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  • What is Hantavirus?

    China has reported the death of a person from Yunnan Province who tested positive for the Hantavirus.

    What is Hantavirus?

    • The Hantaviruses are a family of viruses spread mainly by rodents. It is contracted by humans from infected rodents.
    • Cases of the Hantavirus in humans occur mostly in rural areas where forests, fields and farms offer suitable habitat for infected rodents.
    • A person can get infected if he/she comes in contact with a rodent that carries the virus.
    • In the US and Canada, for instance, the Hantavirus carried by the deer mouse is responsible for the majority cases of the Hantavirus infection.
    • Like this, there are various other kinds of Hantaviruses that find hosts in rodents, like the white-footed mouse and the cotton rat among others that may lead to infections in humans if transmitted.

    Its origin

    • The Hantavirus is not novel and its first case dates back to 1993, according to the US Centre for Disease Control (CDC).
    • In the Americas, the family of viruses is known as ‘New World hantaviruses’.

    Symptoms

    • A person infected with the virus may show symptoms within the first to eighth week after they have been exposed to fresh urine, faeces or the saliva of infected rodents.
    • Symptoms may include fever, fatigue, muscle aches, headaches, chills and abdominal problems.
    • Four to ten after being infected, late symptoms of HPS may start to appear, which include coughing and shortness of breath.

    Mortality risk

    • It is the cause of Hantavirus pulmonary disease (HPS), a severe respiratory disease. The HPS can be fatal and has a mortality rate of 38 per cent.
    • It remains unclear whether human-to-human transmission of the virus is possible.
    • There have been no reports of human-to-human transmission of Hantavirus in the US.

  • India VIX Index

    The  India VIX Index, an indicator of the volatility of the stock market has been plunging after the outbreak of novel coronavirus.

    What is Volatility Index?

    • Volatility Index is a measure of the market’s expectation of volatility over the near term.
    • Volatility is often described as the “rate and magnitude of changes in prices” and in finance often referred to as risk.
    • It is a measure, of the amount by which an underlying Index is expected to fluctuate, in the near term, (calculated as annualized volatility, denoted in percentage e.g. 20%) based on the order book of the underlying index options.

    India VIX Index

    • India VIX is a volatility index based on the NIFTY Index Option prices.
    • From the best bid-ask prices of NIFTY Options contracts, a volatility figure (%) are calculated which indicates the expected market volatility over the next 30 calendar days.
    • “VIX” is a trademark of Chicago Board Options Exchange, Incorporated (“CBOE”) and Standard & Poor’s.
    • The firm has granted a license to NSE to use such mark in the name of the India VIX and for purposes relating to the India VIX.

  • [Prelims Spotlight] Environment related Government bodies in India, Important Declarations,

     

    Prelims Spotlight is a part of “Nikaalo Prelims 2020” module. This open crash course for Prelims 2020 has a private telegram group where PDFs and DDS (Daily Doubt Sessions) are being held. Please click here to register.

    25 March 2020

    Government Bodies Related To Environment

    Central Pollution Control Board

    Established: It was established in 1974 under the Water (Prevention and Control of Pollution) Act, 1974.

    Objective: To provide technical services to the Ministry of Environment and Forests under the provisions of the Environment (Protection) Act, 1986.

    Key Functions:

    • Advise the Central Government on any matter concerning prevention and control of water and air pollution and improvement of the quality of air.
    • Plan and cause to be executed a nation-wide programme for the prevention, control or abatement of water and air pollution
    • Coordinate the activities of the State Board and resolve disputes among them
    • Provide technical assistance and guidance to the State Boards, carry out and sponsor investigation and research relating to problems of water and air pollution, and for their prevention, control or abatement
    • Plan and organise training of persons engaged in the programme on the prevention, control or abatement of water and air pollution
    • Organise through mass media, a comprehensive mass awareness programme on the prevention, control or abatement of water and air pollution
    • Collect, compile and publish technical and statistical data relating to water and air pollution and the measures devised for their effective prevention, control or abatement;
    • Prepare manuals, codes and guidelines relating to treatment and disposal of sewage and trade effluents as well as for stack gas cleaning devices, stacks and ducts;
    • Disseminate information in respect of matters relating to water and air pollution and their prevention and control
    • Lay down, modify or annul, in consultation with the State Governments concerned, the standards for stream or well, and lay down standards for the quality of air.
    • Perform such other functions as may be prescribed by the Government of India.

     

    National Biodiversity Authority

    Established When: It is a statutory autonomous body under the Ministry of Environment and Forests, Government of India established in 2003, after India signed Convention on Biological Diversity (CBD) in 1992

    Headquarter: Chennai

    The objective of the body: Implementation of Biological Diversity Act, 2002

    Key Functions:

    It acts as a facilitating, regulating and advisory body to the Government of India “on issues of conservation, sustainable use of biological resources and fair and equitable sharing of benefits arising out of the use of biological resources.”

    Additionally, it advises State Governments in identifying the areas of biodiversity importance (biodiversity hotspots) as heritage sites.

     

    National Tiger conservation authority

    Established: It was established in December 2005 following a recommendation of the Tiger Task Force, constituted by the Prime Minister of India for reorganised management of Project Tiger and the many Tiger Reserves in India.

    Headquarter: Delhi

    Objective:

    • Providing statutory authority to Project Tiger so that compliance of its directives become legal.
    • Fostering accountability of Center-State in management of Tiger Reserves, by providing a basis for MoU with States within our federal structure.
    • Providing for oversight by Parliament.
    • Addressing livelihood interests of local people in areas surrounding Tiger Reserves.

    Key Functions:

    • to approve the tiger conservation plan prepared by the State Government under sub-section (3) of section 38V of this Act
    • evaluate and assess various aspects of sustainable ecology and disallow any ecologically unsustainable land use such as mining, industry and other projects within the tiger reserves;
    • provide for management focus and measures for addressing conflicts of  men and wild animal and to emphasize on co-existence in forest areas outside the National Parks, sanctuaries or tiger reserve, in the working plan code
    • provide information on protection measures including future conservation plan, estimation of population of tiger and its natural prey species, the status of habitats, disease surveillance, mortality survey, patrolling, reports on untoward happenings and such other management aspects as it may deem fit including future plan conservation
    • ensure critical support including scientific, information technology and legal support for better implementation of the tiger conservation plan
    • facilitate ongoing capacity building programme for skill development of officers and staff of tiger reserves.

     

    Animal Welfare Board of India

    Established When: It was established in 1962 under Section 4 of The Prevention of Cruelty to Animals Act,1960.

    Headquarter: Ballabhgarh

    Objective: To advise Government on Animal Welfare Laws and promotes animal welfare in the country.

