Note4Students
From UPSC perspective, the following things are important :
Prelims level: EIA
Mains level: Paper 3- Environment Impact Assessment
The changes made in the recent notification gives rise to several issues. These changes and issues that could arise are discussed in this article.
- Environmental Impact Assessment (EIA) is a process of evaluating the likely environmental impacts of a proposed project or development, taking into account inter-related socio-economic, cultural and human-health impacts, both beneficial and adverse.
- UNEP defines Environmental Impact Assessment (EIA) as a tool used to identify the environmental, social and economic impacts of a project prior to decision-making.
- It aims to predict environmental impacts at an early stage in project planning and design, find ways and means to reduce adverse impacts, shape projects to suit the local environment and present the predictions and options to decision-makers.
- Environment Impact Assessment in India is statutorily backed by the Environment Protection Act, 1986 which contains various provisions on EIA methodology and process.
History of EIA in India
- The Indian experience with Environmental Impact Assessment began over 20 years back. It started in 1976-77 when the Planning Commission asked the Department of Science and Technology to examine the river-valley projects from an environmental angle.
- Till 1994, environmental clearance from the Central Government was an administrative decision and lacked legislative support.
- On 27 January 1994, the then Union Ministry of Environment and Forests, under the Environmental (Protection) Act 1986, promulgated an EIA notification making Environmental Clearance (EC) mandatory for expansion or modernisation of any activity or for setting up new projects listed in Schedule 1 of the notification.
- The Ministry of Environment, Forests and Climate Change (MoEFCC) notified new EIA legislation in September 2006.
- The notification makes it mandatory for various projects such as mining, thermal power plants, river valley, infrastructure (road, highway, ports, harbours and airports) and industries including very small electroplating or foundry units to get environment clearance.
- However, unlike the EIA Notification of 1994, the new legislation has put the onus of clearing projects on the state government depending on the size/capacity of the project.
The EIA Process
EIA involves the steps mentioned below. However, the EIA process is cyclical with interaction between the various steps.
- Screening: The project plan is screened for scale of investment, location and type of development and if the project needs statutory clearance.
- Scoping: The project’s potential impacts, zone of impacts, mitigation possibilities and need for monitoring.
- Collection of baseline data: Baseline data is the environmental status of study area.
- Impact prediction: Positive and negative, reversible and irreversible and temporary and permanent impacts need to be predicted which presupposes a good understanding of the project by the assessment agency.
- Mitigation measures and EIA report: The EIA report should include the actions and steps for preventing, minimizing or by passing the impacts or else the level of compensation for probable environmental damage or loss.
- Public hearing: On completion of the EIA report, public and environmental groups living close to project site may be informed and consulted.
- Decision making: Impact Assessment Authority along with the experts consult the project-in-charge along with consultant to take the final decision, keeping in mind EIA and EMP (Environment Management Plan).
- Monitoring and implementation of environmental management plan: The various phases of implementation of the project are monitored.
- Assessment of Alternatives, Delineation of Mitigation Measures and Environmental Impact Assessment Report: For every project, possible alternatives should be identified, and environmental attributes compared. Alternatives should cover both project location and process technologies.
- Once alternatives have been reviewed, a mitigation plan should be drawn up for the selected option and is supplemented with an Environmental Management Plan (EMP) to guide the proponent towards environmental improvements.
- Risk assessment: Inventory analysis and hazard probability and index also form part of EIA procedures.
Importance of Precautionary Principle
- The basis in global environmental law for the EIA is the “precautionary principle”.
- Environmental harm is often irreparable and it is cheaper to avoid damage to the environment than to remedy it.
- We are legally bound to the precautionary principle under international treaties and obligations, as well as by Supreme Court judgments.
What is the issue?
- Streamlining the EIA process and bringing it in line with recent judgments are the reasons given by the government for latest notification.
- The Draft EIA Notification disables it, shrinks its scope and removes what teeth it did have.
- The most devastating blow to the EIA regime is the creation of an ex-post-facto clearance route.
1.What is ex-post-facto clearance route?
- It applies to ongoing or completed project for which an EIA clearance was never sought or granted, and the construction of the project took place regardless.[violating the norms]
- The project now can be slapped with minor fines for the violations and get cleared.
- Where such ex-post-facto clearances were being granted previously, the courts cracked down on them as illegal.
- Therefore, what could not be ratified will now find itself notified.
- The legality of sidestepping the courts is questionable and will have to be tested.
How it will affect?
- It will become a business decision as to whether the
- There is an argument that this route will be an “exception”.
- But it is difficult to believe in India. Our law has a long history of expanding the exception into the rule.
Time to furnish response shortened
- The draft notification also shortens the time for the public to furnish responses on the project.
- For project-affected people, who are frequently forest dwellers or otherwise do not have access to information and technology.
- This will make it harder to put forth representations.
2.Monitoring requirements reduced
- Monitoring requirements have been slackened.
- The draft EIA notification halves the frequency of reporting requirements from every six months to once a year.
- It also extends the validity period for approvals in critical sectors such as mining.
3.Scope of EIA reduced
- Industries that previously required a full assessment have been downgraded.
- The construction industry will be one such beneficiary, where only the largest projects will be scrutinised fully.
- While defence and national security installations were always understandably exempt, a vague new category of projects “involving other strategic considerations” will also now be free from public consultation requirements.
4.Recent industrial mishaps
- Oil India Limited’s oil wells in the Tinsukia district, Assam went up in flames this month.
- It is situated only a few kilometres away from protected forest.
- Recent processes for expansion and modification apparently took place without fresh environmental clearance.
- There was a deadly gas leak at LG Polymers’ Visakhapatnam plant in May.
- The plant had been operating without a valid environmental clearance for decades.
Consider the question “Examine the changes made in the draft EIA Notification and what are the issues with it? “
Way Forward
On a positive note, the 2020 draft notification has a clause dedicated to definitions to several terms related to EIA. It may be beneficial in the sense that it consolidates the EIA rules and has the potential of alleviating some ambiguity in the present law.
- The ministry, instead of reducing the time for public consultation, should focus on ensuring access to information as well as awareness about the public hearing and its impact upon the whole EIA process.
- In order to improve ease of doing business, the government should bring down the average delay of 238 days in granting environmental clearance, that emanates from bureaucratic delays and complex laws.
- Grow now, sustain later should not be the policy, as the notion is dangerously tilted against the concept of sustainable development.
Conclusion
Environmental regulation must balance damage to the environment with sustainable development and possible benefits but the new notification lays more emphasis on the benefits and so must be reconsidered.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- India-China relations
The Galwan incident marked the new low in the India-China relations. Following it, there have been talks of a closer alliance with the U.S. This article analyses the utility, potential and the limitations of this approach.
Exploring the strategic options
- As the border stand-off with China deepens, India will have to think of all possible strategic options that gives it leverage.
- One of the options is new arrangements with other powers.
- This is the right moment to mobilise international opinion on China.
- But can this be translated into concerted global action to exert real pressure on China?
Things India should consider while forming alliance with the US
- International relations are formed in the context of a country’s development paradigm.
- India’s primary aim should be to preserve the maximum space for its development model, if it can actually formulate one.
- India is not unique in this respect.
- The question for India is not just whether the US has a stake in India’s development, which it might.
- But it is, rather, to ask whether India’s development needs will fit into the emerging US development paradigm.
- Will the very same political economy forces that create a disengagement with China also come in the way of a closer relationship with India?
- Some sections of American big business might favour India.
- But the underlying political economy dynamics in the US are less favourable.
- Will the US give India the room it needs on trade, intellectual property, regulation, agriculture, labour mobility, the very areas where freedom is vital for India’s economy?
- Will a US hell-bent on bringing manufacturing jobs back to the US, easily gel with an “atma nirbhar” Bharat?
- To see what is at stake, we just need to look how the development paradigm is driving tensions on trade, taxation and regulatory issues between the US and EU.
Why India avoided alignment with the US in the past
- But the drivers of this have often been legitimate differences over development, including climate change.
- It has also been that, at various points, that alignment was against India’s other strategic commitments.
- India was wise to stay out of the war in Iraq, it was wise not to upset Russia.
- It is wise not to throw its weight behind the US’s Iran policy.
- There is more maturity in the US to understand India’s position.
Global reluctance in collective action against China
- It is an odd moment in global affairs, where there is recognition of a common challenge emanating from China.
- But there is no global appetite to take concerted action.
- An interesting example might be the global response to the BRI.
- Many countries are struggling to meet their BRI debt obligations.
- But it is difficult to see the rest of the international community helping all these countries to wean their regimes away from dependence on Chinese finance.
- Similarly, there are now great concerns over frontier areas of conflict like cyber security and space.
- It is difficult to imagine concerted global action to create rules in these area, partly because Great Powers like the US and Russia will always want to maintain their exceptionalism.
Limitations of global alliance and public opinion in solving local conflicts
- 1) The international community has not been very effective in neutralising
- exercised by some powers.
- This is the tactic Pakistan has used.
- 2) Don’t count on the fact that the world will support an Indian escalation beyond a point.
- The efforts of the international community, in the final analysis, will be to try and throw cold water on the conflict.
- No one has a serious stake in the fate of the terrain India and China are disputing.
