Note4Students
From UPSC perspective, the following things are important :
Prelims level: RCEP
Mains level: Paper 3- Economic liberalisation and its impact on Indian economy
The article counters the argument made by External Affairs Minister S. Jaishankar about the impact of economic liberalisation on India’s economy.
Impact of liberalism on India
- India’s External Affairs Minister S. Jaishankar recently disapproved of free trade and globalisation.
- About FTA’s he said that “the effect of past trade agreements has been to de-industrialise some sectors.”
- These observations were made days after countries of the Asia-Pacific region signed the Regional Comprehensive Economic Partnership (RCEP) agreement.
- He said that , “in the name of openness, we have allowed subsidi[s]ed products and unfair production advantages from abroad to prevail”
Flaws in the argument
- There are several flaws in Mr. Jaishankar’s arguments.
1) India cannot be the part of global value chain
- India is now truly at the margins of the regional and global economy.
- With trade multilateralism at the World Trade Organisation (WTO) remaining sluggish, FTAs are the gateways for international trade.
- By not being part of any major FTA, India cannot be part of the global value chains.
- India’s competitors such as the East Asian nations, by virtue of they being part of mega-FTAs, are in an advantageous position to be part of global value chains and attract foreign investment.
2) Indian economy has bee relatively closed economy
- India is surely a much more open economy than it was three decades ago, globally, India continues to remain relatively closed when compared to other major economies.
- According to the WTO, India’s applied most favoured nation import tariffs are 13.8%, which is the highest for any major economy.
- Likewise, according to the United Nations Conference on Trade and Development, on the import restrictiveness index, India figures in the ‘very restrictive’ category.
- From 1995-2019, India has initiated anti-dumping measures 972 times (the highest in the world) trying to protect domestic industry.
3) Economic survey accepts the benefits of FTAs
- The External Affairs Minister is contradicting government’s economic survey presented earlier this year.
- The survey concluded that India has benefitted overall from FTAs signed so far.
- Blaming FTAs for deindustrialisation means ignoring real problem of the Indian industry — which is the lack of competitiveness and absence of structural reforms.
4) India has been a major beneficiary of economic globalisation
- It cannot be ignored that India has been one of the major beneficiaries of economic globalisation — a fact attested by the International Monetary Fund (IMF).
- Post-1991, the Indian economy grew at a faster pace, ushering in an era of economic prosperity.
- According to the economist Arvind Panagariya, poverty in rural and urban India, which stood at close to 40% in 2004-05, almost halved to about 20% by 2011-12.
- This was due to India clocking an average economic growth rate of almost 8%.
Conclusion
Desire to make India a global destination for foreign investment is a pipe dream because it is naive to expect foreign investors to be gung-ho about investing in India if trade protectionism is the government’s official policy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Importance of export for growth
The article highlights the argument made by Arvind Panagaria about the primacy of export for the progress of the country in his new book India Unlimited: Reclaiming the Lost Glory.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Entry 56 of the Union List
Mains level: Paper 2- Challenges to water governance
The article highlights the issue of challenges facing the water governance in India, how need for more coordination between the Centre and the States.
Objectives of the two bills
- Interstate River Water Disputes Amendment Bill 2019 and the Dam Safety Bill 2019 were passed by Lok Sabha and awaits Rajya Sabha nod.
- The Interstate River Water Disputes Amendment Bill 2019 seeks to improve the inter-state water disputes resolution by setting up a permanent tribunal.
- The Dam Safety Bill 2019 aims to deal with the risks of India’s ageing dams, with the help of a comprehensive federal institutional framework comprising.
- The other pending bills also propose corresponding institutional structures and processes.
Challenges to the federal water governance
- The agenda of future federal water governance is not limited to the above cited issues.
- These include emerging concerns of long-term national water security and sustainability, the risks of climate change, and the growing environmental challenges, including river pollution.
- These challenges need systematic federal response where the Centre and the states need to work in a partnership mode.
- Greater Centre-states coordination is also crucial for pursuing the current national projects — whether Ganga river rejuvenation or inland navigation or inter-basin transfers.
Challenges to water governance
- Water governance is perceived and practiced as the states’ exclusive domain, even though their powers are subject to those of the Union under the Entry 56 about inter-state river water governance.
- The River Boards Act 1956 legislated under the Entry 56 has been in disuse.
- No river board was ever created under the law.
- The Centre’s role is largely limited to resolving inter-state river water disputes by setting up tribunals for their adjudication.
- Combined with the states’ dominant executive power, these conditions create challenges for federal water governance.
- This state of affairs puts the proposed bills at a disadvantage.
Bridging the water governance gap
- Each bill proposes their own institutional mechanisms and processes leaning on closer Centre-state coordination and deliberation.
- The disputes resolution committee and dam safety authority rely on active Centre-states participation.
- Segmented and fragmented mechanisms bear the risks of the federal water governance gap.
Way forward
- The massive central assistance (Rs 3.6 lakh crore- Centre and states together) through Jal Jeevan Mission (JJM), is an opportunity to open a dialogue with the states to address this governance gap.
- Globally, federated systems with comparable organisation of powers have used similar investments to usher key water sector reforms.
- The symbiotic phase of implementing JJM can be productively used to engage in a dialogue with the states about the larger water resources management agenda, beyond the mission’s goals.
- The Centre can work with the states in building a credible institutional architecture for gathering data and producing knowledge about water resources.
Consider the question “Water governance in the country requires greater Centre-State coordination to deal with the current issues as well as future challenges. In light of this, examine the challenges and suggest the strategies to deal with it.”
Conclusion
Bridging the governance gap between the Centre and State and creation of institutional framework is at the heart of addressing the future challenges to the federal water governance in the country.
Back2Basics: River Board Act 1956
- The act to provide for the establishment of River Boards for the regulation and development of inter-state rivers and river valleys.
- It empowers the Central Government, on a request received in this behalf from a State Government to establish a River Board for advising the Governments on regulation or development of an inter-State river or river valley or any specified part thereof.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Paris Agreement
Mains level: Paper 3- Balancing development with climate action
India faces an uphill task of balancing its climate action with the economic growth. Bridging the energy deficit through renewable energy in cost-effective and increasing urban forestry could help in balancing the both.
