Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Bt cotton
After almost 20 years of adoption of Bt cotton in India, its time to review the claimed benefits of the Bt.
Hybrid cotton seeds and issues
- Until the 20th century the indigenous ‘desi’ variety, Gossypium arboreum was used.
- From the 1990s, hybrid varieties of G. hirsutum were promoted.
- These hybrids cannot resist a variety of local pests and require more fertilizers and pesticides.
- Cotton suffers from plenty of infestation from moth pests such as the Pink Bollworm (PBW) and sap-sucking (Hemipteran) pests such as aphids and mealy bugs.
- With increasing pressure to buy hybrid seeds, the indigenous varieties have lost out over the years.
Resistant pests and introduction of Bt cotton
- The increasing use of synthetic man-made pesticides to control pests and the rising acreage under the American long-duration cotton led to the emergence of resistant pests.
- Resistant Pink and even American Bollworm (ABW), a minor pest in the past, began increasing, leading to a growing use of a variety of pesticides.
- Rising debts and reducing yields, coupled with increasing insect resistance, worsened the plight of cotton farmers.
- It was in this setting that Bt cotton was introduced in India in 2002.
What is Bt cotton
- The plant containing the pesticide gene from the bacteria Bacillus thuringiensis (Bt), has been grown in India for about twenty years.
- This pesticide, now produced in each Bt plant cell, ought to protect the plant from bollworm, thereby increasing yields and reducing insecticide spraying on the cotton plant.
Review of the utility of Bt cotton
- Review was published in the scientific journal Nature Plants, analysing the entire picture of the use of Bt cotton in India.
- Earlier studies had attributed to Bt the tripling of cotton yield between 2002-2014 in India.
- However, one detail that raises concerns over such a conclusion was that yield differences between farmers who were the early adopters of Bt cotton and those who were not suffered from selection bias.
- Controlling for such bias showed (in 2012) that the contribution of Bt cotton to yield increase was only about 4% each year.
- Since yields vary annually by over 10%, the benefits claimed were dubious.
- There are discrepancies between yield and the deployment of Bt cotton.
- For instance, the Bt acreage was only 3.4% of the total cotton area in 2003, not sufficient to credit it for the 61% increase in yield in 2003-2004.
- The rise in cotton yields can be explained by improvements in irrigation, for instance in Gujarat, and a dramatic growth across the country in the use of fertilizers.
- The PBW developed a resistance by 2009 in India. In a few years, the situation was dreadful.
- A technology that works in the lab may fail in fields since real-world success hinges on multiple factors.
Way forward
- The cost of ignoring ‘desi’ varieties for decades has been high for India.
- Research suggests that with pure-line cotton varieties, high density planting, and short season plants, cotton yields in India can be good and stand a better chance at withstanding the vagaries of climate change.
- But government backing for resources, infrastructure and seeds is essential.
Conclusion
It is time to pay attention to science and acknowledge that Bt cotton has failed in India, and not enter into further misadventures with other Bt crops such as brinjal or herbicide resistance.
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: NAM
Mains level: Paper 2- Finding alternative to non-alignment in India's foreign policy
The article analyses role of non-alignment in India’s foreign policy and India’s struggle to find the alternative to the non-alignment.
Background
- Non-alignment was a policy fashioned during the Cold War, to retain the autonomy of policy between two politico-military blocs.
- The Non-Aligned Movement (NAM) provided a platform for newly independent developing nations to join together to protect this autonomy.
- NAM campaigned for de-colonisation, universal nuclear disarmament and against apartheid.
- After the end of the Cold War, the NAM countries were able to diversify their network of relationships across the erstwhile east-west divide.
Non-alignment and India’s foreign policy in the present context
- For a few years now, non-alignment has not been projected by our policymakers as a tenet of India’s foreign policy.
- India has not yet found a universally accepted alternative to the non-alignment yet.
- “Strategic autonomy” as an alternative soon acquired a connotation similar to non-alignment, with an anti-U.S. tint.
- Multi-alignment has not found universal favour, since it may convey the impression of opportunism, whereas we seek strategic convergences.
- Seeking issue-based partnerships or coalitions is a description that has not stuck.
- “Advancing prosperity and influence” was a description External Affairs minister settled for, to describe the aspirations that our network of international partnerships seeks to further.
Role of geography and politics
- Two major imperatives flow from India’s geography-1) economic and security interests in the Indo-Pacific space. 2) the strategic importance of the continental landmass to its north and west.
- The Indo-Pacific has inspired the Act East policy of bilateral and multilateral engagements in Southeast Asia and East Asia and the Pacific.
- Shared India-U.S. interests in dealing with the challenge from China in the maritime domain have been a strategic underpinning of the bilateral partnership since the early 2000s.
Issues in India’s engagement with the U.S.
- In the immediate-term, Indian and U.S. perspectives are less convergent in India’s continental neighbourhood.
- Connectivity and cooperation with Afghanistan and Central Asia need engagement with Iran and Russia, as well as with the Russia-China dynamics in the region.
- Russia extends to the Eurasian landmass bordering India’s near and extended neighbourhood.
- A close Russia-China partnership should move India to broad-base relations with Russia.
- A strong stake in relations with India could reinforce Russia’s reluctance to be a junior partner of China.
- As the U.S. confronts the challenge to its dominance from China, classical balance of power considerations would dictate accommodation with Russia.
- U.S. should see ties with India as a joint venture not an alliance in which they could pursue shared objectives to mutual benefit and accept that differences of perspectives will have to be addressed.
- This template could have wider applicability for bilateral relations in today’s world order, which former could be described as militarily unipolar, economically multipolar and politically confused.
- The U.S. could acknowledge that India’s development of trade routes through Iran which could provide it route to Afghanistan and Central Asia, bypassing Pakistan and Russia, respectively.
Consider the question “India has not been able to find an alternative to NAM which has been described as the basic tenet of India’s foreign policy. Discuss.”
Conclusion
India should find the alternative to the non-alignment which accommodate its interest in relations with the U.S. at the same time allow it “strategic autonomy”.
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- Electoral reforms and the importance of strong local governments.
The article analyses the issues faced by democracy in India and suggests the way out in the form of strong local governments.
Issues being faced by Indian democracy
1. Issue of use of money power
- Around the world, electoral democracies face the issues of funding political parties and elections.
- Money is required to win elections legitimately, even when people are not bribed to vote, which is illegitimate.
- Communications with citizens can be very expensive.
- Advertisements have to be paid for as well as teams of professionals for managing social media.
- The race to raise more money for legitimate electioneering purposes can corrupt the process of funding parties and elections.
