Type: op-ed snap

Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

Seeding a data revolution in Indian Agriculture

Economics | Mains Paper 3: Inclusive Growth & Issues
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Digitization of Agriculture

In June this year, two significant documents relating to the Indian agriculture sector were released.

What are the reports about?

  • The first is a consultation paper on the India Digital Ecosystem of Agriculture (IDEA) and the second on Indian Agriculture: Ripe for Disruption from a private organisation, Bain and Company.
  • Through their work, these reports have depicted the agriculture reforms announced by the union government as a game-changer in the agriculture sector.

Challenges highlighted

The major challenges of the agriculture sector are:

  1. Food Sufficiency but Nutrition Deficiency
  2. High import of edible oil and oilseeds
  3. Yield plateaus
  4. Degrading soil, Water stress
  5. Inadequate market infra/linkages
  6. Unpredictable, volatile prices
  7. Post-harvest losses, wastages
  8. Lack of crop planning due to information asymmetry

Key takeaway: Way for doubling farmers income

  • These reports in short argues that benefiting from the huge investments into the agri-ecosystem, doubling farmers’ income targets can be achieved in near future.
  • The Indian agriculture sector in future will encompass farm to fork and pave the way for a single national market with a national platform with better connection between producer and consumers.

The forecast

  • The Bain report is a data-based prediction on agri-business scenarios, anchored to the agricultural set-up at present and predicting its future trajectories in another 20 years.
  • It includes targeting the production of alternative proteins, and food cell-based food/ingredients and initiating ocean farming, etc.
  • The report has a ‘today forward– future back approach’ and predicts a drastic investment opportunity development by 2025.
  • The agriculture sector (currently worth $370 billion), is estimated to receive an additional $35 billion investment.

The two enabling conditions for such investment opportunities are:

  1. Changes in the regulatory framework, especially recent changes in the Farm Acts and
  2. Digital disruption

The IDEA of integration

  • Digital disruption: The blueprint of “digital agriculture” is similar to the digital disruption mentioned in the Bain report.
  • Integration: Eventually, the farmer and the improvement of farmers’ livelihood is the aim of the IDEA concept and it is proposed to happen through tight integration of agri-tech innovation and the agriculture industry.
  • Enabling conditions: To be precise, the IDEA concept profounds the creation of second enabling conditions (which is described in the Bain report).
  • Openness of data: The IDEA principles explicitly talk about openness of data, which means open to businesses and farmers, indicating the kind of integration it aims at.
  • Value-added innovative services: by agri-tech industries and start-ups are an integral part of the IDEA architecture.
  • Data architecture: The services listed in the document (to be available on the platform) are equally important data for farmers and businesses.

A thread of digital disruption

  • The IT industry has opposition to IDEA mainly due to the ethics of creating a Unique Farmer ID based on one’s Aadhaar number and also the potential for data misuse.
  • Beyond the news coverage about the prospects of achieving the goal of Doubling Farmers Income on which the present government has almost lost its hope.

Issues with these reports

  • The Bain report has not been widely discussed — at least in the public domain.
  • The assumptions used by authors especially for its ‘future back approach’, need more or less focusing on widespread food production in controlled environments.
  • The emission, energy, and other resource footprints and sustainability issues around these techniques are not adequately studied.

Yet these reports are important

  • The report has convincingly demonstrated the business opportunity available in supply chains between farm to APMC mandi and mandi to the customer.
  • This can be realised with the support of digital disruption and the latest agriculture reforms.
  • Both these reports heavily rely on digital disruption to improve farmers’ livelihoods, without discussing how much farmers will be prepared to benefit from the emerging business.

An unconvincing ‘how’

  • Digital divide: The fact is that a majority of small and marginal farmers are not technology-savvy.
  • No capacity building: That most of them are under-educated for capacity building is ignored amidst these ambitious developments.
  • Unrealistic assumptions: The Bain report relies on the general assumption that more investments into the agriculture sector will benefit farmers; ‘but how’ has not been convincingly answered.
  • Overemphasis on technology: Similarly, how the technology fix will help resolve all the issues of Indian agriculture listed at the beginning of the report is unclear in the IDEA concept.
  • Reluctance by farmers: These reports ignore the protest of farmers against the reforms without considering it as a barrier or risk factor resulting in a repealing of these new farm laws.

Way ahead: Focus on the farmer

  • A data revolution is inevitable in the agriculture sector, given its socio-political complexities.
  • However, we cannot just count on technology fixes and agri-business investments for improving farmers’ livelihoods.
  • There need to be immense efforts to improve the capacities of the farmers in India – at least until the educated young farmers replace the existing under-educated small and medium farmers.
  • This capacity building can be done through a mixed approach through FPOs and other farmers’ associations where technical support is available for farmers.

Conclusion

  • Considering the size of the agriculture sector of the country this is not going to be an easy task but would need a separate program across the country with considerable investment.

 

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Foreign Policy Watch: India-China

A strategy for India in a world that is adrift

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 : Distortions in the Global Order

This article discusses new situations prompted by the tectonic shifts in India’s internal and external environment to take another look at India’s path to power in a world between orders.

New global order: No Order

  • Multipolarity: The world is today adrift. We are neither in a bipolar Cold War nor in a multipolar world, though perhaps tending towards a world of several power centres.
  • Lack of cohesion: The lack of a coherent international response to the COVID-19 pandemic is proof of an absence of international order and of the ineffectiveness of multilateral institutions.
  • Climate ignorance: So is the ineffective international response to climate change and other transnational threats.

What are the major shifts in global order?

  • Secular stagnation
  • Retreat from globalisation
  • Regionalisation of trade
  • Shifting balance of power
  • Rise of China and others
  • Structural China-United States strategic rivalry

All above factors have shifted the geopolitical and economic centres of gravity from the Atlantic to Asia.

Major Concerns

  • Chauvinism: Inequality between and within states has bred a narrow nationalism and parochialism.
  • Existential threats: We are entering a new polarised information age, and face ecological crises of the Anthropocene, making climate change an existential threat.

Asia as the nucleus: With focus on China

  • Shift of focus by the US: Over the next decade we expect Asia to remain the cockpit of geopolitical rivalries, and that the US remains the most formidable power, though its relative power is declining.
  • China at the centre: China sees a window of opportunity but acts in a hurry, suggesting that she believes that window may close or is already closing due to push back from the West and others.

China’s expansionism

  • China’s crowded geography constrains her both on land and at sea.
  • Hence it expects her profile and power to continue expanding, particularly in our periphery.
  • The result is likely continued friction, some cooperation, and quasi-adversarial relations between India and China, which others will take advantage of.
  • Overall, we do not expect conventional conflict between the great powers in Asia, though other forms and levels of violence and contention in the international system will rise, with Taiwan a special case.

Opportunities in disguise for India

  • The uncertainty and changing geopolitical environment clearly pose considerable challenges to Indian policy.
  • However, it also throws up certain opportunities, enhancing our strategic options and diplomatic space, if we adjust policies internally and externally, particularly in the subcontinent.

How can India reap the benefits?

  • Enhancing ties with the US: Increasing security congruence with the US could enable growing cooperation in fields significant for India’s transformation: energy, trade, investment, education and health.
  • Climate cooperation: Other areas in which India and the U.S. could increase cooperation are: climate change and energy, tech solutions for renewable energy, and on digital cooperation.
  • Neighbourhood first: Several middle powers like Sri Lanka, Bangladesh, Indonesia in the neighbourhood are now India’s natural partners.
  • Digital space: This time of transition between orders is also when new standards and norms are being developed, particularly in the digital space. India can and must be present at the creation.
  • Maritime cooperation: At sea, the balance is today more favourable to us than before, possibly more so than on the continent. India must bat for the creation of a Maritime Commission in IOR.

Bottlenecks in India’s neighbourhood policy

  • Over securitisation of policy: towards our neighbours has driven trade underground, criminalised our borders.
  • Conducive environment for entry of China: This has enabled the large-scale entry of Chinese goods destroying local industry in the northeast.
  • Lack of self-strengthening: While lessening dependence on China, and seeking external balancing, our primary effort has to concentrate on self-strengthening.
  • Lack of socio-political enterprise: If there is one country which in terms of its size, population, economic potential, scientific and technological capabilities can match or even surpass China, it is India.

Way forward for India

(A) Bringing multipolarity in Asia.

  • The way forward should be based on the core strategic principles in Non-Alignment 2.0 which are still relevant: independent judgement, developing our capacities, and creating an equitable and enabling international order for India’s transformation.
  • Today’s situation makes India’s strategic autonomy all the more essential.

(B) Making an issue-based coalition

  • India must adjust to changing circumstances. We have no choice but to engage with this uncertain and more volatile world.
  • One productive way to do so would be through issue-based coalitions including different actors, depending on who has an interest and capability.

(C) Reviving SAARC

  • India must craft and reinvigorate regional institutions and processes in the neighbourhood, reviving the South Asian Association for Regional Cooperation (SAARC) for instance.
  • India could be the primary source of both prosperity and security in the neighbourhood — the subcontinent and the Indian Ocean Region.

Conclusion

  • Economic policy must match political and strategic engagement.
  • Globalisation has been central to India’s growth.
  • A more active regional and international role for India is incompatible with a position on the margins of the global economy.
  • Self-reliance in today’s world and technologies can only be realised as part of the global economy.
  • We should not imitate China’s claims to being a civilisational state and its adoption of victimhood.
  • Instead, we should affirm our own strength and historic national identity.

 

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Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

On Digital Health ID, proceed with caution

Governance | Mains Paper 2: Health & Education
Note4Students

From UPSC perspective, the following things are important :

Prelims level : DHID

Mains level : Issues with ABDM

Much recently, the Prime Minister had launched the Digital Health ID project (DHID), generating debate on issues related to the use of technology in a broken health system.

Explained: Digital Health ID

Good intents of the DHID

  • The key objective of DHID is to improve the quality, access and affordability of health services by making the service delivery “quicker, less expensive and more robust”.
  • The ambition is undoubtedly high. Given that health systems are highly complex, the DHID would hardly be able to address some of the issues plaguing it.

Why need DHID?

(a) Record maintenance

  • The use of technology for record maintenance is not just inevitable but necessary. Its time has certainly come.
  • A decade ago, the process to shift towards electronic medical records was initiated in the private sector.
  • It met with limited success, despite the strong positives.
  • With DHID, the burden of storing and carrying health records for every visit to the doctor is minimised.

(b) Better tracking of medical history

  • The doctor has instant access to the patient’s case history –the treatment undertaken, where and with what outcomes — enabling more accurate diagnosis and treatment.
  • As the DHID enables portability across geography and healthcare providers, it also helps reduce re-testing or repeating problems every time a patient consults a new doctor.
  • That’s a huge gain, impacting the quality of care and enhancing patient satisfaction and confidence.

