Note4Students
From UPSC perspective, the following things are important :
Prelims level: Malabar Exercise, Quad
Mains level: Paper 2- Defining the roles and relations between Malabar and the Quad
While highlighting the importance of navy for India, the article examines the need to define the role and relation between the Quad and Malabar.
The salience of navy for India
- It took confrontation in the Himalayas to bring focus on India’s maritime domain clearly indicates that the salience of maritime power is not yet understood in India.
- On its northern and western fronts, India faces a formidable challenge and can at best hope for stalemate due to two factors :
- 1) Economic, military and technological asymmetry between China and India.
- 2) Active China-Pakistan nexus.
- Attention has, therefore, been focused on the maritime domain, where it is believed that India may have some cards to play.
- While preparing to fight its own battles with determination, it is time for India to seek external balancing (read Quad) — best done via the maritime domain.
Evolution of Malabar Exercise
- Above is the backdrop against which one must see the progressive evolution of Exercise “Malabar”,
- At beginning, it was a bilateral event involving just the Indian and US navies.
- It became tri-lateral with the inclusion of Japan in 2015.
- And now it has transformed into a four-cornered naval drill that will also include Australia.
- Apart from its geo-political significance for the Indo-Pacific, this development poses two conundrums.
- Firstly, given the same composition, what is the distinction, now, between “Malabar” and the “Quad”?
- Secondly, does Malabar 2020 mark the release of Australia from China’s thralldom?
Defining the roles and relation betwee Malabar and Quad
- The Quadrilateral Security Dialogue or Quad has its roots in the Core Group of four senior diplomats representing the US, India, Japan and Australia.
- The group was formed to coordinate relief efforts after the Great Asian Tsunami of December 26, 2004.
- The present Quad has obviously retained this tradition and its members have neither created a charter nor invested it with any substance.
- The Quad is 16 years old now, and Malabar 28.
- Both have served a useful purpose, and a reappraisal of the roles and relationship of the Quad-Malabar concepts is, therefore, overdue.
- Since it is India which faces a “clear and present danger”, it should boldly take the initiative to do so.
Need for the Indo-Pacific Concord
- In order to rein in China’s hegemonic urges, there is need for affected nations to come together to show their solidarity and determination in a common cause.
- In this context, there is need to create a broad-based “Indo-Pacific Concord”, of like-minded regional democracies.
- This should be an organisation with a maritime security charter, which has no offensive or provocative connotations.
- Using the Quad and Malabar templates, a shore-based secretariat can be established in a central location like Port Blair, in the Andaman Islands, which would schedule and conduct periodic multinational naval exercises.
- The exercises could be structured to hone the skills of participating navies in specialisations like humanitarian assistance and disaster relief, countering non-traditional threats, undertaking search-and-rescue operations and establishing networked maritime domain awareness.
- The Concord could also designate forces to uphold maritime security or “good order at sea”.
What Australia joining Quad means
- The prospect of Australia belatedly joining the Quad is expected to reinforce the Quad and enhance its credibility.
- But there are reasons for India to be circumspect it.
- Memories are still alive of its past political ambivalence towards India, its criticism of our naval expansion and its vociferous condemnation of the 1998 nuclear tests.
- Nor should one overlook Beijing’s recent influence on Australia’s foreign policy.
- This influence on Australia’s foreing policy caused it to flip-flop over the sale of uranium to India as well as its peremptory withdrawal from the Quad in 2008.
Implications of singing of BECA with the U.S.
- India signing the BECA (Basic Exchange and Cooperation Agreement) with the US last of the four “foundational agreements” would enhance interoperability between the respective militaries.
- However, there is need to pay heed to two valid concerns:
- 1) Regarding the possible compromise of information impinging on India’s security.
- 2) Whether these agreements will barter away the last vestiges of India’s strategic autonomy.
Consider the question “The changing geopolitical equations has necessitated the formation of Indo-Pacific Concord by the democracies of the region.” In light of this, elaborate on India’s role in Quad and its implications for the region”
Conclusion
Indians, given our history, should never lose sight of the truism in international relations, that it is the unerring pursuit of national interests that guides the actions and policies of every nation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: https://www.thehindu.com/opinion/lead/indias-un-journey-from-outlier-to-the-high-table/article32932905.ece
Mains level: Paper 2- India's journey at United Nations
The article examines India’s journey at the UN as it enters it 75year. It also analyses the challenges India faced at the UN and tracks India’s transformation from being an outlier to the high table.
Three phases of India’s presence at the UN
- Seven and a half decades of India at the UN may be viewed with reference to roughly three distinct phases.
First phase: From independence to 1989
- The first phase lasted until the end of Cold War in 1989.
- During this phase, India had learnt to explore and enhance its diplomatic influence in easing armed conflicts in Asia and Africa by disentangling them from the superpower rivalry.
- India also leaned that the UN could not be relied upon to impartially resolve vital security disputes such as Jammu and Kashmir.
- India strove to utilise the UN only to focus on common causes such as anti-colonialism, anti-racism, nuclear disarmament, environment conservation and equitable economic development.
- India seemed to claim the moral high ground by proposing, in 1988 three-phase plan to eliminate nuclear weapons from the surface of earth.
- But it resisted attempts by neighbouring countries to raise bilateral problems.
- Defeat in 1962 war against China meant a definitive redesign of the country’s diplomatic style to privilege bilateral contacts over the third party role by the UN.
Second phase: 1990s
- The 1990s were the most difficult decade for India in the UN.
- The 1990s were marked by the sudden end of the Cold War, the disintegration of the Soviet Union and the emergence of the United States as the unrivalled power.
- Besides, the uncertain political climate along with the balance of payments crisis constrained the country’s capability to be active in various bodies, especially in the Security Council (UNSC) and the General Assembly.
- There was a change in India’s foreign policy: At the UN as India showed pragmatism in enabling the toughest terms on Iraq even after Gulf War or in reversing position on Zionism as racism.
- At the same time, growing militancy in Kashmir in the early 1990s helped Pakistan to internationalise the dispute with accusations about gross human rights violations by India.
- India to seek favours from Iran and China in the Human Rights Commission to checkmate Pakistan.
- The violation of the sovereignty principle by NATO intervention against Yugoslavia in 1999 without the authorisation of the UNSC deeply disturbed India.
- At the same time call for an end to aerial attacks on Yugoslavia did not garner much support in the UNSC.
- India’s diplomatic difficulties was exposed when it suffered a defeat in the hands of Japan in the 1996 contest for a non-permanent seat in the UNSC.
- India resolutely stood against indefinite extension of the Non-Proliferation Treaty in 1995.
- India strongly rejected the backdoor introduction for adoption of the Comprehensive Test Ban Treaty in 1996.
- It is against this background that India surprised the world in 1998 with its Pokhran nuclear weapon tests, ignoring the likely adverse reaction from the nuclear club.
Third phase: Rise in influence in 21st century
- The impressive economic performance in the first decade of the 21st century due to economic liberalisation and globalisation policies, helped a great deal in strengthening profile.
- This is only aided by its reliable and substantial troop contributions to several peacekeeping operations in African conflict theatres.
- India has emerged as a responsible stakeholder in non-traditional security issue areas such as the spread of small and light weapons, the threat of non-state actors acquiring weapons of mass destruction, and the impact of climate change.
- India has scaled up its contributions to development and humanitarian agencies, while India’s share to the UN assessed budget has registered a hike from 0.34% to 0.83%.
- India’s successful electoral contests for various prestigious slots in the UNSC, the Human Rights Council, the World Court, and functional commissions of the Economic and Social Council indicates its growing popularity
Major unsuccessful initiatives by India
- Two major initiatives India has heavily invested in are stuck:
- 1) The draft Comprehensive Convention on International Terrorism it drafted and revised with the hope of helping consensus.
- It encountered reservations on provisions regarding definition of terrorist and the convention’s application to state armed forces.
- 2) Second is the question of equitable expansion of the UNSC to enable India to attain permanent membership along with other claimants from Asia, Africa and Latin America.
- The move has been stuck for more than 25 years because of a lack of unity among the regional formations.
- It also includes opposition from some 30 middle powers such as Italy and Pakistan which fear losing out to regional rivals in the event of an addition of permanent seats.
- The only realistic possibility seems to settle for a compromise, i.e. a new category of members elected for a longer duration than the present non-permanent members without veto power.