- Solutions are not easy because the right to free speech cannot be denied.
2.Issues with deliberations by the representatives
- Debates within India’s Parliament hardly inspire citizens’ confidence in their representatives’ ability to govern the country.
- The problem in electoral democracies is also in the conduct of their deliberations when they come together.
- This problem is not due to the quality of the individuals, it is inherent in the design of the process for electing representatives.
- Representatives of the people must be chosen by smaller electorates within geographical constituencies.
- But when they meet together in the national chamber, they are expected to govern the whole country.
- They must shed the interest of their constituency and consider what will be best for the whole country.
- Constituency favouring leads to challenges for equitable solutions for sharing of river waters, and to railway stations.
- Electing good representatives to Assemblies is not enough to ensure good decisions will be made.
3.Role of political parties: Lack of inner democracies
- Function of parties: Political parties in electoral democracies provide a solution to the problem of creating an alignment of views among representatives from hundreds of constituencies around the country.
- A party’s point of view on fundamental matters can unite many.
- However, when there are too many parties and too many contradictory points of view to be accommodated within a coalition, governance can break down.
- Therefore, political parties are not evil.
- However, when political parties are not internally democratic, they become a source to amass power and wealth, and democratic nations suffer.
So, should we adopt direct form of democracy
- For the reason stated above, it has become very difficult in representative democracies to arrive at good and fair decisions for the governance of a large state or country.
- New Internet technologies make adoption of direct form of democracy possible.
- But, if all voters have not understood what is at stake, they cannot decide well this is what happened in hasty Brexit referendum.
Way Forward
1.Need for the strong local governance
- Complex issues, where many interests collide, must be resolved by reason, not settled by the numbers.
- Hence there is no alternative to good local governance, wherein citizens manage their local affairs democratically.
- One-size solutions devised by experts at the centre cannot fit all.
- Local systems solutions are essential to solve global systemic problems of environmental sustainability and inclusive growth.
2.Funding and Intra-Party Democracy related reforms
- Electoral funding must be cleaned up, and democracy within political parties improved to make representative democracy work better.
- This will require big changes to entrenched systems.
- Citizens must appreciate that they have to be the source of solutions, and not become only the source of problems.
- Citizens must learn to listen to each other’s perspectives in their villages and in their urban neighbourhoods.
What are the challenges the electoral process in India faces? Suggest the solution to the issues democracy in India faces.
Conclusion
Since India’s Independence 73 years ago when the power of government was transferred from a centre in London to a centre in Delhi, strong local governance remains the unfinished agenda to make India’s democracy strong and deep.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
The article analyses the issue of socioeconomic disruption caused by the pandemic and response by regionally coordinated response to it.
Context
- With continued lockdown measures and restricted borders, countries in Asia and the Pacific have been experiencing sharp drops in foreign exchange inflows due to declines in export earnings, remittances, tourism and FDI.
Financing 3 key areas by the U.N.
- The United Nations is contributing through a global initiative, Financing for Development in the Era of COVID-19 and Beyond.
- The initiative aims at comprehensive financing strategy to safeguard the Sustainable Development Goals.
- Governments are united to ensure that adequate financial resources are available to steer an inclusive, sustainable and resilient post-COVID-19 recovery.
- In the Asia-Pacific region, several countries have already adopted financing plans in following three key areas.
- 1) To address the challenge of diminished fiscal space and debt vulnerability 2) To ensure sustainable recovery, consistent with the ambitions of the Paris Agreement and the 2030 Agenda 3) To harness the potential of regional cooperation in support of financing for development.
Regional Conversation series by ESCAP
- The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) has recently launched its first-ever Regional Conversation Series on Building Back Better.
- In this series ministers, decision-makers, private sectors and heads of international agencies participate.
- Their participation results in sharing of collective insights on sharing pathways to resilient recovery from health pandemic and economic collapse.
Debt Service Suspension initiative
- To manage high levels of debt distress global initiatives like the Debt Service Suspension initiative is timely.
- Central banks can continue to keep the balance of supporting the economy and maintaining financial stability.
- This further involves enhancing tax reforms and improving debt management capacities, while using limited fiscal space to invest in priority sectors.
- Exploring sustainability-oriented bonds and innovative financing instruments options such as debt swaps for SDG investment should be explored further.
- Policy paradigm must mainstream affordable, accessible and green infrastructure standards.
- We should also scale up the use of digital technology and innovative applications.
- The financing support of micro, small and medium-sized enterprises must go hand in hand with these national job-rich recovery strategies.
Role of regional cooperation
- Regionally coordinated financing policies can restart trade, reorganise supply chains and revitalise sustainable tourism in a safe manner.
- Across Asia and the Pacific, governments must pool financial resources to create regional investment funds.
- Role of egional cooperation platforms to ensure all countries receive an equitable number of doses of the vaccine is essential.
Conclusion
Through ESCAP, we can scale these efforts across the region, working closely with our member states, the private sector and innovators to build a collective financing response to mobilise the necessary additional resources.
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-Judiciary and relations with executive
The relations between the judiciary and executive have always been tumultuous. This article analyses the changes in the judiciary’s relations with the executive after 2014.
Relations with executive
- In 2014 government blocked the elevation of Gopal Subramanium as a judge of the apex court.
- A month later, the government introduced a bill to create the National Judicial Appointments Commission (NJAC).
- The NJAC Act was passed by Parliament in December 2014.
- In October 2015, the SC struck down the NJAC Act, ruling that it would affect the independence of the judiciary vis-à-vis the executive.
- Following striking down of the NJAC Act, the SC directed the government to propose a new memorandum of procedure (MoP) for appointments to the higher judiciary.
- The draft government sent to the Court allowed the government to reject any name recommended by the Collegium on grounds of national security and made it compulsory for the Collegium to justify its selection.
- The Collegium rejected these clauses and the MoP could never be finalised.
- The government sat on the appointments that the Collegium had recommended months ago.
- In April 2016, 170 proposals for appointments to the high courts were pending at that time.
SC’s perceived reluctance to question executive after 2017
- Appointments and transfers ceased to be a problem because the Collegium accepted the appointments and transfers.
- The Court considered that the Aadhaar Bill could be passed as a Money Bill, validated the Electoral Bonds Act.
- The SC also abstained from dealing with sensitive issues like the abolition of Article 370 or the Citizenship Amendment Act.
- This modus operandi of the court, when applied to Aadhaar, created a fait accompli.
3 questions over the SC’s role
- 1) The court’s reluctance to question the government on contentious issues — from J&K to misuse of sedition law or the NRC — is disturbing.
