Note4Students
From UPSC perspective, the following things are important :
Prelims level: Right to privacy
Mains level: Paper 2- Surveillance and its impact on democracy
Context
The Pegasus revelations reflect an attack on Indian democracy and Indian citizens.
Role of government in protecting the fundamental and human rights of citizens
- The surveillance of the target group in India through Pegasus raises doubts about the functioning of democracy in India.
- Constitutional duty of government: The government has a constitutional duty to protect the fundamental and human rights of its citizens, irrespective of who they are.
- There is clear evidence that the rule of law has been undermined.
- More evidently, this reflects extremely poor governance.
- The Intelligence Bureau, the Research and Analysis Wing, and the National Security Council Secretariat should have forewarned the government and citizens against such surveillance seriously violating privacy and fundamental rights.
- The Supreme Court, in K.S. Puttaswamy v. Union of India (2017), declared privacy a constitutionally protected value.
Violation of human rights
- India is a signatory to the Universal Declaration of Human Rights.
- Article 12 provides that everyone has the right to the protection of the law against arbitrary interference with his privacy, family, home or correspondence.
- The International Covenant on Civil and Political Rights, also signed by India, in Article 17 states, “No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks.”
- In K.S. Puttaswamy, the Supreme Court noted India’s commitments under international law and held that by virtue of Article 51 of the Constitution, India has to endeavour to “foster respect for international law and treaty obligations…”
- The Protection of Human Rights Act, 1993 is a fallout of this commitment.
Recommendations on digital communication technologies
- The annual report of the United Nations High Commissioner for Human Rights (UNHCHR) in 2014 made recommendations on “digital communications technologies”.
- Judicial oversight: The UNHCHR report stated, judicial involvement that meets international standards can help to make it more likely that the overall statutory regime will meet the minimum standards that international human rights law requires.
- At the same time, the report stated that judicial involvement in oversight should not be viewed as a panacea.
- Independent body: The report also recommended an independent oversight body to keep checks.
- Effective remedy to victim: The International Covenant on Civil and Political Rights requires states parties to ensure that victims of violations of the Covenant have an effective remedy.
- Role of business: The report also dealt with the role of businesses and stated that when a state requires that an information and communications technology company provide user data, it can only supply it in respect of legitimate reasons.
- Earlier, due to concerns of member states, the General Assembly adopted Resolution 68/167 affirming that rights held by people offline must also be protected online.
- The resolution also called upon all states to respect and protect the right to privacy, including in digital communication.
Conclusion
Indians have a right to call upon NSO to terminate the agreement, if any, with the Indian government or any private player and to cooperate with citizens to unravel the truth.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Abraham Accords
Mains level: Paper 2- Opportunities for India in middle east
Context
An Egyptian scholar, Mohammed Soliman, has recently written about the significance of what he calls the emerging “Indo-Abrahamic Accord” and its trans-regional implications to the west of India.
About Abraham Accord
- Abraham Accord, signed in August last year in Washington, signifies the normalisation of Israel’s relations with the UAE and Bahrain.
- The UAE and Bahrain were followed by Sudan and Morocco in signing the Abraham Accords.
- Although Egypt (1979) and Jordan (1994) had established diplomatic relations with Israel earlier, the Abraham Accords are widely seen as making a definitive breakthrough in the relations between Israel and the Arabs.
Factors in favour of accord
- Depth of trilateral relationship: Although India had relations with UAE and Israel for many years, they certainly have acquired political depth and strategic character recently.
- Converging interests: Turkish president Recep Tayyip Erdogan’s assertive claims for the leadership of the Islamic world and hostile stand against India on several issues, indicates converging interests between India, the UAE, and Israel.
- One of the unintended consequences of Erdogan’s overweening regional ambition, his alienation of Israel as well as moderate Arabs, his conflict with Greece, and his embrace of Pakistan is the extraordinary opportunity for India to widen India’s reach to the west of the Subcontinent
- Cooperation: There are many areas like defence, aerospace and digital innovation where the three countries can pool their resources and coordinate development policies.
- India’s extended neighbourhood: The notion of a “Greater Middle East” can provide a huge fillip to India’s engagement with the extended neighbourhood to the west.
India-Turkey relations
- Hostile approach on Kashmir: Turkey has been championing Pakistan’s case on Kashmir after India changed the territorial status quo of the state in August 2019.
- Blocking NSG entry: At Pakistan’s behest, Turkey is also blocking India’s entry into the Nuclear Suppliers Group.
- The new geopolitical churn is also driven by Pakistan’s growing alignment with Turkey and its alienation from its traditionally strong supporters in the Arab Gulf — the UAE and Saudi Arabia.
Opportunities for India in extended neighbourhood to the west
- Relations with Greece: The renewed territorial disputes between Turkey and Greece, and Turkey’s quest for regional dominance has drawn Greece and the UAE closer.
- Greece has also looked towards India to enhance bilateral security cooperation.
- Greece’s European partners like France, which have a big stake in the Mediterranean as well as the Arab Gulf, have taken an active interest in countering Turkey’s regional ambitions.
- Erdogan’s support for the Muslim Brotherhood, which seeks to overthrow the current political order in the region, has deeply angered the governments of Egypt, Saudi Arabia and the UAE.
- India’s relations with Egypt: If there is one country that can give substantive depth to the Indo-Abrahamic Accord it is Egypt.
- Located at the cusp of Mediterranean Europe, Africa, and Asia, Egypt is the very heart of the Greater Middle East.
- Independent India’s engagement with the region in the 1950s was centred on a close partnership with Egypt.
- If Delhi and Cairo lost each other in recent decades, India can rebuild the strategic partnership jointly with the Egypt government which is calling for the construction of a “New Republic” in Egypt.
- The notion of a “Greater Middle East” can provide a huge fillip to India’s engagement with the extended neighbourhood to the west.
- The familiar regional institutions like the Arab League and the Organisation of Islamic Cooperation might endure but are incapable of addressing the region’s contradictions.
Consider the question “Amid Turkey’s quest for regional dominance and hostility towards India, the deepening engagement between India, the UAE and Israel can be converted into a formal coalition on the lines of Abraham Accords” Comment.
Conclusion
The opportunities that are coming India’s way to the west of the Subcontinent are as consequential as those that have recently emerged in the east.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Minsky moment
Mains level: Paper 3- Policy intervention needed for recovery of economy
Context
In recent times, several economists have been arguing that the Government does not need to do anything with the economy. They argue that like after the Great Depression, the economy rebounded worldwide, and so will it with us. The argument is fallacious on four accounts:
Four factors that make recovery different from the recovery after the Great Depression
1) Demand destruction
- In the case of the Great Depression, demand was created by the Second World War effort, especially in the United States.
- Demand destruction: In the current scenario, the COVID-19 pandemic has resulted in demand destruction.
- This is because many jobs have been lost, and even where jobs were retained, there have been pay cuts.
- Both of these trends were confirmed in the Centre for Monitoring Indian Economy and other surveys.
Bright spot on export front
- The only bright spot in this dismal scenario is that the western world has spent a lot of money stimulating the economy.
- However, the Indian exporter face the challenge of rising freight costs and structural issues such as a strong rupee relative to major competitors.
- Only the Indian IT sector is placed well to capitalise on rising demand in the world markets.
2) Inflation and factors driving it
- India is suffering from stagnant growth to low growth in the last two quarters.
- As in the low initial base set by last year, almost any growth this year is seen as a significant growth percentage.
- Commodity prices and monetary policy: Inflation in India is being imported through a combination of high commodity prices and high asset price inflation caused by ultra-loose monetary policy followed across the globe.