Priorities at the UNSC as a non-permanent member
- India’s future role will depend on its ability to deal economic slowdown and a troubled relationship with China.
- This is pertinent as India will soon begin its two-year term as a non-permanent UNSC member (January 1, 2021).
- Its areas of priority will continue to be the upholding of Charter principles, act against those who support, finance and sponsor terrorists, besides striving for securing due say to the troop contributing countries in the management of peace operations.
- It is reasonable to assume (based on earlier patterns) that India will work for and join in consensus on key questions wherever possible.
- But it may opt to abstain along with other members including one or two permanent members.
Consider the question “Elaborate on the transformation in India’s role at UN. What are the challenges India may face as a non-permanent member of the UNSC”
Conclusion
As a non-permanent UNSC member now, India needs to uphold the Charter principles in the backdrop of a turbulent world.
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From UPSC perspective, the following things are important :
Prelims level: CAATSA
Mains level: Paper 2- India-U.S. relations
Secretary of State, Mike Pompeo makes his way to India next week, exactly a week before the election. This article discusses the various aspects that could form the part of the discussion.
Difference in U.S’s and India’s position on Quad
- He has stated that meeting in India “would include discussions about how free nations can work together to thwart threats posed by the Chinese Communist Party”.
- Just a few weeks ago, at the Quad Foreign Ministers meeting, U.S. Secretary of State had called for collaboration to protect people and partners from the Chinese Communist Party’s exploitation, corruption, and coercion.
- In contrast, India has maintained that its membership of the Quad is aligned to its Indo-Pacific policy, and by no means directed against any country.
- While Chines aggression is changing India’s priorities, any shift in India’s position on the Quad at the U.S.’s prompting must also benefit India.
What should be the part of U.S.-India collaboration
- It is critical to study just how India hopes to collaborate with the U.S. on the challenge that Beijing poses on each of India’s three fronts: at the LAC, in the maritime sphere, and in the South Asian Association for Regional Cooperation (SAARC) region surrounding India.
- On the maritime sphere, discussions will include strengthening ties in the Indo-Pacific, enhancing joint military exercises like the ‘Malabar’ and completing the last of the “foundational agreements” with the Basic Exchange and Cooperation Agreement for Geospatial Cooperation (BECA).
- In Male, the U.S. has announced a defence agreement that will pave the way for a strategic dialogue.
- And unlike in the past, India has not objected this agreement with Male for entering in its area of influence in the Indian Ocean Region, as it will allow the U.S. to counter Chinese influence there.
- With Sri Lanka the U.S. is in discussions on infrastructure projects, and progress on its “Millenium Challenge Corporation” (MCC) offer of a five-year aid grant of about $480 million.
- At a time when India is delaying Sri Lanka’s requests for debt relief, given its own economic constraints, the U.S. aid offer will be seen as one way of staving off China’s inroads into Sri Lanka.
- Most important will be how the U.S. and India can collaborate on dealing with India’s most immediate, continental challenge from China: at the LAC.
- Apart from enhancing and expediting U.S. defence sales to India, there is must the U.S. could promise to India.
- The U.S. must also commit to keeping the pressure on Pakistan on terrorism, despite the U.S. need for Pakistan’s assistance in Afghan-Taliban talks.
- A firm U.S. statement in this regard may also disperse the pressure the Indian military faces in planning for a “two-front” conflict with China.
Resolving other key issues with the U.S.
- Resolution of Trade issues, an area the Trump administration has been particularly tough, and restoration of India’s Generalised System of Preferences status for exporters should also be priority.
- The government could press for more cooperation on 5G technology sharing, or an assurance that its S-400 missile system purchase from Russia will receive an exemption from CAATSA sanctions.
Conclusion
By inviting Secretary of State this close to the U.S. elections, New Delhi has taken a calculated and bold gamble, however, our leaders must drive a harder bargain to consolidate the pay-offs from the visit.
Back2Basics: What is CAATSA?
- The Countering America’s Adversaries Through Sanctions Act (CAATSA) is a U.S. federal law that imposes economic sanctions on Iran, Russia and North Korea.
- The bill came into effect on August 2, 2017, with the intention of countering perceived aggressions against the U.S. government by foreign powers.
- It accomplishes this goal by preventing U.S. companies from doing business with sanctioned entities.
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From UPSC perspective, the following things are important :
Prelims level: Cereals producer states in India
Mains level: Paper 3- Encouraging cereals production in India to deal with the health issue
Promotion of millet crops serves the dual purpose of securing health and supporting farmers. This article explains the strategy adopted by the government to achieve the same.
Millet crops in India
- The three major millet crops currently growing in India are jowar (sorghum), bajra (pearl millet) and ragi (finger millet).
- India also grows a rich array of bio-genetically diverse and indigenous varieties of “small millets” like kodo, kutki, chenna and sanwa.
- Major producers include Rajasthan, Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Maharashtra, Gujarat and Haryana.
Advantages of millet cultivation
- Millets are good for the soil, have shorter cultivation cycles and require less cost-intensive cultivation.
- These unique features make millets suited for and resilient to India’s varied agro-climatic conditions.
- Millets are not water or input-intensive, making them a sustainable strategy for addressing climate change and building resilient agri-food systems.
Reasons for decline in millet production in India
- In the 1960s before the Green Revolution, millets were extensively grown and consumed in India.
- With the Green Revolution, the focus, rightly so, shifted to food security and high-yielding varieties of wheat and rice.
- An unintended consequence of this policy was the gradual decline in the production of millets.
- Millets were increasingly seen as “poor person’s food”.
- The cost incentives provided via MSPs also favoured a handful of staple grains.
Health issues related to refined food
- Along with declining millet production, India saw a jump in consumer demand for ultra-processed and ready-to-eat products, which are high in sodium, sugar, trans-fats and even some carcinogens.
- This demand was again met by highly-refined grains.
- With the intense marketing of processed foods, even the rural population started perceiving mill-processed rice and wheat as more aspirational.
- This has lead us to the double burden of mothers and children suffering from micronutrient deficiencies and the astounding prevalence of diabetes and obesity.
Strategy for promotion of nutri-cereals
1) Rebranding the cereals as nutri-cereals
- The first strategy from a consumption and trade point of view was to re-brand coarse cereals/millets as nutri-cereals.
- As of 2018-19, millet production had been extended to over 112 districts across 14 states.
2) Incentive through hiking MSP
- Second, the government hiked the MSP of nutri-cereals, which came as a big price incentive for farmers.
- From 2014-15 to 2020 MSPs for ragi has jumped by 113 per cent, by 72 per cent for bajra and by 71 per cent for jowar.
- MSPs have been calculated so that the farmer is ensured at least a 50 per cent return on their cost of production.
3) Providing steady markets through inclusion in PDS
- To provide a steady market for the produce, the Modi government included millets in the public distribution system.
4) Increasing area, production and yield
- The Ministry of Agriculture & Farmers’ Welfare is running a Rs 600-crore scheme to increase the area, production and yield of nutri-cereals.
- With a goal to match the cultivation of nutri-cereals with local topography and natural resources, the government is encouraging farmers to align their local cropping patterns to India’s diverse 127 agro-climatic zones.
- Provision of seed kits and inputs to farmers, building value chains through Farmer Producer Organisations and supporting the marketability of nutri-cereals are some of the key interventions that have been put in place.
5) Intersection of agriculture and nutrition
- The Ministry of Women and Child Development has been working at the intersection of agriculture and nutrition by -1) setting up nutri-gardens, 2) promoting research on the interlinkages between crop diversity and dietary diversity 3) running a behaviour change campaign to generate consumer demand for nutri-cereals.
Consider the question “What are the reasons for decline in the millet production in India? What are the steps taken by the government to encourage its production?”
Conclusion
As the government sets to achieve its agenda of a malnutrition-free India and doubling of farmers’ incomes, the promotion of the production and consumption of nutri-cereals seems to be a policy shift in the right direction.
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From UPSC perspective, the following things are important :
Prelims level: NEP 2020
Mains level: Paper 2- NEP 2020's focus on mathematical and computational thinking
The article deals with the issues with the emphasis on the coding instead of understanding the basic algorithmic process.
Issues with focusing on coding in NEP 2020
- The National Education Policy 2020 (NEP) envisages putting greater emphasis on mathematical and computational thinking throughout the school years.