- 2) The manner in which the judiciary has addressed allegations against itself — Kalikho Pul or Prasad Education Trust or on sexual harassment — gives a handle to those in power.
- 3) The independence of the judiciary is inevitably affected by the acceptance of post-retirement jobs.
Consider the question “While playing its role, judiciary faces several challenges from the other organs of the democracy. In light of this, examine the challenges judiciary in India faces from the executive.”
Conclusion
Supreme Court’s apparent reluctance to question government on consequential issues affects its moral authority.
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- Tax reforms
The article discusses two recent measures announced by the government to bring in the transparency in the tax system.
Issue of lower tax collection and way out
- An economic contraction this year will severely impact tax collections.
- Changing tax rates or the tax base in response is difficult and a hurried approach can have wider consequences.
- So, the only tool available is to urge voluntary compliance.
- Compliance is achieved through a fine balance between enforcement and encouragement.
- Despite enforcement-driven measures in the past the taxpaying population has remained at only 6 per cent.
- Thus, the only way to boost collections is to build trust between the administration and the taxpayer.
Relation between complexity of system and compliance
- A taxpayer has to interact with the tax system at numerous instances.
- While interacting, if the taxpayer perceives the system to be complex, such perception affects compliance.
- Perceived complexity can discourage individuals from filing returns.
- This could reflect simply in the difference between the number of taxpayers and the returns filed: which is around 20 million.
- Such behaviour is bound to impact tax collection.
Recent government measures to bring transparency
1) New taxpayer’s charter with some new features
- The charter is a document that lists a taxpayer’s rights and obligations.
- A taxpayer’s charter is often perceived as a means to build taxpayer’s trust.
- The rights and obligations mentioned in India’s new charter are in line with global practices.
- There are 3 interesting additions in the new charter: 1) commitment to reducing compliance costs 2) holding its authorities accountable 3) publishing a periodic report of service standards.
- A tax ombudsman can ensure that some of these standards are met, however, in 2019, the cabinet approved the abolition of the quasi-judicial post.
2) Faceless assessment
- This relates to the frequent complaint of taxpayers about corruption and delay.
- To end personal interface, e-assessment was introduced in 2019.
- Developing this idea further, faceless assessment now seeks to further automate the case selection and the distribution function of the assessing officer.
- The intent is to divest and distribute the functions of a single assessing officer so that assessment is carried out in a fair manner.
Consider the question “What are the factors responsible for low tax compliance in India? What are the steps taken by the government to increase compliance?
Conclusion
If the commitment to a fair and impartial system and a time-bound resolution of matters is to be met, the new processes, with reviews and anonymity, must ensure efficiency in case selection and consistency in assessment.
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: Mission Karmayogi
Mains level: Paper 2- Mission Karmayogi
The Mission Karmayogi seeks to overhaul the bureaucracy in the country. The article discusses its aims and the challenges it could face.
Context
- The Union cabinet’s approval of Mission Karmayogi has raised the hope of a national bureaucracy that is adequately responsive to the country’s needs.
Need for the overhaul
- The system’s focus needs to be role- rather than rule-specific,
- Coordination should prevail over battles for control, and IAS officers ought to be enablers instead of red-tape wrappers.
- There has been a near consensus in the country that our system of policy implementation needs an overhaul.
What is Mission Karmayogi
- It is an upskilling initiative for government officials that aims to fix and galvanize India’s administration.
- As envisaged, the Karmayogi training mechanism will cover an estimated 4.6 million officials at all levels.
- Due to the scale of the exercise elaborate multi-tier command structure is expected to be put in place for it.
- At its apex would be a Human Resource Council, headed by the Prime Minister.
- Human Resource Council shall approve and monitor various skill-enhancing programmes as well as review the performance of employees routinely.
Challenges
- Given the way our bureaucracy has operated for decades, Mission Karmayogi is likely to prove disruptive.
- The idea of being subject to continuous evaluation by a central authority could unsettle some officers.
- There has been some disquiet within IAS ranks over the Centre’s lateral induction of people for senior roles, perhaps the new mission will resolve such disgruntlement.
Conclusion
Gentralized supervision of such large numbers does not promise to be easy. Globally, centralization has been observed to militate against diversity of thought. And that’s vital to the governance of a country like India.
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: Role and accountability of legislature
Mains level: Paper 2- Role of key organs of democracy during pandemic
The article analyses the impact of pandemic on the functioning legislatures and issues its implications.
Context
- Due to coronavirus pandemic, several States have held very short sessions in which they ratified a number of ordinances and hardly questioned any executive action over the last few months.
Role of Parliament and Court
- The government has the mandate to take decisions and perform various public tasks.
- Government in turn is accountable to the legislature which can question it, and, as an extreme step, even replace it.
- The legislature is accountable to citizens through regular elections.
- Finally, constitutional courts are expected to ensure that all actions are made within the boundaries of the Constitution and laws made by the legislature.
Dilution of the role of Parliament in India
- Indian Parliament has allowed its role to be diluted over the last few decades.
- It has not questioned and monitored the activity of the executive.
- Comparison with British Parliament: The United Kingdom’s joint parliamentary committee on human rights examined the proposals of a contact tracing app.
- The committee recommended that an app could be used only if there was specific primary legislation to enable it.
- India, in contrast, rolled out Aarogya Setu through executive decision, and has created a grey zone on whether it is mandatory or not.
- Parliament should recover lost ground by fulfilling its constitutionally mandated role.
Lack of parliamentary oversight during pandemic
- Parliament will be meeting after 175 days.
- 175 days’ is the longest gap without intervening general elections and just short of the six-month constitutional limit.
- During the pandemic, over 900 central and nearly 6,000 State government notifications have been issued
- Parliamentary committees did not meet for about four months.
- This is unlike many other countries where both the plenary and committees have adopted technology to enable members to participate from home.
Judicial intervention in policy issues
- The lack of parliamentary oversight has been compounded by judicial intervention in many policy issues.
- For example, the government’s actions related to the lockdown should have been questioned by Parliament.
- However, this was taken to the Supreme Court, which is not equipped and mandated to balance policy options.
- Directions of the Court have to be followed which removes flexibility needed to tackle evolving issues with implementation.
- Consider another case, Court decided to limit the period in which telecom companies have to pay their dues to the government, and overruled a cabinet decision.
- This is a policy matter that balances interests of telecom companies, consumers and banks.
- This issue is best judged by the government with oversight by Parliament.
- And court should step in if there is an illegality.
