Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Increasing the age of marriage for girls
The article analyses the issues with objectives of increasing the age of marriage for girls.
Poverty of mother: Important factor
- Raising the age of marriage is the could be the way to improve the health and nutritional status of mothers and their infants.
- An article published in the journal The Lancet Child and Adolescent Health analyses data on stunting in children and thinness in mothers in the latest round of the National Family Health Survey 4 (2015-16).
- The authors examine the strength of the association between many different causal factors.
- As it turns out, the poverty of the mother plays the greatest role of all by far.
- Instead of early pregnancy causing malnourishment, they may both be the consequences of poverty.
- The best way to go about breaking such a cycle would be to pick the factors perpetuating it, it would be the poverty of the mother in this case.
Declining fertility rate in India
- India’s fertility rates have been declining to well below replacement levels in many States, including those with higher levels of child marriage.
- This could be the reason for the shift from fuelling fears about booming populations to expressing concern for the undernourishment of children.
- So, the problem of “populations explosion” is not the real problem as the demographic data suggests.
Concern
- The change in the marriage age will leave the vast majority of Indian women who marry before they are 21 without the legal protections.
Conclusion
The proposal and the objective to be achieved through raising the age of marriage needs reconsideration for the reasons cited above.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3-Areas to put work on to put India on the path of growth
The article suggests the three areas on which country should work on to make it resilient in the future. These three areas include the labour laws for informal employment, conditions of our cities and the strength of our rural economy.
Background
- The Prime Minister, while addressing the Confederation of Indian Industry (CII) annual meeting urged to think big and partner with the government in putting India on the path to growth.
- There is much that we can be achieved if government and industry work towards the same objective, and in a spirit of mutual trust.
Let’s look into some areas
1) Employment
- Over 85 per cent of employment in India is in the informal sector.
- The Centre for Monitoring the Indian Economy (CMIE) estimates that between mid-March and mid-April, 120 million people lost their jobs.
- With this unemployment rise to an all-time high of 27 per cent.
- There was reverse migration on an unprecedented scale — some 10 million people abandoned cities to return to their native villages.
- As economic activity has restarted in cities, CMIE reports that unemployment is now down to around 9 per cent.
3 Problems we must address
1) Need for labour regulation
- We have stringent labour laws to protect workers, but this covers only the 15 per cent formal sector employment.
- The 85 per cent of our workforce who are informally employed have almost no protection, and employers have almost complete flexibility.
- We need to address both the formal and informal labour spectrum to get the balance right between flexibility and protection for all labour.
Way forward
- Everyone must have a minimum level of protection, and every employer a minimum level of flexibility.
- This calls for a new social contract to define a well-calibrated social security system.
- This huge project demands good faith and strong leadership by industry, labour and government.
2) Living conditions of our cities
- We need a massive private home-building programme.
- It probably needs much more liberal land-use regulations — our cities have among the least generous floor-space indices (FSI) in the world.
- New York, Hong Kong, and Tokyo have an FSI five times Mumbai’s.
- Again, this is a multi-year project, and it involves state and city governments partnering with private developers.
- India is unique in having 70 per cent of our population still residing in rural areas.
- We must encourage the migration of people to higher productivity occupations in our cities.
- And we must ensure that clean, affordable and accessible housing is available for all in our cities.
3) Strength of our rural economy
- Reverse migration is also an opportunity to collaborate in spreading the geography of development.
- We need a three-pronged approach:
- 1) As Ashok Gulati has often argued, the easiest way to grow farmer incomes is by having them grow more value-added crops.
- Exports of fruits and vegetables must be consistently encouraged.
- The cultivation of palm plantations with potential for huge import substitution, we need corporate farming as the gestation period of seven years for the first crop is too much for the average farmer to handle.
- The Atmanirbhar agricultural reforms, which permit contract farming, and open up agricultural markets, are major medium-term reforms. Implemented right, they can transform agricultural markets.
- 2) We need to encourage agro-processing near the source.
- Fostering entrepreneurship in rural and semi-urban areas would combine nicely with local processing.
- 3) We need to invest even more massively in rural connectivity.
- Today, we would add digital connectivity to road connectivity to level the playing field for all regardless of where they live.
Consider the question “What are the vulnerabilities in our economic structure that were highlighted by the covid pandemic? Also suggest the measures to make our rural economy strong and resilient to such shocks.”
Conclusion
The task is huge, and only collaboration between all levels of government (Union, state, and city) and our dynamic private sector can hope to make substantial progress.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Women's right to parents' property
The Supreme Court in its latest judgement clarified that women’s right to their parents’ property is their birthright and clarified the air of confusion surrounding the issue due to previous judgements.
What was said in the judgement
- The judgement highlighted the patriarchal practices of the Mitakshra School of Hindu law — the guiding force of the Hindu Succession Act, 1956.
- It settled the confusion created by two of its own antagonistic judgments.
- In Prakash vs Phulawati (2016), it had ruled that the amendments to the Hindu Succession Act (2005) applied only to women whose parents were alive on September 9, 2005, the date of the notification of the act.
- In Danamma @ Suman Surpur vs Amar (2018) cases, it inferred that coparcenary rights were birthrights.
- The Supreme Court has now set forth the idea that coparcenary rights are birthrights free from limitations imposed by the dates of any legal notifications.
Issues that need to be addressed
1) Stree dhan issue
- Section 14 (1) of the Hindu Succession Act 1956 provides that women can acquire property as a full owner, and it can be carried over or retained post marriage as stree dhan.
- There are cases where the movable property may have been given to a daughter by her father as an intentionally undeclared and informal settlement between his descendants.
- At the same time, it is quite true that stree dhan over time gave way to the unethical and illegal practices of dowry.
- But the issue of stree dhan needs to be explained further in the light of this judgment.
- The ruling might impact dowry transactions that continue despite stringent anti-dowry laws.
2) Issues in claiming the right to property
- In the rural context, where most of the property is in the form of agricultural land claiming the property may not be easy.
- With patriarchy, it is doubtful if male heirs will share property-related documents, information.
3) Challenge of societal change
- On occasion, the law and courts may turn out to be progressive.
- However, we can not expect society to readily accede to progressive reforms.
- The challenge for economically dependent women in far-flung rural areas who are denied literacy, dignity and, sometimes, even a name and identity, in securing their rights is immense.
- In parts of Bihar, there are areas where women are still addressed by their village names or more commonly as someone’s wife.
Conclusion
Women are asserting their rights, both in conjugal and property matters. However, there are significant cultural, religious, educational barriers and caste and class inequalities that require a massive overhauling of social attitudes to overcome.
Back2Basics: Mitakshra School of Hindu law
- In the Mitakshara School, the allocation of parental property is based on the rule of possession by birth.
- Moreover, a man can leave his property in his will.
- The joint family property goes to the group known as coparceners.
- Ther are the people who belong to the next three generations.
- Hence, the joint family property by partition can be, at any time, converted into a separate property.
