Two BSF personnel recently got martyrdom who were part of the UN Peacekeeping Mission in the Democratic Republic of the Congo (DRC).
Why in news?
A total 175 Indian peacekeepers have so far died while serving with the United Nations.
India has lost more peacekeepers than any other UN Member State.
What is United Nations Peacekeeping?
UN Peacekeeping helps countries navigate the difficult path from conflict to peace.
UN peacekeepers are often referred to as Blue Berets or Blue Helmets because of their light blue berets or helmets) can include soldiers, police officers, and civilian personnel.
UNPKF in operation
Since 1948, UN Peacekeepers have undertaken 71 Field Missions.
There are approximately 81,820 personnel serving on 13 peace operations led by UNDPO, in four continents currently.
This represents a nine-fold increase since 1999.
A total of 119 countries have contributed military and police personnel to UN peacekeeping.
Currently, 72,930 of those serving are troops and military observers, and about 8,890 are police personnel.
India’s contribution to UN Peacekeeping
India has a long history of service in UN Peacekeeping, having contributed more personnel than any other country.
To date, more than 2,53,000 Indians have served in 49 of the 71 UN Peacekeeping missions established around the world since 1948.
Currently, there are around 5,500 troops and police from India who have been deployed to UN Peacekeeping missions, the fifth highest amongst troop-contributing countries.
India has also provided and continues to provide, eminent Force Commanders for UN Missions.
India is the fifth largest troop contributor (TCC) with 5,323 personnel deployed in 8 out of 13 active UN Peacekeeping Missions, of which 166 are police personnel.
History of India’s contribution
India’s contribution to UN Peacekeeping began with its participation in the UN operation in Korea in the 1950s.
This is where India’s mediatory role in resolving the stalemate over prisoners of war in Korea led to the signing of the armistice that ended the Korean War.
India chaired the five-member Neutral Nations Repatriation Commission, while the Indian Custodian Force supervised the process of interviews and repatriation that followed.
The UN entrusted the Indian armed forces with subsequent peace missions in the Middle East, Cyprus, and the Congo (since 1971, Zaire).
India also served as Chair of the three international commissions for supervision and control for Vietnam, Cambodia, and Laos established by the 1954 Geneva Accords on Indochina.
Role of women in Indian Peacekeeping
India has been sending women personnel on UN Peacekeeping Missions.
In 2007, India became the first country to deploy an all-women contingent to a UN Peacekeeping Mission.
The Formed Police Unit in Liberia provided 24-hour guard duty and conducted night patrols in the capital Monrovia, and helped to build the capacity of the Liberian police.
These women officers not only played a role in restoring security in the West African nation but also contributed to an increase in the number of women in Liberia’s security sector.
Medical care as part of India’s Missions
In addition to their security role, the members of the Indian Formed Police Unit also organized medical camps for Liberians, many of whom have limited access to health care services.
Medical care is among the many services Indian Peacekeepers provide to the communities in which they serve on behalf of the Organization.
They also perform specialized tasks such as veterinary support and engineering services.
India’s views on UN Peacekeeping
India is of the view that the international community must grasp the rapid changes that are underway in the nature and role of contemporary peacekeeping operations.
The Security Council’s mandates to UN Peacekeeping operations need to be rooted in ground realities, and co-related with the resources provided for the peacekeeping operation.
It is critical that troop and police contributing countries should be fully involved at all stages and in all aspects of mission planning.
There should be greater financial and human resources for peace-building in post-conflict societies, where UNPKOs have been mandated, according to officials.
In a recent address, the prime minister shared his anguish on what he called the “revdi” or the freebies culture.
Populist policies and its impact over the states’ finances
What are freebies? N K Singh defined freebies as “something that is given to you without having to pay for them, especially as a way of attracting your support for or interest in something.”
A recent report of the RBI on states’ finances highlighted the perilous condition of states’ finances and enhanced debt stress on account of flawed policies.
Nothing undercuts more irresponsibly India’s abiding international and national commitments than the perils of this reckless populism.
Factors that need to be considered in devising welfare policies
1] Quest for sustainable development
The initiatives undertaken at COP21 in Paris, the International Solar Alliance and subsequently at the COP26 in Glasgow represent India’s national consensus to forge a path of growth geared towards intergenerational equity and to exponentially increase development.
Our ability to adhere to this commitment depends on two other commitments.
1] An increase in the percentage of renewable energy in our energy consumption.
While subsidies are being promised in one form or the other by way of free electricity, the deteriorating health of state distribution companies seriously undercuts their financial viability.
Lowering the price for some consumers, offset through overcharging industrial and commercial contracts, reduces competitiveness, ushers slower growth both in incomes and employment.
2] The inability of discoms to actively encourage solar power is stymied by their financial condition and the inability to evolve tariff structures.
Regulatory capture, a fixation on unrealistic tariffs and cross-subsidy in energy utilisation prevent a credible coal plan, which is central to our energy planning.
2] Challenges in providing basic facilities
The government seeks to address the challenge of inequity by ensuring access to a wide range of basic facilities.
These include banking, electricity, housing, insurance, water and clean cooking fuel, to mention a few.
Removing this inequity to access helps boost the productivity of our population.
3] Issue of access
Benefits under various welfare schemes such as PM Awas Yojana, Swachh Bharat Mission and Jal Jeevan Mission have eliminated the biggest barrier for citizens — the exorbitant upfront cost of access.
Moreover, they are leading to irreversible empowerment and self-reliance.
For instance, a house built under the PM Awas Yojana is a lifelong asset for the beneficiary household that cannot be taken back by any government.
4] Use of technology in direct benefit transfer
Identification of beneficiaries through the SECC and prioritisation based on deprivation criteria has enabled the government to assist those who need it the most.
Governments that end up taking the shortcut of universal subsidies or freebies often end up ignoring the poor and transferring public resources to the affluent.
5] Expenditure prioritisation
The next issue that needs to be considered is of expenditure prioritisation being distorted away from growth-enhancing items, leading to intergenerational inequity.
Investors, both domestic and foreign, and credit rating agencies look to macro stability in terms of sustainable levels of debt and fiscal deficit.