(c) Better Diagnosis

  • DHID can have a transformative impact in promoting ecosystems that function as paperless facilities.
  • Paperless hospitals can promote early diagnosis before the patient reaches the doctor after spending long hours in queue.
  • The doctor can already go through the patient’s record and the pharmacist can make the drugs available by the time the patient reached its counter.

(d) Promoting medical research

  • Digitisation of medical records is another important positive, given the problems related to space and retrieving huge databases.
  • Well organised repositories that enable easy access to records can stimulate much-needed research on medical devices and drugs.
  • This storehouse of patient data can be valuable for clinical and operational research.

Given our population, would this be an idealistic expectation?

  • We need to conduct pilot studies to assess the use of technology for streamlining patient flows and medical records and thereby increase efficiencies across different typologies of hospitals and facilities.
  • While technology helps smoothen processes and enhance patient experience, there is a cost attached.
  • Investments have to be made upfront and results should not be expected overnight.

Issues with DHID

(a) A costly affair

  • In the immediate short run, DHID will increase administrative costs by about 20 per cent, due to the capital investment in data infrastructure.
  • Over the long run, the additional cost to healthcare is expected to be about 2 per cent.
  • Any scaling up of this reform would require extensive fiscal subsidies and more importantly providing techno-logistical support to both government and private hospitals.

(b) Privacy concerns

  • Most important is the issue of privacy, the high possibility of hacking and breach of confidentiality.
  • The possibility of privacy being violated increases with the centralisation of all information.
  • Though it is said that the patient is the owner of the information, how many of us deny access, as a matter of routine, when we download apps or programmes that seek access to all our records?
  • How far is this “consent” practical for an illiterate, vulnerable patient desperate to get well?
  • So, taking refuge behind a technical statement that access is contingent on patient consent is unconvincing.

Ground situation in India

  • Inherently unaffordable healthcare: The costs in the Indian context can be high and that should lead to a careful assessment of the project.
  • Digital divide: Such a scenario is not inconceivable and in the case of health, may cause immense hardship to the most marginalised sections of our population.
  • Infrastructure gap: A large majority of facilities do not have the required physical infrastructure — electricity, accommodation, trained personnel.
  • Usual nature of technical glitches: Cards getting corrupted, servers being down, computers crashing or hanging, and power outages are common in India.
  • Conformity over data synchronization: The inability to synchronise biometric data with ID cards has resulted in large-scale exclusions of the poor from welfare projects.
  • Accuracy of records: Besides, the efficacy of the DHID hinges on the assumption that every visit and every drug consumed by the patient is faithfully and accurately recorded.
  • Increased workload on Medical Professionals: Moreover, while electronic mapping of providers may enable patients to spot a less busy doctor near their location, it is simplistic to assume that the patient will go there.

Plugging the existing gaps

  • Patient preference for a doctor is dependent upon perception and trust. Likewise, teleconsultations need a huge backend infrastructure and organisation.
  • Teleconsulting has certainly helped patients access medical advice for managing minor ailments, getting prescriptions on the phone and even getting drugs delivered home.
  • But in handling chronic diseases that necessitate continuity of care, teleconsultations have been problematic and cannot be substituted for actual physical examination.
  • Continuity of care is central to good outcomes in inpatient management of chronic diseases.
  • The one serious shortcoming of using teleconsultation for such management is the high attrition rate of doctors within the context of an overall shortage of doctors.
  • Technology can be of little use in the absence of doctors and basic infrastructure.

Way forward

  • What is needed is building very robust firewalls and trust.
  • Seeing the frequency with which Aadhaar cards have been breached, it is not unreasonable to be concerned with this issue and the implications it has at the family and societal levels.
  • For this reason, instead of a big bang approach, it is better to go slow and steady.
  • That’s the only way to ensure that a good policy does not die along the way due to poor implementation.

 

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Forest Conservation Efforts – NFP, Western Ghats, etc.

Taproots to help restore India’s fading green cover

Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Bonn Challenge

Mains level : Forest resources management

This op-ed tries to establish a fair link between forest cover and population dependency on it.

A decline in Forest Cover

  • The State of the World’s Forests report 2020, says that since 1990, around 420 million hectares of forest have been lost through deforestation, conversion and land degradation.
  • Nearly 178 million hectares have decreased globally due to deforestation (1990-2020).
  • India lost 4.69 MHA of its forests for various land uses between 1951 to 1995.

Various reasons

  • Despite various international conventions and national policies in place to improve green cover, there is a decline in global forest cover.
  • Dependence on forests by nearly 18% of the global human population has put immense pressure on ecosystems; in India, this has resulted in the degradation of 41% of its forests.

Why conserve forests?

  • Covering nearly 30% land surface of the earth, forests around the globe provide a wide variety of ecosystem services and support countless and diverse species.
  • They also stabilise the climate, sequester carbon and regulate the water regime.

Need for restoration

  • Restoration in laymen’s terms is bringing back the degraded or deforested landscape to its original state by various interventions to enable them to deliver all the benefits.
  • Building and maintaining activities help to improve ecological functions, productivity and create resilient forests with multifarious capabilities.
  • India’s varied edaphic, climatic and topographic conditions are spread over 10 bio-geographical regions and four biodiversity hotspots, sheltering 8% of the world’s known flora and fauna.

India’s dependency on forest resources

  • Out of its 21.9% population living under the poverty line, nearly 275 million people including local tribals depend on the forest for subsistence.
  • The intricate link between poverty and environmental degradation was first highlighted by India at the first UN global conference on the human environment in Stockholm.
  • Though India’s increasing economic growth is helping to eliminate poverty, there is continued degradation and a growing scarcity of natural resources.
  • Further, encroachment of nearly 1.48 MHA of forest and grazing in nearly 75% of forest area is also linked to the livelihood of local communities.
  • The participation of local communities with finances for incentives and rewards is essential to redress this complex riddle.

Strategies adopted by India

Ans. Bonn Challenge

  • To combat this, India joined the Bonn Challenge with a pledge to restore 21 MHA of degraded and deforested land which was later revised to 26 MHA to be restored by 2030.
  • The first-ever country progress report under the Bonn Challenge submitted by India by bringing 9.8 million hectares since 2011 under restoration is an achievement.
  • However, continued degradation and deforestation need to be tackled effectively to achieve the remaining target of restoration by addressing various challenges.

Key challenges

  • Local ecology with a research base: forest restoration and tree planting are leading strategies to fight global warming by way of carbon sequestration.
  • However, planting without considering the local ecology can result in more damage.
  • Similarly, planting a forest in the wrong places such as savannah grasslands could be disastrous for local biodiversity.

Best strategy: Natural Forest Restoration

  • Luckily recent research has shown that naturally regenerated forests tend to have more secure carbon storage.
  • Being less tech-sensitive, cost-effective and conserving more biodiversity, natural forest restoration is becoming more widely accepted.

Limitations to India

  • Nearly 5.03% of Indian forests are under protection area (PA) management needing specific restoration strategies.
  • The remaining areas witness a range of disturbances including grazing, encroachment, fire, and climate change impacts that need area-specific considerations.
  • Further, much of the research done so far on restoration is not fully compatible with India’s diverse ecological habitats hence warranting due consideration of local factors.
  • The involvement of multiple stakeholders in forest restoration is bound to cause a conflict of interests among different stakeholders; along with low priority and insufficient funding, it becomes even more challenging.

Policy measures

  • There have been remarkable initiatives to involve local people in the protection and development of forests by forming joint forest management committees (JFMC).
  • However, a review of their functionality and performance is essential to make them more dynamic and effective to scale up their involvement.
  • Therefore, negotiations with a wide range of stakeholders including these committees for resolving conflicts and fulfilling restoration objectives are a must and a challenging feat to reach a suitable trade-off.

Way forward

  • Adequate financing is one of the major concerns for the success of any interventions including restoration.
  • The active approach of restoration which includes tree planting and the involvement of communities seeks incentives and rewards and make the whole affair quite cost-intensive.
  • The contribution of corporates in restoration efforts so far has been limited to 2% of the total achievement.
  • Hence, alternate ways of financing such as involving corporates and dovetailing restoration activities with ongoing land-based programmes of various departments can help to make it easy for operation.
  • Apart from these specific challenges, the common barriers to restoration as identified globally also need critical review before placing the required methodologies and area-specific strategies in place.

Conclusion

  • Active engagement of stakeholders including non-governmental organizations, awareness and capacity building of stakeholders with enabling policy interventions and finance can help a lot to achieve restoration objectives for India.
  • The need of the hour is an inclusive approach encompassing these concerns with the required wherewithal.

 

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Foreign Policy Watch: India-United States

Outer space

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 : Read the attached story

Mains level : Outer Spaces and its utility

In opening new pathways for outer space cooperation in the recent US visit, PM Modi has positioned India to engage more productively with a rapidly evolving domain that is seeing more commerce and contestation.

Outer Space Cooperation: A backgrounder

  • International cooperation is the new normal in space exploration, but it’s not a new concept.
  • One example of this cooperation is the International Space Station (ISS).
  • Another advance in international cooperation in the peaceful exploration of outer space came with the Artemis Accords.
  • Introduced in October 2020, the Artemis Accords establish a set of principles to guide space cooperation among countries participating in NASA’s Artemis program.

There are five treaties that deal with issues related to outer space

  1. Moon Treaty: Non-appropriation of outer space by any one country, arms control, the freedom of exploration
  2. Liability Convention: Liability for damage caused by space objects
  3. Rescue Agreement: Safety and rescue of spacecraft and astronauts
  4. Outer Space Treaty: Prevention of harmful interference with space activities and the environment
  5. Registration Convention: Notification and registration of space activities, scientific investigation and exploitation of natural resources in outer space and the settlement of disputes

Why does Outer Spaces matter?

  • Space situational awareness (SSA) involves monitoring the movement of all objects — natural (meteors) and man-made (satellites) — and tracking space weather.
  • Today, space is integral to our lives and disruption of space-based communications and earth observation will have serious consequences.

India’s strategic interest in Outer Space

Delhi’s new strategic interest in outer space is based on a recognition of two important trends.

  1. Centrality of emerging technologies in shaping the 21st-century global order
  2. Urgency of writing new rules for the road to peace and stability in outer space

Why need US for this?

  • Technology cooperation has always been an important part of India-US relations.
  • But it has been a boutique discourse between the relevant agencies of the two governments.
  • The US has traditionally dominated outer space in the commercial domain.
  • As emerging technologies overhaul global economic and security structures, Delhi and Washington now have to widen the interface of technology.

Why need a comprehensive outer space treaty?

