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Type: Op-ed

  • Budgeting for the education emergency

    Context

    Faced with an unprecedented education emergency, this is the time to substantially ramp up public spending on education and make it more effective.

    Low allocation for education

    • UNESCO’s 2030 framework for action suggests public education spending levels of between 4% and 6% of GDP and 15%-20% of public expenditure.
    • A recent World Bank study notes that India spent 14.1 % of its budget on education, compared to 18.5% in Vietnam and 20.6% in Indonesia, countries with similar levels of GDP.
    • But since India has a higher share of population under the age of 19 years than these countries, it should actually be allocating a greater share of the budget than these countries.
    • Public spending on education in most States in India was below that of other middle-income countries even before the pandemic.
    • Most major States spent in the range of 2.5% to 3.1% of State income on education, according to the Ministry of Education’s Analysis of Budgeted Expenditure on Education.
    • This compares with the 4.3% of GDP that lower-middle-income countries spent, as a group, between 2010-11 and 2018-19.
    •  In the 2021-22 Budget, the Central government’s allocation for the Education Department was slashed compared to the previous year, even though the size of the overall budget increased.
    • Of the major States and Delhi, eight either reduced or just about maintained their budget allocation for education departments in 2021-22 compared to 2020-21.

    Way forward

    • The vast majority of the 260 million children enrolled in preschool and school, especially in government schools, did not have meaningful structured learning opportunities during the 20 months of school closures.
    • Infusion of resources: The education system now needs not only an infusion of resources for multiple years, but also a strengthened focus on the needs of the poor and disadvantaged children.
    • What it is spent on and how effectively resources are used are important.
    • It is clear what additional resources are required for.
    • The needs include: back-to-school campaigns and re-enrolment drives; expanded nutrition programmes; reorganisation of the curriculum to help children learn language and mathematics in particular, and support their socio-emotional development, especially in early grades; additional learning materials; teacher training and ongoing support; additional education programmes and collection and analysis of data.
    • Focus on teacher training:  How does expenditure on technology compare with the amounts spent on teacher training, which represents just 0.15% of total estimated expenditure on elementary education?
    • Teachers are central to the quality of education, so why does India spend so little on teacher training?

    The opacity of education finance data in India

    • The opacity of education finance data makes it difficult to comprehend this.
    • For instance, the combined Central and State government spending on education was estimated to be 2.8% of GDP in 2018-19, according to the Economic Survey of 2020-21.
    • This figure had remained at the same level since 2014-15.
    • On the other hand, data from the Ministry of Education indicates that public spending on education had reached 4.3% of GDP in the same year, rising from 3.8% of GDP in 2011-12.
    • The difference in the figures is due to the inclusion of expenditure on education by departments other than the Education Department.
    •  Including expenditure on education by, for example, the Ministry of Tribal Affairs, the Ministry of Social Justice and Empowerment (on Anganwadis, scholarships, etc.), the Ministry of Science and Technology (for higher education) is of course legitimate.
    • However, the composition of these expenditures is not readily available.

    Conclusion

    The questions for this Budget should be clear. How much additional funds are being allocated for different levels of education by the principal departments in 2021-22? Are the funds being spent on the specific measures required to address the education emergency facing the children?

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  • A chance to support growth, fiscal consolidation

    Context

    The adverse effect of the third wave of COVID-19, which is mainly affecting the last quarter of 2021-22, may call for a further downward adjustment in the growth rate to about 9%.

    Growth in FY 2021-22

    •  As per the NSO’s advance estimates, at the end of 2021-22, the magnitude of GDP in real terms is estimated at INR₹147.5-lakh crore that is only a shade higher than INR₹145.7-lakh crore in 2019-20.
    • Thus, due to the three waves of COVID-19 that India has experienced, two years of real growth in economic activities have been wiped out. 
    • As per the advance estimates, the gross fixed capital formation (GFCF) relative to GDP at current prices stands at 29.6% in 2021-22.
    • Capacity utilisation in India continues to have considerable slack.
    • Private final consumption expenditure (PFCE) also shows a low growth of 6.9% in 2021-22.
    • Any pick-up in demand would continue to be constrained by low-income growth in sectors characterised by a high marginal propensity to consume (MPC) such as the trade, transport, et al. sector and the Micro, Small and Medium Enterprise (MSME) sector more broadly.
    • It may thus be prudent to expect a real GDP growth in the range of 6%-7%.
    • Growth in 2022-23 would also continue to be constrained by supply-side bottlenecks and high prices of global crude and primary products.
    • Growth in 2022-23 would depend on the basic determinants such as the saving and investment rates in the economy.

