.
    • Innovation and economic growth depend on being able to produce excellent individuals with the right skills and attitudes to be entrepreneurial in their professional lives.
    • The Indian government’s policies like Make in India, Digital India, Atmanirbhar etc. shows the enthusiasm to arrest this talent.

     

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  • [pib] Param Ananta Supercomputer

    Param Ananta, a state-of the art Supercomputer was commissioned at IIT Gandhinagar.

    Param Ananta

    • Param Ananta is capable of offering peak performance of 838 teraflops.
    • It is a joint initiative of Ministry of Electronics and Information Technology (MeitY) and Department of Science and Technology (DST).
    • This facility is established under Phase 2 of the National Supercomputing Mission (NSM).
    • The system is equipped with a mix of CPU nodes, GPU nodes, High Memory nodes, High throughput storage and high performance Infiniband.
    • The supercomputer will rank behind C-DAC’s Param Siddhi-AI, which as of November 2021 was the 102nd most powerful supercomputer in the world — with peak performance capability of 3.3 petaflops.

    What is a Supercomputer?

    • A supercomputer is a computer with a high level of performance as compared to a general-purpose computer.
    • The performance of a supercomputer is commonly measured in floating-point operations per second (FLOPS) instead of million instructions per second (MIPS).
    • Since 2017, there are supercomputers which can perform over a hundred quadrillion FLOPS (peta FLOPS).
    • Since November 2017, all of the world’s fastest 500 supercomputers run Linux-based operating systems.

    Specific features

    • Param Ananta system is based on Direct Contact Liquid Cooling technology to obtain a high power usage effectiveness and thereby reducing the operational cost.
    • Multiple applications from various scientific domains such as Weather and Climate, Bioinformatics, Computational Chemistry, Molecular Dynamics, Material Sciences, Computational Fluid Dynamics etc. have been installed on the system for the benefit of researchers.
    • This high end computing system will be a great value addition for the research community.

    Back2Basics: National Supercomputing Mission (NSM)

    • NSM is a proposed plan by GoI to create a cluster of seventy supercomputers connecting various academic and research institutions across India.
    • In April 2015 the government approved the NSM with a total outlay of Rs.4500 crore for a period of 7 years.
    • The mission was set up to provide the country with supercomputing infrastructure to meet the increasing computational demands of academia, researchers, MSMEs, and startups by creating the capability design, manufacturing, of supercomputers indigenously in India.
    • Currently there are four supercomputers from India in Top 500 list of supercomputers in the world.

    Aims and objectives

    • The target of the mission was set to establish a network of supercomputers ranging from a few Tera Flops (TF) to Hundreds of Tera Flops (TF) and three systems with greater than or equal to 3 Peta Flops (PF) in academic and research institutions of National importance across the country by 2022.
    • This network of Supercomputers envisaging a total of 15-20 PF was approved in 2015 and was later revised to a total of 45 PF (45000 TFs), a jump of 6 times more compute power within the same cost and capable of solving large and complex computational problems.

    When did India initiate its efforts to build supercomputers?

    • India’s supercomputer program was initiated in the late 1980s, when the United States ceased the export of a Cray Supercomputer due to technology embargos.
    • This resulted in India setting up C-DAC in 1988, which in 1991, unveiled the prototype of PARAM 800, benchmarked at 5 Gflops. This supercomputer was the second-fastest in the world at that time.
    • Since June 2018, the USA’s Summit is the fastest supercomputer in the world, taking away this position from China.
    • As of January 2018, Pratyush and Mihir are the fastest supercomputers in India with a maximum speed of Peta Flops.

    What are the phases of the National Supercomputing Mission?

    Phase I:

    • In the first phase of the NSM, parts of the supercomputers are imported and assembled in India.
    • A total of 6 supercomputers are to be installed in this phase.
    • The first supercomputer that was assembled indigenously is called Param Shivay. It was installed in IIT (BHU) located in Varanasi.
    • Similar systems, Param Shakti (IIT Kharagpur) and Param Brahma (IISER, Pune) were also later installed within the country.
    • The rest will be installed at IIT Kanpur, IIT Hyderabad and Jawaharlal Nehru Institute of Advanced Studies (JNIAS).

    Phase II:

    • The supercomputers that are installed so far are about 60% indigenous.
    • The 11 systems that are going to be installed in the next phase will have processors designed by the Centre for Development of Advanced Computing (C-DAC) and will have a cumulative capacity of 10 petaflops.
    • These new systems are to be constructed more cost-effectively than the previous ones.
    • One of the 11 proposed supercomputers will be installed
    • at C-DAC exclusively for small and medium enterprises so that they can train employees as well as work on supercomputers at a very low cost.