  • Although human forays into space began in the middle of the 20th century, the intensity of that activity as well as its commercial and security implications have dramatically increased in recent decades.
  • Outer space has become a location for lucrative business as well as a site of military competition between states.
  • Until recently, outer space has been the sole preserve of states. But private entities are now major players in space commerce.
  • At the same time, as space becomes a critical factor in shaping the military balance of power on the earth, there is growing competition among states.

Expanding QUAD in this term

  • Until now, the maritime domain has dominated the strategic cooperation bilaterally between Delhi and Washington as well as within the Quad.
  • The annual Malabar naval exercise, for example, began nearly three decades ago as a bilateral venture in 1992 and became a quadrilateral one in 2020 with the participation of Australia.

Why does US need India in OST?

  • India, which has developed significant space capabilities over the decades, is a deeply invested party.
  • The US recognises that it can’t unilaterally define the space order anymore and is looking for partners.
  • International cooperation on space situational awareness is similar to the agreements on maritime domain awareness — that facilitate sharing of information on a range of ocean metrics.
  • India has been strengthening its maritime domain awareness through bilateral agreements as well as the Information Fusion Centre for the Indian Ocean Region (IFC-IOR) at Gurugram.
  • India has also taken tentative steps to cope with the unfolding military challenges in outer space.
  • It has also initiated space security dialogue with close partners like the US, Japan, and France.

Making a first global move

  • When signed, the agreement with the US on SSA will be the first of its kind for India.
  • Washington has agreements with more than two dozen countries on SSA.
  • The US and Indian delegations have also discussed a US initiative called the Artemis Accords — that seek to develop norms for activity in the Moon and other planetary objects.

Way forward

  • As commercial and military activity in outer space grows, the 20th-century agreements like Outer Space Treaty and the Moon Treaty (1979) need reinforcement and renewal.
  • The growing strategic salience of outer space demands substantive national policy action in India.
  • That can only be mandated by the highest political level. Back in 2015, PM Modi’s speech on the Indian Ocean focused national attention on maritime affairs.
  • India could do with a similar intervention on outer space today.

 

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Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

Revealing India’s actual farmer population

Economics | Mains Paper 3: Agriculture and related issues
Note4Students

From UPSC perspective, the following things are important :

Prelims level : SAAH report

Mains level : Paper 3- India's farmer population and related issues

Context

Depending on the source, there is a wide variation in the number of farmers in India.

What is the extent of variation?

  • The last Agriculture Census for 2015-16 placed the total “operational holdings” in India at 146.45 million.
  • The Pradhan Mantri-Kisan Samman Nidhi (PM-Kisan) scheme has 110.94 million beneficiaries.
  • National Statistical Office’s Situation Assessment of Agricultural Households (SAAH) report for 2018-19 pegs the country’s “agricultural households” at 93.09 million.

What explains the variation?

  • This wide variation has largely to do with methodology.
  • The Agriculture Census looks at any land used even partly for agricultural production, the land does not have to be owned by that person (“cultivator”), who needn’t also belong to an “agricultural household”.
  • The SAAH report, on the other hand, considers only the operational holdings of agricultural households.
  • Members of a household may farm different lands.
  • The SAAH takes all these lands as a single production unit.
  • It does not count multiple holdings if operated by individuals living together and sharing a common kitchen.
  • Accounting for only “agricultural households”, while not distinguishing multiple operating holdings within them, brings down India’s official farmer numbers to just over 93 million.
  • Expansive definition: SAAH’s definition of “agricultural households” is expansive.
  • It covers households having at least one member self-employed in agriculture and whose annual value of produce exceeds Rs 4,000.
  • Such self-employment needs to be for only 30 days or more during the survey reference period of six months.

So, what is the actual number of farmers?

  • The estimate of actual number is based on the following methodology.
  • The SAAH report gives data on agricultural household income from farm and non-farm sources, both state-wise and across different land-possessed/operational holding size classes.
  • From the above data, we can categorise “full-time/regular” farmers as those households whose net receipts from farming are at least 50 per cent of their total income from all sources.
  • The SAAH report also has state-wise estimates of agricultural households for each land-possessed size class.
  • By taking only those size classes in which the dependence ratios are higher than (or close to) 50 per cent, and adding up the corresponding estimated number of agricultural households, we are able to arrive at the total “full-time/regular” farmers for each state.
  • Following the above methodology, India’s “serious” farmer population, in turn, adds up to 36.1 million, which is hardly 39 per cent of the SAAH estimate.

Policy implications of having actual numbers of farmers significantly lower than estimated

  • If the actual number of farmers deriving a significant share of their income from agriculture per se is only 40 million a host of policy implications follow.
  • Targeted policy: One must recognise that farming is a specialised profession like any other.
  • “Agriculture policy” should, then, target those who can and genuinely depend on farming as a means of livelihood.
  • Minimum support prices, government procurement, agricultural market reforms, fertiliser and other input subsidies, Kisan Credit Card loans, crop insurance or export-import policy on farm commodities will matter mainly to “full-time/regular” farmers.
  • Land size matters: The SAAH report reveals that the 50 per cent farm income dependence threshold is crossed at an all-India level only when the holding size exceeds one hectare or 2.5 acres.
  • This is clearly the minimum land required for farming to be viable, which about 70 per cent of agricultural households in the country do not possess.
  • Policy for labourers: What should be done for this 70 per cent, who are effectively labourers and not farmers?
  • Their problems cannot be addressed through “agriculture policy”.
  • The scope for value-addition and employment can be more outside than on the farm — be it in aggregation, grading, packaging, transporting, processing, warehousing and retailing of produce or supply of inputs and services to farmers.

Consider the question “What explains the wide variation in the estimates of the number of farmers in India? What are the implications of such variations for agriculture policy?”

Conclusion

Agriculture policy should aim not only at increasing farm incomes but also adding value to produce outside and closer to the farms. A more sustainable solution lies in reimagining agriculture beyond the farm.

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GI(Geographical Indicator) Tags

GI ecosystem

Economics | Mains Paper 3: Intellectual Property Rights
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Geographical Indication, WTO, TRIPS

Mains level : Economic potential of GI Tagged products

This editorial discusses various economic and socio-cultural benefits offered by the Geographical Indication (GI) Tagging.

What is Geographical Indication?

  • A GI is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
  • India, as a member of the World Trade Organization (WTO), enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 w.e.f. September 2003.
  • GIs have been defined under Article 22 (1) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
  • GI is granted for a term of 10 years in India. As of today, more than 300 GI tags has been allocated so far in India (*Wikipedia).

Why must we promote GI?

Several studies show that the patents and copyright protection of products under GIs result in higher economic gains, fostering quality production and better distribution of profits.

  • Lost in history: Most GI are either assigned to the dusty pages of history books or left to rural artisans to propagate and preserve.
  • Source of income: Today, with the emphasis on climate change and sustainability, these products can be ready revenue generators.
  • Demand in e-com market: A modern distribution system exists in India’s robust global e-commerce backbone which will propel the nascent GI industry onto the national and world stage.

Need for govt support

  • GI products need the support of governments.
  • The Europeans are masters at it, as seen by products such as Brie cheese and sparkling wine from Champagne. The EU has an $87 billion GI economy.
  • China has also done very well by GI, strengthening e-commerce in rural areas and actively promoting agricultural special product brands in lesser developed areas.

Role of GI in China’s rise

  • A 2017 UNCTAD report on inclusive growth and e-commerce deems China’s e-commerce-driven growth as inclusive.
  • That means China has successfully empowered micro, small and medium enterprises (MSMEs) to compete with large companies on the same stage, with no geographic boundaries.
  • Likewise, despite a globally depressed market for wines, the produce from the Ningxia region of China saw exports surge 46.4 per cent in 2020, benefitting 211 wineries in Ningxia.
  • The output value of GI producers in China totalled $92.771 billion as of 2020.

Socio-cultural benefits offered by GI

  • GI protection has wider positive benefits, especially for local communities.
  • In particular, it encourages the preservation of biodiversity, local know-how and natural resources. And this is where India can do well.
  • Multiple benefits flows from a strong GI ecosystem, which can be a wellspring of economic and soft power.
  • It will automatically resolve the three fraught India issues of poor pay for talent, low female participation in the labour force, and urban migration.

How can GI induce economic transformation?

(1) Promotes Entrepreneurship and ‘Passion Economy’

  • It will convert talent into entrepreneurship with gig workers, and create a “passion” economy, that is, a new way for individuals to monetise their skills and scale their businesses exponentially.
  • It removes the hurdles associated with freelance work to earn a regular income from a source other than an employer.

(2) Employment generation

  • The labour-intensive nature of GI offers the best solution to boosting the employment-to-population ratio in India.
  • India presently has an abysmal 43 per cent compared with the 55 per cent global average.

(3) Women Empowerment

  • GI production mostly involves artisanal work-from-home culture.
  • Monetising this artisanal work done at home will increase India’s low female labour force participation rate, which at 21 per cent in 2019 was half the 47 per cent global average.

(4) Prevents migration

  • The hyper-localised nature of GI offers solutions to reverse urban migration and conserve India’s ancient crafts, culture and food.

(5) MSME Promotion

  • A rejuvenation of MSMEs, which account for 31 per cent of India’s GDP and 45 per cent of exports, will follow.
  • An estimated 55.80 million MSMEs employ close to 130 million people; of this, 14 per cent are women-led enterprises and 59.5 per cent are rural.

(6) GI Tourism

  • Another revenue-earner, GI tourism, is typically a by-product of a strong GI ecosystem.

Hurdles in GIs progress

(1) Credit Facilities and Capacity Building

  • Since GI businesses are micro, it is necessary to address the challenges of capacity-building, formal or easy access to credit.
  • There is a need for forming marketing linkages, research and development, product innovation and competitiveness in both domestic and international markets.

(2) Issue of Intermediaries

  • With the shift to digital platforms, the distribution margins of these gate keepers or mandi agents must be competitive.
  • They often act as countervailing agents by getting into similar businesses or product lines which will erode GI producer incomes.

(3) Ensuring smoother transition

  • As seen from the experience of the new farm laws, this will be a task for the central and state governments; they must ensure the transition without breaking down too many existing linkages.

Way forward

  • Control: Guardrails like regular audits and consultations with the GI producers must be mandated.
  • Cooperative management: Pulling it together will be local GI cooperative bodies or associations which can be nationally managed by a GI board.
  • Ministerial support: The Department for the Promotion of Industry and Internal Trade (DPIIT) and the Ministry of Commerce department should be tasked with developing this new sector.
  • Digital literacy: Finally, a required skill for GI producers is digital literacy. This should be a priority agenda item for NGOs and stakeholders like the DPIIT.