- The framing in the NEP appears to put it at the same level of distinction as the more instrumental ‘coding’, and almost as a mere tool towards the utilitarian goals of artificial intelligence (AI) and data science.
- An overemphasis on learning the nitty-gritty of specific programming languages prematurely — even from middle school — may distract from focusing on the development of algorithmic creativity.
What is coding?
Coding is basically the computer language used to develop apps, websites, and software. Without it, we’d have none of the most popular technology we’ve come to rely on such as Facebook, our smartphones, the browser we choose to view our favorite blogs, or even the blogs themselves. It all runs on code.
About computation and algorithms
- Algorithmics is the abstract process of arriving at a post-condition through a sequential process of state changes.
- It is among the earliest human intellectual endeavours that has become imperative for almost all organised thinking.
- All early learning of counting and arithmetic is method-based, and hence algorithmic in nature, and all calculations involve computational processes encoded in algorithms.
- The core algorithmic ideas of modern AI and machine learning are based on some seminal algorithmic ideas of Newton and Gauss, which date back a few hundred years.
- Though the form of expressions of algorithms — the coding — have been different, the fundamental principles of classical algorithm design have remained invariant.
Algorithms in modern world
- In the modern world, the use of algorithmic ideas is not limited only to computations with numbers, or even to digitisation, communication or AI and data science.
- They play a crucial role in modelling and expressing ideas in diverse areas of human thinking, including the basic sciences of biology, physics and chemistry, all branches of engineering, in understanding disease spread, in modelling social interactions and social graphs, in transportation networks, supply chains, commerce, banking and other business processes, and even in economic and political strategies and design of social processes.
- Hence, learning algorithmic thinking early in the education process is indeed crucial.
So, how coding is different from arithmetics?
- Coding is merely the act of encoding an algorithmic method in a particular programming language which provides an interface.
- AS computational process can be invoked in a modern digital computer.
- Thus, it is less fundamental.
- While coding certainly can provide excellent opportunities for experimentation with algorithmic ideas, they are not central or indispensable to algorithmic thinking.
- After all, coding is merely one vehicle to achieve experiential learning of a computational process.
Way forward
- Instead of focusing on the intricacies of specific programming languages, it is more important at an early stage of education to develop an understanding of the basic algorithmic processes behind manipulating geometric figures.
- Indeed, this is a common outcome of the overly utilitarian skills training-based approaches evidenced throughout the country.
Conclusion
The NEP guideline of introducing algorithmic thinking early is a welcome step, it must be ensured that it does not degenerate and get bogged down with mundane coding tricks at a budding stage in the education process.
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From UPSC perspective, the following things are important :
Prelims level: MDR, IMPS, RTGS, NEFT
Mains level: Paper 3- Role of NPCI in transforming digital payment infrastructure in India
The article tracks the evolution of digital payments system in India and the transformational role played by the NPCI in it.
Adoption of digital payments in India
- Digital payments have found strong ground in India reducing all other modes of payments to the background.
- Through a faster system of simultaneous debits and credits, the money value is transferred from one account to the other across banks.
- With such versatility and ease of settling financial transactions, the growth of digital payments is going to be phenomenal, supported by banks and Fin-Tech companies.
Evolution of digital payments in India
- A major thrust toward large value payments was effected through the Real Time Gross Settlement System, or RTGS, launched by the RBI in March 2004.
- The large value payments on stock trading, government bond trading and other customer payments were covered under the RTGS.
- It substantially reduced the time taken for settlements.
- Around the same time, the RBI introduced National Electronic Funds Transfer, or NEFT to support retail payments.
- Now, NEFT is available round the clock and RTGS will follow from December 2020 — only a few countries have achieved this.
- These systems were seeded and reinforced with the setting up of the umbrella retail payments institution: National Payments Corporation of India (NPCI).
- NPCI was set up by 10 lead banks at the instance of the RBI in 2009.
- The NPCI as a not-for-profit company
How NPCI transformed retail payment systems in India
- The NPCI’s success against deeply entranced formidable international players, supported by innovative technology, viz. Unified Payments Interface (UPI) and Immediate Payment Service (IMPS), is well recognised by central banks in many other countries.
- The Bank for International Settlements’s endorsement of the NPCI model in 2019 is a major accolade.
- With digital payment being a public good like currency notes, it was necessary that the corporation was fully supported by the RBI and the government as an extended arm of the sovereign.
- It was also necessary to contain expectations on profits, avoiding direct or indirect control by powerful private interests could dilute the public good character of the outfit.
Issue of converting NPCI into for-profit
- Converting NPCI intro for-profit company will be a retrograde step with huge potential for loss of consumer surplus along with other strategic implications.
- Instead the strategy should be to assist the NPCI financially, either by the RBI or the government, to provide retail payment services at reduced price (in certain priority areas).
- This may also help support expansion of the payment system network and infrastructure in rural and semi-urban areas in partnership with Fin-Tech companies and banks.
Issue fo MDR
- In Budget 2020-21, the government prescribed zero Merchant Discount Rate (MDR) for RuPay and UPI, both NPCI products.
- Zero MDR on UPI and RuPay will help to popularise digital payments benefiting both customers and merchants.
- There is justification in this zero MDR prescription by the government.
- It is justified because depositors implicitly pay around 3% to banks as net interest margin, being the difference between saving and risk free bond rate, for enjoying certain payments services traditionally.
- When banks enjoy such a huge amount of current account savings account (CASA) deposits, in return, is it not incumbent on them to provide such payment services?
- The government left out other providers of digital payment products from this MDR prescription.
- Taking advantage of this dichotomy, many issuing banks switched to mainly Visa and Master cards for monetary gains.
- As customers were induced by such supplier banks, it created a kind of indirect market segmentation and cartel formation, though there is hardly any quality difference in payment products.
- It may be noted that even the European Central Bank imposed a ceiling on MDR for all, protecting consumer interest.
- It is hoped that the government will take corrective action in the next Budget to ensure a level playing field and to relieve the NPCI from such policy-induced market imperfection.
Pricing for digital payments
- The ideal pricing for digital payments products should be based on an analysis of-(i) producer surplus (ii) consumer surplus (i.e. gain or loss of utility due to pricing) (iii) social welfare for which we need cost-volume-price data.
- A factor which needs to be reckoned is the float funds digital payments allow (cash withdrawal is a drain on the banking system), which is a source of sizeable income for banks.
- The RBI will do well to study and arrive at a rational structure of pricing including MDR (possibly also penalty on default by customer).
Consider the question “Elaborate on how the NPCI has been successful in transforming the digital payment landscape in the country through innovations? What are the challenges facing retail payments infrastructures?”
Conclusion
Given that the digital payment system is like a national superhighway, for which the government has a crucial role to play in protecting consumers against exploitation.
Back2Basics: RTGS and NEFT
- With NEFT (National Electronic Funds Transfer)
you can transfer any amount to the recipient’s account in a one-on-one transfer basis.
- NEFT transactions don’t have a maximum limit for funds that can be transferred in a single day.
- The NEFT system is available round the clock throughout the year on all days (24x7x365).
- Funds are transferred in batches that are settled in 48 half-hourly time slots throughout the day.
- There is no maximum or minimum limit on the amount of funds that could be transferred through NEFT.
RTGS (Real Time Gross Settlement)
- Business owners can use RTGS when they need to transfer large amounts instantly.
- One advantage that RTGS has over the other methods is the transaction speed, since the entire amount is transferred in real time.
- The available hours for RTGS transactions vary based on the individual banks and their branches.
- There’s a minimum limit of Rs. 2 lakhs for RTGS transactions, and there’s no maximum limit as such.
What is MDR?
- The merchant discount rate (MDR) is charged to merchants for processing debit and credit card transactions.
- To accept debit and credit cards, merchants must set up this service and agree to the rate.
- The merchant discount rate is a fee, typically between 1%-3%, that merchants must consider when managing business costs
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From UPSC perspective, the following things are important :
Prelims level: The offset clause
Mains level: Paper 3- Implications of dilutions of offset clause in defence procurement
The ‘offset clause’ could help the country achieve the technological expertise and consequently self-reliance. However, India recently relaxed some norms in the policy. The article discusses the stated reasons for tweaking and its implications for the defence manufacturing industry in India.