    Key Functions:

    • Recognition of Animal Welfare Organisations: The Board oversees Animal Welfare Organisations (AWOs) by granting recognition to them if they meet its guidelines. The organisation must submit paperwork; agree to nominate a representative of the Animal Welfare Board of India on its Executive Committee, and to submit to regular inspections. After meeting the requirements and inspection, the organisation is considered for grant of recognition.
    • The AWBI also appoints key people to the positions of (Hon) Animal Welfare Officers, who serve as the key point of contact between the people, the government and law enforcement agencies.
    • Financial assistance: The Board provides financial assistance to recognised Animal Welfare Organisations (AWOs), who submit applications to the Board. Categories of grants include Regular Grant, Cattle Rescue Grant, Provision of Shelter House for looking after the Animals, Animal Birth Control (ABC) Programme, Provision of Ambulance for the animals in distress and Natural Calamity grant.
    • Animal welfare laws and Rules: The Board suggests changes to laws and rules about animal welfare issues. In 2011, a new draft Animal Welfare Act was published for comment. Guidance is also offered to organisations and officials such as the police to help them interpret and apply the laws.
    • Raising awareness: The Board issues publications to raise awareness of various animal welfare issues. The Board’s Education Team gives talks on animal welfare subjects, and trains members of the community to be Board Certified Animal Welfare Educators.

     

    Forest Survey of India

    Established When:  It is a government organization in India under the Union Ministry of Environment, Forest and Climate Change for conducting forest surveys and studies. The organization came into being in, 1981.

    Headquarter: Dehradun, Uttarakhand

    Objective

    The objective of the organization is monitoring periodically the changing situation of land and forest resources and present the data for national planning; conservation and management of environmental preservation and implementation of social forestry projects.

    Key Functions

    • The Functions of the Forest Survey of India are:
    • To prepare State of Forest Report biennially, providing an assessment of the latest forest cover in the country and monitoring changes in these.
    • To conduct an inventory in forest and non-forest areas and develop a database on forest tree resources.
    • To prepare thematic maps on 1:50,000 scale, using aerial photographs.
    • To function as a nodal agency for collection, compilation, storage and dissemination of spatial database on forest resources.
    • To conduct training of forestry personnel in the application of technologies related to resources survey, remote sensing, GIS, etc.
    • To strengthen research & development infrastructure in FSI and to conduct research on applied forest survey techniques.
    • To support State/UT Forest Departments (SFD) in forest resources survey, mapping and inventory.
    • To undertake forestry-related special studies/consultancies and custom made training courses for SFD’s and other organizations on a project basis.

    Forest Survey of India assesses forest cover of the country every 2 years by digital interpretation of remote sensing satellite data and publishes the results in a biennial report called ‘State of Forest Report'(SFR).

    Central Zoo Authority of India

    Established: It was established in 1992 and constituted under the Wild Life (Protection) Act.

    Headquarter: Delhi

    Objective 

    The main objective of the authority is to complement the national effort in the conservation of wildlife.

    Standards and norms for housing, upkeep, health care and overall management of animals in zoos have been laid down under the Recognition of Zoo Rules, 1992.   

    Key Functions

    • Since its inception in 1992, the Authority has evaluated 513 zoos, out of which 167 have been recognized and 346 refused recognition.
    • The Authority’s role is more of a facilitator than a regulator.  It, therefore, provides technical and financial assistance to such zoos which have the potential to attain the desired standard in animal management. Only such captive facilities which have neither the managerial skills nor the requisite resources are asked to close down.
    • Apart from the primary function of the grant of recognition and release of financial assistance, the Central Zoo Authority also regulates the exchange of animals of the endangered category listed under Schedule-I and II of the Wildlife (Protection Act) among zoos.  
    • Exchange of animals between Indian and foreign zoos is also approved by the Authority before the requisite clearances under EXIM Policy and the CITES permits are issued by the competent authority.  
    • The Authority also coordinates and implements programmes on capacity building of zoo personnel, planned conservation breeding programmes and ex-situ research including biotechnological intervention for the conservation of species for complementing in-situ conservation efforts in the country.

     

     

    Major UN climate negotiations under UNFCCC- Timeline

    1992—

    The UN Framework Convention on Climate Change (UNFCCC) was adopted and opened for signatures in Rio de Janeiro, Brazil, at the UN Conference on Environment and Development, also known as the Earth Summit.

    154 signatories to the UNFCCC agreed to stabilize “greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous interference with the climate system.”

    The treaty is not legally binding because it sets no mandatory limits on GHG emissions. Instead, the treaty provides for future negotiations to set emissions limits. The first principal revision is the Kyoto Protocol.

    1994—

    The UNFCCC Treaty entered into force after receiving 50 ratifications.

    1997—

    KYOTO PROTOCOL

    COP 3 was held in Kyoto, Japan. On December 11, the Kyoto Protocol was adopted by consensus with more than 150 signatories.

    The Protocol included legally binding emissions targets for developed country Parties for the six major GHGs, which are-

    • Carbon dioxide.
    • Methane.
    • Nitrous oxide.
    • Hydrofluorocarbons.
    • Perfluorocarbons, and
    • Sulfur hexafluoride.

    Annex of the Kyoto Protocol

    • Annex 1 – Industrialised Countries (mainly OECD) plus economies in transition (mainly former soviet block countries) – They would mandatorily reduce GHGs, base year – 1990
    • Annex 2 – Subset of Annex 1,  Industrialised Countries (mainly OECD), would also provide finances and technology to non annex countries
    • Non annex – not included in annex, all other countries, no binding targets
    • Annex A – gases covered under Kyoto <name those 7 gases>
    • Annex B – Binding targets for each Annex 1 country i.e Japan will reduce emission by X%, Australia by Y% 

    The Protocol offered additional means of meeting targets by way of three market-based mechanisms:

    • Emissions trading.
    • Clean Development Mechanism (CDM).
    • Joint Implementation (JI).

    Under the Protocol, industrialized countries’ actual emissions have to be monitored and precise records have to be kept of the trades carried out.

    India ratified the Kyoto Protocol in 2002.

     

    2000—

    COP 6 part I was held in The Hague, Netherlands. Negotiations faltered, and parties agreed to meet again.

    COP 6part II was held in Bonn, Germany. The consensus was reached on what was called the Bonn Agreements.

    All nations except the United States agreed on the mechanisms for implementation of the Kyoto Protocol.

    The U.S. participated in observatory status only.

    2001—

    COP 7 was held in Marrakesh, Morocco. The detailed rules for the implementation of the Kyoto Protocol were adopted and called the Marrakesh Accords.