- Therefore in Mitakshara School, sons have an exclusive right by birth in the joint family property.
Coparcener
- Coparcenary is a term often used in matters related to the Hindu succession law, and coparcener is a term used for a person assumes a legal right in his ancestral property by birth.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Issues with autonomy and graded autonomy
The article analyses the issues the graded with the graded autonomy to the Higher Education Institutes.
Background
- NEP 2020 provided for phasing out of the system of affiliated colleges and the grant of greater autonomy in academic, administrative and financial matters to premium colleges.
Concerns with the autonomy
- The move has raised concerns about the politico-bureaucratic interference in the internal functioning of universities.
- It has also raised concerns about the substantial burden on universities which have to regulate admissions, set curricula and conduct examinations for a large number of undergraduate colleges.
- Concerns have long existed about over-centralisation, due to constraints imposed on the potential for premium affiliated colleges to innovate and evolve.
- These apprehensions about the autonomy came to be used by successive governments to build a case for the model of graded autonomy.
The push towards graded autonomy
- Successive governments have pushed through measures that have largely allowed for greater penetration of private capital in higher education.
- Recommendations of recent education commissions have promoted the unequal structure of funding for higher education.
- Under this, hierarchy in higher education was created: Central government-funded universities, provincial Central government-funded universities, regional universities and colleges funded by State governments, etc.
- The National Knowledge Commission (2005) stated that good undergraduate colleges are constrained by their affiliated status… the problem is particularly acute for undergraduate colleges which are subjected to the ‘convoy problem’ as they are forced to move at the speed of the slowest.
- In turn, the dominant policy discourse vocally propagates “graded autonomy” for better performing Higher Educational Institutions.
- Under which academic excellence can be supported through a grant of special funds and allowing greater power to such institutions.
- This basis has been gradually enforced with the UGC in 2018 granting public-funded universities the right to apply for autonomy based on whether they are ranked among top 500 of reputed world rankings or have National Assessment and Accreditation (NAAC) scores above 3.26.
NEP 2020: Centralisation and autonomy
- NEP 2020 is a combination of enhanced centralising features and specific features of autonomy.
- Deeper centralisation is indicative in the constitution of the government nominated umbrella institution, Higher Education Council of India (HECI); Board of Governors, the National Education Commission etc.
Concerns
- The model of graded autonomy will encourage hierarchy that exists between different colleges within a public-funded university, and between different universities across the country.
- While the best colleges gain the autonomy to bring in their own rules and regulations, affiliated colleges with lower rankings and less than 3,000 students face the threat of mergers and even closure.
- A shrinking of the number of public-funded colleges will only further push out marginalised sections.
- Autonomy could lead to more inaccessibility as the independent rules and regulations of autonomous colleges and universities shall curtail transparent admission procedures.
- Graded autonomy can be expected to trigger a massive spurt in expensive self-financed courses as premium colleges, which will lead to exclusion.
Conclusion “Examine the issues with the autonomy of Higher Education Institutes in the NEP 2020.”
Conclusion
More than deliverance, autonomy represents the via media for greater privatisation and enhanced hierarchization in higher education.
Sources: https://www.thehindu.com/opinion/op-ed/privatisation-via-graded-autonomy/article32396753.ece
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: MPC
Mains level: Paper 3- Role of the RBI and contradictions in its functions
Limitations and contradictions in the functioning of RBI
- The Reserve Bank of India, along with the monetary policy committee, has undertaken measures to address the fallout of the COVID-19 pandemic.
- Their actions are guided by multiple considerations — inflation and growth management, debt management and currency management.
- These multiple considerations have inadvertently exposed the limitations of and the inherent contradictions in the central banking framework in India.
Monetary policy functions
- The MPC is guided by the goal of maintaining inflation at 4 plus/minus 2 per cent.
- In its August policy, despite dire growth prospects, MPC chose to maintain the status quo.
- This decision was driven by elevated inflation i.e. above 4 plus/minus 2 per cent.
- This raises the question: At the current juncture, should the MPC be driven by growth considerations or should short-term inflation concerns dominate?
Understanding the nature of current inflation
- The current rise in inflation is driven by supply-chain dislocations owing to the lockdowns.
- This is evident from the growing disconnect between the wholesale and consumer price index.
- Since April, while WPI has been in negative territory, CPI has been elevated.
- The MPC’s mandate is to deliver stable inflation over long periods of time, not just a few months.
- Yet, it would appear as if it is more concerned about elevated inflation in the short run.
- Equally puzzling is the refusal of MPC to provide any firm projection of future inflation.
Manager of government debt
- As manager of the government debt, the RBI is tasked with ensuring that the government’s borrowing programme sails through smoothly.
- To this end, it has carried out several rounds of interventions popularly known as operation twist.
- in operation twist government RBI intended pushing down long-term Gsec yields, and exerting upward pressure on short-term yields as a consequence.
- In doing so, the RBI ended up doing exactly the opposite of what the MPC was trying to achieve by cutting short term rates, well before it reached the lower limit of its conventional policy response.
3) RBI’s intervention in currency markets
- The RBI’s interventions in the currency market have constrained its ability to carry out open market operations as these would have led to further liquidity injections into the system.
- Put differently, its debt management functions have run up against its currency management functions.
- Underlining the complexity of all this is the talk of sterilisation — the opposite of injecting liquidity in the system.
Consider the question “RBI’s functions at the current juncture suffers from contradicting functions. Examine such contradictions in its role and suggest the ways to avoid such contradictions.”
Conclusion
The central bank must develop a clear strategy on what to do. At this juncture, there is a strong argument to look past the current spurt in inflation, and test the limits of both conventional and unconventional monetary policy. At the other end, while it may want to intervene to prevent the rupee’s appreciation, in doing so, it is constricting its debt management functions which will have its own set of consequences. There are no easy answers.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- People's right to know
This article analyses the importance of peoples’ right to know and instrumental role judiciary played in harmonising it with the Official Secrets Act 1923.
Context
- A High Level Committee (HLC) chaired by a retired judge of the Gauhati High Court was constituted by the Home Ministry through a gazette notification.
- Its mandate was, among others, to recommend measures to implement Clause 6 of the Assam Accord and define “Assamese People”.
- The HLC finalised its report by mid-February 2020 and submitted it to the Assam Chief Minister and through him to the Central government.
- With the Central government apparently “sitting idle” over the report, the All Assam Students’ Union (AASU), which was represented in the HLC, released the report.
The right to know
- The right to know was recognised nearly 50 years ago and is the foundational basis or the direct emanation for the right to information.
- In State of U.P. v. Raj Narain (1975), the Supreme Court carved out a class of documents that demand protection even though their contents may not be damaging to the national interest.
- Court held that “the people of this country are entitled to know the particulars of every public transaction in all its bearing”.
- This view was endorsed in S.P. Gupta v. President of India (1981) and a few other decisions.
