Note4Students
From UPSC perspective, the following things are important :
Prelims level: ESIS and EPF
Mains level: Paper 3- ESIS and EPF
The idea of welfare state
- Covid reminds us that a modern state is a welfare state as governments worldwide launched 1,600 plus new social protection programmes in 2020.
- Sustainable social security lies in raising India’s 138th ranking in country per-capita GDP.
- However, on the social security schemes, there is a case for three reforms to our biggest health insurance and pension schemes:
- These schemes are the Employee State Insurance Scheme (ESIS) and Employee Provident Fund (EPF).
Issues with ESIS
- The Employee State Insurance Scheme (ESIS) is India’s richest and biggest health insurance scheme with 13 crore people covered and Rs 80,000 crore in cash.
- Employers with more than 10 employees make a mandatory 4 per cent payroll deduction for employees earning up to Rs 21,000 per month.
- Despite covering roughly 10 per cent of India’s population, a recent working paper from Dvara Research suggests high dissatisfaction.
- The constraint is hardly resources: ESIC’s unspent reserves are larger than the Central government’s healthcare budgetary allocation.
Issues with EPF
- EPF is India’s biggest pension scheme with a Rs 12 lakh crore corpus and 6.5 crore contributors.
- Employers with more than 20 employees make mandatory 24 per cent payroll deductions for employees earning up to Rs 15,000 per month.
- It only covers 10 per cent of India’s labour force and 60 per cent of accounts and 50 per cent of registered employers are inactive.
- EPF offers poor service and pathetic technology despite employer-funded administrative costs that make it the world’s most expensive government securities mutual fund.
Updating the risk-sharing frameworks in society
- In a book titled What We Owe Each Other: A New Social Contract, Nemat Shafik suggests updating the risk-sharing framework in societies.
- This is because current structures are breaking up under the weight of changes in the role of women, longer careers, technology, globalisation, and much else.
- She suggests a more nuanced social security redistribution across time (the piggy bank function), incomes (the Robin Hood function), and financial burden-bearing (the state, individuals, or employers).
- In India, the answer lies in fixing the problems of EPF and ESIS.
Solution to the EPF and ESIS problems
- Both suffer from poor coverage, high costs, unsatisfied customers, metrics confused with goals, jail provisions, excessive corruption, low expertise, rude and unaccountable staff with no fear of falling or hope of rising, and no competition.
Let’s look at possible solutions.
1) Structure
- EPF and ESIS combine the roles of policymaker, regulator, and service provider.
- Splitting roles is a precondition for performance because goals, strategy, and skills are different.
- An independent policymaker horrified with only 6 lakh of India’s 6.3 crore enterprises covered would create competition.
- An independent regulator terrified by ESIS overcharging would frown on a claims ratio of less than 75 per cent.
- An independent service provider would invest heavily in technology, customer service, and human capital.
- Splitting roles would lead to the following benefits:
- 1) Competition from NPS for EPF.
- 2) Ending VIP opt-out by merging CGHS with ESIS,
- 3) Raising enforceability by making employee provident fund contribution voluntary.
- 4) Improving portability by de-linking accounts from employers.
- 5) Targeting universalisation by simultaneously ending minimum employer head-count and employee salary contribution thresholds while introducing absolute contribution caps.
- The Health and Finance Ministry would be logical homes for ESIS and EPF policy roles.
2) Governance
- The governing board of ESIS and EPFO have 59 and 33 members respectively.
- Such a large group can’t have meaningful discussions, make decisions, and exercise oversight.
- This governance deficit needs smaller boards (not more than 15), age limits, term limits, expertise, active sub-committees (HR, Investments, and technology) and real powers.
3) Leadership
- Health and pensions need complex skills developed over time.
- Yet, ESIS and EPF are led by generalist bureaucrats.
- Both organisations need professional chief executives.
- Philosopher Isaiah Berlin’s framing of the generalist vs specialist debate as hedgehogs (who know one thing) and foxes (who know many things) is important.
- A less generalist, non-transitory, and non-cadred chief executive would create a new tone-from-the-top around performance management, technology, and service outcomes.
Conclusion
Social security — not a borrowing binge that steals from our grandchildren — can blunt structural and COVID inequality when combined with complementary policies like formalisation, financialisation, urbanisation, and better government schools. But a great place to start is three flick-of-pen, non-fiscal reforms at EPF and ESIS.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: FDI restrictions on e-commerce
Mains level: Paper 3- FDI in e-commerce
We need a comprehensive FDI policy on trade to take care of the needs of all the stakeholders. The article highlights the issues faced by the e-commerce sector in relation to the FDI policy.
E-commerce as an enabler
- With their efficient, quick and reliable logistics network, e-commerce platforms have nudged consumer behaviour patterns from an offline to an online shopping mode.
- During the pandemic, e-commerce emerged as an enabler in ensuring the availability of essentials to the masses.
- E-commerce is going to be increasingly important in the future of retail shopping in India and the world over.
- It is estimated to become a $100 billion industry by 2024, which was at $38.5 billion until 2017.
- The trend will continue to grow with the government’s impetus on digital literacy, also supported by the increasing penetration of internet and smartphone users.
- However, what the sector lacks is the bandwidth of operation.
Issues with FDI policy for e-commerce
- In addition to the FDI Policy/FEMA, other laws such as IT Act, Consumer Protection Act, and those pertaining to IP and copyright, regulate the e-commerce sector in India.
- Of these, the FDI policy plays an important role as massive investments are needed to build and strengthen the entire ecosystem of the e-commerce sector in the country.
- FDI policies on trade have evolved over time as policy-making was done from time to time mostly responding to the needs of the market coupled with political feasibility.
- Thus, FDI policy in cash and carry or wholesale B2B operations is different (100 per cent FDI allowed under automatic route) compared to highly restrictive FDI policy on retail B2C trade.
- Similarly, an artificial distinction was created between single-brand retail and multi-brand retail as opposition to multi-brand retail was strong: 100 per cent FDI is allowed under automatic route in single-brand retail whereas FDI regime in multi-brand retail is quite restricted.
- E-commerce is not allowed under FDI policy in multi-brand retail.
- The FDI policy on e-commerce is quite different as e-commerce platforms are allowed to work only as a marketplace with permission to provide certain specified services to sellers and buyers.
- However, FDI is allowed in the inventory model when these platforms sell fresh farm produce made in India.
- There is no specific policy on FDI in e-commerce for exports.
Need for comprehensive FDI policy for trade
- The rapid expansion of the retail, organised retail as well e-commerce sector in India in the coming years will create huge opportunities for all.
- The policies that have evolved over time need a relook to balance the interests of all in a win-win policy.
- Today, our small businesses employing an exceptionally large number of workers need to use e-commerce more and more to augment their sales.
- E-commerce provides them with the means to access a much bigger market without having to overly invest in marketing. This should include more and more foreign markets.
- Consumers have benefited enormously from e-commerce.
- Also, the harmonious working of online and offline retailers is essential.
- With GST and the drive towards digitisation, more small traders need to be enabled to make the transition and take advantage of the expanding opportunities.
Consider the question “Why e-commerce sector is important for the economy of a country? What are the issues the sector faces in India?”
Conclusion
Public policy on e-commerce needs to place an equal premium on the views and interests of all the stakeholders in the ecosystem to strengthen our domestic businesses and create many more jobs and livelihood opportunities in the country to fulfil the dreams of Atmanirbhar Bharat.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Factors making Naxal moment a complex security challenge
The article explains the issues with the two common themes adopted for explaining the Naxal movement in India.
Two approaches to explain Naxal movement
1) Root cause and alienation approach
- The recent attack in and around Tekulagudem village in Sukma district demonstrates the threat posed by Maoists.
- The post-incident analysis of such setbacks comes in two flavours.