Comparing India’s commitment
- China’s announcement recently to achieve carbon neutrality, that is, effectively generating net-zero emissions, before 2060 has now shifted focus on India’s commitments.
- In this context, let us compare India’s commitments with other countries, based on an independent scientific analysis carried out by the Climate Action Tracker. Major findings of it are:-
- 1) India is one of the only six countries (amongst the 33 that were assessed), and the only G-20 country, whose climate commitments at Paris are on a path compatible to limit warming well below 2°C.
- 2) It seems that India is well on its way to achieving its carbon intensity reduction and non-fossil-fuel electricity growth capacity commitments well before the 2030 target year.
- Even though China’s commitment is likely to lower warming projections by around 0.2 to 0.3 degrees C by 2100, China continues to remain in the “highly insufficient” category.
- India, despite being the fourth-largest emitter, has consistently kept its commitments in sync with its fair share and will achieve, if not over-achieve, these targets.
Difference in development and growth levels
- Development and growth in India are still at an early stage, and our first goal remains increasing the availability of adequate infrastructure for all Indians.
- A measure of this deficit is that we use only about 0.6 tonnes of oil-equivalent worth of energy per person per year while in China it is 2.36 tonnes per person per year, and is at least 4 tonnes per person per year in the OECD countries.
- It is, therefore, essential that we rapidly bridge the energy deficit.
Bridging the energy deficit through renewable and cost-effective manner
- Cost-effectiveness in renewable electricity has occurred rather rapidly, largely as a result of the global reduction in solar PV and battery prices.
- Solar electricity is already the cheapest electricity available in India when the sun is shining.
- It now seems that round-the-clock renewable electricity may be cost-competitive with coal electricity in the near future.
- This cost-effectiveness of zero-carbon options will emerge in other applications as well.
- It will involve dedicated action in some of the vital sectors which can generate and sustain employment while adding to the country’s economic growth.
- It will enable a shift away from emissions-intensive fossil fuels, reducing our dependence on fuel imports.
Urban forestry to compensate for environmental degradation
- Increasing urban forestry could help compensate for environmental degradation as a result of rapid urbanisation in several Indian cities.
- This is vital to restore the flow of crucial ecosystem services, including air quality, and increase the resilience of cities to extreme climatic events.
- As a result, enhancing biodiversity, minimising human-wildlife conflict and restoring India’s pristine forests by developing dedicated wildlife/biodiversity corridors is an essential next step.
Way ahead
- At the developmental crossroads that India stands, the next decade is vital for its own economic growth, its climate action, and its social and ecological well-being.
- With this in mind, India must focus on its domestic developmental prerogative and disengage them from the pressures that come along with international negotiations, focussing on actions that reduce the development deficits, which also provide strong climate benefits.
- India must initiate a narrative, discussion and dialogue which focuses on each country taking on commitments that move their carbon trajectory towards the Paris agreement goal of limiting global warming to well below 2°C.
Consider the question “Development and growth in India still at an early stage which makes the challenge of balancing the commitment to climate action with economic developement more difficult. In light of this, suggest the strategy that India should follow.”
Conclusion
India, being at the crossroads of development needs to balance the development goals with its commitment towards climate action.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Relocation of supply chains and challenges India faces
The article deals with the challenges India faces in attracting the relocating supply chains in the wake of the pandemic.
Is China losing its appeal
- Some labour-intensive industries, such as textiles and apparels, have been moving to Bangladesh and Sri Lanka as labour costs in China are increasing.
- But trends in other industries show that businesses have mostly remained in China.
- COVID-19 crisis has resulted in firms establishing relatively small-scale operations elsewhere.
- This is perceived as a buffer against being completely dependent on China, referred to as the ‘China +1’ strategy.
3 Reason for firms to remain in China
- 1) Starting an enterprise and maintaining operations in China are much easier than elsewhere.
- 2) Chinese firms are nimble and fast, which is evident from the quick recovery of Chinese manufacturing after the lockdown.
- 3) Many global companies have spent decades building supply chains in China, getting out would mean moving the entire ecosystem.
3 Challenges facing India
- This has led to intensification of competition among Asian countries to be ‘plus one’ in the emerging manufacturing landscape.
- India faces three challenges in this race.
1) Increasing domestic public investment
- First is the task of increasing domestic public investments, which have implications for both demand and supply sides.
- In India, even before the pandemic, the growth in domestic investments had been weak,
- This seems to be the opportune time to bolster public investments as interest rates are low globally and savings are available.
- Private investments would continue to be depressed, due to the uncertainty on the future economic outlook.
2) Reforms in trade policy
- India needs a major overhaul in her trade policy world trade had been rattled by tendencies of rising economic nationalism and unilateralism leading to the return of protectionist policies.
- A revamped trade policy needs to take into account the possibility of two effects of the RCEP:
- 1) Walmart effect: It would sustain demand for basic products and help in keeping employee productivity at an optimum level, but may also reduce wages and competition due to sourcing from multiple vendors at competitive rates.
- 2) Switching effects: It would be an outcome of developed economies scouting for new sources to fulfil import demands, which requires firms to be nimble and competitive.
- Trade policy has to recognise the pitfalls of the present two-track mode, one for firms operating in the ‘free trade enclaves’ and another for the rest.
- A major fallout of this ‘policy dualism’ is the dampening of export diversification.
- The challenge is to make exporting activity more attractive for all firms in the economy.
3) Increasing women’s participation in labour force
- While India’s GDP has grown by around 6% to 7% per year women’s labour force participation rate has fallen from 42.7% in 2004–05 to 23.3% in 2017–18.
- This means that three out of four Indian women are neither working nor seeking paid work.
- Globally, India ranks among the bottom ten countries in terms of women’s workforce participation.
- When Bangladesh’s GDP grew at an average rate of 5.5% during 1991 and 2017, women’s participation in the labour force increased from 24% to 36%.
- India could gain hugely if barriers to women’s participation in the workforce are removed.
- The manufacturing sector should create labour-intensive jobs that rural and semi-urban women are qualified for.