- In Yashwant Sinha v. Central Bureau of Investigation (2019), the Supreme Court referred to the decision of the U.S. Supreme Court in New York Times v. United States (1971) wherein court declined to recognise the right of the government to restrain publication of the Pentagon Papers.
- Our Supreme Court held that a review petition based on three documents published by The Hindu was maintainable since the provisions of the Official Secrets Act, 1923 had not been violated.
- The SC held that there is no provision by which Parliament had vested power in the government either to restrain the publication of documents marked as secret or from placing such documents before a court.
- Section 8(2) of the Right to Information Act, 2005 provides that a citizen can get a certified copy of a document even if the matter pertains to security or relationship with a foreign nation if a case is made out.
- Therefore, it is clear that the right to know can be curtailed only in limited circumstances and if there is an overriding public interest.
Consider the question “Analyse the importance of citizens’ right to know and how the judiciary harmonised the peoples right to know with the Official Secrets Act 1923? “
Conclusion
We must keep in mind observation made by the Supreme Court in S.P. Gupta: “If secrecy were to be observed in the functioning of government and the processes of government were to be kept hidden from public scrutiny, it would tend to promote and encourage oppression, corruption and misuse or abuse of authority, for it would all be shrouded in the veil of secrecy without any public accountability.”
B2BASICS
Official secrets act
- OSA has its roots in the British colonial era and was originally known as The Indian Official Secrets Act (Act XIV), 1889.
- The act was primarily mandated to gag the voice of a large number of newspapers that came up in several languages, and were opposing the Raj’s policies, building political consciousness and facing police crackdowns and prison terms.
- The act was amended and made more stringent in the form of The Indian Official Secrets Act, 1904, during Lord Curzon’s tenure as Viceroy of India.
- In 1923, a newer version was notified. The Indian Official Secrets Act (Act No XIX of 1923) was extended to all matters of secrecy and confidentiality in governance in the country.
- It was further amended after India got independence in 1951 and 1967. The act in its present form deals with two aspects — spying or espionage and disclosure of other secret information of the government.
- Secret information can be any official code, password, sketch, plan, model, article, note, document or information. Under the act both the person communicating the information, and the person receiving the information, can be punished.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Threat to sovereignty of the Arab countries and India's role
The article analyses the threat the Arab countries faces from the new geopolitical realignment and India’s role in it.
Geopolitical realignment in the middle east
- Agreement on the normalisation of relations between the United Arab Emirates and Israel was signed recently.
- At the same time, there is an equally significant reorientation of the Subcontinent’s relationship with the region.
- This is marked by Pakistan’s alignment with non-Arab powers.
Deteriorating relation of Pakistan with Arab world
- Pakistan has been angry with UAE’s invitation to India to address the Organisation of Islamic Cooperation in early 2019.
- Saudi Arabia’s reluctance to convene a meeting to condemn Indian actions in Kashmir last August has angered Pakistan.
- While Pakistan appears to be dreaming of a new regional alliance with Turkey and Iran.
- Pakistan is also betting that a rising China and an assertive Russia will both support this new geopolitical formation as part of their own efforts to oust America from the Middle East.
Threat to the Arab world
- Saudis and Emiratis see sharpening existential threats to their kingdoms from both Turkey and Iran.
- Both Turkey and Iran now intervene with impunity in the internal affairs of the Arab world.
- Two other states have joined this Great Game.
- Malaysia’s Mahathir fancied himself as a leader of the Islamic world.
- Arab Qatar, which is locked in a fraternal fight with the Saudis and the Emiratis, wants to carve out an outsized role for itself in the Middle East.
India’s should follow five principles for Arab Sovereignty
- 1) India must resist the temptation of telling the Arabs what is good for them.
- India should support their efforts to reconcile with non-Arab neighbours, including Israel, Turkey and Iran.
- 2) Oppose foreign interventions in the Arab world. In the past, those came from the West and Israel.
- Today, most Arabs see the greatest threat to their security from Turkish and Iranian interventions.
- 3) Extend support to Arab economic integration, intra-Arab political reconciliation and the strengthening of regional institutions.
- 4) Recognise that India’s geopolitical interests are in close alignment with those in the moderate Arab Centre — including Egypt, Jordan, Saudi Arabia, the UAE and Oman.
- 5) India can’t be passive amidst the unfolding geopolitical realignment in West Asia.
- Some members of the incipient alliance — Turkey, Malaysia and China — have been the most vocal in challenging India’s territorial sovereignty in Kashmir.
Consider the question “Examine the importance of India’s relations with Arab countries. What are the threats the region faces to their sovereignty and how India can play an important role to ensure their sovereignty.”
Conclusion
Standing up for Arab sovereignty and opposing the forces of regional destabilisation must be at the very heart of India’s new engagement with the Middle East.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 239AA and Article 239AB
Mains level: Paper 2- Conflict between Lt. Governor and the Delhi Government
The article analyses the tussle between the Delhi Government and the Lt. Governor.
What the 2018 SC judgement was about
- The Supreme Court in Government of NCT of Delhi vs. Union of India (2018) decided on the conflicts between the government of NCT and the Union Government and its representative, the Lieutenant Governor.
- It reminds the Lt. Governor what his real functions are.
- It tells the State government that it should remember that Delhi is a special category Union Territory.
- It lays down the parameters to enabling the harmonious functioning of the government and the Lt. Governor.
- It did not very clearly delineate the issues in respect of which the Lt. Governor can refer a decision taken by the Council of Ministers to the President in the event of a difference of opinion between the Lt. Governor and the State government.
Settled issues and clarifications
- The Supreme Court affirming that the Lt. Governor is bound to act on the aid and advice of council of ministers except in respect of ‘Land’, ‘Public Order’ and the ‘Police’.
- The Court has also made it clear that there is no requirement of the concurrence of the Lt. Governor and that he has no power to overrule the decisions of the State government.
- However, Article 239AA (4) (proviso) which says that in the case of a difference of opinion between the Lt. Governor and his Ministers on any matter, the Lt. Governor shall refer it to the President for decision and act according to that decision.
- If the Lt. Governor thinks that the matter is urgent he can take immediate action on his own.
How Article 239 AA(4) matters
- Lt. Governor can frustrate the efforts of the government, by declaring that there is a difference of opinion on any issue and refer it to the President.
- Refering matter to the President in reality means the Union Home Ministry.
- The Lt. Governor being its representative, it is easier for him to secure a decision in his favour.
- The State government will be totally helpless in such a situation.
- The recent appointment of prosecutors for conducting the Delhi riot cases in the High Court is a case in point.
- When the government decided to appoint them, the Lt. Governor referred it under proviso to Article 239AA (4) to the President stating that there is a difference of opinion.
- This episode clearly points to the fault lines which still exist in the power equations in the capital’s administrative structure.
But, can Lt. Governor refer routine administrative matter to the President?
- A close reading of the Supreme Court judgment in the NCT Delhi case (supra) would reveal that he cannot.