- The most popular theory amongst our intelligentsia and media is the root cause and alienation approach.
- This approach states that it is the failure of the Indian state to provide economic development and social justice to the tribals living in these areas that has fuelled the Naxal movement and sustained it for five decades.
- As a prescription, a development-centric approach and negotiations are suggested as the way forward.
Issues with root cause and alienation approach
- There are several problems with this approach.
- First, it ignores the ideological foundations of the movement, specifically its rejection of India’s Constitution and democracy.
- Second, it fails to see that social and economic deprivation is not unique to the jungles of Chhattisgarh.
- Third, it doesn’t account for the possibility that while alienation and deprivation may help in igniting the spark of revolution, once lit the flames draw oxygen from many sources.
- Fourth, the role of external forces in fomenting and sustaining this movement is deliberately underplayed.
- Fifth, the grubby ground reality of the praxis of revolution is conveniently swept under the carpet.
- The organised extortion racket from all economic stakeholders in the Naxal-affected areas by our alienated revolutionaries seldom gets talked about.
- Sixth, the extensive ideological, financial and logistical ecosystem that provides sustenance to these revolutionaries in the jungle is seldom acknowledged.
2) Leadership issue
- According to this view, our tactical failures against the Maoists are entirely due to the poor quality of leadership provided by the Indian Police Service.
- The when, where, how of a setback simply don’t matter.
- When in doubt, identify the first IPS officer in the chain of command and hoist him on the petard of tactical incompetence.
- This view completely ignores the many successes of IPS leadership in counterinsurgency operations in Punjab, Andhra Pradesh, Uttar Pradesh and most recently in Odisha.
- Even in the Northeast and Jammu and Kashmir, where the Indian Army provides the backbone of the counterinsurgency grid, the police forces of the respective states and their IPS leadership play a crucial role in gathering intelligence and in executing operations.
- So, the failures and setbacks in the Naxal areas of Chhattisgarh need to be placed in perspective.
Way forward
- The fact that the Indian state has adopted a broad policy of economic development, military restraint and gradual attrition and rejected indiscriminate violence in the Naxal theatre is the democratically prudent and morally just course of action.
- This hasn’t dissuaded Maoist sympathisers from gaining international attention through relentless propaganda against our security forces.
- However, such attacks also help in exposing their true nature and hardening public resolve against them.
- \We have enough examples of successful, police led CI Ops in our country.
- Why we are not able to replicate these successes in Chhattisgarh is a matter of larger political issues, well beyond the narrow scope of operational tactics and individual lapses of police leadership.
- Not just the politics, the geography and demography of the Naxal-affected areas, make it an even more complex challenge of internal security.
Consider the question “What are the factors that make Naxal movement a persistent threat to India’s internal security? ”
Conclusion
Not just the politics, the geography and demography of the Naxal-affected areas, make it an even more complex challenge of internal security.
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From UPSC perspective, the following things are important :
Prelims level: Article 123, Article 213 of the Indian Constitution
Mains level: Paper 2- Issues with the repromulgation of ordinances
Repromulgation of ordinances raises several questions and it also goes against the Supreme Court judgement. The article explains the issues involved.
Ordinance route and issues with it
- The central government has repromulgated the ordinance that establishes a commission for air quality management in the National Capital Region.
- This raises questions about the practice of issuing ordinances to make law, and that of re-issuing ordinances without getting them ratified by Parliament.
- Law making is a legislative function, this power is provided for urgent requirements, and the law thus made has an automatic expiry at the end of six weeks from the time Legislature next meets.
How frequent is the use of ordinance route
- In the 1950s, central ordinances were issued at an average of 7.1 per year.
- The number peaked in the 1990s at 19.6 per year, and declined to 7.9 per year in the 2010s.
- The last couple of years has seen a spike, 16 in 2019, 15 in 2020, and four till now this year.
- States have also been using the ordinance route to enact laws.
- For example, in 2020, Kerala issued 81 ordinances, while Karnataka issued 24 and Maharashtra 21.
- Kerala has also repromulgated ordinances.
What the Supreme Court said
- The issue was brought up in the Supreme Court through a writ petition by D.C. Wadhwa.
- He found out that Bihar had issued 256 ordinances between 1967 and 1981, of which 69 were repromulgated several times, including 11 which were kept alive for more than 10 years.
- A five-judge Constitution Bench of the Supreme Court, in 1986, ruled that repromulgation of ordinances was contrary to the Constitutional scheme.
- The judgment did not stop the practice.
- Instead, the Centre also started to follow the lead of Bihar.
- For example, in 2013 and 2014, the Securities Laws (Amendment) ordinance was promulgated three times.
- Similarly, an ordinance to amend the Land Acquisition Act was issued in December 2014, and repromulgated twice – in April and May 2015.
- The matter came up again in the Supreme Court in 2017, a seven-judge Constitution Bench declared this practice to be unconstitutional and declared it to be a fraud on the Constitution.
- Even this judgment has been ignored.
- The Indian Medical Council Amendment Ordinance was issued in September 2018, and reissued in January 2019.
Way forward
- Ordinances are to tackle exigencies when the legislature is not in session, and expire at the end of six weeks of the next meeting of the legislature.
- This time period is given for the legislature to decide whether such a law is warranted.
- Repromulgation is not permitted as that would be a usurpation of legislative power by the executive.
- As governments, both at the Centre and States, are violating this principle, the legislatures and the courts should check the practice.
- By not checking this practice, the other two organs are also abdicating their responsibility to the Constitution.
Consider the question “What are the issues with the repormulgation of ordinances by the government? Suggest the measures to deal with the issue.”
Conclusion
As the Supreme Court said, repromulgation would most certainly be a colourable exercise of power for the Government and it needs to be avoided.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Importance of Afghanistan in regional strategic matrix
The article highlights how players at 3 levels: global, regional and local level influence Afghan dynamics.
Role of global powers in Afghanistan
1) What the US exit from Afghanistan mean
- The exit of US and NATO forces from Afghanistan underlines the end of the unipolar moment in international affairs.
- Ending US military involvement, however, does not necessarily make Washington marginal to the future evolution of Afghanistan.
- The US remains the most significant global power even after the end of the unipolar moment.
- Its ability to weigh in on multiple issues is considerable.
- President Joe Biden is under some pressure at home not to be seen as abandoning Afghanistan.
- Nor can the US President ignore the dangers of Afghanistan re-emerging as a breeding ground for international terrorism.
- The US will figure prominently in any Taliban strategy to win international diplomatic recognition and political legitimacy.
- It will also need Western economic assistance for stabilising the war-torn country.
2) Russia’s role in Afghanistan
- Russia is determined to play an important role in the future of Afghanistan.
- As a member of the UNSC, the joint leader of the Shanghai Cooperation Organisation with China, and a major source of weapons, Russian clout is real.
- Above all, Putin brings plenty of political will to compensate for Moscow’s loss of superpower status as we have seen across the world, from Venezuela to Myanmar and Mozambique to Syria.
3) How China will benefit from the US withdrawal
- If the US is a distant power, China is Afghanistan’s neighbour.
- Unlike Russia, China can deliver massive economic resources to Afghanistan under the umbrella of the Belt and Road Initiative.
- China’s expanding relations with the different nations of the Gulf and Central Asia and a deep partnership with Pakistan lends much potential depth to Beijing’s role in Afghanistan.
- Both Kabul and the Taliban have seen China as a valuable partner in the pursuit of their divergent interests.
- Beijing has often talked of extending the China Pakistan Economic Corridor to Afghanistan.
- However, China is vulnerable to the extremist politics of the region that fan the flames of religious and ethnic separatism in its Xinjiang province.