Consider the question “Relocation of supply chains offers an opportunity for India. However, it faces several challenges in attracting these relocating supply chains. What are these challenges? Suggest measures to deal with these challenges.”
Conclusion
India’s approach to the changed scenario needs to be well-calibrated. The stage is set for a new ‘Asian Drama’. What will be India’s role in it? Well, it will not be on the basis of past accolades, for sure.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Vulture Action Plan 2020-25
Mains level: Paper 3- Conservation efforts
Union Minister for Environment, Forests and Climate Change has launched a Vulture Action Plan 2020-25 for the conservation of vultures in the country.
Vulture Action Plan
- While the ministry has been carrying out a conservation project for vultures since 2006, the plan is to now extend the project to 2025 to not just halt the decline but to actively increase the vulture numbers in India.
- There are nine recorded species of vultures in India — the Oriental white-backed, long-billed, slender-billed, Himalayan, red-headed, Egyptian, bearded, cinereous and the Eurasian Griffon.
- Vulture numbers saw a steep slide — as much as 90 per cent in some species — in India since the 1990s in one of the most drastic declines in bird populations in the world.
Decline in Populations
- Between the 1990s and 2007, numbers of three presently critically-endangered species – the Oriental white-backed, long-billed and slender-billed vultures — crashed massively with 99 per cent of the species having been wiped out.
- The number of red-headed vultures, also critically-endangered now, declined by 91% while the Egyptian vultures by 80%.
- The Egyptian vulture is listed as ‘endangered’ while the Himalayan, bearded and cinereous vultures are ‘near threatened’.
Why protect vultures?
- Vultures are often overlooked and perceived as lowly scavengers, but they play a crucial role in the environments in which they live.
- The scavenging lifestyle that gives them a bad reputation is, in fact, that makes them so important for the environment, nature and society.
- Vultures, also known as nature’s cleanup crew, do the dirty work of cleaning up after death, helping to keep ecosystems healthy as they act as natural carcass recyclers.
Various threats
- The crash in vulture populations came into limelight in the mid-90s, and in 2004.
- The cause of the crash was established as diclofenac — a veterinary nonsteroidal anti-inflammatory drug (NSAID) used to treat pain and inflammatory diseases such as gout — in carcasses that vultures would feed off.
- Just 0.4-0.7 per cent of animal carcasses contaminated with diclofenac was sufficient to decimate 99 per cent of vulture populations.
Various initiatives
- The MoEFCC released the Action Plan for Vulture Conservation 2006 with the drugs controller banning the veterinary use of diclofenac in the same year and the decline of the vulture population being arrested by 2011.
- The Central Zoo Authority (CZA) and Bombay Natural History Society (BNHS) also established the Vulture Conservation Breeding Programme.
- It has been successful and had three critically-endangered species bred in captivity for the first time.
- The ministry has now also launched conservation plans for the red-headed and Egyptian vultures, with breeding programmes for both.
- The Vulture Safe Zone programme is being implemented at eight different places in the country where there were extant populations of vultures, including two in Uttar Pradesh.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 72 and Article 161
Mains level: Paper 2- Judicial scrutiny of decisions by functionaries
The inaction by the Governor of Tamil Nadu on advice to free the convict has raised the possibility of judicial intervention due to undue delay.
Inaction by Governor on advice
- The Governor of Tamil Nadu has continued to withhold his decision on an application seeking pardon by one of the seven prisoners convicted in the Rajiv Gandhi assassination case.
- In September 2018, the Supreme Court (SC) had observed, while hearing a connected writ petition, that the Governor should take a decision
- The inaction by the Governor now has given rise to constitutional fault lines within the Executive arm of the government.
Past judgements on pardoning power
- In Maru Ram v. Union of India (1981) Supreme Court held that the pardoning power “under Articles 72 and 161 of the Constitution can be exercised by the Central and the State Governments, not by the President or Governor on their own.”
- The majority judgment had said that the “advice of the appropriate Government binds the Head of the State”.
- Therefore, a Governor is neither expected, nor is empowered, to test the constitutionality of the order or resolution presented to her.
Issue of delay in decision of mercy petition
- Recently, the Supreme Court, had examined the inordinate delay by the President and the Governor — in taking decisions on mercy petitions.
- The Supreme Court, in the case of Shatrugan Chouhan v. Union of India, laid down the principle of “presumption of dehumanising effect of such delay”.
- The Supreme Court confirmed that the due process guaranteed under Article 21 was available to each and every prisoner “till his last breath”.
Judicial scrutiny of the actions of Speakers
- It was hitherto believed that the powers of the Speaker, holding a constitutional office and exercising powers granted under the Constitution, were beyond the scope of a ‘writ of mandamus’.
- In the recent case of Keisham Meghachandra Singh v. Hon’ble Speaker (2020), the Supreme Court was asked to examine the Speaker’s inaction with regard to disqualification proceedings.
- However, the apex court, referering to Rajendra Singh Rana v. Swami Prasad Maurya (2007), had confirmed its view that the “failure on the part of the Speaker to decide the application seeking a disqualification cannot be said to be merely in the realm of procedure”
- Consequently, breaking years of convention, the SC set the time period of four weeks to decide the disqualification petition.
- By doing so, the Supreme Court has indicated that it would not be precluded from issuing directions in aid of a constitutional authority “arriving at a prompt decision”.
Consider the question “The undue delays and inactions by the constitutional functionaries threaten to widen the constitutional faultlines among the Executives. Comment.”
Conclusion
Instead of relying on the judicial intervention in the event of delays, it would be better to have a set time limit for arriving at decision by the constitutional judiciary.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Nutrition safety
The article highlights the issue of nutrition and suggest the ways to achieve nutrition security in the country to drive sustainable growth for India.
Nutrition in India
- A recent United Nations report- The State of Food Security and Nutrition in the World, 2020 highlighted that there are 189.2 million undernourished people in India.
- Even though this number has declined by 60 million over the past decade, the progress is far too slow.
- While we recorded a drop in undernourishment, obesity amongst Indian adults grew from 25.2 million in 2012 to 34.3 million in 2016.
- India is likely to miss the 2025 global nutrition targets according to the Global Nutrition Report 2020, unless more is done, soon.