Conclusion

  • It is an opportunity for India to redefine the future of work using automation, technology and artificial intelligence while simultaneously enhancing and adorning the country’s talented local work force.
  • The Indian GI economy can be a platform for India to showcase to the world a model for ethical capitalism, social entrepreneurship, de-urbanisation, and bringing women to the workforce, on the back of a robust digital system.
  • It recalls and attributes of multi-cultural ethos, authenticity, and ethnic diversity are potential turbochargers for the country’s economy.
  • It encompasses the concept of trusteeship, as advocated by Mahatma Gandhi and more recently, by our PM at the UN. It is truly Made in India.

 

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RTI – CIC, RTI Backlog, etc.

PM-CARES

Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Various funds mentioned in the newscard

Mains level : Right to Information Act and its limitations

We all know that the Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund doesn’t come under the ambit of Right to Information (RTI). This oped seeks to discuss certain aspects of this issue.

Present context

  • In a recent affidavit, the Delhi High Court was informed that the PM CARES Fund is not a Government of India fund and that the amount collected by it does not go to the Consolidated Fund of India is strange.
  • This petition is seeking the PM-CARES fund to be declared as the “State” under Article 12 of the Constitution.

Intriguing facts about PM-CARES fund

  • PM CARES has been created not by law, not by notification, but by the mere creation of a webpage, and set up last year in March to raise funds for those affected by the COVID-19 pandemic.
  • The page lists its structure, functions and duties in an arbitrary manner. The official appeals for funds are made under the national emblem.
  • The most significant lie of this sworn statement is that the Government has no control over the Fund.

What is the case?

  • The PM-CARES Fund was not subject to CAG audit since the Supreme Court regarded it as a public charitable trust.
  • It is not under public scrutiny. Also contributions to it were 100% tax-free.
  • It is accused that there was statutory fund already in existence under the Disaster Management Act of 2005 to receive contributions to finance the fight against a calamity.

What is RTI?

  • RTI is an act of the parliament which sets out the rules and procedures regarding citizens’ right to information.
  • It replaced the former Freedom of Information Act, 2002.
  • Under the provisions of RTI Act, any citizen of India may request information from a “public authority” (a body of Government or “instrumentality of State”) which is required to reply expeditiously or within 30.
  • In case of the matter involving a petitioner’s life and liberty, the information has to be provided within 48 hours.

About PM CARES Fund

  • The PM CARES Fund was created on 28 March 2020 following the COVID-19 pandemic in India.
  • The fund will be used for combat, containment and relief efforts against the coronavirus outbreak and similar pandemic like situations in the future.
  • The PM is the chairman of the trust. Members will include the defence, home and finance ministers.
  • The fund will also enable micro-donations. The minimum donation accepted is ₹10 (14¢ US).

The other funds

(1) National Disaster Response Fund (NDRF)

  • The statutorily constituted NDRF was established under the Disaster Management (DM) Act of 2005.
  • The NDRF is mandated to be accountable, and answerable under the RTI Act, being a public authority, and auditable by the Comptroller and Auditor General of India.

(2) Disaster Response Fund

  • The DM Act also provided for a Disaster Response Fund — state and district level funds (besides the national level).
  • It also collects and uses the donations at the local level, with mandatory transparency and audit provisions.

(3) Prime Minister’s National Relief Fund

  • There is the PMNRF operative since the days of Jawaharlal Nehru. It was established with public contributions to assist displaced persons from Pakistan.
  • The resources are now utilised primarily to render immediate relief to families of those killed in natural calamities and to the victims of the major accidents and riots.
  • However, it has the President of India and the Leader of Opposition also as trustees.

Issues over PM-CARES Fund

  • No defined purpose: It is deliberately ignored while a new, controversial, unanswerable, and ‘non-accountable vehicle is created; its character is not spelt out till today.
  • Non-accountable: The government seems to consider statutory provisions for enquiry and information seeking to be embarrassing obstacles.
  • Centralization of donations: It centralises the collection of donations and its utility, which is not only against the federal character but also practically inconvenient. The issue is seeming, the trusteeship of the fund.

Questions and gaps

  • Law/statute: The PM CARES Fund was neither created by the Constitution of India nor by any statute.
  • Authority: If that is the case, under what authority does it use the designation of the Prime Minister, designated symbols of the nation, the tricolour and the official (gov.in) website of the PMO, and grant tax concessions through an ordinance.
  • Collection and dispensation: The amount received by the Fund does not go to the Consolidated Fund of India. If it goes to the CFI, it could have been audited by the CAG.
  • Uncontrolled: The This Trust is neither intended to be or is in fact owned, controlled or substantially financed by any instrumentality of the any govt even being chaired by the PM.

Issue over tax benefits

  • Income tax: An ordinance was promulgated to amend Income Tax Act, 1961 and declare that the donations to the PM CARES Fund “would qualify for 80G benefits for 100% exemption”.
  • CSR Funds: It will also qualify to be counted as Corporate Social Responsibility (CSR) expenditure under the Companies Act, 2013.
  • Foreign donations: It has also got exemption under the FCRA [Foreign Contribution Regulation Act] and a separate account for receiving foreign donations has been opened.

What can be inferred from all these?

  • The Centre now considers it as another obstacle and has created a new trust with the Prime Minister and his Ministers only.
  • The manner in which the PM CARES Fund was set up — with its acronym created to publicise the point that the PM cares for people — shows a bypassing of the statutory obligations of a public authority.

Query and response: Again ironical

  • After initial denials, the Government has conceded it to be a public charitable trust, but still maintains that it is not a ‘public authority’.
  • The point is that the PMO operates the Fund, but says it cannot supply any information about the PM CARES Fund because it is not a public authority.

Severe interpretations: Is it an Office of Profit?

  • If the PM CARES Fund is unconnected with the Government, then the Fund could become an office of profit.
  • And that could disqualify him and the three Ministers from holding those constitutional offices.

Conclusion

  • In order to uphold transparency, the PM CARES Fund should be declared as a Public Authority under the RTI Act, and all RTI queries answered truthfully.
  • The fund should be designated as a “public authority” under Section 2(h) of the RTI Act.

 

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Foreign Policy Watch: India-United States

Four geopolitical developments and a window of opportunity for India

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 : Read the attached story

A number of important developments has taken place over the past several weeks. They may appear disconnected but in fact add up to a significant shift in regional and global geopolitics.

Four major recent developments

  1. Withdrawal of US and NATO forces from Afghanistan: The complete takeover of the country by the Taliban
  2. Significant domestic political changes in China: The ideological and regulatory assault against its dynamic private high-tech companies and now its real estate companies
  3. Announcement of the Australia-UK and US (AUKUS): It represents a major departure in US strategy by its commitment to enable Australia to join a handful of countries with nuclear submarines
  4. Convening of the Quad physical summit in Washington: A major step towards its formalisation as an influential grouping in the Indo-Pacific going beyond security

Risks and opportunity for India

These four developments, taken together, present India with both risks but also with opportunities.  In affirmation, one can conclude that the opportunities outweigh the risks.

[A] Risks in Afghanistan

  • The Afghan situation is a setback for India in the short run.
  • The political capital and economic presence it had built up in the country over the past two decades has been substantially eroded.
  • The Taliban government is dominated by more hard-line and pro-Pakistani elements.
  • They will help deliver on the Pakistani agenda of preventing a revival of Indian diplomatic presence and developmental activity in Afghanistan.

Future of Taliban

  • In the longer run, it seems unlikely that the Taliban will give up its obscurantist and extremist agenda.
  • This may lead to domestic inter-ethnic and sectarian conflict.
  • The unwillingness of the Taliban to cut its links with various jihadi groups, including those targeting Afghanistan’s neighbours, may revive regional and international fears over cross-border terrorism.

How should India defer the Taliban?

  • India’s response should be to bide its time, strengthen its defences against an uptick in cross-border terrorism.
  • India can keep its faith with the ordinary people of Afghanistan, provide shelter to those who have sought refuge.
  • It can join in any international effort to deliver humanitarian assistance to the people of Afghanistan.

[B] Domestic political change in China

  • This is taking an ideological and populist direction.
  • The country’s vibrant private sector is being reined in while the State-Owned Enterprises (SOE) are back in a central role.
  • After the tech sector, it is the large real estate sector that is facing regulatory assault.

Concerns for investors

  • This is leading to deepening concern among foreign investors, including those who have long been champions of long-term engagement with China.

Opportunities for India

  • It is not coincidental that while in NYC, our PM had meetings with the CEOs of Blackstone and Qualcomm, both of which are heavily invested in China but are reconsidering their exposure there.
  • If India plays its cards well, this time round there could be significant capital and technology flows from the US, Japan and Europe diverted towards India because it offers scale comparable to China.
  • Since India has benign partnerships with the US, Japan and Europe, there are no political constraints on such flows.

[C] AUKUS and QUAD

  • The AUKUS and progress made by the Quad serve to raise the level of deterrence against China.
  • It is useful since it has now become the core of the US’s Indo-Pacific strategy. China will be more focused on its activities.
  • The Quad now represents, from the Chinese perspective, a second order threat.

Underlying opportunities

  • This offensive against China suits us since we are not ready to embrace a full-fledged military alliance which will constrain our room for manoeuvre.

Why should India gauge these opportunities?

  • China has given up the expectation that it could unify Taiwan through peaceful and political means, including through closer economic integration.
  • It has lost its credibility after the recent crackdown on civil liberties in Hong Kong.
  • China may advance its forcible takeover of Taiwan before the AUKUS gets consolidated.
  • The nuclear submarines for Australia may not be built and deployed for several years.
  • We may, therefore, be entering a period of enhanced uncertainty and danger in the Indo-Pacific.

India’s area for introspection

  • The constraints are policy unpredictability, regulatory rigidities and bureaucratic red tape in India.
  • Some of these issues are being addressed, such as dropping of retrospective taxation.
  • But there is still a long way to go.

Way forward

All these developments has heightened risk perception among international business and industry who have hitherto seen China as a huge commercial opportunity.

  • For India, some bold initiatives are required to take advantage of the window of opportunity that has opened.
  • It is a narrow window with a very short shelf life.
  • If grasped with both hands, then it could deliver double-digit growth for India for the next two or three decades.
  • This will shrink the asymmetry of power with China and expand India’s diplomatic options.

Conclusion

  • India should not be caught off guard. Failure of deterrence in the Indo-Pacific will have consequences beyond the region and change the geopolitical context for India.
  • For now, let us focus on what we can do to advance India’s economic prospects, for which the times are unexpectedly more propitious.