    Phase III:

    • The third phase aims to build fully indigenous supercomputers.
    • The government had also approved a project to develop a cryogenic cooling system that rapidly dispels the heat generated by a computing chip. This will be jointly built together by IIT-Bombay and C-DAC.

     

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  • Pacific Nations reject China Security Pact

    China has suffered a big diplomatic humiliation in the pacific. 10 island nations in the region rejected China’s proposed security pact.

    Why in news?

    • Chinese foreign minister Wang Yi has returned empty-handed in a highly decorated visit to the Pacific Nations.
    • The secret deal that was to be brokered got leaked in public media, caused huge embarrassment to the Chinese.

    Conspicuous features of the Pact

    • China has had offered to radically ramp up its activities in the South Pacific, directly challenging the influence of the US and its allies in the strategically vital region.
    • The failed deal saw Beijing to:
    1. Train Pacific island police,
    2. Become involved in cybersecurity,
    3. Expand political ties,
    4. Conduct sensitive marine mapping and
    5. Gain greater access to natural resources on land and in the water
    • As an enticement, Beijing is offering millions of dollars in financial aid, the prospect of a potentially lucrative China-Pacific islands free trade agreement and access to China’s vast market.

    Why Pacific Nations rejected this lollipop?

    • The offer is perceived was “disingenuous” and would “ensure Chinese influence in government” and “economic control” of key industries.
    • The nations also cited a lack of regional consensus.

    Pls make observations about Pacific Island Nations:

     

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  • [Burning Issue] Sex Work as a Profession

    Context

    • In a significant order recognising sex work as a “profession”, the Supreme Court has directed that police should neither interfere nor take criminal action against adult and consenting sex workers.
    • A recent Bollywood movie is also nowadays perceived as an ode to sex workers honouring their struggle and spirit.

    Sex Work in India

    • It is said that sex work is the oldest profession in the world.
    • In India, their presence can be dated back to ancient times with scriptures mentioning their presence.
    • In later times, such women were considered the wives of a temple deity or a Devdasi, who saw their god in all their lovers.

    So, where does India stand?

    • Prostitution is not illegal in our country, but soliciting and public prostitution are.
    • Owning a brothel is also illegal, but because places like GB Road are already in place, these laws are rarely enforced.

    Legality check

    • According to the Indian Penal Code (IPC), prostitution in its broader sense is not really illegal per se.
    • But there are certain activities which constitute a major part of prostitution that are punishable under certain provisions of the act, which are:
    1. Soliciting prostitution services in public places
    2. Carrying out prostitution activities in hotels
    3. Indulging in prostitution by arranging for a sex worker
    4. Arrangement of a sexual act with a customer

    Sex Work, not Prostitution: Making the difference

    • Sex workers are adults who receive money or goods in exchange for consensual sexual services or erotic performances, either regularly or occasionally.
    • The term “sex worker” recognizes that sex work is work.
    • Prostitution, on the other hand, has connotations of criminality and immorality.
    • Many people who sell sexual services prefer the term “sex worker” and find “prostitute” demeaning and stigmatizing, which contributes to their exclusion from health, legal, and social services.

    How did the term ‘Prostitution’ materialized in India?

    • In the 1800s, it is reported that the British military established and maintained brothels for its troops to use across India.
    • A report by the BBC states that the girls, many in their early teens from poor, rural Indian families, were recruited and paid directly by the military, which also set their prices.
    • The British have long gone, but the earned infame continues in the country at prime locations of major cities such as GB Road (New Delhi), Budhwar Peth (Pune), Kamathipura (Mumbai) etc.
    • While some estimate that there are around 8,00,000 sex workers in India, the actual number could be as high as 20 lakh across the country.

    Perspectives on Sex Work

    Perspectives on sex workers’ rights generally fall into two categories.

    (1) Feminist perspective

    • It assumes that all people involved in sex work have been coerced, bribed, blackmailed or forced into the trade.
    • No woman could “choose” to be in sex work, and making money from sex thus becomes synonymous with sexual exploitation.
    • Following this perspective, the only approach to giving sex workers their rights is to “free” them from the flesh trade.

    (2) Legal-rational (Modern) perspective

    • It perceives sex work as legitimate business and expects to be treated as such.
    • Viewing sex as business provides a basis for organizing to solve many of the problems associated with commercial sex work.
    • They constitute an integral part of India’s informal sector economy.

    Various issues faced by Sex Workers

    (1) Various violence faced

    • Physical violence: They are often subjected to physical force such as- being slapped, pushed, shoved, hit, being kicked, dragged, beaten up and mutilation of genitals.
    • Sexual violence: Rape, gang rape, sexual harassment, being physically forced or psychologically intimidated to engage in sex or subjected to sex acts against one’s will or that one finds degrading or humiliating.
    • Psychological violence: Being insulted by labelling derogatory names; being humiliated or belittled in front of other people; being confined or isolated from family or friends; being threatened with harm to oneself or someone one cares about; verbal abuse etc.