    Suggestions

    • Extend GST compensation period: The GST compensation provision would also come to an end in June 2022.
    • This would cause a major revenue shock at least for some States such as Tamil Nadu, Kerala and Andhra Pradesh.
    • While this matter may be considered by the GST Council, the compensation arrangement should be extended by two years in some modified form.
    • With respect to non-tax receipts, the scope of the National Monetization Pipeline (NMP) may be extended to cover monetisation of government-owned land assets.
    • Disinvestment initiatives may have to be accelerated.
    • Expenditure prioritisation in 2022-23 should focus on reviving both consumption and investment demand.
    • Urban counterpart to MGNREGA: Since consumption demand remains weak, some fiscal support in the form of an urban counterpart to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) may be considered.

    Focusing on fiscal consolidation

    • It would be appropriate now to consider a graduated return to fiscal consolidation while using fiscal policy to lay the base for faster growth in the years to come.
    • The Fifteenth Finance Commission had suggested a fiscal consolidation path where the Centre’s fiscal deficit was benchmarked at 5.5% of GDP for 2022-23.
    • In their pessimistic scenario, it was kept at 6% of GDP. 
    • It may be prudent to limit the reduction in fiscal deficit-GDP ratio to about 1% point of GDP in 2022-23.
    • This would imply a fiscal deficit in the range of 5.5%-6% of GDP.
    • From here on, a stepwise reduction of 0.5% points per year would enable a level of about 4% of GDP by 2025-26.
    • By this time, as suggested by the Fifteenth Finance Commission, a high-powered inter-governmental group should be constituted to re-examine the sustainability parameters of debt and fiscal deficit of the central and state governments.

    Conclusion

    Expenditure prioritisation in 2022-23 should focus on reviving both consumption and investment demand while aiming for the gradual return to the fiscal consolidation.

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  • Why India needs a single agency to guard its borders

    Context

    Recent developments warrant a comprehensive review of border management to ensure the all-weather security of our borders.

    What makes India’s border management difficult?

    • India shares land borders with Pakistan, China, Nepal, Bhutan, Bangladesh and Myanmar, which stretch approximately 15,106 km.
    • In addition, we have an approximately 3,323 km-long LoC with Pakistan, which further extends to the rechristened 110 km stretch of “Actual Ground Position Line” (AGPL) dividing the Siachen glacier region.
    • Further east, we have the 3,488 km LAC with China.
    • We share maritime boundaries with Sri Lanka, Maldives, Bangladesh, Pakistan, Myanmar and Indonesia; we have a 7,683 km coastline and an approximately 2 million sq km exclusive economic zone (EEZ).
    • This makes India’s task more complex than most other countries.

    Multiple agencies securing borders

    • Complexity is accentuated by the fact that along with the army, we have multiple other security agencies — the Central Armed Police Force (CAPF) and the Paramilitary Forces (PMF) — sharing the responsibility.
    • While the army is deployed along the LoC and AGPL, the Border Security Force (BSF) looks after the international border with Pakistan and Bangladesh.
    • Guarding the LAC has been assigned to the Indo-Tibetan Border Police (ITBP) and Assam Rifles.
    • The Sashastra Seema Bal (SSB) is responsible for guarding the borders with Nepal and Bhutan.
    • The Assam Rifles looks after our border with Myanmar.
    • In a nutshell, in addition to the army, we have four agencies guarding borders with six neighbours.
    • Conversely, maritime borders are guarded by a single agency — the Coast Guard.