 

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Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

PM-KUSUM

Economics | Mains Paper 3: Agriculture and related issues
Note4Students

From UPSC perspective, the following things are important :

Prelims level : PM-KUSUM

Mains level : Paper 3- Revitalising PM-KUSUM

Context

The Union Minister of Power, New and Renewable Energy recently reviewed the progress of the PM-KUSUM scheme and reaffirmed the government’s commitment to accelerating solar pump adoption.

Background

  • It was launched in 2019.
  • PM-KUSUM aims to help farmers access reliable day-time solar power for irrigation, reduce power subsidies, and decarbonise agriculture.
  • PM-KUSUM provides farmers with incentives to install solar power pumps and plants in their fields.
  • Three deployment models: Pumps come in three models: off-grid solar pumps solarised agricultural feeders, or grid-connected pumps.
  • Off-grid pumps have been the most popular, but the nearly 2,80,000 systems deployed fall far short of the scheme’s target of two million by 2022.
  • The other two models are also worth scaling up for they allow farmers to earn additional income by selling solar power to discoms, and discoms to procure cheap power close to centres of consumption.

Challenges

  • Awareness challenge: Barriers to adoption include limited awareness about solar pumps.
  • Upfront contribution: The other barrier includes farmers’ inability to pay their upfront contribution.
  • Limited progress on two models: Progress on the other two models has been rather poor due to regulatory, financial, operational and technical challenges.

Suggestions

  • Extend the scheme’s timelines: Most Indian discoms have a surplus of contracted generation capacity and are wary of procuring more power in the short term.
  • Extending PM-KUSUM’s timelines beyond 2022 would allow discoms to align the scheme with their power purchase planning.
  • Level playing field: Discoms often find utility-scale solar cheaper than distributed solar (under the scheme) due to the latter’s higher costs and the loss of locational advantage due to waived inter-State transmission system (ISTS) charges.
  • To tackle the bias against distributed solar, we need to address counter-party risks and grid-unavailability risks at distribution substations, standardise tariff determination to reflect the higher costs of distributed power plants, and do away with the waiver of ISTS charges for solar plants.
  • Streamline regulation: We need to streamline land regulations through inter-departmental coordination.
  •  States should constitute steering committees comprising members from all relevant departments for this purpose.
  • Financing farmers contribution:  There is a need to support innovative solutions for financing farmers’ contributions.
  • Many farmers struggle to pay 30-40% of upfront costs in compliance with scheme requirements.
  • To ease the financial burden on farmers, we need out-of-the-box solutions.
  • Grid-connected solar pumps: Current obstacles to their adoption include concerns about their economic viability in the presence of high farm subsidies and farmers’ potential unwillingness to feed in surplus power when selling water or irrigating extra land are more attractive prospects.
  • Further, the grid-connected model requires pumps to be metered and billed for accounting purposes but suffers from a lack of trust between farmers and discoms.
  • Adopting solutions like smart meters and smart transformers and engaging with farmers can build trust and address some operational challenges.

Conclusion

These measures, combined with other agriculture schemes and complemented by intensive awareness campaigns, could give a much-needed boost to PM-KUSUM.

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Foreign Policy Watch: India-Nepal

Flood management that cannot be watered down

International Relations | Mains Paper 2: India & Its Neighborhood - Relations
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Rivers mentioned

Mains level : Floods in Bihar

Over the years, many of Bihar’s districts have been facing serious challenges with recurrent and massive flooding.  It is the right time to look at some of the key aspects of India-Nepal flood management.

Simultaneous floods in Bihar and Nepal

  • Some of Nepal’s biggest river systems originate in the Himalayan glaciers which then flow into India through Bihar.
  • During the monsoons, these river systems flood causing many problems for Bihar.
  • It is a necessity that there is process-driven coordination between the Centre and the Government of Bihar to handle the flooding in Nepal’s Terai and North Bihar (largely the Mithilanchal region).

Which are those flooding rivers?

  • Nepal’s three biggest river systems—Kosi, Gandaki and Karnali—originate in the high mountain glaciers, flow through the country and then enter India through the state of Bihar.
  • During the monsoon season, these river systems often get flooded due to heavy rains/landslides in Nepal which create floods in India’s most flood prone state—Bihar.

Bihar’s vulnerability

  • The history of floods in Bihar from 1998 to 2012 reveals how strong discharges of water due to heavy rains in the catchment areas of Nepal have created a strong pressure on the river embankments in India.
  • About 76 per cent of the population living in northern Bihar live under threat of floods due to these river systems and a total of 73.06 per cent of the total geographical area of Bihar is flood affected (mostly during the monsoon).

Measures: Joint flood management program

  • As part of the long-term measures to address the problem of massive and recurrent floods in Bihar, the Joint Project Office (JPO), Biratnagar, was established in Nepal in August 2004.
  • It aimed to prepare a detailed project report to construct a high dam on the Nepal side (on the Kosi, Kamla and Bagmati rivers).

Flaws: Yet to get effect

  • Despite the best efforts made by the Government of Bihar, the task remains unaccomplished even after 17 years.
  • The Government of Bihar has raised the matter at regular intervals for this.

Who is the obstructionist? : Fault lies with Nepal

  • The Central Water Commission (CWC) has convened several meetings with Nepali Authorities.
  • However, what is evident is Nepal’s lack of prompt reciprocation.
  • India has long-standing water sharing issues with Nepal.

What has been done so far?

  • As in the figures shared by Bihar, a total of four new flood protection works in the Gandak basin area were proposed before the floods of 2020.
  • There were proposed Barrage structures located in the border districts.

Nepal’s reluctance

  • However, Nepal argues that many of the bund area falls into no man’s land along the open international border.
  • This is notwithstanding the fact that the embankment was built by India 30 years ago and there has not been any dispute regarding its maintenance all these years.

What does this signify?

  • There is a need for India-Nepal collaboration for an efficiently operated barrage.
  • It is evident that Nepal’s attitude towards mutual issues (water sharing, flood control, etc.) has been short of collaboration, unlike in the past.

Way forward

  • In the best spirit of friendship, Nepal and India should restart the water dialogue and come up with policies to safeguard the interests of all those who have been affected on both sides of the border.
  • It is time the two friendly countries come together and assess the factors that are causing unimaginable losses through flooding every year.
  • Optimisation of the infrastructure will be decisive in finding an alternative paradigm of flood management.
  • By controlling the flooding and using the water resources for common developmental uses such as hydroelectricity, irrigation and waterways, India-Nepal relations can be strengthened even further.
  • Moreover, it is also linked to how the Himalayan glaciers and the green cover are managed.

Conclusion

  • Water resources are priceless assets.
  • Water cooperation should drive the next big India-Nepal dialogue, and despite the challenges, wisdom should prevail to turn the crisis into an opportunity, for the sake of development and environmental protection.

 

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Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

Complex count: On caste census

Indian Society | Mains Paper 1: Salient features of Indian Society
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Caste Census, Census of India

Mains level : Alternatives to Caste Census

These days, many states are urging the Centre to include a caste-wise census in the Census of India to have substantial data for reservations of certain dominant caste groups.

Background

Caste census of Backward Classes difficult: Centre

Reaction by the Centre

  • In this backdrop, the Union government’s assertion in the Supreme Court that a census of the backward castes is “administratively difficult and cumbersome” may evoke varying responses.
  • There are two components to the Government’s stand:
  1. Jeopardizing the Census: It asserts that it is a policy decision not to have caste as part of the regular census and that, administratively, the enumeration would be rendered so complex that it may jeopardise the decennial census itself.
  2. Adding more vagueness: It cites the difficulties and complexities inherent in getting an accurate count of castes, given the mind-boggling numbers of castes and sub-castes, with phonetic variations and similarities.

This is the reason that the data from the 2011 SECC were not acted upon because of “several infirmities” that rendered them unusable.

Why is caste census not feasible?

  • Hurdle to casteless society: The idea of a national caste census is abhorrent when the stated policy is to strive for a casteless society.
  • Political polarization: Political parties with their base in particular social groups may find a caste enumeration useful, if their favoured groups are established as dominant in specific geographies.
  • Electoral impact: Politicians may find the outcome inconvenient, if the precise count turns out to be lower and has a negative bearing on perceptions about their electoral importance.

Limitations of SECC, 2011

  • Completeness and Accuracy: Even in the Censuses up to 1931, when caste details were collected, they were wanting in completeness and accuracy.
  • Lakhs of Caste: Further, the data contained 46 lakh different caste names, and if subcastes were considered, the ultimate number may be exponentially high.

Need for such census

  • Quantifiable data: It may also be a legal imperative, considering that courts want ‘quantifiable data’ to support the existing levels of reservation.
  • Basis for Affirmative actions: It will be useful to establish statistical justification for preserving caste-based affirmative action programmes.

These points do merit consideration, and even those clamouring for a caste census cannot easily brush them aside.

Way forward

  • A caste census need not necessarily mean caste in the census.
  • It may be an independent exercise, but one that needs adequate thought and preparation, if its ultimate goal is not for political or electoral purposes, but for equity in distribution of opportunities.
  • A preliminary socio-anthropological study can be done at the State and district levels to establish all sects and sub-castes present in the population.
  • These can be tabulated under caste names that have wider recognition based on synonymity and equivalence among the appellations that people use to denote themselves.
  • Thereafter, it may be possible to do a field enumeration that can mark any group under castes found in the available OBC/BC lists.

Conclusion

  • A caste census may not sit well with the goal of a casteless society, but it may serve, in the interim, as a useful, even if not entirely flawless, means of addressing inequities in society.

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Climate Change Negotiations – UNFCCC, COP, Other Conventions and Protocols

A climate change narrative that India can steer

Enviro & Biodiversity | Mains Paper 1: Climatic Change
Note4Students

From UPSC perspective, the following things are important :

Prelims level : COP 26, Paris Agreement

Mains level : India's committment for Paris Agreement

A recent report by the Ministry of Earth Sciences (MoES) reveals that India has warmed up 0.7° C during 1901-2018.

What was the report?

Title: Assessment of Climate Change over the Indian Region (by MoES)

(a) Climate severity

  • The 2010-2019 decade was the hottest with a mean temperature of 0.36° C higher than average.
  • Heatwaves continued to increase with no signs of diminishing greenhouse gas emissions despite lower activity since the novel coronavirus pandemic.
  • India may experience a 4.4° C rise by the end of this century.
  • Within 2050, rainfall is expected to rise by 6% and temperature by 1.6° C.
  • India’s Deccan plateau has seen eight out of 17 severe droughts since 1876 in the 21st century (2000-2003; 2015-2018).

(b) Land degradation

  • To make things worse, India lost about 235 square kilometres to coastal erosion due to climate change-induced sea-level rise, land erosion and natural disasters such as tropical cyclones between 1990-2016.