Impact of POSHAN Abhiyan
- With the launch of POSHAN Abhiyan in 2018, the government mainstreamed nutrition, with this multi-ministerial and multi-sectoral approach.
- It converges all existing programs to improve the nutritional status of pregnant women, mothers and children.
- It brings together several programs such as National Rural Health Mission, Mid-Day meals, Integrated Child Development Scheme, Sarva Shiksha Abhiyan, and others to improve nutrition intake in India.
- The success lies in following an outcome based approach to ensure all the benefits under these interventions are delivered to mothers and children within the first 1000 days, setting the base for healthier lives.
Micronutrients through food fortification
- Food fortification is another effective way to deliver micronutrients to Indian masses, through existing food delivery systems such as mid-day meals and the public distribution system.
- Regulators have already been promoting fortification in food products like salt, edible oil, milk, rice and wheat flour to improve nutritional content.
- Going forward, we will see more and more food products and crops getting covered.
Need for innovation
- It is crucial for the food and beverage industry to make nutrition an integral part of their strategy.
- Healthier ingredients, fortification, reformulation to reduce saturated and trans-fat content and optimize sugar and sodium content, immunity boosting product is already commonplace across urban markets.
- This will soon permeate to rural markets.
- Factors such as product taste, convenience, shelf life, and price – all of which determine consumption – are also important elements that ensure higher intake of nutritious products by consumers everywhere.
- This calls for more innovation. Innovation in product, pricing, technology, digitalization, and research and development by food companies.
Rising nutrition awareness
- Solving the problem of malnourishment has to start with awareness.
- In rural areas, general nutritional awareness has historically been lower.
- In urban areas even though people are generally more aware a large percentage still consumes excess sugar and salt, leads sedentary lifestyles coupled with lack of exercise, resulting in lifestyle diseases like diabetes, obesity, high blood pressure
- Consumers everywhere need to be better educated about nutritional benefits of common food items and the importance of including them in regular diet.
- This can be done effectively through government led awareness campaigns and healthy public food distribution initiatives, industry acting responsibly.
Conclusion
Good nutrition is the best investment we can make in human capital. It has the power to drive sustainable economic growth for India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: ASEAN and RCEP
Mains level: Paper 2-Implications of not signing RCEP for India
India’s challenges from RCEP didn’t end by staying out of it. Remaining out of the RCEP has several implications for India. This article discusses such challenges.
What RCEP mean for the region
- The RCEP was finally signed by its 15 members on the sidelines of the Asean Summit last week without India.
- This would make it a trade deal that includes the ten Asean economies, and all of Asean’s bilateral FTA partners, except India.
- It would create new market access for China and Japan-the two largest economies of the group.
- China, Japan and Korea were negotiating a trilateral trade pact, which now might become inconsequential following RCEP.
- In this respect, RCEP would actually produce much greater market access outside of the Asean, among non-Asean members China, Japan and Korea.
- Asean’s specific market access gains would be over and above those that are already available through various Asean+1 FTAs.
- Additional market access gains would be more with respect to China, in terms of the additional tariff coverage and concessions that RCEP would provide.
Implications for China
- Apart from the additional preferential access it obtains, it is also able to pull off strategic dividends.
- As the RCEP proceeds, it would establish China’s decisive say in writing the rules of trade in the region through the RCEP.
- And this is precisely what the US would be wary of.
Implications for the U.S.
- President Obama had pitched the Trans-Pacific Partnership (TPP) as an obvious and essential alternative for counterbalancing Chinese strategic domination of the regional trade game.
- The US was taken out of the TPP by President Trump.
- The remaining members managed to salvage the deal, largely due to the spirited leadership provided by Japan and Australia.
- While the TPP survives as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
- But CPTPP is incapable of being a strategic counterweight to China, and the RCEP.
- Nothing other than a CPTPP that includes the US would be able to counterbalance China in economic size and strategic clout.
Way forward
- The Quad—a security partnership between the US, Japan, India and Australia—is looking to expand beyond defence and assume broader strategic proportions.
- Geopolitics is contributing significantly to the construction of economic alliances, including the reorganisation of regional supply chains.
- Due to these factros, search for an Indo-Pacific trade and economic compact is likely to hasten following the conclusion of RCEP.
- Following RCEP, and the almost non-existent possibility of returning to its fold, India too, might find itself working actively on moving towards an Indo-Pacific trade deal.
- The RCEP, which has a sizeable number of key Indo-Pacific economies like Japan, Australia, Korea, Vietnam and Indonesia, would need to stick to these countries to stick to the trade agreement after its ratification.
Conclusion
RCEP might actually force the U.S to look at returning to CPTPP much more proactively than it might have imagined. It would also, expectedly, look at India to join the bloc. That would be another challenge to navigate. India’s challenges from the RCEP might have increased in spite of staying out of it.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Policy framework for adaptation of technology
The changing realm of technology requires a change in the policy framework. The article discusses the issue of the impact of technology and the required changes in the policy framework.
Adoption of information-based technologies
- The expansion of computing power has driven the pace of information gathering and analysis.
- The new currency drives processes and decision-making across a wide array of products and services, making them more efficient and value accretive for consumers.
- These information-based technologies have been widely adopted across a broad range of industries and products that traditionally have not been perceived as electronic or software based.
- A modern automobile has 40% of its component value from electronic-based products.
- This is a paradigm shift as the amount of “value add” from intangible technology services as opposed to physical objects, even in traditional goods, is being transformed by information.
- Information and electronics are becoming all-pervasive, ensuring that we set boundaries to control quality or the uptime of the equipment.
- Information availability drives efficiency and creates value for customers by providing greater control over the product
- There is increasing digitisation and electronification of industrial activities, products and services, influencing the evolving skill sets in industry.
Need for holistic views in policies
- To address the needs of various stakeholders, governments have tended to build specialised departments and designed policies that govern those areas.
- Over time, as each of these departments grew, they have tended to operate in silos.
- The recent developments in technology have, however, blurred standard boundaries that dictate policy framework in most governments.
- As technology is driving an increasing share of the value add coming from digitisation and data analytics, there needs to be a way of encouraging capital formation by way of intangibles in traditionally tangible industries.