    Need for review of the border management

    • There is a lack of a coherent policy on training, planning and the conduct of guarding operations among various outfits.
    • Overall coordination is also affected.
    • Our adversary on the western border has often escalated violations by resorting to the prolonged use of military resources.
    • Chinese provocations along the LAC are military operations.
    • Clearly, the peace-time scenario is now by and large militarised.

    Way forward

    • Single security agency: In this scenario, India needs a single security agency adequately equipped, suitably armed and trained in advanced military drills and sub-unit tactics to guard our borders.
    • Manpower from Army: Further, to augment the battle efficiency, a fixed percentage of manpower, including the officer cadre, should be drawn on deputation from the army.
    • Paramilitary force under Ministry of Defence: To ensure the desired training and operational standards, this single security agency should be designated as a paramilitary force under the Ministry of Defence and operate under the army.
    • Mergers: The ITBP and the SSB should be fully merged into the new outfit; the BSF and CRPF still have important internal security duties and can be partially merged.
    • The reorganised Assam Rifles too should retain its role of conducting counter-insurgency operations and act as a reserve for the army for conventional operations.
    • Most countries have raised specialised and dedicated armed bodies for border security.
    •  Iran has the Border Guard Command, Italy has the Border Police Service, Russia has created a Border Guard Service, whereas in the US, it is under Homeland Security.
    • Most of these countries, based on threat perception and for better combat cohesion, have placed these organisations under the command of the armed forces.

    Conclusion

    India should adopt a single agency with adequate resources and training to deal with the evolving challenges.

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  • Keeping the spirit of federalism alive

    Context

    Conscious recognition of the federal character of our polity is essential to protect our national character.

    Federal spirit and ideas in Indian Constitution

    • Conscious of the differential needs of the populations of different states, the drafters of the Constitution made provisions for an equitable share of powers and responsibilities among different levels of governments. 
    • The lists in the 7th Schedule of the Constitution — Union, state and concurrent — are an example of this division, wherein each level of government has its own sphere, enabling context-sensitive decision-making.
    • Local self-government: Later, institutions for local self government were added through the 73rd and 74th amendments, which strengthened grass roots democracy.
    • Division of responsibility: Article 246 and Article 243 G provide for this division of responsibilities.
    • Finance Commission: Article 280 provided for the constitution of Finance Commission to define the financial relationship and terms between the Union and states.
    • Inter-State Council: Article 263 provided for the establishment of an Inter-State Council for smooth transition of business between the Union and states and resolution of disputes.
    • The inter-state tribunals, the National Development Council and other informal bodies have served as vehicles of consultations between the Union, states and UTs.
    • Rajya Sabha: Apart from these institutions and the Rajya Sabha, the Constitution makers also left much scope for consultative and deliberative bodies so as to strengthen the spirit of cooperation and federalism.

    Steps against the spirit of federalism

    • The Planning Commission has been scrapped.
    • The Inter-State Council has met only once in the last seven years while the National Development Council has not met at all. 
    •  The tenure of the 15th Finance Commission was mired in controversy and many states expressed apprehensions about devolution.
    • The GST has already taken away much of the autonomy available to states and has made the country’s indirect tax regime unitary in nature.
    • Article 370 was removed without consulting the state legislature.
    • Parliament legislated on “agriculture”, entry no. 14 in the state list, to enact the three contentious farm laws, overstepping its jurisdiction and imposing a law on the states.
    •  The New Education Policy has been flagged as encroaching on the federal nature of the polity.
    •  The BSF’s jurisdiction was extended in Assam, West Bengal and Punjab without any consultation with the concerned states.
    • The constitutional office of governor has come under scrutiny several times for encroaching on the powers of state executive and legislature.

    Conclusion

    It should be underlined that Article 1 of our Constitution declares that “India that is Bharat is a union of states”, and that devolution of powers is necessary in such a setting.

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  • Drop the IAS cadre rules amendments

    Context

    The Central Government has proposed four amendments to Rule 6(1) of the IAS (Cadre) Rules, 1954 dealing with deputation, and has sought the views of State governments before January 25, 2022.