- Liquidity infusion: RBI is infusing massive liquidity into the system by following an expansionary monetary policy through the G-SAP, or Government Securities Acquisition Programme.
- Foreign portfolio investors have directed a portion of the liquidity towards our markets.
- India has a relatively low market capitalisation, therefore, India cannot absorb the enormous capital inflow without asset prices inflating.
- Supply chain issues: Additionally, supply chain bottlenecks have contributed to the inflation we see in India today.
- Rising fuel prices: India’s usurious taxation policy on fuel has made things worse.
- Rising fuel prices percolate into the economy by increasing costs for transport.
Impact of inflation
- The middle and lower-middle-class get destitute due to regressive indirect taxes and high inflation, with their wealth eroding due to said inflation.
- Especially in the case of the lower middle class, inflation is lethal as they do not have access to any hard assets, including the most fundamental hard asset, gold.
- The increase in fuel prices will also lead to a rise in wages demanded as the monthly expense of the general public increases.
- This leads to the dangerous cycle of inflation and depleting growth.
3) Interest Rate
- The only solution for any central banker once he realises that inflation is entrenched is tightening liquidity and further pushing the cost of money.
- If this does not dampen inflation, repo rates will need to go up later this year or early next year.
- Tightening the money supply is a painful act that will threaten to decimate what is left of our economy.
- Rising interest rates lead to a decrease in aggregate demand in a country, which affects the GDP.
- There is less spending by consumers and investments by corporates.
4) Rising NPA and its impact on credit growth
- Rising interest rates, lack of liquidity, and offering credit to leveraged companies instead of direct subsidies to support small and medium-sized enterprises (SMEs) and micro, small and medium enterprises (MSMEs) to counter the COVID-19 pandemic and its effects will result in NPAs of public sector banks climbing faster.
- Our small and medium scale sector is facing a Minsky moment.
- The Minsky moment marks the decline of asset prices, causing mass panic and the inability of debtors to pay their interest and principal.
- India has reached its Minsky moment.
- This means that the public sector unit and several other banks will need capital in copious amounts to make up for bad debt.
- The Union government’s Budget is in no position to infuse large amounts of capital.
- As a result of the above causes, credit growth is at a multi-year low of 5.6%.
Way forward
- Indian economy is in a vicious cycle of low growth and higher inflation unless policy action ensures higher demand and growth.
Conclusion
In the absence of policy interventions, India will continue on the path of a K-shaped recovery where large corporates with low debt will prosper at the cost of small and medium sectors. This means lower employment as most of the jobs are created by the latter.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Freedom of speech and restrictions on it
Mains level: Paper 2- Issues with Section 124A of Indian Constitution
Context
Chief Justice of India N V Ramana has ignited a passionate debate during a preliminary hearing concerning whether “sedition” should be an offence at all, and how to prevent its misuse or abuse, were it to remain
Issues with the sedition under Section 124A
- Against fundamental right: The meandering meanings of expressions such as “disaffection” towards the government, “hatred”, “contempt” etc. constitute an unreasonable restriction on the fundamental right to free expression guaranteed under Article 19(1)(a).
- Neither the framers of the Constitution nor the authors of the amended Article 19(2) included “sedition” as a ground for “reasonable restriction” to freedom of speech and expression.
- Colonial past: CJI Ramana in preliminary hearings has pointedly asked the Attorney General whether “sedition under Section 124A of the Indian Penal Code is still required after 75 years of independence from colonial rule.
- Prone to misuse: The lack of definition of terms used in the section leaves vide the scope for interpretation and thus rampant misuse and abuse.
Way forward
- Some law luminaries have found new stirrings of hope in the Supreme Court to strike it down.
- Find means to prevent misuse and abuse: Alternative way,as the learned attorney general observed is to find constitutional ways and practical means to prevent the abuse and misuse of law.
- Forbid rampant private complaints: A most immediate step is to forbid rampant private complaints by citizens and authorise only very senior police officials to take appropriate action.
Conclusion
What Gandhiji said — the law may not be used to “manufacture affection” under pain of a penal sanction — was as true then as it remains now. It is high time to realise that the law of “sedition” must go, even when it may strictly not even exist!
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Green Pass
Mains level: Paper 2- Issues with vaccine travel policies
Context
The introduction of Covid-19 vaccines has opened up opportunities to help revive travel. However, it is important to carefully design policies that help revive travel demand.
Vaccine certificates
- Many countries like China and Israel have introduced vaccine certificates that ease the process of entering and travelling across the destination country for vaccinated travellers.
- Can encourage discriminatory treatment: Though these certificates can ensure trade facilitation, they can potentially act as a trade barrier if they encourage discriminatory treatment.
- The recent and the most contentious issue in this regard is the European Union’s “Green Pass” scheme.
Issues with European Union’s Green Pass
- Through this vaccine certificate, the European Commission intends to remove travel restrictions such as entry bans, quarantine obligations and testing.
- Only 4 vaccines listed: The EU has listed only four vaccines approved by the European Medicines Agency (EMA) for the pass: Pfizer-BioNTech’s Comirnaty, Moderna’s Spikevax, Oxford-AstraZeneca Vaxzevria and Johnson & Johnson’s Janssen.
- It makes travellers from countries administering alternate vaccines ineligible for certification.
- When it was launched, the policy did not even allow AstraZeneca’s Indian-manufactured vaccine, Covishield.
- Against COVAX policy: This goes against the policy of COVAX, which has categorically stated that such measures would effectively create a two-tier system and would negatively impact the growth of economies that are already suffering the most.
- Discriminatory against low-income countries: Vaccine doses administered per 100 people is 1.4 for low-income countries as compared to 93.2 for high-income countries.
- This makes travellers from low-income countries ineligible to avail these certificates.
- As per estimates based on information from the WHO, countries not administering any of the EMA-approved vaccines account for at least 14 per cent of the vaccinated population.
- These lie mostly in low and middle-income countries, including India.
- Harms domestic sector: Nationals from many of these countries also serve in the hospitality industries in countries across the world, including Europe.
- With this exclusion criteria, an indirect cost burden is put on their domestic service sectors that are already reeling due to the pandemic.
- Against globalisation policy: With such discriminatory intervention, the EU policy does not go well with the globalisation policy of collective welfare.
Steps to boost vaccine production
- Covid vaccine makers across the world have created a platform, led by the Coalition for Epidemic Preparedness Innovations, to connect with key raw material suppliers needed for boosting production.
- In a recent declaration, WTO members have agreed to review and eliminate unnecessary existing export restrictions on essential medical goods needed to combat the pandemic.
Way forward
- Cooperate on vaccine production: To achieve the desired goal, countries need to cooperate on vaccine production to accelerate the global vaccination process.
- Remove restrictions and trade barriers: Accelerating global vaccine production makes lifting trade barriers on raw materials for vaccine production critical.
- The two relevant bodies, WHO and WTO, should also work together to sort out selective criteria for international movement.
Conclusion
Developed countries should refrain from discriminatory international travel policies against low-income countries and focus on increasing vaccine production to close the vaccination gap at the global level.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CoC in IBC
Mains level: Paper 3- Issues with IBC
Context
National Company Law Appellate Tribunal (NCLAT) stayed the approval granted by the Mumbai bench of the National Company Law Tribunal (NCLT) to the resolution plan for the Videocon Group.
Concerns with resolution plan
- Resolution plan submitted by Twinstar Technologies, provided for payment of Rs 2,962 crore — a mere 4.15 per cent of Videocon’s total admitted debt of Rs 64,838 crore.