    The Special Climate Change Fund (SCCF) was established to “finance projects relating to: adaptation; technology transfer and capacity building; energy transport, industry, agriculture, forestry and waste management; and economic diversification.”

    The Least Developed Countries Fund was also “established to support a work programme to assist Least Developed Country Parties (LDCs) carry out, inter alia [among other things], the preparation and implementation of national adaptation programmes of action (NAPAs).”

    2005—

    COP 11/CMP 1 were held in Montreal, Canada. This conference was the first to take place after the Kyoto Protocol took force. The annual meeting between the parties (COP) was supplemented by the first annual Meeting of the Parties to the Kyoto Protocol (CMP).

    The countries that had ratified the UNFCCC, but not accepted the Kyoto Protocol, had observer status at the latter conference.

    The parties addressed issues such as “capacity building, development and transfer of technologies, the adverse effects of climate change on developing and least developed countries, and several financial and budget-related issues, including guidelines to the Global Environment Facility (GEF).” (UNFCCC)

    2007—

    COP 13/CMP 3 were held in Bali. COP parties agreed to a Bali Action Plan to negotiate GHG mitigation actions after the Kyoto Protocol expires in 2012. The Bali Action Plan did not require binding GHG targets for developing countries.

    2009—

    June – As part of the UN Framework Convention on Climate Change (UNFCCC) process, governments met in Bonn, Germany, to begin discussions on draft negotiations that would form the basis of an agreement at Copenhagen.

    December – COP 15 was held in Copenhagen, Denmark.

    It failed to reach agreement on binding commitments after the Kyoto Protocol commitment period ends in 2012.

    During the summit, leaders from the United States, Brazil, China, Indonesia, India and South Africa agreed to what would be called the Copenhagen Accord which recognized the need to limit the global temperature rise to 2°C based on the science of climate change.

    While no legally binding commitments were required by the deal, countries were asked to pledge voluntary GHG reduction targets. $100 billion was pledged in climate aid to developing countries.

    2012—

    COP 18 was held in Doha, Qatar.

    Parties agreed to extend the expiring Kyoto Protocol, creating a second commitment phase that would begin on January 1, 2013 and end December 31, 2020. India ratified the second commitment period in 2017.

    Parties failed to set a pathway to provide $100 billion per year by 2020 for developing countries to finance climate change adaptation, as agreed upon at COP 15 in Copenhagen.

    The concept of “loss and damage” was introduced as developed countries pledged to help developing countries and small island nations pay for the losses and damages from climate change that they are already experiencing.

    2013—

    COP 19 was held in Warsaw, Poland.

    Parties were expected to create a roadmap for the 2015 COP in Paris where a legally binding treaty to reduce greenhouse gas (GHG) emissions is expected to be finalized (in order to come into effect in 2020).

    Differences of opinion on responsibility of GHG emissions between developing and developed countries led to a flexible ruling on the wording and a plan to discuss further at the COP 20 in Peru.

    A non-binding agreement was reached among countries to set up a system tackling the “loss and damage” issue, although details of how to set up the mechanism were not discussed.

    Concerning climate finance, the United Nations’ Reducing Emissions from Deforestation and Forest Degradation (REDD+) Program, aimed at preserving the world’s forests, was formally adopted.

    Little progress was made on developed countries committing to the agreed upon plan of providing $100 billion per year by 2020 to developing countries.

     

    2015—

    PARIS AGREEMENT

    COP 21 or CMP 11 was held in Paris.

    Aims of the Paris Agreement-

    1.Keep the global temperature rise this century well below 2 degrees Celsius above the pre-industrial level.

    2.Pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.

    3.Strengthen the ability of countries to deal with the impacts of climate change.

    Nationally Determined Contributions (NDC)

    • The national pledges by countries to cut emissions are voluntary.
    • The Paris Agreement requires all Parties to put forward their best efforts through “nationally determined contributions” (NDCs) and to strengthen these efforts in the years ahead.
    • This includes requirements that all Parties report regularly on their emissions and on their implementation efforts.
    • In 2018, Parties will take stock of the collective efforts in relation to progress towards the goal set in the Paris Agreement.
    • There will also be a global stock take every 5 years to assess the collective progress towards achieving the purpose of the Agreement and to inform further individual actions by Parties.

    Some facts-

    • It entered into force in November 2016 after (ratification by 55 countries that account for at least 55% of global emissions) had been met.
    • The agreement calls for zero net anthropogenic greenhouse gas emissions to be reached during the second half of the 21st century.
    • In the adopted version of the Paris Agreement, the parties will also “pursue efforts to limit the temperature increase to 1.5 °C.”
    • The 1.5 °C goal will require zero-emissions sometime between 2030 and 2050, according to some scientists.
    • The developed countries reaffirmed the commitment to mobilize $100 billion a year in climate finance by 2020 and agreed to continue mobilizing finance at the level of $100 billion a year until 2025.
    • In 2017, United States announced that the U.S. would cease all participation in the 2015 Paris Agreement on climate change mitigation.
    • In accordance with Article 28 of the Paris Agreement, the earliest possible effective withdrawal date by the United States cannot be before November 2020. Thus, The U.S. will remain a signatory till November 2020.

  • Welcome Policy On APIs, Devices

    Context

    It is most welcome that the Centre has announced a `14,000-crore incentive package to boost the manufacture of drugs, especially active pharmaceutical ingredients (API).

    What should be the immediate policy focus?

    • Focus on protective gear: The immediate policy focus must be to swiftly overcome shortages of critical protective gear like gowns and face masks, diverting production lines if required.
    • We also need to anticipate and step-up production of vital devices like ventilators.
    •  Provisions in the package: What is proposed now are industrial parks for bulk drugs and APIs, together with a policy for multi-year fiscal benefits. And ditto for parks for the manufacture of medical devices and attendant fiscal incentives.
    • The state governments need to identify 1,000 acres for the parks that are well-integrated with knowledge centres and nationally accredited labs.

    What additions need to be made in the package?

    • Public-private partnership: In tandem, the pharmaceuticals package issued on Saturday needs to be followed through, with a forward-looking public-private partnership, to avoid import-dependency in this critical sector.
    • What is envisaged is a set of schemes to reap economies of scale and ready availability of inputs in the production of APIs and medical devices via the cluster approach.

    How India became uncompetitive in API?

    • Policy rigidities and price controls: APIs are, of course, bulk drugs that provide medicines with their therapeutic value, and it is unfortunate that since circa 1995, India has become steadily uncompetitive in API production, thanks to a panoply of policy rigidities such as onerous price controls.
    • Export competition from China: Opaque export competition from China has been game-changing indeed: APIs for most medicines are mostly imported.
    • This needs to change, fast. We do need to competitively and efficiently boost output of pharmaceuticals right across the value chain.