    Historical background of All India Services

    • It was Sardar Patel who had championed the creation of the Indian Administrative Service (IAS) and the Indian Police Service (IPS) as “All India Services” (AIS) whose members would be recruited and appointed by the Centre and allotted to various States, and who could serve both under the State and the Centre.
    • Speaking to the Constituent Assembly on October 10, 1949, Patel said, “The Union will go, you will not have a united India if you have not a good All India Service which has the independence to speak out its mind, which has a sense of security….”.

    Central deputation of All India Service officers

    • Consultative process: AIS officers are made available for central deputation through a consultative process involving the Centre, the States and the officers concerned.
    • The Centre would choose officers only from among those “on offer” from the States.
    • Concurrence of the State government: The existing Rule 6(1) states that a cadre officer may be deputed to the Central Government (or to another State or a PSU) only with the concurrence of the State Government concerned.
    • However, it has a proviso which states that in case of any disagreement, the matter shall be decided by the Central Government.
    • Unfortunately, both the Centre and the States have at times flouted these healthy conventions for political considerations.

    The politicisation of the deputation process

    • In May 2021, the Centre unilaterally issued orders for the central deputation of the Chief Secretary of West Bengal just before his last day in service.
    • Some States used to vindictively withhold the names of some of the officers who had opted for central deputation or delay their relief after they were picked up by the Centre.
    • The proposed amendment to rule: The Central Government has proposed four amendments to Rule 6(1) of the IAS (Cadre) Rules, 1954 dealing with deputation.

    Two of the four proposed amendments are disconcerting

    • 1] Providing a fixed number of IAS officers for central deputation: One is a new proviso making it mandatory for the State government to provide a certain fixed number of IAS officers for central deputation every year. 
    • The proposed amendment more or less compels a State government to offer IAS officers for central deputation even when these officers themselves may not wish to go on central deputation.
    • Reasons for shortage of  IAS officers: Poor working conditions in junior-level posts, an opaque and arbitrary system of empanelment for senior-level posts, and lack of security of tenure at all levels are the real reasons for the shortage of IAS officers, which the Centre should address.
    • 2] Requiring states to release the officer: The other is a proviso that requires the State government to release such officers whose services may be sought by the Central Government in specific situations.
    • Based on experiences of the recent past, State governments have a justified apprehension that this proviso may be misused for political considerations. 

    Issues with the proposed amendments

    • The contemplated changes have grave implications for the independence, security and morale of IAS officers.
    • Infringement of rights of States: States are right in perceiving the proposed amendments as a serious infringement of their rights to deploy IAS officers as they deem best, especially when the cutting edge of policy implementation is mostly at the State level.
    • States may prefer officers of the State Civil Services to handle as many posts as possible.
    • . In course of time, the IAS will lose its sheen, and the best and the brightest candidates will no longer opt for the IAS.
    • Against cooperative federalism: In S.R. Bommai vs Union of India (1994), the Supreme Court held that “States have an independent constitutional existence and they have as important a role to play in the political, social, educational and cultural life of the people as the Union. They are neither satellites nor agents of the Centre”.

    Consider the questions “What are the proposed amendments to IAS Rule 1954? What are the concerns with the proposed changes?”

    Conclusion

    In a federal setup, it is inevitable that differences and disputes would arise between the Centre and the States. But all such quarrels should be resolved in the spirit of cooperative federalism and keeping the larger national interest in mind.

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  • What Russia really wants

    Context

    Vladimir Putin, who annexed Crimea in 2014 has now mobilised some 100,000 troops on the Ukraine border.

    How insecurity and history plays role in Russia’s actions

    • Russia, the world’s largest country by land mass, lacks natural borders except the Arctic Ocean in the north and the Pacific in the far east.
    • Its vast land borders stretch from northern Europe to Central and north east Asia.
    • The country’s heartland that runs from St. Petersburg through Moscow to the Volga region lies on plains and is vulnerable to attacks.
    • In the last two centuries, Russia saw two devastating invasions from the west — the 1812 attack by Napoleonic France and the 1941 attack by Nazi Germany. 
    • After the Second World War, Russia re-established its control over the rim land in Eastern Europe and Central Asia, which it hoped would protect its heartland.
    • But the disintegration of the Soviet Union threw its security calculations into disarray, deepening its historical insecurity.