Way forward
- Several events have taken place over the last six months that need thorough discussion.
- This includes ways to tackle the spread of the coronavirus, economic growth which has had a sharp fall in the first quarter of this fiscal year.
- This has far-reaching implications for creating jobs, stability of the banking system, and government finances.
- The government is likely to bring in a supplementary budget; indeed, a fresh look at the Union Budget may be required given the changes in basic assumptions since January.
- The situation at the China border also needs to be discussed.
Consider the question “Anlyse the impact of pandemic on the key organs of the democracy.”
Conclusion
Parliamentarians have a duty towards Indian citizens to fulfil their role in scrutinising the work of the government and guiding policy. Despite the curtailed session and the constraints due to the coronavirus, they should make the best of the limited time to do so. They need to wrest back their rightful role in our democracy.
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: Hindu Succession Act 1956 and amendments
Mains level: Paper 2- The Supreme Court judgement making daughters coparcener in her own right
The article highlights the importance of the latest Supreme Court Judgement making daughter coparcener in own right by birth removing the conditions laid down in the previous judgement.
Background
- In Vineeta Sharma v. Rakesh Sharma (2020), the Supreme Court held that a coparcener’s daughter would become a coparcener in her own right by birth.
Amendment in 2005 and related SC judgement
- There is a difference between rights conferred by the Hindu Succession Act of 1956 and the amendment to that act in 2005.
- In 1956 Act, equal right of succession at par with a son was given to a daughter, but only after the demise of the father or mother.
- The 2005 amendment gave the right to property to a daughter in a joint Hindu family during the lifetime of the father.
- In Prakash v. Phulavati 2005, the Supreme Court decided on the prospectivity or retrospectivity of the law creating coparcenary rights in favour of daughters.
- It created a condition that the rights under the amendment are applicable only to living daughters of living coparceners as on September 9, 2005; however, it gave no reason as to why this was chosen as a condition.
- The status of a daughter to be subject to her father being alive is apparently a mistake.
- The death of an individual should not determine the rights of their heirs.
- If any right had accrued in the daughter’s favour by a legislation, the same can’t be disturbed by death of her father.
What the SC said in latest judgement
- In the present judgment, Vineeta Sharma v. Rakesh Sharma , the court rightly held that as laid down in Section 6 (1) (a), daughter is to be a coparcener by birth; so there is no question of being prospective or retrospective.
- It is the physical status that matters and should not be linked to a date.
- Even in the case of unregistered partition deeds executed before December 20, 2004, the court has opened a new window for daughters.
- Daughters can claim a right even in an unregistered partition deed which has not been proved conclusively.
Conclusion
There is a need to examine all the existing laws and wherever discriminatory practices exist, they need to be amended appropriately.
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: Personal data and non-personal data
Mains level: Paper 3- Making open data-society by sharing making open the data collected by the government
The article highlights the importance of non-personal data collected by the government and lack of any reference to it in the Gopalakrishnan Committee report.
Background
- The Committee of Experts on the Non-Personal Data Governance Framework headed by K Gopalakrishnan has recommended making privately held non-personal data “open”.
- This has raised concerns about state interference in the private data ecoystem.
Importance of data collected by government agencies
- The report is a missed opportunity to address the governance frameworks around data created by government agencies.
- Some of the most important non-personal data sets are held by the government, or result from taxpayer funding.
- Such data can be useful in either framing public policy or creating and providing new services.
Why government data should be open to citizens: 5 Reasons
- First, the state should be transparent about information that it has. This will improve accountability.
- Second, if taxpayer money has funded any of the data sets, then it is an obligation of the state to return the fruits of that funding to the taxpayer.
- Third, by permitting the reuse of government data sets, we avoid the need for duplication.
- Fourth, government data sets, curated according to publicly verified standards, can lead to increased confidence in data quality and increased usage.
- Finally, free flow of information can have beneficial effects on society in general.
Government policies promoting openness of data
- The Right to Information (RTI) Act, 2005, mandates the disclosure of government data on a suo moto basis.
- One of the nine pillars of the Digital India Policy is “information for all”.
- The National Data Sharing and Accessibility Policy (NDSAP), 2012 requires all non-sensitive information held by public authorities to be made publicly accessible in machine readable formats (subject to conditions).
- The government has also set up an Open Government Data Platform to provide open access to data sets held by ministries and other agencies of the government.
- Various States have also either created their own data portals or have provided data sets to the Open Government Data Platform.
Challenges in making the data open to society
- There are two reasons for our failure to create an open data-based society.
- The first is lack of clarity in some of the provisions of the NDSAP or the relevant implementation guidelines.
- The second is the inability to enforce guidelines appropriately.
- Data sets released by governments are often inconsistent, incomplete, outdated, published in non-machine readable or inconsistent formats, include duplicates, and lack quality (or any) metadata, thereby reducing re-usability.
Issues with Gopalakrishnana Committee Report
- The Gopalakrishnan Committee could have evaluated what is going wrong with existing policies and practice pertaining to government data.
- The report is a missed opportunity to address the governance frameworks around non-personal data sets in a country created by government agencies, or those resulting from taxpayer money.
- The report largely focuses on the dangers posed by data collection by private sector entities.
- This has raised concerns about state interference in the private data ecoystem.
- Many of the concerns that should be addressed in the report that are central to the governance of the data ecosystem have remained in the background.
- For instance, India’s cybersecurity framework continues to be inadequate, while even the Justice B.N. Srikrishna Committee report of 2018 highlighted the need to restrict the growing power of the state to carry out surveillance.
Consider the question “What are the key recommendation made by the Gopalakrishnan Committee for the regulation of non-personal data? What are the shortcomings in of the report in your opinion?”
Conclusion
Since data governance is a relatively new concept in India, the government would be better served in taking an incremental approach to any perceived problems. This should begin with reforming how the government itself deals with citizens’ data.
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- Financial challenges education sector faces in India
The article delineates the challenges academic institutions in India faces in the wake of Covid disruption and suggests some measures to deal with the challenges.
Context
Disruption in the wake of pandemic raised the spectre of educational institutions shuttering their doors completely or taking unprecedented steps that have invariably affected jobs and livelihoods.
Economics of the academics
- Economics has always been a part of academics; it is only in the present circumstances that it has become all the more apparent.
- Management in private institutions, is going to meet demands on the one hand and availability of resources on the other.
- One may call this new phenomenon “acadonomics”.
- “Acadonomics” would imply a careful allocation of resources keeping in mind the transient nature of the issue of how long it is going to take to come back to the steady state of affairs that it once was.