After years of fiscal profligacy, we returned to the path of fiscal rectitude in 2014.
The last time such an effort was made was by enacting the first FRBM Act on August 26, 2003.
6] Impact on future of manufacturing and employment
The next factor that need to be considered is the debilitating effect of freebies on the future of manufacturing and employment.
Freebies lower the quality and competitiveness of the manufacturing sector by detracting from efficient and competitive infrastructure.
They stymie growth and, therefore, gainful employment because there is no substitute for growth if we wish to increase employment.
Conclusion
The poor state finance position should serve as a timely reminder to those promising fiscally imprudent and unsustainable subsidies.
The US House of Representatives has passed by voice vote a legislative amendment that approves waiver to India against the punitive CAATSA sanctions for its purchase of the S-400 missile defence system from Russia.
The amendment was authored and introduced by Indian-American Congressman Ro Khanna.
It had urged the Biden administration to use its authority to provide India with a CAATSA waiver to in the face of aggression from China.
What is the CAATSA?
CAATSA is a law that came into effect in the US in 2017, meant to punish countries having deep engagements with Russia, North Korea, and Iran using economic sanctions.
It said countries having a “significant transaction” with Russian intelligence and military agents will be subject to at least five kinds of sanctions.
Ordinary transactions will not invite sanctions, and the decision of who has sanctions imposed on them comes down to the interpretation of “significant transaction”.
This is one of the various waivers or exemptions mentioned, such as the transaction not affecting US strategic interests, not endangering the alliances it is a part of, etc.
Why did the US enact a law like CAATSA?
The US flagged issues of Russia’s alleged interference in the 2016 Presidential elections, and its role in the Syrian war as some of the reasons for punishing engagement with it.
EU countries that had even more significant ties with Russia for oil and gas supply before the Ukraine-Russia conflict in 2022, had also criticised CAATSA.
Countries facing sanctions
The US has placed sanctions on China and Turkey for purchase of the S-400.
The sanctions included denial of export licences, ban on foreign exchange transactions, blocking of all property and interests in property within the US jurisdiction and a visa ban.
Reasons behind exemption to India
CAATSA impacts Indo-US ties, and dents the image of the US as a reliable partner at a time when it is projecting India as a key player in its Indo-Pacific strategy.
US administration for countries like India has favoured relief, citing the “strategic opportunity” that India presents, and also the opportunity “to trade in arms with India”.
Indeed, the US defence industry sees India as a major market, over the last decade, deals with India have grown from near zero to $15 billion.
Both in term of the number and value of contracts, the US is way ahead of other major suppliers.
The CAATSA exemption also underlines the growing defence and security cooperation that has seen India sign a logistics pact with the US.
Also US designated India as a Major Defence Partner, and both countries coming together on Indo-Pacific strategy, the newly resurrected Quad.
It also marks an acceptance by the US of the point of principle that as a sovereign country, India cannot be dictated on its strategic interests by a third country.
Benefits to US by this waiver
This connection is centred on an eventual ‘payback’ to the US for lifting the spectre of CAATSA, looming over New Delhi since 2018.
India is procuring some 140-odd F/A-18s for both the Indian Navy and the Indian Air Force for around $30-35 billion.
Prospective F/A-18 sales would significantly boost the US economy, buffeted by unemployment and inflation running at 8.6%, its highest since 1981.
The waiver amendment also urged the US to do more to support India’s decision to reduce its reliance on Russian-made weapons.
Why did India sign the S-400 deal?
Security paradigm: S-400 is very important for India’s national security considerations due to the threats from China, Pakistan and now Afghanistan.
Air defence capability: The system will also offset the air defence capability gaps due to the IAF’s dwindling fighter squadron strength.
Russian legacy: Integrating the S-400 will be much easier as India has a large number of legacy Russian air defence systems.
Strategic autonomy: For both political as well as operational reasons, the deal is at a point of no return.
Way forward
The revision in bilateral ties is consistent with the prevailing strategic tone of bilateral ties.
Through associations like Quad and, more recently, I2U2, strategic linkages have also been strengthened.
India’s strategic interests require a shift away from Russians who are increasingly leaning over China.
Following its invasion of Ukraine, Russia’s reliance on China has grown dramatically, and this position is considered unlikely to change in the near future.
It is then apparent that GDP growth matters to the average Indian only if it can generate good quality jobs and incomes for them.
Background
Nobel laureate Simon Kuznets, who conceived of GDP as a measure of economic performance, never intended it to be the single-minded economic pursuit for a nation that it has now become, and warned repeatedly that it is not a measure of societal well-being.
Irrefutably, GDP is an elegant and simple metric that is a good indicator of economic progress which can be compared across nations.
But a compulsive chase for GDP growth at all costs can be counter-productive, since it is not a holistic but a misleading measure.
The excessive obsession over GDP growth by policymakers and politicians can be unhealthy and dangerous in a democracy.
If growth in GDP does not translate into equivalent economic prosperity for the average person, then in a one person-one vote democracy, exuberance over high GDP growth can backfire and trigger a backlash among the general public.
Global phenomenon: Sri Lanka’s mass uprising and people’s revolution can partly be explained through this prism of the structural break between headline GDP growth and economic prosperity for the people.
The U.S. today produces fewer new jobs for every percentage point of GDP growth than it did in the 1990s.
China produces one-third the number of new jobs today than it did in the 1990s for every percentage of its GDP growth.
Employment intensity of economic growth
Data of ‘employment in public and organised private sectors’ published by the Reserve Bank of India (RBI) shows that in the decade between 1980 and 1990, every one percentage point of GDP growth (nominal) generated roughly two lakh new jobs in the formal sector.
In the subsequent decade from 1990 to 2000, every one percentage point of GDP growth yielded roughly one lakh new formal sector jobs, half of the previous decade.
In the next decade between 2000 and 2010, one percentage point of GDP growth generated only 52,000 new jobs.
The RBI stopped publishing this data from 2011-12.
In essence, one percentage of GDP growth today yields less than one-fourth the number of good quality jobs that it did in the 1980s.
It is amply clear that the correlation between formal sector jobs and GDP growth has weakened considerably.