Context
- Recently, the government diluted the “offset” policy in defence procurement, reportedly in response to a Comptroller and Auditor General (CAG) of India’s report tabled in Parliament last month.
Let’s understand ‘offset’ policy
- In order to safeguard national interest, most countries restrict trade in defence equipment and advanced technologies.
- Yet, for commercial gains and for global technological recognition, governments and firms do like to expand the trade through negotiated bilateral sales.
- Restrictions are often imposed on the buyer country on use, modification and resale of such equipment and technologies.
- The product and technology compel buyers to stick to them for: the advantages of bulk purchase, and dependence on the supplier for spares and upgrades.
- The price and the terms of the contract often reflect the government’s relative bargaining strength and also domestic political and economic considerations.
- Large buyers such as India seek to exercise their “buying power” to secure not just the lowest price but also try to acquire the technology to upgrade domestic production and build R&D capabilities.
- The offset clause — used globally — is the instrument for securing these goals.
Changes in the offset policy
- Initiated in 2005, the offset clause has following requirements:
- 1) Sourcing 30% of the value of the contract domestically.
- 2) Indigenisation of production in a strict time frame.
- 3) Training Indian professionals in high-tech skills, for promoting domestic R&D.
- However, the policy has been tweaked many times since.
- According to the recent CAG report, between 2007 and 2018, the government reportedly signed 46 offset contracts worth ₹66,427 crore of investments.
- However, the realised investments were merely 8%, or worth ₹5,457 crore.
- Reportedly, technology transfer agreements in the offsets were not implemented, failing to accomplish the stated policy objective.
- Recently, the government has changed this policy further so that the offset clause will not be applicable to bilateral deals and deals with a single (monopoly) seller, to begin with.
Implications of the changes in offset policy
- The dilution means practically giving up the offset clause, and a setback to India’s prospects for boosting defence production and technological self-reliance.
- The government, however, has defended the decision by claiming a cost advantage.
- Howver, price is but one of many factors in such deals, as explained above.
- The higher (upfront) cost of the agreement due to the offset clause would pay for itself by: reducing costs in the long term by indigenisation of production and the potential technology spill-overs for domestic industry.
- Hence, giving up the offset clause is undoubtedly a severe setback.
How did offset policy work for aerospace industry?
- Despite the heft of Hindustan Aeronautics Limited, India is a lightweight in global civilian aircraft manufacturing, as the public sector giant mostly devotes itself to defence production.
- The National Civil Aircraft Development (NCAD) project — to come up with an indigenously designed Regional Transport Aircraft (RTA) — has remained a non-starter from day one.
- However, with the introduction of the offset policy in 2005, things changed dramatically.
- For contracts valued at ₹300 crore or more, 30% of it will result in offsets, implemented through Indian offset partners.
- As aerospace imports rose rapidly, so did the exports via the offsets, by a whopping 544% in 2007, compared to the previous year.
- By 2014, exports increased to $6.7 billion from a paltry $62.5 million in 2005, according to the United Nations Comtrade Database.
- The offset clause enabled India to join the league of the world’s top 10 aerospace exporters; the only country without a major domestic aerospace firm.
- However, exports reduced after the offset clause was relaxed, primarily when the threshold for the policy was raised from the hitherto ₹300 crore to ₹2000 crore, in 2016.
- The offset exports fell to $1.5 billion by 2019.
- The 2005 policy helped promote a vibrant aerospace cluster, mostly micro, small and medium enterprises (MSMEs) around Bengaluru.
Consider the question “How far has the offset clause been successful in enhancing the domestic capabilities of India in defence manufacturing? What are the challenges in achieving the objectives of the policy?”
Conclusion
There are successful examples to draw lessons from, as the aerospace industry episode demonstrates. India needs to re-conceive or re-imagine the offset clause in defence contracts with stricter enforcement of the deals, in national interest, and in order to aim for ‘Atma Nirbhar Bharat Abhiyaan’, or a self-reliant India.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Police reforms
The article highlights the challenges facing the police force in India and suggests the measures to deal with them.
Urgency of the police reforms
- In a well-ordered democracy, the police are supposed to be a disciplined force trained to uphold the law and enforce the functioning of democracy on constitutional lines.
- However, police in India suffers from a triad of malaises:
- 1) The lack of sensitisation of police personnel.
- 2) Absence of accountability.
- 3) Politicisation of the police.
Objectives of the reforms:
1) Police sensitisation about their role in society
- The sensitisation module should aim at bringing about attitudinal change in police — especially pertaining to gender and power relations and police behaviour.
- There has to be promptness of action and decency of behaviour.
- They need to be trained in body language and strictly advised to refrain from abusive behaviour.
- It is necessary to increase public confidence in the police by upgrading levels of police service delivery as well as by investigating and acting in cases of police misconduct.
2) Increasing accountability
- Public confidence in police decreases when the public perceives that police abuses are not investigated effectively.
- Enhancing accountability will improve police legitimacy and increase public confidence, which, in turn, will reinforce the integrity of the system.
- The Police Ombudsman of Northern Ireland, the Danish Independent Police Complaints Authority are some examples of mechanisms for accountability of the police for acts of abuse of power.
3) De-politicisation of the police
- Linked to accountability is de-politicisation of the police force.
- This is a must for the effective functioning of the country’s criminal justice system.
- The police, as the custodian of maintenance of law and order, must stay away from agenda-driven politics.
Need to resolve the structural issues
In order to achieve the above-stated objectives, structural issues within the force must be given priority.
1) Vacancies and fair representation to women
- According to a report by Common Cause in 2019, the Indian police force is at only 77 per cent of its sanctioned strength.
- India has 144 police personnel for one lakh population and, in some states, the figure is less than 100.
- One in every five posts sanctioned in the Indian Police Service remains vacant.
- In low and middle-rank posts, the vacancies of 5.28 lakh personnel account for nearly one-fourth of the total sanctioned strength of over 22 lakh.
- A fully-staffed police force would only increase India’s police-to-population ratio to 185 against the UN recommended ratio of 222.
- The police-to-people ratio should be improved by at least 50 per cent to meet the challenges faced by the force.
- Women are grossly underrepresented in our police force at less than 7 per cent of our total police strength.
- With the increase in the number of gender crimes, it has become a necessity to augment the strength of police by recruiting more and more women police personnel.
- The situation in Uttar Pradesh is the worst where police are at roughly 50 per cent of sanctioned strength.
- When the numbers are inadequate, police personnel are stretched, leading to shoddy policing.
2) Lack of in-service training
- The existing police personnel are also not adequately trained. Less than 7 per cent police get in-service training.
- Gujarat scores the lowest, with less than one per cent having received any in-service training.
3) Implementation of guidelines and recommendations
- After the National Police Commission in 1977, several committees were set up, including the Gore Committee, Padmanabhaiah Committee and Malimath Committee.
- These commissions and committees have made far-reaching recommendations.
- The top police leadership should be selected by apolitical representatives and an impartial body as suggested by Dharma Vira Commission have farsighted implications.
- It was a strong antidote to opportunistic appointments and transfers.
- Recommendations of the commission, if implemented, along with the Supreme Court directives of 2006 by Justice Sabharwal, in true letter and spirit, will go a long way in police reform.
4) Reforms in criminal justice system
- Reforms in the criminal justice system and separation of law and order from investigation and prosecution are the other areas that need the attention of the authorities.
- These aspects have been highlighted by many commissions and committees constituted by the Centre.
Consider the question “What are the challenges facing the police force in the country? Suggest the measures to deal with these challenges.”
Conclusion
A new role and new philosophy have to be defined for the police to not only make it a capable and effective body but also one accountable to the law of the land and to the people whom they serve.
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From UPSC perspective, the following things are important :
Prelims level: BBIN, SAARC
Mains level: Paper 2- Economic progress of Bangladesh and its implications for the subcontinent
Bangladesh is expected to cross India in terms per capita income. This speaks volumes about the achievements of Bangladesh when contrasted with Pakistan. At the same time, it has several implications for the region. The elaborates on such implications.
What other countries can learn from Bangladesh
- The International Monetary Fund’s latest World Economic Outlook published recently predicts that Bangladesh’s per capita GDP will overtake that of India this year.
- The projected difference is rather small — $1,888 to $1,877 — and unlikely to last beyond this year.
