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  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    Macrovariable projections in uncertain times

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Stagflation

    Mains level: Paper 3- Challenges in projection of economic macrovariables

    Context

    The Fed has raised its benchmark interest rate again by a whopping 0.75%. The Reserve Bank of India has also been forced to raise interest rates further but also take other steps.

    Two challenges for policymakers

    • Decisions in the Monetary Policy Committee (MPC) meeting are based on what the members of the MPC see as the likely course of the economy in the months ahead.
    • But, the trajectory of the world economy, and its likely impact on the Indian economy, is imponderable.
    • So, Indian policymakers would face two crucial problems.
    • 1] Uncertainty due to war and Covid-19: First, the main uncertainty is due to Russia’s war on Ukraine and the resultant economic sanctions on Russia, as well as the zero-COVID-19 policy in China that repeatedly implements lockdowns leading to global supply bottlenecks.
    • 2] Uncertainty in data: Policy has to base itself on data.
    • If it is deficient, it introduces additional uncertainty, making projections for the future difficult and causing policies to fail.
    • This will compound the problem that results from the global uncertainty.

    Role of uncertainties related to Covid and Ukraine war

    • Since early 2020, the SARS-COV-2 virus has caused global uncertainty.
    •  In a globalised interdependent world, production was hit resulting in price rise (inflation) and loss of real incomes.
    • This has resulted in decline in demand and, in a vicious cycle, a further slowing down of the economy.
    • As prices have risen globally and economies slowed down, many countries have faced stagflation.
    • Decline in uncertainty: The uncertainty due to the novel coronavirus has declined in spite of waves of attack persisting because the impact of new virus mutants of the virus is milder and there is also immunity due to vaccination.
    • However, China is an exception with its zero-COVID policy.
    •  It has been implementing strict lockdowns in the last six months, even when only a few cases of the disease have been detected.

    The uncertainties due to Ukraine conflict

    • The war in Ukraine and western sanctions on Russia have caused huge uncertainty since February 2022 (when Russia invaded Ukraine) and displaced the disease-related uncertainty, i.e., COVID-19.
    • The reason is that the war is a proxy war between two powerful capitalist blocs.
    • There is needless continuing suffering of the people of Ukraine, with a bombardment of cities, and this could escalate.
    • The war and the sanctions have already affected the world economy and the Europeans in particular.
    • The U.S. economy has entered technical recession with two quarters of GDP decline.
    • As supplies of critical items supplied by Russia and Ukraine have been hit, prices have soared.
    • Europe, the United States and India have experienced or are experiencing high inflation.
    • The biggest disruption is in energy supplies from Russia, impacting production.
    • The availability of food, fertilizers, metals, etc., have been hit as Ukraine and Russia are important sources.
    • To weaken Russia, sanctions may be imposed on countries that carry out trade with it.
    • Many Indian entities may face the heat since India has increased its imports from Russia, which undermines sanctions.
    • China may also face sanctions since it has increased trade with Russia and is backing it.

    Data related uncertainties

    • Indian policymakers also face data-related issues.
    • It is not only available with a big lag on most macroeconomic variables but for many variables, data are either not available or has huge errors.
    • Errors in data: Policymakers rely on high frequency data to proxy for actual data.
    • For example, very little data are available for quarterly GDP data which is used to calculate the growth rate of the economy.
    • First, except for agriculture, unorganised sector data is not available.
    • Second, for the organised sector, very limited data are available.
    • Third, projections from the previous year or proxies are used — both these introduce errors when there are repeated shocks to the economy, such as the pandemic and now the war.
    • Issues with price data: Price data too are problematic.
    • The services sector is under-represented.
    • Prices of many services have risen and expenditures on them have increased dramatically, thus changing their weight in the consumption basket.
    • Common CPI: Further, the consumer price index is common for the upper classes and the poor.
    •  Earlier, there was a different index for various categories of people, which reflected the differential impact of inflation on people.
    • This gave a truer picture of the economy and peoples’ distress.

    Conclusion

    Indian policymakers face the unenviable task of predicting the course of the economy for the next few months and even the year (or years) ahead because of the shocks and faulty and inadequate data. The problem is compounded by international factors.

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  • RBI Notifications

    Curbing inflation in tomatoes, onions and potatoes requires streamlining their value chains

    op-ed snap | Economics | Mains Paper 3: Agriculture and related issues,Indian Economy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: CPI basket in India

    Mains level: Paper 3- Inflation challenge

    Context

    The higher the weight of food in the overall CPI, the more difficult it is for the monetary policy squeeze alone to contain inflation.

    Inflation challenge in Indian economy

    • Under the FRBM Act, The RBI has the unenviable task of keeping inflation within the 4+/-2 per cent range.
    • But lately, despite its best efforts, inflation has remained defiant and above its tolerance band.
    • The RBI’s major policy tool, the repo rate has already been hiked by 90 basis points, raising it to 4.9 per cent in June.
    • It is likely to rise to at least 5.5 per cent, if not more, over the course of this financial year.
    • But this will not be enough to tame inflation due to the nature and structure of inflation in India.

    How India’s CPI basket is different

    • The CPI basket in India comprises of 299 commodities grouped into six major categories.
    •  The food and beverages group has a weight of 45.86 per cent (with food at 39.06 per cent, prepared meals at 5.55 per cent and non-alcoholic beverages at 1.26 per cent).
    • High weight of food in overall CPI: It is this overwhelmingly high weight of food in overall CPI, based on the consumer expenditure survey (CES) data of 2011-12, that distinguishes Indian inflation from many other developed countries where the food weight is much smaller.
    • It is much lower in Germany (8.5 per cent), the UK (9.3 per cent), the US (13.42 per cent), Canada (15.94 per cent), France (16.49 per cent), Australia (16.8 per cent), China (19.9 per cent), and Japan (26.3 per cent). Even developing nations like South Africa (17.24 per cent), Brazil (25.5 per cent), and Pakistan (34.83 per cent) have lesser weightage of food in overall CPI than India.
    •  The higher the weight of food in the overall CPI, the more difficult it is for the monetary policy squeeze alone to contain inflation.