- At the end of the day, India has to manage China and Pakistan largely on its own.
Conclusion
Even as we deal with the military situation on the border, the test of India’s resolve will be its ability to return to some first principle thinking about its own power.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- PDS and related issues
- The Public distribution system (PDS) is an Indian food Security Systemestablished under the Ministry of Consumer Affairs, Food, and Public Distribution.
- PDS evolved as a system of management of scarcity through distribution of food grains at affordable prices.
- PDS is operated under the joint responsibility of the Central and the State Governments.
- The Central Government, through Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation and bulk allocation of food grains to the State Governments.
- The operational responsibilities including allocation within the State, identification of eligible families, issue of Ration Cards and supervision of the functioning of Fair Price Shops (FPSs) etc., rest with the State Governments.
- Under the PDS, presently the commodities namely wheat, rice, sugar and keroseneare being allocated to the States/UTs for distribution. Some States/UTs also distribute additional items of mass consumption through the PDS outlets such as pulses, edible oils, iodized salt, spices, etc.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- India-China border dispute
The LAC has been exploited by China as leverage against India. And failure on our part to understand long-term strategic aims and objective of China makes the problem hard to solve. This article suggests a three-pronged approach to deal with China.
Incomprehension of aims and objectives
- There is incomprehension among our decision-makers of the long-term strategic aims and objectives that underpin China’s belligerent conduct.
- We have not devoted adequate intellectual capital, intelligence resources and political attention to acquisition of a clear insight into China and its motivations.
- Even when intelligence is available, analysis and dissemination have fallen short.
What China’s Defence White Papers suggest
- These thematic public documents articulate China’s national security aims, objectives and vital interests and also address the “ends-ways-means” issues related to its armed forces.
- The 11 DWPs issued so far are a model of clarity and vision, and provide many clues to current developments.
- No Indian government since Independence has deemed it necessary to issue a defence white paper, order a defence review or publish a national security strategy.
- Had we done so, it may have prepared us for the unexpected and brought order and alacrity to our crisis-response.
China uses LAC as strategic leverage
- In order to show India its place, China had administered it a “lesson” in 1962.
- And it may, perhaps, be contemplating another one in 2020, with the objective of preventing the rise of a peer competitor.
- For China, the line of actual control or LAC, representing an unsettled border, provides strategic leverage.
- Leverage it can use to keep India on tenterhooks about its next move while repeatedly exposing the latter’s vulnerabilities.
1993 Agreement didn’t benefit India
- Our diplomats derive considerable satisfaction from the 1993 Border Peace & Tranquility Agreement.
- This agreement, according to former foreign secretary, Shivshankar Menon, “…effectively delinked settlement of the boundary from the rest of the relationship”.
- But by failing to use available leverage for 27 years, and not insisting on bilateral exchange of LAC maps, we have created a ticking time-bomb, with the trigger in China’s hands.
- While “disengagement” may soon take place between troops in contact, it is most unlikely that the PLA will pull back or vacate any occupied position in Ladakh or elsewhere.
- In which case, India needs to consider a three-pronged strategy.
What should be India’s three-pronged strategy?
1. Reinforce at ground level
- At the ground-level, we need to visibly reinforce our positions, and move forward to the LAC all along.
- We should enhance the operational-tempo of the three services as a measure of deterrence.
- Indian warships should show heightened presence at the Indian Ocean choke-points.
- Cyber emergency response teams country-wide should remain on high alert.
- We should build-up stocks of weapons, ammunition and spares.
- The Ministry of Defence should seize this opportunity to urgently launch some long-term “atma-nirbharta” schemes in defence-production.
2. At strategic level: Modus vivendi
- At the strategic level, the government should consider sustained process of engagement with China at the highest politico-diplomatic echelons.
- The negotiations should seek multi-dimensional Sino-Indian modus-vivendi; encompassing the full gamut of bilateral issues like trade, territorial disputes, border-management and security.
- Simultaneously, at the grand-strategic level, India should initiate a dialogue for the formation of an “Indo-Pacific Concord for Peace and Tranquility”.
- This Concord should involve inviting four members of the Quad as well as Vietnam, Indonesia, Philippines and Malaysia.
3. Political pragmatism
- As a nation, we need to be pragmatic enough to realise that neither conquest nor re-conquest of territory is possible in the 21st century.
- Parliament should, now, resolve to ask the government, “to establish stable, viable and peaceful national boundaries”.
Consider the question “With changing relations with China, India needs to overhaul its strategy on the ground, strategic and political levels in dealing with China”
Conclusion
This three-pronged approach while comprehending the Chines objectives and goals can help India in dealing successfully with the challenge posed by China.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: PM CARES
Mains level: Paper 3- Disaster Management Act, National Plan
The Disaster Management Act (DMA) 2005 has been invoked by the government to deal with the pandemic. However, National Plan as provided under the Act to deal with Covid-19 is nowhere to be found. Also, the creations of PM CARES violated the provision of the DMA-2005. These two issues are discussed here.
Provisions of DMA 2005
- The Act, along with other things provides the constitution of a National Authority, a National Executive committee.
- It also provides for the constitution of an advisory committee of experts in the field to make recommendations and to prepare a national plan.
- This plan must provide for measures for prevention or mitigation.
- The Act lays down “guidelines for minimum standards of relief, including ex gratia assistance.
Provision of various Funds under DMA 2005
- It enables the creation of a National Disaster Response Fund in which the central government must make due contribution.
- It also requires “any grants that may be made by any person or institution for the purpose of disaster management” to be credited into the same Fund.
- It also provides for a National Disaster Mitigation Fund, exclusively for mitigation.
- The Act also provides for State and local-level plans and for creating State Disaster Response Fund among others.
Provision of disaster management plan
- After the direction by the SC, the government came out with a National Disaster Management Plan (NDMP), 2016.
- This Plan dealt with various kinds of disasters; it was amended in 2019.
- Bu this National Plan not in place now.
- Without it, the fight against COVID-19 is ad hoc and has resulted in thousands of government orders.
- These orders are confusing those who are to enforce them as well as the public.
NDRF and PM CARES issue
- On April 3, 2020, the government of India agreed to contribute its share to the NDRF.
- But a public charitable trust under the name of Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) was set up to receive grants made by persons and institutions out of the NDRF, in violation of Section 46 of the Act.
- The crores being sent to this fund are not even audited by the Comptroller and Auditor General (CAG) of India.
- It is a totally opaque exercise.
- The government of the day has not only ignored the binding law but also circumvented it.
- The government has been fighting the crisis in an ad hoc and arbitrary manner instead of the organised steps as mandated by the Act.
- In so doing, the experts have been sidelined.
Consider the question “Describe the various provision of the DMA 2005 to deal with the disaster. In light of this, examine whether the creation of PM CARES conflicts with the provision of his act”
Conclusion
The national plan to deal with the pandemic and making PM CARES more transparent would help the government in its fight against the corona crisis.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Galwan river, Shyok River
Mains level: Paper 2- India-China relations
This article calibrates the changes our future engagement with China will experience following the Galwan incident. The first casualty has been the trust between the two countries. And next could be strategic communications between the two countries. So, India’s response to the incident should be based on these changes.
What explains China’s aggression
- Hubris, internal insecurities in China, the COVID-19 pandemic and the complex and confused external environment explains it.
- Challenge posed by India from the ideological, strategic and economic points of view can be the other factor.
Violation of many agreements
- China’s recent military actions in Ladakh clearly violate the signed agreements of 1993, 1996, 2005, etc on maintaining peace and tranquillity along the LAC.
- These actions are in violation also of other signed agreements, including at the highest level.
- It also contradict positions taken by Xi himself at the informal Wuhan and Chennai summits in 2018 and 2019.
- In 2003, two countries signed a Declaration on Principles for Relations and Constructive Cooperation between our two countries.
- The third principle states: “The two countries are not a threat to each other. Neither side shall use or threaten to use force against the other.”
- This was more than reiterated in the agreement signed in April 2005 on the Political Parameters and Guiding Principles for settlement of the India China boundary question.
- . Article 1 states, inter alia: “Neither side shall use or threaten to use force against the other by any means.”
Doklam and informal summits
- .A qualitative change though occurred in Chinese perceptions after the Doklam face-off.
- That necessitated the first informal summit at Wuhan in April 2018.
- One important outcome of that summit was the agreement to continue to meet at the highest level and to enhance trust and strengthen strategic communication.
- The second informal summit took place between Xi and Narendra Modi in Chennai in October 2019.
- It was in the aftermath of the revocation of Article 370 by India and China’s unnecessary and unsuccessful attempt to raise the issue in the UN Security Council.
- By then, many other developments — both internal and external — had added pressure on China.
- At Chennai, the Chinese undoubtedly drew some red lines.
Which red lines does China feel India has crossed
- One fundamental red line is China’s long-held and strategic interest in parts of Jammu and Kashmir.
- Jammu and Kashmir border Xinjiang and Tibet and allow connectivity between the two.
- It is wrongly argued that it is Pakistan that is the issue in J&K.
- China is as big an issue but has quietly hidden behind Pakistan’s cover.
- That is no longer feasible as democratic India becomes economically and otherwise stronger.
Future of Special Representative process
- The Special Representatives process to address the boundary question seems stalemated and its usefulness needs review.