- Payment of debt not in fair and equitable manner: Under the IBC (Section 30(2)(b)), the resolution plan must provide for payment of debts amongst creditors in a “fair and equitable” manner.
- However, in the plan submitted by Twinstar, unsecured assenting financial creditors and operational creditors are getting a paltry 0.62 per cent and 0.72 per cent of their admitted dues.
- Even the secured assenting and dissenting financial creditors had to settle for only 4.9 per cent and 4.56 per cent of their respective dues.
- Confidentiality obligation concerns: Twinstar’s bid of Rs 2,962 crore is close to the liquidation value of the Videocon Group estimated at Rs 2,568 crore, thereby raising legitimate suspicion and concern over the confidentiality of the resolution process.
- The I&B Regulations, 2016 state that the resolution professional must maintain the confidentiality of the fair market value and liquidation value of the corporate debtor and can only disclose the same to the CoC members after the resolutions plan have been submitted.
- Time delay: Status-quo ante has been restored until the next date of hearing by which time more than three years would have passed since the Videocon group was admitted into insolvency proceedings.
- This is way beyond the statutory timeline of 330 days.
Confidentiality rules need to be revised
- The CoC members must, on receipt of the information, issue an undertaking of confidentiality.
- But no such obligation falls on the resolution professional.
- Further, Section 29(2) of the code provides that the resolution professional must disclose all “relevant information” to the resolution applicant and it is for the resolution applicant to ensure compliance with confidentiality obligations.
- Again, there is no such duty imposed on the resolution professional.
- Even under Section 25 of the code, titled “Duties of resolution professional”, the specific duty to maintain confidentiality of sensitive information is absent.
- Clearly, the current regime does not have much deterrence value so as to ensure solemn adherence to confidentiality.
Conclusion
Videocon was one of the first test cases to examine the prospects of insolvency jurisprudence in India and the first one, for group insolvency proceedings. However, almost four years and a 95 per cent haircut later, the call for an immediate course correction couldn’t be louder.
Back2Basics: Operational creditor and financial creditors
- When a corporate defaulter is brought under the resolution process (Corporate Insolvency Resolution Process or CIRP), there can be two types of creditors to whom the corporate should give back money –
- (1) the entities who gave loans or funds to the corporate.
- (2) the entities from whom the corporate bought inputs and other services.
- The financial creditors are basically entities (lenders like banks) that have provided funds to the corporate.
- Their relationship with the entity is a pure financial contract, such as a loan or debt security.
- On the other hand, business and other entities that have provided inputs and other materials and services and to whom the defaulted corporate owes a debt are called as operational creditors.
- Both have claims on the defaulted corporate or the defaulted corporate owe payments to both these categories.
- Rights for these categories under the resolution process are also different.
- The IBC gives a clear preference to the claims of the financial creditors over the operational creditors through several procedures.
Haircut
- A haircut is the difference between the loan amount and the actual value of the asset used as collateral.
- It reflects the lender’s perception of the risk of fall in the value of assets.
- But in the context of loan recoveries, it is the difference between the actual dues from a borrower and the amount he settles with the bank.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Zero day vulnerability
Mains level: Paper 3- Cyberwarfare-Fifth dimension
Context
The controversy over the use of Pegasus spyware for snooping highlights the threats posed by cyber-weapons.
The emergence of the cyber weapons epoch
- Cyberattacks on institutions such as banks and on critical infrastructure have proliferated to an alarming extent, signaling the emergence of the cyber weapon epoch.
- Privacy has been eroded and the Internet has become a powerful weapon in the hands of those seeking to exploit its various facets.
- Fifth dimension of warfare: Cyber is often touted as the fifth dimension of warfare — in addition to land, sea, air and space.
The domain of everyday life
- Cyber, as the domain of military and national security, also co-exists with cyber as a domain of everyday life.
- The war is no longer out there.
- It is now directly inside one’s drawing-room, with cyberweapons becoming the weapon of choice.
- Israelis today dominate the cyber domain along with the Chinese, Russians, Koreans and, of course, the Americans.
- The linkage between sabotage and intrusive surveillance is but a short step.
Cyberattacks during the past decades
- Beginning with the 2007 devastating cyberattack on Estonia’s critical infrastructure, this was followed by the Stuxnet worm attack a few years later on Iran’s nuclear facility.
- The Shamoon virus attack on Saudi Aramco occurred in 2012.
- In 2016, a cyberattack occurred on Ukraine’s State power grid; in 2017 there was a Ransomware attack (NotPetya) which affected machines in as many as 64 countries.
- United Kingdom’s National Health Service fell prey to the Wannacry attack the same year.
- The series of attacks happened this year on Ireland’s Health Care System and in the United States such as ‘SolarWinds’, the cyber attack on Colonial Pipeline and JBS, etc.
What are the threats posed by cyberattacks?
- Cyberweapons carry untold capacity to distort systems and structures — civilian or military.
- Cyberweapons also interfere with democratic processes, aggravate domestic divisions and, above all, unleash forces over which established institutions or even governments have little control.
- As more and more devices are connected to networks, the cyber threat is only bound to intensify, both in the short and the medium term.
- What is especially terrifying is that instruments of everyday use can be infected or infiltrated without any direct involvement of the target.
- The possibilities for misuse are immense and involve far graver consequences to an individual, an establishment, or the nation.
- It is not difficult to envisage that from wholesale espionage, this would become something far more sinister such as sabotage.
Way forward
- Deeper understanding: Dealing with ‘zero day’ vulnerabilities require far more thought and introspection than merely creating special firewalls or special phones that are ‘detached’ from the Internet.
- Recognising the mindset: What is needed is a deeper understanding of not only cyber technologies, but also recognising the mindsets of those who employ spyware of the Pegasus variety, and those at the helm of companies such as the NSO.
- Short-term remedies are unlikely to achieve desired results.
- No use of AI: Artificial Intelligence (AI) is often seen as a kind of panacea for many of the current problems and ills, but all advances in technology tend to be a double-edged sword.
- If truth be told, AI could in turn make all information warfare — including cyber related — almost impossible to detect, deflect or prevent, at least at the current stage of development of AI tools.
Conclusion
All this suggests that security in the era of ever-expanding cyberweapons could become an ever-receding horizon.
Back2Basics: Zero-day vulnerability
- The term “zero-day” refers to a newly discovered software vulnerability.
- Because the developer has just learned of the flaw, it also means an official patch or update to fix the issue hasn’t been released.
- So, “zero-day” refers to the fact that the developers have “zero days” to fix the problem that has just been exposed — and perhaps already exploited by hackers.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Police Act 1861
Mains level: Paper 2- One nation, one police
Context
Police reforms are still an unfinished task, fifteen years after the Supreme Court gave directives in the Prakash Singh case in 2006.
Integrated schemes in different facilities
- The Government of India has lately been talking of “One Nation, One Ration Card”, “One Nation, One Registry”, “One Nation, One Gas Grid”, and even “One Nation, One Election”.
- These ideas would contribute to an integrated scheme in different facilities and networks across the country.
- The attempt at uniformity should, however, take cognisance of local factors and special features.
Issue of different states passing different Police Act
- Every state is legislating a different Police Act, purportedly in compliance with the Supreme Court’s directions on police reforms given on September 22, 2006.
- We are in the process of having “one nation, many police acts”.
- Circumventing the Prakash Singh judgement: The objective behind these laws is to give legislative cover to the existing arrangement and thereby circumvent the judicial directions given in the Prakash Singh judgement in 2006.
- Eighteen states have already passed Police Acts.
