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  • Poverty Eradication – Definition, Debates, etc.

    Extreme Poverty down in India

    op-ed snap | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters,Government Scheme/Policies

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Poverty in India

    Mains level: Paper 2- Poverty reduction in India

    Context

    A recent World Bank Report has shown that extreme poverty in India more than halved between 2011 and 2019 – from 22.5 per cent to 10.2 per cent.  The reduction was higher in rural areas, from 26.3 per cent to 11.6 per cent.

    What explains the reduction in poverty?

    • Poverty has reduced significantly because of the government’s thrust on improving the ease of living of ordinary Indians through schemes.
    • These schemes include the Ujjwala Yojana, PM Awas Yojana, Swachh Bharat Mission, Jan Dhan and Mission Indradhanush in addition to the Deendayal Antyodaya Yojana-National Rural Livelihood Mission and improved coverage under the National Food Security Act.
    • It is important to understand how poverty in rural areas was reduced at a faster pace.
    • Much of the success can be credited to all government departments, especially their janbhagidari-based thrust on pro-poor public welfare.

    Contributing factors

    1] Identification of beneficiaries through SECC 2011

    • The identification of deprived households on the basis of the Socioeconomic and Caste Census (SECC) 2011 across welfare programmes helped in creating a constituency for the well-being of the poor, irrespective of caste, creed or religion.
    • Deprivation criterion: Since deprivation was the key criterion in identifying beneficiaries, SC and ST communities got higher coverage and the erstwhile backward regions in Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh, Jharkhand, Odisha, Chhattisgarh, Assam, Rajasthan and rural Maharashtra got a larger share of the benefits.
    • Gram Sabha Validation: Social groups that often used to be left out of government programmes were included and gram sabha validation was taken to ensure that the project reached these groups.

    2] Widened coverage of women

    • The coverage of women under the Deendayal Antyodaya Yojana and Self Help Groups (SHG) increased from 2.5 crore in 2014 to over 8 crore in 2018 as a result of more than 75 lakh SHGs working closely with over 31 lakh elected panchayati raj representatives, 40 per cent of whom are women.
    • This provided a robust framework to connect with communities and created a social capital that helped every programme.
    • The PRI-SHG partnership catalysed changes that increased the pace of poverty reduction and the use of Aadhaar cleaned up corruption at several levels and ensured that the funds reached those whom it was meant for.

    3] Creation of basic infrastructure

    • Finance Commission transfers were made directly to gram panchayats leading to the creation of basic infrastructure like pucca village roads and drains at a much faster pace in rural areas.
    • The high speed of road construction under the Pradhan Mantri Gram Sadhak Yojana created greater opportunities for employment in nearby larger villages/census towns/kasbas by improving connectivity and enhancing mobility.

    4] Availability of credit through SHGs

    • The social capital of SHGs ensured the availability of credit through banks, micro-finance institutions and MUDRA loans.
    • Livelihood diversification: The NRLM prioritised livelihood diversification and implemented detailed plans for credit disbursement.

    5]  Implementation of social sector schemes

    • In the two phases of the Gram Swaraj Abhiyan in 2018, benefits such as gas and electricity connections, LED bulbs, accident insurance, life insurance, bank accounts and immunisation were provided to 63974 villages that were selected because of their high SC and ST populations.
    • The performance of line departments went up manifold due to community-led action.
    • The gains are reflected in the findings of the National Family Health Survey V, 2019-2021.

    6] Universal coverage schemes

    • The thrust on universal coverage for individual household latrines, LPG connections and pucca houses for those who lived in kuccha houses ensured that no one was left behind. This created the Labarthi Varg.

    7] Increase in fund transfer to rural area

    • Seventh, this was also a period in which a high amount of public funds were transferred to rural areas, including from the share of states and, in some programmes, through extra-budgetary resources.

    8] Community participation

    • The thrust on a people’s plan campaign, “Sabki Yojana Sabka Vikas” for preparing the Gram Panchayat Development Plans and for ranking villages and panchayats on human development, economic activity and infrastructure, from 2017-18 onwards, laid the foundation for robust community participation involving panchayats and SHGs, especially in ensuring accountability.