Implications of decline in GDP growth’s contribution to job creation
Irrelevant as a political measure: GDP growth may be an important economic measure, but it is becoming increasingly irrelevant as a political measure, since it impacts only a select few and not the vast majority.
Indicates changed nature of economic development: This divorce of GDP growth and jobs is both a reflection of the changed nature of contemporary economic development with emphasis on capital-driven efficiency at the cost of labour and GDP being an inadequate measure.
Political backlash: The perils of the obsession over GDP growth will be felt by politicians who have to answer voters on lack of jobs and incomes despite robust headline growth.
Voter disenchantment over the economy not working for them is already rife in many democracies across the world that have catalysed agitations and social disharmony.
Electoral outcomes in favour of extreme positions in mature democracies such as the U.S., the U.K., France and Germany in the last decade may partly be a reflection of voters’ sense of deception over economic gains.
Way forward
It is time for India’s political leaders to not be drawn into argument over GDP growth every quarter and instead clamour for an overhaul of India’s economic performance measurement framework to reflect what truly matters to the common person.
Conclusion
GDP growth has turned into a misleading and dangerous indicator that portrays false economic promises, betrays people’s aspirations and hides deeper social problems.
In the recent judgement the Supreme Court held that the National Company Law Tribunal (NCLT) cannot admit an insolvency application filed by a financial creditor merely because a financial debt exists and the corporate debtor has defaulted in its repayment.
Why the point of trigger is important in insolvency law
A critical element for any corporate insolvency law is the point of trigger.
The law must clearly provide the grounds on which an insolvency application against a corporate debtor should be admitted.
If there is any confusion at this stage, precious time could be wasted in litigation.
That would cause value destruction of the distressed business.
On the other hand, if the law is clear and litigation can be minimised, the distressed business could be resolved faster.
Its value could be preserved.
And all stakeholders collectively would benefit.
Evidently, objective legal criteria for admission are critical for an effective corporate insolvency law.
Determining insolvency and implications of the SC ruling
The balance-sheet test is one method for determining insolvency at the point of trigger.
This test, however, is vulnerable to the quality of accounting standards.
That’s why the Bankruptcy Law Reforms Committee did not favour this test in the Indian context.
Instead, it recommended that a filing creditor must only provide a record of the liability (debt), and evidence of default on payments by the corporate debtor.
This twin-test was expected to provide a clear and objective trigger for insolvency resolution.
The Supreme Court’s latest ruling is likely to radically alter these expectations.
Implications of the Supreme Court ruling
Resisting the admission by debtor: Now due to the Supreme Court ruling, even if the NCLT is satisfied that a financial debt exists and that the corporate debtor has defaulted, it may not admit the case for resolution if the corporate debtor resists admission on any other grounds.
Corporate debtors are likely to use this precedent to the fullest to resist admission into IBC.
Risk of value destruction due to delay: The likely outcome would be more litigation and delay at the admission stage, enhancing the risks of value destruction in the underlying distressed business.
Conclusion
In all fairness, the Supreme Court has been extremely pragmatic in its interpretation and application of the IBC. Even in the recent ruling, the court has rightly cautioned that the NCLT should not exercise its discretionary power in an arbitrary or capricious manner. Yet, this decision may have opened a Pandora’s box. Policymakers would be well-advised to take note before history starts repeating itself.
As terrestrial 5G mobile networks are being rolled out across countries, there is a renewed interest in integrating Non-Terrestrial Networks.
SatNets for 5G
Satellites and terrestrial networks have always been considered two independent ecosystems, and their standardisation efforts have proceeded independent of each other.
The primary non-terrestrial network that is being considered is the low latency Low Earth Orbit (LEO) satellite networks (SatNets), as a complement to terrestrial networks.
Towards this, Starlink, operated by the Elon Musk-owned SpaceX, and OneWeb, promoted by Bharti Global, have launched about 2,500 and 648 LEO satellites respectively at an altitude of about 1,200 km with the objective of promoting global broadband connectivity.
There are other players such as Reliance Jio in a joint venture with Luxembourg-based SES and Amazon’s Project Kuiper.
Benefits of using SatNets
1] Service continuity in emergency: service continuity to provide seamless transition between terrestrial networks and SatNets in case of public safety, disaster management and emergency situations;
2] Providing service in remote area: Service ubiquity to provide 5G services in unserved and underserved areas of the world, thereby bridging the digital divide;
3] Scalability: Service scalability that utilises the unique capabilities of SatNets in multicasting and broadcasting similar content over a large geographical area.
4] Service to in-motion user: The LEO SatNets can provide service not only to stationary but also to in-motion users.
5] Low latency over long distance: Wireless communications through LEO satellites over long distances is proven to be 1.47 times faster than communication over the same distance through terrestrial optic fibre. It is this advantage along with global coverage that provide a strong use case for LEO SatNets to complement terrestrial optic fibre networks.
SatNet in standardisation: In view of the above advantages, standard-setting organisations such as the Third Generation Partnership project (3GPP), comprising telcos and equipment manufacturers around the world, started integrating SatNets in the standardisation process.
Measures by the government
Realising the advantages, the Government, in its National Digital Communications Policy 2018, has indicated the development of an ecosystem for local manufacturing of satellite communication systems and promoting participation of private players for the strengthening of satellite communication infrastructure in the country.
Accordingly, the New Space India Limited (NSIL), a public sector enterprise, was established in 2019 to re-orient space activities from a ‘supply driven’ model to a ‘demand driven’ model, thereby ensuring optimum utilisation of the space assets.
The Department of Space also established in 2020 a new regulatory body named the Indian National Space Promotion and Authorisation Centre (IN-SPACe).
IN-SPACe is intended to provide a level playing field for private companies to use Indian space infrastructure.
Issues and challenges
Allocation of frequency: Issues will involve addressing issues around frequencies to be allocated for satellite broadband, the methodology of allocation, the relatively higher cost of consumer equipment and the placement and interconnections of SatNets with terrestrial public landline/ mobile networks at the ground stations
Cost: The other major challenge in LEO SatNets is the cost of user terminal and access charges to the end users.