- International development institutions are convinced that the rest of the subcontinent and developing countries around the world can learn much from Dhaka’s experience — the so-called “Bangladesh model”.
5 Implications for the region
1) Rising global interest in the subcontinent
- Rapid and sustained economic growth in Bangladesh has begun to alter the world’s perception of the subcontinent.
- India and Pakistan dominated the region and other countries were considered small.
- But Bangladesh was far from being small, demographically it’s the eighth-largest nation in the world.
- The economic rise of Bangladesh is changing some of that.
2) Changing economic weights of Bangladesh and Pakistan
- This year, Bangladesh’s GDP is expected to reach about $320 billion.
- The IMF did not have the 2020 numbers from Pakistan to report but in 2019, Pakistan’s economy was at $275 billion.
- The IMF suggests that Pakistan’s economy will contract further this year.
- Bangladesh has controlled its population growth and Pakistan has not.
- Dhaka has a grip over its inflation and Islamabad does not.
- There is no question that Pakistan’s negative geopolitical weight in the world will endure.
- But Bangladesh’s growing economic muscle will help Dhaka steadily accumulate geopolitical salience in the years ahead.
3) Accelerate regional integration
- Bangladesh’s economic growth can accelerate regional integration in the eastern subcontinent.
- The region’s prospects for a collective economic advance are rather dim.
- Due to Pakistan’s opposition to economic cooperation with India and its support for cross-border terror, the main regional forum for the subcontinent, the South Asian Association for Regional Cooperation (Saarc), is dormant.
- Instead of merely praying for the revival of Saarc, Delhi could usefully focus on the BBIN.
- BBIN is sub-regional forum among Bangladesh, Bhutan, India and Nepal, activated in the middle of last decade — has not advanced fast enough.
- It is time for Delhi and Dhaka to take a fresh look at the forum and find ways to widen the scope and pace of BBIN activity.
- Meanwhile, there is growing interest in Bhutan and Nepal for economic integration with Bangladesh.
4) Increasing importance of Bangladesh in geopolitics of Indo-Pacific
- The economic success of Bangladesh is drawing attention from a range of countries in East Asia, including China, Japan, South Korea, and Singapore.
- The US, which traditionally focused on India and Pakistan, has woken up to the possibilities in Bangladesh.
- Bangladesh does not want to get into the fight between Beijing and Washington, but the great power wooing of Dhaka is bound to intensify in the new geopolitics of the Indo-Pacific.
5) Development of India’s eastern and north-eastern states could accelerate
- Bangladesh’s economy is now one-and-a-half times as large as that of West Bengal; better integration between the two would provide a huge boost for eastern India.
- Also, connectivity between India’s landlocked Northeast and Bangladesh would provide a boost to the development of north-eastern states.
- Delhi and Dhaka are eager to promote greater cooperation, but there has been little political enthusiasm in Kolkata.
- In Assam, the issue of migration continues to impose major political constraints.
Way forward
- Parliamentary approval of the boundary settlement in 2015, despite the opposition, was a step in the right direction from India.
- So was the acceptance of the 2014 international arbitration award on the maritime boundary dispute between India and Bangladesh.
- But the positive dynamic surrounding the bilateral relationship acquired a negative tone in the second amidst the poisonous rhetoric in India around the Citizenship Amendment Act.
- There is much room for course correction in Delhi and to shift the focus from legacy issues to future possibilities.
Conclusion
Both the countries need to jointly develop and pursue with Dhaka an ambitious framework for shared prosperity.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Doha Accord
Mains level: Paper 3- Threat of terrorism
We have been spared of some unfortunate news of terrorist attacks in the recent past, however, it would be mistake to discount the threat posed by the terrorist organisations especially when we consider the backdrop of Doha Accord. The article deals with the threat of terrorism.
Declining support
- Terrorist organisations like Taliban, al-Qaeda, Islamic State, Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM) have been dormant during a pandemic.
- This is partly explained by the fact that open terror attacks have been reducing, presumably because:
- 1) Terror outfits lack resources.
- 2) Because of temporary loss of support from those normally hostile to the non-Islamic world and tolerant Muslims.
- However, given their past resilience, they continue to pose threats to modern society, especially to India and its neighbourhood.
But threat persists
- These terrorist organisations continue to be attractive to misguided youth in India whose loyalties are extraterritorial.
- Their numbers may not be formidable, but they can cause a ripple effect that cannot be underestimated.
- Terrorist cells are probably engaged in the quiet process of collecting resources for future lethal assaults against India and other countries in the neighbourhood.
- Once the pandemic eases, we may see a resurgence of terror.
- The aggravation of poverty in developing nations due to COVID-19 could offer a fertile ground for recruitment.
- The al-Qaeda and the Islamic State are carrying out their recruitment undiminished by the problems posed by the pandemic.
- Only these two outfits have an impressive global reach backed by global ambitions.
What are the implications of Doha Accord?
- The Doha Accord signed this year between the Taliban and the U.S., which has brought about an improved relationship between the two.
- The U.S. has agreed to a near-total withdrawal of its troops in return for the Taliban’s promise to preserve peace in Afghanistan.
- The Taliban and the al-Qaeda need each other in many areas.
- Both are friendly towards Pakistan and could pose a problem or two to India in the near future.
- Many recent raids by the National Investigation Agency point to an al-Qaeda network in India.
- Once the situation gets better, the al-Qaeda, in cahoots with other aggressive Islamic outfits in and around Pakistan, is bound to escalate the offensive against India.
- This is one factor that makes the al-Qaeda and other terror outfits still relevant to India’s security calculus.
Consider the question “What are the implications of Doha Acord for India’s security architecture?”
Conclusion
The threat posed by the changing geopolitical landscape is bound to increase in the coming days and hence India should prepare itself to tackle the challenge.
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From UPSC perspective, the following things are important :
Prelims level: Regulatory sandbox
Mains level: Paper 3- Regulatory sandbox
The International Financial Services Centres Authority (IFSCA) has introduced a framework for Regulatory Sandbox to tap into innovative Fin-tech solutions.
Try answering this simple question:
Q.What is Regulatory Sandbox? What are its salient features?
Regulatory Sandbox
- A regulatory sandbox usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may permit certain regulatory relaxations for the limited purpose of the testing.
- The objective of the sandbox is to foster responsible innovation in financial services, promote efficiency and bring benefit to consumers.
- It provides a secure environment for fintech firms to experiment with products under supervision of a regulator.
- It is an infrastructure that helps fintech players live test their products or solutions, before getting the necessary regulatory approvals for a mass launch, saving start-ups time and cost.
Its inception
- The concept of a regulatory sandbox or innovation hub for fintech firms was mooted by a committee headed by then RBI executive director Sudarshan Sen.
- The panel submitted its report in Nov 2017 has called for a regulatory sandbox to help firms experiment with fintech solutions, where the consequences of failure can be contained and reasons for failure analysed.
- If the product appears to have the potential to be successful, it might be authorised and brought to the broader market more quickly.
What is the new framework?
- IFSCA has introduced a framework for “Regulatory Sandbox”.
Under this Sandbox framework, entities operating in the capital market, banking, insurance and financial services space shall be granted certain facilities and flexibilities.
- It will experiment with innovative FinTech solutions in a live environment with a limited set of real customers for a limited time frame.
- These features shall be fortified with necessary safeguards for investor protection and risk mitigation. The Regulatory Sandbox shall operate within the IFSC located at GIFT City (Gandhinagar).
- IFSCA shall assess the applications and extend suitable regulatory relaxations to commence limited purpose testing in the Sandbox.
Other propositions
- As additional steps towards creating an innovation-centric ecosystem, the IFSCA has proposed the creation of an “Innovation Sandbox”.
- It will be a testing environment where Fin-tech firms can test their solutions in isolation from the live market.
- This would be based on market related data made available by the Market Infrastructure Institutions (MIIs) operating in the IFSC.
- The Innovation Sandbox will be managed and facilitated by the MIIs operating within the IFSC.
Back2Basics: GIFT City, Gandhinagar
- GIFT city is India’s first operational smart city and international financial services centre (much like a modern IT park).
- The idea for GIFT was conceived during the Vibrant Gujarat Global Investor Summit 2007 and the initial planning was done by East China Architectural Design & Research Institute (ECADI).