- ‘Acadonomics’ will also involve seeing the economics of moving on to an online mode of the teaching-learning process.
Comparison with the West
- The academic choices are not the same for all countries across the world.
- In the United States the elite private and state subsidised universities have endowments that can be used for a range of academic activities.
- Top 10 of the U.S. have a cushion of anywhere between $10 billion to $40 billion.
- By contrast, private academic institutions in India do not have any such buffers.
- None of the institutions in India possesses big corpuses from alumni or industry.
- Their survival, for the most part, is on the annual income that comes from tuition and the assortment of other fees collected.
Private education in India
- Private institutions in India are hardly in a position to meet an eventuality such as COVID-19.
- In an educational set-up in India, nothing can be reduced — the norms cannot be lowered nor can the infrastructure be dismantled.
- For the most part, the fixed and operational costs remain the same, and infrastructure once created cannot be shrunk.
- The downside to self-financed institutions is that in the time of the pandemic and loss of jobs, students plead inability to pay the requisite fee.
- Which places additional burden on the management which feels already stretched because of existing commitments.
Dual mode of learning and issues
- 1) Cost for persisting with a dual mode of the teaching-learning process is going to be quite prohibitive for the next few years.
- The scaling of operations that would include the dual modes of online and offline is going to be expensive.
- 2) The online teaching mode brings with it increased costs of IT infrastructure such as network bandwidth, servers, cloud resources and software licensing fees.
- 3) Online teaching means new hiring in the IT sector and increased costs due to engagements with Massive Open Online Courses, or MOOCs, and other online platforms.
- 4) Online teaching means setting up multiple studios and educational technology centres which translate into investments in high technology.
- 5) Creation of virtual laboratories across all domains of studies and examination centres, etc. would add to the woes in terms of already depleted finances.
- 6) Additional funds have to be allocated to train faculty for online teaching.
Way forward
- The Centre and State governments should provide soft loans to students to stay with the educational course.
- Students looking at online instruction would be disinclined to pay the same fee charged for offline instruction.
- It would seem prudent for the government and regulatory bodies to not interfere in the fee structure, and, for the future, even consider a measure of higher degree of financial autonomy.
- It is high time institutions in India are allowed to create coffers or corpuses for a rainy day.
- Educational institutions could come to be treated like any other corporate body, with an allowable small margin of profit.
Consider the question “What are the challenges faced by the education system in the aftermath of the pandemic. Suggest ways to mitigate the impact.”
Conclusion
‘Acadonomics’ of the future will not only decide the fate of the academic sector in India but also its quality, ranking, research, innovation potential and its collective impact on our country’s economy.
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- Widening consumer base to revive growth
The article suggests the widening of consumer base rather than increasing consumption. To augment that, the government should also direct the spending towards such sectors which would help in broadening of the base.
Prescription for long term growth: Broadening the consumer base
- India entered the pandemic with declining growth and limited scope for a conventional and large fiscal stimulus.
- The NSS 68th round consumption survey indicates that in urban India, the top 20 per cent of the population accounted for nearly 55 per cent of discretionary consumption and 45 per cent of all consumption.
- The narrow consumption base coupled with uncertainty over the demographic dividend could belie India’s long-term investment attractiveness.
- With or without the pandemic, the prescriptions for long-term growth remain the same — broaden the consumer base.
- This broadening of the consumer base should happen through empowering the low and middle-income consumers.
Why can’t the government just spend to revive growth
- 1) Temporary incomes coupled with job/income uncertainty will induce precautionary savings without any impact on growth.
- 2) With revenues declined, funding of additional expenditure is through higher borrowings.
- Any incremental debt should be seen in the context of future investments being hampered due to current consumption.
- India’s public debt/GDP will likely reach around 85 per cent and the consolidated gross fiscal deficit to GDP ratio could be around 12.5 per cent this year.
Way forward
- India needs to broaden its consumer base beyond the top 10-20 per cent of the population to improve long-term growth prospects.
- To achieve this we will need well-paid employment for the bottom and middle segments.
- The “safe” group of India’s workforce is extremely small.
- The PLFS 2018-19 report places around 24 per cent of the workforce in the regular wage/salary category.
- Within this segment, around 40 per cent do not have a written contract, paid leaves, or security while 70 per cent do not have any written contract.
- These sharp skews in consumption and labour become a substantial risk for a consumption-led growth in the aftermath of a crisis.
- The PLFS 2018-19 report indicates that around 50 per cent of the rural non-agriculture workforce.
- 35 per cent of the urban workforce is engaged in the construction and manufacturing sectors.
- The rebuild and recover phase should aim for a wider consumer base with infrastructure and manufacturing as the two pillars.
- To make manufacturing easier, the focus should be on labour reforms, fewer/quicker approvals, reducing the compliance burden, and promoting export-oriented sectors.
- Policies should not become too inward-looking such that export promotion becomes difficult.
Directing public spending and policies appropriately
- Most public spending should be directed towards roads, railways, infrastructure, healthcare and educational facilities.
- To promote infrastructure creation along with private sector participation, the government needs to charge an economic price for goods and services such as power, irrigation, and public utilities.
- Establish the rule of law with minimal interference in pricing, streamline processes for quick approvals and ensure timely payments to private operators.
- The government should also signal its vision along with a financing strategy through sharper expenditure management, enhanced market borrowings, setting up of a Development Financing Institution, and an asset monetisation programme.
Conclusion
To achieve economic growth of 7-8 per cent the government needs to start addressing large infrastructure deficit, the weak financial sector, archaic land and labour laws, and the administrative and judicial hurdles.
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: Extended producer responsibility
Mains level: Paper 3- Coupling growth and environmental protection
Growth and environmental protection are not the polar opposites of each other. The article analyses the issue of balancing the two and using pandemic as an opportunity to evolve novel recovery path.
Pandemic: opportunity to new recovery path
- The pandemic presents an opportunity for us to think of a new recovery path, one that can decouple economic growth and environmental degradation.
- It becomes more important as India sees opportunities on the global call to diversify the supply chain and its internal call for Atmanirbhar Bharat.
- For that, we need to strengthen our production and manufacturing capabilities.
Issue of regulatory infrastructure
- Monitoring and implementing environmental regulations is the biggest challenge we face.
- Take the municipal solid waste rules.
- Two decades after the regulations came into effect, their status not in good shape.
- A comparatively recent regulation, centred around Extended Producer Responsibility, has also posed challenges in monitoring and implementation.
- In a recent ruling, the judiciary not only ruled against the industry but also blamed officials responsible for implementing the regulations.