    Tomato inflation

    • Interestingly, of the 299 commodities that comprise CPI, the highest contributor to overall inflation was tomatoes at 8.9 per cent.
    • Inflation in tomatoes was stupendously high at 158.8 per cent (year-on-year).
    • One of the prime reasons was the low base effect as inflation in June 2021 was minus 14.4 per cent.
    • Due to low price realisation last year, this year tomato farmers shifted acreage to other crops.
    • On top of that, some tomato growing areas got flooded, while many others faced heat waves that further depressed tomato supplies.
    •  It is for this reason a scheme called TOP (Tomatoes, Onions, and Potatoes) and allocated Rs 500 crore to streamline their value chains.
    •  But the scheme went to the Ministry of Food Processing, and was expanded to TOTAL by including several other vegetables.
    • Without having a champion, like Verghese Kurien was for milk, this scheme (from TOP to TOTAL) got diffused in focus and has not shown any visible impact in improving the value chains of vegetables.
    • Way forward: The real solution to tomato inflation may lie beyond the ambit of the RBI.
    • Processing: It requires linking tomato value chains to processing of at least 10 per cent of tomato production into tomato paste and puree during bumper years and using them when fresh tomato prices spike.
    • Reduce GST: Further, to enhance the affordability of processed tomatoes, its GST rates need to be reduced from 12 per cent to 5 per cent.
    • This would also help farmers to stabilise their incomes and avoid the typical cobweb problem they face in case of perishables.

    Way forward

    • So, monetary policy alone may not be as effective in the Indian case.
    • Revise CPI: India desperately needs to revise its CPI with the latest consumption survey weights.
    • Our parliamentarians must recognise the limitations that the RBI faces in taming inflation.

    Conclusion

    The upshot of all this is that the nature and structure of inflation in India is different than in developed countries.

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  • Foreign Policy Watch: India – EU

    India-UK Relations

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Free trade agreement

    Mains level: Bilateral ties, Strategic partnership

    Context

    • The year 2022 is significant for both India and the UK as our country commemorates the 75th anniversary of its Independence and the two celebrate 75 years of bilateral ties.
    • India-UK relations were elevated to a Comprehensive Strategic Partnership in 2021, based on a shared commitment towards democracy, fundamental freedoms and multilateralism.

    Background of the India-UK ties

    • Partnership: The historical legacy has its own imprint on the relationship. But what is truly remarkable is the broad range of partnerships that have evolved between the two countries, transcending trade, investment and strategic affairs.
    • Close ties: This broader partnership between the world’s fifth and sixth largest economies has its foundations on three critical aspects: education, common law system and the increasingly influential role and impact of the Indian diaspora in the UK.
    • Shared values: The India-UK partnership is based on shared values, respect for the rule of law and common law, and institutional integrity protected by democratic institutions in the both the countries.

    What progress has been made in the India-UK relationship?

    1.Economic: During 2019-20, trade between the two countries stood at US$ 15.45 billion with the balance in favor of India. Between April 2021-February 2022, Indian exports to the UK stood at US$ 9.4 billion (2.5% of India’s exports). The imports in the corresponding period were US$ 6.59 billion (1.2% of India’s imports). There is a scope for significant improvement. Both countries expect that the bilateral trade can reach US$ 100 billion by 2030.

    2.Defense and Security: India and the UK signed the Defence and International Security Partnership (DISP) in November 2015. It provides a strategic roadmap and direction to the evolving India-UK Defence Relations. At present some 70 companies in the UK supply goods for aircraft and related equipment besides supporting platforms like the Jaguar, Mirage and Kiran aircraft.

    3.Indian Diaspora: Around 1.5 million people of Indian origin live in Britain. Indian diaspora are making significant contributions to the British Society. This includes 15 Members of Parliament, three members in Cabinet, and two in high office as Finance and Home Ministers.

    4.Education: The UK-India Education and Research Initiative (UKIERI) was launched in 2005. A new ‘UKEIRI Mobility Programme: Study in India’ was also launched in 2019. Under this Britain’s universities collaborate with Indian partners and send UK students to India.

    5.Health: The successful partnership between Oxford University, AstraZeneca and SII on COVID-19 vaccine demonstrated the potential of Indian and UK expertise working together to solve international challenges. The two sides are also working on pandemic preparedness, Antimicrobial Resistance (AMR), digital health, Ayurveda and alternative medicines, as well as health worker mobility.

    What is the significance of India-UK Relationship?

    1.Regional and global issues of mutual interest: A healthy relationship between the two is imperative for enhancing cooperation in the Indo-Pacific, Afghanistan, UNSC, G20 and Commonwealth. For instance, India welcomed the UK’s accession in the Indo-Pacific Ocean’s Initiative under the Maritime Security pillar.

    2.Tackling Climate Change: The cooperation between them can be helpful to achieve the goals of the Paris Agreement and in implementing the Glasgow Climate Pact. For instance, the countries have agreed to work for early operationalisation of the Global Green Grids-One Sun One World One Grid Initiative (OSOWOG) under ISA. They are also working on the IRIS platform under CDRI which was jointly launched by India and UK at COP26.

    3.Supporting 3rd World Countries: Through the Global Innovation Partnership, India and UK have agreed to co-finance up to £ 75 million to support the transfer and scale up of climate smart sustainable innovations to third countries. The novel GIP Fund created under this Partnership will also aim to raise additional £ 100 million from the market to support Indian innovations.