(c) Rising Internal Displacement

  • According to the Internal Displacement Monitoring Centre, India’s Internally Displaced Populations (IDPs) are rising due to damaging climate events.
  • Uttarakhand residents began deserting their homes after the Kedarnath floods in 2013 due to heavy precipitation that increases every year.
  • Recent figures are more alarming with 3.9 million displaced in 2020 alone, mostly due to Cyclone Amphan.

India’s commitment to Climate Mitigation

  • India held the top 10 position for the second year in a row in 2020’s Climate Change Performance Index (CCPI).
  • The country received credit under all of the CCPI’s performance fields except renewable energy where India performed medium.
  • India vowed to work with COP21 by signing the Paris Agreement to limit global warming and submitted the Nationally Determined Contributions (NDCs).
  • It set a goal of reducing emissions intensity of GDP by 33%-35% and increasing green energy resources (non-fossil-oil based) to 40% of installed electric power capacity by 2030.
  • India cofounded with France at COP21, in 2015, the International Solar Alliance (ISA).

Core concern

(a) Good policies, weak practices

  • The question is, are these global alliances and world-leading policies being practised or are merely big promises with little implementation?
  • Despite leading ISA, India performed the least in renewable energy according to the CCPI’s performance of India.

(b) Low compliance

  • India is not fully compliant with the Paris Agreement’s long-term temperature goal of the NDCs and there are still risks of falling short of the 2° C goal.
  • According to India’s carbon emission trajectory, the country is en route to achieve barely half of the pledged carbon sink by 2030.
  • To achieve the Paris Agreement’s NDC target, India needs to produce 25 million-30 million hectares of forest cover by 2030 — a third of current Indian forestation and trees.
  • Going by the facts, it seems India has overpromised on policies and goals as it becomes difficult to deliver on the same.

Why COP26 matters

  • The Glasgow COP26 offers India a great opportunity to reflect on the years since the Paris Agreement and update NDCs to successfully meet the set targets.
  • India is expected to be the most populated country by 2027, overtaking China, contributing significantly to the global climate through its consumption pattern.
  • India is in a rather unique position to have a significant influence on global climate impact in the new decade.

Conclusion

  • India believes that climate actions must be nationally determined.
  • However, the Paris Agreement for developing countries should be at the core of decision-making.
  • India has the ability to improve its global positioning by leading a favourable climate goal aspiration for the world to follow.
  • The country has the opportunity to not only save itself from further climate disasters but also be a leader in the path to climate change prevention.

Back2Basics: COP26, Glasgow

  • The 2021 United Nations Climate Change Conference, also known as COP26, is the 26th United Nations Climate Change conference.
  • It is scheduled to be held in the city of Glasgow, Scotland between 31 October and 12 November 2021, under the presidency of the United Kingdom.
  • This conference is the first time that Parties are expected to commit to enhanced ambition since COP21.
  • Parties are required to carry out every five years, as outlined in the Paris Agreement, a process colloquially known as the ‘ratchet mechanism’.

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Judicial Appointments Conundrum Post-NJAC Verdict

Judicial selection needs more than a tweak

Polity | Mains Paper 2: Executive & Judiciary
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Collegium system, NJAC

Mains level : Transparency issues is Judicial Appointments

In recent weeks, the Supreme Court of India’s collegium has been busy. New judges have been appointed to the Court on its advice and long overdue vacancies have been filled up.

Read this before proceeding:

Collegium recommends nine judges for Supreme Court

What is the matter of concern?

Ans. Transparency in appointments

  • These recommendations are seen as reflective of a new and proactive collegium.
  • What ought to concern us, though, is that long-standing apprehensions about the collegium’s operation remain unaddressed: specifically, its opacity and a lack of independent scrutiny of its decisions.
  • These misgivings are usually seen in the context of a battle between the executive and the judiciary.
  • Less evident is the effect that the failings have on the status of the High Courts.
  • Today, even without express constitutional sanction, the collegium effectively exercises a power of supervision over each of the High Courts.

No specified reasons for Exclusion

  • For nearly two years, despite vacancies on the Bench, the collegium made no recommendations for appointments to the Supreme Court.
  • The conjecture in the press was that this logjam owed to a reluctance amongst some of its members to elevate Justice Akil Kureshi to the Court.
  • Indeed, it was only after a change in its composition that the panel recommended on August 17 a list of names for elevation. This list did not contain Justice Kureshi’s name.
  • The perfunctory nature of the collegium’s resolutions means that we do not know the reasons for his exclusion.
  • We also do not know why five Chief Justices, including Justice Kureshi, and several other puisne judges are now being transferred to different courts.

The public has right to know

  • This is not to suggest that these decisions are unfounded. It is possible that each of the choices made is predicated on administrative needs.
  • But whatever the rationale, surely the public has a right to know.

What is needed?

Ans. Striking a balance in Separation of Power

  • Separation of powers is a bedrock principle of Indian constitutionalism. Inherent in that idea is the guarantee of an autonomous judiciary.
  • To that end, the process of appointing and transferring judges assumes salience.
  • But the question of how to strike a balance between the sovereign function of making appointments and the need to ensure an independent judiciary has long plagued the republic.

As suggested by Dr. Ambedkar

  • The Constitution’s framers wrestled over the question for many days. Ultimately, they adopted what Dr. B.R. Ambedkar described as a “middle course”.
  • That path stipulates the following: Judges to the Supreme Court are to be appointed by the President of India in consultation with the Chief Justice of India (CJI) and such other judges that he deems fit.
  • Judges to the High Courts are to be appointed by the President in consultation with the CJI, the Governor of the State and the Chief Justice of that court.
  • In the case of transfers, the President may move a judge from one High Court to another, after consulting the CJI.

Where does primacy rest?

Ans. In a transparent Collegium system

  • In this design, there is no mention of a “collegium”.
  • But since 1993, when the Supreme Court rendered a ruling in the Second Judges Case, the word consultation has been interpreted to mean “concurrence”.
  • What is more, that concurrence, the Court held there, ought to be secured not from the CJI alone, but from a body of judges that the judgment described as a “collegium”.
  • Thus, the Court wound up creating a whole new process for making appointments and transfers and carved out a system where notional primacy came to rest in the top echelons of the judiciary.

This procedure has since been clarified.  But there is, in fact, no actual guidance on how judges are to be selected.

The NJAC and after

  • In 2015, Parliament sought to undo the procedures put in place by the Court through the 99th Constitutional Amendment.
  • The National Judicial Appointments Commission (NJAC), that the law created, comprised members from the judiciary, the executive, and the lay-public.
  • But the Court scrapped the efforts to replace the collegium and it held in the Fourth Judges Case that judicial primacy in making appointments and transfers was an essential feature of the Constitution.
  • In other words, the Court held that a body that found no mention in the actual text of the Constitution had assumed a position so sacrosanct that it could not be touched even by a constitutional amendment.

Assessing the NJAC

Ans. The NJAC was far from perfect

  • There were legitimate fears that the commission might have resulted in the appointment of malleable judges.
  • Therefore, it is plausible to argue that until a proper alternative is framed, the collegium represents the best solution.
  • This is that allowing senior judges of the Supreme Court primacy in matters of appointments and transfers is the only practical way to guarantee the independence of the judiciary.

Promises are yet unfulfilled over transparency

  • When the Court struck down the NJAC, it also promised to reform the existing system. Six years down the line those promises have been all but forgotten.
  • The considerations that must go into the procedure for selecting judges is left unexplained.
  • The words “merit” and “diversity” are thrown around without any corresponding debates on what they, in fact, mean.
  • Somehow, amidst all of this, we have arrived at a consensus that enveloping a veil over the process of selection is essential to judicial autonomy, and that there is no legitimate reason why the public ought to know how judges are chosen and transferred.

Way forward

  • It is clear that we have come a long way from a time when Chief Justices of High Courts declined invitations to the Supreme Court, because they valued the work that they were already entrusted with.
  • Restoring High Courts to that position of prestige must be seen as essential to the process of building trust in our Constitution.
  • Achieving this will no doubt require more than just a tweak in the process of appointments.

Conclusion

  • It is clear is that the present system and the mysteries underlining the decision-making only further dilute the High Courts’ prominence.
  • At some point we must take seriously the task of reforming the existing scheme because the status quo is ultimately corrosive of the very institutions that it seeks to protect.

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Contention over South China Sea

The big deal behind the ruckus over AUKUS

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 : AUKUS, Quad

Mains level : Focus areas and challenges for AUKUS

The announcement of the new Australia-U.K.-U.S. (AUKUS) trilateral security pact has naturally generated animated debate in strategic circles, before the QUAD summit.

What is the AUKUS?

  • The first major initiative of AUKUS would be to deliver a nuclear-powered submarine fleet for Australia.
  • The nuclear-powered submarines will give Australia naval heft in the Pacific, where China has been particularly aggressive.
  • While the US and Britain have had the capability for decades, Australia has never had an n-sub.

Motive: To counter China

  • China has nuclear-powered submarines, as well as submarines that can launch nuclear missiles.
  • The three signatories to the AUKUS deal have made it clear though, that their aim is not to arm the new subs with nuclear weapons.
  • China has been one of Australia’s biggest trading partners, but the relationship has soured over the last few years.
  • It was in consideration of Chinese sensibilities that Australia had pulled out of the Malabar Naval Exercise with the US, India, and Japan after participating in the 2007 edition (of which Singapore too, was part).
  • Australia came back to Malabar in 2020, which marked the first time in 13 years that the navies of the four Quad nations war-gamed together.

Australia at the Centrestage

  • This is primarily because a nuclear-powered submarine gives a navy the capability to reach far out into the ocean and launch attacks.
  • A nuclear-powered submarine offers long distances dives, at a higher speed, without being detected gives a nation the ability to protect its interests far from its shores.
  • In the context of the AUKUS agreement, nuclear-powered submarines will give the Royal Australian Navy the capability to go into the South China Sea.
  • It conclusively puts to rest a long-standing domestic debate on whether it was time for Australia to assess China through the strategic lens, overcoming the purely mercantile considerations that tended to dominate its China policy.

What makes nuclear submarines so important?

  • A nuclear-powered submarine is classified as an “SSN” under the US Navy hull classification system, wherein ‘SS’ is the symbol for submarine, and ‘N’ stands for nuclear.
  • A nuclear-powered submarine that can launch ballistic missiles is called “SSBN”.
  • Conventional diesel-engine submarines have batteries that keep and propel — though not very fast — the vessel underwater. The life of these batteries can vary from a few hours to a few days.
  • The newer Air-Independent Propulsion (AIP) submarines have additional fuel cells that allow them to stay underwater for longer and move faster than the conventional vessels.
  • However, the fuel cells are used only at strategic times, when the endurance to remain submerged is required.
  • Both conventional and AIP subs need to come to the surface to recharge their batteries using the diesel engine.
  • The diesel engine also propels the vessel on the surface. However, the fuel cells of AIP can only be charged at on-land stations, not while at sea.