    Conclusion

    The government must understand that manufacture by itself is not enough. The policy must ensure competition and quality, keep prices down.

  • [Burning Issue] Oil Prices and OPEC+

     

    Most of the world’s oil is controlled by a very small group of people- the Middle Eastern cartel called OPEC, US, and Russia. And with great resources comes great responsibility. Their job is to manipulate the oil supply to ensure prices the world over remain stable.

    Unfortunately, with Coronavirus having taken centre stage, demand for oil isn’t exactly like it used to be. And in a last-ditch effort to keep prices stable, OPEC decided to push for more production cuts.  However, Russia disagreed, leading to one of the most brutal price wars in history.

    Context

    The talks between OPEC and Russia had finally collapsed, possibly precipitating a price war that could push oil (Brent Crude) down to as much as $20 a barrel. For context, last month oil was trading as high as $60 dollars a barrel.  Hence the concept of OPEC+ stands scrapped!

    Fall in global crude oil prices

    • Oil prices have been tumbling now and it’s hovering at about $35 a barrel now (it was $65 last December).
    • And of course, this is horrible news for all the nations that export oil.

    Background

    Before we get to the story on OPEC+, lets  quickly recap :

    OPEC

    • OPEC is a permanent, intergovernmental organization, created at the Baghdad Conference in 1960, by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
    • It aims to manage the supply of oil in an effort to set the price of oil in the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.
    • It is headquartered in Vienna, Austria.
    • OPEC membership is open to any country that is a substantial exporter of oil and which shares the ideals of the organization.
    • Today OPEC is a cartel that includes 14 nations, predominantly from the middle east whose sole responsibility is to control prices and moderate supply.

    Russia

    • Russia happens to be the 3rd largest supplier of Oil in the world (12% of all oil produced).
    • This means they too have considerable influence in controlling the global oil supply.
    • And back in 2017, OPEC and Russia started colluding informally to cut production and prop up prices. This came against the backdrop of oil having made some terrible lows.
    • So two big parties come together to keep prices stable and it obviously helped.

    OPEC plus and its Fall

    OPEC plus

    • The non-OPEC countries which export crude oil along with the 14 OPECs are termed as OPEC plus countries.
    • OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.
    • Saudi and Russia , both have been at the heart of a three-year alliance of oil producers known as OPEC Plus — which now includes 11 OPEC members and 10 non-OPEC nations — that aims to shore up oil prices with production cuts.

    Why OPEC plus came into existence?

    When Russia concluded the Vienna Agreement in 2016, the Russian leadership believed that it would help prepare the country for the Russian presidential elections in March 2018. Higher oil prices ensured the Kremlin’s financial capacity to lead a successful electoral campaign.

    This changed the regime’s priorities – from satisfying the needs of the general population to ensuring the sustainability of the Kremlin’s alliance with powerful tycoons, including those controlling oil production who would, in the end, either approve a successor to Putin or a constitutional amendment that would allow him to stay in power for two more terms.

    • For Saudi Arabia, turning what had been an ad hoc coalition into a formal group provides a hedge (protection) against future oil-market turbulence.
    • The kingdom now leaned on a group representing almost half of global oil output for support.
    • For Russia, the formalization of the group helps expand Putin’s influence in the Middle East
    • However both reportedly aimed at causing a drop in oil prices in order to hit US shale producers, who have continued to benefit from OPEC production cuts by expanding their market share.

    Why did OPEC+ talks fail?

    • Because with Coronavirus having taken centre stage, things have changed. Air travel has taken a beating. Industries are shutting down. All trading activities are on edge.
    • And the global economic outlook has soured rather considerably. So OPEC has been insisting on deep production cuts to keep prices stable.
    • Now nobody knows for sure why Russia doesn’t want to follow through. Maybe, it’s because Putin doesn’t take orders from a 34-year-old Saudi prince.
    • Experts contend that this is Russia testing the boundaries of this alliance considering the simple fact that Saudi and other OPEC members are negotiating so hard tells us the kind of influence Russia holds in the market.

    Russia’s pullout

    • It seems Putin is able to secure another six-year term with a high enough turnout and significantly high approval rating.
    • Since then, the political goals of the Russian regime have changed, which required a different approach to cooperation with OPEC+.
    • Since Corona outbreak, the Kremlin’s own perception of OPEC+ has changed. It has come to believe that the cartel is losing its ability to shape the global energy market due to the growing oversupply and the beginning of a global energy transition.
    • The Russian leadership finally accepted that the era of high oil prices was gone and that it will not come back.

    Global Implications

    • OPEC is on the offensive and they’ve already started selling oil at deep discounts. They’ve also threatened to flood the markets with oil in the coming days.
    • Saudi Aramco not only announced that it would increase its crude supplies to the market but also said it received instructions to increase its maximum sustainable oil output capacity.
    • The increase in oil supplies to the market will drive oil prices down and launch an economic “war of attrition” between oil producers.
    • In the end, the companies that have the capacity to survive a prolonged period of low oil prices will succeed in securing their share of the market and win the war.
    • Moscow’s limited capacity to increase oil output means it will be unable to compensate for all losses caused by the reduction in prices by upping its production.
    • However, the oil price Russia needs to keep its budget balanced is lower than the one needed by Saudi Arabia and the UAE ($42 pb compared to $70-80 pb).

    Immediate Injury to US

    • The most immediate pain is likely to be felt in the U.S. shale industry, where companies have already been struggling as investors lost enthusiasm for the sector.
    • In part, that’s what the Russian energy ministry has been aiming for.

    Significance for India

    Petrol and diesel prices in India, however, haven’t yet been reflecting the drop in global oil prices. In fact, crude oil prices have halved since the start of 2020, but retail prices have declined by only around 7%.

    Many factors — pricing mechanism, currency movements and taxes – queer the pitch on passing on crude oil cost benefits to customers.

    1) Product pricing not crude linked

    The price of petrol and diesel in India is not determined by the actual costs incurred by refiners on crude oil sourcing, refining and marketing.  Rather, a formula — Trade Parity Price (TPP) — is the starting point for pricing these products.

    • TPP is the weighted average of import parity price (IPP) and export parity price (EPP) with weights of 80 and 20, respectively.
    • IPP is the price importers would pay in case of actual import of the petrol and diesel at Indian ports, while EPP is the price oil companies would realize on export of petrol and diesel.
    • In short, the product pricing assumes that 80 per cent of the petrol and diesel is imported into India and 20 per cent is exported.
    • Essentially, the TPP of petrol and diesel in India is determined based on prices of petrol and diesel prevailing in the international market – and not on the basis of crude oil prices.