- Absence of central guidelines: Several states have, in the absence of any central guidance or directive, passed their own Police Acts, blatantly violating the Supreme Court’s directions.
- No action by judiciary: The Supreme Court has, for inexplicable reasons, not issued a contempt notice to any of the states for non-compliance of its directions on police reforms.
Way forward
1) The Centre should legislate a Model Police Act
- Article 252 of the Constitution gives Parliament the power to legislate for two or more states by consent.
- Soon after the Supreme Court’s directions on police reforms, the Police Act Drafting Committee of the Ministry of Home Affairs came out with the Model Police Act, 2006.
- The Government of India should have enacted a law based on this Model Police Act with such changes as it may have found necessary, and the states should have mutatis mutandis ( making necessary alterations while not affecting the main point at issue) adopted it.
- The least that the Government of India could have done was to legislate for the UTs and then prevailed upon the states to pass similar legislation.
- Enacting a law in the states could have been incentivised by linking their passage with the modernisation grants made available to the states.
2) Need for the spirit of cooperative federalism
- In recent times, we saw the unseemly spectacle of the Mumbai police commissioner accusing the state home minister of using the police as an instrument for extortion.
- In West Bengal, the police have been a mute spectator to the post-election violence.
- The Centre, through a fiat, gave protection to all the MLAs of the BJP.
- Normally, any such arrangement should have been in consultation and with the involvement of the state government.
- Cooperative federalism: The best option would be for the central and state governments to respect each other’s turf in a spirit of cooperative federalism.
3)Need for a fresh look at the distribution of power
- If the central and state governments cannot respect each other’s turf, it would perhaps be necessary to have a fresh look at the distribution of powers in the seventh schedule of the Constitution.
Conclusion
Police reforms on the lines of judicial directives given by the Supreme Court is the need of the hour. The centre needs to act first and nudge the states toward a uniform police structure throughout the country.
Back2Basics: Supreme Court Directive on Police Reforms
1) Limit political control
- Constitute a State Security Commission to:
- Ensure that the state government does not exercise unwarranted influence or pressure on the police.
- Lay down broad policy guidelines.
- Evaluate the performance of the state police.
2. Appointments based on merit
- Ensure that the Director-General of Police is appointed through a merit–based, transparent process, and secures a minimum tenure of 2 years.
3. Fix minimum tenure
- Ensure that other police officers on operational duties (including Superintendents of Police in charge of a district and Station House Officers in charge of a police station) are also provided a minimum tenure of 2 years.
4. Separate police functions
- Separate the functions of investigation and maintaining law and order.
5. Set up fair and transparent systems
- Set up a Police Establishment Board to decide and make recommendations on transfers, postings, promotions and other service-related matters of police officers of and below the rank of Deputy Superintendent of Police.
6. Establish a Police Complaints Authority in each state
- At the state level, there should be a Police Complaints Authority to look into public complaints against police officers of and above the rank of Superintendent of Police in cases of serious misconduct, including custodial death, grievous hurt or rape in police custody.
- At the district level, the Police Complaints Authority should be set up to inquire into public complaints against the police personnel of and up to the rank of Deputy Superintendent of Police in cases of serious misconduct.
7. Set up a selection commission
- A National Security Commission needs to be set up at the union level to prepare a panel for selection and placement of chiefs of the Central Police Organizations with a minimum tenure of 2 years.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: 101st Constitutional Amendment
Mains level: Paper 2- Fiscal federalism
Context
States are facing financial constraints in the backdrop of lockdown and consequent dwindling revenue collection. The situation also highlights the issues of fiscal federalism in India.
Issues facing fiscal federalism in India
1) Issue of 14% compensation
- As per the Constitution (One Hundred and First Amendment) Act, compensation on account of the implementation of GST will be available for a period of five years.
- 14% increment assurance: At the time of introducing the Goods and Services Tax (GST) law assured States a 14% increase in their annual revenue for five years (up to July 1, 2020).
- But the Union government has deviated from the statutory promise and has been insisting that States avail themselves of loans.
- The future interest liability of these loans should not be placed on the shoulders of the States.
- Borrowing limits built into loan: Moreover, the borrowing limit of States, as per the Fiscal Responsibility and Budget Management Act, should not be built into these loans.
2) Conditional increase in borrowing limit
- Last year, the Union government increased the borrowing ceiling of the States from 3% to 5% for FY 2020-21.
- But conditions are attached to 1.5% of the 2% of increased ceiling.
- Attaching conditions for expenditure out of the borrowed amount would clip the wings of the States and goes against the principle of cooperative federalism.
Way forward
- Introduce special rate: A special rate could be levied for a specified period in order to raise additional resources to meet the challenges posed by COVID-19 with the approval of the GST Council.
- As per Section 4(f) of Article 279A, the Union government can consider introducing any special rate to raise additional resources during the pandemic (any natural calamity or disaster).
- The present GST compensation period will end in 2021-22.
- Increase the period beyond five years: Compensation beyond five years requires a constitutional amendment.
- If this period is not increased, it will create serious financial stress to the States, especially to those which require higher compensation.
Conclusion
There is a need for measures on part of the Central government to consolidate fiscal federalism in the aftermath of pandemic and implementation of the GST regime in India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Agriculture reforms to reduce the risk in agriculture in India
Context
The farmers’ protest against farm laws brings into focus the factors afflicting agriculture in India.
Issues of Indian agriculture
- Some 50 years after the Green Revolution, an all-India agricultural landscape is characterized by relatively low productivity levels that co-exist with high levels of variation in crop yields across our farming districts.
- Excessive control: Various government agencies have a say on all aspects of the farmer’s livelihood — the latest count includes 13 central and countless state ministries and agencies.
- These agencies oversee rural property rights, land use, and land ceilings; commodity prices, input subsidies, and taxes, infrastructure, production, credit, marketing and procurement, public distribution, research, education, trade policy, etc.
- Poor policies: The result has been a mix of arbitrary and conflicting policy interventions by both the central and state government agencies.
- Poor provision of basic public goods: This, combined with poor and varying levels of provision of basic public goods, including irrigation explains the poor state of Indian agriculture.
Risk-to-return in agriculture
- The following figures indicate the median (typical) district-level yield (in tonnes-per-hectare) for four major crops — rice, wheat, maize, and cotton — along with the geographic variability of this yield (risk) across all reporting districts for each year from 1966 to 2018.
- Combining these two values — median district yield and its geographic variability across all farming districts — provides us a measure of the all-India level of risk-to-return, in percentage terms.
Lessons from risk-to-return profile
- One, the large gap in rice and wheat yields that opened up between Punjab and Haryana and the farm districts in the rest of the country remains far from being closed.
- Limited mobility of ideas: There is severe unevenness in the provision of common goods across districts — irrigation, roads, power, etc.
- There is also the absence of well-functioning markets for agricultural land, crops, and inputs, the slow labour reform, and the poor quality of education.
- These two factors have worked to reduce overall resource mobility within and across our farming districts.
- Most importantly, they have limited the mobility of ideas and technology needed to increase productivity and reduce the variation of yield across districts.
- Decentralization failed: As a result of lack of mobility, the real promise of a decentralized system — of experimentation, of learning from each other, and the adoption of best practices and policies — has failed to materialize.
- Distortion due to subsidies: Various input subsidies and minimum price guarantee procurement schemes provided by the state have worked to worsen the overall levels of productivity and the risk in agriculture, generating adverse effects for all of us, through the degradation of our water resources, soil, health, and climate.
- At the same time, these policies have tightened the trap our farm households find themselves in.