    3.Strategic Considerations: India can engage with the UK to counter China’s rise in the Indian Ocean Region. The UK on other hand can use India as an alternative destination to China and its companies can invest in India as part of China plus one strategy. It is the business strategy to avoid investing only in China and diversify business into other countries.

    Challenges in India-UK relations

    1.BREXIT

    • Impact on Diaspora– Many members of Indian Diaspora in Britain had voted against BREXIT because it is likely that Indian IT Professional in Britain will face tough competition when UK will open up its border for more skilled migration.
    • Impact on Indian Companies in UK– A hard Brexit would inevitably impact more than 800 Indian companies in UK in crucial sectors of British economy Indian. But data has shown that companies are increasing investments in the UK and creating many thousands of new jobs. This demonstrates that, Brexit or no Brexit, India supports Britain.
    • Impact on India-EU Relations –With €72.5 billion worth of India-EU trade and €19.4 billion of India UK trade at stake, all partners needed to think through this issue carefully in the business and commercial context. Brexit seems to be a challenge to the India EU strategic partnership but India would need to learn to manage its relations with the EU without UK
    • Impact on Trade–Forging a Free Trade Agreement with India will not be a priority for UK as it leaves EU. Instead, Britain would initially focus on tackling existing barriers to trade. But India should grab the opportunity to fill the trade gap in UK, post-Brexit.

    2.Visas and Immigration

    • Illegal Migration: There are more than 1 lakh illegal Indian immigrants in UK. Britain has started putting pressure on Indian government to ensure that Indians who have no right to remain in UK be sent back to India
    • Latest Measures: On the other hand, a white paper on post-Brexit visas and immigration strategy has been unveiled. It is expected to benefit Indian students and professionals, with a focus on skills rather than country of origin. An annual cap of 20,700 on the number of skilled work visas issued will also be removed.

    3.Terrorism

    • In the context of Brexit, unlike the United States’ contemporary view, India continues to be hyphenated with Pakistan in London’s outlook.
    • India states the fact that bilateral relations went beyond the economic realm to issues such as security and terrorism were not being heeded in Britain, despite continuous efforts by India over the past decades.

    4.Totalization agreement

    • The UK government has also made it mandatory for people to pay a health care surcharge as part of their immigration application.
    • When employees are there for a short term as part of their work, it is important that they get to keep their hard-earned money rather than giving UK thousands of pounds of free money as social security taxes.
    • Therefore, it is important for UK and India to sign the totalization agreement at the earliest.
    • The totalization agreement with the UK would have exempted Indian professionals who are working for a certain period of time in the UK from paying those social security taxes if they are paying such taxes in India.

    Way forward

    • The historical baggage also needs to be addressed cooperatively to diminish the possibility of hindrance in future cooperation.
    • The India-United Kingdom are dynamic democracies and the world’s leading economies with impressive advancements in human resources, manufacturing, innovation, research, education, space, defence, green technologies, and clean energy, among other areas.
    • This relationship can be utilized for the betterment of the fields and more collaborations should be undertaken.

    Conclusion

    • As we celebrate the historic collaboration between the UK and India in producing the Covishield vaccine, and look forward to the much-awaited signing of the bilateral Free Trade Agreement, we should not lose sight of the tremendous power that transnational university-wide collaborations can leverage in the accord. Education, research and knowledge partnership ought to become the centre-piece of the India-UK relationship at 75, as we move forward.

    Mains question

    Q.Analyse India-UK bilateral relations with scope of upscaling and challenges they need to overcome .

     

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  • Deciding the terms of debate on freebies, subsidies and compensation

    op-ed snap | Governance | Mains Paper 2: Government Scheme/Policies

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- Debate on subsidies

    Context

    The Reserve Bank of India, in a report published in June, linked the precarious state of state finances to “freebies”, particularly power subsidies, and last week, the Supreme Court, waded into the debate, recommending the creation of an expert body to examine the matter.

    Political, economic and institutional context

    • The determination of what is a good or bad freebie is and always will be a political choice.
    • A constructive debate must necessarily locate itself in the underlying political, economic and institutional context in which these so-called freebies are a feature of our electoral politics.
    • In the Public Interest Litigation filed in the Supreme Court, the petitioner has argued that “irrational freebies… is analogous to bribery”.
    • Commodification of electoral process: The problem with this framing is that it commodifies the electoral process and strips voters of their agency.
    • Voters, in this framing, are passive, unsophisticated actors who can be bought and therefore there is a need to be vigilant.
    • The honourable court had gone a step further, arguing for an expert, independent body, rather than Parliament, to tackle the issue.
    • This is judicial overreach and it privileges “experts” over legitimate democratic negotiation and strikes at the core of the political bargain.
    • Politics is central to welfare, not experts.

    Economic context

    • In that spirit, a debate on the merits and demerits of freebies is important but this debate cannot be divorced from the economic context.
    • India’s structural transformation, particularly since 1991, has been slow and unique.
    • Despite abundant low-skilled labour, our growth trajectory has mostly skipped manufacturing, growing instead on the back of a far smaller, high-skilled services sector.
    • Consequently, as economist Amit Basole has shown the bulk of jobs our economy generated even in its peak growth years were in the largely informal, low value add construction sector.
    • The distributional consequences of this have been significant.
    • Under-employment and low inter-generational mobility have been persistent features of the Indian economy resulting in deep inequalities.
    • Growth lifted a large population out of poverty.
    • However, as the World Bank data show, most of those who escaped poverty between 2005-2012 moved into the vulnerable group — one income shock away from falling below the poverty line.
    • Somewhat reassuringly, democracy created pressure on our politics to respond to these economic failures.
    • It is in this context that the demand for so-called freebies has found legitimate place in our democracy.

    Challenges

    • While democratic pressures led to the halting creation of limited social protection in the form of PDS and MGNREGA, they did not translate into investments in core public and merit goods — health and education being the most critical.
    • It is these accumulated failures that have created the new political logic that we confront today.
    • A logic where welfare freebies are being offered to compensate citizens for what economic growth has failed to do.