- The 2005 agreement contains the necessary parameters for a boundary settlement but there is obviously not adequate common ground.
- Some positivity can, however, be brought in if the LAC clarification process is revived and completed in a time-bound manner.
- But this is easier said than done in the prevailing circumstances.
- Patrolling procedures will need to be revised, preferably by mutual agreement.
Unsustainable economic partnership
- The current nature of the economic partnership between India and China is not sustainable.
- India’s annual trade deficit with China in recent years virtually finances a CPEC a year!
- China has still not fulfilled all its commitments to India on joining the WTO in 2001.
What should be our trade policy
- Indian business and industry must stop taking the easy option.
- Some costs will no doubt go up but there can be environmental advantages of switching to other sources of technology and equipment.
- There is more than one available source of financial investments in Indian ventures.
What will be the nature of bilateral dialogue
- Bilateral dialogue mechanisms will continue their desultory course.
- On issues of interest to India such as terrorism, we get no support from China.
- Cooperation on river waters has not evolved.
- On the global agenda, on issues such as climate change, dialogue and cooperation will continue in multilateral fora depending on mutual interest.
What should be the nature of governments response
- The response to China’s recent actions in Ladakh must be an all-of-government one, indeed an all-India one.
- It should be covering all sectors including heightened security and be coordinated, consistent.
- This is not a question of nationalism or patriotism but of self-esteem and self-respect.
Consider the question “What should be the basis of India’s evolving policy response to China’s new approach to the border dispute?”
Conclusion
Bilateral relations between India and China cannot progress unless there is peace on the borders and China recognises that India too has non-negotiable core concerns, aspirations and interests.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3-Northern border security issue
Two issues have been discussed in this article:change in strategy on northern border and the role of political leaders. Leveraging LAC for premeditated aggression has been part of China’s policy. This makes the change in our policy an imperative.
LAC as leverage against India
- India and China have had parleys since 1981, meetings of Joint Working Groups from 1988 to 2005 and 22 rounds of Special Representatives talks, in addition to many summit-level meetings.
- Despite nearly four decades of discussions delineation and demarcation of the boundary has not been possible.
- Throughout this period CMC/PLA had been at the helm of the defence and foreign policy decision-making,
- The intrusion at Finger 4/5 of Pangong Tso and the transgression up to LAC in Galwan are instructive.
- Out of the blue, most inexplicably and without any historical basis, the official Chinese statement came out seeking the “estuary” of Shyok and Galwan rivers.
- The Chinese have deliberately ensured that the nebulous nature of the LAC is retained as leverage against India.
Modernisation of PLA: So, was Galwan a testbed?
- The PLA is at the threshold of achieving its interim modernisation goals of informatised, integrated joint operations by 2021.
- It is well likely that the events of Eastern Ladakh of May-June 2020 are part of a larger testbed.
- Over the years, the face-offs have witnessed PLA’s jostling and pushing, posse of horses intruding, and scant disregard for the treaties with India.
- Pangong Tso and Galwan showed a new picture.
Need to strategise and revisit the rules of engagement
- For the Indian Army units and formations in Eastern Ladakh or elsewhere facing the PLA, there are limits to adherence to good faith and honour.
- The Indian Army has to strategise and should revisit its rules of engagement on the Northern Borders.
- It has to be mindful that troops in tactical situations cannot be shackled by past treaties, which the PLA deals with disdain.
- The Indian Army has to remain prepared to militarily handle the situations that will arise.
- PLA has always shown extraordinary interest in Eastern Ladakh, especially Daulat-Beg-Oldi, the Chip-Chap river, Track Junction and Karakoram Pass.
- The management practices for the Northern Borders have to be revisited, like placing the nearly division-sized force of ITBP in Eastern Ladakh under the army operationally.
- Real-time intelligence, surveillance equipment and satellite imageries must be available to field formations that need to act on it.
- This should not be delayed by the bureaucratic maze.
Role of political leadership
- At political level, there are representative forums like Parliament, the committees and regular briefings to seek clarifications, which is the right of politicians.
- On national security issues, there must be national unity.
- There ought to be faith in those at the helm that the issues of national security will not be sacrificed for political gains.
- Similarly, within the norms and constraints of national security, the establishment must keep the nation informed, to avoid an information vacuum.
Conclusion
We need to strategise for the future, including the modern manifestations of non-contact, non-kinetic warfare. We must avoid unnecessary nitpicking on semantics of statements made in a particular context.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Fiscal deficit
Mains level: Paper 3- Monetary and fiscal policy response to deal with the crisis.
The economic crisis in the wake of the pandemic is different from past crises. In the past, the financial crisis led to economic shock. This time its economic shock that that is causing the financial crisis. This also means that our response to this crisis should also be different. This article elaborates on the fiscal and monetary policy response to the crisis.
Pattern followed by economic crises
- There is a well-established pattern to economic crises in emerging markets (EMs).
- First, because of loose fiscal and monetary policies, the economy goes into a demand overdrive.
- Demand overdrive spikes inflation and widens the current account deficit (CAD).
- Then, CAD is financed by foreign capital chasing the promise of even higher growth and asset prices.
- At some point, the overdrive is perceived as unsustainable, which triggers a reassessment of growth, inflation, and financial stability.
- Domestic and foreign investors stop new investments, large capital outflows ensue.
- Banks stop giving new loans and rolling over old ones on fears of worsening credit quality.
- Growth collapses and a full-blown economic crisis follows.
- The 1995 Mexican, the 1997 Asian, the 1999 Russian, the 2008 sub-prime, and the 2013 Taper Tantrum are all examples of such crises.
- In the case of India, the 1981-82, the 1991-92, and the 2013 crises all had the same characteristics.
Pattern in response to such crises
- The first response is to restore confidence in policymaking.
- It means large increases in interest rates, massive withdrawal of liquidity, and deep cuts in fiscal deficit.
- Just before the crisis assets [which reflects in bank’s balance sheets] are severely overvalued on inflated views of growth, profits, and income prior to the crisis.
- So, the second step is to restart the economy by restructuring the tattered balance sheets of banks, firms, and households.
- This means debt restructuring and bank recapitalisation aided by privatisation, closures, and mergers.
- These measures often need to be bolstered by structural reforms.
- The economic crisis makes it easier to forge the political consensus for the reforms.
But the economic crisis caused by pandemic is different
- Why is it different?
- Because, before the COVID-19 outbreak far from overheating, Indian economy was slowing down.
- The financial system had virtually shut off the flow of credit as it wrestled with its bad debt burden.
- This is not an instance of a financial crisis turning into an economic shock weighed down by damaged balance sheets.
- Instead, this is an instance of an economic shock that could turn into a financial crisis if the damaged balance sheets are not repaired.
So, should the response also be different?
- Yes.
- Do the opposite of what is done in a typical EM crisis: Cut interest rates, increase liquidity support, and allow the fiscal deficit to widen.
- The RBI has done the first two generously, although with the coming disinflation, it needs to cut interest rates much more.
- But, what about the fiscal policy of the government?
Fiscal policy of the government: Doing not enough
- The government’s approach to fiscal policy, however, seems ambivalent.
- The overall fiscal support from the government will be limited to 2 per cent of the GDP.
- So all the revenue shortfall and the pandemic-related budgetary support must add up to 2 per cent of the GDP.
- If the revenue shortfall is more than 2 per cent of GDP, then total spending will need to be cut.
Why fiscal policy matters for balance sheets
- In this crisis, the causality of damage to balance sheets runs opposite.
- Balance sheets will be damaged not because of prior excesses but because of the collapse in incomes during the lockdown.
- Consequently, debt doesn’t need to be restructured to resume the flow of credit and get the recovery going.
- Instead, what is needed is adequate income support to households and firms.
- Such support will provide the needed time and space for the recovery to take hold.
- Which, in turn, would repair much of the damage to the balance sheets.
- But the fiscal response so far has been inexplicably restrained.
What should the government focus on
- What matters today is the assurance of medium-term growth and not a few higher or lower points in this year’s fiscal deficit.
- To do that, the government needs to allow the deficit to rise.
- This extra deficit should help accommodate the decline in revenue and also provide adequate income support.
- Some have argued that the government, instead, needs to offset the decline on private demand by increasing public spending.
- This is an odd argument.
- It would mean letting demand collapse and then compensating it with higher government spending.
- Instead, using the same resources to ensure that private demand did not decline was the more natural and efficient response.
What should be the RBI’s response
- The RBI, too, has a very large role to play.
- As elsewhere, it is now the only entity that has a strong enough balance sheet to provide any meaningful support.
- The RBI is keeping markets flush with liquidity and low interest rates.
- However, the RBI also needs to undertake extensive quantitative easing to keep bond yields from spiking given the likely large increase in deficit.
- Because of the depth of the growth shock, bad debt will rise.
- The natural instinct of banks is to cut back credit because of worsening credit quality.
- To prevent this from happening, the RBI will need to extend substantial regulatory forbearance on accounting norms, provisioning rules, and, if needed, even capital requirements.
- In addition, like the US Fed and the ECB, the RBI might also need to provide liquidity directly to corporates.
- As of now, banks are providing liquidity to corporates supported by government guarantees as proposed now.