- The Supreme Court says “The words ‘any matter’ employed in the proviso to Article 239AA (4) cannot be inferred to mean ‘every matter’.
- Court also says that “The power of the Lieutenant Governor under the said proviso represents the exception and not the general rule”.
- The President is the highest Constitutional authority and his decision should be sought only on constitutionally important issues.
Executive powers and legislative powers
- Parliament can legislate for Delhi on any matter in the State List and the Concurrent List.
- But the executive power in relation to Delhi except the ‘Police’, ‘Land’ and ‘Public Orders’ vests only in the State government headed by the Chief Minister.
- The executive power of the Union does not extend to any of the matters which come within the jurisdiction of the Delhi Assembly.
- The only occasion when the Union Government can overrule the decision of the State government is when the Lt. Governor refers a matter to the President under the proviso to clause (4).
Consider the question “What are the parameters laid down by the Supreme Court in the Government of NCT of Delhi vs. Union of India (2018) to avoid the conflict between Lt. Governor and the Delhi Government? Also examine the scope of referring any matter to the consideration of the President by the Lt. Governor.”
Conclusion
In the Constitutional scheme adopted for the NCT of Delhi Lt. Governor should not emerge as an adversary having a hostile attitude towards the Council of Ministers of Delhi; rather, he should act as a facilitator.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Nominal GDP
Mains level: Paper 3- Economic slowdown caused by pandemic
Contradictions in the present crisis
- India registered negative economic growth in 1972-73, 1965-66 and 1957-58.
- All these were drought years.
- 1957-58 also registered a significant balance of payments (BOP) deterioration and 1979-80 witnessing the second global oil shock following the Iranian Revolution.
- Farmers harvested a bumper rabi crop last year and public cereal stocks at 94.42 million tonnes as on July 1 were also 2.3 times the required level.
- There’s no shortage today of food, forex or even savings.
- Foreign exchange reserves were at an all-time high of $538.19 billion.
- So, the real GDP decline of 5-10 per cent for 2020-21 would be the country’s first-ever not triggered by an agricultural or a BOP crisis.
“Western style” demand slowdown in India
- What India has been going through is a full-fledged recession bereft of consumption and investment demand.
- Households have cut spending.
- The same goes with businesses. Many have shut or are operating at a fraction of their capacity and pre-lockdown staff strength.
- This demand-side uncertainty and the resulting economic contraction is something new to India.
- Banks are also facing a problem of plenty.
- While their deposits are up 11.1 per cent, the corresponding credit growth has been just 5.5 per cent.
- At some point when all this reduced spending and investments leads to a further contraction of incomes, it is bound to reduce savings as well.
Why the government is not spending?
- Solution in such a situation is the spending by the government.
- There are three probable reasons why government isn’t doing that.
1.Optimism
- Hope that once the worst of the pandemic is behind us, people will start spending and businesses, too, will spring back to life.
- However, this assumes the economy wasn’t doing all that badly previously and that the lockdown hasn’t caused too much of permanent damage.
- The truth is that growth had already slid to 3.9 per cent in 2019-20.
2.State of Government finances
- In 2007-08 global financial crisis, the Centre’s fiscal deficit was only 2.5 per cent of GDP, whereas it stood at 4.6 per cent in 2019-20.
- The space for a fiscal stimulus, in other words, is very limited compared to that time.
3.Sustainability of debt
- Between 2007-08 and 2019-20, the Centre’s outstanding debt-GDP ratio has come down from 56.9 to 49.25 per cent.
- So has general government debt, which includes the liabilities of states, from 74.6 to 69.8 per cent.
- Economists such as Olivier Blanchard have shown that public debts are sustainable provided governments can borrow at rates below nominal GDP growth (i.e. GDP unadjusted for inflation).
- The nominal GDP averaged 11.1 per cent during 2014-15 to 2018-19.
- As against this, the weighted average interest rate on Central government securities ruled between 6.97 per cent in 2016-17 and 8.51 per cent in 2014-15.
- Only with nominal GDP growth falling to 7.2 per cent in 2019-20, and most likely zero this fiscal, has the Blanchard debt sustainability formula come under threat.
Way forward
- Government can take lessons from the Vajpayee period when the weighted average cost of Central borrowings more than halved from 12.01 per cent in 1997-98 to 5.71 per cent in 2003-04.
- In the last four months, yields on 10-year Indian government bonds have softened from 6.5 to 5.9 per cent and even more for states — from 7.9 to 6.4 per cent.
- Interest rates will fall further as banks have nobody to lend to.
Consider the question “Examine how covid induced economic recession is different from the past recessions? What are the options with the government to deal with the situation?”
Conclusion
Governments should borrow and spend. They need worry only about GDP growth, real and nominal.
Sources: https://indianexpress.com/article/opinion/columns/a-crisis-without-villains-6557602/
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Agriculture Infrastructure Fund
Mains level: Paper 3- Measures to achieve better price realisation for agri commodities.
The article analyses the highlights the importance of post harvest infrastructure for the better price realisation of agri-commodities. It also suggests the two areal which could help the farmers in this regard.
Purpose of Agriculture Infrastructure Fund
- Creating post-harvest physical infrastructure is as important as the changes in the legal framework (like the recent ordinances).
- The recently announced Rs 1 lakh crore Agriculture Infrastructure Fund (AIF) will be used over the next four years.
- This fund will be used to build post-harvest storage and processing facilities.
- NABARD will steer this initiative in association with the Ministry of Agriculture and Farmers Welfare, largely anchored at FPOs.
- The creation of the AIF presumes that there is already large demand for storage facilities and other post harvest infrastructure.
Reforms in 2 areas which could help farmers get better price realisation
1) Negotiable warehouse receipt
- More and better storage facilities can help farmers avoid distress sellingimmediately after the harvest.
- But small farmers cannot hold stocks for long as they have urgent cash needs to meet family expenditures.
- Therefore, the value of the storage facilities at the FPO level could be enhanced by a negotiable warehouse receipt system.
- FPOs can give an advance to farmers, say 75-80 per cent of the value of their produce at the current market price.
How NABARD can play an important role
- Since NABARD is also responsible for the creation of 10,000 more FPOs, it can create a package that will help these outfits realise better prices
- FPOs will need large working capital to give advances to farmers against their produce as collateral.
- NABARD can ensure that FPOs get their working capital at interest rates of 4 to 7 per cent.
- Currently, most FPOs get capital from microfinance institutions at rates ranging from 18-22 per cent per annum which is not economically viable unless the off-season prices are substantially higher than the prices at harvest time.
2)Improving Agri-futures markets
- A vibrant futures market is a standard way of reducing risks in a market economy.
- Several countries — be it China or the US — have agri-futures markets that are multiple times the size of those in India.
Way forward
- 1) NABARD should devise a compulsory module that trains FPOs to use the negotiable warehouse receipt system and navigate the realm of agri-futures to hedge their market risks.
- 2) Government agencies dealing in commodity markets — the FCI, NAFED, State Trading Corporation (STC) — should increase their participation in agri-futures.