    9] Social and concurrent audit

    • Through processes like social and concurrent audits, efforts were made to ensure that resources were fully utilised.
    • Several changes were brought about in programmes like the MGNREGS to create durable and productive assets.

    10] Focus of states on improving livelihood diversification

    • The competition among states to improve performance on rural development helped.
    • Irrespective of the party in power, nearly all states and UTs focussed on improving livelihood diversification in rural areas and on improving infrastructure significantly.

    Conclusion

    All these factors contributed to improved ease of living of deprived households and improving their asset base. A lot has been achieved, much remains to be done.

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  • Death Penalty Abolition Debate

    A new track for capital punishment jurisprudence

    op-ed snap | Polity | Mains Paper 2: Executive & Judiciary

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Rarest of rare case

    Mains level: Paper 2- Capital punishment jurisprudence

    Context

    A recent trend in the evolution of jurisprudence around the death penalty in India may reset judicial thinking around sentencing and have long-term ramifications in the awarding of capital punishment.

    New thinking in the jurisprudence around capital punishment

    • Capital punishment once delivered by the court of sessions (“sentencing court”) is required under law, specifically Chapter 28 of the Code of Criminal Procedure, to be confirmed by the jurisdictional High Court (“confirming court”).
    • Over the last six months or so, while dealing with appeals against confirmation of the death sentence, the Supreme Court of India has examined sentencing methodology from the perspective of mitigating circumstances more closely.
    • The Court has also initiated a suo motu writ petition (criminal) to delve deep into these issues on key aspects surrounding our understanding of death penalty sentencing.
    • Bachan Singh vs State of Punjab (1980), the leading case on this point, calls for mitigating and aggravating circumstances to be balanced against each other and laid down the principle that the death penalty ought not to be awarded unless the alternative of life imprisonment is “unquestionably foreclosed”.
    • It is also an equally well-established legal principle that in a sentencing hearing, the accused must necessarily be provided with sufficient opportunity to produce any material that may have bearing on the sentencing exercise.
    • When read in conjunction with the ratio decidendi of the Bachan Singh case, it is incumbent upon the sentencing court and the confirming court to ensure that the question of reform and rehabilitation of a convicted person has been examined in detail for these courts to come to a definitive conclusion that all such options are unquestionably foreclosed.

    Lack of judicial uniformity

    •  A report by the National Law University Delhi’s Project 39A (earlier known as the “Centre on the Death Penalty”) titled ‘Matters of Judgment’ found that there is no judicial uniformity or consistency when it comes to awarding the death sentence.
    •  In the report titled ‘Death Penalty Sentencing in Trial Courts’ (also authored by Project 39A), findings reported from a study of cases involving death sentencing between 2000 and 2015 in Delhi, Maharashtra and Madhya Pradesh have showed that courts have been lax in assessing the aspect of reformation while undertaking the sentencing exercise.
    • The Court, in Mofil Khan vs State of Jharkhand (2021), held that the “the State is under a duty to procure evidence to establish that there is no possibility of reformation and rehabilitation of the accused.
    • Undoubtedly, the onus has been placed on the State to lead evidence to show that no reformation is possible and for the sentencing courts to be satisfied that a thorough mitigation analysis was done before the death sentence is awarded.

    Mitigation investigation

    • For a complete mitigation investigation, professionals trained in psychology, sociology and criminology are required in addition to legal professionals.
    • Taking cognisance of the value of a holistic approach to mitigation investigation, the Court in Manoj & Ors vs State of Madhya Pradesh (2022) issued directions to the State to place before the court all “report(s) of all the probation officer(s)” relating to the accused and reports “about their conduct and nature of the work done by them” while in prison.
    •  The order also directs that a trained psychiatrist and a local professor of psychology conduct a psychiatric and psychological evaluation of the convict.

    Conclusion

    The intervention of the Supreme Court of India in, hopefully, framing guidelines around incorporation of a mitigation analysis and consideration of psycho-social reports of the prisoner at the time of sentencing is timely and necessary.

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  • Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

    India must seize the trade opportunity opening now

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Non-tariff barriers

    Mains level: Paper 3- Trade opportunities for India

    Context

    Slower global growth, an adverse geopolitical environment, the shadow of recurring waves of the pandemic and prolonged supply chain issues are likely to weigh on export growth this year.

