Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 3- Prospects of recovery of Indian economy and indications from demand and supply side.
Context
The focus in the near future should to increase investments and facilitate credit for funding these productive assets so that India’s potential output growth can steadily rise.
Growth prospects of India
- The NSO forecast at 5%: The latest data from the National Statistical Office (NSO) retained India’s economic growth forecast at 5 per cent for the current financial year.
- Growth has dropped from 6.1 per cent in the previous year.
- Fall in nominal GDP: More strikingly, nominal GDP growth has decelerated from an average of 11 per cent during 2016-17 to 2018-19 to 7.5 per cent this year.
- Lower inflation added to the volume slowdown.
- The value of India’s GDP for FY20 is estimated at around $2.9 trillion.
Input and output side growth prospects
- GDP is estimated from both output and demand lenses, using specific economic indicators as proxies for activity in specific sectors.
- Output side: From the output side, sector-wise estimates were as following-
- Agriculture sector growth was revised up to 3.7 per cent (up from the 2.8 per cent previously).
- Agricultural production is expected to improve based on the third advance estimates of the rabi season crops, as well as higher horticulture and allied sector output (livestock, forestry and fishing), which now is significantly larger than conventional food crops.
- Industrial activity was lowered to 1.5 per cent (from 2.3 per cent earlier).
- The key concern regarding the continuing slowdown is the increasing weakness in the industrial sector (particularly of manufacturing, whose growth has progressively fallen from 13.1 per cent in FY16 to 5.7 per cent in FY19, and plummeting to 0.9 per cent in FY20).
- Services output remained largely unchanged at 6.5 per cent.
- Demand-side: From a demand perspective, the obverse side to the manufacturing slowdown is the even sharper drop in fixed asset investment growth — down sharply from an average 8.5 per cent during FY17 and FY19 to -0.6 per cent in FY20.
- The causes for this contraction needs to be understood in detail, and we will return to this.
Private consumption- a significant driver of growth
- Private consumption at 60% of GDP: The other significant driver of growth in India has been private consumption. For perspective, the share of private consumption had averaged 59-60 per cent during FY16-FY20.
- Government consumption 10% of GDP: Reflecting the higher spending over the last couple of years, the share of government consumption in GDP has risen from an average of 10.5 per cent of GDP over FY12-17 to almost 12 per cent in FY20, resulting in the share of total consumption above 70 per cent.
Drop in the share of nominal investment
- Drop from 39 % to 30 % of GDP: The really remarkable trend, though, as noted above, is the share of nominal investment in GDP progressively dropping from 39 per cent in FY12 to 30 per cent in FY20.
- Is it a good sign? Part of this is actually good, reflecting higher Capex efficiency.
- Slowing household consumption: One narrative underlying the contraction in fresh Capex in FY20 was slowing household consumption growth, which, in nominal terms, fell from an average 11.6 per cent during FY16-19 to an estimated 9.1 per cent in FY20.
- Disproportionate contribution to lower growth: Though the deceleration prima facie does not seem significant enough to result in a broader economic slowdown of the current magnitude, the high share of household consumption has contributed disproportionately to lower growth.
- Fall in capacity utilisation: A direct fallout of this is that seasonally adjusted capacity utilisation (based on RBI surveys) had shrunk from 73.4 per cent in the first quarter of FY20 to 70.3 per cent in the second quarter, and this is unlikely to have improved materially in the second half of the year.
- This is one of the reasons for the low levels of fresh investment.
Reduced flow of credit to the commercial sector
- Impediment to growth revival: The other cause of the low Capex, more from the supply side, is a much-reduced flow of credit to the commercial sector, and this remains the proximate impediment for growth revival, with signs of risk aversion in lending still strong despite the recent measures by RBI to incentivise credit to productive sectors.
- Funds from selected sources, over April-January FY20, was only about Rs 9 lakh crore as against Rs 15 lakh crore in the corresponding 10 months of FY19.
- Bank credit lowest in three months: Growth in bank credit (which is still the largest source of financing) till mid-February 2020 was down to 6.3 per cent — the lowest in three years.
- Even this is almost wholly driven by retail credit; incremental credit to industry and services over this period was negative.
Investor confidence and coronavirus factor
- A bright feature of the economic environment: One bright feature in this economic environment is strong foreign investor confidence in India, reflected in both FPI equity and FDI flows.
- Many borrowers have used offshore sources to refinance or pay down domestic bank loans and debt.
- A global risk-off environment might restrict even this channel in the near future.
- Robust corporate bond issuances: Domestic corporate bond issuances have also remained robust, although the dominant set of borrowers still remain public sector agencies and financial institutions.
- Coronavirus factor likely to moderate the gains: Monthly economic indicators suggest that the growth deceleration has likely bottomed out in the third quarter.
- The bet has been on reducing inventories and the consequent production ramp-up to replenish stocks. However, the evidence on this is mixed.
- The coronavirus effects, both concurrent and lagged, will also moderate some of the emerging positive effects of counter-cyclical policy measures of the past six months.
- If the outbreak does not abate over the next month or so, the complex supply chains of intermediates sourced from China will run dry and add to the already weak system demand.
- Growth prospects in the next few weeks: Surveys indicate that both business and consumer confidence, which while improving, remain muted. A growth revival, hence, is likely to be only very modest over the next few quarters.
Conclusion
A $5 trillion economy by 2025 is still a worthwhile target and aspirational; coordinated strategies, policies, execution and institutional mechanisms will be needed to move up to a sustained 8 per cent plus growth consistent with achieving the target. The focus in the near future should to increase investments and facilitate credit for funding these productive assets so that India’s potential output growth can steadily rise.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 3- Nuclear energy-issues involved.
Context
For more than a decade, no major meeting between an Indian Prime Minister and a U.S. President has passed without a ritual reference to India’s promise made in 2008 to purchase American nuclear reactors.
Issues in the nuclear deal
- Construction of reactors: During president Trumps visit techno-commercial offer for the construction of six nuclear reactors in India at the earliest date was considered.
- More expensive: Indeed, it has been clear for years that electricity from American reactors would be more expensive than competing sources of energy.
- Prone to disasters: Moreover, nuclear reactors can undergo serious accidents, as shown by the 2011 Fukushima disaster.
- No liability for accidents: Westinghouse has insisted on a prior assurance that India would not hold it responsible for the consequences of a nuclear disaster.
- Which is effectively an admission that it is unable to guarantee the safety of its reactors.
Who will be benefited from the deal?
- The two beneficiaries: The main beneficiaries from India’s import of reactors would be Westinghouse and India’s atomic energy establishment that is struggling to retain its relevance given the rapid growth of renewables.
- Political implications: Mr Trump has reasons to press for the sale too. His re-election campaign for the U.S. presidential election in November.
- The election centrally involves the revival of U.S. manufacturing and he has been lobbied by several nuclear reactor vendors, including Westinghouse.
- Finally, he also has a conflict-of-interest.
Comparisons with the renewables
- The total cost of the reactors: The six reactors being offered to India by Westinghouse would cost almost ₹6 lakh crore.
- If India purchases these reactors, the economic burden will fall upon consumers and taxpayers.
- Per unit price: In 2013, it was estimated that even after reducing these prices by 30%, to account for lower construction costs in India, the first year tariff for electricity would be about ₹25 per unit.
- Comparison with solar energy: Recent solar energy bids in India are around ₹3 per unit.
- Lazard, the Wall Street firm, estimates that wind and solar energy costs have declined by around 70% to 90% in just the last 10 years and may decline further in the future.
Safety concern with nuclear energy
- Long term cost in case of disasters: Nuclear power can also impose long-term costs.
- Chernobyl accident: Large areas continue to be contaminated with radioactive materials from the 1986 Chernobyl accident and thousands of square kilometres remain closed off for human inhabitation.
- Fukushima accident: Nearly a decade after the 2011 disaster, the Fukushima prefecture retains radioactive hotspots.
- The cost of clean-up: the cost of clean-up has been variously estimated to range from $200-billion to over $600-billion.
- No liability towards company: The Fukushima accident was partly caused by weaknesses in the General Electric company’s Mark I nuclear reactor design.
- But that company paid nothing towards clean-up costs, or as compensation to the victims, due to an indemnity clause in Japanese law.
- What are the provisions in Indian laws: Westinghouse wants a similar arrangement with India. Although the Indian liability law is heavily skewed towards manufacturers, it still does not completely indemnify them.
- So nuclear vendors have tried to chip away at the law. Instead of resisting foreign suppliers, the Indian government has tacitly supported this process.
India’s experience with nuclear energy
- Starting with the Tarapur 1 and 2 reactors, in Maharashtra, India’s experiences with imported reactors have been poor.
- The Kudankulam 1 and 2 reactors, in Tamil Nadu, the only ones to have been imported and commissioned in the last decade, have been repeatedly shut down.
- Producing less than capacity: In 2018-19, these reactors produced just 32% and 38%, respectively, of the electricity they were designed to produce.
- These difficulties are illustrative of the dismal history of India’s nuclear establishment.
- Electricity generation stagnant at 3%: In spite of its tall claims, the fraction of electricity generated by nuclear power in India has remained stagnant at about 3% for decades.
Conclusion
The above factors indicate that the government should take the rational decision on the adoption of nuclear energy given its cost and the risk involved and the better alternative available in the form of solar and other renewable energies.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 3- What reforms are needed in space sector to leverage it for commercial purposes.
Context
As it looks at the growing role of the private sector and the effort by nations like the UAE and Luxembourg, Delhi needs to move quickly towards a new model for India’s space activity.
Growing presence in the outer space
- Outer space no longer a preserve of a few: When you think of outer space, you think of big powers like the United States, Russia and China.
- You might also note the collective European effort under the European Space Agency as well as the impressive national space programmes of India and Japan.
- Strategic or symbol of national pursuit: Space programmes have for long been viewed as either strategic or symbols of national prestige for big countries that are prepared to invest significant resources in the pursuit of a credible presence in outer space.
- Two small countries challenging the narrative: Two small countries, the United Arab Emirates in the Gulf and the Grand Duchy of Luxembourg in Europe have begun to demonstrate that the outer space need not be the playing ground for big powers alone.
- Sceptics might think it is pretentious for the UAE with its native population of barely one million and Luxembourg with 600,000 people to think of a place for themselves in space.
UAE’s presence in the space
- Reminder for India: The interesting path these two countries have set for themselves in outer space is a reminder that Delhi needs to adapt to the rapidly changing dynamic in outer space.
- Hope Mars Mission: That size is not a constraint is reflected in the UAE’s plan to launch its Mars mission, “Hope”, later this year in partnership with a range of organisations across the world — including three universities in the US.
- Japan is scheduled to launch the UAE Mars probe this year.
- India’s own ISRO is also working with the UAE on its Mars mission.
- Last year, the first Emirati Astronaut, Hazza al-Mansouri spent more than a week in the US-Russian space station.
- What are the reasons for the UAE’s space strategy? It is about cornering a slice of the rapidly growing commercial space industry — part of a major effort to diversify the UAE economy away from its reliance on hydrocarbons.