Focus on implementation and monitoring
- In the long run, diluting regulatory norms will create more adverse impacts resulting in greater community upsurge.
- The focus has to be to improve the system’s capabilities to monitor and implement regulatory requirements.
- There needs to be greater transparency and accountability; there is no dearth of technology to facilitate this.
- The intention and capacity to take action, rectify and diffuse is critical.
- The right ecosystem between the industry, community and regulator is crucial.
- If the three stakeholders remain isolated and get activated only in a crisis, we will not make any progress towards solving the issue.
Way forward
- We need to couple growth and environmental protection.
- Environmental health will be the key enabler of socio-economic growth in the future.
- Industry needs to realise that it is a part of an ecosystem and not at the centre of it.
- Communities get impacted, either positively or negatively, they need to empower themselves through education, so that they are not driven by the agenda of individuals with vested interests.
- We have a challenge in implementing environmental regulations.
- The community does not trust that the industry is meeting its compliance requirements, so, the regulatory system’s role is to improve this trust quotient.
Conclusion
As we plan our recovery past the pandemic, we have a good chance to create a new normal. We need to align towards a common cause and goals. We should not miss this chance.
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: GST
Mains level: Paper 3- GST compensation issue and reforms needed
The GST compensation issue raises the need for reform in the system. The article discusses this issue and suggests reform.
Background
- Three years ago, the Centre and the States of the Union of India struck a grand bargain resulting in GST.
- The States gave up their right to collect sales tax and sundry taxes, and the Centre gave up excise and services tax.
Issue of compensation
- Consent of the states was secured by a promise of reimbursing any shortfall in tax revenues for a period of five years.
- This reimbursement was to be funded by a special cess called the GST compensation cess.
- The promised reimbursement was to fill the gap for an assured 14% year on year tax growth for five years.
Why is the Centre denying GST compensation
- As the economy battles a pandemic and recession, the tax collection has dropped significantly.
- At the same time, expenditure needs are sharply higher at the State level.
- Using an equivalent of the Force Majeure clause in commercial contracts, the Centre is abdicating its responsibility of making up for the shortfall in 14% growth in GST revenues to the states.
Why Central government is wrong in denying the compensation
- 1) The States do not have recourse to multiple options that the Centre has.[like sovereign bond or a loan against public sector unit shares from the Reserve Bank of India]
- 2) The Centre can get loans at lower rates of borrowing from the markets as compared to the States.
- 3) In terms of aggregate public sector borrowing, it does not matter for the debt markets, nor the rating agencies, whether it is the States or the Centre that is increasing their indebtedness.
- 4) Fighting this recession through increased fiscal stimulus is basically the job of macroeconomic stabilisation, which is the Centre’s domain.
- 5) Using the alibi of the COVID-19 pandemic causes a serious dent in the trust built up between the Centre and States.
- It will weaken the foundation of cooperative federalism.
Reforms needed
- GST is a destination-based consumption tax, which must include all goods and services with very few exceptions.
- That widening of the tax base itself will allow us to go back to the original recommendation of a standard rate of 12%, to be fixed for at least a five-year period.
- Some extra elbow room for the States’ revenue autonomy could be allowed by States non VATable surcharges on a small list of “sin” goods.
- In the long term there are many changes in consumption patterns, production configurations and locations, which cannot be anticipated and hence a static concept of Revenue Neutral Rate cannot be reference.
- The commitment to a low and stable rate is a must.
- We must recognise the increasing importance of the third tier of government.
- After 28 years of the 73rd and 74th Amendments, the local governments do not have the promised transfer of funds, functions and functionaries.
- Of the 12% GST, 10% should be equally shared between the States and the Centre, and 2% must be earmarked exclusively for the urban and rural local bodies.
- Fresh approach also calls for an overhaul of the interstate GST and the administration of the e-way bill.
Consider the question “Discuss the issue related to GST compensation to the States by the Central government. Suggest the measures changes in the GST regime to deal with flaws.”
Conclusion
GST is a crucial and long-term structural reform which can address the fiscal needs of the future, strike the right and desired balance to achieve co-operative federalism and also lead to enhanced economic growth. The current design and implementation has failed to deliver on that promise. A new grand bargain is needed.
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- Providing alternative investment destination to China and policy changes in India
The article examines whether India has been proving a favourable alternative to China or not.
Is India becoming alternate supply source and investment destination?
- Despite media reports and strong messaging from Washington, fewer U.S. companies than predicted might quit China.
- Companies focused on the Chinese domestic market rather than as a base for exports will likely remain, at least for now.
- Those that do leave may not choose India as a relocation destination.
- Many U.S. companies with experience working with China are not convinced that India has China’s established industrial base and expertise.
- They also see other Asian countries as more competitive.
India’s strengths
- Democracy: India’s identity as a democratic “un-China” is one of its strongest selling points.
- Strong IPR: There is no threat of stealing of intellectual property rights.
- No coercive tactics: Foreign companies in India are not subject to coercive tactics as in China.
- Institutions: India’s open and vibrant press, an independent judiciary, and other advantages of democratic governance also provide a contrast to China.
- Domestic market:India’s well-off domestic market also attracts foreign investors.
Why China is a favoured destination
- China offers many advantages, such as a manufacturing infrastructure and skill level that allows innovations to move quickly from prototype to product.
- China’s specialised industrial zones are massive, collocating companies, factories, logistics, and even research and universities.
Way forward
1) Focus on the States
- India can start by focusing development in those Indian States that have already demonstrated the ability to produce and export in key sectors.
- Foreign capital could also greatly increase infrastructure funds beyond government spending alone.
- India might also usefully build up new industrial centres with an eye to geography. [for instance-linking the southeast of the country to supply chains in Southeast Asia]
2) Focus on the policy framework
- India should take two great steps-
- 1) Reduce the number of investments needing approval by the Centre.
- 2)To increase intra-Ministry coordination on foreign direct investment policies.
- The same coordination could be extended to the appointment of a high-level official or body in the Prime Minister’s Office.
- This will ensure that all proposed economic policy changes are consistent with the goal of attracting foreign investment.
Conclusion
A policy framework that is transparent, predictable, and provides increased consultations with existing and potential foreign company stakeholders before introducing new Indian economic policies, will play a crucial role in determining India’s foreign investment outlook.
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: Various indicators in Ease of Doing Business index
Mains level: Paper 3- Ease of doing business Index and issues with it
India’s ranking in the World Bank’s ‘Ease of Doing Business’ index has improved spectacularly. However, the World Bank recently halted its publication and announced decision to review and assess data changes for last five years.
