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

A disease surveillance system, for the future

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Integrated disease surveillance project

Mains level : Paper 2- Disease surveillance

Context

A well-functioning system can reduce the impact of diseases and outbreaks.

Importance of disease surveillance system

  • Successful tackling of cholera in 1854 in London by use of the health statistics and death registration data from the General Registrar Office (GRO) started the beginning of a new era in epidemiology.
  • Importance of data: The application of principles of epidemiology is possible through systematic collection and timely analysis, and dissemination of data on the diseases.
  • This is to initiate action to either prevent or stop further spread, a process termed as disease surveillance.
  • Subsequently, the high-income countries invested in disease surveillance systems but low- and middle-income countries used limited resources for medical care.
  • Then, in the second half of the Twentieth century, as part of the global efforts for smallpox eradication and then to tackle many emerging and re-emerging diseases, many countries recognised the importance and started to invest in and strengthen the diseases surveillance system.
  • These efforts received a further boost with the emergence of Avian flu in 1997 and the Severe Acute Respiratory Syndrome (SARS) outbreak in 2002-04.

Surveillance in India

  • The Government of India launched the National Surveillance Programme for Communicable Diseases in 1997.
  • However, this initiative remained rudimentary.
  • In wake of the SARS outbreak, in 2004, India launched the Integrated Disease Surveillance Project (IDSP).
  • The focus under the IDSP was to increase government funding for disease surveillance, strengthen laboratory capacity, train the health workforce and have at least one trained epidemiologist in every district of India.

Issues with surveillance: Interstate variation

  • Variation among states: The disease surveillance system and health data recording and reporting systems are key tools in epidemiology.
  • In the fourth round of serosurvey, Kerala and Maharashtra States could identify one in every six and 12 infections, respectively; while in States such as Madhya Pradesh, Uttar Pradesh and Bihar, only one in every 100 COVID-19 infections could be detected.
  • This points towards a weak disease surveillance system.
  • In a well-functioning disease surveillance system, an increase in cases of any illness would be identified very quickly.
  • While Kerala is picking the maximum COVID-19 cases; it could pick the first case of the Nipah virus in early September 2021. 
  • On the contrary, cases of dengue, malaria, leptospirosis and scrub typhus received attention only when more than three dozen deaths were reported and health facilities in multiple districts of Uttar Pradesh, began to be overwhelmed.

Way forward

  • A review of the IDSP in 2015, conducted jointly by the Ministry of Health and Family Welfare, the Government of India and World Health Organization India had made a few concrete recommendations to strengthen disease surveillance systems.
  • These included increasing financial resource allocation, ensuring an adequate number of trained human resources, strengthening laboratories, and zoonosis, influenza and vaccine-preventable diseases surveillance.
  • Increase allocation: The government resources allocated to preventive and promotive health services and disease surveillance need to be increased by the Union and State governments.
  • Trained workforce: The workforce in the primary healthcare system in both rural and urban areas needs to be retrained in disease surveillance and public health actions.
  • The vacancies of surveillance staff at all levels need to be urgently filled in.
  • Capacity increase: The laboratory capacity for COVID-19 needs to be planned and repurposed to increase the ability to conduct testing for other public health challenges and infections.
  • The interconnectedness of human and animal health: The emerging outbreaks of zoonotic diseases, be it the Nipah virus in Kerala or avian flu in other States as well as scrub typhus in Uttar Pradesh, are a reminder of the interconnectedness of human and animal health.
  • The ‘One Health’ approach has to be promoted beyond policy discourses and made functional on the ground.
  • Strengthening registration system: There has to be a dedicated focus on strengthening the civil registration and vital statistics (CRVS) systems and medical certification of cause of death (MCCD).
  • Coordination: It is also time to ensure coordinated actions between the State government and municipal corporation to develop joint action plans and assume responsibility for public health and disease surveillance.
  • The allocation made by the 15th Finance Commission to corporations for health should be used to activate this process.

Consider the question “Examine the measure for disease surveillance in India? How it can help reduce the impact of the diseases?”

Conclusion

We cannot prevent every single outbreak but with a well-functioning disease surveillance system and with the application of principles of epidemiology, we can reduce their impact.

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A flawed calculation of inflation

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Weightage of Services in WPI and CPI

Mains level : Paper 3- Issues with inflation data

Context

Inflation for the last four months has been worryingly high. This is happening at a time when demand has been down, unemployment has been high, many have lost incomes and poverty has aggravated.

Issues with the recent inflation data

  • The shock of lockdowns not only made data collection difficult but the consumption basket for calculating CPI should have been changed.
  • Issue with the base: In April and May 2020, data on production and prices could not be collected due to the strict lockdown.
  • As such, the official inflation figures for these months in 2021 do not reflect the true picture.
  • For calculating inflation, a single number is arrived at by assigning weights to different commodities and services.
  • Issue due to different consumption baskets: For WPI, the weights in production are used; for CPI, the consumption basket is used.
  • The consumption basket is vastly different for the poor, the middle classes, and the rich.
  • Hence, the CPI is different for each of these classes and a composite index requires averaging the baskets.
  • So, in a sense, it represents none of the categories.
  • Changed consumption pattern: During lockdown and unlock in 2020, people largely consumed essentials.
  •  RBI data show that consumer confidence fell drastically from 105 in January 2020 to 55.5 by January 2021.
  • While the consumption pattern of the well-off sections may have changed little, the poor and middle classes, especially those who lost jobs and incomes, would have had to cut back on their consumption.
  • Thus, the weights in the CPI would have changed and inflation required recalculation, but this has not been done.
  • Under-representation of services: Inflation data under-represents services in the consumption basket.
  • In production, services are about 55% of the GDP but have no representation in WPI and about 40% in CPI.
  • Increased health and education cost not captured: Health costs and education costs shot up during the pandemic, but this is not captured in inflation figures.
  • Many services were not used. Eating out and travel, for instance, should have been factored out.

Impact of the inflation

  • If the income does not increase in proportion to inflation, for the middle classes, both consumption of less essential items and savings get reduced.
  • But the poor, who hardly save, have to curtail essential consumption.
  • Decline in demand: In India, 94% work in the unorganised sector and mostly earn low incomes and have little savings.
  • By definition, they cannot bargain for higher incomes as prices rise, further, due to lockdowns, the wages of many declined, both in the unorganised and organised sectors.
  • Consequently, demand has declined not only for non-essentials but even for essentials.
  • Impact on employment generation: In a vicious cycle, this is slowing down economic recovery and employment generation.
  •  Further, this impacts the government’s revenues and tends to increase the budgetary deficit.
  • This puts pressure on the government to cut back budgetary expenditures, especially on the social sector.
  • That aggravates poverty and reduces demand further.

Factors leading to inflation

  • Tax on fuels: Increase in tax on fuel push up the prices of all goods and services.
  • This is an indirect tax, it is regressive and impacts the poor disproportionately more.
  • It also makes the RBI’s task of controlling inflation difficult.
  • Supply bottlenecks: The lockdowns disrupted supplies and that added to shortages and price rise.
  • Prices of medicines and medical equipment rose dramatically.
  • Prices of items of day-to-day consumption also rose.
  • International factors: Most major economies have recovered and demand for inputs has increased while supplies have remained disrupted (like chips for automobiles).

Consider the question “What are the issues with measurement of inflation data in India? How inflation in times of low demand and reduced incomes leads to a vicious cycle?”

Conclusion

The current official inflation rate does not correctly measure price rise since the lockdown administered a shock to the economy. The method of calculating it needed modification.

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Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

Changing the agri exports basket

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Generalised System of Preference

Mains level : Paper 3- Agri-exports

Context

The Indian government has been encouraging agricultural exports to meet an ambitious target of $60bn by 2022.