How Luxembourg is increasing its presence in the outer space
- Commercial space as a major opportunity: Over the years, Luxembourg moved away from its past reliance on the steel industry to become a centre of European banking and finance.
- It is now looking at commercial space as a major opportunity.
- Regulatory steps: Luxembourg has taken a number of regulatory steps to create a vibrant ecosystem for space companies ranging from satellite operations to future extraction of resources from asteroids and other space objects.
- Expansion of the space sector: At the moment, the space sector accounts for nearly 2 per cent of Luxembourg’s GDP.
- There are more than 50 companies and two public research organisations that are driving the expansion of space sector in Luxembourg.
- It entered the space sector only in the middle of the last decade. It is also driven by the need for economic diversification.
- Leveraging new ideas: UAE and Luxembourg do have a reputation for leveraging new ideas to transcend the limitations of their size in the world.
- But their space adventure was not possible without the structural changes that are reshaping the global space activity.
How space industry underwent a change over the years
- Preserve of national programs: Through the second half of the 20th century, outer space was the sole preserve of national space programmes driven by government-funding, direction and management.
- The emergence of the private sector: As military uses of space and prestige projects like Moon-landing emerged, major private sector entities already in the aviation industry like Boeing and Lockheed won space contracts in the US.
- Collaboration with government: The Pentagon and the National Aeronautics and Space Administration (NASA) told these companies what to do.
- Expansion: The last decades of the 20th century saw significant expansion of satellite-based telecommunication, navigation, broadcasting and mapping, and lent a significant commercial dimension to the space sector.
- As the digital revolution in the 21st century transformed the world economy, the commercial space sector has begun to grow in leaps and bounds.
- The global space business is now estimated to be around $ 400 billion and is expected to easily rise to at least trillion dollars by 2040.
- Rise of SpaceX: One example of the rise of private sector companies in the space sector is SpaceX run by the US entrepreneur Elon Musk.
- Hired for a resupply mission for the space station, it now launches more rockets every year than NASA.
- The entry of the private sector has begun to drive down the cost-per-launch through innovations such as reusable rockets.
Scope of the expansion of the space industry
- Decrease in launch cost and rise in ambition: As launch costs came down, the private sector has become more ambitious.
- Internet through space: SpaceX plans to launch hundreds of satellites into the low-earth orbit to provide internet services. Amazon has plans to build a network of more than 3,000 satellites in the low-earth orbit.
- Space tourism: Musk and Amazon’s Jeff Bezos have plans to develop space tourism and build human settlements on the Moon and on Mars.
- Small private companies in the fray: It is not just big companies that are aiming for the Moon. Last year, a private company in Israel sent a lunar lander to the Moon. Although the lander crashed, much like India’s Vikram, the private sector has begun to do things that were once the monopoly of national agencies.
India not in synch with the global changes
- Not adapting to the change: India, however, is quite some distance away from adapting to the unfolding changes in the global space business.
- In its early years, India’s space programme that was constrained by lack of resources found innovative ways of getting ahead in space.
- Space sector dominated by the government: Although the ISRO encourages private sector participation in the national space programme, its model is still very 20th century — in terms of governmental domination.
Conclusion
As it looks at the growing role of the private sector and the effort by nations like the UAE and Luxembourg, India needs to move quickly towards a new model for India’s space activity. It needs a regulatory environment that encourages a more dynamic role for the private sector and promotes innovation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Provision of constitution of tribunal, tenure and the SC directives.
Context
The reframed Tribunal rules are in contempt of several Constitution Bench decisions of the Supreme Court.
What the SC said in Rojer Mathew case
- Rules being unconstitutional: In November 2019, a Constitution Bench of the Supreme Court, in Rojer Mathew, declared the Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and other Conditions of Service of Members) Rules, 2017 as unconstitutional.
- Why it was declared unconstitutional? It was declared unconstitutional for being violative of principles of independence of the judiciary and contrary to earlier decisions of the Supreme Court in the Madras Bar Association
- Direction to the Central government: In Rojer Mathew, there was also a direction to the Central government to reformulate the rules strictly in accordance with principles delineated by the Court in its earlier decisions.
- The reframed rules, notified by the Ministry of Finance, however, suffer from the same vices.
What were the issues in the Finance Act, 2017
- What was prescribed in the Finance Act, 2017: The Finance Act, 2017, around 26 Central statutes were amended.
- Excessive rule-making powers to the Centre government: The power to prescribe eligibility criteria, selection process, removal, salaries, tenure and other service conditions pertaining to various members of 19 tribunals were sub-delegated to the rule-making powers of the Central government.
- Attempt to keep the judiciary away: Describing the search-cum-selection-committee as an attempt to keep the judiciary away from the process of selection and appointment of members, vice-chairman and chairman of tribunals.
- Executive litigant in most cases: The Court held that the executive is a litigating party in most of the litigation and hence cannot be allowed to be a dominant participant in tribunal appointments.
- Selection committee issue: Barring the National Company Law Appellate Tribunal (NCLAT), the selection committee for all other tribunals was made up either entirely from personnel within or nominated by the Central government or comprised a majority of personnel from the Central government.
- While the selection committee for NCLAT consisted of two judges and two secretaries to the Government of India, all other committees comprised only one judge and three secretaries to the Government of India. Now, in the 2020 rules, by default, all committees consist of a judge, the president/chairman/chairperson of the tribunal concerned and two secretaries to the Government of India
- 3 years tenure injurious to the efficiency: Reiterating its previous decision in Madras Bar Association (2010), the Court held that the tenure of three years for members will “preclude cultivation of adjudicatory experience and is thus injurious to the efficiency of the Tribunals”.
An equal say for the judiciary
- 2 Judges in 4 member committee: The common thread in the Madras Bar Association series and Rojer Mathew decisions is that judiciary must have an equal say in the appointment of members of the tribunals.
- To deny the executive an upper hand in appointing members to tribunals, the court ordered to have two judges of the Supreme Court to be a part of the four-member selection committee.
- In Madras Bar Association(2010), held that the selection committee should comprise the Chief Justice of India or his nominee (chairperson, with a casting vote), a senior judge of the Supreme Court or Chief Justice of the High Court, and secretaries in the Ministry of Finance and Ministry of Law and Justice respectively.
- Decision applicable to all tribunals: Subsequent Constitution Bench decisions in Madras Bar Association (2014), Rojer Mathew and the decision of the Madras High Court in Shamnad Basheer have repeatedly held that the principles of the Madras Bar Association (2010) are applicable to the selection process and constitution of all tribunals in India.
- What are the provisions dealing with appointment in 2020 rules? Under the 2020 rules, the inclusion of the president/ chairman/chairperson of the tribunal as a member in the selection committee is in the teeth of previous decisions of the Supreme Court.
- Non-judicial member can become a chairman: For instance, now, in the Income Tax Appellate Tribunal (ITAT), Customs Excise and Service Tax Appellate Tribunal (CESTAT), Central Administrative Tribunal (CAT), Debt Recovery Appellate Tribunal (DRAT), etc. a non-judicial member can become the president/chairman/chairperson, as the case may be.
- Therefore, when a non-judicial member becomes a member in the selection committee, the Supreme Court judge will be in minority, giving primacy to the executive, which is impermissible.
- Only judges and advocates can be judicial members: In Madras Bar Association (2010), the Court explicitly held that only judges and advocates can be considered for appointment as a judicial member of the tribunal and that persons from the Indian Legal Service cannot be considered for appointment as judicial member.
- Recently, in Revenue Bar Association (2019), the Madras High Court declared Section 110(1)(b)(iii) of the CGST Act, 2017 as unconstitutional for allowing members of Indian Legal Service to be judicial members in GSTAT.
Violation of the SC directives
- What the SC said on tenure: Based on Madras Bar Association (2010), in Rojer Mathew, the Court held that the term of three years is too short, and by the time members achieve a refined knowledge, expertise and efficiency, one term will be over.
- What are the provisions in 2020 rules? In the 2020 rules, the tenure of members has been increased from three years to four years, thereby blatantly violating the directions of the Supreme Court.
- Since the Madras Bar Association (2010), the government has repeatedly violated the directions of the Supreme Court.
- One by one, the traditional courts, including the High Courts, have been divested of their jurisdictions and several tribunals have been set up.
Conclusion
The 2020 rules are, thus, in contempt of several Constitution Bench decisions of the Supreme Court. Unless the Court comes down heavily on the Central government, we will see these encroachments over and over again.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2-Key areas India needs to focus on to achieve good health and well being.
Context
The article focuses on the top three Sustainable Development Goals (SDGs) of the United Nations, namely poverty elimination, zero hunger, and good health and well-being by 2030.
India’s record on extreme poverty, hunger and health
- Decline in extreme poverty: The World Bank’s estimates of extreme poverty- measured as $1.9/per capita/per day at purchasing power parity of 2011- show a secular decline in India from 45.9 per cent to 13.4 per cent between 1993 and 2015.
- Elimination of extreme poverty 2030: If the overall growth process continues as has been the case since, say, 2000 onwards, India may succeed in eliminating extreme poverty by 2030, if not earlier.
- Zero hunger by 2030: Given the overflowing stock of food grains with the government, and a National Food Security Act (NFSA) that subsidises grains to the tune of more than 90 per cent of its cost to 67 per cent of the population, there is no reason to believe that India can also not attain the goal of zero hunger before 2030.
- Health- a real challenge: The real challenge for India, is to achieve the third goal of good health and well-being by 2030. India’s performance in this regard, so far, has not been satisfactory. as per the National Family Health Survey (NFHS 2015-16)-
- In 2015-16, almost 38.4 per cent of India’s children under the age of five years were stunted.
- 8 per cent were underweight.
- 21 per cent suffered from wasting (low weight for height).
- The situation in some states like Bihar, Jharkhand and Uttar Pradesh is even worse.
- Global Hunger Index ranking of India: No wonder, the Global Hunger Index (GHI) ranks India at 102 out of 117 countries in terms of the severity of hunger in 2019.
What are the various targets set on the nutrition problem?
- Target on reducing the problems of underweight children: The National Nutrition Strategy, 2017, aims to reduce the prevalence of underweight children (0-3 years) by three percentage points every year by 2022 from NFHS 2015-16 estimates.
- Why this is an ambitious target? This is an ambitious target given the decadal decline in underweight children from 42.5 per cent in 2005-06 to 35.8 per cent in 2015-16 amounts to less than 1 per cent decline per year.
- Targets set in National Nutrition Mission: Similar targets have been set by the National Nutrition Mission (renamed as POSHAN Abhiyaan), 2017.
- To reduce stunting by 2 per cent.
- Under-nutrition by 2 per cent.
- Anaemia (among young children, women and adolescent girls) by 3 per cent.
- Low birth weight by 2 per cent.
Four areas India needs to focus to achieve the set targets
- India has to focus on four key areas: If India has to make a significant dent on malnutrition by 2030.
- First- Mother’s education.
- Multiplier effect: It is one of the most important factors that have a positive multiplier effect on child care and access to healthcare facilities.