- Thus, as is evident in the next chart, outside of rice and wheat, the risk-to-return levels are even higher in the case of maize and cotton, including for Punjab.
- As a result, the farm households of Punjab and Haryana fear both, the loss of state support for rice and wheat and the higher risks implied by a switch to other crops.
Way forward
- Minimize risk: The guiding principle for three farm laws must be to create conditions that allow farm households to maximize their income while minimizing the overall level of risk in Indian agriculture.
- Freedom of choice: Farmers must be made free to determine the best mix of resources, land, inputs, technology, and organizational forms for their farms.
- More freedom: Farmers, just as entrepreneurs in the non-farm sector, must be allowed to enter and exit agriculture, on their own terms and contract with whomever they wish.
- Allow entry of corporates: Entry of the large or small private corporates in the Indian agricultural stream will help the Indian farmer, along with the rest of us, move to a low-risk, high-return path of progress.
Conclusion
The more we delay the needed reforms, the more difficult it will prove to be for all of us to extract ourselves out of these risk-laden currents of agriculture.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: 97th Amendment
Mains level: Paper 2- Striking down of the 97th Amendment Act
Context
In Union of India vs Rajendra N. Shah, the Supreme Court of India partially struck down the 97th Constitutional Amendment.
Background of the 97th Constitutional Amendment
- The 97th Constitutional Amendment came into effect from February 15 2012.
- The amendment added “cooperative societies” to the protected forms of association under Article 19(1)(c), elevating it to a fundamental right.
- It also inserted Part IXB in the Constitution which laid down the terms by which cooperative societies would be governed, in more granular detail than was palatable.
Why was the Amendment struck down?
- The Constitution can be amended only by the procedure provided in Article 368.
- The amendment procedure requires a majority of the total strength of each of the Houses of Parliament and two-thirds majority of those present and voting.
- A proviso to the Article lists out some articles and chapters of the Constitution, which can be amended only by a special procedure.
- The special procedure requires that the amendment will also have to be ratified by the legislatures of half of the States.
- It is precisely on the grounds of violation of this additional requirement that the 97th Constitutional Amendment was challenged.
- The Gujarat High Court struck down the amendment in 2013 on the grounds that it had failed to comply with the requirements under Article 368(2) by virtue of not having been ratified by the States and had also given an additional finding that the 97th Amendment violated the basic structure of the Constitution.
- The Union Government challenged the Gujarat High Court judgment before the Supreme Court, arguing that the amendment neither directly nor effectively changed the scheme of distribution of powers between the Centre and the States.
- The court took the example of the 73rd and 74th Amendments which were similar in impact on the legislative power of the States, had been passed by the special procedure involving ratification by State legislatures.
- Procedural lacuna: The court noted that the procedure had not been followed in this case.
- The Supreme Court clarified that the does not go into the question of the amendment being violative of the basic structure of the Constitution.
- The judgment makes a distinction between cooperative societies operating in one State and multi-State cooperative societies and holds that while a ratification by half the State legislatures would have been necessary insofar as it applies to cooperative societies in one State.
Increasing control of the Union government
- Union government has been acquiring incrementally greater control of cooperative societies over the years.
- Cooperative banks have been brought under the purview of the Reserve Bank of India.
- Union Government recently established Union Ministry for Cooperation.
Issues with Central control over cooperative sector
- Domain of States: The idea that the cooperative sector ought to be controlled at the State level and not at the central or Union level goes back all the way to the Government of India Act, 1919 which placed cooperatives in the provincial list.
- Part of State list: Entry 32 of the State List in the Seventh Schedule of the Constitution confer power on the State legislatures to make laws pertaining to incorporation, regulation and the winding up of cooperative societies.
- The cooperative sector has always been in the domain of the States or provinces.
- Different organising principles: The organising principles and mechanism of these cooperatives differ from area to area and depend on the industry or crop which forms the fulcrum of the cooperative.
- Homogeneity nor require: Homogeneity in this area would only result in the creation of round holes in which square pegs no longer fit.
- They also would not really serve to break the control some political interests have taken over cooperatives.
Conclusion
It is best that the Government takes this judgment in the right spirit and stays away from further meddling in the cooperative sector, notwithstanding the creation of the new Ministry.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Inflation
Mains level: Paper 3- Economic recovery
Context
Many developed countries are poised for strong growth. This will compel their respective central banks to begin normalizing the extremely loose monetary policies. This will require a reorientation of India’s stimulus strategy.
Global growth momentum
- On the global front, the growth momentum has been strong, particularly in the US and China, although recent data suggest this has peaked or is even stalling.
- Post the perceived hawkishness of the last US Federal Reserve policy meeting, the traded interest rate of the benchmark US 10-year treasury bond fell to below 1.3 percent.
- The falling rate reflects disquiet about the durability of the recovery once the fiscal stimulus starts waning.
- China recently announced a 0.5 percent cut in the required reserves ratio for banks.
- Europe’s recovery had begun to inch up, but members of the European Central Bank have begun to push back on market expectations of early tapering.
- However, some smaller global central banks have started normalizing their respective Quantitative Easing programs.
Growth momentum in India
- The encouraging aspect of the recovery is the resilience of many mid-and large-turnover companies in the face of the debilitating public health crisis
- In India, there are signs that the recovery momentum began to strengthen from mid-June, and of demand accelerating, despite capacity utilization in many industries below thresholds needed for the next round of private investments.
- In line with the market consensus, we think that 2021-22 growth is likely to be in the 9-10 percent range.
- Tax collections, another indicator of activity, even if a bit skewed, support this view.
- A revival of retail consumer demand is critical for sustaining the recovery. Reports from industry associations suggest a somewhat mixed picture.
- Demand emanating from rural geographies is important for sustaining recovery.
- Demand for work under MGNREGA suggests continuing stress.
- Monsoons will be a big contributor.
- The sowing of Kharif crops stalled in late June but is predicted to pick up again in mid-July.
- Renewed government intervention is required.
Factors deciding the trajectory of recovery
- Inflation: Rising inflation could force a monetary policy normalization faster than presently anticipated.
- Global recovery: Effects global central banks’ policy tightening will only add to the difficulty of balancing a policy-induced increase in interest rates, moderating financial markets volatility, and maintaining growth incentives.
- Access to credit: Access to credit remains a crucial input in the recovery matrix, particularly for small and micro-enterprises.
- The Union government’s Emergency Credit Line Guarantee Scheme (ECLGS) has reportedly been very effective in stabilizing the solvency (and cash flows) of micro and small businesses.
Way forward
- Expansion of subvention scheme: The expansion of subvention (ECLGS) is probably the most effective template to incentivize credit flows, leveraging on the government’s balance sheet to take on the first loss risks.
- At the same time, capex proposals of the Centre and states should gradually draw in private sector capex.
- Policy intervention to create a level field: Corporate health has improved, with lower debt on balance sheets.
- Adoption of technology is widespread; this will boost productivity and competitiveness.
- But these factors reinforce trends in consolidation and market power.
- It will require policy interventions to create a more level playing field for smaller companies, which is crucial for job creation.
Conclusion
Policy support will thus need to adapt from the “revive” to the “thrive” phase, to place India on a sustained 7 percent-plus growth path.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CDS
Mains level: Paper 3- Issues with creation of theatre commands
Context
The government is reportedly planning to re-organise the military into a theatre command under the chief of defence staff (CDS) in which the assets of the Air Force will be split into four and distributed among four operational theatres.
Background of the creation of CDS
- In 2012, the Naresh Chandra Committee suggested the creation of a CDS, which would take on overall functions of the chairman, chiefs of committee as well as the responsibilities pertaining to centralised planning, induction, training, intelligence and logistics.