- Currently approximately 225 units/companies are operational with more than 12000 professionals employed in the City.
- The entire city is based on concept of FTTX (Fibre to the home / office).The fiber optic is laid in fault tolerant ring architecture so as to ensure maximum uptime of services.
- Every building in GIFT City is an intelligent building. There is piped supply of cooking gas. India’s first city-level DCS (district cooling system) is also operational at GIFT City.
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From UPSC perspective, the following things are important :
Prelims level: District Development Councils
Mains level: Paper 2- DDCs in J and K
The Centre has amended the Jammu and Kashmir Panchayati Raj Act, 1989, to facilitate the setting up of District Development Councils (DDC).
Tap to read more about: Reorganization of J&K
What are DDCs?
- DDCs structure will include a DDC and a District Planning Committee (DPC).
- The J&K administration has also amended the J&K Panchayati Raj Rules, 1996, to provide for establishment of elected District Development Councils in J&K.
- This system effectively replaces the District Planning and Development Boards in all districts, and will prepare and approve district plans and capital expenditure.
Composition of DDCs
- Their key feature, however, is that the DDCs will have elected representatives from each district.
- Their number has been specified at 14 elected members per district representing its rural areas, alongside the Members of
- Legislative Assembly chairpersons of all Block Development Councils within the district.
Term of reference
- The term of the DDC will be five years, and the electoral process will allow for reservations for Scheduled Castes, Scheduled Tribes and women.
- The Additional District Development Commissioner (or the Additional DC) of the district shall be the Chief Executive Officer of the District Development Council.
- The council, as stated in the Act, will hold at least four “general meetings” in a year, one in each quarter.
What will be the process here onward?
- The 14 constituencies for electing representatives to the DDC will have to be delimited.
- These constituencies will be carved out of the rural areas of the district, and elected members will subsequently elect a chairperson and a vice-chairperson of the DDC from among themselves.
Within the third tier, where do the DDCs fit in?
- The DDCs replace the District Planning and Development Boards (DDBs) that were headed by a cabinet minister of the erstwhile state of Jammu and Kashmir.
- For Jammu and Srinagar districts, as winter and summer capitals, the DDBs were headed by the Chief Minister.
However, for Leh and Kargil districts, the Autonomous Hill Development Councils performed the functions designated for the DDBs.
How will DPC work, then?
- For every district there will be DPC comprising MPs representing the area, Members of the State Legislature representing the areas within the District etc. among others.
- The MP will function as the chairperson of this committee.
- The committee will “consider and guide” the formulation of development programmes for the district.
- It would indicate priorities for various schemes and consider issues relating to the speedy development and economic uplift of the district.
- It would function as a working group for formulation of periodic and annual plans for the district; and formulate and finalise the plan and non-plan budget for the district.
Centre’s objective behind this new structure
- The J&K administration in a statement said that the move to have an elected third tier of the Panchayati Raj institution marks the implementation of the entire 73rd Amendment Act in J&K.
- The idea is that systems that had been made defunct by earlier J&K governments such as the panchayati raj system are being revived under the Centre’s rule in the state through the Lieutenant Governor’s administration.
- In the absence of elected representatives in the UT, senior government officials argue that DDCs will effectively become representative bodies for development at the grassroots in the 20 districts of the UT.
- They hope that this may draw some former legislators in as well.
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From UPSC perspective, the following things are important :
Prelims level: Constitutional provisions related to the Governor
Mains level: Paper 2- Misuse of discretionary power by the Governor
The article deals with the role of Governor in the state and issue of misuse of discretionary power vested in him.
Constitutional provision related to Governor
- Various Raj Bhavans have become embroiled in controversies over the decade.
- This is partly because the Constitution of India does allow a certain discretion to the Governor.
- And a discretion invariably does get abused.
- The framers of the Constitution had rejected an elected Governor because they were unambiguously clear that political power would only be vested with elected executives.
- Yet, they were not inclined to put in a formal Instrument of Instructions for the Governors and were content to believe that political decencies and correctness would be observed both by the Governor and the Chief Minister.
As the distinguished constitutional expert, Nani A. Palkhivala explained it “the Constitution intended that the Governor should be the instrument to maintain the fundamental equilibrium of the people of the State and to ensure that the mandates of the Constitution are respected in the State”.
Misuse of ‘discretion’ by Governors
- As an appointee of the Union Government, the Governors have been prone to act on the instructions by ruling party at the Centre.
- Inevitably the “discretion” in choosing a Chief Minister, or requiring a Chief Minister to prove his/her majority, or dismissing a Chief Minister, dissolving the legislature, recommending President’s Rule — came to be tainted with partisan political considerations.
- More often than not, the governor’s discretion was abused, sometimes absurdly, even whimsically.
- In the S.R. Bommai case, the Supreme Court did try through its judgment to prevent the misuse of power.
Conclusion
The guidelines given in the S.R. Bommai case should be adhered to by the Governor and should avoid conflict with the elected governments in the States.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Police reforms
The police have been in the news for incidents involving violence and killings. These instances points to the urgent need for the implementation of the Supreme Court directives given in the Prakash Singh case. The article deals with the issues of delay in the implementation.
Need for immediate remedial measures
- Police has been in the news for incidents involving police brutalities like thrashing of a Dalit Ahirwar couple by the police Madhya Pradesh, torture and killing of father-son duo in Tamil Nadu and killing of gangster in UP.
- These incidents and several others show that we need immediate remedial measures.
Past attempts for police reforms
- The first serious attempt was when the National Police Commission (NPC) was set up in 1977.
- The NPC submitted eight reports to the Ministry of Home Affairs between 1979 and 1981.
- Seven of these reports were circulated to the States in 1983.
Prakash Sing Case
- No action was taken on the reports of the reports until 1996.
- In 1996 Prakash Singh, a retired IPS officer, filed a PIL in the apex court in 1996 demanding the implementation of the NPC’s recommendations.
- In 2006, the Supreme Court issued a slew of directives on police reform.
Status of implementation of directives by Staes
- The one directive that would hurt the most is the setting up of a State Security Commission (SSC) in each State.
- State Security Commission would divest the political leaders of the unbridled power that they wield at present.
- Of the States that constituted an SSC, only Andhra Pradesh and Karnataka have made SSC recommendations binding on the State government.
- Only six States provided a minimum tenure of two years to the Director General of Police (DGP).
- Many States have not implemented a single directive of the Supreme Court.
Way forward
- Expecting political will to implement police reforms is difficult to come by, it is for the judiciary to step in and enforce the directives it had passed.
- Fourteen years is too long a period for any further relaxation.
- The Court has to ensure that its directives are not dismissed lightly.
Consider the question “What are the issues facing police administration? What are the reasons for lack of full implementation of the directives given by the Supreme Court in the Prakash Singh case?
Conclusion
A bold step towards bringing down crimes is possible only when the politicians-criminals-police nexus is strangled.
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The article analyses some trends in India’s population growth as found in the Sample Registration System Statistical Report (2018).
Context
- There have been some encouraging trends in India’s population in the Sample Registration System (SRS) Statistical Report (2018) and global population projections made by the Institute of Health Metrics and Evaluation (IHME), US.
Declining TFR
- SRS report estimated the Total Fertility Rate (TFR), the number of children a mother would have at the current pattern of fertility during her lifetime, as 2.2 in the year 2018.
- It is estimated that replacement TFR of 2.1 would soon be, if not already, reached for India as a whole.
- As fertility declines, so does the population growth rate.
- This report estimated the natural annual population growth rate to be 1.38 per cent in 2018.
- A comparison of 2011 and 2018 SRS statistical reports shows that TFR declined from 2.4 to 2.2 during this period.
- Fertility declined in all major states.
- In 2011, 10 states had a fertility rate below the replacement rate. This increased to 14 states.
- The annual natural population growth rate also declined from 1.47 to 1.38 per cent during this period.
So, when will India’s population stabilise
- Duet to population momentum effect, a result of more people entering the reproductive age group of 15-49 years due to the past high-level of fertility, population stabilisation will take some time.
- The UN Population Division has estimated that India’s population would possibly peak at 161 crore around 2061.
- Recently, IHME estimated that it will peak at 160 crore in 2048.
- Some of this momentum effect can be mitigated if young people delay childbearing and space their children.
Factors affecting fertility rates
- Fertility largely depends upon social setting and programme strength.