Regional powers influencing Afghan dynamics
- One of the biggest concern about the Afghan future is the kind of influence Islamic radicals might regain in the country under Taliban rule and its consequences for the subcontinent, Central Asia, and the Middle East.
- Pakistan and Iran, which share long physical borders, have had the greatest natural influence on land-locked Afghanistan.
- When the Taliban ruled Afghanistan, Saudi Arabia and the UAE were the only countries other than Pakistan to recognise the government-run by its leader, Mullah Omar.
- They have taken a back seat in the current round of Afghan diplomacy, but would certainly return to the centre stage sooner than later.
- Meanwhile, bold Qatar and ambitious Turkey have injected themselves into the Afghan jousting.
Influence of local actors
- The local actors in Afghanistan have agency of their own.
- All of them know how to manipulate external powers for their own ends in Afghanistan.
- The image of the Taliban as a creature of the Pakistan army is misleading, the Taliban is quite capable of making independent deals with the rest of the world.
- The Taliban’s opponents, too, are likely to fight for their interests and will seek out external partners.
Consider the question “Discarding old hesitations and building new geopolitical coalitions will be critical for a successful Indian engagement with the Afghan microcosm. Comment.”
Conclusion
Several contentions unfolding in and around Afghanistan promise to reorder the region again. Delhi needs much strategic activism to secure its interests and promote regional stability in this flux.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CAATSA
Mains level: Paper 2- India-Russia relations
Avoiding military alliances and retaining its strategic autonomy could help India play an important role in geopolitics at the same time maintaining the diversity in its relationships.
Transformation in India-Russia relations
- The principal objective of the Russian Foreign Minister was to prepare the ground for the visit of President Vladimir Putin later this year.
- The Indian perspective on the Indo-Pacific was conveyed to the Foreign Minister of Russia.
- India insists that its Indo-Pacific initiatives seek a cooperative order, that the Quad is not the nucleus of a politico-military alliance.
- A $1 billion Indian line of credit for projects in the Russian Far East and activation of a Chennai-Vladivostok maritime corridor were announced in 2019.
- The message was that India’s effort to restrain Chinese aggression is compatible with Russia’s vision of a Eurasian partnership.
- Russia remains unconvinced, either because it feels India’s words do not match its actions or because of its close ties with China.
China factor in India-Russia relations
- India is concerned about Russia’s China embrace, encompassing close political, economic and defence cooperation: Russia accounted for 77% of China’s arms imports in 2016-20.
- India’s apprehensions about their technology- and intelligence-sharing were heightened by Mr. Putin’s remark that he would not rule out a future Russia-China military alliance.
Russia-Pakistan relations
- Foreign Minister visited Pakistan directly after India — the first time a Russian Minister has done so.
- .He confirmed that Russia would strengthen Pakistan’s “counter-terrorism capability” .
- Russia is now Pakistan’s second-largest defence supplier, accounting for 6.6% of its arms imports in 2016-20.
- Their cooperation includes joint “counter-terrorism” drills and sharing perspectives on military tactics and strategic doctrines.
Factors to consider about defence cooperation with Russia
- Despite being a major defence supplier of China and Pakistan, Russia remains a major supplier of cutting-edge military technologies to India.
- The Stockholm International Peace Research Institute (SIPRI) records that Russia supplied 49% of India’s arms imports in 2016-20.
- SIPRI estimates that recent orders for Russian arms could boost future import figures. T
- his is a reality check.
- Defence cooperation is not a transactional exchange. Sharing of technologies and strategies is underpinned by a mutual commitment to protection of confidentiality.
- Sustainable defence cooperation is based on a credible assurance that what is transferred to our adversaries will not blunt the effectiveness of our weapons systems.
- In this already complex mix, the American sanctions legislation, CAATSA (Countering America’s Adversaries Through Sanctions Act), adds an external layer of complexity.
Criticality of geography influence India’s relationship with Russia and China
- The Eurasian landmass to India’s north is dominated by Russia and China.
- Strategic and security interests in Central Asia, West Asia and Afghanistan dictate our engagement with the region and the connectivity projects linking it, like the International North-South Transport Corridor through Iran.
- India cannot vacate this space to a Russia-China condominium (with Pakistan in tow), without potentially grave security consequences.
The broader geopolitical context
- The principal element in this is the drive for the superpower status of a powerful, assertive China.
- The U.S., as the pre-eminent superpower, seeks to retard this process.
- In a deviation from classical geopolitical strategy, the U.S. is taking on both China and Russia.
- This move is driving Russia and China together and arguably accelerating the move to bipolarity.
- Even so, the differentials in military, economic and political power across countries may complicate the emergence of two clear poles of the Cold War variety.
- A decline in Western hostility to Russia could add to the complexity, if Russia takes the opportunity to loosen the Chinese embrace and position itself as a pole in the multipolar world.
Consider the question “The depth of India’s relationship with Russia will depend on the willingness and capacity of both countries to show mutual sensitivity to core security concerns. Comment.”
Conclusion
India has to explore the space within these processes to maximise its global influence by steering clear of alliances and retaining the autonomy of policy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Agriculture households in India
Mains level: Paper 3- Need to focus on India's actual farming population
The article highlights the ambiguity about the number of farmers in India and related issues.
How many farmers does India really have
- The Agriculture Ministry’s last Input Survey for 2016-17 pegged the total operational holdings at 146.19 million.
- The NABARD All India Rural Financial Inclusion Survey of the same year estimated the country’s “agricultural households” at 100.7 million.
- The Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) has around 111.5 million enrolled beneficiaries.
- Agricultural households, as per NABARD’s definition, cover any household whose value of produce from farming activities is more than Rs 5,000 during a year.
- That obviously is too little to qualify as living income.
Who is real farmer
- Agricultural households, as per NABARD’s definition, cover any household whose value of produce from farming activities is more than Rs 5,000 during a year.
- That obviously is too little to qualify as living income.
- A “real” farmer is someone who would derive a significant part of his/her income from agriculture.
- This, one can reasonably assume, requires growing at least two crops in a year.
- The 2016-17 Input Survey report shows that out of the total 157.21 million hectares (mh) of farmland with 146.19 million holdings, only 140 mh was cultivated.
- And even out of this net sown area, a mere 50.48 mh was cropped two times or more, which includes 40.76 mh of irrigated and 9.72 mh of un-irrigated land.
- Taking the average holding size of 1.08 hectares for 2016-17, the number of “serious full-time farmers” cultivating a minimum of two crops a year would be hardly 47 million.
- The above figure is also consistent with other data from the Input Survey.
- These pertain to the number of cultivators planting certified/high yielding seeds (59.01 million), using own or hired tractors (72.29 million) and electric/diesel engine pumpsets (45.96 million), and availing institutional credit (57.08 million).
- Whichever metric one considers, the farmer population significantly engaged and dependent on agriculture as a primary source of income is well within 50-75 million.
- The current agriculture crisis is largely about these 50-75 million farm households.
Lack of price parity
- At the heart of farmers’ crisis is the absence of price parity.
- In 1970-71, when the minimum support price (MSP) of wheat was Rs 76 per quintal, 10 grams of 24-carat gold cost about Rs 185.
- Today, the wheat MSP is at Rs 1,975/quintal, gold prices are Rs 45,000/10g.
- The absence of farm price parity didn’t hurt much initially when crop productivity was rising.
- Since the 1990s, yields have further gone up to 5.1-5.2 tonnes/hectare in wheat and 6.4-6.5 tonnes for paddy. But so have production costs.
- The demand for making MSP a legal right is basically a demand for price parity that gives agricultural commodities sufficient purchasing power with respect to things bought by farmers.
Way forward
- Most government welfare schemes are aimed at poverty alleviation and uplifting those at the bottom of the pyramid.
- But there’s no policy for those in the “middle” and in danger of slipping to the bottom.