- There is a need to have a holistic view of policies for economic development as technology is becoming a significant enabler in most industries.
- A change in policy framework regarding economic development that enables various ministries to work together is essential.
Way forward
- A nourishing ecosystem for industry, including the hard infrastructure and softer areas such as education, skilling, technical institutions, laboratories, testing centres, etc., has to be cultivated.
- The creation of clusters of companies in adjacent but complementary areas could constitute such an ecosystem that encourages multi and cross-disciplinary learning and spur innovation and economic development.
- Moreover, this type of ecosphere could also attract investment and capital formation.
- There is also the larger issue of a shift of value between manufacturing and services as technology changes.
- The policy, by and large, promotes and gives incentives for manufacturing, whereas the share of intangibles are not adequately covered in industrial policies.
- It is important to include these to encourage innovation and technological development.
- It is important that there is close cooperation and alignment between the Centre and State to ensure effective implementation on the ground.
Conclusion
Some of these thoughts could help us navigate through an ecosystem that is changing with technology.
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Note4Students
From UPSC perspective, the following things are important :
Mains level: Paper 2- India-China relations and increasing convergence
Track 1.5 dialogue
- The third round of India-Canada Track 1.5 Dialogue, comprising senior diplomats, officials and independent experts, will be held on a virtual platform.
- This promising interaction represents a major, deliberate endeavour to boost the bilateral relationship.
Convergence on China issue
- Common challenges of the COVID-19 era accelerated the momentum of bilateral engagement.
- Canada’s travails with China, starting with the arrest of Huawei’s chief financial officer in Canada in December 2018.
- Later, the ‘hostage diplomacy’ practised by Beijing which arrested two Canadian nationals, has caused huge stress in Canada-China relations, turning Canadian public opinion against China.
- This opened the door to a closer relationship with India.
- In this backdrop, developments concerning the Indo-Pacific — strengthening of the Quad and the growing interest of France, Netherlands and Germany to be active players in the region — are of immense relevance to Ottawa.
- The forthcoming dialogue can deepen the India-Canada convergence on this issue.
Principal area’s of bilateral cooperation
- Canada-India merchandise trade exceeded C$10 billion in 2019.
- Canada’s cumulative investment, including foreign direct investment and by Canadian pension funds, is a substantive C$55 billion.
- Addressing virtually the ‘Invest India’ conference in Canada on Prime Minister pointed out that mature Canadian investors have been present in India for many years and assured them that no barriers would come in their way.
- Indian students are increasingly being educated in Canada, and a quarter million of them spent an estimated $5 billion in tuition fees and other expenses last year, a solid contribution to the Canadian economy.
- Of 330,000 new immigrants accepted by Canada last year, 85,000 i.e. nearly 25%, were from India.
- The Indian diaspora in Canada is now 1.6 million-strong, representing over 4% of the country’s total population.
- The principal areas of bilateral cooperation are best defined by five Es: Economy, Energy, Education, Entertainment and Empowerment of women.
- In particular, the digital domain holds immense potential, given Canada’s proven assets in technology — especially its large investment in Artificial Intelligence, innovation and capital resources, and India’s IT achievements, expanding digital payment architecture and policy modernisation.
Conclusion
Divided by geographical distance but united through clear common interests and shared values, India and Canada will begin their steady journey of progress, this time with a laser-like focus on common goals as well.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Dealing with the air pollution through regulations
Despite efforts from several levels, air pollution is getting worse day by day. The article suggests the strategy to deal with the issue of air pollution.
Solvable problem
- Pollution is very much a solvable problem but it cannot be solved on an emergency basis.
- It has to be dealt with firmly and gradually.
- Why gradually? Because there are many sources of pollution and it would be prohibitively costly to stop them or even significantly reduce them all at once.
Replacing existing technologies with existing technology
- The biggest sources air polltion nationally are cooking fires, coal-fired power plants, various industries, crop residue burning, and construction and road dust. Vehicles are further down on the list.
- Dealing with all these sources will require a gradual replacement of existing technologies with new technologies.
- Cooking fires must be replaced with LPG, induction stoves, and other electric cooking appliances.
- Old coal power plants must be closed and replaced with wind and solar power and batteries while newer plants must install new pollution control equipment.
- No new coal-fired power plants should be built — with renewables being cheaper, coal is obsolete for power generation.
- Other industries that use coal will have to gradually switch over to cleaner fuel sources such as gas or hydrogen while becoming more energy-efficient at the same time.
- Farmers will have to switch crops or adopt alternative methods of residue management.
- Diesel and petrol vehicles must gradually be replaced by electric or hydrogen fuel cell vehicles running on power generated from renewables.
Legal measures and issues
- Governments can make clean investments more profitable and dirty investments less profitable by taxing polluting activities and subsidising clean investments.
- The judiciary is more powerful but has far less scientific and technical competence.
- It tends to act only during crises and focus on past mistakes rather than planning to prevent new ones.
Reforms in regulatory agency
- Our existing laws do not allow the central and state pollution boards to levy pollution fee or cess based on pollution emissions.
- Since closing down an industry is a drastic step, it almost never happens.
- We need a regulatory agency that can levy pollution fee or cess, is that the regulatory decision need not be an all-or-nothing decision.
- Pollution fees can start small, and the EPA can announce that they will rise by a certain percentage every year.
- The regulatory agency should be given some independence,like
- 1) a head appointed for a five-year term removable only by impeachment.
- 2) a guaranteed budget funded by a small percentage tax on all industries.
- 3) autonomy to hire staff and to set pollution fees after justification through scientific studies.
- Three advantages of the regulator with such powers would be-
- 1) Politicians in power can pass on the blame for decisions on pollution fees to the EPA.
- 2) Pollution fees raise revenue for the government.
- 3) If the law establishing an independent EPA is written to require that changes to pollution fees and regulations must be published in advance, and cannot involve abrupt changes, then surprises are avoided.
- Industry opposition will be muted, especially if industry gets a piece of the revenue to invest in new technologies.