- Programme strength is indicated by the unmet need for contraception, which has several components.
- The National Family Health Survey (2015-16) provides us estimates for the unmet need at 12.9 per cent and contraceptive prevalence of 53.5 per cent for India.
- Female education is a key indicator for social setting, higher the female education level, lower the fertility.
- As the literacy of women in the reproductive age group is improving rapidly, we can be sanguine about continued fertility reduction.
Declining sex ratio at birth: Cause for concerrn
- The SRS reports show that sex ratio at birth in India, measured as the number of females per 1,000 males, declined marginally from 906 in 2011 to 899 in 2018.
- Biologically normal sex ratio at birth is 950 females to 1,000 males.
- The UNFPA State of World Population 2020 estimated the sex ratio at birth in India as 910, lower than all the countries in the world except China.
- This is a cause for concern for following 2 reasons:
- 1) This adverse ratio results in a gross imbalance in the number of men and women.
- 2) Impact on marriage systems as well as other harms to women.
- Increasing female education and economic prosperity help to improve the ratio.
- It is hoped that a balanced sex ratio at birth could be realised over time, although this does not seem to be happening during the period 2011-18.
Conclusion
In conclusion, there is an urgent need to reach young people both for reproductive health education and services as well as to cultivate gender equity norms. This could reduce the effect of population momentum and accelerate progress towards reaching a more normal sex-ratio at birth. India’s population future depends on it.
Back2Basics: Total Fertility Rate and Replacement rate
- Total fertility rate (TFR) in simple terms refers to total number of children born or likely to be born to a woman in her life time if she were subject to the prevailing rate of age-specific fertility in the population.
- TFR of about 2.1 children per woman is called Replacement-level fertility (UN, Population Division).
- This value represents the average number of children a woman would need to have to reproduce herself by bearing a daughter who survives to childbearing age.
- If replacement level fertility is sustained over a sufficiently long period, each generation will exactly replace itself without any need for the country to balance the population by international migration.
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From UPSC perspective, the following things are important :
Prelims level: Various UN bodies
Mains level: Paper 2- Opportunity for India to push for institutional changes at the UN
The article analyses the changing geopolitical context against the background of the pandemic. China has been facing some challenges at the UN of late. Multilateralism faces an unprecedented crisis. This context provides an opportunity for India to push for reforms in international institutions.
China facing difficulty in elections to UN bodies
- Recently, India besting China in the elections for a seat on the UN’s Commission on the Status of Women (CSW).
- Soon after the CSW vote, it lost another election, this time to tiny Samoa for a seat on the UN Statistical Commission.
- And a couple of days ago, it just about managed to get elected to the UN High Rights Council, coming fourth out of five contestants for four vacancies.
- Earlier, China’s candidate had lost to a Singaporean in the race for DG World Intellectual Property Organization.
China’s strengths
- Taking advantage of its position as a member of the P-5 and as a huge aid giver, China made itself invincible in UN elections.
- It won among others, the top positions at the Food and Agriculture Organization (FAO), the UN Industrial Development Organization (UNIDO), the International Telecommunication Union (ITU) and the International Civil Aviation Organization (ICAO).
Historical background on China’s rise at the UN
- World War II saw strong U.S.-China collaboration against the Japanese, including U.S. operations conducted from India.
- Their bilateral ties saw the U.S. include the Chinese in a group of the most important countries for ensuring world peace post- World War II, along with the U.S., the USSR and the U.K.
- This enlarged into the P-5, with France being added by the UK at the San Francisco conference held in 1945 where the UN charter was finalised.
- The pure multilateralism of the League of Nations was thus infused with a multipolarity, with the U.S. as the sheet anchor.
Challenges to multilateralism and the need for reform in the international institutions
- Multilateralism is under stress due to COVID-19 pandemic and a certain disenchantment with globalisation.
- At the root is the rise of China and its challenge to U.S. global hegemony.
- But in the current scenario multilateralism backed by strong multipolarity in the need of the hour.
- This demands institutional reform in the UN Security Council (UNSC) and at the Bretton Woods Institutions.
- In this context, it is good that recently India, Germany, Japan and Brazil (G-4) have sought to refocus the UN on UNSC reform.
- As proponents of reform, they must remain focused and determined even if these changes do not happen easily or come soon.
- This is also the way forward for India which is not yet in the front row.
Way forward
- Earlier in the year, India was elected as a non-permanent member of the UNSC for a two-year term.
- India will also host the BRICS Summit next year and G-20 Summit in 2022.
- These are openings for India in collaborating the world in critical areas that require global cooperation especially climate change, pandemics and counter-terrorism.
- India also needs to invest in the UN with increased financial contributions in line with its share of the world economy and by placing its people in key multilateral positions.
Consider the question “The UN, which came into existence in different time fails to take into account the realities of the changing world. In light of this, examine the basis of India’s claim to a permanent seat at the UN. What are the challenges to India’s claim.”
Conclusion
Against the backdrop of pandemic and subsequent pushback against China at the UN, it is also an opportune moment for India and a Reformed Multilateralism.
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From UPSC perspective, the following things are important :
Prelims level: Criteria for MSMEs
Mains level: Paper 3- Formalisation of MSMEs
The lack of formalisation has several implications for MSMEs. Registering them could help them in various ways. The article deals with the issue of formalisation.
Please read the link shared below for issues related to MSME
The missing large in MSMEs
Steps taken by Government to Formalize MSME
- UAM: In 2015, the government notified the Udyog Aadhaar Memorandum (UAM), an online filing system for MSMEs.
- As of January, 86 lakh MSMEs had registered on the UAM portal.
- In 2016, the government notified rules under which MSMEs had to furnish information relating to their enterprises, online, in an MSME databank.
- As of January, only 1.6 lakh units registered on it.
- A new process of classification and registration for small businesses took off on July 1 called as “Udyam”.
- As of October 1, the MSME ministry has confirmed that only 7 lakh registrations have taken place using the new system.Nudge by the government
- In an attempt to nudge more enterprises to become lifetime Udyam, the government has integrated the system with the Trade Receivables Electronic Discounting System (TReDS) and the Government e-Marketplace (GeM).
- In its updated Priority Sector Lending (PSL) guidelines, the RBI has established that for the purposes of PSL, MSMEs will be identified as per the gazette notification laying down the new process of classification and registration.
Addressing the concerns
- While the Udyam initiative holds more promise, it is important to assess if this will be detrimental to accessing formal finance.
- To this end, the government and RBI should consider whether the registration requirement can be exempted for units with investment and turnover that falls in the lower end of the criteria.
- In 2018, the International Finance Corporation estimated that the overall supply of finance from formal sources met only one-third of the credit demand of the MSME sector.
- Enabling strategies such as PSL could provide a fillip to priority sectors including MSMEs which require increased formal financing.
Conclusion
The costs of formalisation and compliance are high and onerous in many states in India. In such an ecosystem, there are perverse incentives to remaining small and informal. Governments’ efforts towards formalisation should be directed towards addressing these issues.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Need for multilateralism
Multilateralism faces several challenges at the time when it is needed the most. The article highlights the need for more of it in the face of global challenges.
Lack of international collaboration to deal with Covid
- As COVID-19 recognises no boundaries, one would have expected that countries with technological and financial capabilities, would agree to pool their resources together to work on an effective and affordable anti-virus vaccine.
- Instead, there are several parallel national efforts underway even as the World Health Organization (WHO) has put together a Covax alliance for the same purpose.
- Active collaboration would have enhanced our collective ability to overcome what has become a public health-cum-economic crisis.
- But we live in an era when nationalist urges, fuelled by a political opportunism, diminish the appeal of international cooperation.
- The post-pandemic world will have the awful dilemma of global integration without solidarity.
Trends in the global order that suggests the need for multilateralims
1) Global food crisis
- The World Food Program has been awarded this year’s Noble Peace Prize.
- The award is sending a message to the world — that we need multilateralism as an expression of international solidarity.
- According to the WFP, 132 million more people could become malnourished as a consequence of the pandemic.
- To the 690 million people who go to bed each night on an empty stomach, perhaps another 100 million or more will be added.
- The Nobel Prize to the WFP will hopefully nudge our collective conscience to come together and relieve this looming humanitarian crisis.