    Trade growth in 2021 and uncertainties in 2022

    • The year 2021 was a record one for trade despite the pandemic.
    • In terms of volumes, merchandise trade rose 9.8 per cent, while in dollar terms, it grew 26 per cent.
    • The value of commercial services trade was also up 15 per cent.
    • India has had a good export run in line with global trends, witnessing record goods exports of $419 billion, while touching $250 billion in services exports.
    • However, global growth forecasts have now been pared down.
    • Slower global growth, an adverse geopolitical environment, the shadow of recurring waves of the pandemic and prolonged supply chain issues are likely to weigh on export growth this year.

    Taping into opportunities

    • Ukraine and Sri Lanka are major exporters of agricultural products and the vacuum created by their limited presence in global trade will open up agricultural export opportunities for India.
    • This will not only spur overall exports but will also help to support the recovery of the agrarian economy through higher realisations.
    • Tea and wheat: As many as 25 African countries import more than one-third of their wheat from Russia and Ukraine and for 15 of them, the share exceeds 50 per cent.
    • Sri Lanka is also a major player in the global tea market and produces around 300 million kg annually.
    • Almost 98 per cent of its annual production is exported.
    • India, the second-largest producer of tea with an annual production of 900 million kg, is in a good position to exploit the opportunity and fill the gap.
    • Textile: Apart from tea and wheat, newer export opportunities have arisen for textiles.
    • Sri Lanka exports $5.42 billion worth of garments and prolonged power cuts in the island nation will hurt its production and export capacity.

    Suggestions

    • 1] Work on non-tariff barriers: One, work on non-tariff barriers for agricultural trade with a special focus on harmonising the sanitary and phytosanitary (SPS) requirements.
    • 2] Autonomy in tea sector: To support tea exports, traditional tea boards are seeking a greater role and autonomy for optimising the development, promotion, and research in the sector.
    • Quicker implementation of the proposed Tea Promotion and Development Act is of utmost importance.
    • 3] Integration with global supply chains: India must double down on its integration with global supply chains.The commerce ministry has negotiated a slew of trade deals.
    • 4] Reduce tariff rates for intermediate inputs: Tariff rates for intermediate inputs should be reduced to either zero or should be negligible for India to become an attractive location for assembly activities.
    • 5] Realignment of specialisation patterns: India must persist with the creation of an enabling ecosystem that realigns its specialisation patterns towards labour-intensive processes and product lines.
    • The labour market reforms must be taken to their logical conclusion.
    • 6] Pro-active FDI policy: A continuous and pro-active FDI policy is also critical as foreign capital and technology are key enablers for entry into global production networks even as local firms play a role as subcontractors and suppliers of intermediate inputs to MNEs.
    • 7]Power supply and logistical bottlenecks: Lastly, exports could suffer if basic issues such as availability of power and logistical bottlenecks keep rearing their ugly heads.
    • The Economic Survey 2019 had recommended that low levels of service link costs (costs related to transportation, communication, and other tasks involved in coordinating the activity etc) are prerequisites to strengthen their participation in GVCs.
    • This should not be neglected.

    Conclusion

    If India were to tap export opportunities in developed markets, it must act on the suggestions above.

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  • Absence of Roe v Wade won’t just impact the US

    op-ed snap | Polity | Mains Paper 2: Comparison Of The Indian Constitutional Scheme With That Of Other Countries,Effect Of Policies & Politics Of World On India’S Interests

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Right to privacy

    Mains level: Paper 2- Abortion rights

    Context

    The leak of an initial draft majority opinion of the US Supreme Court voting to overturn the decision in Roe v Wade has sent shockwaves across liberal and conservative quarters alike, globally.