- When crop prices fail to keep pace with escalating costs — of not only inputs, but everything the farmer buys — the impact is on the 50-75 million surplus producers.
- Any “agriculture policy” has to first and foremost address the problem of price parity.
- Farmers’ interest be even better served by the government guaranteeing a minimum “income” rather than “price” support.
- Subsistence or part-time agriculturalists, on the other hand, would benefit more from welfare schemes and other interventions to boost non-farm employment.
Conclusion
Whether it is crop, livestock or poultry, agriculture policy has to focus on “serious full-time farmers”, most of them neither rich nor poor. This rural middle class that was once very confident of its future in agriculture today risks going out of business. That shouldn’t be allowed to happen.
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From UPSC perspective, the following things are important :
Prelims level: Article 324
Mains level: Paper 2- Need for clarity on the powers of ECI
The article highlights the issue of lack of clarity on the extent of the power of the Election Commission of India.
Where ECI derives its power from
- Supreme Court held in Mohinder Singh Gill vs Chief Election Commissioner that Article 324 contains plenary powers to ensure free and fair elections.
- These plenary powers are vested in the ECI which can take all necessary steps to achieve this constitutional object.
- Thus, the model code of conduct has been issued in exercise of its powers under Article 324.
- Besides the code, the ECI issues from time to time directions, instructions and clarifications on a host of issues which crop up in the course of an election.
The model code of conduct
- The model code of conduct issued by the ECI is a set of guidelines meant for political parties, candidates and governments to adhere to during an election.
- This code is based on consensus among political parties.
- The model code is observed by all stakeholders for fear of action by the ECI.
- However, there exists a considerable amount of confusion about the extent and nature of the powers which are available to the ECI in enforcing the code as well as its other decisions in relation to an election.
Issues with model code of conduct
1) Issue of enforceability
- As the code of conduct is framed on the basis of a consensus among political parties, it has not been given any legal backing.
- A committee of Parliament recommended that the code should be made a part of the Representation of the People Act 1951.
- However, the ECI did not agree to it on the ground that once it becomes a part of the law, all matters connected with the enforcement of the code will be taken to court, which would delay elections.
- But then the question about the enforceability of the code remains unresolved.
- Paragraph 16A of the Election Symbols (Reservation and Allotment) Order, 1968 says that the commission may suspend or withdraw recognition of a recognised political party if it refuses to observe the model code of conduct.
- But it is doubtful whether this provision is legally sustainable.
- When the code is legally not enforceable, how can the ECI resort to a punitive action such as withdrawal of recognition?
2) Transfer of officials
- Observers of ECI report to it about the conduct of certain officials of the States where elections are to be held.
- Transfer of an official is within the exclusive jurisdiction of the government.
- It is actually not clear whether the ECI can transfer a State government official in exercise of the general powers under Article 324 or under the model code.
- Transfer of an official is within the exclusive jurisdiction of the government.
- It is actually not clear whether the ECI can transfer a State government official in exercise of the general powers under Article 324 or under the model code.
- Further, to assume that a police officer or a civil servant will be able to swing the election in favour of the ruling party is extremely unrealistic and naive.
3) ECI’s intervention in administrative decisions
- According to the model code, Ministers cannot announce any financial grants in any form, make any promise of construction of roads, provision of drinking water facilities, etc or make any ad hoc appointments in the government. departments or public undertakings.
- These are the core guidelines relating to the government.
- But in reality, no government is allowed by the ECI to take any action, administrative or otherwise, if the ECI believes that such actions or decisions will affect free and fair elections.
- A recent decision of the ECI to stop the Government of Kerala from continuing to supply kits containing rice, pulses, cooking oil, etc is a case in point.
- The Supreme Court had in S. Subramaniam Balaji vs Govt. of T. Nadu & Ors (2013) held that the distribution of colour TVs, computers, cycles, goats, cows, etc, done or promised by the government is in the nature of welfare measures and is in accordance with the directive principles of state policy, and therefore it is permissible during an election.
- So, how can the distribution of essential food articles which are used to stave off starvation be electoral malpractice?
Consider the question “The model code of conduct issued by the Election Commission of India is in the forms of guidelines and lacks legal backing. In light of this, examine the issues that arise due to the lack of legal backing.”
Conclusion
There is no doubt that the ECI, through the conduct of free and fair elections in an extremely complex country, has restored the purity of the legislative bodies. However, no constitutional body is vested with unguided and absolute powers.
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From UPSC perspective, the following things are important :
Prelims level: GAVI
Mains level: Paper 2- Issues with vaccine diplomacy
Amid the second wave of covid pandemic, India’s decision to supply vaccine to foreign countries has been questioned from various quarters. The article deals with this issue.
Issue of vaccine supply to foreign countries
- While responding to a question Minister of State in the Ministry of External Affairs noted that India was sending these vaccines abroad in the form of grant, commercial sales of manufacturers GAVI’s COVAX facility.
- The supply to GAVI’s COVAX facility is an obligation since India is a member of this multilateral body and also a recipient of vaccines from this body.
- By doing this, India wishes to signal that it is a responsible global power which does not self-obsessively think of itself alone.
- This desire to be a good global citizen can be traced to the Objective Resolution moved by Jawaharlal Nehru in the Constituent Assembly on December 13, 1946.
- The premise of the ideal ‘Vasudhaiva Kutumbakam’ is no different to that of the Objective Resolution.
Factors to consider
- The government made estimates of the vaccines that could be sent abroad on the interplay of three factors: domestic production, the demands of the national vaccine programme and requests for vaccines manufactured in India.
- What is not known is how these factors were collectively addressed in the decision-making process.
- It is also argued that it was obligatory to send vaccines contracted under GAVI’s COVAX facility.
- However, sovereign states can always invoke supreme national interest to over-ride obligations.
- Certainly, the vaccines sent as grants were voluntary and the commercial contracts of the company concerned could always be disregarded under existing laws.
Conclusion
The government needs to convince Indians that the vaccine exports have not been made at the cost of their health.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Multipolar global
With the declining American supremacy in the global order, the world is set for new global order led by the developing countries. The article deals with this rise of alternate global order.
Factors that explains decentred and pluralistic global order
- The international order is under threat of the rising economic power of the BRICS nations, with China dominating in its economic and military capacity.
- It is apparent that the future of global politics requires a significant agenda in the hands of the rising powers that are aggressively building a parallel economic order envisaging new centres of hegemonic power.
- It forebodes the final decline of American ascendancy.
- It was the Bandung Conference of 1955, a meeting of Asian and African states, most of which were newly independent, that set the schema for the rise of Asia, politically and economically.
- The confrontational stance was therefore the expected corollary in third world struggles to create a parallel order.
- America will continue to play a prime role in international affairs though its image representing universal brotherhood has sharply declined under the Trump regime.
- The rising tide of far-right ultra-nationalism and ethnic purity experienced in the Brexit phenomena, in Trumpism and in the promotion of the right-wing agenda in India, has set in motion the wearing down of liberal democracy.
- Other threats such as terrorism, ethnic conflicts and the warning of annihilation owing to climate change necessarily demand joint international action where American “exceptionalism” becomes an incongruity and an aberration.
- This indeed has chipped away at the American global supremacy.
- The world is, as a result, witness to a more decentred and pluralistic global order.
New world order led by developing countries
- Though pandemic has ravaged economies such as Brazil, India, Turkey and South Africa into a downward spiral, in the post-pandemic period, these economies would rise to meet the American-led liberal hegemonic world order.
- With China spearheading Asian regionalism, a serious challenge is possible.
- China must strengthen the opposition to the West through the promotion of regional multilateral institutions.
- More than having individual partners or allies, China must embrace and give a push to multilateral affiliations in order to not further exacerbate regional tensions.