    NATO’s expansion after disintegration of the Soviet Union

    • When the Soviet Union collapsed, Russia lost over three million square kilometres of sovereign territory.
    •  In the last months of the Soviet Union, the West promised that the North Atlantic Treaty Organization (NATO) would not “expand an inch to the east”.
    • The United States and the United Kingdom repeated the pledge after the collapse of the Soviet Union.
    • But despite the promises, NATO continued expansion.
    • In March 1999, in the first enlargement since the end of the Cold War, the Czech Republic, Hungary and Poland (all were members of the Soviet-led Warsaw Pact) joined NATO.
    • Five years later, seven more countries — including the three Baltic countries of Estonia, Latvia and Lithuania, all of which share borders with Russia — were taken into the alliance.
    • Russia felt threatened but was not able to respond.
    • But in 2008, when the U.S. promised membership to Georgia and Ukraine in the Bucharest summit, Russia, which was coming out of the post-Soviet retreat, responded forcefully.

    How Russia see NATO expansion as threat to its dominance on Black Sea

    • Turkey, Bulgaria and Romania, all Black Sea basin countries, are NATO members.
    • Ukraine and Georgia are the other countries that share the Black Sea coast, besides Russia.
    • Russia was already feeling squeezed on the Black Sea front, its gateway to the Mediterranean Sea.
    • If Ukraine and Georgia also join NATO, Russia fears that its dominance over the Black Sea would come to an end.
    • So, in 2008, Mr. Putin sent troops to Georgia over the separatist conflict in South Ossetia and Abkhazia.
    • In 2014, when the Kremlin-friendly regime of Ukraine was toppled by pro-western protesters, he moved to annex the Crimean peninsula, expanding Russia’s Black Sea coast, thereby protecting its fleet based in Sevastopol in Crimea.

    Restoring the rim land

    • In recent years, Mr. Putin has tried to turn every crisis in the former Soviet region into a geopolitical opportunity.
    • South Ossetia and Abkhazia, the self-proclaimed republics that broke away from Georgia, are controlled by Russia-backed forces.
    •  In 2020, when protests erupted in Belarus after a controversial presidential election, Mr. Putin sent assistance to the country to restore order.
    • In the same year, Russia sent thousands of “peacekeepers” to end the war between Armenia and Azerbaijan.
    • Earlier this year, Belarus leader Alexander Lukashenko, with Mr. Putin’s backing, manufactured a migrant crisis on the Polish border of the European Union.
    • This month, when violent unrest broke out in Kazakhstan, the largest and wealthiest country in Central Asia, its leader turned to Russia for help.

    How do geopolitical circumstances favour Russia?

    • The U.S.’s ignominious withdrawal from Afghanistan has left the Central Asian republics deeper in the Russian embrace.
    • Europe is very much dependent on Russian gas, which limits its response.
    • For years, the West, the winner of the Cold War, discounted Mr. Putin.
    • Having failed to defeat the Taliban in Afghanistan, NATO is unlikely to pick a war with Russia over Ukraine.

    Conclusion

    By destabilising Georgia and Ukraine and re-establishing Russia’s hold in Belarus, Caucasus and Central Asia, Moscow has effectively stalled NATO’s further expansion into its backyard.

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  • The mobile phone sector has lessons for India’s economy

    Context

    The mobile phones and room air conditioners (RAC) sectors in recent times have shown us the formulae for expansion of the manufacturing sector and growing exports.

    How did India expand its mobile manufacturing base?

    • We were one of the largest consumers of mobile phones in 2014.
    • In 2014-15, our mobile phone imports exceeded $8 billion.
    • Our electronics imports were threatening to exceed our oil imports.
    • Steps taken by govt: The government took many steps like 100 per cent automatic FDI,
    • levy of import duties to protect local manufacturers,
    • the Phased Manufacturing Plan (PMP),
    • manufacturing clusters (EMC 2.0) and
    • the Production Linked Incentive (PLI) scheme.
    • They have attracted investments, created lakhs of jobs, and have moved us from being a net importer to a net exporter.
    • Our mobile phone manufacturing value has jumped more than eight times from Rs 0.27 trillion in 2013-14 to Rs 2.2 trillion in 2020-21.
    • We have surpassed the US and South Korea to become the second-largest manufacturer globally.