- Operations, according to the committee’s suggestion, would continue to be managed by the respective chiefs of staff.
- However, sometime in 2016-17, this idea was modified to organise the operational assets of the three services into four theatre commands, all of which are now proposed to be brought under the CDS.
Issues with creating theatre command by dividing Air Force
- Professional leadership is critical in support elements: The Air Chief’s professional leadership of the Air Force is crucial to orchestrate a variety of support elements like aerial tankers, AWACS (Airborne Warning And Control Systems), AEW, Heliborne support and UAVs in an “offensive operation”.
- Lack of in-dept understanding: A land theatre command, if given power over the air elements, may not have the confidence to launch such a mission because of the lack of in-depth understanding of the organisational complexity and the risks involved.
- Dilution of assets may harm effectiveness: Dilution of the combat assets of the Air Force, a 30-squadron force consisting of five or six types of aircraft, might severely affect mission-effectiveness.
- Role of CDS: It is extremely doubtful if the CDS can cope with the enhanced responsibilities that include operations, albeit through the theatre commanders.
- That would leave only training, maintenance, and support under the chiefs of staff — a gross under-utilisation of the operational leadership built over 40 years.
- Resource limitations: Forming a separate air defence command for the air defence of the entire nation seems an impractical idea considering our resource limitations.
- Current arrangement functioned effortlessly: The current arrangement of a decentralised air defence organisation managed by Air Force geographical commands has functioned faultlessly.
- Flexibility: The existing structures afford better flexibility.
- There will be significant expenditure to construct the operational infrastructure of the theatre commands.
- Timing: We are trying to effect changes at a time the military is deployed actively.
- The Chinese have dug in hard, and we do not yet know their strategy.
- To divide the Air Force into four units at this moment is inadvisable.
Way forward
- White paper: There is no white paper on the advantages of the theatre commands or one listing the merits of the CDS donning the mantle of the operational head of the entire military operation.
- So, a white paper on these aspects could clear the air over the utilities of such moves.
- Joint planning is a must, but operations are best undertaken by individual services who know what other services are doing and when.
Conclusion
Splitting the asset of the Air Force would result in dilution of its power and is not advisable at the current juncture.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GVA
Mains level: Paper 3- Limits of relying on high-growth sectors
Context
The latest estimates of the fourth quarter of financial year 2020-21 (January-March) brought some relief, for policymakers.
Interpreting the construction sector GVA increase
- The construction sector showed a 15 per cent increase in gross value added (GVA) in the last quarter, which is nearly double the growth experienced by the sector in the previous year (7.7 per cent).
- Sign of better times: The buoyant growth of this sector has been hailed by policymakers not just as a sign of better times to come,
- Addressing distress: Growth in the construction sector is also considered as the capacity of the economy to address the distress that households have faced in the past year.
- Addressing needs of workforce: The Chief Economic Advisor pointed to the high growth rates in construction possibly to indicate that growth would address the needs of the beleaguered workforce.
- The Union budget 2021 has also allocated a considerable sum towards infrastructure and construction in the hopes of the sector playing a catalysing role.
Issues with relying on the growth of high-employment sector
- No strong correlation: While GVA and/or GDP are considered as indicators of economic health, it has been argued in detail how it may not be prudent to rely on these alone as measures of economic welfare.
- In particular, mere growth in a sector may not necessarily translate into benefits for its workers.
- In the last quarter of 2019-2020, when construction GVA grew at nearly 8 per cent, employment in the same sector grew by 3 per cent based on our estimates from CMIE-CPHS.
- Fallback employment option: The fact that employment grew in this sector even during a crisis year is largely because of the fact that the construction sector emerged as a fallback employment option for many displaced workers.
- During “normal” times, the sector typically employs only about 10-15 per cent of India’s total workforce.
- Even if this sector were to expand in line with its GVA growth, it will not be able to provide employment beyond a certain level.
- Employment alone is not enough: Moreover, employment alone is not enough.
- Earnings for an average daily wage worker in the sector have actually declined this year.
- Again, the overall economic growth in GVA in the sector has not been passed on to the workers.
Way forward
- Any relief effort that relies solely on economic growth as a means to uplift workers will be sorely inadequate as we see from the experience of workers in construction.
- The need of the hour is to go beyond relying on sectoral growth as a means of delivering relief to workers.
- Direct transfers of cash and food are also needed, as is livelihood support through employment guarantee programmes.
Conclusion
While boosting growth of high-employment sectors is one strategy to adopt, this has its limitations. The capacity of a sector is limited in terms of the number of workers that it can absorb, and the extent to which growth can benefit workers.
Back2Basics: What is GVA?
- Gross value added (GVA) is an economic productivity metric that measures the contribution of a corporate subsidiary, company, or municipality to an economy, producer, sector, or region.
- GVA is essentially a measure of the “net” value of output — deducting the cost of any input that went into its production from its total value.
- GVA thus adjusts gross domestic product (GDP) by the impact of subsidies and taxes (tariffs) on products.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Paradox in debate over relations with the US
Context
As the Indian leadership reviews US ties this week with the visiting Secretary of State, Antony Blinken, a paradox stands out.
Deepening Indo-US ties
- India and the US have come a long way since the 1990s.
- There is growing political and security cooperation, expanding economic engagement, widening interface between the two societies, and the intensifying footprint of the Indian diaspora in the US.
- Convergence of interests: That ambition, in turn, is based on the unprecedented convergence of Indian and American national interests.
- Agenda for cooperation: The two countries have already agreed on an ambitious agenda for bilateral, regional and global cooperation.
Debate in India over Indo-US relation: A paradox
- The discourse within India’s strategic community continues to be anxious.
- Some of the questions that animate the media and political classes have not changed since the 1990s.
- Issues in the debate: Debate focuses on US’s stand on the Kashmir issue, democracy and human rights and its impact on India-US relations.
- Contradictory fears: There are also contradictory fears such as whether the US extend full support in coping with China.
- While we expect the US to give guarantees on supporting us, we insist that India will never enter into an alliance with the US.
- Small state syndrome in India: As India’s relative weight in the international system continues to grow, it creates much room for give and take between India and the US.
- Yet, a small state syndrome continues to grip the foreign policy elite.
- The situation is similar on the economic front.
- Although India is now the sixth-largest economy in the world, there is unending concern about the US imposing globalisation on India.
- Even as India’s salience for solutions to climate change has increased, India’s debate remains deeply defensive.
Factors responsible paradox
- Missing the big picture: The narrow focus on the bilateral precludes an assessment of the larger forces shaping American domestic and international politics.
- That, in turn, limits the appreciation of new possibilities for the bilateral relationship.
- Underinvestment in American studies: The problem is reinforced by India’s under-investment in public understanding of American society.
- Russia and China have put large resources in American studies at their universities and think tanks.
- The Indian government and private sector will hopefully address this gap in the not-too-distant future.
Policy shifts unfolding in the US
- Domestic economic policies: If the economic policy drift in the last four decades was to the right, Biden is moving left on the relationship between the state and the market — on raising taxes, increasing public spending and addressing the problem of sharp economic inequality.
- Economic policy and globalisation: Biden has also joined Trump in questioning America’s uncritical economic globalisation of the past.
- If Trump talked of putting America First, Biden wants to make sure that America’s foreign and economic policies serve the US middle class.
- Foreign policy: Biden has concluded that four decades of America’s uncritical engagement with China must be reconstituted into a policy that faces up to the many challenges that Beijing presents to the US.