    Demand and supply dynamics globally could be different for the raw material (crude oil) and the finished products (petrol and diesel), and so could their price trajectory — in terms of direction and/or timing.

    2) Daily pricing; fortnightly average

    • The TPP, which is quoted in dollars, is converted to rupees.
    • To this is added the cost of inland freight, marketing costs and margins charged by the oil companies, the dealer commission and the taxes levied by the Central and State governments.
    • Until then, prices for these fuels used to be determined on a fortnightly basis.
    • But even under the ‘daily pricing’ mechanism, in which the prices of petrol and diesel are revised daily, the price is based on a 15-day rolling average rate of the international benchmarks of petrol and diesel.
    • For instance, the price of petrol in India would be based on the international prices of petrol during the preceding fortnight.
    • So, international prices of petrol and diesel do not reflect immediately in India — that happens with a time lag.

    3) Forex factor

    • It is also to be noted that while crude oil prices have crashed, the rupee has been slipping. From 71.2 per dollar in early January 2020, the rupee now trades at 74.4.
    • This rupee weakness offsets to some extent the benefit of lower international crude oil and petrol/diesel prices, which are quoted in dollars.
    • This will chip away at the price reduction in petrol and diesel.

    4) Tax burden

    • Next, even if international prices of petrol and diesel are low over an extended period, it does not always reflect in the price of these products in India.
    • Blame this on the heavy taxes imposed by both Central and State governments.
    • For instance, last time, when the crude oil rout was underway from mid-2014 to early 2016, the Governments at the Centre and many States chose to pocket most of the gains through regular hikes in excise duty and VAT (value added tax) on petrol and diesel.
    • Not just the Centre, many states also upped their VAT rates when the previous oil rout was underway.
    • High VAT rates are why customers in some States such as Maharashtra and cities such as Mumbai have it worse than others.
    • In effect, only a minor portion of the crude oil cost reduction benefit was passed on to consumers.

    5) Other factors

    • One variable impacting the mismatch is the Rupee. The value of the rupee has depreciated by about 3.6% vis-a-vis the U.S. dollar this year.
    • And this is kind of important because we buy a large part of our oil using dollars. So a devalued Rupee means we have to spend a lot more money to buy the same amount of oil we used to.
    • This effectively wipes out some of the gains that we might have made from the drop in oil prices.
    • There’s also the possibility that the government might not choose to pass on the benefits of lower prices to consumers at all.
    • Instead, Govt. has decided to raise Excise duties on petrol and diesel- money which will go directly into central and state coffers.

    Potential benefit

    Who gains from the fall?

    • Oil Marketing Companies (like BPCL and IOCL) choose to retain most of the gains.
    • Because when prices rise and public pressure forces governments to act, the government asks the OMCs to take a hit on their margins so people can continue buying oil at a modest price.
    • Granted the government does reimburse some of this money, but it’s not very reliable.
    • So when prices dip, it’s an opportunity for OMCs to shore up their margins by keeping some of the gains themselves.

    Point of Interest: The governments can force OMCs to absorb the losses because they have majority ownership in most of these companies.

    Benefits for India

    • India imports over 80% of its crude oil requirements, making us inadvertent winners in this price war.
    • India’s crude oil import bill during FY 2018–19 was around $112 billion. And for each dollar reduced per barrel now, this bill drops by $1.45 billion, year on year.
    • This kind of decrease is substantial because it helps us in reducing the big bad number everyone’s scared of — the Current Account Deficit.
    • Also, there is another more obvious benefit when oil prices tank. If the price reduction is passed on to customers in the form of lower petrol and diesel prices, we get to save on fuel.

    Increasing Strategic Petroleum Reserves (SPR)

    • Away from the geopolitical firestorm, India is focused on topping up its SPR.
    • According to experts, India will spend about $ 670 million to buy oil at around $30 a barrel, for its strategic reserves, drawn from Saudi Arabia and the United Arab Emirates. Deliveries will start around April-May.
    • The Strategic Petroleum Reserves Ltd. (ISPRL), a subsidiary of the Oil Industry Development Board, run by the Ministry of Petroleum and Natural Gas manages these reserves.
    • Unlike India, it is estimated that China will achieve its strategic petroleum reserve target of 90 days this year.

    When did India plan for SPR?

    • In order to manage contingencies, we need at least one month of strategic petroleum reserves, which was the original plan when the exercise began in 2003.
    • Unsurprisingly, the government is considering building 30 day reserves in the first phase which will be eventually extended to 60 and, finally 90 days.
    • In June 2018, the Cabinet had cleared an additional 6.5 million tonne SPR facilities at Chandikhol in Odisha and Padur in Karnataka, to augment India’s energy security by 11.5 days.
    • Two more facilities — one in Bikaner and another in Rajkot — are also expected to be initiated soon to enable storage for 30 days.
    • The ISPRL has also been asked to pin down new sites so that a 90-100 days of oil reserve stocks are eventually available at all times.

    References

    https://www.aljazeera.com/indepth/opinion/fall-opec-age-oil-price-wars-200312124946313.html

    https://finshots.in/archive/why-isnt-fuel-prices-coming-down-in-india/

    https://finshots.in/archive/why-oil-prices-have-been-tanking/

    https://www.nytimes.com/2019/12/05/business/opec-oil-production-cuts.html

    https://www.livemint.com/market/commodities/global-oil-producers-face-brutal-reckoning-after-epic-failure-of-opec-deal-11583564684234.html

  • What is Finance Bill?

    The Parliament has passed the Finance Bill 2020 with 40 amendments without any discussion.

    Highlights of the Bill

    • Among the important amendments included was one enabling the government to raise additional excise duty on petrol by up to Rs 18 per litre and diesel by up to Rs 12 per litre when required.
    • Amendments enabling the taxation of NRIs’ India-controlled income above Rs 15 lakh, and another extending the DDT exemption to REITs and Infrastructure Investment trusts were passed.
    • The Bill also changes the definition of ‘Resident’, as stipulated under the Income Tax Act.
    • Presently, a person is considered a resident of India, i.e. their global income is taxable in India if they are in the country for more than 182 days a year. This has now been reduced to 120 days.
    • The amendments also include provisions for levying TDS of 1 per cent on e-commerce transactions.

    What is a Finance Bill?

    • As per Article 110 of the Constitution, the Finance Bill is a Money Bill.
    • The Finance Bill is a part of the Union Budget, stipulating all the legal amendments required for the changes in taxation proposed by the Finance Minister.
    • This Bill encompasses all amendments required in various laws pertaining to tax, in accordance with the tax proposals made in the Union Budget.
    • The Finance Bill, as a Money Bill, needs to be passed by the Lok Sabha — the lower house of the Parliament. Post the Lok Sabha’s approval, the Finance Bill becomes Finance Act.