- That is how China deepened its agri-futures markets.
- 3) The banks that give loans to FPOs and traders should also participate in commodity futures as “re-insurers” for the healthy growth of agri-markets.
- 4) Government policy has to be more stable and market friendly.
- In the past, it has been too restrictive and unpredictable.
Consider the question “Creating post-harvest physical infrastructure is as important as the changes in the legal framework. In light of this, highlight the importance of recently announced Agriculture Infrastructure Fund and suggest the measures to increase the price realisation of agri-products by farmers.”
Conclusion
India needs to not only spatially integrate its agri-markets (one nation, one market) but also integrate them temporally — spot and futures markets have to converge. Only then will Indian farmers realise the best price for their produce and hedge market risks.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Census of India
Mains level: Need for reforms in Census and Surveying
- In all likelihood, the February 2021 Census will have to be rescheduled to ensure comparability with earlier censuses.
- This will also affect the National Sample Surveys and others that use the census as the sampling frame.
- The delay can, however, be used to introduce much-needed reforms to this gigantic exercise whose roots go back to the late 19th century.
Try this question for mains:
Q.The Census of India needs a basic overhaul beyond its procedural digitization. Critically analyse.
Background: Census of India
- The decennial Census of India has been conducted 15 times, as of 2011.
- While it has been undertaken every 10 years, beginning in 1872 under British Viceroy Lord Mayo, the first complete census was taken in 1881.
- Post-1949, it has been conducted by the Registrar General and Census Commissioner of India under the Ministry of Home Affairs, Government of India.
- All the censuses since 1951 were conducted under the 1948 Census of India Act.
- The last census was held in 2011, whilst the next will be held in 2021.
Census 2021
- The Census 2021 will be conducted in 18 languages out of the 22 scheduled languages (under 8th schedule) and English, while Census 2011 was in 16 of the 22 scheduled languages declared at that time.
- It also will introduce a code directory to streamline the process
- The option of “Other” under the gender category will be changed to “Third Gender”.
- There were roughly 5 lakh people under “other” category in 2011.
- For the first time in the 140 year history of the census in India, data is proposed to be collected through a mobile app by enumerators and they will receive an additional payment as an incentive.
- The Census data would be available by the year 2024-25 as the entire process would be conducted digitally and data crunching would be quicker.
Issues with the Census
(1) Data quality issues
- The past four decades have seen a decline in the quality of data and growing delays in its release despite technological innovations.
- The use of census data in delimitation and federal redistribution has been questioned on grounds of poor quality, while the Covid-19 pandemic revealed the obsolete and poor quality of data on internal migration.
(2) No major reforms
- The legal foundation of the census has remained largely unchanged since newly independent India enacted permanent census legislation in 1948.
- Despite sustained problems, the census has not seen any major reform after 1994 when both the Census Act, 1948 and Census Rules, 1990 were amended.
(3) Old methods and questionnaire
- The methodological core – extended de facto (synchronous) canvasser-based enumeration – too has remained intact even though the length and layout of schedules changed quite a bit.
- The Household Schedule, for instance, grew with the footprint of the state, from 14 questions in 1951 to 29 questions in 2011.
(4) Workforce issues
- Data collection has not kept pace with improvements in data processing technology due to the lack of motivated and adequately trained enumerators.
- Given the high salaries of school teachers, the modest honorarium paid for census work does not cover the opportunity cost of conducting the door-to-door enumeration.
Understand the ‘purpose’ of the census
Reforms should begin with the design of schedules based on a clear understanding of two essential functions of the census:
(a) Resource allocations
- First, census facilitates the rule-based distribution of power and resources through constitutionally mandated redistribution of taxes, delimitation of electoral constituencies and affirmative action policies.
- It is also used in routine policy-making across tiers of government.
(b) Population projections
- Second, census serves as the sampling frame for surveys and is also the basis of population projections.
- Other routine policies require distribution of the headcount by households, marital status, age, sex, literacy, migrant status, and mother tongue.
- Put together, these variables are sufficient for choosing representative samples for surveys.
What can be done?
1.Cut the questions
- Nearly half of the ‘Houselisting and Housing Schedule’ of the census is devoted to questions on household amenities and assets.
- These questions can be dropped because the information can be more appropriately collected through sample surveys and administrative statistics.
Why put fewer questions?
- Cutting down the length of unwieldy schedules has several advantages.
- First, it will improve data quality by reducing the workload of enumerators.
- Second, it will also free up senior census officials and help revive the earlier tradition of producing detailed administrative and other reports crucial for understanding the context of data.
- Third, shorter schedules will seem less invasive and assure respondents uncomfortable with sharing too many details.
- Fourth, it will cut down processing time and help in reducing delays in the release of data.
2.Dealing with data manipulation
- There is poor accounting of migrants that distorts estimates of urbanisation as well as the inter-state distribution of the population.
- There exists grassroots manipulation of data-driven by political and economic considerations.
- There is a need to demystify census operations and build trust in the impartiality of the exercise, better scrutiny of electoral records and welfare schemes to weed out bogus beneficiaries.
Conclusion
- These reforms are essential to ensure that the census exercise is able to fulfil its constitutional, policy and statistical obligations and also clear the ground for debates on the future of census in the digital era.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Strategic autonomy and alignment with the U.S.
India has been maintaining strategic autonomy in its foreign policy since Independence. But the end of Cold War and growing closeness towards the U.S. raises concerns. This article addresses this issue.
India’s foreign policy: characterised by autonomy
- India has historically prided itself as an independent developing country which does not take orders from or succumb to pressure from great powers.
- Indian maintained this stance in its foreign policy when the world order was bipolar from 1947 to 1991, dominated by the U.S. and Russia.
- Also, when the world was unipolar from 1991 to 2008, dominated by the U.S.
- Or when it is multipolar as at the present times.
- The need for autonomy in making foreign policy choices has remained constant.
Flexibility in foreign policy
- However, strategic autonomy has often been adjusted in India’s history as per the changing milieu.
- During the 1962 war with China, Prime Minister Nehru, had to appeal to the U.S. for emergency military aid.
- In the build-up to the 1971 war with Pakistan, Prime Minister Indira Gandhi had to enter a Treaty of Peace, Friendship and Cooperation with the Soviet Union to ward off both China and the U.S.
- And in Kargil in 1999, India welcomed a direct intervention by the U.S. to force Pakistan to back down.
- In all the above examples, India did not become any less autonomous when geopolitical circumstances compelled it to enter into de facto alliance-like cooperation with major powers.
- Rather, India secured its freedom, sovereignty and territorial integrity by manoeuvering the great power equations and playing the realpolitik game.
Concerns over India’s growing closeness to the U.S.
- As India is facing China’s growing aggression along the LAC, Non-alignment 2.0 with China and the U.S. makes little sense.
- Fears that proximity to the U.S. will lead to loss of India’s strategic autonomy are overblown.