- Increases awareness: It also increases awareness about the nutrient-rich diet, personal hygiene, etc. This can also help contain the family size in poor, malnourished families.
- Thus, a high priority to female literacy, in a mission mode through liberal scholarships for the girl child, would go a long way towards tackling this problem.
- Second- Access to improved sanitation and safe drinking water.
- The Swachh Bharat Abhiyan and Jal Jeevan Mission would have positive outcomes in the coming years.
- Third-shift in dietary pattern
- Shift from cereals to more nutritious food: There is a need to shift dietary patterns from cereal dominance to the consumption of nutritious foods such as livestock products, fruits and vegetables, pulses, etc.
- But they are generally costly and their consumption increases only by higher incomes and better education.
- Diverting the food subsidy to nutritious foods: Diverting a part of the food subsidy on wheat and rice to more nutritious foods can help.
- Fourth- Adoption of new agricultural technology
- Adopt bio-fortifying cereals: India must adopt new agricultural technologies of bio-fortifying cereals, such as zinc-rich rice, wheat, iron-rich pearl millet, and so on.
- The Indian Council of Agricultural Research (ICAR) has to work closely with the Harvest Plus programme of the Consultative Group of International Agricultural Research (CGIAR) to make it a win-win situation for curtailing malnutrition in Indian children at a much faster pace — and, at a much lower cost than would be achieved under a business as usual scenario.
Examples from the world
- Right public policies make the difference: Global experience shows that with the right public policies focusing on agriculture, improved sanitation, and women’s education, one can have much better health and well-being for its citizens, especially children.
- China’s example: In China, it was agriculture and economic growth that significantly reduced the rates of stunting and wasting among the population and lifted millions of people out of hunger, poverty and malnutrition.
- Brazil and Ethiopia example: According to FAO, Brazil and Ethiopia have transformed their food systems: They have targeted their investments in agricultural R&D and social protection programmes to reduce hunger in the country.
Conclusion
Despite India’s improvement in child nutrition rates since 2005-06, it is way behind the progress experienced by China and many other countries. According to the Global Nutrition Report, 2016, at the present rates of decline, India will achieve the current stunting rates of China by 2055. India can certainly do better, but only if it focuses on this issue.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Issues in the SAARC, India need to move sub-regional grouping to increase the intra-regional trade.
Context
Former Sri Lankan Prime Minister Ranil Wickremesinghe’s push for regional economic integration and for India-Pakistan dialogue should be studied carefully by New Delhi.
What are the issues with SAARC?
- Recent moves by India: India has more or less shut down all conversations on the South Asian Association for Regional Cooperation (SAARC).
- India also walked away from the ASEAN-led Regional Comprehensive Economic Partnership (RCEP).
- Mr Wickremesinghe set out a number of suggestions:
- The original purpose of SAARC-Regional growth: India-Pakistan tensions have brought economic integration within the SAARC region to a “standstill”.
- That the original purpose of the South Asian group was to build a platform where bilateral issues could be set aside in the interest of regional growth.
- Start at the sub-grouping levels: To engender more intra-regional trade, an even smaller sub-grouping of four countries with complementary economies: India, Sri Lanka, Bangladesh and Thailand, can start the process of reducing tariffs and demolishing non-tariff barrier regimes.
- When it comes to the intra-regional share of total trade, SAARC and BIMSTEC languish behind groupings such as ASEAN, EU and MERCOSUR.
- Economic Integration Road Map: The Sri Lankan leader also suggested that with India’s leadership, a more integrated South Asian region would be better equipped to negotiate for better terms with RCEP so as not to be cut out of the “productivity network” in Asia, and envisioned an Economic Integration Road Map to speed up the process.
Governments stand
- Talks with Pakistan off the table: The government has made it clear that talks with Pakistan are strictly off the table, and that a SAARC summit, which has not been held since 2014, is unlikely to be convened anytime soon.
- More reliance on bilateral deals: The government, which has taken a protectionist turn on multilateral trade pacts, is relying more on direct bilateral deals with countries rather than overarching ones that might expose Indian markets to flooding by Chinese goods.
- India’s trade deficit with the neighbours: For any regional sub-grouping in South Asia to flourish, it is India that will have to make the most concessions given the vast trade deficits India’s neighbours have at present, which it may not wish to do.
Conclusion
- The overall projection that India’s global reach will be severely constrained unless it is integrated with its neighbours, and tensions with Pakistan are resolved, cannot be refuted. India needs to be more accommodative for the realisation of its ambitions.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- What India can learn from China's dealing with the coronavirus outbreak?
Context
China’s handling of coronavirus, in contrast to SARS, has been effective, should be a template for others.
Why lockdown of Wuhan is a big deal?
- A move without precedent: China’s lockdown of roughly 60 million people in Wuhan and other cities in Hubei province for more than a month now is without precedent in the history of public health.
- Best way to stop the virus from spreading: The best way to stop a virus from spreading from person to person, is to give it no place to spread to.
- This is achieved by isolating those who are infected and quarantining those who might be infected.
- Cordon sanitaire: In China, though, the control has moved beyond traditional quarantine to a cordon sanitaire-an exclusion zone people cannot travel into or get out of.
- In most countries, this simply would not work for a period this long and a population that large.
- Inconceivable move in other places: Wuhan is a city of 11 million people, slightly larger than Chennai or Bengaluru. It would be inconceivable to think of cutting off transportation in and out of these cities or asking people to stay at home for even a day, let alone a month.
- No political control nor administrative mechanism: Like India, most countries in the world have neither the political control to impose their will on people this way nor the administrative mechanism to enforce this degree of control.
Human cost and ethic of the lockdown
- The human cost: The human cost of such a strategy is immense.
- Feeling of being unable to escape: The fear induced by being unable to escape from a place where a new virus is circulating is immense.
- The worries and stresses of everyday life multiply one hundred-fold when everything from shopping for food to occupying children stuck at home becomes a challenge.
- The slightest cough, cold or fever can trigger panic.
- Ethics involved in the move: The ethics of the cordon sanitaire in Wuhan, as well as the quarantining by Japanese authorities of the cruise ship Diamond Princess, will be debated for years after this particular outbreak is over.
- Slowing the spread: But whatever its human and financial cost, China’s actions in the first month of the outbreak helped to slow the spread of the virus within the country as well as internationally.
How China’s response this time is different from the SARS
- On December 31, the Chinese government informed the WHO, and the world, of the existence of a form of pneumonia of unknown cause
- It also told the people of Wuhan to wear masks if they had symptoms and seek medical attention.
- Virus identification: For the world, the big breakthrough from China came on January 7, when researchers in Wuhan identified the virus as a new coronavirus.
- Sharing of the genetic sequence of the virus: Two days later, China shared its genetic sequence with the world.
- How genetic sequence helped? The sharing of the genetic sequence allowed labs all over the world to develop testing kits to detect the disease.
- It also put countries on the alert for travellers with the disease, without which the new coronavirus would have spread much quicker and farther than it has so far.
- China’s response to SARS: The Chinese response to SARS in 2003, in contrast to this, was a cover-up.
- The disease circulated for nearly three months, enabled by government secrecy and censorship.
- Spread of disease without warning: When travellers from China brought the disease first to Hong Kong and from there to other cities across the globe, there was no warning.
- It was only after the disease spread in Hong Kong, that scientists and public health experts began to decipher this new virus.
- Lessons learned: China, fortunately, learned the lessons for SARS and put together systems to identify and respond to this new disease quickly.
What India can learn from China
- Infrastructure with speed: Public health officials all over the world, including in India, should study the speed with which China put together an infrastructure to deal with this new disease.
- Modern, well-equipped hospitals dedicated to coronavirus patients were constructed in weeks.
- Centralised information and logistic system: Centralised information and logistics systems and systems to ensure coordination between multiple levels of government -from the central government to provincial and municipal governments, were put into place.
- All the systems seem to have worked reasonably smoothly, given the chaotic and complex atmosphere of a disease outbreak.
- Unique approach: The way China has tackled this disease has been an “all of government, all of the society approach”, in the words of Bruce Aylward, the leader of the WHO team that recently spent two weeks in the country.
- It was, as he described it, “a very old-fashioned approach”, but one that had “prevented at least tens of thousands, but probably hundreds of thousands of cases.”
Conclusion
- In all probability, it is only a matter of time before India sees new cases. The Indian health system, as in China, is multi-layered. Some states like Kerala have strong public health infrastructure and a strong response capability. Many other states like Uttar Pradesh and Bihar do not have strong public health systems. They will find it difficult to respond and will learn that diseases, like the revolution, can be brutal.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: DDT-What is dividend distribution tax?
Mains level: Paper 3- What are the steps taken in the budget in order to simplify the taxation in India.
Context
Loss expected from lower tax rates may be countered by gains from the settlement of cases, higher dividend taxes on top incomes, and the wider scope for taxing international incomes.
Simplification and providing ease to the taxpayers
- Fiscal constraints leaving no room for a lower rate: Ahead of The Union budget, taxpayers had anticipated a wide range of measures that they hoped would stoke demand.
- These ranged from lower tax rates to a more even tax structure on income from various sources.
- As the former was less feasible given the fiscal constraints, the budget proposals focused on simplification and providing ease to the taxpayer.
- Simplification in personal tax: The recalibration of personal income tax slabs was suggested as a step towards simplification.
- However, its uptake is contingent on the preference for new slabs.
- Who will not opt for a new slab? Switching over to the new slab rates is not beneficial to-
- An individual currently claiming full exemptions.
- An individual with incomes comprising largely of capital gains.
- It is possible, however, that individuals do not claim such exemptions or deductions.
- How switching to new slab impact revenue? An analysis of data published by the Central Board of Direct Taxes suggests that for the assessment year 2018-19, it suggest improvement in the collection.
- 1% improvement: If individuals do switch over to the new regime, it may translate to a 1 per cent improvement in tax collections, rather than a loss.
- Limited takers of the new slab: It can be inferred that this option may be exercised by few individuals, if at all, since the potential gains from foregoing exemptions and the intended simplification is expected to be limited.
Tax disputes
- The new scheme proposed: A common concern among taxpayers is protracted disputes. To reduce litigation, a new scheme has been proposed.
- Importance of precedence in disputes: 39 per cent of the cases made a reference to a similar case in the previous year. This underscores the importance of precedence.
- In such cases, the settlement is not a superior option as the waiver of the penalty and interest does not offer any advantage against a decision that would impact future assessment.
- Success rates of disputes: The success rate of the tax department is 27 per cent at the Income Tax Appellate Tribunal (ITAT) and the Supreme Court and 12 per cent in appeals filed in high courts.
- Given the odds of success, an assessee may thus be tempted to pursue litigation.
- Incentivising the settlement: Taxpayers may choose to settle for the waiver of interest and penalty in cases where it is one time and does not set a precedent for future transactions.
Dividend Distribution Tax (DDT)
- What is DDT? It is one of the significant change is in the taxation of dividends.
- The dividend distribution tax is a unique levy on distributed profits and is payable by the distributing company.