India’s agri-exports

  • The Ministry of Food Processing Industries shows that the contribution of agricultural and processed food products in India’s total exports is 11%.
  • Primary processed agricultural commodities form the majority share.
  • India’s export earnings will increase by focusing more on value-added processed food products rather than primary processed agricultural commodities (Siraj Hussain, 2021).
  • From 2015-16 to 2019-20, the value of agricultural and processed food increased significantly from $17.8bn to $20.65bn.
  • The Indian agricultural economy is shifting from primary to secondary agriculture where the focus is more on developing various processed foods.

Changes in India’s agricultural export basket

  • Traditionally, Basmati rice is one of the top export commodities.
  • However, now there is an unusual spike in the export of non-basmati rice.
  • In 2020-21, India exported 13.09 million tonnes of non-basmati rice ($4.8bn), up from an average 6.9 million tonnes ($2.7bn) in the previous five years.
  • Indian buffalo meat is seeing a strong demand in international markets due to its lean character and near organic nature.
  • The export potential of buffalo meat is tremendous, especially in countries like Vietnam, Hong Kong and Indonesia.

Challenges in Increasing agri-export

  • Lack of comparative advantage: The export of processed food products has not been growing fast enough because India lacks comparative advantage in many items.
  •  Domestic prices of processed food products are much higher compared to the world reference prices.
  • Non-tariff measures: The exporters of processed food confront difficulties and non-tariff measures imposed by other countries on Indian exports (Siraj Hussain, 2021).
  • Some of these include mandatory pre-shipment examination by the Export Inspection Agency being lengthy and costly.
  • Compulsory spice board certification being needed even for ready-to-eat products.
  • Lack of strategic planning of exports by most State governments.
  • Lack of a predictable and consistent agricultural policy discouraging investments by the private sector.
  • Prohibition of import of meat- and dairy based-products in most of the developed countries.
  • Withdrawal of the Generalised System of Preference by the U.S. for import of processed food from India.

Consider the question “What are the challenges facing export of processed foods from India? Suggest the way forward.”

Way forward

  • The main objective of the Agriculture Export Policy is to diversify and expand the export basket so that the export of higher value items, including perishables and processed food, be increased
  • Support to industry: The policy needs to nurture food processing companies, ensuring low cost of production and global food quality standards, and creating a supportive environment to promote export of processed food.
  • Focus on reputed brands: Reputed Indian brands should be encouraged to export processed foods globally as they can comply with the global standard of codex.
  • Indian companies should focus on cost competitiveness, global food quality standards, technology, and tap the global processed food export market.

Conclusion

India has competitive advantages in various agricultural commodities which can be passed onto processed foods. It has the potential to become a global leader in the food processing sector.

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Higher Education – RUSA, NIRF, HEFA, etc.

Empathy through education

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2-SEL

Context

While the National Education Policy (2020) notes numeracy and literacy as its central aims, Social and Emotional Learning should be an equally important goal as it supports skills such as communication, collaboration, critical thinking and creativity.

What is social and emotional learning (SEL)?

  • SEL is the process of learning to recognise and manage emotions and navigate social situations effectively.
  • SEL is foundational for human development, building healthy relationships, having self and social awareness, solving problems, making responsible decisions, and academic learning.
  • Neurobiologically, various brain regions such as the prefrontal and frontal cortices, amygdala, and superior temporal sulcus are involved in the cognitive mechanisms of SEL.
  • Brain systems that are responsible for basic human behaviour, such as getting hungry, may be reused for complex mechanisms involved in SEL.
  • Despite its importance to life, SEL is often added as a chapter in a larger curriculum rather than being integrated in it.
  • The pandemic has brought unprecedented challenges for SEL as school closures reduced opportunities for students to deepen social relationships and learn collaboratively in shared physical spaces.
  • Even with parental involvement, the challenge of an inadequate support system for SEL remains.

Way forward

  • Perhaps we can contextually adapt best practices from existing models.
  • A starting point would be to consider insights from the Indian SEL framework:
  • One, the application of SEL practices should be based on students’ socioeconomic backgrounds.
  • Two, SEL strategies of caretakers and educators must align with one another.
  • Three, long-term success requires SEL to be based on scientific evidence.

Conclusion

As a sustainable development goal outlines, policymakers now have to ensure that future changes prioritise “inclusive and equitable quality education and promote lifelong learning opportunities for all.” Importantly, the onus lies on all of us to make individual contributions that will drive systemic change.

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Foreign Policy Watch: India-China

Hardly the India-China century

Note4Students

From UPSC perspective, the following things are important :

Prelims level : New Development Bank

Mains level : Paper 2- India-China relations

Context

Deng Xiaoping had told then-Indian Prime Minister Rajiv Gandhi in 1988 that the 21st century would be “India and China’s century”, the current Chinese leadership has no patience for such pablum. They believe — indeed believe they know — that it is destined to be China’s century alone.

The policy of side-stepping contentious issues and encouraging bilateral economic relations

  • There have always been political tensions, both over each country’s territorial claims over land controlled by the other, and China’s alliance with Pakistan, and India’s hospitality to the Dalai Lama.
  • But neither country had allowed these tensions to overwhelm them:
  • China had declared that the border dispute could be left to “future generations” to resolve.
  • India had endorsed the “One China” policy, refusing to support Tibetan secessionism while limiting official reverence for the Dalai Lama to his status as a spiritual leader.
  • India actions and statements have usually been designed not to provoke, but to relegate the border problem to the back burner while enabling trade relations with China (now worth close to $100 billion) to flourish.
  • India made it clear that it was unwilling to join in any United States-led “containment” of China.
  • From negligible levels till 1991, trade with China had grown to become one of India’s largest trading relationships. 
  • India engages with China diplomatically in the BRICS  as well as conducting annual summits of RIC (Russia-India-China).
  • India is an enthusiastic partner in the Chinese-led Asian Infrastructure Investment Bank and the New Development Bank (NDB).
  • However, it has become increasingly apparent that the policy of side-stepping contentious issues and encouraging bilateral economic relations has played into Chinese hands.

Chinese strategy in Galwan

  • In the Galwan clash, the Chinese troops seem to have been engaged in a tactical move to advance their positions along areas of the LAC that it covets, in order to threaten Indian positions and interdict patrols.
  • They are threatening India’s construction of roads, bridges and similar infrastructure on undisputed Indian territory, a belated effort to mirror similar Chinese efforts near the LAC in Tibet.
  • They have established a fixed presence in these areas well beyond China’s own ‘Claim Line’.
  • The objective seems to be to extend Chinese troop presence to the intersection of the Galwan river and the Shyok river, which would make the Galwan Valley off bounds to India.
  • The Chinese have constructed permanent structures in the area of their intrusion and issued statements claiming that sovereignty over the Galwan valley has “always belonged” to China.
  • Consolidation of LOC: China’s strategy seems to be to consolidate the LAC where it wants it, so that an eventual border settlement — that takes these new realities into account — will be in its favour.
  • Implications for India:  In the meantime, border incidents keep the Indians off-balance and demonstrate to the world that India is not capable of challenging China, let alone offering security to other nations.

India’s options

  • India has reinforced its military assets on the LAC to prevent deeper incursions for now.
  • And hopes to press the Chinese to restore the status quo ante through either diplomatic or military means.
  • Chinese and Indian officials are currently engaged in diplomatic and military-to-military dialogue to ease tensions, but de-escalation has been stalled for months.
  • Economic options: India has responded with largely symbolic acts of economic retaliation.
  • India has also reimposed tighter limits on Chinese investment in projects such as railways, motorways, public-sector construction projects, and telecoms.

Limits to India’s economic retaliation

  • India is far too dependent on China for vital imports — such as pharmaceuticals, and even the active ingredients to make them, automotive parts and microchips that many fear it will harm India if it acted too strongly against China.
  • Imports from China have become indispensable for India’s exports to the rest of the world.
  • Various manufacturing inputs, industrial equipment and components, and even some technological know-how come from China; eliminating them could have a seriously negative effect on India’s economic growth.
  • And there are limits to the effectiveness of any Indian retaliation: trade with China may seem substantial from an Indian perspective, but it only represents 3% of China’s exports.
  • Drastically reducing it would not be enough to deter Beijing or cause it to change its behaviour.