Conclusion
Our pollution problem has taken decades to grow into the monster that it is. It can’t be killed in a day. We need the scientific and technical capacity that only a securely funded independent EPA can bring to shrink pollution down to nothing.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Freedom of speech and expression
Mains level: Paper 2- Regulation of digital media and issues with it
The article deals with the recent decision of the government to regulate digital media through the Ministry of Information and Broadcasting and issues with it.
Regulating the press
- Recently, government put the online news and current affairs portals along with “films and audio-visual programmes made available by online content providers” under the Ministry of Information and Broadcasting.
- Through the move, government is clubbing the only sector of the media which has pre-censorship, namely films with the news media which has so far, at least officially, not been subject to pre-censorship.
- The move hijacks matters before the Supreme Court of India relating to freedom of the press and freedom of expression to arm the executive with control over the free press, thereby essentially making it unfree.
- It also hijacks another public interest litigation in the Supreme Court relating to content on “Over The Top” (OTT) platforms not being subject to regulation or official oversight to bring that sector too under the Ministry of Information and Broadcasting.
- The move creates an artificial distinction between the new-age digital media which is the media of the future, the media of the millennial generation — and the older print and TV news media.
Reasons given by the government and issues with it
- The explanation given is that the print media have the oversight of the Press Council of India and the TV media of the News Broadcasters Association (NBA).
- Therefore the digital media needed a regulatory framework — no less than that of the Ministry of Information and Broadcasting.
- However, there is no comparison between the Press Council of India and the NBA as professional bodies on the one hand and the Ministry of Information and Broadcasting on the other.
- The fate of the digital media under the control of the Ministry of Information and Broadcasting leaves little scope for hope.
Consider the question “Regulation of digital media while solving some chronic issues gives rise to concerns over the freedom of press and expression. In light of this, examine the need for regulation of digital media by government and issues in it.”
Conclusion
The government regulations would be counterproductive for both the media practitioner and the media entrepreneur and for the startups that have been the new vibrant face of contemporary journalism.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Increasing the income and productivity of labour force
Slowdown in demand
- The bigger medium-term problem facing Indian economy is the slowdown of aggregate demand — private final consumption expenditure (PFCE), investment and exports.
- The largest component of GDP, PFCE, has declined as a share of GDP 68 per cent in 1990 to 56 per cent of GDP in 2019 .
- The consumption of the top socio-economic deciles (top 10%) has stagnated.
- Also the consumption demand of the rest of the demography ( 90%) — mostly in agriculture, small-scale manufacturing and self-employed — is not increasing due to low income growth.
How to increase income and productivity
- Atmanirbhar Bharat depends on improving the income and productivity of a majority of the labour force.
- First, incentivise the farming community to shift from grain-based farming to cash crops, horticulture and livestock products.
- Second, shift the labour force from agriculture to manufacturing.
- India can only become self-reliant if it uses its 900 million people in the working-age population with an average age of 27 and appropriates its demographic dividend as China did.
- That is possible if labour-intensive manufacturing takes place in a big way, creating employment opportunities for labour force with low or little skills, generating income and demand.
- India is in a unique position at a time when all other manufacturing giants are ageing sequentially — Japan, EU, the US, and even South Korea and China.
- Most of these countries have moved out of low-end labour-intensive manufacturing, and that space is being taken by countries like Bangladesh, Vietnam, Mexico, etc.
- India offers the best opportunity in terms of a huge domestic market and factor endowments.
Way forward
- We need Indian firms to be part of the global value chain by attracting multinational enterprises and foreign investors in labour-intensive manufacturing, which will facilitate R&D, branding, exports, etc.
- There is a need to aggressively reduce both tariffs and non-tariff barriers on imports of inputs and intermediate products.
- Removing these barriers create a competitive manufacturing sector for Make in India, and “Assembly in India”.
- Apart from trade reforms, further factor market reforms are required, such as rationalising punitive land acquisition clauses and rationalising labour laws, both at the Centre and state level.
- We also have to go for large-scale vocational training from the secondary-school level, like China and other east and south-east Asian countries.
Consider the question “Key to faster economic progress of India lies in income growth and productivity of its labour force. Suggest the ways to achieve these.”
Conclusion
The COVID-triggered economic crisis should lead us to create a development model that leads to opportunities for the people at the bottom of the pyramid. A competitive and open economy can ensure Atmanirbhar Bharat.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Challenges faced by lending financial institutions and the issue of stagnant credit growth in India
The article deals with the issue of credit and financial institutions in India. It also suggests the five changes needed in the lending financial institutions in India.
Financial institutions and credit in India
- India has labour and land but not enough capital.
- The case for foreign financial institutions is also simple — their technology, processes, and experience raise everybody’s game.
- India is open — foreigners own 25 per cent of public equity, 90 per cent of private equity, and Google and Walmart are UPI’s biggest volume contributors.
- India’s challenge over the last 10 years has been bank credit.
- Credit-to-GDP ratio is stuck at 50 per cent, banking concentration measured by flow has increased by 70 per cent, and bad loans exceed Rs 10 lakh crore.
Significance of lending financial institutions
- Foreign institutions are unlikely to lend when needed most and lend to small enterprise borrowers.
- Bank numbers have practically remained unchanged since 1947 despite world-leading net interest margins.
- Nationalised banks that have an eight-times higher chance of bad loan, would save Rs 35,000 crore annually with industry benchmarked productivity.
- regulators prioritise domestic stakeholders.
- The home bias for global bank lending is accelerating.
- UPI crossing 2 billion monthly transactions demonstrates how mandated interoperability, local innovation, and enlightened regulation help insurgents take on incumbents.
5 Changes required in lending financial institutions
- 1) The biggest impact lies in creating a nationalised bank holding company that replaces the Finance Ministry’s Department of Financial Services, has no access to government finances, and is governed by an independent board.
- 2) We must licence 25 new full banks over 10 years.
- 3) We must expect and empower the RBI to deal with bank challenges earlier, faster, and invasively, by reimagining post-mortems, granting listed bank capital induction flexibility and making regulation ownership agnostic.
- 4) We must explore new eyes for banking supervision that include differential deposit insurance pricing.
- 5) Finally, financial stability and innovation are not contradictory; let’s blunt regulatory barriers between banks, non-banks, and fintech.