    Difference between a Money Bill and the Finance Bill

    1) Money Bill

    • A Money Bill has to be introduced in the Lok Sabha as per Section 110 of the Constitution. Then, it is transmitted to the Rajya Sabha for its recommendations.
    • The Rajya Sabha has to return the Bill with recommendations in 14 days.
    • However, the Lok Sabha can reject all or some of the recommendations.

    2) Finance Bill

    • In a general sense, any Bill that relates to revenue or expenditure is a Financial Bill.
    • The Finance Bill is introduced in Lok Sabha.
    • Rajya Sabha can recommend amendments in the bill. However, the bill has to be passed by the Parliament within 75 days of introduction.

    >Types of Finance Bills

    Type I

    • Financial Bill Cat-1 is a bill which contains any of the matters specified in Article 110 but does not exclusively deal with such matters.
    • For example- a bill which contains a taxation clause, but does not deal solely with taxation under Article 117 (1), has two features in common with a money bill.
    1. It cannot be introduced in the Rajya Sabha.
    2. It can only be introduced in Lok Sabha with the prior recommendation of the President.(Similarities)
    • But has one feature uncommon that is, not being a Money Bill, the Rajya Sabha has the same power to reject or amend such Financial Bill subject to limitation.

    Type II

    • It is a finance bill which merely involves expenditure and does not include any of the matters specified in Article 110.
    • It is an Ordinary Bill and may be initiated in either House and the Rajya Sabha has full power to reject or ament it.
    • It is thus apparent that all Money Bills are Financial Bills but all Financial Bills are not Money Bills.

    Who decides the Bill is a Finance Bill?

    • The Speaker of the Lok Sabha is authorised to decide whether the Bill is a Money Bill or not.
    • Also, the Speaker’s decision shall be deemed to be final.

    Why Finance Bill is needed?

    • The Union Budget proposes many tax changes for the upcoming financial year, even if not all of those proposed changes find a mention in the Finance Minister’s Budget speech.
    • These proposed changes pertain to several existing laws dealing with various taxes in the country.
    • The Finance Bill seeks to insert amendments into all those laws concerned, without having to bring out a separate amendment law for each of those Acts.
    • For instance, a Union Budget’s proposed tax changes may require amending the various sections of the Income Tax law, Stamp Act, Money Laundering law, etc.
    • The Finance Bill overrides and makes changes in the existing laws wherever required.

    What changes can be made via Finance Bill?

    • The most awaited changes in the tax proposals in the Union Budget usually pertain to personal income tax.
    • For taxpayers across the country, the most awaited moment is when the Finance Minister’s speech announces an increase in minimum income threshold, or declares any changes in income tax slabs to make it less costly, or other exemptions.
    • In addition, there might be changes in the rules, procedures, and deadlines for filing tax returns or the payment of tax itself.
    • For instance, there might be a change in the amount of penalty for missing the deadline. Those proposed changes would typically need to be brought in via amending the Income Tax Act.
    • Among other changes, the FM may propose in the Union Budget with regard to the rates or processes for payment or administration of stamp duty levied on various instruments.
    • Such a change would need to be brought in via an amendment to the Stamp Act.
    • Since the introduction of GST, there is no amendment to indirect taxes in the Union Budget, since that is under the purview of the GST Council.

     

  • Govt. has raised excise duty cap on fuel

    In a move which would help the government to raise excise duty on fuel further in future, the government has raised the cap on special additional excise duty on petrol and diesel. These changes are as per the amendments in the Finance Bill passed in the Parliament.

    Why such move?

    • Government is increasing duties on petrol and diesel to raise revenues in view of a tight fiscal situation.
    • Slump in global crude oil prices, alongside possibility of a global economic recession, has forced the government to look for avenues to raise revenues to support growth.
    • With major companies going for production shut downs, industry players have suggested the government to boost fiscal stimulus in the wake of demand collapse triggered by the coronavirus.
    • Earlier, Saudi Arabia had triggered the crash in prices by announcing a sharp increase in oil production after Russia declined to reduce oil supply to contain a fall in oil prices due to declining demand in a meeting of petroleum exporting countries.

    Impact of the move

    • Every rupee hike in excise duty is expected to yield roughly Rs 13,000-14,000 crore annually.
    • The slump in global crude oil prices enables the government to raise these duties substantially without immediately putting the burden on the consumer.
    • But there is expected to be a demand slowdown for fuels with a nearly country wide lockdown in the wake of coronavirus.
    • With airlines, railways, trucks and passenger cars going off the roads, petrol, diesel and ATF (aviation turbine fuel) consumption is expected to fall drastically.

    Back2Basics

    What is Excise Duty?

    • Excise duty is a form of tax imposed on goods for their production, licensing and sale.
    • It is the opposite of Customs duty in sense that it applies to goods manufactured domestically in the country, while Customs is levied on those coming from outside of the country.
    • At the central level, excise duty earlier used to be levied as Central Excise Duty, Additional Excise Duty, etc.
    • Excise duty was levied on manufactured goods and levied at the time of removal of goods, while GST is levied on the supply of goods and services.

    Purview of excise duty

    • The GST introduction in July 2017 subsumed many types of excise duty.
    • Today, excise duty applies only on petroleum and liquor.
    • Alcohol does not come under the purview of GST as exclusion mandated by constitutional provision.
    • States levy taxes on alcohol according to the same practice as was prevalent before the rollout of GST.
    • After GST was introduced, excise duty was replaced by central GST because excise was levied by the central government. The revenue generated from CGST goes to the central government.

    Types of excise duty in India

    Before GST kicked in, there were three kinds of excise duties in India.

    Basic Excise Duty

    • Basic excise duty is also known as the Central Value Added Tax (CENVAT). This category of excise duty was levied on goods that were classified under the first schedule of the Central Excise Tariff Act, 1985.
    • This duty was levied under Section 3 (1) (a) of the Central Excise Act, 1944. This duty applied on all goods except salt.

    Additional Excise Duty

    • Additional excise duty was levied on goods of high importance, under the Additional Excise under Additional Duties of Excise (Goods of Special Importance) Act, 1957.
    • This duty was levied on some special category of goods.

    Special Excise Duty

    • This type of excise duty was levied on special goods classified under the Second Schedule to the Central Excise Tariff Act, 1985.
    • Presently the central excise duty comprises of a Basic Excise Duty, Special Additional Excise Duty and Additional Excise Duty (Road and Infrastructure Cess) on auto fuels.