Background
- Citing irregularities of data for a few countries, the World Bank halted its annual publication ‘Doing Business’ report.
- It will conduct a systematic review and assessment of data changes that occurred subsequent to the institutional data review process for the last five Doing Business reports.
Why India should be concerned
- Through improved ranking India sought to attract investments to achieve the targets set for ‘Make in India’.
- India’s success in boosting its ease of doing business ranking is spectacular, to 63rd rank in 2019, up from the 142nd position in 2014.
- Policymakers celebrated it to signal India’s commitment to “minimum government and maximum governance”.
- The World Bank decision to audit the ‘Doing Business’ report for the last five years may soon cause discomfort by shining a spotlight on the sharp rise in India’s ranking.
- Study at the Center for Global Development found that the improvement in India’s ranking was almost entirely due to methodological changes.
- During the same period, however, Chile’s global rank went down sharply, from 34th position in 2014 to 67th in 2017.
- The contrasting experience of Chile and India casts doubts on not just the country-level data but also the changes in underlying methodologies.
Does ease of doing business have predictive power?
- While India’s rank drastically improved, it has meant nothing on the ground.
- The share of the manufacturing sector has stagnated at around 16-17% of GDP, and 3.5 million jobs were lost between 2011-12 and 2017-18.
- Annual GDP growth rate in manufacturing fell from 13.1% in 2015-16 to zero in 2019-20, as per the National Accounts Statistics.
- India’s import dependence on China has shot up.
- In case of Russia, ease of doing business rank jumped from 120 in 2012 to 20, but without becoming a magnet for investment inflows.
- China, on the contrary, attracted one of the highest capital inflows but its ease of doing business ranking was low and hovered between 78 and 96 for the years between 2006 and 2017.
Other flaws in the Index
- The Indicators used for the index are de jure (as per the statute), not de facto (in reality).
- The data for computing the index are obtained from larger enterprises in two cities, Mumbai and Delhi, by lawyers, accountants and brokers — not from entrepreneurs.
- The World Bank’s own internal watchdog, the Independent Evaluation Group, in its 2013 report, has widely questioned the reliability and objectivity of the index.
- The World Bank conducts a global enterprise survey collecting information from companies.
- There is no correlation between the rankings obtained from ease of doing business and the enterprise surveys.
Lack of theoretical basis: Major flaw
- There is little in any major strand of economic thought which suggests that minimally regulated markets for labour and capital produce superior outcomes in terms of output and employment.
- Economic history shows rich variations in performance across countries and policy regimes, defying simplistic generalisations.
- Such simplistic basis is used under a seemingly scientific garb of the quantitative index to the disadvantage of workers.
- To meet the ease of doing business targets, safety standards of factories are compromised.
- For instance, in 2016, the Maharashtra government abolished the annual mandatory inspection of steam boilers under the Boilers Act of 1923 and the Indian Boilers Regulation 1950.
- However, no factory has complied with self-certification or submitted the third party certification.
Consider the question “Examine the issues with the World Bank’s ‘Ease of Doing Business Index’? What are its implications for India?”
Conclusion
It is time the World Bank rethinks its institutional investment in producing the ‘Doing Business’ report. India should do some soul searching as to why the much trumpeted rise in global ranking has failed miserably on the ground.
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: NDHM
Mains level: Paper 2- National Digital Health Mission
The National Digital Health Mission promises to transform the Indian healthcare system with the aid of technology. The article highlights the key aspects of the mission.
Building integrated digital health infrastructure through NDHM
- NDHM is based on the principles of health for all, inclusivity, accessibility, affordability, education, empowerment, wellness, portability, privacy and security by design.
- NDHM will build the backbone necessary to create an integrated digital health infrastructure.
- With its key building blocks HealthID, DigiDoctor, Health Facility Registry, Personal Health Records, Telemedicine, and e-Pharmacy, the mission will bring together disparate stakeholders and radically strengthen and, thus change India’s healthcare delivery landscape.
- NDHM is also a purposeful step towards the achievement of the United Nations’ Sustainable Development Goal of Universal Health Coverage.
Importance of digital intervention in health service
- Digital interventions significantly enhance the outcomes of every health service delivery programme.
- Importance of digital intervention is demonstrated in the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana scheme.
- Under PM-JAY, 1.2 crore cashless secondary and tertiary care treatments have been provided using an indigenously developed state-of-the-art IT platform.
- The Arogya Setu mobile app deploys ICT innovations for contract tracing.
Principal highlight of NDHM
1) Voluntary in nature
- HealthID is entirely voluntary for citizens.
- Its absence will not mean denial of healthcare to a citizen.
- They can choose to generate their Health Account or ID using their Aadhaar card or digitally authenticable mobile number and by using their basic address-related details and email ID.
- The use of Aadhaar, therefore, is not mandatory.
2) Data sharing based on consent
- Providing access to and sharing of personal health records is a prerogative of the HealthID holder.
- The consent of the health data owner is required to access this information or a part of it.The consent can be withdrawn anytime.
- The personal health record will enable citizens to store and access their health data, provide them with more comprehensive information and empower them with control over their private health records.
3) Compliance with laws and fundamental rights
- NDHM has been built within a universe of fundamental rights and legislation such as the Aadhaar Act and the IT Act 2008 as well as the Personal Data Protection Bill 2019.
- This project is also informed by the entire gamut of Supreme Court judgments and core democratic principles of cooperative federalism.
- The Mission gets its strategic and technical foundation from the National Digital Health Blueprint, the architectural framework of which keeps the overall vision of NHP 2017 at its core and ensures security and privacy by design.
4) Reaching out to the unconnected population
- NHDM is a digital mission led by technology powered by the internet.
- So, to reach out to and empower the large number of “unconnected” masses specialised systems are being built and off-line modules that will be designed to reach out to the “unconnected”.
5) Partnership with all key stakeholders
- The design of NDHM has been built on the principle of partnership with all key stakeholders — doctors, health service providers, technology solution providers and above all citizens.
- Without their belief, trust, adoption, and stewardship, this mission will not achieve its desired result.
Consider the question “Examine the key aspects of the National Digital Heath Mission and how it could help transform the Indian healthcare landscape?”
Conclusion
NDHM is a mission whose time has come because health is the first step towards self-reliance and only a healthy nation can become Atma Nirbhar.
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: Provision of compensation to states under GST
Mains level: Paper 3- Issues of GST compensation to states.
The article analyses the issue of GST compensation to states under GST regime for five years and how this has turned to be contentious issues after the economic disruption caused by Covid-19.