A recent research analysing both Starlink and OneWeb concludes that the standalone LEO SatNets have a distinct cost advantage only if the density is less than 0.1 person per square km compared to terrestrial broadband networks.
Hence it is to the advantage of LEO SatNet providers to integrate their networks with terrestrial 5G networks to improve the cost economies.
Conclusion
All these, along with the proposed revisions to the Satellite Communications Policy of the Government, will provide the required fillip to LEO SatNets to become an integral part of the communication infrastructure of the country.
LEO satellites orbit between 2,000 and 200 kilometers above the earth. LEO satellites are commonly used for communications, military reconnaissance, spying and other imaging applications.
A low earth orbit (LEO) satellite is an object, generally a piece of electronic equipment, that circles around the earth at lower altitudes than geosynchronous satellites.
Satellites made for communications benefit from the lower signal propagation delay to LEO.
This lower propagation delay results in less latency.
Being closer to the earth has an obvious benefit for many types of earth observational satellites by resolving smaller subjects with greater detail.
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In the intro, mention that India’s long term growth prospects are embedded in public capital expenditure programs.
In the body mention that significant part in investment is in the form of public investment and as a result important driver of growth. In the next part mention that there is not significant change in the distribution as mentioned in the article.
Conclude by mentioning the need for balance between “directly productive investments” (in farms and factories) and infrastructure investments.
In the body, mention the use of nuclear threat by Russia during the Ukraine crisis.
In the body, mention factors that contributing to the need for rethink such as expansion and modernisation of nuclear arsenal by China, muscular approach to territorial dispute and reluctance of other countries in the Ukraine conflict due to the fear of nuclear armed adversary. In the suggestions mention review of the policy of minimum deterrence and no first use policy, development of more sophisticated nuclear warheads with the cooperation of the USA, reconsidering entrenched nuclear assumptions etc.
Conclude by mentioning that India needs to respond to the changes in global environment triggered by the rise of assertive China.
Surging inflation and sharp slowdowns in the United States and China prompted the IMF to cut its outlook for the global economy this year and next, while warning that the situation could get much worse.
By one common definition, the major global economies are on the cusp of a recession.
What is Recession?
A recession is a significant decline in economic activity that lasts for months or even years.
Experts declare a recession when a nation’s economy experiences negative GDP, rising levels of unemployment, falling retail sales, and contracting measures of income and manufacturing for an extended period of time.
Recessions are considered an unavoidable part of the business cycle—or the regular cadence of expansion and contraction that occurs in a nation’s economy.
What causes Recessions?
These phenomena are some of the main drivers of a recession:
A sudden economic shock: An economic shock is a surprise problem that creates serious financial damage. The coronavirus outbreak, which shut down economies worldwide, is a more recent example of a sudden economic shock.
Excessive debt: When individuals or businesses take on too much debt, the cost of servicing the debt can grow to the point where they can’t pay their bills. Growing debt defaults and bankruptcies then capsize the economy.
Asset bubbles: When investing decisions are driven by emotion, bad economic outcomes aren’t far behind. Investors can become too optimistic during a strong economy.
Too much inflation: Inflation is the steady, upward trend in prices over time. Inflation isn’t a bad thing per se, but excessive inflation is a dangerous phenomenon. Central banks control inflation by raising interest rates, and higher interest rates depress economic activity.
Too much deflation: While runaway inflation can create a recession, deflation can be even worse. Deflation is when prices decline over time, which causes wages to contract, which further depresses prices. When a deflationary feedback loop gets out of hand, people and business stop spending, which undermines the economy.
Technological change: New inventions increase productivity and help the economy over the long term, but there can be short-term periods of adjustment to technological breakthroughs. In the 19th century, there were waves of labour-saving technological improvements.
What’s the difference between Recession and Depression?
Recessions and depressions have similar causes, but the overall impact of a depression is much, much worse.
There are greater job losses, higher unemployment and steeper declines in GDP.
Most of all, a depression lasts longer—years, not months—and it takes more time for the economy to recover.
Economists do not have a set definition or fixed measurements to show what counts as a depression. Suffice to say, all the impacts of a depression are deeper and last longer.
In the past century, the US has faced just one depression: The Great Depression.
The Great Depression
The Great Depression started in 1929 and lasted through 1933, although the economy didn’t really recover until World War II, nearly a decade later.
During the Great Depression, unemployment rose to 25% and the GDP fell by 30%.
It was the most unprecedented economic collapse in modern US history.
By way of comparison, the Great Recession was the worst recession since the Great Depression.
During the Great Recession, unemployment peaked around 10% and the recession officially lasted from December 2007 to June 2009, about a year and a half.
Some economists fear that the coronavirus recession could morph into a depression, depending how long it lasts.
How long do recessions last?
Gulf War Recession (July 1990 to March 1991): At the start of the 1990s, the U.S. went through a short, eight-month recession, partly caused by spiking oil prices during the First Gulf War.
The Great Recession (2008-2009): As mentioned, the Great Recession was caused in part by a bubble in the real estate market.
Covid-19 Recession: The most recent recession began in February 2020 and lasted only two months, making it the shortest US recession in history.
Can we predict a recession?
Given that economic forecasting is uncertain, predicting future recessions is far from easy. However, the following warning signs can give you more time to figure out how to prepare for a recession before it happens:
An inverted yield curve: The yield curve is a graph that plots the market value—or the yield—of a range. When long-term yields are lower than short-term yields, it shows that investors are worried about a recession. This phenomenon is known as a yield curve inversion, and it has predicted past recessions.
Declines in consumer confidence: Consumer spending is the main driver of the US economy. If surveys show a sustained drop in consumer confidence, it could be a sign of impending trouble for the economy.
Drop in the Leading Economic Index (LEI): Published monthly by the Conference Board, the LEI strives to predict future economic trends. It looks at factors like applications for unemployment insurance, new orders for manufacturing and stock market performance.
Sudden stock market declines: A large, sudden decline in stock markets could be a sign of a recession coming on, since investors sell off parts and sometimes all of their holdings in anticipation of an economic slowdown.
Rising unemployment: It goes without saying that if people are losing their jobs, it’s a bad sign for the economy.
How does a recession affect individuals?