    Steps need to be taken

    •  Our mobile phone exports are primarily limited to feature phones and low-value smartphones.
    • India must aim for a significant increase in exports from the current $4 billion.
    • China exports $200 billion, and Vietnam exports $60 billion worth of mobile phones.
    • The PLI scheme aims to achieve the same by allocating incentives of Rs 410 billion for the mobile phone category over the next five years.
    • Low value addition: Our value addition in mobile phone manufacturing is currently limited to 15-20 per cent versus more than 40 per cent in China.
    •  The scheme for promoting the manufacturing of electronic components and semiconductors (SPECS) is a step in the right direction.
    • We must focus on setting up a fabrication plant to manufacture semiconductor chips to facilitate complete vertical integration.

    The Room AC sector story

    •  We imported RACs worth Rs 41 billion in 2017-18.
    • The government initiated multiple measures such as the PMP scheme, banning the import of refrigerant-filled ACs, increasing the import duty on RACs and critical components, and the PLI scheme.
    • From 2017-18, RAC imports have declined by 56 per cent to Rs 18 billion in 2020-21.
    • Our import of RACs has shifted from China to an FTA country like Thailand, where import duty isn’t applicable.
    • A judicious mix of protection (levy of import duty/banning of finished goods) and incentives (PMP, PLI scheme, 100 per cent FDI) has developed local manufacturing, created jobs, and turned a trade surplus.

    Way forward

    • We missed the manufacturing/export bus in the 1980s.
    • We did excel in services like software to become back office to the world. With China+1 becoming a geopolitical imperative, it is an opportune time for us to expand the manufacturing sector and improve our export market share.
    • To achieve our true potential we need close coordination and seamless working between central, state, and local governments, the rule of law, improvements in infrastructure, especially logistics and flexible labour laws.

    Conclusion

    Many of our peers are ahead of us in ease of doing business, but none of them has a large domestic market like us. The automobile and generic pharma sector in the past and the mobile phone/RAC sectors recently have shown that we know the formulae.

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  • Democratise and empower city governments

    Context

    The “State Finances, Study of Budgets of 2021-22” report, correctly identify the role of the city governments in meeting the challenges the pandemic has thrown up, the report also points to the draining of resources.

    What the RBI report says about the role of local governments

    • The report highlights the frontline role played by the third-tier governments by implementing containment strategies, healthcare.
    • Due to this, their finances have come under severe strain, forcing them to cut down expenditures and mobilise funding from various sources.
    • Need for functional autonomy: The RBI further commented that the functional autonomy of civic bodies must increase and their governance structure strengthened.
    • Empowering financially: This could happen by ‘empowering them financially through higher resource availability.
    • The RBI did echo the recommendations of the 15th Finance Commission report on local bodies that emphasised city governance structures and financial empowerment.
    • Limited coverage of property tax: The RBI report also highlights the limited coverage of property tax and its failure in shoring up municipal corporation revenues.
    • Organisation for Economic Co-operation and Development (OECD) data show that India has the lowest property tax collection rate in the world — i.e., property tax to GDP ratio. 

    Issues faced by city governments

    • During the pandemic, while leaders from the Prime Minister to Chief Ministers to District Magistrate were seen taking a call on disaster mitigation strategies, city mayors were found missing.
    • The old approach of treating cities as adjuncts of State governments continues to dominate the policy paradigm.
    • The general approach towards urban empowerment has remained piecemeal in India.
    • The first intervention to understand ‘the urban’ (though there are references in the Five Year plans) and plan with a pan-Indian vision took place in the 1980s when the National Commission On Urbanisation was formed with Charles Correa as its chairperson.
    • Another important intervention was in the first half of the 1990s with the Constitution 73rd and 74th Amendments. 
    • The latter refers to urban reforms — empowering urban local bodies to perform 18 functions listed in the 12th Schedule.
    • However, there is no mention of financial empowerment.
    • The only exception to the rule has been the people’s plan model of Kerala where 40% of the State’s plan budget was for local bodies (directly) with a transfer of important subjects such as planning, etc.