- Because independent India has never been subordinated to a foreign hegemon.
What should be India’s strategy
- In the threat environment marked by a pushy China, India should aim to have both- American support and stay as an independent power centre by cooperation with middle powers in Asia and around the world.
- For India complete dependence on the U.S. to counter China would be an error.
- Such complete dependence would be detrimental to India’s national interest such as its ties with Iran and Russia and efforts to speed up indigenous defence modernisation.
- A wide and diverse range of strategic partners, including the U.S. is the only viable diplomatic way forward in the current emerging multipolar world order.
Consider the question “Does India’s close alignment with the U.S. harms its strategic autonomy? Suggest the strategy to balance India’s security concerns and maintaining strategic autonomy.”
Conclusion
We are free and self-reliant not through isolation or alliance with one great power, but only in variable combinations with several like-minded partners. India is familiar with the phrase ‘multi-vector’ foreign policy. It is time to maximise its potential.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Role of judiciary in democracy and challenges it faces
The article analyses the role of the judiciary in democracy and the challenges it has been facing.
Challenges to democracy
- Growing lack of faith among many Indians in the functioning of the Supreme Court (SC).
- The politicisation of the civil service and the police.
- The creation of a cult of personality
- The intimidation of the media.
- The use of tax and investigative agencies to harass and intimidate independent voices.
- The refusal to do away with repressive colonial-era laws and instead the desire to strengthen them.
- The undermining of Indian federalism by the steady whittling down of the powers of the states by the Centre.
Role and challenges judiciary faces
- In recent years the Supreme Court has done little to stop or stem the degradation of democracy.
- Some examples: Court’s refusal to strike down laws like UAPA that should have no place in a constitutional democracy.
- Its unconscionable delay in hearing major cases.
- The COVID-19 crisis has accelerated trend towards authoritarianism and the centralisation of power.
- But the hearings and orders of the past few months show, the Supreme Court seems unable or unwilling to check these ominous trends.
- The failure of the SC is in part a failure of leadership.
- One chief justice has accepted a Governorship immediately on retirement, and another has accepted a Rajya Sabha seat.
- Powers of the Master of the Roster are imperfectly defined, and can lead themselves to widespread misuse by the incumbent.
Consider the question “Examine the role of the judiciary as the guardian of the Constitution. What are the challenges judiciary facing the judiciary in recent times?”
Conclusion
Time has come for all the serving justices in the highest court of the land to think seriously about the ever-increasing gap between their calling as defined by the Constitution, and the direction the Court is now taking.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: TFR
Mains level: Paper 1- Declining TFR in India
The article analyses and explains the declining trend in India’s total fertility rate. The aspirational revolution in the parents explains such decline.
What the projections say
- A new study was published in The Lancet, and prepared by the Seattle-based Institute for Health Metrics and Evaluation (IHME).
- It argues that while India is destined to be the largest country in the world, its population will peak by mid-century.
- And as the 21st century closes, its ultimate population will be far smaller than anyone could have anticipated, about 1.09 billion instead of approximately 1.35 billion today.
- It could even be as low as 724 million, the study projects.
- Until 2050, the IHME projections are almost identical to widely-used United Nations projections.
- It is only in the second half of the century that the two projections diverge with the UN predicting a population of 1.45 billion by 2100, and the IHME, 1.09 billion.
Present trends in India’s fertility rate
- In the 1950s, India’s Total fertility rate (TFR) was nearly six children per woman; today it is 2.2.
- Between 1992 and 2015, it had fallen by 35% from 3.4 to 2.2.
- It is even below the replacement rate in 18 States and Union Territories.
What explains the trends
- One might attribute it to the success of the family planning programme.
- But family planning has long lost its primacy in the Indian policy discourse.
- Punitive policies include denial of maternity leave for third and subsequent births, limiting benefits of maternity schemes and ineligibility to contest in local body elections for individuals with large families.
- However, these policies are mostly ignored in practice.
Aspirational revolution
- It seems highly probable that the socioeconomic transformation of India since the 1990s has played an important role.
- Over the years parents began to rethink their family-building strategies.
- Smaller families when compared with a bigger family with same income level, invest more money in their children by sending them to private schools and coaching classes.
- It is not aspirations for self but that for children that seems to drive fertility decline.
Consider the question “Examine the factors responsible for the declining trends in the total fertility rate for India. What are its implications for country?”
Conclusion
Demographic data suggest that the aspirational revolution is already under way. What we need to hasten the fertility decline is to ensure that the health and family welfare system is up to this challenge and provides contraception and sexual and reproductive health services that allow individuals to have only as many children as they want.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Current Account
Mains level: Paper 3- Steps taken by the RBI to stop banking frauds
The article explains the salience of the RBI’s recent restriction on the opening of current accounts by the companies.
Context
- RBI has put restrictions on who can open a current account with which bank.
What are the restrictions and why it matters
- A company that has borrowed from a bank cannot open a current account with another bank.
- It can open a current account with its lending banks under some circumstances.
- Otherwise such company is encouraged to use the cash credit and overdraft facilities under which it has borrowed.
Let’s understand why it matters
- Firms borrow from PSU banks, but open current accounts with private or foreign banks.
- When transactions move to current account of banks other than the lending bank, it loses visibility on end use of the funds.
- Basically the PSU bank has no idea where the money has gone.
- For example, when a firm gets money from its customers, instead of parking it with the lending bank it puts it in the current account with another bank.
- The lending bank has no way of knowing if the loan is going bad wilfully or otherwise.
Why private banks may oppose the move
- Easy revenue source has got blocked.
- They can, of course, start lending to firms to retain this business but that would mean taking risk.
- It would be far safer to be with retail customers who have neither power nor lawyers to defend them against sharp banking practices.
Why it matters to bank customers
- Vanishing money raises the cost of funds to the bank and results in higher lending rates and lower deposit rates for us.
- For taxpayers, it means regular use of our funds to recapitalize the banking system that periodically goes bankrupt due to loans gone bad.
- So, an overall tightening of the system is great news.
Conclusion
For too long have the citizens been punished with greater scrutiny, tighter rules, higher costs and fewer benefits as compared to the suits. We should let the banks hand-wring, but celebrate the closure of each loophole as it happens.
Back2Basics: What is the current account?
- A current account is like a savings bank account, but with many facilities for swift and multiple transactions, overdraft facilities and it carries no interest.
- Banks like to sell these accounts as they enjoy huge floats, or money that just sits with the bank waiting to be used by the depositing firms.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Challenges to secularism in India
Secularism in India faces multiple challenges. This article analyses challenge the Indian secularims faces from the party-political secularims.
Features of constitutional secularism in India
- Constitutional secularism is marked by at least two features.
- First, critical respect for all religions.
- Unlike some secularisms, ours is not blindly anti-religious but respects religion.
- It respects not one but all religions.
- Every aspect of religious doctrine or practice cannot be respected but respect for religion must be accompanied by critique.
- Second, intervene whenever religious groups promote communal disharmony.