  • Legal Provisions Used By Law Enforcement Agencies To Control The Spread Of Coronavris

    To enforce a full lockdown to contain the spread of COVID-19, law enforcement agencies have taken the help of various legal provisions in CrPC and IPC.

    • The orders issued to curb the spread of the coronavirus have been framed under the Epidemic Diseases Act, 1897, which lays down punishment as per Section 188 of the Indian Penal Code, 1860.
    • Similarly, Sections 269 and 270 IPC are being invoked against persons who malignantly do any act which is likely to spread the infection of any disease dangerous to life.

      Sections 269 and 270 of the IPC

      • Sections 269 (negligent act likely to spread infection of disease dangerous to life) and 270 (malignant act likely to spread infection of disease dangerous to life) come under Chapter XIV of the IPC.
      • The chapter is named ‘Of Offences Affecting The Public Health, Safety, Convenience, Decency and Morals’.
      • While Section 269 provides for a jail term of six months and/or fine, Section 270 provides for a jail term of two years and/or fine.
      • In Section 270, the word ‘malignantly’ indicates a deliberate intention on the part of the accused.
      • During the coronavirus outbreak, penal provisions, such as Sections 188, 269 and 270 of the IPC, are being invoked to enforce the lockdown orders in various states.

      Earlier instances of invocation

      • Both Sections have been used for over a century to punish those disobeying orders issued for containing epidemics.
      • The Sections were similarly enforced by colonial authorities during outbreaks of diseases such as smallpox and bubonic plague.

    What is Section 188 of the Indian Penal Code?

    • Section 3 of the Epidemic Diseases Act, 1897, provides penalties for disobeying any regulation or order made under the Act.
    • These are according to Section 188 of the Indian Penal Code (disobedience to order duly promulgated by public servant).
    • It is not necessary that the offender should intend to produce harm, or contemplate his disobedience as likely to produce harm.
    • It is sufficient that he knows of the order which he disobeys, and that his disobedience produces, or is likely to produce, harm.

    What happens if you violate the lockdown orders? 

    Under Section 188, there two offences:

    1) Disobedience to an order lawfully promulgated by a public servant, If such disobedience causes obstruction, annoyance or injury to persons lawfully employed

    Punishment: Simple Imprisonment for 1 month or fine of Rs 200 or both

    2) If such disobedience causes danger to human life, health or safety, etc.

    Punishment: Simple Imprisonment for 6 months or fine of Rs 1000 or both

    According to the First Schedule of the Criminal Procedure Code (CrPC), 1973, both offences are cognizable, bailable, and can be tried by any magistrate.

    Triable By: Any Magis­trate

     

  • [pib] National Supercomputing Mission (NSM)

    The Union Ministry of Science & Technology has informed about the progress of the National Supercomputing Mission.

    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.

    IWhat 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 (petaFLOPS).
    • Since November 2017, all of the world’s fastest 500 supercomputers run Linux-based operating systems.

    Why do we need supercomputers?

    • Developed and almost-developed countries have begun ensuring high investments in supercomputers to boost their economies and tackle new social problems.
    • These high-performance computers can simulate the real world, by processing massive amounts of data, making cars and planes safer, and more fuel-efficient and environment-friendly.
    • They also aid in the extraction of new sources of oil and gas, development of alternative energy sources, and advancement in medical sciences.
    • Supercomputers have also helped weather forecasters to accurately predict severe storms, enable better mitigation planning and warning systems.
    • They are also used by financial services, manufacturing and internet companies and infrastructure systems like water-supply networks, energy grids, and transportation.
    • Future applications of artificial intelligence (AI) also depend on supercomputing.
    • Due to the potential of this technology, countries like the US, China, France, Germany, Japan, and Russia have created national-level supercomputing strategies and are investing substantially in these programmes.

    When did India initiate its efforts to build supercomputers?

    • India’s supercomputer programme 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.

    What are the advantages of the National Supercomputing Mission?

    • The National Supercomputing Mission can ensure accessibility to supercomputers at an affordable rate to the scientific community and medium and small enterprises.
    • It can exponentially enhance the quality and quantity of R&D and higher education in the areas of science and technology.
    • It can solve the current and future challenges that are plaguing the country.
    • Currently, the world’s top supercomputers are mostly under the control of advanced nations like the US, Japan, China and the European Union. This Mission has the potential to bring India into this select league of such nations.
    • These supercomputers can be used in the areas of climate modelling, weather predictions, computational biology, atomic energy simulations, defence, disaster simulation, astrophysics etc.
    • These computers have played a crucial role in scientific and technological advancements in numerous fields.
    • Unlike other computers, these high-performance machines can crunch the most complex of data at a speed, which is millions of times faster than a desktop PC.
    • This mission, aiming to provide supercomputing facilities to about 60-70 institutions across the nation and thousands of active researchers, academicians, is moving fast towards creating a computer infrastructure within the country.
    • This mission can also enhance the country’s capacity to develop the next generation of supercomputer experts.

    How do other countries make use of supercomputers?

    China:

    • Jiangsu Province has a supercomputer called “Sunway TaihuLight”.
    • This supercomputer performs a wide range of tasks, including climate science, weather forecasting and earth-system modelling to help ships avoid rough seas, improve farmers’ yields and ensure the safety of offshore drilling.
    • TaihuLight has already led to an increase in profits and a reduction in expenses that justify its cost ($270 million).

    United States:

    • In the US, supercomputers are radically transforming the healthcare system.
    • The Centre for Disease Control (CDC) has used supercomputers to create a far more detailed model of the Hepatitis-C virus, a major cause of the liver disease that costs $9 billion in healthcare costs in the US alone.
    • Using supercomputers, the researchers have now developed a model that comprehensively simulates heart down to the cellular level and can lead to a substantial reduction in heart diseases.

    These are some of the very few cases of how supercomputers have enhanced breakthroughs in various fields.

    How do supercomputers help fight coronavirus?

    • Earlier, the US had established COVID-19 High-Performance Computing Consortium that will bring together industry, academic institutions, and federal laboratories to try to identify or create candidate compounds that might prevent or treat coronavirus infection.
    • One of the members of the consortium, the Oak Ridge National Laboratory, aimed to look into compounds that are already available in the market that might combat COVID-19.
    • For this purpose, the world’s fastest supercomputer “Summit” was used.
    • Like other viruses, the novel coronavirus uses a spike protein to inject cells.
    • Using Summit with an algorithm to investigate which drugs could bind to the protein and prevent the virus from doing its duty, the researchers have a list of 77 drugs that show promise.
    • Starting with 8,000 compounds, Summit has shortened the time of the experiment exponentially, ruling out the vast majority of possible medications before settling on 77 drugs, which are ranked based on how effective they are likely to be at halting the virus in the human body.