We may lose your job during a recession, as unemployment levels rise. It becomes much harder to find a job replacement since more people are out of work.
People who keep their jobs may see cuts to pay and benefits, and struggle to negotiate future pay raises.
Investments in stocks, bonds, real estate and other assets can lose money in a recession, reducing your savings and upsetting your plans for retirement.
Business owners make fewer sales during a recession, and may even be forced into bankruptcy.
With more people unable to pay their bills during a recession, lenders tighten standards for mortgages, car loans, and other types of financing.
India has severely criticized the reported move by both China and Pakistan for third-party participation in some projects on the China-Pakistan Economic Corridor (CPEC) that passes through Pakistan-occupied Kashmir (PoK).
China-Pakistan Economic Corridor (CPEC)
The CPEC, one of the most ambitious components of Beijing’s Belt and Road Initiative (BRI), was announced to great fanfare in 2015.
CPEC is a collection of infrastructure projects that are under construction throughout Pakistan beginning in 2013.
Originally valued at $47 billion, the value of CPEC projects is worth $62 billion as of 2020.
It is intended to rapidly upgrade Pakistan’s required infrastructure and strengthen its economy by the construction of modern transportation networks, numerous energy projects, and SEZs.
On 13 November 2016, CPEC became partly operational when Chinese cargo was transported overland to Gwadar Port for onward maritime shipment to Africa and West Asia.
Why CPEC?
CPEC has consistently been held up as a “gamechanger” for Pakistan’s economy.
But the road to completion has proved long and winding. Reports indicate that the pace of CPEC projects has been slowing down in Pakistan in recent years.
At the same time, China is the only country that is heavily investing in Pakistan.
Why in news?
The lack of progress has led to numerous reports about CPEC being at a near standstill in the country.
Gwadar, despite being the epicenter of multibillion-dollar projects, lacks basic necessities like reliable access to water and electricity, let alone other facilities.
The baloch freedom movement is another impediment to the stalled project.
There have been sporadic attacks in Gwadar and elsewhere in the province and the country to discourage Chinese investments in the province.
China is also seeking to deploy its Army in the CPEC projects, to which Pakistan has contested.
India’s reservation
The GoI, which shares tense relations with Pakistan, objects to the CPEC project as upgrade works to the Karakoram Highway are taking place in Gilgit-Baltistan.
This is the territory illicitly occupied by Pakistan in 1947-48.
During the visit of Indian PM Modi to China in 2015, the Indian FM, Sushma Swaraj reportedly told the Chinese.
India did not object to the Chinese construction of the Karakoram Highway which was built between 1959 and 1979.
Russia will pull out of the International Space Station (ISS) after 2024 and focus on building its own orbiting outpost.
Why in news?
Russia will end a symbolic two-decade orbital partnership between Moscow and the west.
International Space Station (ISS)
The ISS was launched in 1998 as part of joint efforts by the U.S., Russia, Japan, Canada and Europe.
The idea of a space station originated in the 1984 State of the Union address by former U.S. President Ronald Reagan.
The space station was assembled over many years, and it operates in low-earth orbit.
Since its inception, it has served as a laboratory suspended in space and has aided multiple scientific and technological developments.
The ISS was originally built to operate for 15 years.
Why was ISS launched?
A space station permits quantum leaps in research in science, communications, and in metals and lifesaving medicines which could be manufactured only in space.
ISS has consistently maintained human presence for the past 21 years, providing astronauts with sophisticated technologies for scientific research.
What is Russia’s role in maintaining the ISS?
The ISS is built with the cooperation of scientists from five international space agencies — NASA of the U.S., Roscosmos of Russia, JAXA of Japan, Canadian Space Agency and the European Space Agency.
Each agency has a role to play and a share in the upkeep of the ISS.
Both in terms of expense and effort, it is not a feat that a single country can support.
Russia’s part in the collaboration is the module responsible for making course corrections to the orbit of the ISS.
They also ferry astronauts to the ISS from the Earth and back.
Until SpaceX’s dragon spacecraft came into the picture the Russian spacecraft was the only way of reaching the ISS and returning.
India has added five more Ramsar sites, or wetlands of international importance, bringing the number of such sites in the country to 54.
Newly added Ramsar Sites
Karikili Bird Sanctuary, Pallikaranai Marsh Reserve Forest and Pichavaram Mangrove in Tamil Nadu,
Sakhya Sagar in Madhya Pradesh
Pala Wetlands in Mizoram
What are Wetlands?
A wetland is a distinct ecosystem that is flooded by water, either permanently or seasonally, where oxygen-free processes prevail.
The primary factor that distinguishes wetlands from other landforms or water bodies is the characteristic vegetation of aquatic plants, adapted to the unique hydric soil.
Significance of Wetlands
Wetlands provide a wide range of important resources and ecosystem services such as food, water, fibre, groundwater recharge, water purification, flood moderation, erosion control, and climate regulation.
They are, in fact, are a major source of water and our main supply of freshwater comes from an array of wetlands that help soak rainfall and recharge groundwater.
They provide many societal benefits: food and habitat for fish and wildlife, including threatened and endangered species; water quality improvement; flood storage; shoreline erosion control; economically beneficial natural products for human use; and opportunities for recreation, education, and research, etc.
India and Ramsar Wetlands
India’s Ramsar wetlands are spread over 11,000 sq.km — around 10% of the total wetland area in the country — across 18 States.
No other South Asian country has as many sites, though this has much to do with India’s geographical breadth and tropical diversity.
The UK (175) and Mexico (142) — smaller countries than India — have the most Ramsar sites, whereas Bolivia spans the largest area with 1,48,000 sq.km under the Convention protection.
The National Wetland Inventory and Assessment compiled by the ISRO estimates India’s wetlands to span around 1,52,600 square kilometres.
What makes Ramsar designation significant?
Being designated a Ramsar site does not necessarily invite extra international funds.
Acquiring this label helps with a locale’s tourism potential and its international visibility.
Criteria for Ramsar site designation
To be Ramsar site a place must meet at least one of the criteria as defined by the Ramsar Convention of 1961, such:
Supporting vulnerable, endangered, or critically endangered species or threatened ecological communities or,
If it regularly supports 20,000 or more waterbirds or,
Is an important source of food for fishes,
Spawning ground,
Nursery and/or migration path on which fish stocks are dependent upon.