The basis for compensation
- Under Goods and Services Tax (GST) regime the Centre would make good the loss in the first five years if States faced revenue deficits after the GST’s introduction.
- States sacrificed their constitutionally granted powers of taxation in the national interest.
GST compensation cess
- To pay the compensation to states, GST compensation cess was introduced.
- When the GST compensation cess exceeded the amount that had to be paid to States, the Central government absorbed the surplus.
- Now, the economy has slowed down dramatically and the resources raised are insufficient.
- The Centre is raising questions about whether it is legally accountable to pay compensation.
- The constitutional framework that ushered in the GST does not provide an escape clause for ‘Acts of God’.
Way forward
- As stated by the Secretary of the GST Council in the tenth meeting, the central government could raise resources by other means for compensation and this could then be recouped by continuing the cess beyond five years.
- Monetary measures are the monopoly of the central government.
- Even borrowing is more efficient and less expensive if it is undertaken by the Central government.
- As equal representatives of the citizens State governments expected the Centre to demonstrate empathy and provide them relief through the Consolidated Fund of India.
Conclusion
Central government should consider the legal provision in the GST regime and act in the spirit of cooperative federalism.
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- Issue of wage growth
The article discusses the threat posed to the Indian economy by the subdued demand following the return of the labourers to their urban jobs.
Rural employment issue
- About 30 million migrant workers rushed home to their villages during the pandemic.
- About 60 per cent of out-migration from rural India is aspiration-led.
- Income earned in urban jobs is 2.5 higher than earned in rural area.
- Though rural economy has been recovering faster than the urban economy, this optimism could prove short-lived, as eventually the more long-lasting determinants of rural wages could prevail.
What are the determinants of rural wages
1) NREGA wages
- The government has raised the rural employment guarantee programme (NREGA) wages and outlays.
- Demand for the scheme is outpacing supply.
- This demand-supply mismatch means that it may not be an effective driver of higher rural wages.
2) Low construction activities
- Many rural Indians, especially those without land, have become building labourers.
- 70 per cent of construction is related to real estate and property developers are dependent on funding from struggling non-banking financial companies.
- Until this type of lending restarts, construction may not normalise.
- And that means rural wages may not rise quickly either.
3) Rising debt level
- The increase in borrowing and fall in inflation over the last few years has increased the “real” indebtedness of rural Indians.
- This affected particularly the landowners who pay villagers to farm their land.
- This is likely to hurt their ability to pay high wages.
3 Reasons why wage outlook could be dimmer
- As migrant labours start to return to their urban jobs, their wage outlook appears to be bleak for 3 reasons.
- 1) As during demonetisation, workers could find jobs again, but at lower wages.
- 2) There could be a second-round of pandemic-led labour market weakness, driven by job losses and falling wages from the first round.
- 3) We find that both rural and urban wages are driven by economic growth, India’s post-pandemic medium-term growth falling by one percentage point to 5 per cent does not bode well.
Way forward
- Weak wages could keep demand subdued. To offset this policymakers have an important role to play.
- 1) In particular, policymakers may have to ensure that capital is allocated efficiently.
- After all, investment is the only way to increase the economy’s capacity to create well-paying jobs.
- 2) Bringing back investment growth would also involve capital re-allocation.
- This means taking it away from sectors that are not working and redeploying it in sectors that are.
- Improving the Insolvency and Bankruptcy Code procedure is a key step here.
- 3) Another important step is to improve the health of banks as they are the ones allocating capital by giving loans.
- Implementation of the 5-Rs — recognition, restructuring, resolution, recapitalisation and reforms — for the banking sector may be particularly useful here.
Consider the question “After supply-side disruption is over, India’s growth may suffer from the subdued wage growth. Suggest the steps to avoid this from happening.”
Conclusion
Supply disruption caused by reverse migration won’t last long, but led by lower wages, demand could remain weak, requiring policy intervention.
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 article charts out the plan to leverage the potential and the present size of the India markets to settle the boundary dispute with China.
Boycott of Chinese goods: view and counterview
- After Galwan incident, there have been calls for the boycott of Chinese goods.
- Counter views have been expressed that the Indian economy is so dependent on China that the costs would be disproportionately higher for India.
- Our dependence can be reduced substantially if there is a national will and resolve to do so.
Need for mutually acceptable boundary agreement
- China may not be willing to go back substantially from the areas they have occupied.
- Agreeing on maintaining peace and tranquillity or clarification of the LAC has left space for the Chinese to create border incidents which have now led to casualties.
- So India needs to get China to seriously negotiate a mutually acceptable boundary agreement.
India could use its market as leverage
- Size of Indian market: The size of the Indian market and its potential in the coming years provides India considerable leverage.
- But to use this leverage, Indians, individual consumers as well as firms, have to accept that there would be a period of adjustment in which they would have to pay higher prices.
- The Chinese have a competitive advantage and are integral to global supply chains.
- But whatever they sell is, and can be, made elsewhere in the world.
- Indian can produce everything imported by China: Most of what we import from China was, is and can be made in India itself.
- With volumes and economies of scale, the cost of production in India would decline as it did in China.
Steps need to be taken to use market as leverage
- Focus on those imports from China which have been increasing: The initial focus should be on items which are still being made in India and where imports from China have been increasing.
- Depriciate Rupees: If the RBI let the currency depreciate in real terms it would be equivalent to an increase in import duties of about 10 per cent.
- China-specific safeguard duties and use of non-tariff trade barriers should be used in segments like electrical appliances to let Indian producers expand production and increase market share.
- Government Finances for expansion: The government should also facilitate the flow of finances for expansion and provide technical support for testing, improving quality and lowering costs of production.
- Look for other players: In critical areas such as Active Pharmaceutical Ingredients, we need a vigorous approach to procure from elsewhere and have early production in India.
- The government could provide support for environmental compliance to bring down costs of production.This would create demand for domestic goods and services.
- There are strategic sectors where we should reduce vulnerability: Like scrutiny of -Chinese FDI, Chinese 5G participation etc.
- Assured government procurement: In critical areas like solar panel and grid storage batteries private investment for manufacturing in India would be triggered by assured government procurement.
Consider the question “Size and potential of India market could be leverage by India to settle the issues it has with its neighbour. What India needs to achieve this is a strategy and its implementation. Comment.”
Conclusion
A sustained and graded economic response to the recent Chinese conduct on the border is needed. We should signal India’s firm resolve and willingness to bear the cost. China could choose to settle the border amicably and have full access to our market. We could then work together to make this the Asian century.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