    Background of the Roe v Wade case

    • Right to abortion: While locating the right of privacy within the guarantee of personal liberty enshrined in the fourteenth amendment of the American constitution, Roe embodies a supervening constitutional right to abortion emanating from this right of privacy.
    • The right to abort was held to be a constitutionally protected right within the right of privacy.
    • Roe, the 1973 outcome of an unmarried woman’s crusade for bodily autonomy, had declared overbroad, and consequently unconstitutional, a provision of the Texas Penal Code which permitted only those abortions that were “procured or attempted by medical advice to save the life of the mother”.
    • The decision simultaneously recognised the state’s interest in protecting the life of the foetus as also the life of the mother. 
    • Roe is not only relevant as a progressive trailblazer for reproductive rights in the United States but is also fundamental to constitutional jurisprudence globally for the interpretative tools it employed.

    Implications of overturning Roe v Wade

    • Political considerations vs judicial responsibility: The overturning of Roe is more than the mere abdication of the judicial responsibility to protect individual rights — it signals a dangerous trend of courts making long-standing determinations of legal rights based on transient political considerations.
    • Incursion into women’s right to abort: It would also mean legitimisation of state incursions into women’s right to abort and consequently their right to bodily autonomy and liberty, in addition to forcing them to move to states with enabling laws to procure abortions, leading to issues of access and affordability of abortions.
    • While the impact of Roe’s absence would most profoundly be felt in the US, it is likely to embolden conservative anti-abortion voices across the world.
    • Limits of judicial activism: It will inevitably also raise fundamental questions on the limits of judicial activism aimed at protecting the rights of persons and classes, which do not find explicit mention within a country’s constitutional framework.
    • Possibility of a conservative approach to abortion cases: In 2021, the abortion laws in India underwent substantial changes, with the introduction of the Medical Termination for Pregnancy (Amendment) Act, 2021 which, in addition to destigmatising pregnancies outside marriage by introducing the nomenclature of “any woman or her partner”, also increased the upper gestational limits within which pregnancies are legally terminable.
    • The Act, however, carries ambiguities and leaves room for both judicial and executive interpretation.
    • As cases of subjective determination arise, the Indian judiciary will be called upon to reconcile the right to privacy recognised in Puttaswamy with the permissible limits of abortion in the Act.

    How does Roe v Wade apply in the Indian context?

    • In KS Puttaswamy v Union of India, Justice Chandrachud referred to Roe and Planned Parenthood while reading the right to privacy into the existing framework of constitutionally protected fundamental rights subject to “just, reasonable and fair” restrictions.
    • Recognising derivative rights: In the lifetime of the Indian Supreme Court, recognising derivative rights within the existing framework of fundamental rights has been regularly witnessed — be it rights during arrest and detention, the right to express one’s sexual and gender identity, or rights against harassment at the workplace, to cite a few.
    • Setback to transformative constitutionalism: In the Indian context, the overturning could be seen as a setback to the celebrated doctrine of transformative constitutionalism, which sees the Indian Constitution as a “living document” that moulds, adapts and responds to changing times and circumstances.

    Conclusion

    The likelihood of the overturning of Roe leading to more conservative approaches to judicial interpretation in abortion rights cases, cannot be ruled out.

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  • Foreign Policy Watch: India – EU

    The challenge for Middle Powers like India, France and Germany

    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: Not much

    Mains level: Paper 2- Challenges for the middle powers

    Context

    Prime Minister Narendra Modi’s visit to European capitals should help both sides acquire a better understanding of each other’s security concerns. Whether it will fundamentally alter equations remains to be seen.

    New India-EU equation

    • As “Middle Powers”, countries like France, Germany and India should seek policy space for themselves and not be forced into taking positions by the Big Powers — the United States, China and Russia.
    • The EU is understandably concerned about Russian aggressiveness in Europe.
    •  ndia is equally concerned about Chinese aggressiveness in Asia. 
    • Even after Russia has sought to tear down the post-Cold War security structure in Europe, India has stayed the course in its equations both with Russia and the European Union.

    Division of national and group agenda and its implications for India

    • While Russia’s invasion of Ukraine is the context in which Modi visited Europe and the head of the European Union visited India, the fact is that the agenda at bilateral meetings with individual European countries has generally been very different from the agenda that the EU prefers to focus on.
    • While individual European nations, especially Germany and France, focus on their own strategic and business interests, including defence equipment sales, the EU retains the remit for negotiating trade and investment rules.
    • Problem for India: This division of national and group agendas has often posed a problem for India because individual countries cannot offer bilateral market access in exchange for bilateral defence deals.
    • So the French will sell Rafale jets in the name of strategic partnership but they cannot offer a trade and investment deal that Brussels will not allow Paris to strike with India.
    • While the EU and G7 may now wish to derisk, if not decouple, from aggressively rising China, how much they would be able to do in this regard and what they would be willing to do to help a slowly rising India remains to be seen.