Static or flowing, fresh, brackish or salt, including areas of marine water the depth of which at low tide does not exceed six metres
Does not include river channels, paddy fields, human-made water bodies/ tanks specifically constructed for drinking water purposes
Back2Basics: Ramsar Convention
The Convention on Wetlands of International Importance (better known as the Ramsar Convention) is an international agreement promoting the conservation and wise use of wetlands.
It is the only global treaty to focus on a single ecosystem.
The convention was adopted in the Iranian city of Ramsar in 1971 and came into force in 1975.
Traditionally viewed as a wasteland or breeding ground of disease, wetlands actually provide fresh water and food and serve as nature’s shock absorber.
Wetlands, critical for biodiversity, are disappearing rapidly, with recent estimates showing that 64% or more of the world’s wetlands have vanished since 1900.
Major changes in land use for agriculture and grazing, water diversion for dams and canals, and infrastructure development are considered to be some of the main causes of loss and degradation of wetlands.
The generation of unique disability IDs (UDIDs) had increased from an average of 5,000 a day to an average of 7,000 to 9,000 daily during the 90-day Azadi Se Antodaya Tak campaign.
Why such a move?
According to the 2011 Census, there were 2.68 crore people with disabilities.
What is Unique Disability IDs (UDIDs)?
“Unique ID for Persons with Disabilities” project is being implemented with a view of creating a National Database for PwDs, and to issue a Unique Disability Identity Card to each person with disabilities.
It functions under the Ministry of Social Justice and Empowerment.
The project aims only to encourage transparency, efficiency and ease of delivering the government benefits to the person with disabilities, and ensure uniformity.
The project will also help in stream-lining the tracking of physical and financial progress of beneficiary at all levels of hierarchy of implementation – from village level, block level, District level , State level and National level.
Types of disabilities covered
As per the Persons with Disabilities (Equal Opportunities, Protection of Rights & Full Participation) Act, 1995 – A person with a disability can be defined as one with one or more of disabilities falling under any of the below-mentioned categories :
Blindness
Leprosy-cured
Cerebral Palsy: It means a group of non-progressive conditions of a person characterized by abnormal motor control posture resulting from brain insult or injuries occurring in the pre-natal, peri-natal or infant period of development.
Low vision: It means a person with impairment of visual functioning even after treatment of standard refractive correction but who uses or is potentially capable of using vision for the planning or execution of a task with appropriate assistive device;
Locomotor disability: It means disability of the bones, joints or muscles leading to substantial restriction of the movement of the limbs or nay form of cerebral palsy;
Mental retardation: It means a conditions of arrested or incomplete development of mind of a person which is specially characterized by sub normality of intelligence;
Mental illness: It means any mental disorder other than Mental retardation
Hearing Impairment: It means loss of sixty decibels or more in the better ear in the conversational range of frequencies
Monkeypox was previously limited to the local spread in central and west Africa, close to tropical rainforests, but has recently been seen in various urban areas and now in more than 50 countries.
About monkeypox
A virus belonging to the poxviruses family causes a rare contagious rash illness known as monkeypox.
This zoonotic viral disease (a disease transmitted from animals to humans) has hosts that include rodents and primates.
It is a self-limiting disease with symptoms lasting two to four weeks and a case fatality rate of 3-6 per cent.
Symptoms: A skin rash on any part of the body could be the only presenting symptom.
Swollen lymph nodes are another distinguishing feature. Aside from these, other symptoms of a viral illness include fever, chills, headache, muscle or back aches, and weakness.
Mode of transmission: Touching skin lesions, bodily fluids, or clothing or linens that have been in contact with an infected person can result in transmission.
It’s also worth noting that monkeypox does not spread from person to person through everyday activities like walking next to or having a casual conversation with an infected person.
Treatment: Monkeypox is mostly treated by managing symptoms and preventing complications if it is diagnosed.
In the minor proportion who are immunocompromised, complications can occur; pulmonary failure was the most common complication with a high mortality rate.
Containment Measures
Because symptoms usually appear 5-21 days after exposure, people with rashes, sores in the mouth, rash, eye irritation or redness, or swollen lymph nodes should be monitored.
When symptoms appear, it is critical to isolate the infected from other people and pets, cover their lesions, and contact the nearest healthcare provider.
It is also critical to avoid close physical contact with others until instructed to do so by our healthcare provider.
It is preferable to use home isolation whenever possible.
Priority should be given to educating grassroots workers about symptoms, specimen collection, disease detection, acquiring sample collection equipment, and maintaining cold storage of specimens.
Increased surveillance and detection of monkeypox cases are critical for controlling the disease’s spread and understanding the changing epidemiology of this resurging disease.
Preventive health measures, such as avoiding infected animal or human contact and practising good hand hygiene, are the best option.
Vaccines and drugs
In the US, pre exposure vaccination with JYNNEOS® is available to healthcare workers and lab workers exposed to this group of poxviruses.
The smallpox vaccine is 85 percent effective against the disease.
Another vaccine, ACAM2000, is a live vaccinia virus vaccine that is otherwise recommended for smallpox immunisation and can also be used for high-risk individuals during monkeypox outbreaks.
In addition, Tecovirimat, an antiviral drug used to treat smallpox, is recommended for monkeypox.
Challenges: Smallpox vaccination programmes have been discontinued for the past 50 years, resulting in a scarcity of effective vaccines.
There are approved drugs and vaccines, but they are not widely available to scale up controlling monkeypox.
Why WHO declared it as international concern?
The increase in monkeypox cases in a short span of time in many countries necessitated the declaration of public health emergency of international concern (PHEIC) and additional research studies.
It is unclear whether the recent sudden outbreaks in multiple countries result from genotypic mutations that alter virus transmissibility. SARS-CoV-2 and monkeypox virus co-infection can alter infectivity patterns, severity, management, and response to vaccination against either or both diseases.
As a result, there is a need to improve diagnostic test efficiency.
Way forward
Plan for pandemic preparedness: This is not the last such difficulty we will face, as the world is still witnessing more such public health crises.