- What is the shortcoming in DDT? The shortcoming of such tax is that foreign investors can’t claim the credit.
- Additional 10 % of DDT: In an effort to make the tax progressive, an additional dividend tax of 10 per cent was introduced for domestic investors receiving dividend in excess of Rs 10 lakh.
- Dividend pay-out decreased after DDT: Changes in DDT were accompanied by a decline in dividend pay-out – the proportion of profits paid as dividends declined from 30 per cent in early 2000s to 22 per cent in 2019 (BSE 500 companies).
- Chance of improvement in pay-outs: It is expected that the reversion to the classical system may improve dividends pay-outs.
- However, this will benefit individual taxpayers with incomes below Rs 5 lakh as the slab rate applicable is less than the existing rate.
Taxing cross-border income
- In the international arena, India is determined to tax cross-border incomes.
- Taxing digital companies: The addition of explanation 3A to the Income Tax Act reinforces India’s commitment to taxing digital companies.
- What comprises the business with nexus to India: The proposed amendment clarifies that incomes related to the advertisement, sale of data of a person residing in India and sale of goods and services based on the data of a person residing in India, may be attributed to a business with nexus in India.
- Taxing citizen not taxable anywhere: To tax Indian citizens that are not taxable in any other jurisdiction, the Act will now deem such individuals as resident taxable in India.
- While the application of the law may be challenged giving rise to disputes, it is a step forward.
The proposal of Citizen’s charter
- Charter on rights and obligations: The finance minister also referred to introducing a citizen’s charter that incorporates taxpayer’s rights and obligations.
- Limits of charters: International experience shows that charters have limited enforceability unless adopted in primary legislation.
- Supporting charters with legislation: Introducing charter to the statutes may, therefore, prove to be a positive initiative.
- Faith can be built through enforcement of the charter.
- However, the penal provisions must be well-thought-out so as to avoid adding another contentious element.
Conclusion
- Lack of uniformity: The budget proposals aimed to provide simplicity, yet much remains to be done, given the lack of uniformity in the taxation of incomes such as capital gains.
- Limited revenue implications: The success of schemes proposed is contingent on the traction they gain. As for the revenue implications, the impact of these measures may, in fact, be limited.
- Countering loss through gains from settlements: Loss expected from lower tax rates may be countered by gains from the settlement of cases, higher dividend taxes on top incomes, and the wider scope for taxing international incomes.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Aadhaar- how it has fared so far?
Context
Aadhaar-based biometric authentication did not reduce PDS leakages, finds Jharkhand-based empirical study
What was the rationale behind Aadhaar?
- What did the UIDAI’s report say? Aadhaar has curtailed leakages of government subsidies. Through Aadhaar, savings worth ₹90,000 crores have accrued to the government– UIDAI’s2017-18 annual report.
- Plugging the leakages in the schemes: When Aadhaar was conceived a decade ago, the rationale postulated was: India spends nearly three trillion rupees a year across several core welfare programmes such as Public Distribution System (PDS), LPG, Mahatma Gandhi National Rural Employment Guarantee Act etc.
- Huge leakage due to duplications: Roughly 30-40% of this three trillion is lost in leakages.
- Leakages are largely due to ‘ghost’ and ‘duplicate’ beneficiaries using fake identities to avail these benefits; a unique identity biometric scheme can eliminate these leakages and vastly improve efficiency in welfare delivery.
- Improve welfare delivery efficiency: In fact, the former Union Minister, Arun Jaitley, even renamed the Aadhaar Bill to ‘Targeted Delivery of Financial and other Subsidies, Benefits and Services’ Bill, making it amply clear that Aadhaar’s primary, if not sole purpose, was to improve welfare delivery efficiency.
What are the findings of study?
- How was the study carried out?
- Use of RCT and sample of 15 million people: They conducted a scientifically designed study of the PDS system in Jharkhand covering 15 million beneficiaries using the technique of randomised control trials (RCT).
- In the study, one set of beneficiaries went through the Aadhaar-based biometric authentication while the other group used the old system of procuring their ration.
- The results were then compared to see if Aadhaar-based biometric authentication had any impact in reducing leakages.
- What were the findings of the study?
- No measurable benefit: The study concluded that Aadhaar-based biometric authentication had no measurable benefit.
- No reduction in leakages: Aadhaar-based biometric authentication did not reduce leakages due to elimination of ghosts and duplicates, as widely perceived.
- Increase in transaction costs for beneficiary: On the other hand, they found that Aadhaar-based biometric authentication increased transaction costs for beneficiaries.
- 17% extra cost: That is, to claim ration worth ₹40, beneficiaries in the Aadhaar system incurred an additional ₹7 of costs than those in the old system, because of multiple trips to authenticate themselves and the opportunity cost of time spent.
- This is a whopping 17% extra cost burden of the value of the benefit they were entitled to receive.
- Type 1 error of exclusion: To make matters worse, Aadhaar-based biometric authentication also introduced what empirical scientists call Type I error of exclusion.
- Aadhaar authentication falsely rejected genuine PDS beneficiaries who were then denied their ration supplies.
- The study finds that nearly 10% of legitimate beneficiaries were denied their ration either because they did not have their Aadhaar linked to their ration card or due to an exclusion error.
- Summary of the finding: In summary, the study states that there was-
- No direct impact of Aadhaar in reducing leakages.
- 2. It denied ration to 10% of genuine beneficiaries and increased costs by 17% to those that were forced to get their ration using Aadhaar.
- Pain with no gain: They conclude that Aadhaar authentication for PDS in Jharkhand caused “some pain with no gain”.
What premises were wrong about Addhaar?
- No testing of empirical belief: There was a widespread belief among the policy elite that ghosts and duplicates were the scourge of India’s welfare delivery and that Aadhaar would eliminate this.
- But this belief was never empirically tested.
- Based on this belief, an entire story was concocted about improving welfare efficiency by eliminating ghosts and duplicates with Aadhaar and a whole new law was enacted to this effect.
- The pilot project not carried out: Many studies now establish that ghosts and duplicates are not the significant cause of leakages.
- It would have been better to have undertaken a robust pilot project of scale to test the belief about ghosts and duplicates, before embarking on it nationwide.
Conclusion
In a sociologist’s world and in a liberal society, a policy that could run the risk of denying welfare to just a few people, putting their lives at risk, is not worth implementing regardless of how many millions it benefits.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Jal Jeevan Mission, ensuring quality drinking water.
Context
The competitive politics of Delhi election has brought the issue of drinking water to centre stage.
Controversy over BIS water status report
- Politicising of the report: The controversy started with the release of the BIS report for 21 major Indian cities, in keeping with the objectives of the ‘Jal Jeevan Mission’.
- The mission aims to provide safe piped water to all households by 2024.
- The fact that drinking water in Delhi was ranked the most unsafe, as the samples failed in 19 out of 28 parameters, was challenged by the Government of Delhi and the Delhi Jal Board (DJB).
- Compilation of information on the existing status: The study is scheduled to cover all districts in the country within a year. Supply of potable water obviously requires first compilation of information on the existing status
- Water as an urgent concern: The fact that water should be treated as an urgent concern for public health and the ecosystem of the country cannot be denied.
- Imperceptible threat: The threats to human health due to poor water quality, except when they appear as an epidemic, are largely imperceptible.
- This generally subjects the population to subtle health problems without its knowledge or consent.
Pollution and water crisis in India
- Pollution contributing to water crisis: India is on the throes of a severe water crisis, not only because of a gradual reduction in per capita availability of water due to a rising population but also because of rising and unchecked pollution in the country’s rivers and water bodies.
- It is a fact which is mostly overlooked in the deliberations on water resources management.
- Only 30% sewage treatment capacity in major cities: As per published estimates of the Central Pollution Control Board, the country has a treatment capacity of only about 30% of sewage generated in the major cities.
- Not to talk of other urban and rural areas where the sewage finds its way to local water bodies or rivers without treatment.
Impending water stress in the country
- NITI Aayog report: A 2018 Report of the NITI Aayog has observed that currently, 600 million Indians face high to extreme water stress.
- The report also states that about two lakh people die every year due to inadequate access to safe water.
- Demand twice the supply by 2030: The crisis is only going to get worse.
- By 2030, the country’s water demand is projected to be twice the available supply, implying severe water scarcity for hundreds of millions of people.
- High methane in Yamuna water in Delhi: For the water coming from the Yamuna released from Haryana, the DJB has to often stop the supply for a few days if the concentration of methane goes up beyond a certain level.
- This is because the tri-chloromethane that may be produced during the disinfection process is highly carcinogenic.
- The effect may surface on human health not immediately but over a period of time.
The capital’s high pollutant load and need for improvement in governance
- Contributing 50% pollutant: Delhi, which constitutes less than 1% of the total catchment of the Yamuna, contributes more than 50% of total pollutant load in the river.
- Delhi has 7,000 km of sewer line as on date, against a requirement of 24,000 km.
- The 17 sewage treatment plants being operated by the DJB are able to take care of not more than 30% of sewage treatment.
- There is no sewerage system at all for over 45% of the population in unauthorised and even regularised colonies and rural areas.
- As of now, there are 18 major drains carrying sewage, garbage and industrial effluents into the Yamuna.
- Solid waste dumping in Yamuna: It is not only the untreated sewage water and industrial effluents, but also the solid wastes and construction material discharged by individuals, companies and municipal bodies that have caused the suffocation of the Yamuna.
- Also, floodplains have been encroached upon by settlements.
- Challenge of supplying quality water: Ensuring the supply of quality drinking water is not only expensive, but it also needs improvement in governance.
- It needs technical knowledge on measurement and regulation of water quality.
- It is not the fault of the DJB or the Delhi government alone that they have not been able to ensure a 100% supply of quality water to the citizens of Delhi.
- Given the constraints they face, especially those concerning the water resources management and laws in the country.
Conclusion
The Jal Jeevan Mission, even if it has not been so far structured, conceptualised and funded adequately, has begun the important work of gathering information on the scale and scope of the problem and making it available in an open and transparent manner. The best outcome is that the competitive politics of the Delhi election has ensured a political debate on water quality.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Supreme Court delivering its judgement without giving the reasons and its implications.
Context
In a highly unusual move, a nine-judge Bench of the Supreme Court resorted to a non-speaking order as it ruled affirmatively on the preliminary issue arising out of the Sabarimala review petition.
Departure from norms
- The importance of a ‘reasoned decision’ in a constitutional democracy committed to the rule of law, is self-evident.
- Its importance cannot be overstated and this curious departure from the norm merits close analysis.
- Time and again, the Supreme Court has unequivocally endorsed and underlined the requirement of giving reasons in support of the order.
- The SC has often chastised subordinate institutions for their failure to supplement their orders with reasons.
Importance of ‘reasoned decision’
- The juristic basis for the ‘reasoned decision’: The juristic basis for this has also been explored in a number of cases.
- In various decisions, the court has ruled that speaking orders promote-
- Judicial accountability and transparency.
- Inspire public confidence in the administration of justice; and
- Introduce clarity and minimise the chances of arbitrariness.