Consider the question “State of India-China relationship hardly indicate the 21st Century being the “India and China’s century”. In light of this, examine the factors responsible for this and suggest the way forward for India.”

Conclusion

This range of considerations seems to leave only two strategic options. Playing second fiddle to an assertive China or aligning itself with a broader international coalition against Chinese ambitions. Since the first is indigestible for any democracy, is China de facto pushing India into doing something it has always resisted — allying with the West?

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Foreign Policy Watch: India-Australia

India-Australia relations

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Malabar naval exercise

Mains level : Paper 2- India-Australia relations

Context

A few days ago, India’s Defence Minister and External Affairs Minister held the inaugural ‘2+2’ talks with their Australian counterparts.

Transforming relations between India-Australia

  • Both are vibrant democracies which have respect for international laws and a belief in the equality of all nations irrespective of their size and strength.
  • Both draw their congruence from a rule-based international order, believe in inclusive economic integration in the Indo-Pacific region, and face challenges from a belligerent China.
  • Prime Minister Narendra Modi and Australian Prime Minister Scott Morrison elevated their bilateral strategic partnership to a Comprehensive Strategic Partnership in June 2020.
  • Growing convergence on issues: There is a growing convergence of views on geo-strategic and geo-economic issues.
  • The convergence is backed by a robust people-to-people connection.
  • Both countries have stepped up collaborations through institutions and organisations on many issues in bilateral, trilateral, plurilateral and multilateral formats.
  • Bilateral security cooperation: Given their common security challenges and in order to enhance regional security architecture, both countries have intensified bilateral security cooperation.
  • Further, elevation of their ‘2+2’ Foreign and Defence Secretaries’ Dialogue to the ministerial level emphasises the positive trajectory of their transforming relations.
  • They have also stepped up security dialogue with key partner-countries to deepen coordination in areas where security interests are mutual.
  • The Malabar naval exercise by the Quad (Australia, India, Japan, the U.S.) is a step in this direction.
  • Partnership with like-minded countries:  Beyond bilateralism, both countries are also entering into partnerships with like-minded countries, including Indonesia, Japan and France, in a trilateral framework.
  • Trade ties: Trading between India and Australia has seen remarkable growth in recent years.
  • Two-way trade between them was valued at $24.4 billion in 2020. 
  • Trade is rapidly growing and encompasses agribusiness, infrastructure, healthcare, energy and mining, education, artificial intelligence, big data and fintech.
  • An early harvest agreement by December will pave the way for an early conclusion of a bilateral Comprehensive Economic Cooperation Agreement between both countries.

Issues in deeper economic integration

  • High tariff on agri products in India: India has a high tariff for agriculture and dairy products which makes it difficult for Australian exporters to export these items to India.
  • Non-tariff barrier in Australia: At the same time, India faces non-tariff barriers and its skilled professionals in the Australian labour market face discrimination.

Consider the question “A growing convergence of views on geo-strategic and geo-economic issues between Indian and Australia makes it imperative to forge a partnership guided by principles with a humane approach. Comment.” 

Conclusion

The Quad has gained momentum in recent months. The time is ripe for these countries to deliberate on a ‘Quad+’ framework. The geo-political and geo-economic churning in international affairs makes it imperative for India and Australia to forge a partnership guided by principles with a humane approach.

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Financial Inclusion in India and Its Challenges

Financial inclusion

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 3- Challenges in financial inclusion

Context

There are 63.4 million MSMEs in India and 99 per cent of which are micro-enterprises with less than Rs 10 lakh in investment. Financial inclusion and integration is key to bring these businesses into the formal economy.

Financial integration

  • What is Financial inclusion? On the front of “financial inclusion”, which refers to the accessibility of banking and availability of credit, we have made significant progress.
  • Financial integration:  The journey from inclusion to integration is not only about making products available and accessible, but also about making them relevant, applicable, and acceptable.

Demand size challenges

1) Gap between demand and supply of capital

  • Due to a limited risk appetite, low or thin-file data on customers and challenging regulatory oversight, capital remains a constraint in designing bespoke products.
  • Way forward: For India to overcome these challenges, the existing infrastructure must be adapted to our new purpose, providing easy-to-use, customer-centric experiences.

2) Accessibility

  •  Greater accessibility has major benefits for not only the customer but also the supplier.
  • For example, in rural India, people tend to save in the post office, because of village postal agents collect their savings from their doorstep.

3) Intelligent product design and delivery

  • Products must be designed and delivered intelligently to meet the customer where they are, and by keeping in mind that they use products to reach their goals.
  • This involves tailoring the products to the needs and income profile of the customer, including being cognisant of their environment, geography, and demography.

4) Lowering the operating costs

  • In the traditional financial system, the design and distribution cost on financial products at sachet size is high.
  • Financial service providers are consequently dissuaded from attempting to reach rural, financially excluded groups.
  • By using the power of machine learning and cloud infrastructure, we can significantly lower operating costs while offering customers affordable, bespoke financial products.

5) Demand-side issues: Financial literacy and technology readiness

  • Financial literacy and technology readiness are two critical issues on the demand size.
  • Financial education assists people in making sound financial decisions.

Consider the question “Benefits of the financial inclusion remain unrealised without financial integration. In light of this, examine the challenge in financial integration in India and suggest the way forward” 

Conclusion

It is our responsibility to create an ecosystem for them to deploy this capital of courage.

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PPP Investment Models: HAM, Swiss Challenge, Kelkar Committee

Decoding asset monetisation

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NMP

Mains level : Paper 3- How NMP is different from PPP

Context

The National Monetisation Pipeline (NMP), a bold initiative was recently announced by the Finance Minister.

 PPP model and issues with it

  • BOT: The PPP was about attracting private parties to build, operate and then transfer ‘greenfield’ or new infrastructure projects under build-operate-transfer (BOT) concession agreements.
  • More risks for the private sector: The winning private bidder had to take not only the operating risk, but also the development and construction risk of the project, such as a toll road, from scratch.
  • Why it was prone to delays?:  It involved the acquisition of land. This process became controversial and was subject to delay.
  • It involved securing environmental and other regulatory approvals. These proved challenging to obtain.
  • Undermining the trust: Compliance with these became a source of friction between the concessioning authority and the concessionaire.
  • All this undermined trust between the public and private parties and led to a huge volume of disputes for which there was no readily available resolution mechanism.

How NMP is different from PPP?

  • Brownfield assets: The NMP is about leasing out ‘brownfield’ infrastructure assets such as an already operating inter-State toll highway under a toll-operate-transfer (TOT) concession agreement.
  • No land acquisition: In such an arrangement no acquisition of land is involved.
  • No construction risk: Nor does the concessionaire need to take any of the construction risk.
  • It is also certain to attract a different class of private capital.
  • To be successful in the BOT bids required a proven ability to navigate and manage the system.
  • Under the NMP, what will be required is operational experience in running a particular class of infrastructure assets and a strong understanding of the potential cash flows generated over the life of the concession.
  • This is certain to attract the largest global pension funds.