    Conclusion

    The answer does not lie in rapping state governments on the knuckles for being profligate. It lies in building a renewed democratic consensus on our economic and institutional growth path.

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  • Finance Commission – Issues related to devolution of resources

    fiscal federalism in India

    op-ed snap | Polity | Mains Paper 2: Federalism

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Finance Commission

    Mains level: Paper 2- Issues with fiscal federalism in India

    Context

    The centralisation of fiscal powers in India has been blamed for the poor fiscal health of the states.

    Centralisation of fiscal powers: A background

    • Jawaharlal Nehru believed that socio-economic inequities could be addressed through the planning process.
    • A degree of centralisation in fiscal power was required to address the concerns of socio-economic and regional disparities.
    • As a result asymmetric federalism is inherent to the Indian Constitution.
    • India was never truly federal — it was a ‘holding together federalism’ in contrast to the ‘coming together federalism,’ in which smaller independent entities come together to form a federation (as in the United States of America).
    • In fact, the Government of India Act 1935 was more federal in nature than the Constitution adopted on January 26, 1950 as the first offered more power to its provincial governments.
    • Historically, India’s fiscal transfer worked through two pillars, i.e., the Planning Commission and the Finance Commission. 
    • But the waning of planning since the 1990s, and its abolition in 2014, led to the Finance Commission becoming a major means of fiscal transfer as the commission itself broadened its scope of sharing all taxes since 2000 from its original design of just two taxes — income tax and Union excise duties.
    •  Today, the Finance Commission became a politicised institution with arbitrariness and inherent bias towards the Union government.
    • Tamil Nadu government constituted a committee under Justice P.V. Rajamannar in 1969, the first of its kind by a State government, to look at Centre-State fiscal relations and recommend more transfers and taxation powers for regional governments.

    Declining fiscal capacity of the states

    • While States lost their capacity to generate revenue by surrendering their rights in the wake of the Goods and Services Tax (GST) regime, their expenditure pattern too was distorted by the Union’s intrusion, particularly through its centrally sponsored schemes.
    • The ability of States to finance current expenditures from their own revenues has declined from 69% in 1955-56 to less than 38% in 2019-20.
    • While the expenditure of the States has been shooting up, their revenues did not.
    • Stagnant revenue: Since States cannot raise tax revenue because of curtailed indirect tax rights — subsumed in GST, except for petroleum products, electricity and alcohol — the revenue has been stagnant at 6% of GDP in the past decade.

    Implications of fiscal centralisation in India

    • Use of non-divisive cess: Even the increased share of devolution, mooted by the Fourteenth Finance Commission, from 32% to 42%, was subverted by raising non-divisive cess and surcharges that go directly into the Union kitty.
    •  This non-divisive pool in the Centre’s gross tax revenues shot up to 15.7% in 2020 from 9.43% in 2012, shrinking the divisible pool of resources for transfers to States.
    • Cut in the corporate tax: The recent drastic cut in corporate tax, with its adverse impact on the divisible pool, and ending GST compensation to States have had huge consequences.
    • States paying high interest rates: States are forced to pay differential interest — about 10% against 7% — by the Union for market borrowings.
    • Centrally sponsored schemes curbing autonomy:  There are 131 centrally sponsored schemes, with a few dozen of them accounting for 90% of the allocation, and States required to share a part of the cost.
    • They spend about 25% to 40% as matching grants at the expense of their priorities.
    • These schemes, driven by the one-size-fits-all approach, are given precedence over State schemes, undermining the electorally mandated democratic politics of States.
    • In fact, it is the schemes conceived by States that have proved to be beneficial to the people and that have contributed to social development.
    • Driven by democratic impulses, States have been successful in innovating schemes that were adopted at the national level.
    • The diversion of a State’s own funds to centrally sponsored schemes, thereby depleting resources for its own schemes, violates constitutional provision.
    • Deepening inequality: The World Inequality Report estimates ‘that the ratio of private wealth to national income increased from 290% in 1980 to 555% in 2020, one of the fastest such increases in the world.
    • The poorest half of the population has less than 6% of the wealth while the top 10% nearly grab two-third of it’.
    • India’s tax-GDP ratio has been one of the lowest in the world — 17% of which is well below the average ratios of emerging market economies and OECD countries’ about 21% and 34%, respectively.
    • Its income tax base has been very narrow.
    • Indirect tax still accounts for about 56% of total taxes.
    • Instead of strengthening direct taxation, the Union government slashed corporate tax from 35% to 25% in 2019 and went on to monetise its public sector assets to finance infrastructure.

    Conclusion

    In sum, India’s fiscal federalism driven by political centralisation has deepened socio-economic inequality, belying the dreams of the founding fathers who saw a cure for such inequities in planning. It has not altered inter-state disparities either.

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  • Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

    Labour welfare necessity

    op-ed snap | Governance | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: NA

    Mains level: Labour welfare initiatives

    Context

    • One of the biggest economic fallout of the pandemic has been the deteriorating labour market conditions.
    • In the years ahead when the health crisis subsides and the economy witnesses a rebound, the healing of the labour market may take some more time. This is because the impact of recovery on this market is always felt with a lag.
    • Given the ebb and flow of the pandemic, the growth recovery is likely to be fragmented and will weigh on the number and types of jobs available.

    Definition

    • Labour welfare relates to taking care of the well-being of workers by employers, trade unions, governmental and non-governmental institutions and agencies.
    • Welfare includes anything that is done for the comfort and improvement of employees and is provided over and above the wages.

    What are labour rights?

    • Labour rights or workers’ rights are both legal rights and human rights relating to labour relations between workers and employers. These rights are codified in national and international labour and employment law. In general, these rights influence working conditions in relations of employment.