    Way forward

    • For India’s part, it is not clear at the moment how much and what it can unilaterally offer Europe beyond the promise of standing up to China or reducing dependence on Russia.
    • Challenge for the three middle powers lies in combine their “strength and stability” to ensure “peace and tranquillity” in their respective neighbourhoods.
    • If middle powers like Brazil, France, Germany, India, Indonesia, Japan, South Africa and others can work together they may well be able to impose some discipline on the three big powers — China, Russia and the US.

    Conclusion

    At a time when big powers lurking behind in seeking to stabilise and shape the global order middle powers need to act to balance the influence exerted by the big powers.

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  • Monetary Policy Committee Notifications

    Inflation control needs another model

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: CPI and WPI

    Mains level: Paper 3- Need for the review of inflation targeting model

    Context

    At the conclusion of the April meeting, the Monetary Policy Committee had already warned that the focus will henceforth be on inflation. Yesterday it raised the repo rate somewhat sooner than was expected by the market.

     Discourse on inflation engaged in by the western central banks

    • Inflation reflects an excess of output over its ‘natural’ level.
    • Inflation targeting refers to the policy of controlling inflation by raising the interest rate over which the central bank has control, i.e. the rate at which it lends to commercial banks, the ‘repo rate’.
    • This, it is argued, will induce firms to stay their investment plans and reduce inventories, lowering production.
    • As economy-wide output declines, becoming equal to the natural level of output, inflation will cease.
    • This story does not just legitimise a policy of output contraction for inflation but sees it as optimal.
    • The natural level of output itself is the productive counterpart of the natural level of employment, the level that obtains in a freely functioning labour market.
    • So, at the natural level of output, the economy is deemed to be at full employment.
    • Salient in the context is the fact that the natural level of output is unobservable.
    • Hence inflation as a reflection of an “overheating” economy is something that must be taken on trust.

    Inflation control in India

    • Not surprisingly for a theory based on an unobservable variable, the proposition that inflation is due to an overheating economy fares poorly when put to a statistical test for India. 
    • There is not a single demonstration of the empirical validity of the model of inflation presented in the RBI report of 2014, which recommended a move to inflation targeting.
    • On the other hand inflation in India can be explained in terms of the movement of the prices of agricultural goods and, to a lesser extent, imported oil.
    • How effective is monetary policy in controlling inflation: The implication of this finding is damaging for the claim that monetary policy can control inflation, for neither the price of agricultural goods nor that of imported oil is under the central bank’s control.
    • The only route by which monetary policy can, in principle, control inflation is by curbing the growth of non-agricultural output, which would in turn lower the growth of demand for agricultural goods.
    • As the demand for agricultural goods slows, so will inflation, but this comes at the cost of output and employment.
    • At least, this is the theory.
    • Whether this takes place in practice depends upon the extent to which changes in the repo rate are transmitted to commercial bank lending rates.

    Way forward

    • Focus on supply of agricultural goods: The implication for the policymaker that inflation is driven by agricultural goods prices, as is the case in India presently, is that the focus should be on increasing the supply of these goods.
    • Growing per capita income in India has shifted the average consumption basket towards foods rich in minerals, such as fruits and vegetables, and protein, such as milk and meat.
    • But the expansion of the supply of these foods has been lower than the growth in demand for them.
    • So a concerted drive to increase the supply of food other than rice and wheat holds the key.
    • Costly food threatens the health of the population, as people economise on their food intake, and holds back the economy, as only a small part of a household’s budget can be spent on non-agricultural goods.

    Conclusion

    Monetary policy manoeuvres, typified by the RBI’s raising of the repo rate is not an efficient solution for agricultural price-driven inflation. Any lasting inflation control would require placing agricultural production on a steady footing, with continuously rising productivity.