- Biden is also focused on renewing the traditional US alliances to present a united front against China.
- He is also seeking to overcome Washington’s hostility to Russia by resetting ties with Moscow.
Question of democracy and human rights
- Democracy is very much part of America’s founding ideology.
- But living up to that ideal at home and abroad has not been easy for the United States over the last two centuries.
- Delhi and Washington will also have much to discuss on the challenges that new surveillance technologies and big tech monopolies pose to democratic governance.
- The exclusive American focus on democracy promotion has been rare, costly and unsuccessful.
- India’s own experience at spreading democracy in its neighbourhood is quite similar.
- But that discussion is only one part of the expansive new agenda — from Afghanistan to Indo-Pacific, reforming global economic institutions to addressing climate change, and vaccine diplomacy to governing new technologies that beckon India and the United States.
Conclusion
As they intensify the bilateral cooperation, the two sides will hopefully turn the Indo-US partnership from a perennial curiosity to a quotidian affair.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: The Andaman and Nicobar Command
Mains level: Paper 3- Jointness in armed forces
Context
The Chief of Defence Staff General Bipin Rawat’s recent description of the Indian Air Force (IAF) as a supporting arm and the IAF chief Air Chief Marshal R.K.S. Bhadauria’s rebuttal highlights turbulent journey marking the reorganisation process of the armed forces.
Issues before IAF
- The IAF is warning against splitting it into packets.
- Reports suggest that counting even ageing aircraft, the IAF is 25% short on fighter squadrons.
- A pan service shortage of about 400 pilots, almost 10% of their authorised strength, further aggravates this.
- Therefore, the IAF has a point when it warns against splitting assets, for, there may be nothing much to split.
Way forward
- Confidence building: A common understanding of the nuances of military airpower is the key.
- With the experience of operating almost every kind of aircraft the IAF operates, the naval leadership understands air power.
- This applies to the Indian Army too, in its own way.
- Confidence needs to be developed that rightly staffed apex joint organisations can draw up professional operational plans for air power.
- Enhancing military education: Confidence building will need some effort in the short term towards enhancing professional military education though, at the staff level.
- Analysis before implementation: Major reorganisations must strictly follow the sequence of written concepts, their refinement through consultation, simulation or table top war gaming, field evaluation and final analysis before implementation.
- This would help address command and control, asset adequacy, individual service roles, operational planning under new circumstances and the adequacy of joint structures.
- Who gets to lead what also matters.
- The Western Command between the Indian Army and the IAF, the Northern Command with the Indian Army, Maritime Command with the Indian Navy and the Air Defence Command with the IAF may be an acceptable formula.
Why jointness?
- With dwindling budgets, a steadily deteriorating security situation and the march of technology, the armed forces understand the need to synergise.
Challenges
- Challenges in co-existence: Different services do not co-exist well where they are colocated.
- Bitter fights over land, buildings, facilities, etc. harms optimal operational synergising.
- Allocation challenge: Then there is the issue of giving each other the best, or of wanting to be with each other.
- Lack of operational charter: The Andaman and Nicobar Command suffered from the lack of a substantial operational charter, and the services not positioning appropriate personnel or resources there.
- Lack of interest in joint tenure: As a joint tenure did not benefit career, no one strove for it.
- The U.S., when faced with the same problem, made joint tenures mandatory for promotions.
Steps to be taken
- Security strategy: We need a comprehensive National Security Strategy to guide the services develop capacities required in their respective domains.
- Professional education: We need to transform professional education and inter-service employment to nurture genuine respect for others.
- Mutual resolution of difference: The armed forces must resolve their differences among themselves, as the politicians or bureaucrats cannot do it.
- Quality staff: Good quality staff, in adequate numbers, at apex joint organisations, will help to reassure individual services and those in the field that they are in safe hands.
- Tailored approach: There is need for the acceptance of the fact that what works for other countries need not work for us.
Conclusion
We may need tailor-made solutions which may need more genuine thinking. For genuine military jointness, a genuine convergence of minds is critical.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CBAM
Mains level: Paper 3- Way forward for Indian industry after the introduction of CBAM
Context
On July 14, the European Union introduced new legislation, Fit for 55, to cut its GHG emissions by 55 per cent by 2030 and to net-zero by 2050.
Implications of Fit for 55
- Legal backing: It turns the EU’s announcement into law, protecting it from the winds of political change.
- Opportunity for India: It opens new markets for Indian industry, for example for electric vehicles.
- CBAM: However, it also introduces a potentially adverse policy called the carbon border adjustment mechanism (CBAM).
- CBAM is meant to discourage consumers from buying carbon-intensive products and encourage producers to invest in cleaner technologies.
What is CBAM?
- The EU has had a carbon emission trading system since 2005.
- With Fit for 55, the EU’s carbon price is likely to go up.
- High carbon price will make the EU’s domestic products more expensive than imports from countries that do not have such rules.
- The new CBAM is meant to level the playing field between domestic and imported products.
- CBAM will require foreign producers to pay for the carbon emitted while manufacturing their products.
- The adjustment will be applied to energy-intensive products that are widely traded by the EU, such as iron and steel, aluminium, cement, fertiliser, and electricity.
Why CBAM is a cause for concern for India?
- India is Europe’s third-largest trading partner, and it does not have its own carbon tax or cap.
- So, CBAM should be a cause for concern for it.
- A UNCTAD study predicts that India will lose $1-1.7 billion in exports of energy-intensive products such as steel and aluminium.
- India’s goods trade with the EU was $74 billion in 2020.
Way forward for Indian Industry
- Clean technology partnerships: Indian Industry should enter clean technology partnerships with European industry.
- Invest in renewables: Indian companies should invest in more renewable electricity and energy efficiency.
- Incentivise low-carbon choices: They can adopt science-based targets for emission reduction and internal carbon pricing to incentivise low-carbon choices.
- Schemes and Government financing: The government can extend the perform-achieve-trade scheme to more industries and provide finance to MSMEs to upgrade to clean technologies.
- WRI India’s analysis shows that carbon dioxide emissions from the iron and steel industry can be reduced from 900 million tonnes to 500 million tonnes in 2035 through greater electrification, green hydrogen, energy efficiency, and material efficiency.
- Diversify export: India can try to diversify its exports to other markets and products.
Consider the question “What is carbon border adjustment mechanism (CBAM) introduced by the EU? What are its implications for Indian industry?”
Conclusion
At present, the CBAM may seem obstructionist. But over the long-term, it can provide regulatory certainty to industry by harmonising carbon prices, and Indian industry can position itself as a strong player in the trade landscape of the future.
Back2Basics: UNCTAD
- UNCTAD is a permanent intergovernmental body established by the United Nations General Assembly in 1964.
- Its headquarters are located in Geneva, Switzerland, and have offices in New York and Addis Ababa.
- UNCTAD is part of the UN Secretariat.
- IT report to the UN General Assembly and the Economic and Social Council but have own membership, leadership, and budget.
- It is also part of the United Nations Development Group.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SAARC countries
Mains level: Paper 2- Relevance of SAARC
Context
Despite the framework SAARC provides for cooperation amongst South Asian nations, it has remained sidelined and dormant since its 18th summit of 2014 in Kathmandu. No alternative capable of bringing together South Asian countries for mutually beneficial diplomacy has emerged.
Common challenges facing South Asia
- The region is beset with unsettled territorial disputes, as well as trans-border criminal and subversive activities and cross-border terrorism.
- The region also remains a theatre for ethnic, cultural, and religious tensions and rivalries besides a current rise in ultra-nationalism
- Nuclear-armed neighbours India and Pakistan are at loggerheads.