    Why labour law is needed

    • Labour law aims to correct the imbalance of power between the worker and the employer; to prevent the employer from dismissing the worker without good cause; to set up and preserve the processes by which workers are recognized as ‘equal’ partners in negotiations about their working conditions etc.

    Constitutional mandate

    • Article 41 – The state shall within the limits of its economic capacity and development make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement and in other cases of underserved want.
    • Article 42 – The state shall make provision for securing just and humane conditions of work and for maternity relief.

    Necessity for welfare

    • There were only 25 million during the initial period of industrial growth, while the strength of the workers is increasing year after year and hence, need for a mechanism to look into the welfare of the labour.
    • Workers put in long hours of work in unhealthy surrounding and the drudgery of the factory work continues to have adverse effect. To counter these welfare measures were felt necessary.
    • As a result of hardwork, they fall prey to alchoholism, gambling and other immoral activities results in absenteeism and other problems in the organisation. Hence the need was felt.

    Scope for labour welfare in India

    • Contribute to the productivity of labour and efficiency of the enterprise.
    • Raise the standard of living of workers by indirectly reducing the burden on their purse.
    • Be in tune and harmony with similar services obtaining in a neighbouring community where an enterprise is situated.
    • Be based on an intelligent prediction of the future needs of industrial work and be so designed as to offer a cushion to absorb the shock of industrialization and urbanization
    • Be administratively viable and essentially development in outlook.

    Government steps in this direction

    • Social Security Measures: The social security measures would help man to face the contingencies as such it is difficult for him either to work or to get work and support himself and his family. Thus social security measure provides a self balancing social insurance or assistance from public funds.
    • Social Insurance: is described as the giving in return for contribution, benefits up to subsistence level, as of right and without a means test, so that an individual may build freely upon it.
    • Social Assistance: is provided as an supplement to social insurance for those needy persons who cannot get social insurance payments and is offered after a means test.
    • Public Service: is a programme constituting the third main type of social security. They are financed directly by the government from its general revenues in form of cash payments or services to every member of the community falling within a defined category.

    Case study of Finland

    • Universal basic income pilot project: For two years Finland’s government gave 2,000 unemployed citizens €560 a month with no strings attached. It was the first nationwide basic income experiment. The concept is slowly becoming difficult for people to ignore.

    Challenges in labour welfare in India

    • Technical glitches: Under the Constitution of India, Labour is a subject in the concurrent list where both the Central and State Governments are competent to enact legislation. As a result, a large number of labour laws have been enacted catering to different aspects of labour e.g. occupational health, safety, employment etc.
    • Loopholes: Because of the predominantly heavy-handed labour regulations (also called as Inspector Raj) with exploitable gaps, the MNCs and domestic organizations have resorted to alternate ways i.e. employing contract labour at less than half the payroll of a permanent employee.
    • Gaps in labour laws: One of the main reasons for labour reforms is the concept of contract labour. Trade Unions suggest that this concept itself should be removed. There is stringent hiring and firing process defined in Industry Disputes Act. It makes it mandatory for the organization to seek Government permission before removing an employee.

    Conclusion

    • Labour Welfare helps labourers improve their working conditions, providing social security and raising their standard of living.
    • Raise the employee’s morale use the workforce more effectively besides removing dissatisfaction help to develop loyalty in workers towards the organization.

    Mains question

    Q.What is labour welfare according to you? Why it is needed? Explain the challenges in front of Indian labour reforms.

     

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  • Medical Education Governance in India

    Medical education in India

    op-ed snap | Governance | Mains Paper 2: Health & Education

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: NA

    Mains level: Medical education in India

    Context

    • The increasing population (1.32 billion ) and the occurrence of diseases, demands Indian medical education and the training approach to be modified and ensure enhancing practical clinical skills, than just sticking with predominantly theoretical or classroom training.
    • The demand for medicine to be taught in language beside English has been made repeatedly over the years, and was reiterated by union home minister recently.

    Definition

    • Medical education consists of training aimed at ensuring physicians acquire the competencies, skills and aptitudes that that allow them to practice professionally and ethically at the highest level.

    Goal of medical education

    • The goal of basic medical education is to ensure that medical students have acquired the knowledge, skills, and professional behaviors that prepare them for a spectrum of career choices, including, but not limited to, patient care, public health, clinical or basic research, leadership and management, or medical education.

    Why medical education in India needs urgent reforms

    • Current Status: Despite being home to one of the oldest medicinal systems in the world, India is still struggling to bring its medical education at par with the leaders around the world. The 541 medical colleges in the country haven’t been able to reach the standard of education that could meet the healthcare needs of the country.
    • Deficiency: The doctor-patient ratio of 1:1655 in India as against WHO norm of 1:1000 clearly shows the deficit of MBBS. While the government is working towards a solution and targeting to reach the required ratio, there is a need to relook at the overall medical education.
    • Post pandemic scenario: The lag in formal medical education has come up evidently post-pandemic when the nation saw the medical fraternity struggling to fill the doctor deficit.
    • Structural issues: It also brought forth the outdated learning methods that most of the medical institutes were using. Due to lockdown and fear of Covid-19 spread, a lot of institutes cancelled lectures and practical sessions.

    Current challenges faced by medical education in India

    • Limited government seats: The number of seats available for medical education in India is far less than the number of aspirants who leave school with the dream of becoming doctors.
    • What data speaks: Of the 1.6 million students who appeared in the National Eligibility cum Entrance Test (NEET) in 2021, only 88,120 made it into the 562 medical colleges in the country. Others had to enrol in non-medical courses in India or seek admission to foreign medical colleges. While the number of medical colleges has now increased to 596 (with 89,875 seats), the entry barrier is still high.
    • Lack of skills: Though the institutes are managing to hire professors and lecturers, there is a lack of technical skills. Finding faculties in clinical and non-clinical disciplines is difficult and there are very few faculty development programs for upskilling the existing lot.
    • Lack of infrastructure: The gap in digital learning infrastructure is currently the biggest challenge the sector is facing. There is an urgent need to adopt technology and have resources available to facilitate e-learning.
    • Lack of research and innovation: The medical research and innovation needs an added push as there haven’t been many ground-breaking research here. The education system needs to focus more on increasing the quality of research. Additionally since industry academia partnership is not available, hence innovation also takes a back-seat.