- Quotes from various judgements: In addition to being a “healthy discipline for all those who exercise power over others”, recording of reasons has been described by the Supreme Court as the “heartbeat of every conclusion”; the “life blood of judicial decision making”; and a cherished principle of “natural justice”.
- The Madhya Pradesh Industries Ltd case: In this case Justice Subba Rao K. stated:
- “The condition to give reasons introduces clarity and excludes or at any rate minimises arbitrariness;”
- “… it gives satisfaction to the party against whom the order is made; and it also enables an appellate or supervisory court to keep the tribunals within bound… Speaking order will at its best be reasonable and at its worst be at least a plausible one.”
Devaluation by the SC and implications
- Implicit rules: The need for a court to provide an intellectual substrate for its decisions is also implicit in the expression “pronounce judgment” in Supreme Court Rules, 2013.
- According to settled decisions, the same signifies “judicial determination by reasoned order”.
- However, when it came to applying the principle to its own verdict, the apex court has inadvertently devalued the importance of concurrent reporting of reasons.
- The court seems to have downplayed the fact that it may be coming across as inarticulate at best and indecisive at worst.
- Undermining integrity: Besides undermining institutional integrity, a decision’s authority as a binding precedent is also potentially compromised by this omission.
Culture of justification
- The term “transformative constitutionalism” has recently found currency in constitutional adjudication (Navtej Joharand Joseph Shine).
- The Supreme Court is yet to articulate a comprehensive theory of the concept but it has been fleshed out in other jurisdictions.
- From authority to justification: For example, Pius Langa, former Chief Justice of the Constitutional Court of South Africa, argued that “transformative constitutionalism” entails a transformation of legal culture from one “based on authority” to the one “based on justification”.
- Karl Klare (the scholar who coined the term) posited that it may be legitimately expected of constitutional adjudication to “innovate and model intellectual and institutional practices appropriate to a culture of justification”.
Conclusion
In light of the above, it can be concluded that the practice of issuing non-speaking orders and giving post-hoc rationalisations later is an anathema to the principle of constitutional governance. Duty to give reasons is an incident of the judicial process and constitutional justice should not be a matter of afterthought.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- How NOTA has fared so far, what are the shortcomings and scope.
Context
The recently-concluded Delhi Assembly elections were the 45th Assembly polls since the inception of the none of the above (NOTA) option in 2013. And Delhi, although mostly urban, is widely regarded as the microcosm of India.
NOTA in Delhi
- Delhi’s preference to NOTA is less than the national average.
- From 0.63% in 2013, Delhi polled 0.39% of those favouring NOTA in 2015, a statistically significant reduction indeed.
- It now increased to 46% in 2020; again statistically significant.
- While 96% of the constituencies had a reduced percentage of NOTA votes in 2015 than 2013, the NOTA percentage has increased in 71% constituencies this year.
- In the Lok Sabha elections, Delhi polled 0.47% and 0.52% of those favouring NOTA, in 2014 and 2019, respectively.
- Takeaway: Roughly one in 200 voters of Delhi opted for NOTA in the last six to seven years, with relatively larger support for NOTA in reserved constituencies.
Gujarat and Maharashtra examples
- Interestingly, in the 2017 Gujarat Assembly elections, despite being 1.8%, NOTA got more votes than any political party other than the Indian National Congress and the Bharatiya Janata Party (except the Independents).
- Again, in the 2019 Maharashtra Assembly election, NOTA became a runner-up in two constituencies – Latur (Rural) and Palus-Kadegaon.
- Do these cases mark any significant shift in the voter mindset?
Essence and scope of NOTA
- Not a right to reject: In 2013, India became the 14th country to institute negative voting through NOTA.
- However, it is not a “right to reject”.
- Toothless option: NOTA in India is a toothless option.
- Former Chief Election Commissioner of India S.Y. Quraishi, had observed in an article: “Even if there are 99 NOTA votes out of a total of 100, and candidate X gets just one vote, X is the winner, having obtained the only valid vote. The rest will be treated as invalid or ‘no votes’.”
- Not right to select: NOTA enfeebles the electorate as it does not empower to “select” either.
- Democratic means to express resentment: Certainly NOTA provides democratic means to express resentment anonymously rather than boycotting the polls outright.
- A group of women activists in Kerala out on the road urging people not to elect any candidate if no woman was present in the fray.
- A youth group in Tamil Nadu that campaigned for NOTA as a protest vote against corruption.
- Pleas to extend the scope of NOTA: There have been pleas to extend the scope of NOTA.
- Recommendation of re-elections: In 2018, a former CEC, T.S. Krishnamurthy, has recommended holding elections again in those constituencies where the victory margin is less than the total numbers of NOTA.
- Right to reject in place of NOTA: A PIL has been filed in Madras High Court seeking the full right to reject in place of NOTA.
Cases of extending the scope of NOTA
- Maharashtra SEC order: In June 2018, the Maharashtra State Election Commission (SEC) issued an order that said:
- “If it is noticed while counting that NOTA has received the highest number of valid votes, the said election for that particular seat shall be countermanded and a fresh election shall be held for such a post.”
- NOTA as a fictional candidate in Haryana: In November 2018, the SEC of Haryana went a step further and issued an order where NOTA is treated like a “fictional candidate” in municipal polls from December 2018.
- If NOTA gets the maximum vote, none of the “real” candidates will be declared elected, and the elections will be cancelled and held afresh.
- What is more, the candidates securing votes less than NOTA would be barred from contesting in that re-election.
- Example from Indonesia: Interestingly, in Makassar, Indonesia, the only candidate in the 2018 election for mayor received 35,000 less votes than NOTA, which forced a repeat election in 2020.
The optimism expressed by the Supreme Court on NOTA
- The SC’s anticipation: While introducing NOTA, the Supreme Court anticipated that “there will be a systemic change and the political parties will be forced to accept the will of the people and field candidates who are known for their integrity.”
- Thus, its percentage should either increase to enforce the political parties to field candidates with “integrity”.
- Or NOTA percentage should consistently decrease if the electorates feel that the system has achieved the desired level of cleansing.
- No increase or decrease in NOTA votes: In contrast, the share of NOTA votes in India remained around a meagre level of 1% on an average; 1.11% in the 2014 Lok Sabha, and 1.08% in 2019, if we consider constituency-wise averages.
- What this represents? This perhaps represents a confused state of mind of the electorate. Has the perceived cynicism of Indian voters regarding the right to reject been exaggerated?
Would NOTB- None of The Below more advantageous?
- Last option disadvantage? Is NOTA, as the last button of all EVMs in the country, a psychological issue as far as the electorates are concerned?
- First position on ballot advantage: A 2004 article in The Journal of Politics, have discussed the possible advantage of the first position in the ballot, at least in the U.S. context.
- NOTB instead of NOTA: Although there is no such concrete study to gauge the Indian voter’s mindset, one wonders whether using NOTB (‘none of the below’) instead of NOTA- with such an option as the first on the electronic voting machine — might produce a significantly different outcome or not.
- An experiment, after changing the rule suitably, can be attempted, at least.
Conclusion
Extending the scope of NOTA by empowering it with the right to reject along with other changes like placing NOTA at the top of EVM would help in making the election process clean and fair.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Conflating duties and rights and its consequences.
Context
At an International Judicial Conference 2020 this weekend, the Chief Justice of India, S.A. Bobde, drew attention to the Constitution’s Fundamental Duties chapter.
The logic of duties
- Wide range of duties: The first thing to note is that as citizens, there exists a wide range of duties that bind us in everyday life.
- Duties towards the state and individual: These duties are owed both to the state and to other individuals.
- Legal duties: We have a legal duty to pay our taxes, to refrain from committing violence against our fellow-citizens, and to follow other laws that Parliament has enacted.
- Breach of these legal duties triggers financial consequences (fines), or even time in jail.
- Following the duties is price for living in the society: At any given time, therefore, we are already following a host of duties, which guide and constrain how we may behave.
- This is the price that must be paid for living in society, and it is a price that nobody, at least, in principle, objects to paying.
- Self-contained whole: Our duties and the consequences we bear for failing to keep them, therefore, exist as a self-contained whole.
- Co-existence and sacrifice: The peaceful co-existence requires a degree of self-sacrifice, and that if necessary, this must be enforced through the set of sanctions.
The logic of rights
- Understanding the logic through history: Rights, on the other hand, follow a different logic entirely. This is a logic that is best understood through history.
- Two concerns: At the time of the framing of the Indian Constitution and its chapter on Fundamental Rights, there were two important concerns animating the Constituent Assembly.
- Treatment as subjects: The first was that under the colonial regime, Indians had been treated as subjects.
- Their interests did not count, their voices were unheard, and in some cases — for example, the “Criminal Tribes”- they were treated as less than human.
- Holocaust example: Apart from the long and brutal history of colonialism, the framers also had before them the recent example of the Holocaust, where the dignity of more than six million people had been stripped before their eventual genocide.
- The first role of fundamental rights chapter: To stand as a bulwark against dehumanisation.
- Dignity and equality guaranteed: Every human being no matter who they were or what they did had a claim to basic dignity and equality that no state could take away, no matter what the provocation.
- Unconditional right: One did not have to successfully perform any duty, or meet a threshold of worthiness, to qualify as a rights bearer. It was simply what it meant to be human.
- Second role of the fundamental rights: To stand against the hierarchy.
- Removing the subordination and degradation: The axes of gender, caste and religion had all served to keep masses of individuals in permanent conditions of subordination and degradation.
- Equalising and democratising: Through guarantees against-
- Forced labour.
- Against “untouchability”.
- Against discriminatory access to public spaces, and others.
- Fundamental rights were meant to play an equalising and democratising role throughout society, and to protect individuals against the depredations visited on them by their fellow human beings.
- Significance of the above two roles
- Transformative purpose: The twin principles of anti-dehumanisation and anti-hierarchy reveal the transformative purpose of the fundamental rights chapter.
- The recognition that true democracy could not exist without ensuring that at a basic level, the dignity and equality of individuals were protected, both from the state as well as from social majorities.
- Rise from subject to citizen: It was only with these guarantees could an individual rise from the status of subject to that of the citizen.
- And, as should be clear by now, it was only after that transformation had been wrought, that the question of duties could even arise.
- Importance of the language of the duty:
- The language of duties can play an important role in a society that continues to be divided and unequal.
- In such a society, those who possess or benefit from entrenched structural and institutional power (starting with the state, and going downwards) certainly have a “duty” not to use that power to the detriment of those upon whom they wield it.
- That is precisely what the guarantees against “untouchability”, forced labour, and discriminatory access in the Constitution seek to accomplish.
Issue of conflating duties and rights
- The problem lies in the conflation of rights and duties.
- In that context, it is always critical to remember Dr B.R. Ambedkar’s words in the Constituent Assembly (which were also cited by the CJI in his speech): that the fundamental unit of the Constitution remains the individual.
- If the position of the individual and the Constitution’s commitment to combating hierarchy is kept in mind, then the language of duties can be understood in its proper context.