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  • RBI Notifications

    With repo rate hike, RBI has done what’s necessary

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: CRR

    Mains level: Paper 3- Inflation targeting by the RBI

    Context

    The RBI has decided to take the bull by the horns. It has raised the repo rate by 40 basis points and the cash reserve ratio (CRR) by 50 basis points to fight inflation.

    Why major central banks across the world are hiking rates?

    • Across the world, major central banks have of late gone on a rate hike spree, waking up to the realisation of inflationary pressures not being transitory in nature.
    • Record high inflation in the US: The US Fed has been on the offensive battling a 40-year high surge in prices.
    • It has tapered its bond purchase programme drastically while suggesting in no uncertain terms the pace of rate hikes needed to combat inflation.
    • The European Union has been slow to respond but voices are growing to correct the path at the earliest.
    • Banks like the Central Bank of Brazil or the Russian Central Bank have increased the interest rate to double digits.
    • Emerging economies have been doubly hit — the days of easy liquidity are well behind them even as their economic resources remain constrained to support an uneven proportion of population hit by pandemic.
    • Including the RBI’s decision today to push the benchmark rate to align with the current market realities, 21 countries have increased interest rates so far.

    Analysing the RBI’s decision to hike interest rates

    • To this extent, the decision by the RBI to frontload the rate hikes ahead of the Fed decision is again an attempt to stem capital outflows.
    • Accommodative policy stance; The most interesting aspect of the rate hike today is the continuation of the accommodative policy stance.
    • The CRR hike may be just an attempt to build up a war chest on the liquidity front.
    • Liquidity inflows to the financial system could be either policy induced by the central bank for example changes in reserves, open market operations etc or non-policy induced such as foreign exchange reserves, government cash balances, and currency in circulation.
    • Given that non-policy induced liquidity inflows have been recently impacted (outflows of portfolio capital) and given the huge size of the government borrowing programme, the RBI also needs to support the market through some means.
    • Impounding bank reserves through the CRR (Rs 87,000 crore) could give some space to the central bank to conduct open market purchases of bonds from banks and thus inject concomitant liquidity some time in the future if the need so arises.
    •  The CRR rate hike is thus an important tool to possibly manage G-sec yields.

    Inflation dynamics in India

    • The inflationary pressures can be attributed mainly to adverse cost-push factors, coming from supply-side shocks in food and fuel prices.
    • The RBI statement thus cites food inflation as a major source of discomfort.
    • Additionally, nominal rural wages for both agricultural and non-agricultural labourers picked up during the second half 2021-22.
    • However, such wage growth has remained soft.
    • Measures to ameliorate supply-side cost pressures would be thus critical at this juncture, especially in terms of a calibrated reduction of taxes on petrol and diesel.
    • On the policy side, however, it would mean that even after rate hikes, inflation may continue to remain high for some time.
    • The MCLR (Marginal Cost of Funds based Lending Rate) linked loans have a share of around 53 per cent in the overall loan kitty.
    • With the rise in CRR and expected future hikes in the benchmark rates, there would be an increase in MCLR due to a negative carry.

    Conclusion

    The RBI has acted prudently in responding to market forces that could impact India’s growth prospects if inflationary concerns were not addressed now. At the same time, by pledging to remain accommodative to spur, and reinvigorate growth, it has reaffirmed its commitment to being a trusted partner in the growth of the country.

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  • Foreign Policy Watch: India – Germany

    India-Germany 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: Green Hydrogen Task Force

    Mains level: Paper 2- India-Germany relations

    Context

    Prime Minister Narendra Modi’s visit to Berlin for the sixth Indo-German Inter-Governmental Consultations (IGC) is significant for its timing and substantial results.

    Strategic and economic importance of India-German ties

    • The timing of the IGC, which Germany chose not to delay, showed outreach to India and the Indo-Pacific.
    • Impact of pandemic on economy: The pandemic hit German economy and sanctions on Russia will further dent its prospects.
    • The country requires new markets for trade and investment.
    • India is an important partner in this regard due to its sustained economic growth and market size.
    • Ukraine crisis: The Ukraine crisis created an urgency to engage with India as part of Germany’s fledgling Indo-Pacific policy.