- Thus, it has to constantly decide when to engage or disengage, help or hinder religion depending entirely on which of these enhances our constitutional commitment to freedom, equality and fraternity.
How populism is harming secularism
- Secularism has paid a heavy price in our country for being at the centre of public and political discourse.
- Populism based politics is indifferent to freedom and equality-based religious reform, it has removed critical from the term ‘critical respect’.
- It has even been complicit in igniting communal violence.
- This party-political ‘secular’ state, cozying up alternately to the fanatical fringe of the minority and the majority, was readymade for takeover by a majoritarian party.
- This takeover was accomplished by removing the word ‘all’ and replacing it by ‘majority’.
- Today, Indian constitutional secularism is swallowed up by this party-political secularism, with not a little help from the Opposition, media and judiciary.
Way forward
- 1) There is a need for a shift of focus from a politically-led project to a socially-driven movement for justice.
- 2) Also, a shift of emphasis from inter-religious to intra-religious issues.
- Such focus on intra-relisious issues may allow deeper introspection within, multiple dissenting voices to resurface, create conditions to root out intra-religious injustices, and make its members free and equal.
- 3) Europe’s secularism provided a principle to fight intra-religious oppressions.
- In India, secularism was not only a project of civic friendship among religious communities but also of opposition to religion-based caste and gender oppressions.
- A collective push from young men and women may help strengthen the social struggle of emancipation from intra-religious injustices.
- 4) Inter-religious issues also should not be ignored.
- Distance, freedom from mutual obsession, give communities breathing space.
- Each can now explore resources within to construct new ways of living together.
Consider the question “How populism in the politics thretens the idea of secularim in India? Suggest the ways to deal with it.”
Conclusion
Needed today are new forms of socio-religious reciprocity, crucial for the business of everyday life and novel ways of reducing the political alienation of citizens, a democratic deficit whose ramifications go beyond the ambit of secularism.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India-U.S. ties
This article analyses what the new shift in the India-U.S. ties will require for the mutual benefit.
Following 12 factors would influence the depth and longevity of the India-U.S. ties.
1) Outcome of the U.S. Presidential elections
- The success of India’s new bonding with the U.S. will depend on the outcome of the U.S. Presidential elections.
- The Democratic party candidate with the Left wing and liberals in the U.S. has been highly critical of the Citizenship (Amendment) Act.
2) Need to build trust with the U.S.
- India purchased of the S-400 air defence missile system from Russia disregarding the U.S. concerns.
- India refused to send Indian troops to Afghanistan.
- We need to build trust with the U.S. that we will give to the U.S. as good as it gives us.
- For this structuring we must realise that India-U.S. relations require give and take on both sides.
- What India needs to take today is for dealing with the Ladakh confrontation with China.
- India needs U.S. hardware military equipment.
3) Fighting the U.S. enemy in neighbourhood
- The U.S. needs India to fight her enemies in the neighbourhood such as in Afghanistan.
- India should send two divisions gradually to Afghanistan and relieve U.S. troops to go home
4) Intelligence sharing and cooperation
- India needs the support of the U.S. and its ally, Israel, in cyberwarfare, satellite mappings of China and Pakistan.
- There is a need for sharing intercepts of electronic communication, hard intelligence on terrorists, and controlling the military and the Inter-Services Intelligence in Pakistan.
5) Developing naval bases
- India needs the U.S. to completely develop the Andaman & Nicobar, and also the Lakshadweep Islands as a naval and air force base.
- These naval bases can be used by the U.S and shared along with its allies such as Indonesia and Japan.
6) Economic relations and India’s concerns
- The economic relations must be based on macroeconomic commercial principles.
- Free, indiscriminate flow of U.S. foreign direct investment (FDI) is not in India’s national interest.
7) Technology sharing
- India needs technologies such as thorium utilisation, desalination of sea water, and hydrogen fuel cells.
8) U.S. should allow import of agricultural product
- The U.S. must allow India’s exports of agricultural products including Bos indicus milk, which are of highly competitive prices in the world.
9) FDI in India
- FDI should be allowed into India selectively from abroad, including from the U.S.
- FDI in India should be based on the economic theory of comparative advantage and not on subsidies and gratis.
10) Tariffs
- Tariffs of both India and the U.S. should be lowered, and the Indian rupee should be gradually revalued to ₹35 to a dollar.
- Later, with the economy picking up, the rupee rate should go below 10 to the dollar.
11) Stay away from certain issues
- India should not provide the U.S. with our troops to enter Tibet, or be involved in the Hong Kong and Taiwan issue.
- There is always a possibility of a leadership change in China.
- Thus, China’s policy changed very favourably towards India.
- In the cases of Tibet, Taiwan, and Hong Kong, we have made explicit agreements.
- In the case of Tibet, two formal treaties were signed by Nehru (1954) and A.B. Vajpayee (2003).
12) Trilateral commitment to world peace
- In the long run, India, the U.S., and China should form a trilateral commitment for world peace provided Chinese current international policies undergo a healthy change.
Consider the question “What are the factors influencing the India-U.S. ties? Suggest the pathway to address the issues that hamper the deepening of India-U.S. ties.”
Conclusion
Both countries need to recognise each other’s concern and work towards the deepening of the ties for the mutual benefit and with a view to dealing with the challenges confronting both the countries.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India-China relations
The economic grip China exerts on the world protects it from the threat of isolation. This article examines this issue and its implications for India.
Worsening U.S.-China ties and implications for other countries
- After years of cooperating with one another, the U.S. and China are currently at the stage of confrontation.
- Both are seeking allies to join their camps.
- This places several countries in Asia, in a difficult position as most of them, loathe to take sides.
- The U.S. may not necessarily be the first choice for many countries of Asia and the Asia-Pacific region.
- In the case of China, it is clearly more feared than loved.
China’s aggression
- Beijing’s virtual takeover of Hong Kong has only confirmed what had long been known about China’s intentions.
- In March-April this year, China further stepped up its aggressive actions, renaming almost 80 geographical features in the region as an index of Chinese sovereignty.
- Taiwan, Japan, Vietnam, Indonesia and South Korea have all complained about China’s menacing postures in their vicinity.
How countries are resisting China
- Hardly any country in Asia is willing to openly confront China, and side with the U.S.
- East Asian countries explain that China was always known to be over-protective of the South China Sea.
- And China consider South China Sea a natural shield against possible hostile intervention by outside forces inimical to it.
- No U.S. assurance and Chinese aggression has been enough to make countries in the region openly side with the U.S. and against China.
China’s economic grip and lessons for India
- Despite a series of diktats from Washington to restrict economic and other relations, China remains unfazed.
- China seems confident that its stranglehold on the global economy ensures that it does not face any real challenge.
- It would be wise for India to recognise this.
- It is equally necessary to realise how fickle some of these countries can be when it comes to economic issues.
- At a recent meeting in Washington Australia (a member of the Quad) made it clear that China is important for Australia.