    How to achieve functional autonomy for city government

    • This should happen with three F’s: the transfer of ‘functions, finances and functionaries’ to city governments.
    • There are nearly 5,000 statutory towns and an equal number of census towns in India.
    • Nearly 35% of the population lives in urban centres.
    • And, nearly two-thirds of the country’s GDP stems from cities and almost 90% of government revenue flows from urban centres.
    • Before value-added tax and other centralised taxation systems, one of the major earnings of cities used to be from octroi.
    • But this source of revenue collection was taken away by the State and the central governments.
    • Instead, finance commissions recommended grants to urban local bodies based on a formula of demographic profile. 
    • In such a situation, it is difficult for the towns to sustain their ability to perform their bare minimum functions, especially with the latest Pay Commission recommendations.
    • This has resulted in burdening people more with taxes and further privatisation/outsourcing of the services of the municipalities.
    • The often-cited example is how cities in the Scandinavian countries manage their functions well — from city planning to mobility to waste management.
    • But the truth is that a chunk of the income tax from citizens is given to city governments.
    • A committee formed by the Ministry of Housing and Urban Development to review the 74th constitutional amendment recommended that 10% of income tax collected from the cities was to be given back to them as a direct revenue grant from the central government.

    Way forward

    • 1] Cities must be treated as important centres of governance, where democratic decentralisation can bring in amazing results.
    • There will be transparency and adequate participation of the people.
    • 2] Cities should not be considered as entrepreneurship spaces where the sole driving force is to make them competitive to attract investments.
    • 3] The resources required for quantitative and qualitative data must be immediately provided to the cities to ensure a disaster risk reduction plan keeping vulnerable communities in mind.
    • 4] A piecemeal approach such as the concept of ‘smart cities’ must be shunned altogether.
    • This approach further widens the gap between different sets of people.
    • 5] Leadership in the cities must be elected for a term of five years. 
    • Likewise, the third F, i.e., functionaries, must be transferred to the cities with a permanent cadre.

    Consider the question “The functional autonomy of civic bodies must be increased and their governance structure strengthened. This could happen by ‘empowering them financially through higher resource availability’. Comment.” 

    Conclusion

    Thus, in this exercise by the RBI, the good part is that there has least been a mention of cities, with local bodies as important centres of governance.

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  • What the budget needs to do

    Context

    We need to insure the most vulnerable against shocks such as Covid, but even more, we need to create good job opportunities for the unskilled. What can the budget do?

    Impact on informal economy

    • The last two quarters have seen a substantive recovery in the Indian economy.
    • Corporate profitability of our largest firms has hit a new record this year.
    • So have GST collections, another indicator of the formal economy, with an average monthly collection of Rs 1.2 trillion in the second and third quarters.
    • The glass though is half full, the informal economy was particularly badly hit by Covid and its associated lockdowns.
    • Small enterprises, retail, hospitality, and construction were all hammered.
    • These were our main source of recent employment growth.
    •  Agricultural employment has risen in the last year-and-a-half, while manufacturing and services employment has fallen — this is the opposite of development.
    •  Informal service sector jobs may not seem like great jobs to us, but they are greatly prized relative to eking out a marginal existence in agriculture.
    • We need to insure the most vulnerable against such shocks, but even more, we need to create good job opportunities for the unskilled, equip people at all levels to participate more fully in the modern economy, and systemically promote wider policies of inclusion.

    What can the budget do?