    Opportunities for India

    • As Germany does the reassessment of China’s role in world affairs it creates an opportunity for India.
    • The Bundestag will discuss the situation of Uyghurs in China’s Xinjiang on May 7.
    • Any departures from China will bring business engagement to India.
    • Germany and India do not have a traditional strategic partnership.
    • It is a green partnership based on trade, investment, technology, functional collaboration, skill development, and sustainability.
    • There are several initiatives like the Indo-German energy forum, environmental forum, partnership on urban mobility, skill development and science and technology.
    • The biggest gain from the IGC has been the Joint Declaration of Intent (JDI) establishing the Green and Sustainable Development Partnership.
    • This will raise the quality and quantum of the existing partnership between the two countries.
    • Germany is reaching out with new and additional financing of €10 billion to fund green projects in India under public, private and PPP models.
    • To support this, a ministerial segment is being introduced under the IGC.
    • The IGC is the only such format that India has with any country.
    • Another significant development is the JDI on Triangular Development Cooperation for projects in third countries.
    • This will provide avenues to work together in the Indo-Pacific, Africa and beyond.
    • The Indo-German Education Partnership, which the German Bundestag passed in 2016 as a New Passage to India, has borne fruit — from about 4,000 students in 2015, there are nearly 29,000 Indian students in Germany.
    • The Indo-German Science and Technology Centre has made valuable contributions.
    • Now, under the energy partnership, the Green Hydrogen Task Force will develop a Green Hydrogen Roadmap.
    • This will attempt to take R&D to the level of commercialisation.
    • The JDI on migration and mobility is an important step taken during this IGC.

    Conclusion

    A new period is reflecting new priorities in view of crises like the pandemic, the economic downturn and now, Ukraine. The German response to India as evidenced through the IGC has been promising. Both sides may justifiably call it a defining moment in the Indo-German partnership.

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  • Foreign Policy Watch: India – EU

    India-Denmark 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: India-Europe Trade and Technology Council

    Mains level: Paper 2- India-Europe engagement

    Context

    As Russia, isolated by unprecedented Western sanctions, deepens its alliance with China, Europe has begun to loom larger than ever before in India’s strategic calculus. Prime Minister Narendra Modi’s visit to Berlin, Copenhagen, and Paris this week could give us a glimpse of India’s post-Russian strategic future in Europe.

    Engagement with collective Europe

    • In her visit to Delhi, the president of the European Commission, Ursula von Der Leyn, unveiled the new contours of the EU’s strategic partnership with India by launching the India-Europe Trade and Technology Council. 
    • This week, the focus is on India’s key bilateral partnerships with European majors — Germany and France — as well as a critical northern corner of Europe, the so-called Norden.
    • Having built up a significant engagement with Moscow over the decades, India and Germany are under pressure to disentangle from the Russian connection.
    • Modi and Scholz could also exchange notes on how their long-standing illusions about China came crashing down.
    • Macron’s return to power in France offers a good moment for Modi to imagine the next phase in bilateral relations.
    • For some time now it has been said that France is India’s “new Russia” — Delhi’s most important strategic partner.
    • In recent years, France has emerged as a strong defender of India’s interests in the United Nations Security Council and a regional ally in the vast Indo-Pacific theatre.
    • France has also been a major supplier of advanced arms to India.
    • But Delhi and Paris have been some distance away from demonstrating full possibilities of their defence partnership.
    • There is no doubt that Western Europe has moved from the margins to the centre of India’s foreign and security policies.
    • The crisis in Ukraine, which has shattered the regional order that emerged in 1991, intensifies the imperatives for deeper strategic cooperation between India and its European partners.

    India’s engagement with smaller European countries

    • In Copenhagen, the bilateral talks with Danish leadership are about Delhi finally finding time for the smaller European countries.
    • The Nordic summit hosted by Denmark underlines India’s discovery of the various sub-regions of Europe — from the Baltics to the Balkans and from Iberia to Mittleuropa.
    • The Nordic Five — Denmark, Finland, Iceland, Norway, and Sweden — have a population of barely 25 million but their GDP at $1.8 trillion is greater than that of Russia.
    • Two members of the Nordic five — Sweden and Finland — are now rushing to end their long-standing neutral status and join NATO.
    • The other three — Denmark, Iceland, and Norway — have been founding members of NATO, set up in 1949.
    • Listening to the Nordic leaders might help Delhi appreciate the deeply-held fears about Russia among Moscow’s smaller neighbours.
    • In Copenhagen, Modi would want to build on the unique bilateral green strategic partnership with Denmark.