    A recent analysis estimates that India has only 4.8 fully qualified and actively serving doctors per 10,000 population.

    Government steps in tackling these challenges and issues

    • NMC bill: The National Medical Commission Bill, 2019 was passed recently by the parliament. The bill sets up the National Medical Commission (NMC) which will act as an umbrella regulatory body in the medical education system. The NMC will subsume the MCI and will regulate medical education and practice in India. Apart from this, it also provides for reforms in the medical education system.
    • MCI suggestion: The Medical Council of India (MCI) launched the globally recognized Competency-based medical education (CBME) for MBBS students in 2019. The CBME curriculum seeks to step away from a content-based syllabus and more towards one that is more practical and aligned with the country’s increasing health demands.
    • Schemes: 22 new All India Institutes of Medical Sciences (AIIMS) were developed under this initiative, and MBBS classes have already commenced at 18 of the new AIIMS.

    About NMC

    The Aim of the National Medical Commission are to (i) improve access to quality and affordable medical education, (ii) ensure availability of adequate and high quality medical professionals in all parts of the country; (iii) promote equitable and universal healthcare that encourages community health perspective and makes services of medical professionals accessible to all the citizens; (iv) encourages medical professionals to adopt latest medical research in their work and to contribute to research; (v) objectively assess medical institutions  periodically in a transparent manner; (vi) maintain a medical register for India; (vi) enforce high ethical standards in all aspects of medical services; (vii) have an effective grievance redressal mechanism.

    Steps to be taken 

    • To cater to any unprecedented demand in the future and to bring up the quality of education, the Indian medical education system undoubtedly needs major reforms.
    • While the focus needs to be put on improving the curriculum to bring competency-based education, there are several ways that can help bring reform in the current medical education system. Some of these are;
    1. Leveraging technology to offer digital learning solutions
    2. Capitalizing on e-learning and facilitating infrastructure to support it
    3. Revising curriculum to have more practical training, competency-based skill development
    4. Inculcating problem-solving approach by situational/case-based examination
    5. A broad-based faculty development program to sharpen the competency of teachers
    6. Eliminating caste-based reservation and paving way for merit-based admission
    7. Industry academia collaboration to facilitate innovation

    Way forward

    • There should be a substantial step-up in public investment in medical education.
    • By establishing new medical colleges, the government can increase student intake as well as enhance equitable access to medical education.
    • Besides, it must allocate adequate financial resources to strengthen the overall capacity of existing medical colleges to enrich student learning and improve output.

    Try this question for mains

    Q. Considering the large diaspora of medical students across the globe do you consider there are problems in Indian medical education system? If there are any ,discuss them along with current health status and steps needed to counter them .

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  • Climate Change Impact on India and World – International Reports, Key Observations, etc.

    Development vs sustainability

    op-ed snap | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Green carbon fee

    Mains level: Sustainable development

    Context

    • According to NITI Aayog, “600 million people in India face high to extreme water stress with nearly 70% of water being contaminated; India is placed at 120th amongst 122 countries in the water quality index”.
    • The latest global environmental ranking by Yale and Columbia Universities puts India at the bottom among 180 countries.

    What is development?

    • Economic development means different things to different people. On a broad scale, anything a community does to foster and create a healthy economy can fall under the auspice of economic development.

    What is sustainability?

    • The integration of environmental health, social equity and economic vitality in order to create thriving, healthy, diverse and resilient communities for this generation and generations to come. The practice of sustainability recognizes how these issues are interconnected and requires a systems approach and an acknowledgement of complexity.
    • Sustainability is the balance between the environment, equity, and economy.

    What sustainability do for us?

    • Sustainable practices support ecological, human, and economic health and vitality.
    • Sustainability presumes that resources are finite, and should be used conservatively and wisely with a view to long-term priorities and consequences of the ways in which resources are used.
    • In simplest terms, sustainability is about our children and our grandchildren, and the world we will leave them.

    Definition of carrying capacity of earth

    • Carrying capacity: Carrying capacity is the maximum number of a species an environment can support indefinitely. Every species has a carrying capacity, even humans. The species population size is limited by environmental factors like adequate food, shelter, water, and mates. If these needs are not met, the population will decrease until the resource rebounds.

    Mother earth has reached its carrying capacity now

    • No species has altered the Earth’s natural landscape the way humans have.
    • Global climate change, mass extinction, and overexploitation of our global commons are all examples of the ways in which humans have altered the natural landscape.
    • Our growing population, coupled with rising affluence and per capita impact, is driving our planet closer to its tipping point.
    • With population expected to reach 5 billion by 2050, many wonder if our natural resources can keep up with our growing demands.

    Enrich your mains answer with this

    8 Billion dreams, ambitions, aspirations and only one earth to support them all . Human population, now nearing 8 billion, cannot continue to grow indefinitely. There are limits to the life-sustaining resources earth can provide us. In other words, there is a carrying capacity for human life on our planet.

    Development vs environment issues

    • Unemployment: For India, the national context is shaped by high youth unemployment, millions more entering the workforce each year, and a country hungry for substantial investments in hard infrastructure to industrialise and urbanise.
    • Growth with low emission footprint: India’s economic growth in the last three decades, led by growth in the services sector, has come at a significantly lower emissions footprint.
    • Infrastructure: But in the coming decades, India will have to move to an investment-led and manufacturing-intensive growth model to create job opportunities and create entirely new cities and infrastructure to accommodate and connect an increasingly urban population.