- Power rivalry in a multipolar world would remain a possibility with military conflict not ruled out.
- However, the capabilities of the rising economies cannot be underestimated.
- China and India clearly have the age-old potential to lead as, historically, they have been pioneers of some of the oldest civilisations in the world.
- China is indisputably a serious rival to the U.S. in the South China Sea, a world leader in renewable energy, and a formidable actor on the global stage of investment and trade, penetrating India, Israel, Ethiopia and Latin America.
- Thus, a kind of dualism persists in the world order with no clear hegemony that can be bestowed on one single nation.
Conclusion
It is feared that there could be a possibility of a multipolar world turning disordered and unstable, but it is up to the rising nations to attempt to overcome territorial aspirations and strike a forceful note of faith on cultural mediation, worldwide legitimacy, and the appeal of each society in terms of its democratic values.
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From UPSC perspective, the following things are important :
Prelims level: GDPR
Mains level: Paper 3- Data governance
The article explains the data governance norms we need to adopt to secure better societal outcomes.
Whatsapp privacy issue
- New terms of service circulated by WhatsApp, caused a stir among the user.
- It informed users that data about chats with business accounts would be shared with Facebook.
- These policies seemed unfair to India as they were not applicable to the European Union (EU), given their strong data protection policies.
Acceptable levels of data exchange
- Default norms provide power to the tech platforms to collect, analyse and monetize data with complete control.
- This undergirds business models that seem undesirable for society—with harms to privacy and free speech.
- Global discussions about alternatives to the “exchange of data for free services” are becoming nuanced.
3 Norms in the data governance
1) Recognition of individual and collective rights related to data
- It was generally accepted that extraction of data to access free services was a fair exchange with individuals.
- Emergence of existential threats related to privacy and democracy have highlighted the role of guaranteeing human and civil rights.
- There has been significant global progress through regulations on individual data rights.
- A United Nations Conference on Trade and Development (UNCTAD) report claims that 128 of 194 countries have put in place legislations for data protection and privacy.
- However, this protection is insufficient as it is centered on individuals and does not account for safety of groups.
- The next wave of data governance ideas will seek to protect collective harms and build on the foundation of individual agency and control.
2) Data sovereignty
- One-size-fits all global norms of data governance are changing and being replaced by region-specific ideas.
- Greater acceptance for “data sovereignty” assertions across India and Europe is a welcome shift towards crafting governance that is respectful of local nuances and inclusive of civic participation.
- The EU general data protection regulation (GDPR) had created an early lighthouse example.
- On the other hand, the US has adopted a light regulation approach—there is no comprehensive country-wide data protection law.
- Closer home, India is finalizing the contours of a country-wide and cross-sector personal data protection bill, which reflects local norms.
3) Value creation for all stakeholders
- So far, data economy has operated in a completely unregulated space, creating a “winner takes all” market, with concentrated profits and little contribution to local taxes.
- A healthy economy requires value creation for all stakeholders.
- As tech platforms take up the profitable role of acting as the gateway to all information and social connections, they have a greater accountability and responsibility to contribute to the economy.
- India’s digital tax through the 2% “equalization levy” is an attempt to make the tech giants pay for revenues earned in India.
Consider the question “What should be norms of data governance we must adopt for achieving better societal outcomes?”
Conclusion
Formal adoption of regulations and setting up of enforcement institutions will lead to meaningful progress in the right direction.
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From UPSC perspective, the following things are important :
Prelims level: Eurasian Economic Union
Mains level: Paper 2- Multipolar world
Four middle powers: India, Japan, China and Turkey anchor the world to multipolarity. The article deals with this issue.
New cold war
- In respect of three crucial relationships, namely China, Russia and Iran, Mr. Biden is following in the footsteps of his predecessor.
- Mr. Biden has also extended his firm backing for the “Indo-Pacific” and the associated alignment — the Quadrilateral Security Dialogue, or Quad for short.
- The U.S. continues to view China as its principal adversary on the world stage and that it will use the Quad to challenge China in the Indo-Pacific.
- The U.S.’s hostility for Russia goes back to the latter’s war with Ukraine and the occupation of Crimea in 2014, followed by allegations of Russian cyber-interference in the U.S. presidential elections of 2016.
- U.S. animosity has encouraged China and Russia to solidify their relations.
- The two countries have agreed to harmonise their visions under the Eurasian Economic Union sponsored by Russia and China’s Belt and Road Initiative (BRI).
- This idea has now been subsumed under the ‘Greater Eurasian Partnership’ to which both are committed.
- Thus, the new Cold War is now being reflected in a new geopolitical binary — the Indo-Pacific versus Eurasia.
How middle powers can play an important role
- Four nations, Japan, Iran, Turkey and India, which, as “middle powers”, have the capacity to project power regionally, build alliances, and support (or disrupt) the strategies
- But all four seems to be already aligned.
- Japan and India are part of the Quad and have substantial security ties with the U.S.
- Iran has found strategic comfort with the Sino-Russian alliance.
- Turkey, a NATO member, has found its interests better-served by Russia and China rather than the U.S. and its European allies.
- So, why the uncertainty? The main reason is that, despite the allure, the four nations are not yet prepared to join immutable alliances.
Why the middle powers are reluctant to join alliances
1) India’s China concerns
- India has been expanding defence ties with the U.S. since 2016, by massive defence purchases and agreements on inter-operability and intelligence-sharing and frequent military exercises, as also the elevation of the Quad to ministerial level.
- This might have signalled to China that India was now irreversibly in the U.S. camp.
- But China has a point: while the Quad has made India a valuable partner for the U.S. in the west Pacific, neither the U.S. nor the Quad can address the challenges it faces at its 3,500-kilometre land border with China.
- Moreover, the U.S.’s intrusive approach on human rights issues ensures that India will need to manage its ties with China largely through its own efforts while retaining Russia as its defence partner.
2) Sino-Japan relations
- Japan has an ongoing territorial dispute with China relating to the Senkaku Islands in the East China Sea.
- But there is more to Sino-Japanese relations: in 2019, 24% of Japanese imports came from China, while 19% of its exports went to China, affirming the adage.
3) Why Iran is reluctant
- The crippling sanctions on Iran and the frequent threats of regime change make it a natural ally of the Sino-Russian axis.
- However, its strategic culture eschews long-term security alignments.
4) Why Turkey is reluctant to join
- Turkey is steady distancing from its western partners and increasing geopolitical, military and economic alignment with Russia and China.
- But Turkey still wishes to keep its ties with the U.S. intact and retain the freedom to make choices.
- Its “New Asia” initiative involves the strengthening of east-west logistical and economic connectivity backed by western powers and China.
Consider the question “What are the factors India need to consider as it deepens its involvement in the Quad?”
Conclusion
As the clouds of the new Cold War gathers over the world, these four nations could find salvation in “strategic autonomy” — defined by flexible partnerships, with freedom to shape alliances to suit specific interests at different times.
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From UPSC perspective, the following things are important :
Prelims level: Pre-pack in IBC
Mains level: Paper 3- Pre-packs for MSME in IBC
The Insolvency and Bankruptcy Code was amended recently taking into account its creditor centric approach.
Introducing pre-packs for MSMEs
- IBC was amended last week, through an ordinance.
- The amendment sought to address a structural weakness in India’s resolution architecture by introducing the concept of pre-packs for micro, small and medium enterprises (MSMEs).
- The pre-packaged framework involves a privately negotiated contract between the promoters of a financially distressed firm and its financial creditors to restructure the company’s obligations.
- This contract is negotiated within the IBC architecture but before the commencement of insolvency proceedings.
- Once accepted by creditors, the plan must be presented to the National Company Law Tribunal (NCLT) for approval.