- US military withdrawal from Afghanistan has fuelled fears of intensification of these trends.
Significance of SAARC
- As the largest regional cooperation organisation, SAARC’s importance in stabilising and effectively transforming the region is becoming increasingly self-evident.
- SAARC is needed as institutional scaffolding to allow for the diplomacy and coordination that is needed between member-states in order to adequately address the numerous threats and challenges the region faces.
- Though SAARC’s charter prohibits bilateral issues at formal forums, SAARC summits provide a unique, informal window — the retreat — for leaders to meet without aides and chart future courses of action.
- The coming together of leaders, even at the height of tensions, in a region laden with congenital suspicions, misunderstandings, and hostility is a significant strength of SAARC that cannot be overlooked.
- In March last year, Indian Prime Minister Narendra Modi seized the Covid-19 crisis and utilised SAARC’s seal to convene a video conference of SAARC leaders.
- Such capacity to bring member-states together shows the potential power of SAARC.
What role SAARC can play in Afghanistan
- Commitment to get rid of terrorism: The third SAARC summit in 1987 adopted a Regional Convention on Suppression of Terrorism and updated it in 2004 with the signing of an additional protocol.
- These instruments demonstrate the collective commitment to rid the region of terror and promote regional peace, stability, and prosperity.
- Using the network of institutions: In 36 years of existence, SAARC has developed a dense network of institutions, linkages, and mechanisms.
- SAARC members are among the top troop-contributing countries to UN peacekeeping missions.
- Joint peacekeeping force: With the US withdrawal from Afghanistan, a joint peacekeeping force from the SAARC region under the UN aegis could be explored to fill the power vacuum that would otherwise be filled by terrorist and extremist forces.
Consider the question “What role SAARC can play in stabilising the region after the US withdrawal from Afghanistan? Is SAARC still relevant for the region?”
Conclusion
Allowing SAARC to become dysfunctional and irrelevant greatly distorts our ability to address the realities and mounting challenges facing SAARC nations.
Back2Basics: About SAARC
- In 1985, at the height of the Cold War, leaders of South Asian nations — namely Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka — created a regional forum.
- The South Asian Association for Regional Cooperation (SAARC) was established with the goal of contributing “to mutual trust, understanding and appreciation of one another’s problems.”
- Afghanistan was admitted as a member in 2007.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 21
Mains level: Paper 2- Biocentric jurisprudence
Context
In a recent ruling, the Supreme Court of India has sought to move away from an anthropocentric basis of law.
Biocentrism Vs. Anthropocentrism
- Anthropocentrism argues that of all the species on earth humans are the most significant and that all other resources on earth may be justifiably exploited for the benefit of human beings.
- The philosophy of biocentrism holds that the natural environment has its own set of rights which is independent of its ability to be exploited by or to be useful to humans.
- Biocentrism often comes into conflict with anthropocentrism.
Supreme Court of India upholds biocentric principles
- The Great Indian Bustard is a gravely endangered species, with hardly about 200 alive in India today.
- The overhead power lines have become a threat to the life of these species as these birds frequently tend to collide with these power lines and get killed.
- Recently, the Supreme Court in M.K. Ranjitsinh & Others vs Union of India & Others, said that in all cases where the overhead lines in power projects exist, the governments of Rajasthan and Gujarat shall take steps forthwith to install bird diverters.
- In protecting the birds, the Court has affirmed and emphasised the biocentric values of eco-preservation.
- A noteworthy instance of the application of anthropocentrism in the legal world is in that of the “Snail darter” case in the United States.
- The Supreme Court of the United States of America in Tennessee Valley Authority vs Hill, had held that since the “Snail darter” fish was a specifically protected species under the Act, the executive could not proceed with the reservoir project.
Human role in extinction of species
- About 50 years ago, there were 4,50,000 lions in Africa. Today, there are hardly 20,000.
- Indiscriminate monoculture farming in the forests of Borneo and Sumatra is leading to the extinction of orangutans.
- Rhinos are hunted for the so-called medicinal value of their horns and are slowly becoming extinct.
- From the time humans populated Madagascar about 2,000 years ago, about 15 to 20 species of Lemurs, which are primates, have become extinct.
- The compilation prepared by the International Union for Conservation of Nature lists about 37,400 species that are gravely endangered; and the list is ever growing.
Evolution of Right of Nature laws in Constitutions
- Pieces of legislation are slowly evolving that fall in the category of the “Right of Nature laws”.
- These seek to travel away from an anthropocentric basis of law to a biocentric one.
- The Constitution of India is significantly silent on any explicitly stated, binding legal obligations we owe to our fellow species and to the environment that sustains us.
- It is to the credit of the Indian judiciary that it interpreted the enduring principles of sustainable development and read them, inter alia, into the precepts of Article 21 of the Constitution.
- In September 2008, Ecuador became the first country in the world to recognise “Rights of Nature” in its Constitution.
- Bolivia has also joined the movement by establishing Rights of Nature laws too.
- In November 2010, the city of Pittsburgh, Pennsylvania became the first major municipality in the United States to recognise the Rights of Nature.
- These laws, like the Constitution of the countries that they are part of, are still works in progress.
Conclusion
In times like this the Supreme Court’s judgment in M.K. Ranjithsinh upholding the biocentric principles of coexistence is a shot in the arm for nature conservation. One does hope that the respective governments implement the judgment of the Court.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Gulf of Hormuz
Mains level: Paper 3- Leveraging advantageous geography to counter China
Context
The Chinese are about to extend their geographical advantage by building a new high-speed rail from Chengdu, running close by and parallel to the Arunachal border, up to Lhasa.
Manpower and Defence Budget: Comparison with China
- The Indian army, according to diverse sources, numbers between 12,50,000 and 14,00,000 officers and men.
- Chinese PLA actually has only 9,75,000 officers and men.
- They have downsized their army.
- China is an aspiring world power that spends $252 billion on its defence budget, as compared to $72.9 billion that India spends.
- Both countries limit their budget to around 2 per cent of their GDP, which in China’s case is five times our size.
Why does India need to reduce manpower in defense?
- Expensive: A major portion of the budget is spent on manpower, 81 percent of the army budget goes into manpower and maintenance. Gradually, manpower is going to get increasingly expensive.
- Also, our strategic options get constrained because the army gets 61 percent of the defense budget.
- We need to downsize the army by 2,00,000 men over five years through retirement and reduced recruitment.
- The reduction in manpower will save approximately Rs 30,000 crore, which can be equally divided between the three services.
Way forward: Bigger role to navy and air force
- We can achieve better conventional deterrence against China by giving bigger roles to the navy and air force.
- The first step is to accept that we are an asymmetric power and leverage the RMA (Revolution in Military Affairs) so that numerical inferiority is of no consequence.
- They are invulnerable on land, and their only strategic weakness is their reliance on the Indian Ocean SLOCs (sea lines of communications) for 70 percent of their imported oil.
- The only guarantee of Chinese non-aggression and good behavior is a well-crafted threat to their oil tankers and a complete naval mastery of the escalation that is bound to follow.
- India can also leverage the QUAD resources in various ways such as information.
- Build up the Car Nicobar airfield into a full-fledged airbase.
- We could negotiate with Oman for the use of the old RAF airbase at Masirah to dominate the Gulf of Hormuz and threaten the Chinese base at Djibouti.
Conclusion
China cannot be countered by throwing expensive manpower at the problem, but only by shifting the battlespace to advantageous geography, by a united navy and air force effort, while a technically advanced army holds the Himalayan border.
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