Consider the question “The economic crisis brought by the corona crisis is not like the ones we faced before. This crisis is about an economic shock turning into the financial crisis. So, what should be fiscal and monetary policy interventions to tackle the crisis?”
Conclusion
This is not a crisis like the ones before. This time around, we need to weigh not the cost of taking these measures but the cost of not taking them.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India-China realtions
This article tracks the faultline in India’s China policy that makes it an enduring tragedy. China never bought into India’s narratives of Asian unity and untied Asian front against the West. Instead, China cultivated its relations with the West and leveraged that for furthering its interests.
Enduring tragedy: India’s China policy
- That tragedy is rooted in persistent political fantasies.
- Refusal to learn from past mistakes.
- And the belief that the US and the West are at the source of India’s problems with China.
- The problem predates independence.
- Each generation has been reluctant to discard the illusions that India’s China policy has nurtured over the last century.
Historical background
- Tagore went to China in 1924 with the ambition of developing a shared Asian spiritual civilisation.
- He was accused by Chines of diverting Chins’s attention away from the imperatives of modernisation and, yes, westernisation.
- Jawaharlal Nehru approached China as a modernist and nationalist.
- He met a delegation of Chinese nationalists at Brussels in 1927.
- There he issued a ringing statement on defeating western imperialism and shaping a new Asian and global order.
- But in Second World War, Congress was unwilling to join hands with China in defeating Japanese imperialism.
- Indian and Chinese nationalists could not come together for they were fighting different imperial powers.
Relations after independence
- As India’s first PM, Nehru campaigned against the western attempt to isolate China.
- Afro-Asian conference in Bandung, Indonesia in 1955 was attended by both.
- Within five years war broke out in 1962.
- Atal Bihari Vajpayee travelled to China in February 1979 to re-engage Beijing.
- Before he could head home, Beijing had launched a war against a fellow communist regime in Vietnam.
- That was an end of hope for Asian solidarity.
- Rajiv Gandhi in 1988 sought to normalise relations with China while continuing to negotiate on the boundary dispute.
Other issues: Trade entanglement
- Amid border dispute, other issues have taken a life of their own.
- For example, the massive annual trade deficits.
- India’s hope that economic cooperation will improve mutual trust will help resolve other issues was also dashed.
- India’s massive trade deficit with China is now a little over half of its total trade deficit.
- India is finding it hard to disentangle the deep economic dependence on imports from China.
Story of political cooperation: From unipolar to bipolar world
- As the Cold War ended, India began political cooperation with China on global issues.
- It was hoped that such cooperation will provide the basis for better bilateral relations.
- It could not have been more wrong.
- P V Narasimha Rao and his successors joined China and Russia in promoting a “multipolar world” [remember the US dominance].
- Delhi is now struggling to cope with the emergence of a “unipolar Asia” — with Beijing as its dominant centre.
- China’s rapid rise has also paved the way for the potential emergence of a “bipolar world” dominated by Washington and Beijing.
Engagement with West
- China never worked with Indian on the ideas of building coalitions against the West.
- While India never stopped arguing with the West, China developed a sustained engagement with the US, Europe and Japan.
- Mao broke with Communist Russia to join forces with the US in the early 1970s.
- Deng Xiaoping promoted massive economic cooperation with the US to transform China and lay the foundations for its rise.
Will staying away from West lead to good relations with China
- China has leveraged the deep relationship with the West to elevate itself in the international system.
- Delhi continues to think that staying away from America is the answer for good relations with Beijing.
- Beijing sees the world through the lens of power.
- Delhi tends to resist that realist prism.
- India has consistently misread China’s interests and ambitions.
- The longer India takes to shed that strategic lassitude, the greater will be its China trouble.
Facts that India needs to come to terms with
- India must also recognise that China, like the great powers before it, wants to redeem its territorial claims.
- China also has the ambition to bend the neighbourhood to its will, reshape the global order to suit its interests.
- China has not hidden these goals and interests, but India has refused to see what is in plain sight.
Consider the question “Acknowledging Beijing’s rise, scale of challenge it presents, are first steps in crafting a new China policy” Comment.
Conclusion
Acknowledging China’s dramatic rise and recognising the scale of the challenge it presents is essential for Delhi in crafting a new China policy.
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From UPSC perspective, the following things are important :
Prelims level: Various personalities that contributed to India's food reaserch
Mains level: Paper 3- Contributors to the India's agri-research
This article introduces us to the Indian winners of the prize that is considered as the Nobel for research in food. Their contribution has benefited agriculture immensely.Here, we’ll get a brief idea about their work.
Word Food Prize
- The World Food Prize is often described as the Nobel for research in food.
- It was set up by Ñorman Borlaug.
- Borlaug won the Nobel Peace Prize in 1972 for his work on hybridisation of wheat and rice.
- His work led to the Green Revolution in the mid-1960s.
Indian winners of the award
- The awards to eight Indians of the total of 50 given so far are a tribute to the country’s agricultural university education and research system.
- The country should celebrate their achievements unabashedly when 7-10 million new productive jobs need to be created annually.
- And when it accounts for a third of global undernourished.
- The COVID-19 pandemic has made job creation and improved nutrition and health more urgent than ever.
Let’s look at the contributions made by these personalities
Rattan Lal
- Rattan Lal was awarded for developing and mainstreaming a soil-centric approach to increasing food production.
- This approach also restores and conserves natural resources and mitigates climate change.
- His research has shown that growing crops on healthy soils produces more food from less land area, less use of agrochemicals, less tillage, less water, and less energy.
M S Swaminathan
- Swaminathan’s vision transformed India from a “begging bowl” to a “breadbasket” almost overnight.
- His work helped bringing the total crop yield of wheat from 12 million tonnes to 23 million tonnes in four crop seasons.
- Which helped in ending India’s dependence on grain imports.
Verghese Kurien
- Kurien, received the prize in 1989 for India’s white revolution.
- Under his leadership, milk production increased from 23.3 million tonnes (1968-69) to 100.9 million tonnes (2006-07).
- And now it is projected to reach 187 million tonnes for 2019-20.
- This helped in bringing millions of small and marginal farmers, including women into the marketplace.
Ramlal Barwale
- Barwale, a small farmer and entrepreneur, received the award in 1996.
- He made selling seeds of okra and sorghum “hip” and founded the Maharashtra Hybrid Seeds Company.
- The Crop Science Society of America has called him father of the seed industry in India.
- He introduced hybrid rice from China to India.
Surinder Vasal
- Vasal was given the prize in 2000 for developing quality protein maize (QPM).
- Integrating cereal chemistry and plant breeding techniques, Vasal and Villegas of Mexico collaborated to work on “opaque-2” maize variety using molecular biology techniques.
- In the mid-1980s, they produced a QPM germplasm with hard kernel characteristics and taste like that of the traditional grain.
- But it has much higher quality levels of lysine and tryptophan, thereby enhancing the nutrition value.
Mododugu Gupta
- Gupta received the award in 2005 for starting a blue revolution.
- He developed two exceptional approaches for increasing fish harvests among the very poor.
- This helped in increasing the protein and mineral content in the diets of over one million of the world’s most impoverished families.
- Gupta’s aquaculture technologies boosted Bangladesh’s fish yields from 304 kg per hectare to over 2,500 kg per hectare in less than a year — including 1,000 kg per hectare harvests in the dry season.
Sanjaya Rajaram
- Rajaram, who won the prize in 2014.
- He succeeded Borlaug in leading CIMMYT’s wheat breeding programme.
- There he went on to develop an astounding 480 varieties that have been widely adopted by both small and large-scale farmers.
- Rajaram was born near a small farming village in Uttar Pradesh and received his master’s degree from IARI.
Decreasing government support
- The awardees all come from the time of the green and rainbow revolutions (of dairy and aqua-culture).
- It was also the time when India invested heavily in agricultural science education and research and Indian scientists shone brightly in the global galaxy of science.
- Government support for state agricultural universities, and research conducted by the ICAR and the departments of science and technology and biotechnology has slipped in recent years.
- Today, not a single Indian university is counted among the top 100 in the world.
Consider the question asked by the UPSC in 2019 “How was India benefitted from the contributions of Sir M.Visvesvaraya and Dr M. S. Swaminathan in the fields of water engineering and agricultural science respectively?”
Conclusion
Students and faculty at ICAR and state agricultural universities can follow in their footsteps and achieve scientific excellence, if they receive the resources and their work is supported with incentives.
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From UPSC perspective, the following things are important :
Prelims level: NPA
Mains level: Paper 3- Issue of bad loans
Steps taken by the government have averted the piling up of the bad loans, though for the time being only. When the moratorium period ends, we will see the spike in the bad loans. This article explains the same.
Why bad loans are expected to increase
- Consumer spending has collapsed over the last few months due to the pandemic.
- Though lately there have been some signs of revival, it will take a while before spending comes anywhere near the pre-covid level.
- This will mean that many businesses will start running out of cash pretty soon if they have not already.
- A company that starts running out of cash will not be in a position to repay its loans and, thus, will ultimately default.
How individuals will be affected
- A recent estimate by rating agency Crisil suggests that about 70% of 40,000 companies have cash to cover employee costs for only two quarters.
- This tells us that companies will fire employees, before, during, or even after defaulting on a loan.