Way forward

  • Allow flexibility: Given the long tenure of these concession agreements, they must be designed to allow for some flexibility so that each party has the opportunity to deal with unforeseen circumstances (such as climate-related disasters).
  • Performance standards: Contracts must also incorporate clear key performance indicators expected of the private party and clear benchmarks for assets as they are handed over by the government at the start of the concession.
  • Ensure effective implementation: No matter how well a contract is crafted, it still needs to be implemented effectively.
  • No opacity in concessional agreements: Experience shows that there is a tendency for government departments to inject opacity so that they have more power over the concessionaire.
  • To avoid this, it would be useful if the responsibility for administering the concession agreements did not lie directly with the line ministries and/or their agencies.
  • Dispute resolution mechanism: It is vital to put in place a robust dispute resolution mechanism.
  • Institute for contracts: There is a strong case to set up a centralised institution with the skills and responsibility to oversee contract design, bidding and implementation.
  • An institution such as ‘3 PPP India’, first mooted in the 2014 Budget, is needed.
  • Set up tribunal: It would also be advisable to set up an Infrastructure PPP Adjudication Tribunal along the lines of what was recommended by the Kelkar Committee (2015).
  • Start with predictable sectors: The government could start with sectors that offer the greatest cash flow predictability and the least regulatory uncertainty before expanding the experiment.

Conclusion

The NMP significantly differs from the PPP model and seeks to avoid its shortcomings through various changes.

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Textile Sector – Cotton, Jute, Wool, Silk, Handloom, etc.

Catching up on PLI scheme for textile sector

Note4Students

From UPSC perspective, the following things are important :

Prelims level : MMF vs natural fibre

Mains level : Paper 3- PLI for textile sector

Context

The Cabinet approved the Production-Linked Incentive (PLI) scheme for the textile sector that is expressly targeted at the man-made fibre (MMF) and technical textiles segments.

Why India needs to focus on Man-made fibre (MMF) in textile trade

  • Preference for MMF:  The MMF surpassed cotton as the fibre of choice in the 1990s.
  • The MMFs share in worldwide textile consumption is about 75%.
  • Dominance of natural fibre in India’s export: India’s textile and clothing exports have continued to remain dominated by cotton and other natural fibre-based products.
  • The MMF have contributed less than 30% of the country’s $35.6 billion in overall sectoral exports in 2017-18.
  • While policy makers have been cognisant of the need to bolster support for the MMF segment.

About the scheme

  • The PLI scheme has a budgeted outlay of ₹10,683 crore.
  • Incentive at two levels: The incentives have been categorised into two investment levels.
  • First level: Firms investing at least ₹300 crore into plant and machinery over two years would need to hit a minimum turnover of ₹600 crore before becoming eligible to receive the incentive over a five-year period.
  • Second level: At a second level an investment of ₹100 crore with a pre-set minimum turnover of ₹200 crore would enable qualification for the incentive.
  • Intermediate products included: The aim of the scheme is to specifically focus investment attention on 40 MMF apparel product lines, 14 MMF fabric lines and 10 segments or products of technical textiles.
  • The inclusion of intermediate products reflects the Government’s keenness to ensure the scheme ultimately delivers on the broader policy objectives.

Conclusion

Operational success of the scheme is likely to hinge on how new entrepreneurs and existing companies weigh the risk-reward equation, especially at a time when the pandemic-spurred uncertainty has already made private businesses leery of making fresh capital expenditure.

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The national security discourse is changing

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Humanitarian Assistance and Disaster Relief (HADR)

Mains level : Paper 3- Interplay between national security and domestic policies

Context

From a rising China to the pressures of climate change; from the challenges of counter-terrorism to the COVID-19 pandemic (the four Cs), the old order is collapsing much faster than the ability of nations to create the foundations of a new one.

The reduced difference between the domestic and foreign policy of the  U.S.

  • The idea that foreign and domestic policies are tightly intertwined is not a novel one.
  • All serious grand strategic thinking in democracies looks for sustenance in popular public support.
  • A process that was started by former U.S. President Donald Trump has been taken forward by the Biden Administration.
  • Asserting that “foreign policy is domestic policy and domestic policy is foreign policy,” the new administration has suggested that their task is to re-imagine American national security for the unprecedented combination of crises they face at home and abroad.
  • These crises include the pandemic, the economic crisis, the climate crisis, technological disruption, threats to democracy, racial injustice, and inequality in all forms”.
  • There is a growing bipartisan acknowledgment in the U.S. today that the requirements of American national security today are different from what they were during the Cold War.
  • Today’s strategic environment requires a different response for national security: one that shores up domestic industrial base helps in maintaining pre-eminence in critical technologies, makes supply chains for critical goods more resilient, protects critical infrastructure from cyberattacks and responds with a sense of urgency to climate change.

Indian situation: Dependence on the external supply chain is the national security challenge

  • In India too, there is greater recognition of the challenges emanating on national security from domestic vulnerabilities.
  • Dependence on Chinese manufacturing: One of the most significant consequences of the COVID-19 pandemic has been to reveal how deeply India has been dependent on Chinese manufacturing for critical supplies.
  • At a time when Indian armed forces were facing the People’s Liberation Army, this exposed India to a new realization that dependence on overseas supply chains is a national security challenge of the highest order.
  • Dimensions of national security: The Indian Army chief has argued that “national security comprises not only warfare and defence but also financial security, health security, food security, energy security, and environmental security apart from information security”.

Way forward for India

  • Shore up domestic capacities: India has since moved towards increasing domestic capacities in critical areas and also started looking at free trade agreements through a new lens.
  • Whole-of-government approach: Army Chief had suggested that instead of viewing national security “primarily from the perspective of an armed conflict, there is a need to take a whole-of-government approach towards security”.
  • Investment in armed forces: The Army chief has pointed out that investment in the armed forces contributes to the national economy.
  • Therefore, indigenization of defence procurement provides an impetus to indigenous industries, aid to civil authorities, or Humanitarian Assistance and Disaster Relief (HADR).
  • Demand for hi-tech military products by the armed forces helps entire industries.
  • Transportation and logistics capacities of the armed forces are acting as force enablers for the Government in times of emergencies.

Consider the question “The idea that foreign and domestic policies are tightly intertwined is not a novel one. In light of this, examine the challenges facing India’s national security that are linked with its domestic vulnerability. Suggest the ways forward.”

Conclusion

As nations across the world reconceptualise their strategic priorities, policymakers will need to think more creatively about the roles of various instruments of statecraft. National security thinking is undergoing a shift. India cannot be left behind.

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Foreign Policy Watch: India-Sri Lanka

Sri Lanka’s economic crisis poses challenges for India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : SAARC Currency Swap Framework 2019-2022

Mains level : Paper 2- India-Sri Lanka relations

Context

On 31 August 2021, Sri Lanka declared a state of economic emergency, as it is running out of foreign exchange reserves for essential imports like food.

Economic cooperation with Sri Lanka

  • India is Sri Lanka’s third-largest export destination, after the US and UK.
  • More than 60% of Sri Lanka’s exports enjoy the benefits of the India-Sri Lanka Free Trade Agreement, which came into effect in March 2000.
  •  India is also a major investor in Sri Lanka.
  •  Foreign direct investment (FDI) from India amounted to around $ 1.7 billion over the years from 2005 to 2019.
  • Concessional financing of about $ 2 billion has been provided to Sri Lanka through various Indian government-supported Lines of Credit across sectors like railways, infrastructure and security.
  • India’s development partnership with Sri Lanka has always been demand-driven, with projects covering social infrastructure like education, health, housing etc.
  • The Reserve Bank of India (RBI) had signed a currency-swap agreement with the Central Bank of Sri Lanka (CBSL) under the Saarc Currency Swap Framework 2019-22.

Factors responsible for economic emergency in Sri Lanka

  • Tourism: Tourism, a big dollar earner for Sri Lanka, has suffered since the Easter Sunday terror attacks of 2019, followed by the pandemic.
  • Declining FDI: Earnings fell from $3.6 billion in 2019 to $0.7 billion in 2020, even as FDI inflows halved from $1.2 billion to $670 million over the same period.
  • Debt distress: Its public debt-to-GDP ratio was at 109.7% in 2020, and its gross financing needs remain high at 18% of GDP, higher than most of its emerging economy peers.
  •  The external debt-to-GDP ratio stood at 62% in 2020 and is predominantly owed by its public sector.
  • More than $2.7 billion of foreign currency debt will be due in the next two years.