- Chances of duties leading to unpleasant consequences: Without the moral compass of rights and their place in the transformative Constitutional scheme the language of duties can lead to unpleasant consequences.
- It can end up entrenching existing power structures by placing the burden of “duties” upon those that are already vulnerable and marginalised.
- The constitution is about rights: It is for this reason that, at the end of the day, the Constitution, a charter of liberation, is fundamentally about rights.
Conclusion
It is only after guarantee to all the full sum of humanity, dignity, equality, and freedom promised by the Constitution, that we can ask of them to do their duty. Perhaps, then, it is time to update Hind Swaraj for the constitutional age: “real duties are the result of the fulfilment of rights”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2-Balancing India's interests in the light of US's strategy to contain China in the Pacific.
Context
Since 2017, the United States government has released a few reports and fact sheets on its new Indo-Pacific strategy. Buried in these documents is a much deeper agenda of the U.S. government: to use three large Asian states — Australia, India, and Japan — to isolate China. There is nothing else to it.
The scale of BRI and the US objections
- Objections to BRI: The U.S. government has made it clear that what it finds most objectionable is China’s Belt and Road Initiative (BRI), which has signed on more than 70 countries in the world.
- What BRI aims to achieve? Adopted in 2013, the BRI is intended as a mechanism to-
- Development of new markets: BRI aims to end China’s reliance upon the markets of the West and to develop new markets in other continents.
- Building infra: It is also intended to use China’s massive surpluses to build infrastructure in key parts of Africa, Asia, and Latin America.
- Investment of $ 1.3 trillion: By 2027, according to estimates by Morgan Stanley, China will spend about $1.3 trillion on this ambitious construction project.
- Involvement of Saudi Arabia: Even Saudi Arabia, a close ally of the U.S., has made the BRI one of the cornerstones of its Saudi Vision 2030 plan.
- Involvement of Pakistan: While China has invested $68 billion to build the China-Pakistan Economic Corridor from Xinjiang to Pakistan’s Gwadar Port.
- Saudi Arabia has agreed to invest $10 billion in the port itself.
Significance of the BRI and comparison with the US spending
- Staggering scale and participation: The scale of Chinese investment, and the participation of a range of countries with different political identities in the BRI, is staggering.
- Loss of appetite in the US to spend: At the Indo-Pacific Business Forum in July 2018 the U.S. said that it has spent $2.9 billion through the Department of State and the USAID (United States Agency for International Development).
- It has lined up hundreds of millions of dollars more through its U.S. Millennium Challenge Corporation (MCC) and the Overseas Private Investment Corporation.
- Inadequate US spending: If one adds up all the money that the U.S. intends to spend for economic projects, it is still a fraction of the amount spent by China.
- ‘America First’ attitude: There is no appetite in Washington, D.C., with its ‘America First’ attitude, to funnel more money towards investments in the region currently being built by the BRI.
Military Claims of the US and investment
- US investment with military presence: It appears as if U.S. investments will come only with military claims.
- The case of Nepal: A few years ago, Nepal discovered a large amount of uranium in Mustang, near the Nepal-China border; this has certainly motivated U.S. interest in Nepal’s economy.
- If the U.S. money comes with U.S. military presence, this will create a serious flashpoint in the Himalayas.
Raising human right and transparency issue against China
- The argument of human rights and transparency
- Rhetorical argument: Unable to outspend the Chinese, the U.S. government is making a rhetorical argument that it has more respect for “transparency, human rights, and democratic values” than China, which “practices repression at home and abroad”.
- The argument of transparency and the debt trap
- Debt trap used by the US: It is hard to imagine the U.S. being “transparent” with its trade deals. It is equally hard to imagine the U.S. being able to argue that it would not put countries into debt.
- Debt crisis created by the US in the 1980s: The U.S. government enabled a massive Third World debt crisis in the 1980s, which was then used by the U.S.-driven International Monetary Fund’s Structural Adjustment Programs to strangle countries in Africa, Asia, and Latin America.
- This history is alive, and it makes a mockery of the U.S.’s attempt to say that its own approach is superior to that of China’s.
US withdrawal from multilateralism
- Apart from that, the U.S. government has already indicated that it is uninterested in multilateral deals.
- Withdrawal from TPP: The US withdrew from the Trans-Pacific Partnership in 2017, for instance.
- Australia and Japan shrugged, and then put their energy into the Regional Comprehensive Economic Partnership, which sidelines the U.S.
The claim of free and open Indo-Pacific
- Renaming the Pacific Command: In May 2018, the U.S. military’s Pacific Command was renamed the Indo-Pacific Command, a symbolic gesture that provides a military aspect to the Indo-Pacific Strategy.
- What free and open mean to the US? The U.S. government has made it clear that for all its talk of a “free and open Indo-Pacific”, what it actually wants is an Indo-Pacific with fewer Chinese ships and more U.S. warships.
- Just before this renaming, the U.S. National Security Strategy of 2017 noted that “China seeks to displace the United States in the Indo-Pacific region”, and so the Indo-Pacific Strategy intends for the S. to fight for its dominance in the Pacific Ocean, the Indian Ocean, and in the Asian rim.
- This is a very dangerous war that the U.S. seeks to impose on Asia.
India adopting the US project of Indo-Pacific
- Australia and Japan moving away: As the military aspect of the Strategy increased, both Australia and Japan edged away from full-scale adoption of the U.S. project.
- Japan has begun to use the term “Indo-Pacific” without the word “Strategy”.
- Australia has signed onto a “comprehensive strategic partnership” with China.
- Only India adopting the project: Only India remains loyal to the agenda set by U.S. President Donald Trump.
- No US strategy to contain China: In all the documents released by the U.S. government and in all the speeches by officials, there is no discussion of the strategy to contain China.
- There is only rhetoric that skates into the belligerent territory.
Conclusion
India would be advised to study the U.S. project rather than jump into it eagerly. Room for an independent foreign policy for India is already narrowed, and room for independent trade policy is equally suffocated. To remain the subordinate ally of the U.S. suggests that India will miss an opportunity to be part of a reshaped Asia.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Data localisation and issues involved.
Context
The contentious clauses on local data storage in the revised Personal Data Protection Bill need re-examination.
What Personal Data Protection Bill contains?
- Greater control to an individual: The draft law is a comprehensive piece of legislation that seeks to give individuals greater control over how their personal data is collected, stored and used.
- The promise of improvement over the current privacy law: Once passed, the law promises a huge improvement on current Indian privacy law, which is both inadequate and improperly enforced.
- Criticism of the bill: The proposed bill has attracted criticism on various grounds such as-
- The exceptions created for the state.
- The limited checks imposed on state surveillance, and-
- Regarding various deficiencies in the structures and processes of the proposed Data Protection Authority.
The issue over the “data localisation”
- Data within the country: The phrase, which can refer to any restrictions on cross-border transfer of data, has largely come to refer to the need to physically locate data within the country.
- Provisions for the transfer of personal data outside India: The PDP Bill enables the transfer of personal data outside India, with the sub-category of sensitive personal data have to be mirrored in the country (e. a copy will have to be kept in the country).
- Ban on transfer of critical data outside the country: Data processing/collecting entities will, however, be barred from transferring critical personal data (a category that the government can notify at a subsequent stage) outside the country.
- Different from Justice Srikrishna committee report: These above provisions have been changed from the earlier version of the draft Bill, released by the Justice Srikrishna Committee in 2018.
- The 2018 draft imposed more stringent measures that required both personal and sensitive personal data to be mirrored in the country (subject to different conditions).
- Welcome move: The move to liberalise the provisions in the 2019 version of the Bill is undoubtedly welcome, particularly for businesses and users.
How removing the restriction matters?
- Reduction in cost to business: Liberalised requirements will limit costs to business and ensure users have greater flexibility in choosing where to store their data.
- More proportionate approach: The changes in the 2019 draft reflect a more proportionate approach to the issue as they implement a tiered system for cross-border data transfer, ostensibly based on the sensitivity/vulnerability of the data.
- Move-in accordance with the right to privacy: This seems in accord with the Supreme Court’s dicta in the 2017 Puttaswamy case.
- Conditions for interference in privacy: The Court had made it clear that interference in the fundamental right to privacy would only be permissible if inter alia deemed necessary and proportionate.
Test of proportionality in the bill
- On closer examination, it appears that even the revised law may not actually stand the test of proportionality.
- The three-argument for imposing norms: There are broadly three sets of arguments advanced in favour of imposing stringent data localisation norms:
- Sovereignty and government functions. Referring to the need to recognise Indian data as a resource to be used to further national interest (economically and strategically), and-
- To enable enforcement of Indian law and state functions.
- Accruing benefits to the local industry: The second claim is that economic benefits will accrue to local industry in terms of creating local infrastructure, employment and contributions to the AI ecosystem.
- Protection of civil liberties: Regarding the protection of civil liberties, the argument is that local hosting of data will enhance its privacy and security by ensuring Indian law applies to the data and users can access local remedies.
- Contradiction in the claim of protection? If data protection was required for the above purposes, it would make sense to ensure that local copies were retained of all the categories of personal data provided for in the Bill (as was the case with the previous draft of the law).
- Sectoral obligations: In the alternative, sectoral obligations would also suffice as is currently the case with sectors such as digital payments data, certain types of telecom data, government data, etc.
- Will data localisation lead to privacy protection? We note that the security of data is determined more by the technical measures, skills, cybersecurity protocols, etc. put in place rather than its mere location.
- Localisation may make it easier for domestic surveillance over citizens.
- Enabler of better exercise of privacy by citizens: It may also enable the better exercise of privacy rights by Indian citizens against any form of unauthorised access to data, including by foreign intelligence.
- Effectiveness matters: The degree of protection afforded to data will depend on the effectiveness of the applicable data protection regime.
- Protecting privacy through less intrusive measures: Insofar as privacy is concerned, this could be equally protected through less intrusive, suitable and equally effective measures such as requirements for contractual conditions and using adequacy tests for the jurisdiction of the transfer.
- Such conditions are already provided for in the PDP Bill as a set of secondary conditions.
- The European Union’s General Data Protection Regulation too uses a similar framework.
- Extra-territorial operation: The extraterritorial application of the PDP Bill also ensures that the data protection obligations under the law continue to exist even if the data is transferred outside the country.
- Giving an individual a choice: If privacy protection is the real consideration, individuals ought to be able to choose to store their data in any location which afford them the strongest privacy protections.
- It is arguable that data of Indians will continue to be more secure if stored and processed in the European Union or California.
- These two jurisdictions have strong data protection laws and advanced technical ecosystems.
Way forward
- Identification of the issues: The joint parliamentary committee ought to, ideally, identify the need, purpose and practicality of putting in place even the (relatively liberal) measures contained in the PDP Bill.
- Broader thinking at policy level: Further, in order for localisation-related norms to bear fruit, either in terms of protecting citizen rights, enabling law enforcement access to data or enabling the development of the local economy, there has to be broader thinking at the policy level.
- This may include for instance-
- Reforming surveillance-related laws.
- Entering into more detailed and up-to-date mutual legal assistance treaties.