    Why a Carbon Fee and Dividend is Imperative

    It is clear that we will soon pass the limit on carbon emissions, because it requires decades to replace fossil fuel energy infrastructure with carbon-neutral and carbon negative energies.

    What could India do to pursue an industrialization pathway that is climate-compatible?

    • A coherent national transition strategy is important in a global context where industrialised countries are discussing the imposition of carbon border taxes while failing to provide developing countries the necessary carbon space to grow or the finance and technological assistance necessary to decarbonise.
    • What India needs is an overarching green industrialisation strategy that combines laws, policy instruments, and new or reformed implementing institutions to steer its decentralised economic activities to become climate-friendly and resilient.
    Case study for value addition

    • Bhutan: Bhutan remains, for example, the first and only carbon-negative country in the world, and they have also recently prevented the COVID-19 pandemic from overwhelming its population, with only one Bhutanese citizen  passing away from the virus to date.

     

     

    Way forward

    • India should set its pace based on its ability to capitalise on the opportunities to create wealth through green industrialisation.

    Mains question

    Do you think mother earth has reached its carrying capacity? Discuss this in context of development vs environment debate.

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  • Uniform Civil Code: Triple Talaq debate, Polygamy issue, etc.

    The Portuguese Civil Code of 1867 is a colonial burden on Goa

    op-ed snap | Polity | Mains Paper 2: Indian Constitution – historical underpinnings, evolution, features, amendments, significant provisions and basic structure

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Article 44

    Mains level: Paper 2- Uniform civil code issue

    Context

    The Portuguese Civil Code of 1867, the so-called “common civil code” of Goa, is in the news again. A 28-member parliamentary standing committee recently visited the state to study it in the context of the demand for a uniform civil code.

    Background

    • Long before the arrival of the British imperialists in India, the Portuguese had occupied certain territories in the coastal regions with its capital in Cochin, later shifted to Goa.
    • They did not interfere with the local customs relating to family relations and framed, in the mid-19th century, three separate codes of religion-based customary laws of Goa, Daman and Diu.
    • The three codes were formally enforced as the law by royal decrees issued by the King of Portugal.
    • The Portuguese Civil Code of 1867 was extended to Goa, Daman and Diu by a royal decree of November 18, 1869, declaring that the code would apply to the natives subject to the local usages and customs “so far as they are not inconsistent with morality or public order”.
    •  In 1910, the Portuguese parliament enacted two civil marriage and divorce decrees and, in 1946, a canonical marriage decree for Catholics.
    • All of these too were extended to Goa, Daman and Diu.
    • The family law applied by the Portuguese, both at home and in the occupied Indian territories, was thus not a uniform code but a loose conglomeration of civil and religious laws.

    After Indian independence

    • Fourteen years after the advent of Independence, Goa and its affiliated territories were liberated and turned into a Union Territory (UT) under central rule.
    •  The Goa, Daman and Diu Administration Act of 1962 declared that all laws in force in these territories before their liberation would continue to be in force “until amended or repealed by a competent legislature or other competent authority” (Section 5).
    • None of the pre-liberation family laws was, however, amended or repealed.
    • Nor was any central law on family rights, including the four Hindu law Acts of 1955-56, extended to any of the three territories.
    • In 1987, the Goa, Daman and Diu Reorganisation Act made Goa a full-fledged state with its own legislative assembly and left Daman and Diu as a UT.
    • Twenty-five years later, the Goa state legislature enacted the Succession, Special Notaries and Inventory Proceedings Act, amending certain provisions, mainly procedural, of the 155-year old civil code.
    • In 2019, the UT of Daman and Diu was merged with another such territory – Dadra and Nagar Haveli (also ruled in the past by Portugal) — to form a single UT under central rule.
    • As laid down in Section 17 of the unifying Act, this development did not in any way change the family law system prevailing in either of these places since their liberation from foreign rule.

    Need for uniform civil code

    • The law ministry has told the concerned standing committee of Parliament that the Portuguese civil code and its later amendments as in force in Goa may — if required — be duly reviewed.
    • Uniform civil code: What has been said now by the law ministry about Goa is in the context of implementing the constitutional directive of Article 44 for a uniform civil code for the citizens throughout the territory of India.
    • However, while the 21st Law Commission had already given its opinion against the feasibility and need of such a code at this juncture
    • In recent months, the ministry has told Parliament about its reference on this issue to the Law Commission.
    • There is no justification for retaining over a century-old archaic law, 75 years after the independence of India.
    • Hindu law Acts of 1955-56 governing four religious communities in the rest of the country needs to be extended to the same communities in Goa, Daman and Diu.

    Conclusion

    The ministry has now reportedly told the parliamentary committee that enacting a uniform civil code would be possible only when a “sizeable majority” of the people seeks such a change.

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  • Innovation Ecosystem in India

    Journey towards innovation

    op-ed snap | Science Tech | Mains Paper 3: Achievements Of Indians In S&T

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Samba mashuri rice, Wax Deoiling Technology

    Mains level: CSIR ,IPR regime

    Context

    • Senior scientist Nallathamby Kalaiselvi was appointed the director general of the Council of Scientific and Industrial Research (CSIR), on Saturday, August 6, 2022. This makes her the first woman to head the largest research and development organisation in India, which runs 38 laboratories and institutes, 39 outreach centres, and three innovation centres. 

    What is CSIR?

    • The Council of Scientific and Industrial Research, abbreviated as CSIR, was established by the Government of India in September 1942 as an autonomous body that has emerged as the largest research and development organisation in India.
    • CSIR covers a wide spectrum of science and technology – from oceanography, geophysics, chemicals, drugs, genomics, biotechnology and nanotechnology to mining, aeronautics, instrumentation, environmental engineering and information technology.

    Who established it?