How economic crisis may push Sri Lanka to align its policies with China

  • Reliance on Chinese credit: Sri Lanka has increasingly relied on Chinese credit to address its foreign debt burden.
  • Unable to service its debt, in 2017, Sri Lanka lost the unviable Hambantota port to China for a 99-year lease.
  • Increasing bilateral trade: China’s exports to Sri Lanka surpassed those of India in 2020 and stood at $3.8 billion (India’s exports were $3.2 billion).
  • Strategic investment by China: Owing to Sri Lanka’s strategic location at the intersection of major shipping routes, China has heavily invested in its infrastructure (estimated at $12 billion between 2006 and 2019).
  • In May, Sri Lanka passed the Colombo Port City Economic Commission Act, which provides for establishing a special economic zone around the port and also a new economic commission, to be funded by China.

Implications for India

  • Relations between India and Sri Lanka seem to have plummeted since the beginning of this year.
  • In February, Sri Lanka backed out from a tripartite partnership with India and Japan for its East Container Terminal Project at the Colombo Port, citing domestic issues.
  • Sri Lanka’s economic crisis may further push it to align its policies with Beijing’s interests.
  • India is already on a diplomatic tightrope with Afghanistan and Myanmar.
  • Other South Asian nations like Bangladesh, Nepal and the Maldives have also been turning to China to finance large-scale infrastructure projects.

Way forward

  • Nurturing the Neighbourhood First policy with Sri Lanka will be important for India.
  • Explore possibility through regional platforms: The BIMSTEC and the Indian Ocean Rim Association could be leveraged to foster cooperation in common areas of interest like technology-driven agriculture and marine sector, IT, renewable energy, and transport and connectivity.
  • Cooperation on private sector investment: Both countries could also cooperate on enhancing private sector investments to create economic resilience.

Consider the question “How economic troubles in Sri Lanka could impact India? Suggest the way forward.”

Conclusion

With its economy in deep trouble, Sri Lanka may get further pushed towards China, India has to deliver on its Neighbourhood First policy to protects itself from the adverse fallout.

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Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

Revolution unfolding in data regulation

Note4Students

From UPSC perspective, the following things are important :

Prelims level : DEPA

Mains level : Paper 3-Data protection regulations

Context

A number of countries have been looking to extend their existing data protection frameworks to ensure that users have more effective control over their data than their regulations currently allow.

Measures to unlock the data silos

  • Benefits: These measures aimed at unlocking data silos will make it easier for data to flow from the entity that currently holds it to any other data business that might want to use it with the permission of the data subject.
  • In Australia, Consumer Data Right framework will allow consumers in Australia to require any business with which they have a commercial relationship to transfer that data to any other business of their choice.
  • The first sector in which this new data right is being rolled out in the banking sector, with power set to follow close on its heels.
  • The EU’s proposed Data Act will create a fairer data economy by ensuring better access to and use of data and is intended to cover both business-to-business and business-to-government transfers of data.
  • Along similar lines, the EU has also drafted a Data Governance Act to govern the data exchanges and platforms.
  • It will thus both enable and regulate new data-sharing arrangements that will intermediate the transfer of data from data businesses that currently hold it to those that have been permitted to use it.
  • Data regulation to protect and utilize data: Regulatory activity seems to suggest that it is not enough to protect data if you cannot also ensure that this data is effectively utilized.

What are the issues with regulation measures?

1) Law and regulation cannot keep pace with technology

  • Technology determines how data is collected, processed and used, and, by extension, the manner in which it is transferred.
  • Decades of trying to regulate technology businesses have taught us that laws and regulation simply cannot keep pace with changes in technology.
  • No matter how fast we move, if the only weapon we are using to regulate technology is the law, we will be doomed to play catch-up forever.
  • These new consumer-centric measures are likely to fail if they are to be implemented solely through legislation.

2) Data transfers in the absence of a legal framework can lead to problems in India

  • India has adopted a slightly different approach to data transfers known as the Data Empowerment and Protection Architecture (DEPA).
  • DEPA offers a technology-based solution for consent-based data flows, allowing users to transfer their data from data businesses that currently hold them to those that want to use them.
  •  Last week, the country’s Account Aggregator framework—the first implementation of DEPA—went live in the financial sector.
  •  It too suffers from infirmities that could threaten its success.
  • India still does not have a data protection regulation and implementing a technological solution for data transfers in the absence of a legal framework could lead to new problems.

Way forward: Techno-legal approach

  • Use techno-legal approach to regulate: Technology businesses are most effectively regulated through a judicious mix of law and technology—strong, principle-based laws to provide the regulatory foundation, with protocol-based guardrails to ensure compliance.
  • Seven countries came together to endorse a techno-legal approach to data regulation.
  • If successful, this would be the first global attempt to adopt a techno-legal solution for data-transfer regulation.

Consider the question “There is growing appreciation in regulatory circles that it is not enough to protect data if you cannot also ensure that this data is effectively utilized” In light of this, examine the challenges in regulation of data while ensuring its safe transfer for utilisation.” 

Conclusion

Techno-legal solution offers effective ways to deal with the problems of data regulation and data transfer.

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Reform in India’s reservation system

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Article 14,15,16

Mains level : Paper 2- Need for reforms in India's reservation system

Context

While it is undeniable that affirmative action has been one of the protagonists of Indian democracy’s success stories, these have also accumulated a fair share of problems and call for immediate policy attention and debate.

Problems with the current policy of reservation

  • With the reservation of seats in political and public institutions of the state, it was thought that the hitherto marginalised groups would be able to find place in the power sharing and decision-making processes.
  • This strategy of removal of disabilities has not translated into an equalisation of life chances for many groups in our heterogeneous society.

What are the problems?

1) Problem of reification

  • The Justice G. Rohini Commission’s report on the sub-categorisation of OBCs based on the last five years’ data on  central government jobs and OBC admissions to central higher education institutions highlights this problem.
  • The commission concluded that 97% of central OBC quota benefits go to just under 25% of its castes.
  • As many as 983 OBC communities — 37% of the total — have zero representation in both central government jobs and admissions to central universities.
  • Also, the report states that just 10% of the OBC communities have accrued 24.95% of jobs and admissions.
  • Clearly, the assumption that the disadvantages of every sub-group within each category are the same is severely misplaced.
  • Consequently, asymmetrical distribution of reservation has severely deterred political projects of unified subaltern solidarity.

2) Insufficiency of data

  • There is a dire need of accurate data pertaining to the socio-economic condition of different social groups.
  • Though caste-based reservations have been pivotal in animating upward social mobility we hardly have sufficient data about the actual reach and access of this policy measure.
  • We do not know what liberalisation has done to castes which remained tied to more traditional sources of income and were incapable of realising the new opportunities provided by the opening of the economy.
  • What is urgently required is a mechanism that can address this lacuna and make the system more accountable and sensitive to intra-group demands.

Way forward

  • Since every further categorisation will only lead to reification and fragmentation in the long run, two things are required.
  • Evidence based policy option: We need to develop a wide variety of context-sensitive, evidence-based policy options that can be tailored to meet specific requirements of specific groups.
  • Institution: We need an institution alike the Equal Opportunities Commission of the United States or the United Kingdom which can undertake two important but interrelated things:
  • 1) Make a deprivation index correlating data from the socio-economic-based census of different communities.
  • 2) Undertake an audit on performance of employers and educational institutions on non-discrimination and equal opportunity and issue codes of good practice in different sectors.
  • This will make the formulation of policy and its monitoring simpler at an institutional level.
  • Similar suggestions were made a decade ago in the recommendations that the expert committee for an Equal Opportunities Commission (2008) made in its comprehensive report that it submitted to the Ministry of Minority Affairs.