- If companies do not resort to employee retrenchment, they will cut salaries and many already have.
- Past payments and future business with vendors and suppliers will be negatively impacted.
- In this situation, the problem at the company level will impact individuals too.
- When individuals start having a cash flow problem, it will lead to defaults on retail loans
But why we are not seeing the defaults happening already?
- A moratorium is a deferment of repayment to provide temporary relief to borrowers. The loan ultimately needs to be repaid.
- The Reserve Bank of India has let banks and non-banking financial companies (NBFCs) offer a moratorium on loans.
- Hence, until the end of August, borrowers have an option to not repay the loans, without it being considered as a default.
- Hence, any loan defaults will start only after August but they won’t be immediately categorized as a non-performing asset or a bad loan.
- Bad loans are largely those loans that have not been repaid for 90 days or more.
- Hence, defaulted loans will be categorized as bad loans only post-November.
- This will be revealed when banks publish their results for October to December 2020, in January-February 2021.
Conclusion
Even if 20% of loans that end up under a moratorium are defaulted on, the quantum of bad loans, especially those of public sector banks, will go up big time.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India-China relations and border dispute
While formulating our response to China’s aggressive policies in Ladakh, we should first understand their objectives. This article explains these objective and suggests the steps to deal with China’s policies.
Statements on Aksai Chin and Pakistan
- Statements over Aksai Chin and Pakistan-occupied Kashmir (PoK) by India have painted the image of India as a revanchist power in utter disregard of the country’s capabilities.
- These statements also gave the impression that India precludes any attempt at changing the status quo on either front.
- Though these statements were justifiable in terms of India’s legal rights to these territories, were ill-timed.
How these statements were perceived by China
- They were made when Beijing was feeling alarmed at the Indian government’s decision to separate Ladakh from Jammu and Kashmir.
- The move augmented its perception that it was a prelude to India’s attempt to change the status quo in Aksai Chin.
- India’s assertion of its claims on PoK that in China’s perception threatened the China-Pakistan Economic Corridor project.
China’s 4 strategic objectives
1. India and China are not equals
- China wants India to understand that it is not in the same league as China.
- China resorts to periodic assaults across the Line of Actual Control (LAC) if India tries to assume a position of equality.
2. Keep India away from interfering in Indo-Pacific
- China wants India not to actively oppose Chinese designs to dominate the Indo-Pacific region.
- Also, China wants Indias to refrain from aligning with the U.S. and its allies — Japan and Australia, in particular — in an attempt to contain China.
3. Keeping India preoccupied with problems
- China’s strategy also includes keeping India preoccupied with problems in its immediate neighbourhood.
- So with these problems, India cannot act as an alternative pole of power to China in the broader Asian region.
4. Supporting Pakistan to neutralise India
- As part of the last objective, China supports Pakistan economically and militarily, including the sharing of nuclear weapons designs.
- China uses Pakistan to neutralise India’s conventional power superiority vis-à-vis that country.
An understanding of these objectives is essential to fashioning a realistic Indian response to China’s aggressive policies in Ladakh and elsewhere along the LAC.
But, what about Pakistan?
- Pakistan is at best an irritant for India. (so, focus on China)
- Pakistan can be managed with the use of diplomatic tools, international opprobrium, and superior military force.
- In fact, the Pakistani challenge to India has become magnified because of its nexus with China.
What India should do?
- India’s main strategic goal should be the adoption of carefully calculated policies that neutralise China’s diplomatic and military clout in the Asia-Pacific region.
- While doing so, India should not appear as a surrogate for other powers.
- And India should also ensure that in making alliances it in not sacrificing the autonomy of decision-making in foreign policy.
Consider the question “Understanding of China’s objective is essential to formulate a realistic response to its aggressive policies in Ladakh.” Comment.
Conclusion
Understanding the greater threat posed by China vis-a-vis Pakistan should be the basis of India’s policy towards China.
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From UPSC perspective, the following things are important :
Prelims level: Acts related to workers
Mains level: Paper 3- Migrant workers
Issue of migrant workers caught attention of the nation amid lockdown. This issue has wider implications for the economy. This article highlights need for formulating a program to deal with the migrant labourers’ issue in its entirety.
Issue with many implications: Migrant labour
- Out of the total labour force of 465 million workers, around 91 per cent (422 million) were informal workers in 2017-18.
- The Economic Survey (2017) estimated 139 million seasonal or circular migrants.
- Circular urban migrants perform essential labour and provide services.
- Hence, this issue has implications for livelihoods, agriculture, food security, and safety net policy as well as programme responses.
Existing and proposed legal provision
- There exists The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act of 1979.
- Despite this act, there is no central registry of migrant workers.
- The Occupational Safety, Health and Working Conditions Code of 2019 has been introduced in Parliament.
- This code seeks to promote the welfare of migrant workers and legal protection for their rights.
- The code seeks to merge 13 labour laws, including the Inter-state Migrant Workmen Act, 1979 into a single law.
One nation, one ration card
- “One nation one ration card” addresses the problem of ration-card portability.
- The move would benefit nearly 670 million people and will be completed by March 2021.
Provisions in the package for migrant workers, small farmers, street vendors
- There is a provision of Rs 30,000 crore through NABARD, in addition to the already existing Rs 90,000 crore allocation, for the rabi harvest and post-harvest rabi-related work for small and marginal farmers.
- Further, Rs 2 lakh crore concessional credit will be provided to two crore farmers across the country.
- About Rs 11,000 crore was allocated for the urban poor, which includes the migrant workers, for building shelter homes for the homeless.
- Several government-funded housing projects in major cities would be developed into affordable rental housing complexes on a PPP mode.
Free grains for two months
- The Centre will transfer 8 lakh metric tonnes of grain and 50,000 metric tonnes of chana to state governments.
- Form this stave will provide 5 kg of grain (wheat or rice) per labourer and 1kg of chana per family per month for two months free.
- This is expected to benefit up to eight crore migrant workers.
Program for growth and structural transformation
- Devicing such a program requires a review of national legal, regulatory and institutional concerns in resettlement and rehabilitation of migrant labourers.
- There is a need to adopt a human rights approach to address the socio-legal issues.
- The resolution of contradictions in trade, fiscal, monetary and other policies would also require.
- Following 3 policy changes are urgently required.
- 1)The implementation of the report of the task force on migration (2017).
- 2)Expansion of the outreach of the Integrated Child Development Services– to include migrant women and children.
- 3) Inclusion of migrant children in the annual work plans of Sarva Shiksha Abhiyan.
- Given the environment of uncertain livelihoods it is necessary to strengthen the resilience of the financial system and skill workers.
- The issues and challenges of migrant workers require leveraging information and communication technologies and the JAM trinity.
Consider the question “Migrant workers issue is an issue with many implications. This issue needs to be considered in its entirety to formulate a speedy and effective response. In light of this suggest the required policy changes.”
Conclusion
The debilitating physical effects of the coronavirus necessitate coordinated and concerted efforts by all stakeholders to meet the challenges of the present and the expectations of the future. We shall overcome.
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From UPSC perspective, the following things are important :
Prelims level: Gig economy
Mains level: Paper 3- Gig economy and issue it faces
3 min
The shockwave that pandemic sent through the economy has been reshaping the global job market. Gig economy would have to accommodate the new entrants. This article underlines the changes in the gig economy after the pandemic. Four areas that need attention are also discussed here.
What constitutes gig economy?
- The word “gig” includes in its current parlance all freelancers, disconnected from the workplace.
- Example: drivers of Uber, delivery boys of Zomato, plumbers and electricians of Urban Clap.
- The gig economy is not confined to low-skilled jobs. Skilled professionals are also part of it.
How pandemic is reshaping the gig economy
- Aviation, hospitality, automobile entertainment and retail are some of the hardest hit sectors.
- The classic gig anchors- Uber and AirBnB, have laid off thousands of people.
- In contrast to this, highly skilled professionals —laid off by employers — are joining the gig bandwagon.
- Surely, job demand will far outstrip supply, at least in the short-term.
What does the future hold?
- A Deloitte report from April notes that Indian organisations are considering to expand the share of gig workers.
- Declining full-time jobs will lead to increased assignment-based hiring.
- For instance, a graphic designer working from home could be in demand with a media house or Netflix may hire AI designer paid by an hour to personalize streaming.
- But, what is missing in picture? The national database is missing.
4 focus areas of gig economy
1. National database: A missing link
- National database of job seekers and job creators can connect firms with qualified candidates.
- A prospective employee would need access to a job database, sorted by skill, geography, duration and emoluments.
- Companies should be able to dip into the data pool of talent, experience, location, qualification and expectation.
- Currently, both data sets are fragmented and stored in silos.
- The government could play the role of a facilitator, in partnership with the private sector.
2. Regulatory protection to gig workforce
- The gig economy increases employee vulnerability.
- This segment of the economy so far has been outside the ambit of regulatory labour policies.
- Social protection like wage protection, health benefits and safety assurance should be made available to gig workers.
- The Karnataka government has considered introducing a new labour legislation focused on the gig economy.
3. Prepare college students for freelancing
- Apart from regular campus placements, the placement cells need to reorient and focus on preparing students for freelancing opportunities.
- For the educated youth, this could be the first step towards entrepreneurship.