    • Dr Shanti Swarup Bhatnagar
    • He was the Founder Director (and later first Director-General) of CSIR who is credited with establishing twelve national laboratories. He played a significant role in the building of post-independent Science and Technology infrastructure and in the formulation of India’s S & T policies

    CSIR’s Vision

    • “Pursue science which strives for global impact, technology that enables innovation – driven industry and nurture trans-disciplinary leadership thereby catalyzing inclusive economic development for the people of India”

    Why CSIR is important?

    • Innovation: Regarding intellectual property, the CSIR has over 2971 patents filed internationally with 1592 patents filed in India. Since its inception in 1942 over 14000 patents have been granted worldwide. It was awarded the National Intellectual Property Award in 2018 by the India Patent Office.
    • Pandemic handling: CSIR identified the unmet needs, assessed its strengths and capabilities for addressing the pandemic and adopted a multi-pronged strategy of working on diagnostics, surveillance, drugs, hospital assistive devices, personal protective equipment and supply chain and logistics. This strategy is now beginning to yield exciting solutions.

    Contribution of CSIR

    Strategic Sector

    • Head-Up-Display (HUD) In high-tech areas, CSIR-NAL made significant contribution by developing indigenous Head-Up- display(HUD) for Indian Light Combat Aircraft, Tejas. HUD aids the pilot in flying the aircraft and in critical flight maneuvers including weapon aiming.
    • Design and Development of Indigenous Gyrotron: Addressing the challenges of technology denial:Design and development of indigenous gyrotron for nuclear fusion reactor has been accomplished.

    Energy & Environment

    • Solar Tree: On July 22nda solar tree designed by CSIR- CMERI lab in Durgapur was  launched which occupies minimum space to produce clean power.
    • Wax Deoiling Technology:Technology developed for recovery of wax developed in collaboration with Engineers India Limited (EIL) and Numaligarh Refinery Ltd., (NRL). Country’s largest wax producing (50,000 metric ton) plant has been commissioned at NRL with investment of over Rs 600 crore.

    Value added Agriculture

    • Medicinal and Aromatic Plants:Enhanced cultivation of Medicinal and Aromatic Plants in the country brought about through development of new varieties and agro-technologies.
    • Samba Mahsuri Rice Variety – Bacterial Blight Resistant:CSIR has in collaboration with DRR (ICAR) and DBT part funding developed an improved bacterial blight resistant Samba Mahsuri variety.
    • Rice Cultivar (Muktashree) for Arsenic Contaminated Areas:A rice variety has been developed which restricts assimilation of Arsenic within permissible limit. The variety has been released to farmers of West Bengal.
    • White-fly resistant Cotton variety:Developed a transgenic cotton line which is resistant to whiteflies. It is expected to render it commercially cultivable in 10 years, after due regulatory clearances.

    Healthcare

    • JD Vaccine for Farm Animals:Vaccine developed and commercialized for Johne’s disease affecting Sheep, Goat, Cow and Buffalo so as to immunize them and increase milk and meat production.
    • Plasma Gelsolin Diagnostic Kit for Premature Births, and Sepsis related Deaths:A new kit is being developed to diagnose pre-mature birth and sepsis.
    • Genomics and other omics technologies for Enabling Medical Decision – GOMED: Genetic diseases, though are individually rare, cumulatively affect a large number of individuals. A programme called GOMED (Genomics and other omics technologies for Enabling Medical Decision) has been developed by the CSIR which provides a platform of disease genomics to solve clinical problems.

      Food & Nutrition

    • Ksheer-scanner: The Ksheer Scanner, a new technological invention by CSIR-CEERI detects the level of milk adulteration and adulterants in 45 seconds at the cost of 10 paise,
    • Double-Fortified Salt:Salt fortified with iodine and iron having improved properties developed and tested for addressing anaemia in people. To be launched in the market soon.
    • Anti-obesity DAG Oil:Oil enriched with Diacylglycerol (DAG) instead of conventional triacylglycerol (TAG) developed. To be launched in the market soon.

    Water

    • Aquifer Mapping of Water Scarce Areas: Heliborne transient electromagnetic and surface magnetic technique based aquifer mapping carried out in six different geological locations in Rajasthan (2), Bihar, Karnataka, Maharashtra and Tamil Nadu.
    • Understanding the Special Properties of the Ganga Water:Assessment of Water Quality & Sediment Analysis of Ganga from different parts being done.

    Some of the challenges faced for sustainable growth of R&D in India are

    • Low research professionals: India has an estimated full-time equivalent R&D professional strength of only 150 professionals per million, compared to that of other countries.
    • Low investment: Indian research is mostly skewed towards basic research and lacks in application oriented R&D. The vast majority of organizations would rather go for quick acquisition of technology rather than invest in internal R&D.
    • IPR enforcement: Inadequate enforcement of intellectual property rights (IPR). While India has improved its IPR regime, the protection of intellectual property remains weak in some areas owing to inadequate laws and ineffective enforcement.

    Some positive suggestions to improve innovation

    • Embrace technology: Technologies, such as machine learning, can be used to improve R&D decision-making. Documents need to be filed throughout the R&D process, for example, and the process could be automated to free up employees to do more complex tasks.
    • Invest in innovation hubs: Companies that invest in innovation hubs expand talent and relationships with local universities and startups can support a two-way learning process and faster innovation cycles.
    • Promoting startups: Most radical innovations are coming from startups and more of them are needed. Tilting higher education towards science and encouraging more students to take degrees in science-based subjects can provide the people needed for R&D.

    Conclusion

    India is a strong contender in the field of Global R&D. For India to derive maximum growth and sustainability of R&D, its R&D fundamentals have to be strong and excellent.

    Mains question

    Q.Culture of innovation is needed in national growth in this context discuss what is IPR regime? How CSIR has helped to consolidate it?

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