    (2) Lifetime issues

    • Stigma and Marginalization: Sex work is not treated as work, but as a dirty and immoral lifestyle threatening to taint the “innocent” public.
    • Lack of access to justice: Their uncertain status in law result in judgments that often mark sex-workers as criminals and repeat offenders.
    • Social and civil exclusion: For sex workers, the State is an instrument of violence; feared, rather than seen as protectors of rights.  
    • Identity crisis: Most sex workers hide their identity and origin. They are often raided from their premises and are unable to return to their residences.
    • Denial of basic amenities: Due to this discrimination, women in sex work have been denied safety, proper healthcare, education and, most importantly, the right to practice the business of making money from sex.
    • Risks of violence: People in sex work are not only at a higher risk for violence, but they are also less likely to get protection from the police—often the very perpetrators of this violence.
    • Marginalization: Illiteracy, ignorance and fear of the medical establishment make it difficult for women to access healthcare.

    (3) Human-rights abuses

    Human-rights violations that should be considered in conjunction with violence against sex workers are:

    1. Money extortion by Police and Goons
    2. Denied or refused food or other basic necessities
    3. Refused or cheated of salary, payment or money that is due to the person
    4. Forced to consume drugs or alcohol
    5. Arbitrarily stopped, subjected to invasive body searches or detained by police
    6. Arbitrarily detained or incarcerated in police stations, detention centres and rehabilitation centres without due process
    7. Refused or denied health-care services
    8. Subjected to coercive health procedures such as forced STI and HIV testing, sterilization, abortions
    9. Deprived of sleep by force

    Why is it a vicious trap?

    • The stigma against a woman in sex work is not limited to the woman herself; it carries down to her children, regardless of their own professions or lifestyles.
    • Children of sex workers repeatedly report discrimination, ostracization and isolation felt on account of their mothers’ work.
    • Many are embarrassed by their home lives.
    • This has had significant effects on their education, as the drop-out rate in this community is particularly high.
    • Children abandon school for myriad reasons, ranging from exam performance to harassment by teachers and classmates.
    • Undoubtedly this harassment leads to lower self-esteem and a lack of motivation in school.

    Debunking myths about Sex Work

    Popular media fuels the image of women as either overly sexual outcastes who threaten the very structure of Indian family life. Indian laws and policies regarding sex work are crafted from a moralistic standpoint and people involved in sex work are defined by—and treated as— their “immoral” profession.

    In fact, women in sex work cannot be put into a box.

    • While there are certainly victims of trafficking in sex work today, the majority of women in sex work consent to doing it.
    • They have decided that making money from sex is a lucrative option for them and their families.
    • But traditionalists cannot divorce sex from its sacred and religious implications. Tawaif and Devdasi system is a testimony to this.

    Why sex work is not recognized/promoted in India?

    • A victimless crime: Prostitution creates a setting whereby crimes against men, women, and children become a commercial enterprise. It is an assault when he/she forces a prostitute to engage in sex scenes.
    • Evils of institutionalizing: Even with the decriminalization of prostitution, women and even children can still suffer from violence and physical abuse. People who are into this profession are prone to rape.  
    • Sexually transmitted diseases: Even if a worker is being tested every week for HIV, she will test negative for at least the first 4-6 weeks and possibly the first 12 weeks after being infected. This means that she can be a silent vector of the deadly virus.
    • Encourage human trafficking: Human trafficking, especially of girl children, is rampant in our country. With poverty driving some parents to sell their kids to sexual predators is alarming and if prostitution will be legal, more children will be coerced to be sex workers.

    Various policy moves

    (1) Ujjwala Scheme

    • The Ministry of Women and Child Development implements the Ujjawala Scheme.
    • It is a comprehensive scheme for prevention of trafficking and rescue, rehabilitation and re-integration of victims of trafficking for commercial sexual exploitation.
    • The protective and rehabilitative homes provide basic amenities such as food, clothing, medical care, legal aid, education for rescued children and vocational training to provide them alternate livelihood options.

    (2) Protection against forceful sex work

    • The Immoral Traffic (Prevention) Act, 1986 is an amendment of the original act.
    • As per this act, prostitutes are to be arrested if they are found soliciting their services or seducing others.
    • Furthermore, call girls are prohibited from making their phone numbers public.
    • They can be punished for up to 6 months along with penalties if found doing so.

    (3) Constitutional safeguard

    Article 23 of the Indian Constitution, amended in 2014, includes the following provisions:

    1. Prohibition of human trafficking and forced labour.
    2. Traffic in human beings and bears and other similar forms of forced labour are prohibited and any contravention of this provision shall be an offence punishable in accordance with the law.
    3. Nothing in this article precludes the State from imposing compulsory service for public purposes, and the State shall not discriminate solely on the basis of religion, race, caste, or class, or any combination thereof, in imposing such service.