Zoonotic diseases are caused by various factors, including unchecked deforestation, climate coupled with a failure to prioritise public health, poverty, and climate change.
Instead, a robust plan for pandemic preparedness should be accelerated, guided by a single health agenda.
The world is yet to recognise emerging and re-emerging infectious diseases as a genuine threat.
The immediate priority is to strengthen the surveillance infrastructure, including hiring public health professionals and field workers who can participate in outbreak detection and response during many future PHEICs.
Conclusion
Without prioritising public health strengthening, the threat of new and re-emerging infectious diseases, as well as the enormous social and economic challenges that accompany them, is real and grave.
China is witnessing one of the most challenging economic crisis in its history.
The real estate market which accounts for nearly 30% of its GDP has come crashing down in the past 1 year.
Property sales plummeted by 72%, 1000s of people are protesting in 86 cities, and now there is a banking crisis where banks have started freezing the accounts of the Depositors.
In its heaviest crackdown on depositors, it has deployed tanks against the protesters.
And in spite of all this trouble, experts say that this is the just beginning of one of the worst economic crises that is followed in China!! The question is-
Chinese Evergrande Crisis: A backgrounder
What is Evergrande?
Evergrande is a Real Estate company which currently owns more than 1,300 projects in more than 280 cities across China.
The broader Evergrande Group now encompasses far more than just real estate development.
Its businesses range from wealth management, making electric cars and food and drink manufacturing.
It even owns one of country’s biggest football teams – Guangzhou FC.
What is the crisis?
Chinese property giant Evergrande, whose liabilities exceed $300bn (£228bn), failed to meet interest payments to international investors.
That prompted Fitch, an agency that rates companies’ financial risk, to declare Evergrande in default.
The crisis has spooked investors who fear contagion across China’s property and banking sectors.
Fitch, whose risk ratings are closely followed by major investors seeking to deploy billions of dollars, said it contacted Evergrande about the non-payment but received no response.
How did it land itself in trouble?
Evergrande expanded aggressively to become one of China’s biggest companies by borrowing more than $300bn.
Last year, Beijing brought in new rules to control the amount owed by big real estate developers.
The new measures led Evergrande to offer its properties at major discounts to ensure money was coming in to keep the business afloat.
Now, it is struggling to meet the interest payments on its debts.
This uncertainty has seen Evergrande’s share price tumble by almost 90% over the last year.
Why would it matter if Evergrande collapses?
There are several reasons why Evergrande’s problems are serious.
Loss of public money: Many people bought property from Evergrande even before building work began. They have paid deposits and could potentially lose that money if it goes bust.
Loss to investors: There are also the companies that do business with Evergrande. Firms including construction and design firms and materials suppliers are at risk of incurring major losses, which could force them into bankruptcy.
Economic impact on China
Huge dependence on a single company: Evergrande is an enormous company embedded across China’s financial system and economy, which relies heavily on the property for growth and jobs.
Credit crunch in theeconomy: If Evergrande defaults, banks and other lenders may be forced to lend less. This could lead to what is known as a credit crunch, when companies struggle to borrow money at affordable rates.
Withdrawal of foreign investments: Companies that can’t borrow find it difficult to grow, and in some cases are unable to continue operating. This may also unnerve foreign investors, who could see China as a less attractive place.
Snowball effect on debts: In theory, a collapse could chase investors away from other publicly traded developers, setting off a chain of defaults.
Rise in unemployment: A collapse could also undermine the economic activity and jobs created by Evergrande and its downstream suppliers.
Visible bankruptcy: Cash is so short the company this summer started paying some suppliers with unfinished apartments instead of money.
Why Chinese people are fuming over the streets?
Many investors have expressed concerns about the Chinese government’s lack of communication about its plans.
Continued absence of a clear message from Beijing is posing notable downside risk to growth.
Given wide use of property as collateral for loans to companies and local governments, a deep and widespread drop in prices, however unlikely, could threaten the financial system.
To head off further damage, the government faces the challenge of ensuring customers get the homes they bought.
What is China’s government doing to prevent a crisis?
The government of the province, where Evergrande is based, said that at the company’s request it would dispatch a working group to help Evergrande manage its risks and maintain normal operations.
China’s central bank said it supported the decision to step in and would cooperate, while banking and securities regulators said they would work together to maintain the health of the broader property market.
Chinese authorities had earlier asked local governments to prepare to step in—only at the last minute—if Evergrande fails to manage its affairs in an orderly fashion.
This approach signals Beijing’s reluctance to bail out the debt-saddled property developer while bracing to cushion any economic or social fallout.
What exactly went wrong with the Real estate market in China?
There were two immediate triggers that precipitated the crisis at Evergrande.
Chinese regulators, as part of a widespread crackdown on sectors such as the digital economy and education, kicked off probes into the high borrowings of property developers.
To counter that, Evergrande tried selling off some of its business.
But a progressive slowing down of China’s property market and tapering demand for new houses crimped cash flows.
These two factors combined to precipitate the cash crunch at Evergrande.
Three red lines In August 2020, in an effort to better manage the heavily leveraged sector, Chinese regulators introduced rules dubbed the “three red lines” to limit borrowing of real estate firms. The three red lines mandate that developers maintain: 1. A debt-to-asset ratio of 70% or lower, 2. A 100% cap on net debt to equity, 3. Enough cash on hand to satisfy short-term borrowing, debts, and liabilities.
Why is the world worrying?
A collapsing property market in China has triggered alarm bells across the world.
(1) Future of manufacturing
It is still the manufacturing hub of the world and if its economy falters, countries around the globe would suffer from slower and more expensive exports.
Contract electronics and semiconductor manufacturing, where China is a global leader, had already stalled various sectors such as auto, consumer electronics and more due to Covid-induced supply bottlenecks.
This would only go up further in an economic crisis.
(2) Future of BRI Projects
China is also the global creditor of the developing world. Developing countries dependent on China for infrastructure projects, would be hard-hit.
The Xi-government has sponsored numerous projects under the Belt and Road Initiative.
Currently, BRI projects are valued at over $1 trillion across 139 countries around the globe. These building sites, highways, power generation plants and so on could be left unfinished.