How this framework is different from the existing framework
- A firm’s promoters could have submitted a resolution plan even after it enters the insolvency proceedings, subject to restrictions imposed under Section 29A which clarifies all those who are ineligible for submitting the resolution plan.
- So, the difference in the new framework essentially boils down to the following.
1) Control of the firm
- Under the IBC, upon the initiation of insolvency proceedings, control of a firm is taken away from promoters, and a resolution professional is appointed.
- Now, during the restructuring, the promoter, through the pre-pack, retains control over the firm.
- So effectively, we have transitioned from a “creditor-in-control” model of resolution to a “debtor-in-control” model of restructuring.
- This amendment, which creates a framework for restructuring, without the promoter losing control over the firm, addresses a lacuna in the IBC.
2) Issue of price discovery
- In this arrangement, the is an absence of an open bidding process, such as during the resolution phase.
- This might raise questions over price discovery, especially if value maximisation for creditors is the yardstick to measure the efficacy of IBC.
- This marks a fundamental change in the IBC framework.
Why the changes were needed
- The IBC, while it has strengthened the position of the creditors, had swung to an extreme.
- The resolution architecture as it stood prior to this amendment was perceived as being too creditor-centric.
- Wresting control from the “errant” promoter, comes with its own set of consequences.
- The notion that all business failure is due to the connivance of promoters needs to be reconsidered.
- Firms may be unable to pay their obligations simply because the economic cycle has turned.
- Or projects have not materialised as expected.
- Of the 2,422 cases closed since IBC came into being, 46.5 per cent of the firms have gone into liquidation, while a resolution plan has been accepted in only 13.1 per cent of the cases.
- This indicates liquidation bias.
- At a time when there aren’t enough buyers in the economy, the IBC process would lead to significant value destruction.
How it will benefit both creditor and promotors
- Promoters get to hold on to their firms, and exit the process with more manageable obligations, making this an attractive proposition.
- For creditors, considering the liquidation bias in IBC, as long as the value of the restructured obligation is greater than the liquidation value it makes sense to choose this option.
- Moreover, this entire process remains outside the restructuring framework of the central bank.
- And, considering that the pre-packs encompass all financial creditors, as opposed to RBI’s restructuring schemes which deal only with banks.
- This takes into account the concerns of other financial creditors as well.
Consider the question “How far IBC has succeeded in improving the insolvency regime in India? How the concepts of pre-packs is different from the previous system?
Conclusion
This approach will help clarify issues, bring about greater certainty to the process. And, once the creases are ironed out, it will create a permanent mechanism for restructuring debts.
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From UPSC perspective, the following things are important :
Prelims level: UNCLOS
Mains level: Paper 2- Understanding the rights of the coastal state under UNCLOS
The explains the issues involved in the recent incident in which US position on freedom of navigation under UNCLOS differed from India’s.
Different positions
- On April 7, the U.S.’s 7th Fleet Destroyer conducted a ‘Freedom of Navigation Operation’ inside India’s Exclusive Economic Zone (EEZ).
- This exercise was conducted without requesting India’s consent.
- Moreover, the U.S. 7th Fleet noted in its press release that India’s requirement of prior consent is “inconsistent with international law”.
- However, India asserted that the UN Convention on the Law of the Sea (UNCLOS) “does not authorize other States to carry out in the Exclusive Economic Zone and on the continental shelf, military exercises or manoeuvres, in particular those involving the use of weapons or explosives, without the consent of the coastal state”.
- The question is, can countries carry out military exercises in another country’s EEZ and if yes, subject to what conditions?
UNCLOS Provisions for EEZ
- UN Convention on the Law of the Sea (UNCLOS) binds all its signatories and customary international law binds all states, subject to exceptions like the doctrine of persistent objector.
- As per the UNCLOS, EEZ is an area adjacent to the territorial waters of a coastal state.
- Under UNCLOS, a sovereign coastal state has rights and duties relating to management of natural resources; establishment and use of artificial islands, installations and structures; marine scientific research; and protection of the marine environment.
- India is a party to the UNCLOS while the U.S. is not.
- Article 87 provides for freedom of the high seas under which all states have the freedom of navigation.
- Apart from that, states enjoy the freedom of overflight and of the laying of submarine cables and pipelines as well as other internationally lawful uses of the sea.
- However, the freedom of navigation is subject to the conditions laid down under the UNCLOS and other rules of international law.
- In addition to it, Article 58 (3) stipulates another qualification: “In exercising their rights and performing their duties under this Convention in the exclusive economic zone, States shall have due regard to the rights and duties of the coastal State and shall comply with the laws and regulations adopted by the coastal State…”.
So, what laws and regulation are adopted by India under Article 58 (3) of UNCLOS
- The relevant Indian law in this regard is the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones of India Act, 1976.
- Section 7 sub-section 9 of this Act recognises the freedom of navigation of the ships of all States but makes them subject to the exercise of rights by India within the zone.
- Article 310 of the UNCLOS does permit states to make declarations in order to explain the relationship between the Convention and their own laws.
- The declaration by India in 1995 also states that India “understands that the provisions of the Convention do not authorize other States to carry out in the exclusive economic zone and on the continental shelf military exercises or manoeuvres.
Way forward
- Non-consensual military activities that hinder the lawful enjoyment of rights of coastal states need not be permissible.
- Also, a coastal state is naturally concerned about military exercises and manoeuvres posing a risk to its coastal communities, its installations or artificial islands, as well as the marine environment.
- Thus, any state which wishes to conduct such exercises must do so only in consultation with the coastal state since the coastal state is the best judge of its EEZ.
- Both India and the U.S. should negotiate such concerns for the maintenance of international peace and security.
Consider the question “What are the rights of coastal state on its Exclusive Economic Zone under UNCLOS? “
Conclusion
On a conjoint reading of Articles 58, 87 and 310, it can be argued that freedom of navigation cannot be read in an absolute and isolated manner.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Second wave of covid
The article suggests ways to deal with the second wave of Covid in India.
What explains the bigger second wave
- The size of any epidemic is a function of three things:
- 1) The size of the pool of the susceptible population.
- 2) The pattern of contact between the members of the population (frequency, mix, closeness and duration).
- 3) Probability of spread during that contact (infectiousness of the agent).
Let us have a look at these 3 factors in the current context
- As many people have already been infected in the first wave, the pool of susceptibles should be smaller.
- Serosurveys also support this as they found that about 25 per cent of people had already been infected nationally.
- However, this is an average and hides significant variations by state, age and place of residence.
- Populations with lower seroprevalence become the potential pool for the second wave.
- Given India’s large population base, the actual number of people are sufficiently large to enable multiple waves till we achieve a more even spread of protected people.
- The persistence of protectiveness of antibodies of those already infected and their cross-protectiveness to newer strains is not well established.
- Vaccination would reduce the pool of susceptibles.
- However, the current level of vaccination coverage is not sufficient to make a significant difference to this wave, given the fact that we are already riding it.
- It is a good strategy to prevent the next wave, if we can achieve substantial coverage with it.
- Vaccination also prevents severe disease, and hence reduces the death toll.
- With the removal of most restrictions, the probability of contact between individuals has risen sharply.
Way forward
- What can and should be avoided are super-spreader events like a crowded park, the Kumbh mela, election rallies, etc.
- A much stronger community engagement with a robust communication strategy and lesser emphasis on “criminalising” inappropriate behaviour is required.
- A nuanced communication campaign is the need of the hour and is conspicuous by its complete absence.
- What is urgently needed is a robust evidence-based communication campaign.
- Such a campaign would involve proactive serial assessment of the community perceptions and concerns, testing and refining messages through an evolving campaign.
- A district-specific strategy of “test, trace, treat” along with containment measures (isolation and quarantine) is still the best way to deal with the situation.