4. Gender equality
- Gender is another crucial dimension of the digital labour markets.
- The low enrolment of girls for higher education in science, technology, engineering and math would constrict their opportunity in the gig world.
- Going ahead, this would need greater policy attention to ensure gender parity.
Consider the question “What is the gig economy? Suggest the policy measures to make it more resilient in the present economic context disrupted by the pandemic.”
Conclusion
The government and the private sector would need to collaborate along with academia to build adequate safeguards in the unfolding eco-system.
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From UPSC perspective, the following things are important :
Prelims level: Icesat 2, Cryosat 2
Mains level: Paper 1- Arctic ice and how it influence climate change
This article is about Polarstern, is an icebreaker, which traversed the Arctic Ocean to study the aspects related to ice there. Here, we will look at some of these aspects. These aspects are-monitoring of the ice, difficulty in measuring the thickness, rate of melting of ice and relations with cloud formation.
Arctic: A recorder and driver of climate change
How is it a recorder of climate change?
- It is a recorder because of two co-related factors, these are-
- 1) The visible difference between ice and water.
- 2) The obvious relationship between global temperatures and the amount of ice around.
- Two factors together shows in an easily graspable way how things are changing.
- The extent of the Arctic sea ice in summer has declined by 30% in the past 30 years, and that loss is accelerating (see chart).

How is it a driver of climate change?
- The Arctic is also a driver of climate change, because the whiteness of ice means it reflects sunlight back into space, thus cooling Earth.
- Whereas the darkness of open water means it absorbs that light.
- The less of the reflection of sunlight and the more absorption of light will result in a faster rise in global temperatures.
Monitoring the Arctic’s ice
- At the moment this is monitored mainly by satellite.
- Measuring the extent of the Arctic’s ice from space is easy.
- Measuring its thickness is trickier.
- From orbit, this is done by a mixture of radar and laser beam.
- Icesat 2, an American craft, provides laser-altimeter data that record the height above sea level of the top of the snow that overlies the ice.
- Cryosat 2, a European one, uses radar to penetrate the snow and measure the height of the top of the ice itself.
- The thickness of the ice in a particular place can then be calculated by applying Archimedes’ principle of floating bodies to the mixture of ice and snow, and subtracting the thickness of the snow.
- But there is a view that the data collected by these two satellites may be inaccurate, leading to an overestimation of the ice’s thickness.
Let’s understand why the data about thickness could be inaccurate
- When all is working perfectly, the return signal for Cryosat 2 comes exactly from the boundary between the ice and any overlying snow.
- But, that this is not always what happens.
- Variables such as layering within the snow, along with its temperature and salinity, might affect the returning radar signal by changing the snow’s structure and density.
- This could cause the signal to be reflected from inside the snow layer, rather than from the boundary where it meets the ice.
- If that were happening, it would create the illusion that the ice beneath the snow is thicker than is actually the case.
How topography of Arctic ice matters
- Though sea ice is solid, it is not rigid.
- It forms but a thin skin on the ocean—varying in depth from around 30cm in summer to a couple of metres in winter—so is readily moved by wind and current.
- As the ice moves it stretches and cracks in some places.
- Large cracks formed in this way are called leads, because they are wide enough to “lead” a ship.
- In other places, by contrast, movement makes the ice thicker.
- As individual panes of ice butt up against each other, they create ridges that can be metres high.
- But even from the ship’s deck one can watch leads opening and ridges forming around the vessel.
- Observations suggest that winter the ice has been particularly mobile—and has thus become particularly rough, with a surprising number of ridges.
So, how these ridges affect the rate at which ice melts?
- These ridges may affect the rate at which the ice melts—but to complicate matters, this could happen in two opposing ways.
- Ridges make ice thicker, and thicker ice melts more slowly.
- On the other hand, a ridge projects down into the sea as well as up into the air (Archimedes, again), so it may stir up water from below the surface.
- Deep water is warmer than the surface layer, so this stirring would serve to increase melt rates.
- Moreover, to add to the confusion, ridges are prone to having pieces of ice fall off them into the sea, to form small blocks known as brash.
- This brash, having more surface area per unit volume than unbroken ice, melts faster.
How cloud formation is affected by cracks in Arctic ice
- On most parts of Earth clouds form as droplets of water condense around “seeds” of dust or organic molecules.
- In the Arctic, there is little dust.
- Biological activity, too, is in short supply compared with elsewhere—and is, moreover, conducted mainly below the barrier of the sea ice.
- It might, therefore, be expected that there would be few seeds present for clouds to form around.
- And yet, clouds are present.
- Cloud seeds there tended to be compounds containing sulphur, nitrogen, chlorine, bromine or iodine.
- Presence of these molecules suggests their link with cracks in the ice sheets.
- This means that more cracks in the ice sheet could lead to more clouds in the Arctic.
- What overall effect that might have on the climate is unclear.
- Summer clouds would reflect sunlight back into space, cooling the planet.
- Those formed in winter, when the sun is below the horizon, would serve as insulation, warming it.
- Two opposite outcomes are possible—or perhaps the net effect will be that they cancel each other out.
Conclusion
Properly disentangling the interactions between Arctic ice, atmosphere and ocean life will require data collected across a full year—for the contrast between winter and summer at the poles is greater than anywhere else on the planet.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Issues of inclusive growth
The sight of thousands of migrant workers walking thousands of kms back home after lockdown has been the watershed moment for the collective conscience of our country. This made us think about the present economic model and policies we have been adopting. So, the answer to the problems created by the present model lies in building “nurturing economy”. What is nurturing economy? Read to know…
Broadly, we can summarise the impact of pandemic as-
- Unemployment is shooting up.
- Supply chains of food and essentials have been disrupted.
- Dark clouds of economic recession are on the horizon.
Invisible cost of pandemic
- The visible cost of the pandemic in terms of the lives lost are being counted by the day.
- But the invisible cost of hunger and impoverishment of the most vulnerable sections is yet to be effectively addressed.
- Vulnerable section- our workers, the poor and the migrants, particularly women, are at receiving end of these invisible cost.
Health of economy before pandemic
- The pandemic came at one of the worst possible times.
- India’s economy has been in deep trouble since 2016.
- In 2019-20, even before the pandemic happened, our GDP growth had dropped to 4.2 per cent, lowest growth seen in the last 11 years.
- Even the oil prices dropped at their historic low.
- Non-food bank credit is a good indicator of overall economic robustness.
- By December 2019, the growth of non-food bank credit had dropped to below 7 per cent. ( lowest in the last 50 years.)
What happened to economy after the pandemic?
- After the pandemic arrived, matters, of course, got worse.
- In March, $16 billion of foreign capital exited the country, which is an all-time record for India.
- India’s unemployment rate shot up to a record high of 23.8 per cent in April.
- In the same month, Indian exports dropped by 60 per cent.
- This was one of the biggest drops seen in any emerging market economy in the world.
- There is a genuine risk that this year our growth will drop to an all-time low, beating the record plunge of 1979-80.
So, the pandemic has forced us to think about the building a nurturing economy, one in which Gandhiji’s Talisman is followed in word and spirit, one in which John Rawls ideas are implemented.
So, What building a nurturing economy involves?
- Our economic and political policies must not be ends in themselves.
- Instead, these policies should involve instruments for building a society that is secular, inclusive and nurturing.
- It should be a society where people of all religions, caste, race and gender feel wanted and at home.
- Environment sustainability and focus on green economy is also part of nurturing economy.
- We should strive to create a society that respects knowledge, science and technology, and culture.
Threefold crisis emerging out of our exploitative behaviours
- The outcome of our exploitative behaviour is a threefold crisis which describes India’s current predicament.
- 1) Rising poverty and unemployment despite abundance.
- 2) Rising intolerance and violence.
- 3) Environmental catastrophe.
Consider the question “Pandemic and the predicament of migrant labours has highlighted the lack of inclusive growth in our economy. And we must look for the solution to such shortcomings in our approach. In light of this, suggest the changes that our economy must embrace to ensure inclusive growth.”
Conclusion
Our ambition should not be to make India the richest nation in the world. India should be an example of an equitable society, where people are not abandoned without income and work, where no one feels the insecurity of being a minority, and of being discriminated against.
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From UPSC perspective, the following things are important :
Prelims level: WIPO, UNIDO
Mains level: Paper 2-Multilateralism in the post-Covid world
What is the future of multilateralism? This is the question we have come across many times recently. Given the chaos that we are witnessing in the global order, multilateral seems to be headed for either collapse or capture by China. But, the author of this article suggests that it would be a mistake to consider the choice as binary. Between the collapse and the capture, there are many stakeholders working for its sustenance. So, multilateralism will endure.
International institutions performing below par
- The COVID-19 outbreak has placed all international institutions under a magnifying glass.
- By any measure, most have performed below par.
- Such is the caution espoused that multilateralism today seems to have reverted to its version 0.1.
- The General Assembly now passes resolutions through no-objection procedure.
- The Security Council has been found wanting in no small measure.
- The 75th session’s ‘leaders week’ runs the risk of being reduced to a video playback session.
Pursuit of change by threatening to leave
- It is true that functioning of multilateral institutions requires reform.
- They need to adapt to new realities.