(3) Disburse of finances
China’s extended property boom that started in the mid-1990s has now ensured that nearly three quarters of the country’s household wealth is locked up in housing.
An impending collapse at the biggest real estate company could have a serious knock-on effect on the entire economy.
It could drag down growth and potentially setting off a cascading impact that could singe the global commodities and financial markets.
Impact on India
India’s buoyant iron ore exports, much of which is headed to China, could also see an impact if the twin crises in China triggers an extended slowdown in the Chinese real estate market.
In India’s stock markets, the metals segment, which has been surging since the start of the year and appeared to show signs of overheating.
Analysts view this more as a short-term correction, but there could be an extended impact if the crisis in China were to remain unresolved.
And there could potentially be a sustained impact on global growth prospects, dampening the nascent recovery that is underway in markets such as India.
Why global sentiments now are against China?
Aggressive expansion: In recent years, China has expanded its diplomatic and economic relationships through aggressive means.
Covertness of BRI: It has been positioning itself as a donor of much-needed public goods through it’s the Belt and Road Initiative.
As China’s influence has grown, so have the number of countries concerned with its:
Lack of economic reciprocity
Dominant technological policies
Coercive foreign policy practices, and
Regional military ambitions
In Asia, where strong economic ties with China are critical to development, Beijing has still managed to drum up resentment for its unyielding position on territorial claims in the South China Sea.
Criticism of Chinese policies, both at home and abroad, has revealed the grittier side of Beijing’s diplomacy.
The coronavirus has only further highlighted this dynamic.
Will China collapse?
What do incidences say?
Freezing of bank accounts: Some Chinese banks have responded by seizing purchasers’ savings deposits, claiming they are really ‘mortgage investment products.’
Putting tanks over protestors: This has sparked open protests outside some banks, leading to the government surrounding the banks with tanks.
However, there is not going to be a financial crash in China. Why?
That’s because the government controls the financial levers of power:
The central bank,
The big four state-owned commercial banks which are the largest banks in the world (who lends Pakistan always)
The so-called ‘bad banks,’ which absorb bad loans
Big asset managers
Hence we can say that China is too big to collapse.
How can China achieve this?
Ans. Socialistic Autocracy
The government can order the big four banks to exchange defaulted loans for equity stakes and forget them.
It can tell the central bank, the People’s Bank of China, to do whatever it takes.
It can tell state-owned asset managers and pension funds to buy shares and bonds to prop up prices and to fund companies.
It can tell the state bad banks to buy bad debt from commercial banks.
It can get local governments to take up the property projects to completion.
So a financial crisis is ruled out because the state controls the banking system.
What are the lessons India needs to learn from the Chinese economic Crisis?
What we need to learn from this Chinese crisis is that investment instruments driven by mindless social norms will often cost both the people and the economy heavily.
In this case the Chinese definition of a well-seeded person got a ton of debtpiled up for the Chinese people in spite of the sky high prices.
In our case in India the same thing happened with fixed deposits (FDs) because we outright considered FDs to be safe because of the social norm without understanding inflation.
Similarly the mindless purchase of gold is now hindering our economy so take a step back and assess whether your instruments are backed by calculated strategy or just mindless social norms.
The Indian real-estate sector has been stagnant.
If companies in the sector are to be believed, this has primarily been because of high interest rates. But what is basically holding back people are high home prices.
We need homes in a price range of ₹10-15 lakh for real estate to become a major contributor to economic growth, like it has been in the Chinese case.
India has completed five years under the GST regime.
How GST has performed so far
Before the GST, there were multiplicity of the Centre and state levies that masked the actual incidence of tax on products, the debilitating effects of the entry tax and the uncertainty of tax rates.
Today, in contrast, we have a single tax across the country combined with a stability in rates and a common technology platform in the form of a GSTN.
Record number of registrants: The ease of payments has improved over time with the technical glitches having been slowly sorted out, leading to a record number of GST registrants – increasing from 1.08 crore in April 2018 to 1.36 crore in 2022.
The revenue gains have been significant.
If we factor in the three-percentage point decline in the incidence of GST duty from 14.8 to 11.8 per cent as suggested by the RBI, the actual proportion in 2021-2022 would have been 7.4 per cent of the GDP (according to a recent article by Arvind Subramanian and Josh Felman).
What were the changes made to ensure the stricter compliance
The above improvement can be traced to stricter compliance flowing from three factors.
1] Input credit only after supplier uploads invoice: Denial of input credit to the buyer without the supplier uploading the invoice.
2] The introduction of e-invoicing.
3] Third the introduction of e-waybills for transporters for value exceeding Rs 50,000 per consignment.
Greater coordination between CBIC and CBDT: Another factor is greater coordination between the Central Board of Excise and Customs (CBIC) and Central Board of Direct Taxes (CBDT) in compliance verification.
Changes needed
1] Provisions for unregistered GST suppliers: The micro, small and medium enterprises (MSME) sector has been affected by the GST reforms because the large units have been reluctant to buy from them in the absence of input duty credit.
An important measure here would be to amend the law to provide that all units buying from unregistered GST suppliers would have to pay duty on a reverse charge basis.
2] Rate rationalisation: While the revenue gains have come through better compliance, the next surge in GST revenues will have to come from an increase in the average incidence of GST duties.
This will require a combination of measures — phasing out of exemptions, raising of the merit rate from the present level of 5 per cent and merging the 12 per cent rate with the standard rate, whether to 16 per cent or 18 per cent.
3] Inclusion of fuels and real estate: Including natural gas/ATF under GST should be considered.
Further reforms in the factor markets — land, real estate and energy — would require their inclusion in the GST.
This is essential because while the economic reforms of the 1990s restructured the product market, the factor market reforms were incomplete.
4] Creation of federal institution: We need to create another institution in the form of a GST state secretariat that can bring together senior officers from the Centre and states in an institutional forum registered under the Society Act.
This forum could also provide a common point of contact for trade and industry to redress the grievances on non-policy matters.
Conclusion
As GST enters its sixth year journey, the changes suggested above will fine tune it to propel India towards $5 trillion economy.