- We also need to put a stop to political bickering; it erodes public trust and confidence.
Conclusion
Dealing with the second wave should be based on the experience drawn from dealing with the first wave and complemented by a better communication strategy.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Reviving BIMSTEC
More than two decades after its formation, BIMSTEC still remains a work in progress. And it has many obstacles to overcome. The article highlights challenges and progress made so far.
Background of BIMSTEC
- The foreign ministers of BIMSTEC (the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) met virtually on April 1.
- It was established as a grouping of four nations — India, Thailand, Bangladesh and Sri Lanka — through the Bangkok Declaration of 1997 to promote rapid economic development.
- BIMSTEC was expanded later to include three more countries — Myanmar, Nepal and Bhutan.
- It moved at a leisurely pace during its first 20 years with only three summits held and a record of modest achievements.
Growing significance
- BIMSTEC suddenly received special attention when India chose to treat it as a more practical instrument for regional cooperation over a faltering SAARC.
- The BIMSTEC Leaders’ Retreat, followed by their Outreach Summit with the BRICS leaders in Goa in October 2016, drew considerable international limelight to the low-profile regional grouping.
- At the fourth leaders’ summit in Kathmandu in 2018, a plan for institutional reform and renewal that would encompass economic and security cooperation was devised.
- It took the important decision to craft a charter to provide BIMSTEC with a more formal and stronger foundation.
- The shared goal now is to head towards “a Peaceful, Prosperous and Sustainable Bay of Bengal Region”.
Why the recent summit is important
- In the recent virtual summit, the foreign ministers cleared the draft for the BIMSTEC charter.
- They endorsed the rationalisation of sectors and sub-sectors of activity, with each member-state serving as a lead for the assigned areas of special interest.
- The ministers also conveyed their support for the Master Plan for Transport Connectivity.
- Preparations have been completed for the signing of three agreements:
- 1) Mutual legal assistance in criminal matters.
- 2) Cooperation between diplomatic academies.
- 3) The establishment of a technology transfer facility in Colombo.
Lack of progress on trade
- In the recent deliberation, there was no reference to the lack of progress on the trade and economic dossier.
- A January 2018 study by the Federation of Indian Chambers of Commerce and Industry had suggested that BIMSTEC urgently needed a comprehensive Free Trade Agreement to be a real game-changer.
- Ideally, it should cover trade in goods, services and investment; promote regulatory harmonisation; adopt policies that develop regional value chains, and eliminate non-tariff barriers.
- Also lacking was an effort to enthuse and engage the vibrant business communities of these seven countries.
- Over 20 rounds of negotiations to operationalise the BIMSTEC Free Trade Area Framework Agreement, signed in 2004, are yet to bear fruit.
Achievements
- Much has been achieved in Humanitarian Assistance and Disaster Relief and security, including counterterrorism, cybersecurity, and coastal security cooperation.
- India has led through constant focus and follow-up.
- While national business chambers are yet to be optimally engaged with the BIMSTEC project, the academic and strategic community has shown ample enthusiasm through the BIMSTEC Network of Policy Think Tanks and other fora.
Challenges
- A strong BIMSTEC presupposes cordial and tension-free bilateral relations among all its member-states.
- However, there has been tensions in India-Nepal, India-Sri Lanka, and Bangladesh-Myanmar ties in recent years.
- Second, uncertainties over SAARC hovers, complicating matters. Both Kathmandu and Colombo want the SAARC summit revived, even as they cooperate within BIMSTEC, with diluted zeal.
- Third, China’s decisive intrusion in the South-Southeast Asian space has cast dark shadows.
- Finally, the military coup in Myanmar and the continuation of popular resistance resulting in a protracted impasse have produced a new set of challenges.
Consider the question “What are the challenges BIMSTEC faces in emerging as an alternative to the SAARC? What are its achievements?”
Conclusion
The grouping needs to reinvent itself, possibly even rename itself as ‘The Bay of Bengal Community’. It should consider holding regular annual summits. Only then will its leaders convince the region about their strong commitment to the new vision they have for this unique platform linking South Asia and Southeast Asia.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Economic recovery and challenges posed by second covid wave
The article highlights the challenges posed by the second wave of covid and how aggressive vaccination could help dealing with the issue.
Severe second covid wave in India
- India’s daily new cases have surged past 1,50,000, much above the first peak.
- In India’s first wave, the increase from 50,000 to about 1,00,000 cases took about 50 days; in the second wave, it’s taken just 13.
- To start with, the second wave was more concentrated, with Maharashtra accounting for 60 per cent of cases.
- While the top five states still account for about 65 per cent of cases, the reproduction (R) factor in almost 10 states is estimated to be two or higher, creating risks for a wider and more rapid spread, if unaddressed.
Lessons from the first wave
- Policymakers, businesses and households have all learnt from the first wave and with the private sector better adapted to “live with the virus”.
- Therefore, the economic costs should hopefully not be comparable to the first wave. Yet, they may not be trivial either.
- The five states that account for 65 per cent of new cases also account for almost 36 per cent of GDP.
- As virus cases have grown and restrictions have been imposed, retail and recreational mobility across these five states, is down 10 per cent since mid-March.
- Labour market surveys have also begun to show discernable impacts on both participation and unemployment rates.
Implications of unequal recovery for developing countries
- The IMF projects India’s FY22 growth at 12.5 per cent, this would still leave India about 8-9 per cent below the level of output that was projected pre-pandemic for the end of 2021-22.
- The challenge for emerging markets is that, given the quantum of fiscal and monetary space expended in combating the first wave, space to respond to subsequent waves will be constrained.
- Owing to the fiscal support and pace of vaccinations the US will be the only large economy, apart from China, to surpass its pre-pandemic path.
- This, resulted in increased US yields, tightened global financial conditions, induced dollar strength and triggered
- All this makes it harder for emerging economies to respond expansively to domestic shocks.
- In effect, the heterogeneity of the recovery across developed and emerging markets is imposing policy constraints on the latter which, ironically, will simply compound the economic divergence.
Challenges for India
- India’s fiscal space to respond to a second wave appears constrained due to the following two factors:
- 1) In India’s case, consolidated public debt will approach 90 per cent of GDP.
- 2) The consolidated public sector borrowing requirements are budgeted above 11 per cent of GDP in FY22.
- The dependence on budgeted asset sales has only increased, both as a hedge to tax revenues that could be impacted from a second wave, and as a means of protecting expenditures.
- It will be equally crucial to leaving enough space for higher MGNREGA demand and other safety nets on account of a second wave, even while protecting capital expenditures — which generate large multiplier effects on the economy.
- Similarly, monetary policy is already very accommodative, and with core inflation sticky and elevated, global deflationary pressures entrenched, there are natural limits to the degree of more monetary accommodation.
Aggressive vaccination is the key
- Israel, the UK and the US have all demonstrated how aggressive vaccinations can bend the COVID-curve.
- Therefore, the Indian government’s decision to approve a third vaccine and fast-track emergency approval for foreign-produced vaccines is unambiguously positive.
- On the demand side, of an estimated 100-110 million population of seniors (60-plus) in India, only about 40 million have taken the vaccine over the last six weeks, suggesting a reluctance to get vaccinated.
- But, in fact, it’s crucial to ensure the vulnerable — those whose probability of hospitalisation is the highest — are fully vaccinated to reduce pressure on the health infrastructure.
Consider the question “What are the challenges posed to the developing countries by heterogeneity of recovery across the developed and developing countries?
Conclusion
Vaccinations should be construed as simultaneously delivering both a positive demand and supply shock (for the economy), and a negative demand shock (for health infrastructure), thereby providing the best chance to decisively break the trade-offs between lives and livelihoods that bedevilled emerging markets all of last year.