Conclusion

As evident, a socio-economic caste-based census becomes a necessary precondition to initiate any meaningful reform in the affirmative action regime in India.

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

The April-June quarter GDP numbers indicated at 20.1 per cent growth

Note4Students

From UPSC perspective, the following things are important :

Prelims level : GVA and GDP

Mains level : Paper 3- How to sustain economic recovery

Context

The April-June quarter GDP numbers indicated at 20.1 per cent growth.

Making sense of the numbers

  • The higher GDP growth was driven by high indirect tax collections, largely GST.
  • The more representative measure of economic activity, gross value added (GVA), grew by 18.8 per cent.
  • GDP is derived by adding indirect tax collections, net of subsidy payouts, to GVA.
  • These numbers are over a base quarter that had contracted sharply due to the lockdowns during the first Covid wave last year.
  • The revival of manufacturing GVA was the most robust, with mining and electricity growth somewhat moderate.
  • The overall and sector-specific activity levels need to be evaluated vis-à-vis the corresponding thresholds of (the pre-pandemic) first quarter of 2019-20.
  • Agriculture grew at 4.5 per cent, with cereals, pulses and oilseeds output at all-time highs.
  • As could be expected, the services sector remained vulnerable, with activity even softer than expected.
  • Steel and cement output growth — proxies for construction activity — were also quite robust in the quarter.
  • Demand and expenditure: Private consumption was up 19.3 per cent while investment was at 55.3 per cent.
  • Government consumption was lower by 4.8 per cent.
  • Export: Net exports are typically in deficit, but the gap was much lower in the first quarter.

How to sustain recovery: way forward

  • Looking beyond the first quarter, the set of high-frequency economic signals suggest a strong recovery in July and August.
  •  But, how can this recovery over the rest of the year and beyond be sustained, and even accelerated?
  • Sustaining 3 growth drivers: The three distinct potential growth drivers — consumption, investment and exports — will need to be effectively sustained by policy initiatives over the next couple of years.
  • Government spending: Centre’s revenues and expenditures during April-July this year suggest that it has significant room to increase spending.
  • National Monetisation Plan will open up further fiscal space to increase spending, in particular, on capex.
  • Credit support to stressed segment: mid-and small-sized enterprises will take some time to restore their pre-pandemic operational levels.
  • An increase in the flow of credit, from banks, NBFCs and markets, particularly to these stressed segments, is a priority, as a supplement to state spending.
  • Opportunity for exports: Global inventories are low and depending on the progression of the pandemic relaxations across geographies, are likely to provide opportunities for Indian exports to fill some of these gaps.
  • Reforms: Multiple reform initiatives, tax and other incentives are in the process of implementation.
  • These need to be accelerated in coordination with states to enable an environment of steady, high growth in the medium term.

Challenges

  • Global central banks’ are signalling the imminent normalisation of ultra-loose monetary policy.
  • The resulting increase in financial sector volatility will have spillover effects on emerging markets, including India.
  • To keep the process smooth, it is crucial to raise India’s potential growth so that the economic recovery does not rapidly close the output gap, thereby preventing a surge in inflationary pressures.

Conclusion

There is a limited window of opportunity for India to leverage the current ongoing realignment of global supply chains and progressively onboard both manufacturing and services entities.

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Banking Sector Reforms

Our banks are mispricing capital

Note4Students

From UPSC perspective, the following things are important :

Prelims level : SLR and CRR

Mains level : Paper 3- Mispricing of capital

Context

We have a situation in India today where the policy repo rate has been kept low. Banks are just about managing their non-performing assets (NPAs) and there is uncertainty in the air.

Mispricing of capital by banks

  • There are different components of the cost of funds for banks, which are captured by the MCLR or marginal cost of funds-based lending rate.
  • For every 100 deposits that enter the banking system, there are different accompanying costs for the system.
  • These are deposit costs, provisioning for NPAs, return on assets (ROA or minimum profit), and the regulatory cost of cash reserve and statutory liquidity ratio balances (CRR and SLR) that perforce have to be held.
  • Adding these components, the basic cost works out to be 8.9%, which should be the rate at which incremental lending should take place.
  • By offering loans at a much lower rate of 7.23%, the system is actually mispricing capital.
  • It may be noted that deposit rates have been compressed to a very large degree and so this cost of 4% is very low.
  • Banks do have the advantage of getting free demand deposits and the right to offer differential rates on saving accounts.
  • Clearly, deposit-holders are subsidizing borrowers quite significantly.

Issue of NPA provisioning in India

  • In the past couple of years, provisions as a proportion of NPAs have averaged 30-40%.
  • As NPAs increase, ideally, banks should load this cost onto their borrowers.
  • But that rarely happens in India. Instead, it is taken on banks’ books and gets reflected in their balance sheets.
  • If NPAs were kept in the region of, say, 4-5% of assets, it would have been possible to bring the cost down to 1.5% (from 3%), which would then have justified the present MCLR.

Low return on assets (ROA)

  • The ideal return norm is 1%, which should be derived from all assets.
  • This does not happen for banks’ investment portfolios, and the value imputed here is only for loans.
  • The ROA for banks is abysmally low, as this aspect does not go into the pricing of products on the asset side.
  • Deposit costs have been driven down as savers don’t have a choice.
  • But a commensurate return does not materialize in the loan books of banks.

Cost of regulations

  • The CRR component gets no compensation, while the SLR part earns around 6%, which is the average cost of fresh borrowing for the Union government.
  • While these numbers vary across banks, the minimum rate of 8.9% would hold for the system, which will vary by the level of NPAs.
  • The concept of linking benchmarks to certain loans further misprices fresh lending, as those loans are not ideal anchors to use, for they are being manually driven downwards by a deluge of liquidity in the system after the pandemic.
  • Excess liquidity of 4-7 trillion a day since April 2020 has meant banks have been placing funds costing them 8.9% with the central bank which gives them just 3.35%.
  • This is eventually borne by bank shareholders.

Implications

  • With rather rigid policies on corporate lending to avert possible NPAs, banks have preferred lending to the retail segment, which is less risky, and small businesses, backed by the Centre’s credit guarantee.
  • The central bank’s government-bond buying programme to provide liquidity has been successful.
  • But in the absence of fructification of lending and a continuous rollover of funds at the reverse-repo window, Indian banks are bearing a negative carry trade, with a 6% return traded for just 3.35%.

Conclusion

Banks must price capital appropriately and not get overly influenced by arguments in favor of cheap credit or the fact that loans are cheaper in the West. We need to get practical on this issue.

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Back2Basics: CRR and SLR

  • Cash Reserve Ratio, or popularly known as CRR is a compulsory reserve that must be maintained with the Reserve Bank of India.
  • Every bank is required to maintain a specific percentage of their net demand and time liabilities as cash balance with the RBI.
  •  The banks are not allowed to use that money, kept with RBI, for economic and commercial purposes.
  • It is a tool used by the apex bank to regulate the liquidity in the economy and control the flow of money in the country.
  • Statutory Liquidity Ratio, shortly called as SLR also an obligatory reserve to be kept by the banks, as prescribed securities, based on a certain percentage of net demand and time liabilities.
  •  It is used to maintain the stability of banks by limiting the credit facility offered to its customers.
  • CRR is maintained in the form of cash while the SLR is to be maintained in the form of gold, cash, and government-approved securities.

Managing natural resources

Note4Students

From UPSC perspective, the following things are important :

Prelims level : MGNREGA

Mains level : Paper 3- Managing natural resources

Context

A project in Meghalaya empowers communities to take informed action pertaining to their environment.

Depletion of natural resources in Meghalaya

  • In recent years, many parts of Meghalaya have witnessed the loss of forest cover and natural resources have rapidly deteriorated.
  • The State, known to have spots designated as the ‘wettest places’ on earth, is now facing a severe water crisis.
  • Natural resource management becomes critical in this context.