Why is France unhappy about Australia getting these submarines?

  • The deal has complicated the relations between France and Australia, and also France and the US.
  • France is upset as it has been kept out of the loop. But, with the core objective of pushing back against China’s aggression, all five countries — US, UK, Australia, France and India — are on the same track.
  • The deal between France and Australia had been marked by delays and other issues.
  • The first submarine was expected to be operational around 2034.

Does India have nuclear-powered submarines?

  • Yes, India is among the six nations that have SSNs. The other five are the US, the UK, Russia, France and China.
  • India has had the capacity since it got the Soviet-built K-43 Charlie-class SSN in 1987.
  • Commissioned with the Red Fleet of the USSR in 1967, it was leased to the Indian Navy, and was rechristened INS Chakra. The submarine was decommissioned in 1991.

Indo-Pacific is the core issue

  • France, which like the UK has historically been an Indo-Pacific power with territories and bases across the region.
  • It has participated in a multi-nation naval exercise in the Bay of Bengal with the four Quad nations.
  • There is no gainsaying the fact that rapid accretion in China’s economic and military capacities, but more particularly its belligerence, has led to a tectonic shift in regional security paradigms.
  • Several countries have been obliged to review their defence preparedness in response to China’s rising military power and its adverse impact on regional stability.

A chance for the UK

  • The AUKUS pact is also an emphatic assertion of the relevance of the U.S.-Australia Security Treaty (ANZUS).
  • New Zealand, the outlier, walked away in 1984 from the treaty that ironically still bears its initials.
  • Its “nuclear-free” stance ran counter to the U.S. Navy’s non-disclosure policy in regard to nuclear weapons aboard visiting vessels.
  • Close ties notwithstanding, Australia’s future fleet of nuclear submarines will not be permitted access to New Zealand’s ports or waters, as averred by PM Jacinda Ardern.
  • AUKUS provides a fresh opportunity to the United Kingdom to reinsert itself more directly into the Indo-Pacific.
  • It is already a member of the Five Eyes (FVEY), an intelligence-sharing alliance built on Anglo-Saxon solidarity (Australia, Canada, New Zealand, the U.K., and the U.S.).

AUKUS is not a substitute for the Quad

  • It does not erode the Quad’s significance as a platform for consultations and coordination on broader themes of maritime security, free and open trade, health care, critical technologies, supply chains and capacity-building.
  • The AUKUS submarine deal, on the other hand, is an undiluted example of strategic defence collaboration, and a game-changer at that.

Chinese reception of AUKUS

  • China, expectedly, has strongly criticised AUKUS and the submarine deal as promoting instability and stoking an arms race.

The exposed double standards

  • China has the world’s fastest-growing fleet of sub-surface combatants.
  • This includes the Type 093 Shang-class nuclear-powered attack submarine (SSN) and the Type 094 nuclear-powered Jin-class ballistic missile submarine (SSBN).
  • Its nuclear submarines are on the prowl in the Indo-Pacific.
  • Yet, China denies Australia and others the sovereign right to decide on their defence requirements.

What’s in the box of AUKUS?

Ans. Greater role for Australia

  • Australia’s proposed nuclear submarines will give quite a punch in terms of a stand-off capability.
  • The growing focus on anti-submarine warfare across a more expansive region is clearly altering calculations.
  • Australia’s nuclear submarines would help create a new balance of power in the Indo-Pacific, especially in tandem with the U.S. and the U.K.
  • It will now have a more meaningful naval deterrence of its own to protect its sovereign interests.
  • It is set to play a more robust role in ensuring peace and stability in the Indo-Pacific.

Way forward

  • The setback ‘down under’ may spur France to focus afresh on partners such as India.
  • India must strike a balance between continuing imports and implementing the all-important Atmanirbhar Bharat in defence manufacturing.
  • France should take AUKUS as a business deal.
  • Its momentary reaction at the cancellation of the contract by Australia should soon subside.
  • As a major Indo-Pacific power, France is an important part of the regional security calculus.

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Foreign Policy Watch: India – EU

Is there a role for India in divided AUKUS?

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 : AUKUS

Mains level : Paper 2- Role for India in issues over AUKUS

Context

France recalled its ambassadors to the US and Australia in a diplomatic slap intended to convey its anger over a deal forged in secrecy that saw Paris lose a multi billion dollar submarine contract.

Depth and diversity of India’s relations

  • That Delhi today is a part of a difficult conversation between the US, UK, France, Europe, and Australia points to the growing depth and diversity of India’s relations with different parts of the West.
  • Popular and academic discourse on India’s foreign policy has been obsessed with the concept of “non-alignment” —was about keeping distance from the West as a whole.
  • India’s contemporary diplomacy, in contrast, takes a nuanced view of internal dynamics in the West, and recognises the political agency of individual states, and develops wide-ranging relationships with the Western nations.

Relations with France

  • Paris has always taken an independent view of the world, while remaining within the broad framework of the American alliance.
  •  In the 1990s, Paris championed the construction of a multipolar world to constrain American “hyperpower” but India did not join it.
  • The last few years, however, have seen an intensification of India’s strategic engagement with France.
  • For example, India has overcome the earlier reluctance to work with France on Indian Ocean security.

Engagement as collective and sub-region

  • The government has also stepped up on the political engagement with Europe as a collective as well as its sub-regions — from Baltics to the Balkans and from Iberia to Mitteleuropa.
  •  As India discovers that every European nation, from tiny Luxembourg to a rising Poland, has something to offer, Europe has become a thriving hub of India’s international relations.

Relations with the UK

  • Due to the bitter colonial legacy, relations between India and UK have always been underdeveloped.
  • In the last couple of years, India has made a determined effort to build a new partnership with Britain, which is the fifth-largest economy in the world, a leading financial hub, a technological powerhouse, and punches well above its weight in global affairs.

Relations with “Anglosphere”

  • India’s neglect of London also meant Delhi had no time for the “Anglosphere” that binds the UK to Australia, Canada, and New Zealand.
  • Many had presumed that the Anglosphere was irrelevant — AUKUS, however, is a reminder that Anglo-Saxon political bonds endure.
  • Instead of treating the Anglosphere with scepticism, India has begun to vigorously engage with the “settler colonies” that have so much to offer India — from natural resources to higher education and critical technologies.
  • The UK and its settler colonies have long been the preferred destination for the Indian diaspora (besides the US).
  • Leveraging diaspora politics: While the diaspora tends to connect the domestic politics of the Anglosphere with that of India, Delhi is figuring out that the diaspora politics can be played both ways.

Relations with Japan and Australia

  • The transformation of India’s relations with Australia has occurred despite entrenched scepticism in the foreign policy bureaucracy.
  • Finally, Japan has been a part of the West in the post-War era and Delhi’s relations with Tokyo have never been as rounded as they are today. They are also fellow members of the Quad.

Way forward for India

  • This wide-ranging engagement with the West should help Delhi convey two important messages to its partners this week.
  • Not undermining the larger goal: India needs to remind France, Australia, the UK and US of the shared interests in securing the Indo-Pacific and the dangers of letting the current quarrel undermine that larger goal.
  • Effective deterrence in Indo-Pacific: The other is to highlight the region’s vast requirements for effective deterrence in the Indo-Pacific;
  • And that there is enough room for the US, UK, France, and Europe to collaborate with Indo-Pacific partners in overlapping coalitions to develop high technology and defence-industrial cooperation in all the areas highlighted by AUKUS — effective underwater capabilities to AI, quantum computing and cyber warfare.
  • Deeper cooperation: India’s interests lie in deeper strategic cooperation with France and Europe as well as the Quad and the Anglosphere.

Conclusion

India’s diverse relationships in the West must be deployed in full measure to prevent a split in the Indo-Pacific coalition.

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Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

The end of the doing business rankings

Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Ease of Doing Business Report

Mains level : Read the attached story

The World Bank Group has scrapped its flagship publication, the ‘Doing Business’ report.

Doing Business Report

  • This report publishes the influential annual ranking of countries on the Ease of Doing Business (EDB) index.
  • It ranks countries by the simplicity of rules framed for setting up and conducting businesses.

Utility of the index

The World Bank’s decision has wide ramifications, as the index serves varied purposes.

  • Many countries showcase improved ranking to signal market-friendly policies to attract foreign investments. National leaders often set EDB rank targets.
  • This helps them measure domestic policies against global “best practices” and browbeat domestic critics.
  • India, for instance, wanted its administration to ensure that India breaks into the top 50 ranks of the EDB index.
  • Some countries seem to use their political heft to improve their rank, polish their international image and sway public opinion (as appears to be China’s case).

Issues with the credibility of the report

  • The Group acted on its commissioned study to examine the ethical issues flagged in preparing the 2018 and 2020 editions of the EDB index.
  • It is accused of having exerted pressure on the internal team working on the Doing Business report to falsely boost China’s rank by doctoring the underlying data.
  • Similarly, tensions were also reportedly brought to bear in the case of Saudi Arabia’s rank, among others.

EDB index rank vs economic outcomes

  • There is a disconnect between the stellar rise in EDB index rank and economic outcomes.
  • The theory underlying the EDB index could be suspect, the measurement and data could be faulty, or both.
  • For example, China’s phenomenal economic success, especially its agricultural performance (after the reforms in 1978), is perhaps the most unmistakable evidence demonstrating that lack of clarity of property rights may not be the binding constraint in a market economy.
  • What matters is economic incentives.
  • Measuring regulatory functions underlying the index could be tricky and subjective and possibly politically motivated as well, as the controversies surrounding the index seem to suggest.

EODB in India: At what cost

Ans. Weakening labour regulations

  • Closer home, India has weaponised the mandate to improve the rank in the EDB index to whittle down labour laws and their enforcement and bring them close to the free-market ideal of ‘hire and fire’.
  • Most States have emulated Maharashtra’s lead of administrative fiat, which renders labour laws toothless by dismantling official labour inspection systems and allowing employers to file self-regulation reports.
  • The government has farmed out critical safety regulations such as annual inspection and certification of industrial boilers to ‘third party’ private agencies.
  • The Labour Department’s inspection is now not mandated; it is optional only by prior intimation to employers.

Implications of such moves

  • Such abdication of the government’s responsibility towards workers has reportedly affected industrial relations.
  • The workers’ strike at Wistron’s iPhone assembly factory in Karnataka last year is an example.
  • Further, severe industrial accidents are rising, damaging life and productive industrial assets.

Why did World Bank scrap the index?