    Germany and India’s engagement with Russia

    • Berlin is tied far more deeply to Russia than India.
    • Germany’s annual trade with Russia is about $60 billion while India’s is at $10 bn.
    • Germany relies heavily on Russian natural gas, while Russian arms dominate India’s weaponry.
    • Irrespective of their Russian preferences, Germany and India have no option but to live with circumstances over which they have no control.
    • Opportunity for India: Making India an attractive new destination for German capital, now under pressure to reduce its exposure to Russian and Chinese markets, should be the highest priority for PM Modi.
    • Germany is one of India’s oldest economic partners, but the full potential of the commercial relationship has never been realised.
    • If there ever was a moment to think big about the future of German trade and investment in India, it is now.

    Conclusion

    A new paradigm is beckoning India — strong commercial and security partnerships with Europe that stand on their own merit and bring the many synergies between them into active play.

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  • Policy Wise: India’s Power Sector

    The supply bottlenecks causing power shortages

    op-ed snap | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Power generation in India

    Mains level: Paper 3- Coal shortage crisis

    Context

    The power sector in India is going through a crisis. Peak shortages in some states have reached double digits.

    Chronology of the crisis

    • First, with summer approaching before time, power demand has shot up to record levels.
    • The second reason for the rise in power demand is that the economy is recovering, and demand from the industrial sector is going up.
    • All things put together, power demand crossed 207 GW on April 29, which is about 14 per cent higher than what it was a year ago.
    • Experts feel that the peak demand may even touch 215 GW in the coming months.

    Coal shortage crisis

    • On average, coal stocks available are only good enough for about eight days’ generation against a norm of 24 days.
    • In some plants, the stocks available are just about enough to run the plant for a day or two more.
    • Part of the problem of poor coal stock is also rumoured to be on account of the non-payment of dues of coal companies.
    • But this is not the major cause of the shortage.

    Reasons for coal shortage and fall in generation

    • The fall in coal stock in power stations is because of two main reasons.
    • 1] Rise in international price of coal: The first is that due to a rise in the international price of coal on account of the Ukraine crisis, all plants that were importing coal have either stopped generating completely or are generating at much lower levels.
    • We have a sizeable generating capacity based on imported coal, estimated at about 16 GW to 17 GW.
    • All these plants after stopping imports are now looking for domestic coal, creating pressure on domestic coal.
    • 2] Non-availability of rakes with Indian railways for transporting coal: Though about 22 MT of coal may be available in power stations, if one includes the stocks available with mining companies, the figure is well over 70 MT.
    • So, it is all a question of transporting the coal to the power stations.
    • 3] Fall in generation from gas-based plants: To make matters worse, generation from gas-based plants has also fallen due to high gas prices in the world market.
    • 4] Impact on hydro generation: Reservoirs, too, are drying up due to intense heat which will adversely affect hydro generation.

    Transportation problem faced by Indian railways

    • The railways have about 2,500 rakes which can be used for coal transportation.
    • With a turn-around time of about four-and-a-half days which goes up to nine days for coastal regions, the railways can provide only about 525 rakes on any single day. 
    • Of this, about 100 rakes are used for transporting imported coal and therefore, only about 425 rakes are available on a daily basis for transporting domestic coal.
    • But only 380 rakes were being provided in the first half of April this year, though efforts are on to increase this to about 415 rakes.
    • The railways prefer to transport coal over short distances in order to save on the turn-around time.
    • There is also the issue of availability of tracks since they are being used on a back-to-back basis.
    • Thus production has to be enhanced so that the replenishment rate is higher than consumption.
    • Unless we do that, the total stock of coal in the country will deplete further and it will no longer be a mere transportation problem as it is now, but a general lack of supply of coal.

    Conclusion

    This is the right time to enhance coal production and build adequate stocks because once the monsoon sets in, production will fall.

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