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From UPSC perspective, the following things are important :
Prelims level: RCEP
Mains level: Paper 2- India-Pakistan relations and its impact on the region
India-Pakistan relations weigh down heavily on the SAARC. This affects the economic development of the region. The highlight opportunity for India and Pakistan to separate politics from economics.
Economic integration
- There is a growing, but unstated, realisation that neither India nor Pakistan can wrest parts of Kashmir that each controls from the other.
- A fair peace between India and Pakistan is not just good for the two states but for all the nations constituting the South Asian Association for Regional Cooperation (SAARC).
- While SAARC has facilitated limited collaborations among its members, it has remained a victim of India-Pakistan posturing.
- World Bank publication titled ‘A Glass Half Full’ conclude that there is explosive value to be derived from South Asian economic integration.
- An economically transformed and integrated South Asian region could advantageously link up with China’s Belt and Road Initiative and even join the RCEP.
Important role of India
- Collectively with a population of slightly over 1.9 billion, South Asia has a GDP (PPP) of $12 trillion.
- However, India’s enjoys an overwhelming ‘size imbalance’ in South Asia.
- The shares of India in the total land area, population, and real GDP of South Asia in 2016 are 62%, 75%, and 83%, respectively.
- The two other big countries in South Asia are Pakistan and Bangladesh with shares in regional GDP of only 7.6% and 5.6%, respectively.
- Given its size and heft, only India can take the lead in transforming a grossly under-performing region like South Asia.
Consider the question “How India-Pakistan relations affects the potential of SAARC? Examine the role both countries can play in the prosperity of the region through economic integration.”
Conclusion
This is the moment for India to think big and act big. But for that to happen, India needs to view peace with Pakistan not as a bilateral matter, but as essential and urgent, all the while viewing it as a chance of a lifetime, to dramatically transform South Asia for the better, no less.
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From UPSC perspective, the following things are important :
Prelims level: IT Act 2000
Mains level: Paper 3- Personal Data Protection Bill and related issues
The existing data protection framework based on IT Act 2000 falls short on several counts. The Personal Data Protection Bill seeks to deal with the shortcoming in it. The article explains how the two differs.
Need for new data protection regime
- The need for a more robust data protection legislation came to the fore in 2017 post the Supreme Court’s landmark judgment in Justice K.S. Puttaswamy (Retd) v. Union of India.
- In the judgment, the Court called for a data protection law that can effectively protect users’ privacy over their personal data.
- Consequently, the Committee of Experts was formed under the Chairmanship of Justice (Retd) B.N. Srikrishna to suggest a draft data protection law.
- The Personal Data Protection Bill, 2019, in its current form, is a revised version of the draft legislative document proposed by the Committee.
Issues with the existing data protection framework
- The Information Technology Act, 2000 governs how different entities collect and process users’ personal data in India.
- However, entities could override the protections in the regime by taking users’ consent to processing personal data under broad terms and conditions.
- This is problematic given that users might not understand the terms and conditions or the implications of giving consent.
- Further, the frameworks emphasise data security but do not place enough emphasis on data privacy.
- As a result, entities could use the data for purposes different to those that the user consented to.
- The data protection provisions under the IT Act also do not apply to government agencies.
- Finally, the regime seems to have become antiquated and inadequate in addressing risks emerging from new developments in data processing technology.
How the new regime under Data Protection Bill 2019 is different
- First, the Bill seeks to apply the data protection regime to both government and private entities across all sectors.
- Second, the Bill seeks to emphasise data security and data privacy.
- While entities will have to maintain security safeguards to protect personal data, they will also have to fulfill a set of data protection obligations and transparency and accountability measures.
- Third, the Bill seeks to give users a set of rights over their personal data and means to exercise those rights.
- Fourth, the Bill seeks to create an independent and powerful regulator known as the Data Protection Authority (DPA).
- The DPA will monitor and regulate data processing activities to ensure their compliance with the regime.
Concerns
- Under clause 35, the Central government can exempt any government agency from complying with the Bill.
- Similarly, users could find it difficult to enforce various user protection safeguards (such as rights and remedies) in the Bill.
- For instance, the Bill threatens legal consequences for users who withdraw their consent for a data processing activity.
- Additional concerns also emerge for the DPA as an independent effective regulator that can uphold users’ interests.
Consider the question “What are the issues with the present framework in India for data and privacy protection? How the Personal Data Protection Bill seeks to address these issues?”
Conclusion
The Joint Parliamentary Committee that is scrutinising the Bill is expected to submit its final report in the Monsoon Session of Parliament in 2021 Taking this time to make some changes in the Bill targeted towards addressing various concerns in it could make a stronger and more effective data protection regime.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Russia-China-US dynamic and its impact on India
Relations between Russia, China and the US have not always been the same. The changes in triangular dynamic offers lessons for India. The article deals with this issue.
India’s changing relations with great powers
- The recent visit of Russian foreign minister Sergei Lavrov to Delhi and Islamabad is among multiple signs of India’s changing relations with the great powers.
- At the same time, Delhi’s growing strategic partnerships with the US and Europe have begun to end India’s prolonged alienation from the West.
- Also, New Delhi’s own relative weight in the international system continues to increase and give greater breadth and depth to India’s foreign policy.
Shifts in triangular relations between Russia, China and America
1) Russia-China relations
- The leaders of Russia and China — Joseph Stalin and Mao Zedong — signed a formal treaty of alliance in 1950.
- Russia invested massively in the economic modernisation of China, and also gave it the technology to become a nuclear weapon power.
- However, by the 1960s, their relations soured and two were arguing about ideology and a lot else.
- The Sino-Soviet split had consequences way beyond their bilateral relations.
- None of them more important than the efforts by both Moscow and Beijing to woo Washington.
- The break-up between Russia and China also opened space for Delhi against Beijing after the 1962 war in the Himalayas.
- Under intense American pressure on Russia in the 1980s, Moscow sought to normalise ties with Beijing.
- Stepping back to the 1960s and 1970s, China strongly objected to Delhi’s partnership with Moscow.
2) Russia-US relations
- Russia, which today resents India’s growing strategic warmth with the US, has its own long history of collaboration with Washington.
- Moscow and Washington laid the foundations for nuclear arms control and sought to develop a new framework for shared global leadership.
- But Delhi was especially concerned about the Nuclear Nonproliferation Treaty system, with all its constraints on India’s atomic options, that Moscow and Washington constructed in the late 1960s.
3) US-China relations
- Despite fighting Korean War with the US in the early 1950s, China normalised relations with the U.S. in 1971 to counter the perceived threat from Russia.
- Deng Xiaoping, refused to extend the 1950 security treaty with Russia that expired in 1980.
- China turned instead, towards building a solid economic partnership with the US and the West that helped accelerate China’s rise as a great power.
Lessons for India
- The twists and turns in the triangular dynamic between America, Russia and China noted above should remind us that Moscow and Beijing are not going to be “best friends forever”.
- India has no reason to rule out important changes in the way the US, Russia and China relate to each other in the near and medium-term.
- In the last few years, India has finally overcome its historic hesitations in partnering with the US.
- India has also intensified its efforts to engage European powers, especially France.
- Prime Minister Boris Johnson’s visit to India later this month promises a fresh start in India’s difficult postcolonial ties with Britain.
- India is also expanding its ties with Asian middle powers like Japan, Korea and Australia.
- Despite the current differences over Afghanistan and the Indo-Pacific, India and Russia have no reason to throw away their mutually beneficial bilateral partnership.
- The current troubles with China seem to be an unfortunate exception to the upswing in India’s bilateral ties with global actors.
Consider the question “What are the lessons India can draw from the twists and turns in the triangular dynamic between America, Russia and China.”
Conclusion
India has successfully managed the past flux in the great power politics; it is even better positioned today to deal with potential changes among the great powers.
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