Conclusion
The opportunities for India arising from the coming Asian century, China’s contradictions and China’s new inward focus strategy come not once in a decade but once in a generation. Let’s empower our financial services entrepreneurs to exploit this opportunity.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Issue with legal language
Context
- Recently, a PIL was filed in the Supreme Court regarding the use of legal language.
- Reacting to the plea, the Supreme Court has asked the Ministry of Law and Justice and Bar Council to respond.
Wha the PIL is about?
- The PIL (Subhash Vijayran vs Union of India) wants the legislature and executive to use plain English in drafting laws, the Bar Council to introduce plain English in law curricula and the Supreme Court to only allow concise and precise pleadings.
- He begins the synopsis to the writ petition in the following way. “The writing of most lawyers is: (1) wordy, (2) unclear, (3) pompous and (4) dull.
Way forward
- When asking the Ministry of Law and Justice and Bar Council to respond, the Chief Justice of India referred to Anthony Burgess’s book (1964) Language Made Plain.
- George Orwell set out six principles, which could be used while drafting.
- Copy editors routinely use these principles, but not the judiciary.
- The Vidhi Centre for Legal Policy produced a manual on plain language drafting in 2017.
Conclusion
The Ministry of Law and Justice make use of the opportunity provided by the PIC to come up with the set of principles to make the legal language easier for all.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Role of CPCB and SPCBs
Mains level: Paper 3- Issues faced by SPCBs
The article deals with the issues faced by the State Pollution Control Boards.
Role of CPCB and State Pollution Control Boards
- The pollution crisis is a highly complex, multi-disciplinary issue with several contributory factors.
- To address this crisis, India has a plethora of rules, laws and specialised agencies which, at least on paper, seem very impressive.
- The footsoldiers of India’s battle against polluters are its officials at the state pollution control boards.
- The Central Pollution Control Board (CPCB) based in Delhi is generally well funded and resourced, unlike the state pollution control boards (SPCBs) that are in charge of implementation of the rules that CPCB writes.
5 issues faced by SPCBs
1) Shortage of Staff
- As an illustration, the Haryana State Pollution Control Board has been operating with a 70 per cent staff shortage.
- What this means practically is that a single officer is tasked to handle the demands of pollution control for an entire district without any subordinate technical staff.
- This comes at the cost of not being able to do inspections and other core pollution control work.
2) Lack of specialisation
- The officers at the SPCBs do not get to develop any specialisation.
- The CPCB has a decent workforce and robust laboratories, where scientists once recruited get to work and excel in a particular area.
- On the other hand, SPCBs don’t have such a stratified system, and the same officer is in charge of all these pollution categories, making it impossible to gain expertise and excel in any one area.
3) Lack of legal skills to take on pollutors
- SPCBs lack the necessary legal skills to take on polluters.
- While a legal cell may exist at the head office of a SPCB, they have few full-time public prosecutors there.
- As a result, engineering graduates in district SPCB offices — have to play the role of lawyers and develop legal paperwork that often falls short of holding polluters to account.
- Clerks and superintendents at courts often refuse to file cases, pointing at flaws that someone not trained in law would naturally make.
4) Lack of funds
- SPCBs are chronically underfunded.
- For instance, the funds of several SPCBs such as Haryana’s largely come from “No Objection Certificates” and “Consent to Operate” that the boards grant to industries and projects, rather than budgetary allocations by the government.
- Owing to this, SPCB officials are unable to spend on critical functions.
5) Additional duties
- SPCB officials are at times given additional responsibilities that are unrelated to pollution control.
- Haryana’s SPCB, for instance, has poultry farms under its ambit.
Consider the question “Dealing with the crisis of air pollution need coordination at various levels and the State Pollution Control Boards play an important role in it. In light of this, examine the challenges and suggest the steps needed to empower them.”
Conclusion
India must empower SPCBs to act by giving them the necessary funds, human resources, tools and technologies.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3-Challenges in judicial review of the central bank actions
Judicil review of central bank action could impact several stakeholders at the same time. This type of problems could be termed as polycentric problems. The article disusses the issues with judicial reviews in such cases.
Judicial review of central bank actions
- The Supreme Court is currently considering if the RBI should extend the COVID-19 induced loan moratorium and waive the accrued interest on interest.
- Earlier this year, the court struck down an RBI circular imposing a ban on virtual currencies.
- Last year, it quashed RBI circular that mandated banks and financial institutions to initiate insolvency proceedings against defaulting companies with significant loan exposures.
Unsuitable for adjudication
- Legal scholars have long recognised that certain disputes are inherently unsuitable for adjudicative disposition.
- The most influential arguments on this subject were advanced by the American legal philosopher Lon Luvois Fuller.
- Fuller compared polycentricity with a spider’s web — a pull on one strand distributes the tension throughout the web in a complicated pattern.
- Applied to adjudication, polycentric problems normally involve many affected parties and a somewhat fluid state of affairs.
- The range of those affected by the dispute cannot easily be foreseen and their participation in the decision-making process by reasoned arguments and proofs cannot possibly be organised.
- As a result, the adjudicator is inadequately informed and cannot determine the complex repercussions of a proposed solution.
Complexity of functioning of bank
- Disputes involving certain central bank functions are highly polycentric and are unsuitable for resolution through judicial review.
- For example, consider monetary policy function.
- This involves varying short-term interest rate to control supply and demand of money in the economy, which, in turn, influences economic activity and inflation.
- If judicial review supplants the central bank’s decision on this rate with the decision of the adjudicator, the repercussions would affect every single borrower and saver.
- Yet, the adjudicator can neither offer a meaningful hearing to all those affected parties, nor can he effectively process all the necessary information to determine an optimal solution.
- Evidently, disputes about monetary policy rate are highly polycentric and are better resolved outside the court.\
Which actions of banks should involve judicial review
- Not all disputes involving central bank functions are polycentric.
- For example, a dispute regarding imposition of a pecuniary penalty by a central bank could be resolved through judicial review.
- If the adjudicator finds the central bank to be correct, it need not interfere.
- If the adjudicator finds the central bank to be incorrect, it could modify or overturn the central bank’s decision.