- Enabling the development of sufficient digital infrastructure, and
- Creating appropriate data-sharing policies that preserve privacy and other third party rights, while enabling data to be used for socially useful purposes.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 3- Ending the opacity in the financial system and making the multinationals pay their fair share of tax.
Context
It is now beyond obvious that India cannot revive its economy without increasing public spending, and so increasing its fiscal resources is essential. Among other measures, this requires urgent adoption of legislation and institutional reforms to end financial opacity.
The opacity in the data
- Unlikely Budget estimates: The Union Budget was presented, based on numbers for revised estimates for the current year and Budget estimates for the coming year that the Finance Ministry itself knows are
- Where else the opacity in data extends: The opacity of data also extends to cross-border movement of funds generated through a range of activities, including tax evasion, misappropriation of state assets, laundering of the proceeds of crime, and bribery.
- Even here, India still has a lot to do, as confirmed by the recent publication of the Financial Secrecy Index by the Tax Justice Network, a U.K.-based financial advocacy group.
- Financial Secrecy Index rank: On the surface, India has managed to reduce its contribution to global financial secrecy, with its rank falling from 32 on the 2018 index to 47 in 2020.
- But this is partly because the new edition of the index covers more countries than it did two years ago.
Transparency Reforms by the government
- Arrangement with Switzerland: It is true that the government has adopted and supported a few transparency reforms, such as the automatic exchange of tax and financial information with other jurisdictions, like Switzerland.
- What the arrangement with Switzerland mean? If an Indian citizen has an account with a Swiss bank and has a balance over a certain threshold, this information will be sent to the Indian tax authorities automatically.
- Beneficial ownership register: The government did create a beneficial ownership register- which would allow the identification of the beneficial owner of an asset regardless of whose name the title of the property is in.
- Exemption making the law weak: The law is weak since it exempts a lot of people at the discretion of the authorities.
- Also, this register is not accessible to the public.
Making multinationals and the super-rich pay their fair share of taxes
- Need to do more: Stopping the financial haemorrhage and making multinationals and the super-rich pay their fair share of taxes requires much more.
- Capital flight and consequence for the country’s development: Capital flight out of India by Indian elites and foreigners alike has been undermining our country’s development for decades.
- Outdated international system: An important part of these flows is the result of artificial profit shifting by multinational companies taking advantage of an outdated international tax system.
- How the multinationals shifts profits? These multinationals may be making profits in India but can easily declare those profits in a low tax jurisdiction like Hong Kong and justify that transaction as a payment for the use of a patent.
- The magnitude of loss-$27.5 billion: According to one estimate, this strategy represented a loss of $27.5 billion in 2014 for the Indian government, up from $142 million in 2000.
Onshore financial services and issues with it
- Paradoxical decision: Three years ago, the government took the paradoxical decision to set up onshore international financial services in the country.
- This is how the International Financial Services Centre in the Gujarat International Finance Tec-City (GIFT-City), Gandhinagar, emerged.
- It was modelled after offshore financial centres such as Hong Kong, Singapore, the City of London and Dubai.
- Increasing the possibility of regulatory arbitrage: While this has not created much employment, it has led to growing possibilities for regulatory arbitrage by financial firms, with potentially very problematic consequences.
The issue with the policy of tax incentives
- Little evidence of attracting investment: The government keeps granting tax incentives on a discretionary basis, even though there is little evidence that these incentives attract investment.
- What factors matters for investment: Recent research by International Monetary Fund, factors such as-
- Quality of infrastructure.
- A healthy and skilled workforce.
- Market access and-
- Political stability matters much more.
- Consequences of the policy-reduction in tax revenue: The massive reduction in corporate tax rates has thus far not led to any increase in private investment.
- But it has meant a significant reduction in tax revenues, with devastating consequences.
- Implications for health, educations etc.: Reduction in tax revenue translates into a lack of resources for education, healthcare, food and nutrition and infrastructure.
- Low tax-GDP ratio: India is already an outlier among similarly placed developing countries with its low tax-GDP ratio of 18%.
- Making the budget dependent on indirect taxes: The government budget is also highly dependent on indirect taxes like the Goods and Services Tax which are regressive and hit ordinary citizens harder.
Way forward
- Legislation to end financial opacity: Adoption of legislation and institutional reforms to end financial opacity- including, for example-
- Opening the beneficial ownership register to the public and-
- Stopping the creation of onshore tax havens is the need of the hour.
- Opening the debate on how to make the multinationals pay their fair share: The Government of India must also assume a more vocal role in the international debate about how to make multinationals pay their fair share of taxes.
- This means continuing to appeal for a United Nations tax body, which is much more legitimate than the Organisation for Economic Co-operation and Development (OECD).
- The issue with the OECD’s proposal: The OECD’s proposals, published at the end of 2019, are neither ambitious nor fair enough.
- Explore the possibility of going alone: If the organisation continues to remain deaf to the demands of developing countries, India must be prepared to go it alone, thinking unilaterally about how to make multinationals pay what they owe.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2-Policy framework needed to reap the benefits of demographic dividends.
Context
The demographic dividend is close to five-decade-long demographic opportunities that can be leveraged only with suitable policies and programmes
The youngest population in the world
- Median age at 28 years: By 2022, the median age in India will be 28 years.
- In comparison, it will be 37 in China and the United States.
- 45 in western Europe, and 49 in Japan.
- The demographic dividend
- The working-age population more than non-working: India’s working-age population has numerically outstripped its non-working age population.
- An extraordinary opportunity: A demographic dividend, said to have commenced around 2004-05, is available for close to five decades.
The two caveats
- The demographic dividend is an extraordinary opportunity. There are, however, two caveats.
- First: Dividend available in different states at different times.
- India’s population heterogeneity ensures that the window of demographic dividend becomes available at different times in different States.
- Example of Kerala vs. Bihar: While Kerala’s population is already ageing, in Bihar the working-age cohort is predicted to continue increasing till 2051.
- Decline in 11 major states by 2031: By 2031, the overall size of our vast working-age population would have declined in 11 of the 22 major States.
- Second: Many factors that matter for harnessing the dividend
- Factors that matter: Harnessing the demographic dividend will depend upon the-
- Employability of the working-age population.
- Health.
- Education.
- Vocational training and skill.
- Besides appropriate land and labour policies, as well as good governance.
- Demography is not destiny: India will gain from its demographic opportunity only if policies and programmes are aligned to this demographic shift. Demography is not destiny.
Need for skills
- Need for the additional jobs: The Economic Survey 2019 calls for additional jobs to keep pace with the projected annual increases in the working-age population.
- Lack of education and skills: UNICEF 2019 reports that at least 47% of Indian youth are not on track to have the education and skills necessary for employment in 2030.
- Possibility of demographic disaster: The projected demographic dividend would turn into a demographic disaster if an unskilled, under-utilised, and frustrated young population undermines social harmony and economic growth.
- Poor learning outcomes: While over 95% of India’s children attend primary school, the National Family Health Surveys (completed up to 2015-16) confirm that poor infrastructure in government schools, malnutrition, and scarcity of trained teachers have ensured poor learning outcomes.
What needs to be done?
- Adopt a uniform school system: A coordinated incentive structure prompting States to adopt a broadly uniform public school system focusing on equity and quality will yield a knowledge society faster than privatising school education can accomplish.
- Ensure training in line with the market demand: Most districts now have excellent broadband connectivity-
- Let geography not trump demography: Irrespective of a rural or urban setting, the public school system must ensure that every child completes high school education, and is pushed into appropriate skilling, training and vocational education in line with market demand.
- Invest and modernise: Modernise school curricula, systematically invest in teacher training so that they grow in their jobs to assume leadership roles while moving beyond the tyranny of the syllabus.
- Use of technology: Deploy new technology to accelerate the pace of building human capital by putting in place virtual classrooms together with massive open online courses (MOOCS) to help prepare this huge workforce for next-generation jobs.
- Investing in open digital universities would further help yield a higher educated workforce.
Focus on women
- Translating literacy into skill: Growing female literacy is not translating into relevant and marketable skills.
- A comprehensive approach is needed to improve their prospects vis-à-vis gainful employment.
- Need of the flexible policies: Flexible entry and exit policies for women into virtual classrooms, and into modules for open digital training, and vocational education would help them access contemporary vocations.
- The need for equal pay: Equal pay for women will make it worth their while to stay longer in the workforce.
- The deferred bonus: Economist Yogendra Alagh has written that the significance of this “deferred bonus” (women entering the workforce), could be higher than the immediate benefits of the dividend from shifts in population age structure.
Health care
- In India, population health is caught between the rising demand for health services and competition for scarce resources.
- Impact of economy on rural health: The National Sample Survey Office data on health (75th round, 2018), shows that a deep-rooted downturn in the rural economy is making quality health-care unaffordable.
- People are availing of private hospitals less than they used to, and are moving towards public health systems.
- Diverting public investment from However, central budget 2020-21 lays emphasis on private provisioning of health care which will necessarily divert public investment away from public health infrastructure.
- The Ayushman Bharat Yojana: It links demand to tertiary in-patient care.
- This promotes earnings of under-utilised private hospitals, instead of modernising and up-grading public health systems in each district.
- We need to assign 70% of health sector budgets to integrate and strengthen primary and integrated public health-care services and systems up to district hospital levels.
- Include out-patient department and diagnostic services in every health insurance model adopted, and-
- Implement in ‘mission mode’ the Report of the High-Level Group, 2019, submitted to the XV Finance Commission.
- The elderly population in India is projected to double from 8.6% in 2011 to 16% in 2040.
- This will sharply reduce the per capita availability of hospital beds in India across all major States unless investments in health systems address these infirmities.
Conclusion
The policies that we adopt and their effective implementation will ensure that our demographic dividend, a time-limited opportunity, becomes a boon for India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Success of Swachh Bharat Mission and replicating it in Jal Jeevan Mission.
Context
After the success of the SBM, government is looking for the next mission in the form of Jal Jeevan Mission.
Investment in Sanitation
- Investment of over 1 lakh crore: The central and state governments have invested in excess of one lakh crore on sanitation over the past five years.
- Where the fund was used? A majority of these funds have gone towards-
- Incentivising the poor and marginalised households to construct and use household toilets.
- Bringing about behaviour change, and-
- Building capacities of field functionaries.
- The success of the mission: Over 10 crore toilets have been built in rural India and nearly 55 crore people have stopped defecating in the open, all in just five years.
- This has contributed in bringing down global open defecation by more than half.
- Return on the investment in sanitation: The returns on these investments have been manifold, and their effects on the broader economy, markets and employment have been significant.
- 400 % return: The UNICEF recently estimated that investments in sanitation in India are yielding a 400 per cent return with each rural household in an open-defecation-free village saving Rs 50,000 on account of avoided medical costs and time savings.
- Future prospects for the sanitation infrastructure: The Toilet Board Coalition has estimated that the sanitation infrastructure and services market in India will be worth over $60 billion by 2021.
- Many new jobs, even in the most rural areas of the country, apart from reducing health and environmental costs and generating savings for households.