- Likewise, the U.K.’s Secretary of State for Foreign and Commonwealth Affairs, recently stated in its Parliament, that the U.K. wants a positive relationship with China.
- It is evident that few nations across the world are willing to risk China’s ire because of strong economic ties.
India’s relations with neighbouring countries: concerns
- India’s relations with Nepal, meanwhile, have hit a roadblock over the Kalapani area.
- In Sri Lanka, the return of the Rajapaksas to power after the recent elections does not augur too well for India-Sri Lanka relations.
- The strain in India-Bangladesh relations is a real cause for concern since it can provide a beachhead against Chinese activities in the region.
Growing Chinese presence in India’s sphere of influence
- In July, the Chinese Foreign Minister organised a virtual meeting of the Foreign Ministers of Nepal, Afghanistan and Pakistan.
- In this meeting, China proposed economic corridor plan with Nepal, styled as the Trans-Himalayan Multi-Dimensional Connectivity Network.
- China has also made headway in Iran to an extent, again at India’s expense.
Conclusion
Geo-balancing is not happening to China’s disadvantage. This lesson must be well understood when India plan its future strategy.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Direct and indirect taxes
Mains level: Paper 3- Increasing proportion of indirect taxes in India and issues with it
India, with a tax-GDP ratio of 10.9 per cent in 2019 needs an overhaul of its tax system. This article analyses India’s growing dependence on indirect taxes and its implications for the poor.
Important changes in direct taxes
- The wealth tax was abolished in 2016.
- Wealth tax was replaced by a 2 per cent surcharge on super-rich individuals with taxable income of over Rs 10 crore.
- But the government rolled back the increase in surcharge in 2019.
- Corporate taxes were slashed from 30 per cent to 22 per cent to attract foreign investors and induce Indian companies to invest.
- Cuts in corporate tax that have resulted in a revenue loss of Rs 1.5 lakh crore have contributed to making the state poor.
Increasing indirect taxes and cess
- The share of indirect taxes has increased by up to 50 per cent of the gross tax revenue in FY2019 from 43 per cent in FY2011.
- The combined share of customs and excise duties and value-added tax reached an all-time high of 10.5 per cent of GDP.
- This high was following a three-year-long steady increase in customs or excise duty on commonly used goods, such as petroleum products, metals and sugar, automobiles and consumer durables.
- This is also when the service tax was hiked steadily to 18 per cent under GST from 12.4 per cent in 2014.
- Swachh Bharat cess and Krishi Kalyan cesses were imposed in addition to GST.
- The permanent nature of these cesses has been widely opposed by the states and criticised by the CAG.
- CAG has pointed out the lack of transparency and incomplete reporting in accounts on the utilisation of amounts collected under cesses.
- All of this is troubling because indirect taxes often penalise the poor and the middle class more than the rich.
Case for the wealth tax
- High tax rates on the wealthy in Europe have played a key role in ensuring a strong social security net for the poor.
- This successful example should encourage India to consider the rationale for a wealth tax.
- Higher taxes on the super-rich could be used for cash transfers and a fiscal stimulus, that, in India, at 1 per cent of GDP each, have been negligible so far.
- A wealth tax, a COVID-19 cess on the super-rich and a surcharge on the super-rich for their income from listed equity shares are critical for mitigating the current situation.
Issues with such policy
- Cuts in corporate taxes, increased indirect tax revenues, decreased capital expenditure and practically no change in revenue expenditure on health and education show that India’s taxation policy is more business-friendly than pro-poor.
- This is happening at a time when a supply-side oriented approach to the economy is counter-cyclical.
- Faced with increased expenditure amid pandemic Centre increased the duty on fuel by a record Rs 10 per litre on petrol when global crude prices have been falling.
- This speaks of the government’s increased dependency on indirect tax-based revenues.
Examine the implications of India’s growing dependence on indirect tax revenue? Suggest the measures to reduce such dependence.
Conclusion
COVID-19 may be a blessing in disguise if it allows India to reform its tax system in order to make it work towards inclusive growth and sustainable development rather than targeting only investment-led economic growth.
bACK 2 BASICS
GO THROUGH THE ARTICLE BELOW FOR MORE INFORMATION ON TAXATION:
Taxation in India: Classification, Types, Direct tax, Indirect tax
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Demand problem and ways to deal with it
The focus of this article is on the behavioural changes in the consumer post Covid. It also suggest the ways to deal with these changes.
Context
- The consumer during and post-COVID is showing remarkable flexibility, bringing about a paradigm shift in her consumption pattern.
Issue of generating demand
- Some state governments are busy demanding the opening up of the economy.
- However, the issue is that the economy does not merely need opening up, but it requires urgent generation of basic demand.
- That is why consumer behaviour needs to be closely watched.
- Since the lockdown, the priorities of consumers have seen a drastic shift.
Factors to consider to increase demand
- 1) The decrease in the purchasing power to buy products needs to be addressed.
- The government must look at ways like a reduction in taxes which will help the common man.
- 2) The current scenario has also made all of us go back to the basic needs.
- Luxury products hold little value. But renting will increase.
- 3) The emphasis will be on saving for a rainy day, whether in the case of banks or households
- 4) Aviation, tourism and hospitality sectors have been hit and continue to remain so even after the restrictions are lifted.
- 5) e-commerce has shown exponential growth and will continue to do so.
- 6) With “Vocal for Local” gaining momentum, there’s a huge increase in local apps, local kirana stores, local artisans and brands.
- 7) Schools and colleges have taken a hit as e-learning and online courses are being preferred.
- 8) The entertainment industry has been drastically hit. The media and entertainment industry needs to pay heed to this and curate content accordingly.
- 9) With a lot of people laying emphasis on their health and immunity, there’s been a substantial rise in the consumption of organic, ayurvedic, and immunity-boosting products.
- Apart from the obvious products, financial and medical insurance will play an important role.
- 10) Real estate will suffer as no long-term, high investment purchases will be favoured, but renting will increase.
Role of the government
- 1) People need to be provided with their daily needs — basic essentials such as food, water, housing, and electricity.
- The government is already taking care of that, but money also needs to be given.
- 2) Jobs need to be provided through development of infrastructure projects.
- 3) Farmers need to have insurance for their crops and the infrastructure to sell at the right price.
- 4) Migrant workers with their livelihoods being disrupted are looking for support,and many are focusing on agriculture as a means of income.
Way forward
- The government should focus on generating demand for products, and create jobs by improving infrastructure.
- The government must incentivise spending by offering tax benefits on the amount spent.
- Government must forget about fiscal prudence this year.
- Consumers in rural areas are buying more than before.Companies should focus on tapping the rural demand
Consider the question “Demand has been the driver of India’s growth. But the pandemic has dampened it with devastating effect. Agaist this backdrop suggest the measures to be taken by the government to revive the demand.”
Conclusion
With focus on these emerging trends and changing behaviour of the consumers, the government must take steps to bring the economy fast on the tracks.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now