2) Despite issues, U.N. is still important
- The United Nations is at the centre of multilateral institutions and processes and kept alive the notion of international solidarity and cooperation.
- But it suffers from several disabilities due to the fault of its most powerful member countries.
- They have deprived the UN of resources.
- They have resisted efforts to institute long-overdue reforms.
- Its structure no longer reflects the changes in power equations that have taken place and country such as India continues to be denied permanent membership of the Security Council.
- And yet, the UN is now an essential part of the fabric of international relations for two reasons:
- 1) The salience of global issues has expanded.
- 2) The need for multilateral approaches in finding solutions has greatly increased.
3) Multilateral institutions have become platform for contestation
- In the network of multilateral institutions, several belong to the UN system, others are inter-governmental, still others may be non-governmental of a hybrid character.
- This network performs two important tasks:
- 1) Enable governance in areas which require coordination among nation-states.
- 2) Set norms to regulate the behaviour of states so as to avoid conflict and to ensure both equitable burden-sharing and, equally, a fair distribution of benefits.
- While there are multilateral institutions they have become platforms for contestations among their member states.
- There is recognition of the need to cooperate but this is seen as a compulsion rather than desirable.
4) Globalisation driven by technology will remain here
- Globalisation may have stalled, but as we become increasingly digitised, there will be more, not less, globalisation.
- The pandemic has triggered galloping globalisation in the digital economy.
- Globalisation is driven by technology and as long as the technology remains the key driver of economic growth, there is no escape from globalisation.
- In the contemporary world, the line separating the domestic from the external has become increasingly blurred.
- In tackling domestic challenges deeper external engagement is often indispensable. This is certainly true of climate change.
- The pandemic originated in a third country but soon raged across national borders.
- If there had been a robust and truly global early warning system, perhaps it could have been contained.
5) Interconnectedness of challenges
- We must also take into account the inter-connectedness among various challenges, for example, food, energy and water security are inter-linked with strong feedback loops.
- Enhancing food security may lead to diminished water and energy security.
- It may also have collateral impact on health security.
- It is in recognition of these inter-connections that the international community agreed on a set of Sustainable Development Goals (SDGs).
- The SDGs are cross-domain but also cross-national in character, and hence demand greater multilateral cooperation in order to succeed.
6) Need for more democratic world
- The lack of cooperation from even a single state may frustrate success in tackling a global challenge.
- A fresh pandemic may erupt in any remote corner of the world and spread throughout the globe.
- Prevention cannot be achieved through coercion, only through cooperation. It is only multilateralism that makes this possible.
Conclusion
It is a paradox that precisely at a time when the salience of cross-national and global challenges has significantly increased, nation-states are less willing to cooperate and collaborate in tackling them. So, there is a need for more of multilateralism to deal with the issues of global level.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Inflation targeting mechanism
Mains level: Paper 3- Issues with the inflation targeting mechanism of the RBI
The article analyses the recent changes signalled by the RBI in its policymaking.
Changes in the economic policymaking
- Recently the U.S. Fed declared that the Fed will not let inflation stand in the way of maximising employment.
- The reason for this was that the Phillips Curve, the relationship between inflation and unemployment, may no longer hold in the U.S. economy.
- This is significant, given that the Anglo-American economics has been dominated by Phillips Curve.
Why there was need for change in inflation targeting
- Data show that the model that currently guides India’s inflation control strategy may be quite irrelevant.
- This is seen in the recent behaviour of inflation.
- We know that output contracted by more than 23% in the first quarter of this year.
- Despite this staggering decline the inflation rate did not change,
- This was contrary to experience that inflation reflects an ‘over heating’ economy, one growing too fast in relation to its potential.
- This view represents the RBI’s official understanding of inflation, and presumably forms the basis of its policy of inflation targeting.
- It was endorsed by the Government of India when it legislated the modern monetary policy framework to enable the RBI to pursue inflation targeting.
- If the Phillips Curve, which the RBI’s approach internalises, exists, inflation should have decreased as India’s economy contracted during the lockdown.
- The current inflation targeting mechanism had been imagined with developing economies in mind.
- Inflation targeting mechanism is based on the idea that food prices are an important determinant of inflation along with imported inflation.
- Accordingly, a macroeconomic contraction need not lower inflation.
Role of food prices in India
- A recent working paper of the RBI’s research department suggested that a more eclectic model than the one that underlies inflation targeting does a better job of forecasting inflation in India.
- This model accepts a role for food prices, a possibility that is missed when embracing economic models developed in the western hemisphere, where food prices have stopped trending upwards over half a century ago.
Conclusion
The RBI shifting away from its rigid inflation targeting policy is in tune with the time and signals that the central bank is finally alive to India’s economy.
Back2Basics: What is Philips Curve?
- The Phillips curve is an economic concept, stating that inflation and unemployment have a stable and inverse relationship.
- The theory claims that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment.
- However, the original concept has been somewhat disproven empirically due to the occurrence of stagflation in the 1970s, when there were high levels of both inflation and unemployment.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Export led growth
Mains level: Paper 3- Contribution of export in the growth
To aim for achieving high growth rate by focusing only on the domestic consumption and domestic demand could result in failure. The article argues for the focus on export to achieve the objective of growth.
Domestic-demand led growth and its limitations
- The debate in India has focused on domestic-demand led growth.
- But there is no known model of domestic demand/consumption-led growth, anywhere that has delivered quick, sustained, and high rates of economic growth for developing countries.
- India’s GDP growth of over 6 per cent after 1991 was associated with real export growth of about 11 per cent.
- Moreover, domestic-demand led growth requires more public spending, tax cuts, private investment, and/or financial sector reforms: which is not feasible in the present context due to pandemic.
- Consumption growth will be limited by the fact that household debt has grown rapidly in the last few years.
- Consumption now can grow only if incomes grow.
- Government spending could be a short run option, but COVID has limited that possibility.
Why India should not follow advanced countries’ fiscal policies
- India’s interest rates are not at zero and are unlikely to be so because of persistent inflation.
- India’s borrowing is still considered risky which is reflected in ratings.
- The favourable interest rate-growth differential that supports expansionary policy in the advanced countries is absent in India.
- India may well have scope for expansionary fiscal policy in the short run but not as a medium run growth strategy.
Why India should focus on export
- Given all the above factors, India does not have the luxury of abandoning export orientation because the alternatives are so limited.
- India’s market is too small to sustain any kind of serious import substitution strategy.
- Small size of the market makes it difficult to offer investors the domestic market as bait and incentivising them to export.
- India’s big, unexploited opportunities are in unskilled labour exports.
- India is vastly under-exporting relative to its labour force.
- Because China’s wages are rising as it has become richer, it has vacated about $140 billion in exports in unskilled-labour intensive sectors.
- Post-COVID, the move of investors away from China will probably accelerate to hedge against supply chain disruptions.
- India did not take advantage of the first China opportunity, now, a second opportunity stemming from geo-politics should be seized by India.
- As India contemplates atmanirbharta, two deeper advantages of export orientation are always worth remembering.
- 1) Foreign demand will always be bigger than domestic demand for any country.
- 2) If domestic producers are competitive internationally, they will be competitive domestically and domestic consumers and firms will also benefit.
Why openness of ecnonomy is important
- Exploiting this opportunity in unskilled exports requires more not less openness.
- To be internationally competitive, many parts and components have to be imported from so many different sources.
- One indicator is the foreign or import contribution to exports.
- China and Vietnam at the time of their export boom in textiles and clothing suggests that exports were highly dependent on imports (between 40 and 45 per cent).
- In contrast, India’s import share is about 16 per cent.
- Achieving Chinese and Vietnamese levels of success will therefore require greater imports and openness.
Way forward
- Export success will require genuine easing of costs of trading and doing business in India.
- In the case of clothing, a key policy change in India will be to eliminate tariffs on all inputs.
- It will also require signing free trade agreements with Europe that still impose high duties on India’s clothing export, while Bangladeshi and Vietnamese exports which enjoy preferential access to world markets.
Consider the question “As India contemplates atmanirbharta, we should not forget that export dynamism is essential for the rapid and sustained high economic growth. Comment.”
Conclusion
In sum, resisting the misleading allure of the domestic market, India should zealously boost export performance and deploy all means to achieve that. Pursuing rapid export growth in manufacturing and services should be an obsession with self-evident justification.
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