    Way forward

    • It is evident that supercomputers would become a vital part of our lives as it can provide solutions to the current and future problems and India, one of the most populous nations in the world, must ensure that it also has access to this technology for the welfare of its people.
    • Supercomputers, as they operate at such incredible speeds, will encounter numerous barriers like network and interconnectivity hardware that previous generations of designers did not have to deal with.
    • The cooling system is also one of the major design constraints.
    • Hence, India must give a high emphasis on innovation to tackle these challenges.
    • India must also give high emphasis to the application rather than the technology itself.
    • Supercomputing research also requires fundamental research of the next stages of computing like quantum computing that are still in the theoretical stage.
    • Bureaucratic red-tapism must be circumvented and scientists and researchers must be allowed to take bold and radical steps without fear of reprisal.
    • The government must also invest in necessary physical and digital infrastructure.
    • It must also address the challenges of:
    • Limited funding and delayed release of funds
    • The increasing need for imports for necessary hardware components to build supercomputers

    Conclusion:

    • Supercomputers are strategically important for India as it can help the country to become a knowledge-driven economy.
    • This technology also can support cutting edge research that can benefit the economy, society, businesses, environment, etc.
    • Thus, enhancing investments, improving flexibility for research and providing other necessary infrastructures must be ensured for it to grow.
    • Without this technology, India risks being surpassed on the global stage by other nations and will consequently miss the huge benefits that come from having this strategically important technology at the disposal of the country’s best and brightest minds

     

     

  • China and WHO a new story

    Context

    The WHO leadership, especially its Director-General, has been accused of serving China’s interests rather than preparing the world against the spread of the virus.

    What is the basis of accusations?

    • The first basis for these charges is the WHO’s endorsement of the Chinese claim in mid-January that there was no evidence of human-to-human transmission of the virus.
    • Second, consistent support for Beijing’s handling of the crisis.
    • Third, WHO’s criticism of other nations for imposing travel restrictions to and from China.
    • Critics also believe the WHO lulled the world into complacence by delaying the decision on calling it a global emergency.

    The new geopolitics of multilateralism

    • Whatever the merits of the above arguments, they point to the new geopolitics of multilateralism,
    • It also disproves the assumptions in both the West and India on China’s role in the UN.
    • It also underlines Beijing’s success in the leveraging of international organisations for its national advantage.
    • Nations working together against the trans-national threat: On the face of it, the sentiment that nations must work together against common trans-national threats is an eminently sensible one. But it does not easily translate into concrete actions.
    • Example of failure to act against a common threat: Take climate change. Attempts at developing collective solutions to the problem over the last three decades have foundered.
    • Most leaders agree on the problem and the solutions but are not willing to accept the framework — either the domestic or international — for distributing the costs associated with the solutions.
    • The US-China rivalry angle to the coronavirus outbreak: The problem of the cost-benefit distribution is compounded by great power rivalries. The coronavirus has shown up at a moment of deepening tensions between the US and China.
    • The grave collective challenge that the virus constitutes has only sharpened the conflict.
    • The blame game between the two: The US blames Beijing for letting this virus become a global monster and Beijing is doing all it can to deny that the virus came out of China.

    How the relationship between China and WHO has transformed over the years?

    • WHO’s actions in the past: Nearly two decades ago, during the SARS crisis, WHO was at the front and centre of pressing China to come clean on the unfolding pandemic.
    • In 2003, it had issued the organisation’s first travel advisory ever on travel to and from the epicentre of the pandemic in southern China.
    • As the SARS crisis escalated, Beijing’s traditional arguments about the centrality of state sovereignty yielded place to a new policy of working with the WHO and taking proactive steps to reassure neighbours in South East Asia.
    • Reasons for change in WHO’s stance: Some attribute the turnaround in the relationship between Beijing and WHO to China’s growing financial contributions.
    • China’s efforts to expand clout: Observers of the UN point to something more fundamental — a conscious and consequential Chinese effort to expand its clout in the multilateral system.
    • China, which was admitted to the UN system in the 1970s, was focused on finding its way in the 1980s, cautiously raised its profile in the 1990s, took on some political initiatives at the turn of the millennium and seized the leadership in the last few years.

    How India and the West are reacting to China’s rise?

    • Unprepared to deal with China’s rise at UN: Neither the West nor India have been prepared to deal with the impact of China’s rise on the UN system.
    • The US and its allies bet that China will be a “responsible stakeholder”. Put another way, they hoped that China will play by the rules set by the West.
    • China’s ambitions: China, of course, wants to set its own rules. Only the political innocents will be shocked by China’s natural ambition.
    • India’s past alignment with China: India, which considered US dominance over the international institutions in the 1990s as a major threat, chose to align with China in promoting a “multipolar world”.
    • Delhi convinced itself that despite differences over the boundary, Pakistan and other issues, there is huge room for cooperation with China.
    • Replacing the US as the dominant force: To their chagrin, the West and India are being compelled to respond to a very different environment at the UN. China wants to replace America as the dominant force in the UN.
    • The US is now fighting back. Last month, Washington went all out to defeat the Chinese candidate for the leadership of an obscure UN agency called the World Intellectual Property Organisation.

    Implications of China’s rise for India

    • Chinese hegemony vs. American primacy: Delhi discovered that Chinese global hegemony could be a lot more problematic than American primacy.
    • After all, it is China that complicates India’s plans for membership of the Nuclear Suppliers Group, protects Pakistan against international pressures on cross-border terrorism, and relentlessly pushes the UN Security Council to take up the Kashmir question.
    • India now turns to the US and its allies to pursue some of its interests in the UN.
    • Multilateralism not an end in itself: Political ironies apart, if there is one lesson that India could learn from China’s experience with WHO and the UN, it is that multilateralism is not an end in itself for major powers.
    • It is an important means to secure one’s national interest and shape the international environment.
    • As a nation battered by the Cultural Revolution, China used international cooperation and global institutions to rebuild itself in the last decades of the 20th century.
    • Ready to reorder global governance: Having developed its economy and advanced its scientific and technological base, China is now ready to reorder global governance and become a rule-maker.
    • The effects are visible in the arena of global health.
    • China’s expanding global engagement with the WHO, its substantive international health assistance programmes, and an impressive domestic health technology sector are poised to boost China’s ambition to build a “Global Silk Road for Health’.

    Conclusion

    On its part, Delhi needs to intensify the recalibration of India’s multilateralism, rewrite its diplomatic lexicon at the UN, and build new political coalitions that will simultaneously contribute to India’s internal modernisation and enhance its international influence. The corona crisis is a good moment to start writing a new script for India’s own health diplomacy.

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