Challenges in natural resource management

  • Traditional practices on sustainable use of natural resources have been passed down from one generation to another.
  • Overexploitation: This indigenous knowledge began to slowly fade, however, owing to population growth,  the quest for unsustainable developmental activities, and indiscriminate exploitation of natural resources.
  • Inaccessibility of knowledge: Another roadblock to natural resource management was knowledge inaccessibility among rural communities.

Providing knowledge: Landscape Management Project

  • The government wanted to see if, when provided with the correct knowledge, solutions to problems can be devised and even implemented by community members themselves.
  • The World Bank-supported Meghalaya Community-Led Landscape Management Project seeks to reactivating the community’s connection to natural resources and enabling them to tackle the resource crisis.
  • How the project worked: cross-functional teams with diverse expertise were set up.
  • The Mahatma Gandhi National Rural Employment Guarantee Scheme became the main scheme channelizing resources to impact poor households so that there was systematic convergence of all line departments such as agriculture, horticulture, soil, and water conservation.
  • The programme leverages technology and the youth population.
  • Leveraging technology, more than 2,000 village community facilitators have already been trained and are working towards climate change reversal.
  • Autonomy: To build autonomy, simple tools are used.
  • They have been designed keeping in mind many things: creating community agency, building the capacities of all persons in the programme, and ensuring frequent interactions among them.
  • Leveraging technology: Technology empowers them with real-time data, which in turn results in better programme governance, transparency, and accountability.
  • Communities are now able to articulate the complexities of their problems through a scientific lens and create their own natural resource management plans.
  • To carry forward this momentum, there is a plan to launch a Centre of Excellence in Meghalaya, a one-stop centre for natural resources management.

Conclusion

The project intends to empower thousands of village community facilitators and enable them to articulate the complexities of their problems through a scientific lens and create their own natural resource management plans.

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Climate Change Negotiations – UNFCCC, COP, Other Conventions and Protocols

India is setting a global example in meeting its Nationally Determined Contributions

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Emission intensity of GDP

Mains level : Paper 3- India is right on the path to achieve NDC under Paris Agreement

Context

Despite accomplishments, global pressures are intensifying on India to commit more towards the Conference of the Parties (COP26), scheduled for November 2021 in Glasgow.

India’s accomplishments

  • At the fifth anniversary of the Paris Agreement on Climate Change (December 2020), India was the only G20 nation compliant with the agreement.
  • India has been ranked within the top 10 for two years consecutively in the Climate Change Performance Index.
  • The Unnat Jyoti by Affordable LEDs for All (UJALA) scheme is the world’s largest zero-subsidy LED bulb programme for domestic consumers.
  •  India provided leadership for setting up the International Solar Alliance, a coalition of solar-resource-rich countries, and the Coalition for Disaster Resilient Infrastructure.

Why it is unfair to pressure India on climate action

We can attempt to answer the question by comparing the achievements of other countries vis-à-vis India’s performance.

  • Historical perspective: World Bank data for CO2 emissions (metric tons per capita) over two decades since the Kyoto protocol informs that at the current rate, both China and the U.S. could emit five times more than India in 2030.
  • The U.K.’s emission levels could be more than 1.5 times that of India.
  • Brazil, with its dense forests, may end up at similar levels.
  • Latest efforts: Last year, China, the world’s largest GHG emitter, joined the ‘race to zero’ and targets carbon neutrality by 2060.
  • Interestingly, it hopes to peak CO2 emissions by 2030 for bending the emissions curve.
  • Recently, the U.S. rejoined the Paris Agreement and committed to reducing emissions by 50%-52% in 2030 and reaching net-zero emissions economy-wide by 2050.
  • The French government, during the novel coronavirus pandemic, set green conditions for bailing out its aviation industry.
  • However, the analysts say that no baseline for reducing emissions from domestic flights was fixed.
  • In Australia, complicated domestic politics prevented them from addressing the problem, despite the country being vulnerable, and stretches of the famous Great Barrier Reef having died in recent years.

India’s performance

  • Exceeding the NDC commitment: India is on track (as reports/documents show) to meet and exceed the NDC commitment to achieve 40% electric power installed capacity from non-fossil fuel-based sources by 2030.
  • Reduction in emission intensity of GDP: Against the voluntary declaration for reducing the emission intensity of GDP by 20%-25% by 2020, India has reduced it by 24% between 2005-2016.
  • More importantly, we achieved these targets with around 2% out of the U.S.$100 billion committed to developing nations in Copenhagen (2009), realised by 2015.
  • Renewable energy expansion: India is implementing one of the most extensive renewable energy expansion programmes to achieve 175 GW of renewable energy capacity by 2022 and 450 GW by 2030.
  • Investment in green measures: As part of the fiscal stimulus after the pandemic, the Government announced several green measures, including:
  • a $26.5-billion investment in biogas and cleaner fuels,
  • $3.5 billion in incentives for producing efficient solar photovoltaic (PV)
  • and advanced chemistry cell battery, and $780 million towards an afforestation programme.
  •  India’s contribution to global emissions is well below its equitable share of the worldwide carbon budget by any equity criterion.

Conclusion

To sum up, India has indeed walked the talk. Other countries must deliver on their promises early and demonstrate tangible results ahead of COP26.

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Police Reforms – SC directives, NPC, other committees reports

Custodial Violence

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NCRB

Mains level : Paper 2- Police reforms

Context

Earlier this month, Chief Justice of India N.V. Ramana expressed concern at the degree of human rights violations in police stations in the country. He said that “the threat to human rights and bodily integrity is the highest in police stations”

Deaths in police custody

  • Improvement in the situation: A reality check shows that the picture is not so bleak and efforts are being made to improve the human rights protection regime in police stations.
  • National Crime Records Bureau (NCRB) data reveal that though the number of custodial deaths varies year to year, on average of about 100 custodial deaths have taken place every year between 2010 and 2019.
  • Of them, about 3.5 persons allegedly died due to injuries caused by policemen.
  • A judicial inquiry, which is mandatory for every suspicious custodial death, was conducted in 26.4 cases.
  • Though every death in custody needs to be prevented, suspicious deaths which bring disrepute to the police system must be rooted out completely.

Measures to reduce the instances of custodial violence

1) Reduce the number of arrests

  • As per the law, arrest for offences punishable up to seven years of imprisonment should be made only when such arrest is necessary to prevent the person from tampering with evidence, or committing any further offence, etc.
  • The Supreme Court held that each arrest must be necessary and justified; having the authority to arrest is alone not sufficient.
  • In Arnesh Kumar v. State of Bihar (2014), it was held that despite the offence being non-bailable under Section 498A of the Indian Penal Code (IPC), which relates to torture for dowry, arrest is not mandatory as per Section 41 of the Code of Criminal Procedure (CrPC).
  • In Special Action Forum v. Union of India (2018), the Court further held that the police officer shall furnish to the magistrate the reasons and materials which necessitated the arrest for further detention of the accused.
  • The purpose of these checks is to ensure that the police does not abuse the power of arrest.
  • NCRB data show that the ratio of the number of arrests to the number of IPC offences has decreased from 1.33 in 2010 to 0.96 in 2019.

2) Separate investigation from law and order

  • The National Police Commission (1977-81), the Law Commission in its 154th report (1996) and the Malimath Committee Report (2003), and the Supreme Court in Prakash Singh v. Union of India (2006), have recommended that the investigating police should be separated from the law-and-order police to ensure better expertise in investigation.
  • It is believed that a separate wing will do more professional investigation and will not use unwarranted methods to extract confession from the accused.
  • Though efforts have been made by some States in this direction, more resources are required in policing to implement the Court’s directions.

3) Increase the number of investigating officers

  • Unless investigating officers are increased in proportion to the number of serious offences, the quality of investigation may suffer.
  • The Malimath Committee’s recommendation that an investigating officer should preferably investigate no more than 10 cases every year needs to be implemented.
  • Subject expert officers: With the increase of newer types of crime like white collar crime and cybercrime, subject experts are needed to assist the police in the investigation.