- Growth in the sanitation-related business: The business of manufacturing toilet-related hardware accessories have reported huge growth in sales during the SBM period.
- They project a continued uptrend through retrofitting and upgrades.
- This has been corroborated by another recent study by UNICEF in which they have estimated that SBM has resulted in creating over 75 lakh full-time equivalent jobs over the past five years, giving the rural economy a major boost.
A milestone, not a finish-line
- Sustaining the success: The government is committed to ensuring that this success is sustained.
- On October 2, 2019, the prime minister said that we must all ensure that people continue to use toilets and that no one is left behind.
- Allocation of 10,000 crores in the Budget: This has been backed up by the finance minister in the budget for 2020-21.
- In the budget, she announced about Rs 10,000 crore for rural sanitation to focus on-
- ODF sustainability.
- Bio-degradable waste management.
- Greywater management.
- Sludge management and-
- Plastic waste management for all villages by 2024.
Next Mission- Piped Water Supply
- Jal Jeevan Mission: The next critical basic service, is piped water supply. On Independence day this year, the prime minister announced the Jal Jeevan Mission (JJM).
- With the goal of ensuring piped water supply for all households of India by 2024 and with a commitment of Rs 3.6 lakh crore of central and state funds for the scheme.
- The budgetary allocation of 12,000 crores: In the Union budget for 2020-2021, the government has already allocated Rs 11,500 crore for JJM, with an additional Rs 12,000 crore being made available through extra-budgetary resources.
- Earmarking 50% grants for drinking water and sanitation: In addition, a huge impetus to the rural water supply and sanitation sector is the earmarking of 50 per cent of the Rs 60,750 crore grant for rural local bodies provided under the Fifteenth Finance Commission for drinking water and sanitation.
- Making local bodies more responsible: This will ensure that the gram panchayats and local communities are responsible for the upkeep of their water and sanitation infrastructure, providing a boost to the sustainability of service delivery to people.
- Making sanitation and water supply everyone’s business: This approach will ensure that just like sanitation, provision of water supply and its upkeep will also become everyone’s business.
Conclusion
It is fairly clear now that investment in sanitation is actually a facilitator for broader economic, health and social gains. The government should ensure the sustainability of SBM and replicate its success in implementing the JJM.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2-India-US, Importance for India, issues involved.
Context
It is clearer than perhaps ever before in recent times, that New Delhi needs the continued support of the U.S. government on almost everything substantial that matters to India in its quest to be a power of substance in the international system.
Preparing for Trump 2.0
- The world may have to deal with Mr Trump for four more years after the end of his present term this year.
- Where India can benefit from constructive ties with the US?
- A fairer trade regime.
- Accessing cutting-edge technology.
- The fight against terrorism.
- Stabilising our region.
- New Delhi stands to benefit from constructive ties on all issues, given a more sensitive United States.
- India must, therefore, seek greater understanding and engagement should there be a Trump 2.0.
- Understanding the asymmetrical partnership: Asymmetrical partnerships, as we know from history, are rarely easy.
- Partnership with the superpowers: Partnerships with superpowers are even more difficult; in international politics, as in life, even the best of unequal relationships results in a loss of some dignity and autonomy.
Why the partnership with the US matters for India?
- The growing influence of China in Indo-Pacific: Without the United States, the region could become willy-nilly part of a new Chinese tributary system.
- Chance of more organic rule-based order: With a fully engaged United States, the region has at least the chance of creating a more organic rules-based order.
- Past consequences for India: the history of “estrangement” with the United States, during the Cold War, has had consequences for vital national interests that continue to cast their shadow on the present.
- Jammu and Kashmir (J&K).
- Nuclear non-proliferation.
- Festering of the Pakistan “problem”.
- The Chinese humiliation of 1962, are just a few examples.
- Change in the perception over the US: But much of course has changed today.
- Anti–Americanism is outdate: Anti-Americanism, once the conventional wisdom of the Indian elite, seems outdated.
- Close alignment with the US: New Delhi has, over the decades, gone on to align itself more closely with Washington.
- Opinion in favour of the stronger ties: More important, both within India and in the U.S., the consensus across the mainstream of political opinion favours stronger relations between the two countries.
Pro-US tilt of the Indian Foreign policy
- A survey suggests support for Trump: According to the latest Pew Surveys of Global Opinion, support for Mr Trump in India is high enough to suggest a great deal of public affection for the American President.
- That itself is a marker of the way India and Indians now see the world.
- Reason for the change in geo-strategic change: The reason for the change in New Delhi’s geostrategic outlook can be summarised quickly.
- If the 1971 Friendship Treaty with the Soviet Union was a response to the continuing U.S. tilt towards Pakistan and the beginnings of a Washington-Beijing entente.
- China factor: At present, it is the prospect of a potentially hegemonic China in the Indo-Pacific region is helping to cement the relationship.
- Beijing has managed to alienate nearly all its neighbours and allies, except North Korea and Pakistan.
- Gains made in bilateral ties in the last 3 years:
- COMCASA– A foundational military agreement that allows for the sharing of encrypted communications and equipment.
- Export control law relaxation: A change in U.S. export control laws that places India in a privileged category of NATO and non-NATO U.S. allies;
- 2+2 dialogue: New ‘2+2’ foreign and defence ministers dialogue.
- Oil export to India: An exponential increase in U.S. oil exports to India.
- Tri-lateral military exercise: The inauguration of the first India-U.S. tri-service military exercise and expansion of existing military exercises.
- The signing of Industrial Security Annex: The signing of an Industrial Security Annex that will allow for greater collaboration among the two countries’ private defence industries.
- Inclusion of India in a U.S. security Initiative: The inclusion of India and South Asia in a U.S. Maritime Security Initiative.
Preparing for the President from Democratic Party
- There is, of course, a chance that we may have a Democratic President next year.
- Bipartisan support in the US: In those circumstances, we can only hope that the bipartisan consensus on engaging India will prevail.
- To be sure, however, a new President will seek to put his/her own imprimatur on the relationship.
- Democrats and the Human Right issue: The Democrats will clearly be more proactive on human rights and on issues of inclusion and diversity, which would make a greater demand on India and test its capacity and creativity.
- Indian diaspora: India, of course, continue engaging with its strongest source of support in the United States: the Indian diaspora.
- Fortunately, there is a near consensus on the need to strengthen this constituency.
Conclusion
In any case, there is little doubt that whoever is the next occupant of the White House, a retreat from multilateralism (especially on trade-related issues) and concern about China will continue to be the two main pillars of contemporary American foreign policy. If for only those reasons, Mr Trump’s reason has undeniable significance.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 3- Sustainable economic growth and focus areas to achieve it.
Context
India has to forge a different development model -one that will shift India’s workforce from agriculture to globally leading, resource-efficient businesses.
How India can deliver sustainable prosperity?
- The two intertwined forces: Just as liberalisation and globalisation transformed the economy in the past, two different yet intertwined forces will likely transform the economy in the future.
- First–High competitiveness: India must have globally leading companies across a range of key sectors such as financial services and manufacturing.
- Global productivity frontier: These super competitive businesses should define the global productivity frontier so that they can surpass the production processes of the best companies in the world.
- Second-Long term sustainability: India must also adopt a resource-efficient, low-carbon development pathway to utilise scarce natural resources effectively. There is no other way.
- Apocalyptic air pollution.
- Dire water shortages.
- Rising temperatures and-
- Extreme climate events- have already brought us to the brink of an environmental crisis.
- The need for India’s leadership for achieving the target: Moreover, note that the world needs India’s leadership to achieve the 2 degree Celsius global warming target.
- In short, India’s growth has to be green.
- What is the problem in achieving these goals?
- No nation has ever attempted these twin transformations — high competitiveness and long-term sustainability — simultaneously.
- The traditional development model: The traditional development model has been a farm-to-factory development model with economies transitioning from traditional agriculture to resource-intensive, urban manufacturing.
- India has to forge a different development model — one that will shift India’s workforce from agriculture to globally leading, resource-efficient businesses.
- Also, these companies must use the most advanced green technologies and business models.
- India’s development model will, therefore, need to take the Indian economy from “the farm-to-green frontier”.
Three focus area for green transformation
- The productivity transformation driven by super competitive businesses is well underway.
- We now need to consider a comprehensive policy package that will enable us to simultaneously undertake a green transformation.
- Global best practices and India’s own experiences suggest three focus areas for such a transformation.
- India has the third-largest start-up ecosystem in the world and our larger companies are also pursuing innovation-driven growth.
- Specific and stable policy goals
- Specific and stable policy goals need to be established to set detailed green targets for various sectors.
- A macro-economic model that factors in-
- Current skills.
- Sectoral connections.
- Relative emission and-
- Financial constraints are necessary to inform such targets going forward.
- Such a model can then be used to evaluate various green growth scenarios.
- Decarbonisation approaches in the green frontier scenario will drive the growth of green industries, green jobs, green skills, green entrepreneurs and green finance.
- Pursuing the policy goals: Global and Indian experience highlights that green targets will have to be pursued in a stable manner across decades.
- Most large emitters and pollutants are associated with long-lived (20-30 plus years useful life) assets.
- The basic requirement for investment in green assets: Investments in green assets will only be possible if there is the sanctity of contracts, pricing stability, and consistent policies that are backed up by the full force of law.
- Implementation: Finally, these specific and stable policy goals need to be implemented urgently to avoid lock-in with high-carbon assets.
- Revamp the institutional framework: India may need to revamp its existing institutional framework for environmental governance in order to align it with the country’s green transformation.
- Four levels of institutional structure: As demonstrated by global best practices, a comprehensive institutional framework could include four levels — super sovereign, sovereign, state/province and city.
- Council for monitoring: An independent council or board may also be required to monitor, report, and verify green targets.
- Appropriate financing capacity: Indian policymakers and entrepreneurs will unleash market forces that will drive the growth of waste management, solar panels, electric vehicles, super-efficient appliances, recyclable food packaging, clean coal, etc.
- These green industries will require massive investments and appropriate financing capacity will have to be created to support their growth.
- Preliminary estimates suggest that India’s green transformation may require an average investment of $95 billion to $125 billion per year, aggregating over $1 trillion in the next decade.
- A “green super fund” could be established to jumpstart green investments by pooling together international and domestic capital.
- Dual roles of financial institution: Such a financial institution could play a dual role in mediating and mitigating risk for global capital, as well as identifying sectoral project pipelines.
- The success of financial institution: Indian financial institutions have been very successful in building up new industries such as microfinance, EdTech, and affordable healthcare, which have delivered both financial and social returns; however, financial support for green industries will have to be orders of magnitude larger.
- Moreover, the “green super fund” may have to be able to invest across the capital structure (debt plus equity) as well as across the company lifecycle (early stage, growth capital, infrastructure investments, and so on).
Conclusion
Our future depends on how we resolve our environmental challenges. Further, we are the world’s third-largest carbon emitter and will play a crucial role in getting the planet to a low-carbon trajectory. Simply put, we must urgently transform our economy to get to the green frontier.
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