- Clearly, judicial review could be effectively used to resolve bipolar disputes involving the central bank if they exhibit low polycentricity.
Need for striking the balance
- Monetary policy and pecuniary penalties are at two extreme ends of the polycentricity spectrum.
- There are, however, various central bank functions of intermediate polycentricity.
- Consider prudential regulations such as bank capital regulation.
- If judicial review supplants provisions of such regulations with the decision of the adjudicator, it may appear to directly impact only the banks and nobody else.
- But in reality, it could impact bank lending, which, in turn, would have complex repercussions on the entire credit market and risk-taking abilities across the economy.
- Effective hearing of all affected parties, directly or indirectly, would, therefore, be impossible.
- Consequently, some bipolar disputes involving the central bank may be too polycentric for meaningful resolution through judicial review.
- Judicial review could be purely procedural — the adjudicator could merely review whether the central bank’s action is within its legal mandate or not.
- The adjudicator could at most nullify a procedurally invalid central bank action, but may never supplant the decision of the central bank with his own.
Consider the question “Judicial review of the central bank actions could be different from the other judicial reviews. Examine the issues in such reviews by the judiciary.”
Conclusion
Adopting polycentricity test within constitutional jurisprudence would help sustain the legitimacy of judicial review while retaining the accountability of technocratic institutions such as the central bank.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Funds allocated for containing air pollution and issue of its inadequacy
The article deals with the issue of allocation of funds to tackle air pollution and issues with it.
Allocation in the budget
- A ₹4,400 crore package was announced in last budget for 2020-21 to tackle air pollution in 102 of India’s most polluted cities.
- The funds would be used to reduce particulate matter by 20%-30% from 2017 levels by 2024 under the National Clean Air Programme (NCAP).
Issues with estimating the scale of the problem
- It is unclear if this amount is adequate because the scale of the problem is unknown.
- Delhi government spent money on the measurement of pollution for in Delhi that far exceeds s allocations that find mention in the Centre and State government’s budgeting books.
- The funds allocated don’t account for the trained manpower and the support system necessary to effectively maintain the systems and these costs are likely to be significant.
- Historically, cites have used manual machines to measure specified pollutants and their use has been inadequate.
- An analysis by research agencies Carbon Copy and Respirer Living Sciences recently found that only 59 out of 122 cities had PM 2.5 data available.
- Only three States, had all their installed monitors providing readings from 2016 to 2018.
- Prior to 2016, making comparisons of reduction strictly incomparable.
- Now manual machines are being replaced by automatic ones and India is still largely reliant on imported machines.
- In the case of the National Capital Region, at least ₹600 crore was spent by the Ministry of Agriculture over two years to provide subsidised equipment to farmers in Punjab and Haryana and dissuade them from burning paddy straw.
- Yet this year, there have been more farm fires than the previous year and their contribution to Delhi’s winter air woes remain unchanged.
- This indicates that money alone doesn’t work.
Conclusion
A clear day continues to remain largely at the mercy of favourable meteorology. While funds are critical, proper enforcement, adequate staff and stemming the sources of pollution on the ground are vital to the NCAP meeting its target.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Lessons from Bangladesh and Vietnam for Indian economy
The article examines the emergence of Bangladesh and Vietnam as the major export hubs in the world and explains the lessons India could draw from it.
Context
- Bangladesh has become the second-largest apparel exporter after China.
- Vietnam’s exports have grown by about 240% in the past eight years.
Analysing Vietnam’s success
- An open trade policy, a less inexpensive workforce, and generous incentives to foreign firms contributed to Vietnam’s success.
- Vietnam’s open trade policy through Free Trade Agreements (FTAs) means trading partners do not charge import duties on products made in Vietnam.
- Vietnam’s domestic market is open to the partners’ products.
- Vietnam has agreed to change its domestic laws to make the country attractive to investors.
- Over a decade or so, large brands such as Samsung, Canon, Foxconn, H&M, Nike, Adidas, and IKEA have flocked to Vietnam to manufacture their products.
What explains Bangladesh’s success?
- In Bangladesh, large export of apparels to the EU and the U.S. make the most of the country’s export story.
- The EU allows the import of apparel and other products from least developed countries (LDCs) like Bangladesh duty-free.
- India, as a good neighbour, accepts all Bangladesh products duty-free (except alcohol and tobacco).
- Bangladesh may not have this facility in four to seven years as its per capita income rises and it loses the LDC status.
- Bangladesh is working smartly to diversify its export basket.
Lessons for India
- The key learning from Bangladesh is the need to support large firms for a quick turnover.
- Yet, most of Vietnam’s exports happen in five sectors, in contrast, India’s exports are more diversified.
- The Economic Complexity Index (ECI), which ranks a country based on how diversified and complex its manufacturing export basket is, illustrates this point.
- The ECI rank for China is 32, India 43, Vietnam 79, and Bangladesh 127.
- India, unlike Vietnam, has a developed domestic and capital market.
- To further promote manufacturing and investment, India could set up sectoral industrial zones with pre-approved factory spaces.
- There should be no need to search for land or obtain many approvals.
India should pursue organic growth
- Most of Vietnam’s electronics exports are just the final assembly of goods produced elsewhere.
- In such cases, national exports look large, but the net dollar gain is small. China also faces this issue.
- Country’s Export to GDP ratio (EGR) indicates its export capacity.
- Vietnam’s EGR is 107%, such high dependence on exports brings dollars but also makes a country vulnerable to global economic uncertainty.
- The U.S.’s EGR is 11.7%, Japan’s is 18.5%, India’s is 18.7%. Even for China, with all its trade problems, the EGR is 18.4%.
- Most such countries, including India, follow an open trade policy, sign balanced FTAs, restrict unfair imports, and have a healthy mix of domestic champions and MNCs.
- While export remains a priority, it is not pursued at the expense of other sectors of the economy.
- The focus is on organic economic growth through innovation and competitiveness.
Consider the question “While export is essential for the growth of the country, over-dependence on it and its promotion at the expense of the other sectors could do more harm to the economy than good. Comment.”
Conclusion
With reforms promoting innovation and lowering the cost of doing business, India is poised to attract the best investments and integrate further with the global economy without increasing its dependence on export.
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