    Why they are still excluded in India?

    • No documentation of socio-economic status: Stigma related to their work and identity and the migratory nature of work prevents sex workers from accessing identification documents, essential to accessing entitlements. They are yet to have Aadhaar Cards.
    • Denial of formal education: Residence proof, father’s name and caste, and the ration card are some documents required for getting their children registered in schools.
    • Food insecurity: The Public Distribution System (PDS), meant for people below the poverty line to access food items cheaply, needs supporting proof of sex workers being below poverty line.
    • Denial of safe environment and labour protection: Sex work happens in informal settings and is an occasional form of income or a long term occupation. This includes access to benefits, legal redress for workplace grievances, adequate health and safety regulations.

    Recent Supreme Court Directive: Key Takeaways

    (1) Recognition to profession and personal dignity

    • Sex Work is a profession whose practitioners are entitled to dignity and equal protection under law.
    • Criminal law must apply equally in all cases, on the basis of ‘age’ and ‘consent’.
    • It need not be gainsaid that notwithstanding the profession, every individual in this country has a right to a dignified life under Article 21 of the Constitution, the court observed.
    • The order was passed after invoking special powers under Article 142 of Constitution.

    (2) Cautions to Police

    • It is clear that the sex worker is an adult and is participating with consent, the police must refrain from interfering or taking any criminal action.
    • The Bench ordered that sex workers should not be “arrested or penalised or harassed or victimised” whenever there is a raid on any brothel.
    • Since voluntary sex work is not illegal and only running the brothel is unlawful.
    • Basic protection of human decency and dignity extends to sex workers and their children, the court noted.
    • A child of a sex worker should not be separated from the mother merely on the ground that she is in the sex trade, the court held.
    • Further, if a minor is found living in a brothel or with sex workers, it should not be presumed that the child was trafficked.

    (3) Taking cognisance of sexual crimes against sex workers

    • The court ordered the police to not discriminate against sex workers who lodge a criminal complaint of offence committed against them is of a sexual nature.
    • Sex workers can also be victims of sexual assault should be provided every facility including immediate medico-legal care.
    • The court said media should take “utmost care not to reveal the identities of sex workers, during arrest, raid and rescue operations.

    What will change if the Policymakers endorse the Court’s direction?

    • Sex workers will be accorded equal legal protection.
    • If a sex worker reports a criminal/sexual or other type of offence, the police will take it seriously and act in accordance with the law.
    • If a brothel is raided, the sex workers involved will not be arrested, penalised, harassed, or victimised.
    • Any sex worker who is a victim of sexual assault will be given all of the same services as a survivor of sexual assault, including immediate medical attention.
    • Provisions similar to those of Transgenders will be extended to sex workers.

    Sex work in other countries

    Some countries choose to outright ban the practice, while others have attempted to regulate prostitution and provide health and social benefits to sex workers.

    Here are a few examples of countries where prostitution is legal:

    • New Zealand: Prostitution has been legal since 2003. There are even licenced brothels operating under public health and employment laws, and they get all the social benefits.
    • France: Prostitution is legal in France, though soliciting in public is still not allowed.
    • Germany: Prostitution is legalised and there are proper state-run brothels. The workers are provided with health insurance, have to pay taxes, and they even receive social benefits like pensions.
    • Greece: The sex workers get equal rights and have to go for health checkups as well.
    • Canada: Prostitution in Canada is legal with strict regulations.

    Way forward

    • Decriminalization: It is a prerequisite to ensure the physical and emotional inviolability of sex workers, their right to life, right to freedom of labour, health and reproductive and sexual rights.
    • Trafficking and should not be conflated with sex work:  Trafficking of Adult Persons and Trafficking of Children should be dealt with under two separate laws to ensure that consenting adults are not infantilised and children are given justice.
    • Rehabilitation with consent: Shut down compulsory detention or rehabilitation centres for people involved in sex work. Instead, provide sex workers with evidence-based, voluntary, community empowerment services.
    • Participation in policy making: Ensure participation of sex work organisations in drafting/ amending laws, policies and programs relevant to them and in its eventual implementation process as the govt did for Transgenders.
    • Policing reforms: Sensitivity to issues faced by sex workers should be made a part of training for police personnel, public prosecutors and the judiciary in partnership with community organisations of sex workers.
    • Human rights protection: Strengthen National Human Rights Commission (NHRC) and increase their accountability to respond to complaints or initiate suo moto action reports of violence against sex workers.
    • Access to justice: Ensure Free Legal Services are available in rural areas for sex workers and offered by lawyers who have been trained in issues faced by sex workers.

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