4) Sensitise Police

  • The police officers must know that their mandate is to protect human rights and not violate them.
  • They need to be sensitised regularly and encouraged to employ scientific tools of interrogation and investigation like the lie detection test, narco test and brainfingerprinting test.

5) Display board on human rights

  • The CJI’s suggestion to install display boards on human rights to disseminate information about the constitutional right to legal aid and availability of free legal aid services may deter police excesses.

Steps taken to deal with the issue

  • Much has changed in the police consequent to the judgment in D.K. Basu v. State of West Bengal (1996) in which the Supreme Court laid down guidelines to check custodial torture.
  • Guidelines incorporated in CrPC: Most of these guidelines such as providing information to a friend or relative about the arrest, medical examination, and permission to meet a lawyer have now been incorporated in the CrPC.
  • CCTV Cameras installed:  In Paramvir Singh v. Baljit Singh (2020), the Supreme Court has directed States to cover more area of each police station under CCTV cameras and have storage facility of audio-video recording for 18 months.
  • Actions against guilty:  NCRB data show that on average about 47.2 criminal cases were registered annually against policemen in last 10 years.
  • Departmental action against errant officers is a rule in the police force, rather than an exception.
  • Compensation by NHRC: The National Human Rights Commission also oversees deaths in custody due to human rights violations and recommends compensation in appropriate cases.
  • Incentives linked with police reforms: The Home Ministry has recently linked the ‘police modernisation scheme’ with police reforms.
  • Unless sufficient action is taken by the State governments and the police authorities, incentives in the form of additional funds will not be released.

Consider the question “Human right violations in police stations is a cause for concerns. What are the reasons for such violations? Suggest the measures to curb it.”

Conclusion

Our commitment to the protection of human rights is unconditional and total. Many steps have been taken so far to check custodial violence and no stone shall be left unturned to eliminate such violence in toto.

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Foreign Policy Watch: India-Afghanistan

Soft power, India’s strength in Afghanistan

Note4Students

From UPSC perspective, the following things are important :

Prelims level : CDRI

Mains level : Paper 2- Afghanistan issue

Context

Over the past few weeks, there has been much talk about India’s diplomatic stakes being threatened by the changing political scenario in Afghanistan.

India’s role in Afghanistan’s development

  • India is currently the fifth-largest donor in Afghanistan.
  • India’s total development assistance over the years has been worth over $3 billion.
  • Soft and hard measures: India’s development cooperation with Afghanistan has encompassed both soft and hard measures.
  • Soft measures have helped build goodwill and greater people-to-people contact and has involved measures focusing on health, education, capacity development and food security, among others.
  • Many projects have been community-driven, thus helping engage a large section of people in development efforts.
  • Hard infrastructure examples include the parliament building which was inaugurated in 2015, financing the Delaram-Zaranj Highway as well as the 42 MW Salma Dam in Herat province.
  • India had also engaged in triangular cooperation under the US umbrella, cooperating with USAID on various programmes.
  • This includes Afghan Women’s Empowerment Programme, a collaboration between USAID and the Self-Employed Women’s Association (SEWA) for providing vocational education for Afghan women.

How India’s approach differed from other donors?

  • Demand-driven approach: India follows a demand-driven approach, which implies that the sectors for investment are chosen by the recipient government.
  • Not condition based: although its aid is extended as a soft means to gain strategic leverage, it comes without political conditions.
  • In PPP terms, the value of the Indian rupee is often underestimated, meaning that the Indian rupee would be able to buy substantially more goods and services at adjusted exchange rates.
  • For example, a study by the Stimson Centre found out that even though Indian aid in 2015-16 totalled $1.36 billion, in PPP terms it could be pegged at over $5 billion.

Way forward

  • Adapt programs to new reality: At the Afghanistan Conference in Geneva in 2020, India announced several development projects.
  • New political developments in Afghanistan are unlikely to lead to a complete disconnect with India and its established socio-economic role.
  • However, India may need to adapt its programmes to new realities.
  • Diversify portfolio: There is still an infrastructure deficit in Afghanistan and a need for rebuilding and reconstruction.
  • As far as development cooperation is concerned, however, India needs to further diversify its portfolios.
  • Resilient Afghanistan to climate change: India can do much to build a more resilient Afghanistan with respect to climate change and disaster risk reduction with it spearheading global campaigns like CDRI.

Conclusion

India needs to establish itself as a neutral entity that is keen on the development of the region but ready to work with all parties concerned.

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RBI Notifications

A way of diluting credit discipline

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 3- Current account opening restriction to deal with the NPA issue

Context

Some bank borrowers have gone to court demanding that it quash the Reserve Bank of India (RBI) circular dated August 6, 2020 on opening current accounts.

Background

  • Current accounts with non-lending banks are an important channel for diversion.
  • Diversion of funds is a major reason for large non-performing assets (NPAs).
  • Internal diversion is for non-priority purposes and funds can also be diverted to other firms, owned or controlled by the same group, friends or relatives.
  • To prevent this, the RBI mandates a No-Objection Certificate (NOC) from lending banks before opening such accounts.
  • Banks should verify with CRILC, the RBI credit database, and inform lenders. Banks should also obtain a NOC from the drawee bank when an account is opened through cheques.
  • Widespread non-compliance with mandated safeguards forced the RBI to bar non-lending banks from opening current accounts for large borrowers.
  • Thus, if borrowing is through a cash credit or overdraft account, no bank can open a current account.

What are the current regulations?

  • If a borrower has no cash credit or overdraft account, a current account can be opened subject to restrictions.
  • If the bank’s exposure is less than 10% of total borrowings, debits to the account can only be for transfers to accounts with a designated bank.
  • If total borrowing is ₹50 crore or more, there should be an escrow mechanism managed by one bank which alone can open a current account.
  • Other lending banks can open ‘collection accounts’ from which funds will be periodically transferred to the escrow account.
  • If the borrowing is between ₹5 crore and ₹50 crore, lending banks can open current accounts.
  • Non-lending banks can open collection accounts.
  • If borrowing is below ₹5 crore, even non-lending banks can open current accounts.
  • The working capital credit should be bifurcated into loan and cash credit components at individual bank levels.

Issues with regulations

  • If a borrower has an overdraft, how can there not be a current account?
  • An overdraft is the right to overdraw in a current account up to a limit.
  • The second issue is that the circular forecloses such operational flexibility.
  • Third, why should a bank with low exposure transfer funds to another bank when it can use it to adjust other dues with it?
  • Fourth, share in borrowing is not static. Crossing the threshold both ways could happen often.
  • Fifth, there is a mismatch between what a borrower needs and the regulations allow.
  • Support of non-lending banks through current accounts in other banks is required for large accounts.
  • Sixth, transactions in an active current account enables a bank to monitor a borrower’s account, however small.
  • The lack of such control was why large development financial institutions of yesteryear built up huge NPAs.
  • Seventh, the regulation mandates splitting working capital into loan and cash credit components across all banks.
  • Such a one-size-fits-all regulation does not factor in the purpose of the different facilities.
  • A large company might avail itself of loans in Mumbai, but require current accounts with another bank in Assam where it might have a factory.
  • Lack of flexibility: Rules are not flexible, do not provide for unforeseen circumstances, and can be easily circumvented.
  • Use more generic terms: Regulation needs to use more generic terms. Terms such as Working Capital Term Loan might mean different things in different banks.
  • Diversion of fund is risk better dealt by banks: Is it not better to leave management of exceptional risks such as diversion of funds to the banks?
  • The cost of regulation: the costs of regulation be justified by the benefits.

Conclusion

When regulation ignores market practices, it lacks legitimacy, a construct from neo-institutionalist literature. When legitimacy is wanting, compliance suffers.

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