- However, the pursuit of change by threatening to leave multilateral institutions is a phenomenon we witnessed only during the period of the League of Nations.
- One state followed another in bidding goodbye, until the League’s final demise.
Why post Second World War institutions survived departures
- The post Second World War multilateral institutions have survived such departures.
- The United Nations Educational, Scientific and Cultural Organization (UNESCO) in Paris and the Human Rights Council in Geneva have survived the departure of the U.S.
- The United Nations Industrial Development Organization (UNIDO) in Vienna continues despite the withdrawal of the U.S. and many others.
- The World Health Organization (WHO), notwithstanding its visible shortcomings, will survive U.S. threats.
- The reasons are simple.
- Multilateral organisations serve desperately felt global needs of the vast membership.
- The pandemic has reinforced the desire for greater global cooperation amongst most states.
So, will the current multi-lateral order survive China’s onslaught?
- It is true that Chinese nationals head four multilateral organisations.
- It is also true that Chinese nationals have failed in campaigns to head UNESCO and the World Intellectual Property Organization (WIPO).
- Despite contributing nearly 10% of the UN’s budget, Chinese nationals are not exactly over-represented in terms of staff positions.
- China has certainly risen up the multilateral pantheon and is able to better promote its interests.
- It has warded off attacks against it in multilateral fora, at times with the aid of the heads of these organisations.
- However, it is yet to display an ability to set the multilateral agenda and dominate the discourse on an array of issues, in the manner that the U.S. once indispensably did.
- China’s flagship venture, the Belt and Road Initiative, remains only on the fringes of multilateral fora.
- Neither in monetary terms nor in substantive inputs are there portents of a ‘Chinese takeover’.
- Amidst this, multilateral bodies are populated by a plethora of small and middle states quietly working to restore equilibrium, when the balance tends to shift.
- The capture of the existing multilateral order by a new hegemon is antithetical to the ethos of multilateralism.
- Multilateralism thrives on the notion of the Lilliputians tying up Gulliver — old or new.
Evolving multilateralism is not a choice between collapse and capture
- Between collapse and capture, there are other pathways.
- Multilateral architecture places a premium on structures over functions, processes over substance.
- It slows down the change of any sort.
- The same processes that have stalled change in the past will militate against a takeover in the future.
- Does that mean that multilateralism will meander meaninglessly?
- It will meander, but perhaps not meaninglessly.
- The ‘pluri-laterals’ and the emerging ‘mini-laterals’ each have their place in terms of international agenda-setting, but global norm-setting requires inclusivity that they lack.
Opportunity for India
- Being able to shape the discourse at an incipient stage is a good perch to be on.
- Issue-specific ‘coalitions of the willing’ are catalysts.
- As a growing power, India needs to avail of such avenues.
- However, by themselves, these will not do justice to the depth and variety of India’s interests and our stakes in global cooperation.
- Also, they are not holistic solutions in ensuring global acceptance of norms.
Understanding the essence of multilateralism
- Responses of states during the COVID-19 crisis point to more emphasis on sovereign decision making than before.
- The imprimatur for acting on behalf of the global community is not going to be available easily.
- On myriad issues, from sustainable development to the environment, from climate change to pandemics and cyberspace to outer space, the demands for ‘nothing about us without us’ are likely to increase.
- Since stakeholders perceive that their stakes have risen, they will call for enhanced engagement.
- Convening such stakeholders in pursuit of global goals is the essence of multilateralism.
Consider the question “In the world afflicted by Covid, multilateralism seems to be headed for collapse or capture by a hegemon. Critically examine.”
Conclusion
We need to patiently promote reforms while building partnerships to avail opportunities which may arise for more fundamental change. We need to bide our time without hiding our intent.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: ECA, APMC Act
Mains level: Paper 3- Agri-marketing and issues with it
Following the announcement of reforms in the agri-sector, the government issued ordinances to make good on its promise. These ordinances deal with- ECA-1955, APMC Act and Contract farming. The author in this article examines whether these ordinances deliver on the promises made or not.
1) Ordinance for amendment of APMC Act
- ‘Farming Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020.’ seek to address the problems farmers face in selling their produce.
- Due to the unionisation of middlemen (arhatias) and their financial clout, politicians in the states have been reluctant to amend agriculture marketing laws which are exploitative and don’t allow farmers to receive a fair price.
- Rather than coax the states financially to correct the markets, an unregulated marketplace has been created where 15 crore farmers will be exposed to the skulduggery of traders.
- Imagine the mayhem in stock markets if ROC and SEBI were similarly made redundant.
Issues and benefits
- Rather than replicate Punjab’s successful agriculture mandi model, now states will lose vital revenue to even upgrade and repair rural infrastructure.
- The ordinance may be challenged by the states for its constitutional overreach.
- But, on the flip side, over time, the largest informal sector in the country will begin to get formalised and new business models will develop.
- A different breed of aggregators will create the much-needed competition to the existing monopoly of local traders.
- Additionally, henceforth, when farmers sell agricultural produce outside of APMC market yards, they cannot legally be charged commission on the sale of farm produce.
- To survive, the APMCs across the nation will have to radically standardise and rationalise their mandi fee structure and limit the commission charged by traders on sale of farmers’ produce.
2) ECA 1955: Not enough has been done
- Here, the amendment was supposed to allay the genuine fears of traders emitting from the bureaucracy’s draconian powers to arbitrarily evoke stockholding limits etc.
- Rather than forego its own powers for the larger good, the amendment’s fine print makes it ambiguous and leaves space for whimsical interpretations as before.
- The trader’s uncertainty is compounded by the arbitrary import-export policy decisions which dilute the purpose of the amendment itself.
3) Ordinance on Contract farming
- “The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020” tries to placate the fears of both the farmer and the contractor when they sign an agreement.
- For the farmer, the legal recourse is never a practical choice as the persuasive powers of the aggregators’ deep pockets cast a dark shadow over the redressal process.
- Likewise, the tediously stretched legal proceedings are dissuasion enough to either not seek redressal or settle for unfavourable terms.
- That produce derived from contract farming operations will not be subject to any obstructionist laws is a very good step.
- Farmer-producer organisations and new aggregators will get a boost with these laws, and become harbingers of prosperity in some small corners of the countryside.
- There are green shoots in the ordinances, but the downside dwarfs the upside.
So, what are the implications of these 3 reforms?
- The union of the three ordinances appears to be a precursor to implementing the Shanta Kumar Committee recommendations to dilute and dismantle FCI, MSP & PDS which will push farmers from the frying into the fire.
- It may also be interpreted to mean that now the sugar industry needn’t pay farmers the central government FRP or the state government SAP price for sugarcane.
Consider the question ” There was a mention of reforms related to agri-sector in the recently announced stimulus package. Examine the issues with segments of agri-sector which necessitated these reforms.”
Conclusion
The reforms in these 3 areas if carried out earnestly could go a long way in helping the farmers get out of the misery and help achieve the goal of doubling of farmers income in the set time frame.
Back2Basics: Agriculture Produce Marketing Committee Regulation (APMC) Act.
- All wholesale markets for agricultural produce in states that have adopted the Agricultural Produce Market Regulation Act (APMRA) are termed as “regulated markets”.
- With the exception of Kerala, J & K, and Manipur, all other states have enacted the APMC Act.
- It mandates that the sale/purchase of agricultural commodities notified under it are to be carried out in specified market areas, yards or sub-yards. These markets are required to have the proper infrastructure for the sale of farmers’ produce.
- Prices in them are to be determined by open auction, conducted in a transparent manner in the presence of an official of the market committee.
- Market charges for various agencies, such as commissions for commission agents (arhtiyas); statutory charges, such as market fees and taxes; and produce-handling charges, such as for cleaning of produce, and loading and unloading, are clearly defined, and no other deduction can be made from the sale proceeds of farmers.
- Market charges, costs, and taxes vary across states and commodities.
Essential Commodities Act 1955
- The ECA is an act which was established to ensure the delivery of certain commodities or products, the supply of which if obstructed owing to hoarding or black-marketing would affect the normal life of the people.
- The ECA was enacted in 1955. This includes foodstuff, drugs, fuel (petroleum products) etc.
- It has since been used by the Government to regulate the production, supply and distribution of a whole host of commodities it declares ‘essential’ in order to make them available to consumers at fair prices.
- Additionally, the government can also fix the maximum retail price (MRP) of any packaged product that it declares an “essential commodity”.
- The list of items under the Act includes drugs, fertilizers, pulses and edible oils, and petroleum and petroleum products.
- The Centre can include new commodities as and when the need arises, and takes them off the list once the situation improves.
How ECA works?
- If the Centre finds that a certain commodity is in short supply and its price is spiking, it can notify stock-holding limits on it for a specified period.
- The States act on this notification to specify limits and take steps to ensure that these are adhered to.
- Anybody trading or dealing in the commodity, be it wholesalers, retailers or even importers are prevented from stockpiling it beyond a certain quantity.
- A State can, however, choose not to impose any restrictions. But once it does, traders have to immediately sell into the market any stocks held beyond the mandated quantity.
- This improves supplies and brings down prices. As not all shopkeepers and traders comply, State agencies conduct raids to get everyone to toe the line and the errant are punished.