    • Create good jobs for unskilled: The way it can do so directly is through accelerating spending on infrastructure.
    • The National Infrastructure Pipeline has identified a good set of projects.
    • The government should be complimented for its intention and ambition; what we need now is implementation.
    • Labour-intensive manufacturing: Most countries developed by putting millions to work in labour-intensive manufacturing.
    • We do not have the huge firms in export-oriented labour-intensive sectors that employ millions in China, Vietnam, and Bangladesh.
    •  Bangladesh has thrived by putting millions to work in manufacturing.
    • A booming garment sector employs 4.4 million.
    • As 80 per cent of those employed in garment factories are women, Bangladesh has twice the female labour force participation ratio of India.
    • Implement labour laws: In June and September 2020, the government passed four labour laws.
    • These laws have since been left dormant.
    • The budget should announce a time frame for implementation, notification by the Union government and then by the states.
    • Investment in education and skilling:  India has among the least skilled workforces in the world.
    • Under 5 per cent of our workforce is formally skilled, compared to 96 per cent in South Korea, 75 per cent in Germany and 52 per cent in the US.
    • That is why the work of the National Skills Development Corporation is so important.
    • Can the budget specify it as an independent entity controlled and run by the private sector that is then held accountable for delivering on our skilling targets.
    • Education is even more important, especially primary education.
    • Pratham’s education reports make for sobering reading.
    • The New Education Policy has a proposal that every second standard child should be able to read and do arithmetic at the second standard level as a foundation for further education.
    • This welcome initiative must receive greater dedication and focus from both government and industry.
    • School education is a state subject, so the Union budget can at best incentivise states to do the right things, say by linking the flow of additional funds to those that demonstrate improved second standard learning outcomes.
    • As a part of CSR, many companies work actively with schools.
    • Education is already the largest single area for CSR spending, accounting for one-third of the Rs 9,000 crore spent by the top 100 companies.

    Conclusion

    Other policies for economic inclusion must go beyond social inclusion. These include measures like reducing tariffs to benefit millions of consumers instead of thousands of firms. Industrial policies that help all firms such as the ease of doing business, instead of incentivising a selected few.

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  • Preventing genocide

    Context

    Incendiary speeches at a religious assembly include calls for the genocide of Muslims in India and can be seen as part of an ongoing pattern of targeting minorities.

    Background of the convention against genocide

    • India’s role: India has signed and ratified the Convention on the Prevention and Punishment of the Crime of Genocide of 1948.
    • In 1946, Cuba, India and Panama co-sponsored General Assembly Resolution 96(I), which affirmed genocide as a ‘crime under international law’.
    • As a result of this resolution, a convention on the prohibition of genocide was drafted, which was passed by the General Assembly in 1948 and came into effect in 1951, with more than 150 states party to the convention presently.
    • Legal obligation: Legal obligations on states that are party to the convention include:
    • the obligation not to commit genocide,
    • to prevent genocide, and to punish genocide(Article I),
    • to enact legislation to give effect to the provisions of the convention (Article V);
    • to provide for effective penalties for those found guilty of criminal conduct (Article V); and
    • the obligation to try those charged with genocide in a competent tribunal (Article VI).

    No legislation enacted by India

    • Since signing the Genocide Convention and ratifying it, to date India has not enacted any legislation in accordance with Article VI of the Genocide Convention.
    • At the outset, India is in violation of its international obligation to criminalise genocide within its domestic law per Articles V, VI and VII, and to take all means to ensure the prevention of genocide.
    •  Indian domestic law shows that there are no comparable provisions for the prosecution of any mass crimes, least of all genocide.
    • Indian Penal Code provisions relating to rioting, unlawful assembly and ‘promoting enmity between different groups’ do not embody the basic elements of the crime of genocide, which is against a collectivity or a group, with the specific intent to cause its destruction.
    • These also do not pertain to another key aspect of the Genocide Convention – that of prevention, and creating the conditions in which such hate speech and other associated acts are not allowed to flourish.

    Significance of the Gambia’s proceedings before the ICJ against Myanmar

    •  The Gambia has initiated proceedings before the International Court of Justice (ICJ) against Myanmar on the basis of the Convention.
    • The ICJ, relying on a previous case of Belgium v. Senegal, stated, “It follows that any State party to the Genocide Convention, and not only a specially affected State, may invoke the responsibility of another State party with a view to ascertaining the alleged failure to comply with its obligations erga omnes partes, and to bring that failure to an end.”

    Conclusion

    It is more imperative than ever that international legal protections against genocide are incorporated in domestic legislation. Furthermore, the fact that India has international legal obligations under the Genocide Convention which it is not adhering to must be rectified.

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