  • Investigations into “data irregularities” in preparing the EDB index, as brought out by the independent agency, seems to confirm many shortcomings repeatedly brought to light for years now.
  • The index appears motivated to support the free-market ideal.
  • It is dressed up under scientific garb and is underpinned by seemingly objective methods and data collection.
  • Strong leaders (and motivated officials) seem to have used their position to manipulate the index to suit their political and ideological ends.

Conclusion

  • India claimed the success of its Make in India initiative by relying on its ranking on the EDB index without tangible evidence.
  • Handing over law enforcement to employers by self-reporting compliance seems to have increased industrial unrest and accidents.
  • It perhaps calls for honest soul-searching as to what havoc a questionable benchmark can wreak.

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FDI in Indian economy

Holding transnational corporations accountable

Economics | Mains Paper 3: Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level : BIT

Mains level : Paper 3- Using BITs to hold TNCs accountable

Context

Given the enormous power that transnational corporations (TNCs) wield, questions about their accountability have arisen often. There have been many instances where the misconduct of TNCs has come to light such as the corruption scandal involving Siemens in Germany.

Holding TNCs accountable: Background

  • The effort was made at the UN to develop a multilateral code of conduct on TNCs.
  • However, due to differences between developed and developing countries, it was abandoned in 1992.
  • Role of BITs: Aim was to use international law to institutionalise the forces of economic globalisation, leading to the spread of BITs.
  • Asymmetry in BITs: These treaties promised protection to foreign investors under international law by bestowing rights on them and imposing obligations on states.
  • This structural asymmetry in BITs, which confer rights on foreign investors but impose no obligations, relegated the demand for investor accountability.
  • In 2014, the UN Human Rights Council established an open-ended working group with the mandate to elaborate on an international legally binding instrument on TNCs and other businesses concerning human rights.
  • Since then, efforts are being made towards developing a treaty and finding ways to make foreign corporations accountable.
  • The latest UN report is a step in that direction.

UN report on human rights-compatible international investment agreements

  • The UN working group on ‘human rights, transnational corporations (TNCs) and other businesses’ has published a new report on human rights-compatible international investment agreements.
  • It urges states to ensure that their bilateral investment treaties (BITs) are compatible with international human rights obligations.
  • It emphasises investor obligations at the international level i.e., the accountability of TNCs in international law.

Using BITs to hold TNCs accountable

  • BITs can be harnessed to hold TNCs accountable under international law.
  • The issue of fixing accountability of foreign investors came up in an international law case, Urbaser v. Argentina (2016).
  • Subjecting corporates to international law: In this case, the tribunal held that corporations can be subjects of international law and are under a duty not to engage in activities that harm or destroy human rights.
  • The case played an important role in bringing human rights norms to the fore in BIT disputes.
  • It also opened up the possibility of using BITs to hold TNCs accountable provided the treaty imposes positive obligations on foreign investors.
  • Recalibrating BITs: In the last few years, states have started recalibrating their BITs by inserting provisions on investor accountability.
  • Issues with BITs: However, these employ soft law language and are hortatory.
  • They do not impose positive and binding obligations on foreign investors.
  • They fall short of creating a framework to hold TNCs accountable under international law.

Takeaways for India

  • The recent UN report has important takeaways for India’s ongoing reforms in BITs.
  • Best endeavour clauses not enough: India’s new Model BIT of 2016 contains provisions on investor obligations.
  • However, these exist as best endeavour clauses. They do not impose a binding obligation on the TNC.
  • Impose positive binding obligations: India should impose positive and binding obligations on foreign investors, not just for protecting human rights but also for imperative issues such as promoting public health.
  • The Nigeria-Morocco BIT, which imposes binding obligations on foreign investors such as conducting an environmental impact assessment of their investment, is a good example.

Consider the question ” Ensuring that the bilateral investment treaties (BITs) are compatible with international human rights obligations in the need of the hour. In light of this, assess the progress made globally on this issue and suggest way forward for India in framing its BITs.”

Conclusion

Reforms would help in harnessing BITs to ensure the answerability of foreign investors and creating a binding international legal framework to hold TNCs to account.

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Insolvency and Bankruptcy Code

EoDB at risk if issue of appointments to tribunals is not resolved

Economics | Mains Paper 3: Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level : NCLAT, NCLT

Mains level : Read the attached story

While hearing a challenge to the Tribunal Reforms Act, 2021, the Supreme Court came down heavily on the government of India for vacancies not being filled on time. This could severely impact the ease of doing business in India, said the court.

Background

  • The government has lauded the role of the Insolvency and Bankruptcy Code, 2016 (IBC), for improving India’s ranking on the “Ease of Doing Business” index over the last couple of years.
  • However, the SC’s observation is spot-on as vacancies in the tribunals have slowed down insolvency resolution due to the huge pendency of cases.
  • When the SC made its observations, the NCLT had only 30 members against a total strength of 63.

About NCLAT and NCLT

  • National Company Law Appellate Tribunal (NCLAT) was constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of National Company Law Tribunal(s) (NCLT) in 2016.
  • NCLAT is also the Appellate Tribunal to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India (CCI).
  • It is also the Appellate Tribunal to hear and dispose of appeals against the orders of the National Financial Reporting Authority.

Difference between NCLT AND NCLAT

NCLT

NCLAT
·         NCLT is established as per Section 408 of companies act, 2013 ·         NCLAT is established as per Section 410 of companies act, 2013
·         It holds primary jurisdiction on cases of insolvency and bankruptcy ·         It holds appellate jurisdictions over the cases judged by NCLT
·         NCLT accepts and analyzes the evidence from creditors and debtors ·         NCLAT accepts and analyzes the decision made by NCLT
·         NCLT collects facts and evidences ·         NCLAT analyzes facts and evidences

CJI’s reservations over Pendency

  • The NCLAT had a sanctioned strength of a chairperson plus 11 members but its functioning strength was of eight members.
  • Both the NCLT and NCLAT have been without chairpersons for several months respectively.
  • These vacancies are concerning because as of May 31, 13,170 insolvency petitions were pending before benches of the NCLT.
  • Of these, 2,785 petitions have been filed by financial creditors and 5,973 by operational creditors.

Note: The IBC created an institution called an information utility to be the repository of information on debts and defaults in India.  The sole utility in India at present is the National E-Governance Services Ltd. (NeSL).

Basis of these cases

  • The financial creditors are facing criticism for taking haircuts as high as 90 per cent against their claims.
  • A longer approval period would entail greater value erosion of a corporate debtor which would be an unattractive proposition for any prospective resolution applicant.
  • This uncertainty can be cured by a faster approval process by the NCLTs by the creation of more benches and filling up of current vacancies.

Why is the Supreme Court fuming over vacancies?

(a) Covid impact

  • The Indian economy is recovering from the adverse effects of the Covid-19 pandemic.
  • During the downturn, financial institutions and banks have suffered higher defaults than usual, impacting the robustness of the system.
  • Lending has decreased during this time and can only be encouraged now by shoring up the mechanism under the IBC to inspire confidence in creditors.

(b) Non-compliance by the govt

  • The SC had granted time to the government till September 13 to take substantial steps in this regard, which was partially complied with by appointing 18 members.
  • The government, however, failed to avoid embarrassment as the CJI expressed his anger at the appointment process which had ignored candidates recommended by the selection committee.

(c) Burden of pendency

  • There is a real risk of the court taking matters into its own hands by making appointments itself, or by taking harsher steps like transferring jurisdiction under the IBC to high courts.
  • One hopes that the situation is resolved quickly to make strict time-bound insolvency resolutions a reality.

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

Rising unemployment is yet to receive the attention it deserves from government

Economics | Mains Paper 3: Issues relating growth and development, employment
Note4Students

From UPSC perspective, the following things are important :

Prelims level : LFPR

Mains level : Paper 3- Rising unemployment

Context

India’s unemployment rate in August was 8.3 per cent. This was higher than the 7 per cent recorded in July. The month-to-month variations notwithstanding, these are all very high unemployment rates.

Why inflation gets more attention in India than unemployment?

  • Periodic Labour Force Survey (PLFS) results showed the historically high unemployment rate of 6.1 per cent for 2017-18 (July to June). It was at a 45-year high.
  • New norm at 7-8 per cent: Till then, India was used to recording an unemployment rate of around 3 per cent. 
  • Today, an unemployment rate of 7-8 per cent seems to be the norm and such levels do not seem to matter.
  • The unemployment rate is not the most important labour market indicator for a country like India.
  • Why inflation gets preference: Between inflation and unemployment, the two economic indicators conjoined theoretically by the Phillips curve, it is inflation that wields political power.
  • Inflation hurts almost the entire population.
  • Equally importantly, high inflation rates can upset financial markets that in turn exert pressure on regulators to keep inflation in control.
  • Unemployment directly impacts only the unemployed, who don’t count much.
  • Worse still, society perceives being unemployed as an individual shortcoming, and not an outcome of a macroeconomic malaise.

What does low labour force participation rate (LFPR) indicate about the labour market in India?

  • The unemployment rate is a measure of the economy’s inability to provide jobs only for those who seek work.
  • But, in India, very often people do not look for jobs in the belief that none are available which is reflected in a low labour force participation rate (LFPR).
  • India’s LFPR is at around 40 per cent when the global rate is close to 60 per cent.
  • It is important that this belief in the futility of a job hunt is overcome by an explosive creation of new good quality formal jobs.

Why employment rate is a useful indicator for India

  • A useful labour market metric for a country like India is the employment rate.
  • This measures the proportion of the population over 14 years of age that is employed.
  • The definition of employment needs to be changed, at present, engaging in some economic activity for just one hour in any of the past seven days is counted as employment.
  • India’s record in providing employment to its people has been abysmally poor.
  • CMIE’s definition of employment indicates that in 2016-17, only 42.8 per cent of the working-age population was employed.
  •  In the year of the pandemic, it fell to 36.5 per cent.

Reverse migration in employment from manufacturing to low productivity employment

  • People are moving away from factories as manufacturing jobs shrink, to farms that provide shelter largely in the form of disguised unemployment.
  • It cannot be the desire of a nation to move people away from high productivity, better quality jobs in manufacturing to low productivity employment in agriculture or as gardeners or security guards in the household sector.
  • Employment opportunities need to expand in areas where labour is deployed to deliver higher productivity for enterprise and higher returns to labour.

Way forward

  • Increase investment: A large part of the solution to this lack of adequate jobs is in increasing investments.
  • Focus on demand size: For this, the investment climate needs to be business-friendly and government interventions must shift away from supply-side support to spurring demand.

Conclusion

The government needs to come up with policies for generating employment opportunities and stemming the reverse migration from manufacturing jobs to low productivity employment.

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