- The excess stocks are auctioned or sold through fair price shops.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Indian states sharing border with Nepal
Mains level: Paper 2- India-Nepal ties and border issue
Of late, India’s bilateral relations with Nepal has been going south. The latest trigger has been the changes made by Nepal in the map. This article explores the transformation of Nepal and its impact on India-Nepal relations. Despite the efforts by Nepal to explore the options beyond India, ties are still robust between the two countries and this is reflected in more than one ways.
Let’s map the changes in Nepal with one constant factor: nationalism
1. Democracy
- The obvious change in Nepal is that it is now a democratic republic after nearly 250 years of being a monarchy.
- The Nepali Congress and Maoist leader, Prachanda, claim democracy (1990) and the abolition of monarchy (2008) as their legacies.
2. Societal change due to exposure to globalisation
- More pervasive is the societal change from Nepal’s exposure to globalisation.
- Geography, too, stands to change, with the Chinese now having the potential to bore through the Himalayas and exhibiting their presence in Kathmandu in economics and politics.
3. Nationalism
- The constant in Nepal is nationalism which is really a mask for anti-India sentiment.
- Politicians use it for personal gain, and it is deeply ingrained in the bureaucracy, academia and the media.
- Today, Prime Minister K.P. Sharma Oli is cementing his legacy as a nationalist by extending Nepal’s map into Indian territory.
- The cartographic aggression and the embedding of the new map in the country’s national emblem and Constitution are untenable and should have been avoided under all circumstances.
- In 2015, the Nepali Congress government adopted the new Constitution, ignoring India’s concerns.
4. Identity politics
- Identity politics with India is also visible within the country.
- Nepali citizens from the Terai (Madhesis) feel discriminated as being “Indian”.
To Nepal, their attitudes reflect the angst of a small state. To India, Nepal appears incorrigible.
Let’s understand how globalisation changed Nepal
- After democracy was restored in 1990, passports were more liberally issued, and Nepalis began looking for work opportunities globally, beyond just India.
- West Asia and South-East Asia specifically became major destinations for labour migration.
- Security uncertainties with the Maoist insurgency at home also propelled the trend of migration.
- Students and skilled personnel began moving to Europe, the United States, Australia, Thailand and even to Japan and South Korea.
- As of 2019, nearly a fifth of Nepal’s population, from all parts of the country, were reportedly overseas.
- At an estimated $8 billion, global remittances account for nearly 30% of Nepal’s nominal GDP.
- This makes Nepal one of the most remittance-dependent countries in the world.
- Leftist ideology and the prominent presence of international non-governmental organisations — ostensibly there to resolve conflict and alleviate poverty — have added to Nepal’s exposure to the world.
- Nepal’s 2011 Census shows that over 80% of its 28 million-strong population were Hindus, and since 1962, it had formally been a Hindu kingdom.
- The new Constitution in 2015 makes Nepal a secular country.
- The proliferation of communication technology has also spread a certain cosmopolitanism but without the accompanying metropolitanism.
Nepal exploring options beyond India
- Kathmandu has continued its long-standing efforts to spread Nepal’s options beyond India.
- Multilateral development banks are by far the biggest lenders and players in the country’s development efforts.
- And in fact, one of Nepal’s largest aid donors is the European Union.
- India and China are not the only players for big projects either.
- A long-delayed project to pipe water into Kathmandu was with an Italian company.
- Major investments in the telecom sector are coming from Malaysia, and the largest international carrier in Nepal is Qatar Airways.
Weakening of natural bond and responsible factors
- The outward movement of students, along with with the growth of institutions of higher learning at home, has meant that most young people in Nepal, including emerging contemporary leaders in politics, business or academics, have not studied in India.
- This lack of common collegiate roots removes a natural bond of previous generations that had provided for better understanding and even empathy.
- While most Nepalis understand Hindi, because of the popularity of Bollywood, articulation is quite another matter.
Robust ties with India, despite diversification
- Despite Nepal’s efforts to diversify its options globally, its linkages with India remain robust.
- Nepal’s trade with India has grown in absolute terms and continues to account for more than two-thirds of Nepal’s external trade of around $12 billion annually.
- This clearly reflects the advantages of geography, both physical and societal.
- India continues to be the largest aggregate investor in Nepal.
- The massive under-construction Arun-III 900 MW hydro-electric project is slated to singly produce as much power, when completed in five years, as Nepal produces today.
- Moreover, the peg with the Indian Rupee provides unique stability to the Nepali Rupee.
Unique advantage to Nepal
- Nepal’s per-capita income is just above $1,000.
- While the huge remittance economy has brought a semblance of well-being, the country has a long way to go in reaching prosperity.
- The relationship with India, with open borders and Nepalis being allowed to live and work freely, provides Nepal a unique advantage and an economic cushion.
- The latter is particularly important today with COVID-19-caused global contraction positioned to pop the remittance bubble.
- Neither the Chinese nor any others are likely to write blank cheques.
- India for its part should also focus on developing its border areas with Nepal, with better roads and amenities of interest (such as shopping malls) to the burgeoning Nepali middle class.
- This would have economic plusses for both sides and keep ties strong at the people’s level. It would also be an image makeover.
Consider the question “Despite intermittent disagreements over certain issues, India-Nepal ties remain robust. In light of this, elaborate on the ties between the two countries and suggest ways to find the solution to the latest border dispute between the two countries.”
Conclusion
It is important that we update the prism through which we view our relationship with our Himalayan neighbour. We must not forget the past nor turn away from it but, instead, must be mindful of the realities of a changing India and a changing Nepal.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Forex reserves and exchange rates
Mains level: Paper 3- India's Forex reserves touched ceiling of half-trillion
At first, it seems almost contradictory. And so it is. Our foreign exchange reserves touched new high of $500 billion for the first time, but the time in which this has happened makes it paradoxical. At the time when economies around the world are touching new lows, this rise in the Forex seems all but usual. In this article, you’ll learn about the 4 factors that made it happen.
1. Decreased oil imports
- Usually, we import a lot of oil.
- But the payment here is dollar-denominated since very few countries are going to accept our currency (Rupee) as is.
- So, you have to expend dollars i.e. the foreign exchange reserves to keep the flow of crude oil intact.
- However, with the nationwide lockdown in place, our import bill has reduced drastically.
- We simply don’t need as much oil anymore.
- And considering oil prices have also taken a beating simultaneously, our Forex Reserves have been piling up.
- Less oil import. More Forex reserves.
2. Dollars coming with foreign investors
- Contrary to popular opinion, foreign investors have been pouring money into India of late.
- You could attribute a bulk of these inflows to Reliance Jio.
- They’ve been enticing investors all over the world and they’ve been doing it at a pace that belies all rational expectations.
- They’ve raised close to $15 Bn over the course of a few months and it doesn’t look like they’re stopping anytime soon.
- So technically, dollar inflows have spiked and therefore, Forex reserves get a boost once again.
3. RBI preparing itself for a bad time
- Another popular explanation is that the RBI is preparing a war chest to stave off future uncertainties.
- At a time when the world economy is reeling from an unprecedented crisis, it’s perhaps prudent to build up reserves for a rainy day.
- So the RBI buys gold and dollar-denominated assets using our national currency and builds up the foreign exchange reserves.
- Inadvertently, this increases the money supply within the economy.
- There will be more “Rupees” floating around.
- As more Indian currency keeps entering the ecosystem, the value of the rupee depreciates.
- And yes, the value of rupee has tumbled recently, but we are not in dire straits yet.
- But if India’s economy takes a turn for the worse, it becomes incumbent on the RBI to ensure price stability.
- Imagine the value of the rupee starts fluctuating wildly because of economic uncertainties.
- The RBI has to intervene.
- It has to exchange the foreign reserves for the Indian currency.
- If they keep mopping up the excess Rupees floating in the system, they could ensure the value of the rupee remains stable.
- So long as the value of the rupee remains stable, prices of commodities will follow the same cue, all things remaining equal that is.
- Now, there’s still no clear consensus on what kind of reserves we might need if things do go south.
- Although there have been recommendations made in the past about hoarding too much, it’s still the RBI’s call at the end of the day.
4. The RBI is doing it for the government
- The RBI can turn a profit if it wants to.
- And once it does turn a profit, it can transfer a part of the surplus to the government — as dividends.
- Now if the RBI wanted to offer the government a higher dividend, it has to simply turn a higher profit.
- One way to accomplish this is to simply let the value of the rupee depreciate. Do not intervene.
- Do not forego the reserves. Let the rupee tumble.
- And so long as you don’t intervene, all the dollar-denominated assets you own will be worth more in rupee terms.
- Consider the hypothetical example-suppose the exchange rate was 1$= Rs. 71 in March 2020, then the rupee loses value and you see the same line item once again in June 2020 will be 1$=Rs. 76.
- The extra ₹ 5 is treated as a profit. And this profit could be ploughed back to the government.
Consider the question “With the economy in the tailspin amid pandemic, the news of India’s Forex reserves touching the $500 billion mark for the first time provided the semblance of solace. Examine the factors that could explain this increase.”
Conclusion
Though there will always be the debate over the optimum value of the Forex reserves, the new level it reached in such an uncertain time for the economy is, nonetheless, a cause for celebration.
Reference Source : https://finshots.in/archive/india-foreign-exchange-reserves/
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