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  • Insolvency and Bankruptcy Code

    Getting the perfect haircut from the IBC

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: IBC 2016

    Mains level: Paper 3- Right timing in the use of IBC matters

    Understanding the role of IBC 2016

    • For reasons sometimes a company may experience stress, that is, is unable to repay the debt in time — implying that it has assets less than claims against it.
    • So, when a company has inadequate assets, the claim of an individual creditor may be consistent with its assets while claims of all creditors put together may not.
    • In such a situation, creditors may rush to recover their claims before others do, triggering a run on the company’s assets.
    • The IBC provides for reorganisation that prevents a value-reducing run on the company.
    • It aims to rescue the company if its business is viable or close it if its business is unviable, through a market process.
    • Restructuring: The claims of creditors are restructured, which may be paid to them immediately or over time.
    •  In case of closure, the assets of the company are sold, and proceeds are distributed to creditors immediately as per the priority rule.
    • Reorganisation by financial creditor: The IBC entrusts the responsibility of reorganisation to financial creditors as they have the capability and the willingness to restructure their claims.

    Why so much variation in haircut?

    • Where the company does not have adequate assets, realisation for financial creditors, through a rescue, may fall short of their claims known as haircut.
    • The IBC process yields a zero haircut (100% recovery of claimed amount) in one case and 100 per cent haircut (i.e. 0% recovery) in another.
    • Factors: It depends on several factors, including the nature of business, business cycles, market sentiments, and marketing effort.
    • It critically depends on at what stage of stress, the company enters the IBC process.
    • If the company has been sick for years, and its assets have depleted significantly, the IBC process may yield a huge haircut or even liquidation.
    • A haircut is typically the total claims minus the amount of realisation/amount of the claims.
    • But this formulation may not tell the complete story.
    • The realisation often does not include the amount that would be realised from equity holding post-resolution, and through the reversal of avoidance transactions and the insolvency resolution of guarantors — personal and corporate.
    • It also does not include realisations made in other accounts.
    • The amount of claim often includes NPA, which may be completely written off, and the interest on such NPA.
    • These understate the numerator and overstate the denominator, projecting a higher haircut.

    Significance of IBC

    • A haircut should be seen in relation to the assets available and not in relation to the claims of creditors.
    • The market offers a value in relation to what a company brings on the table, not what it owes to creditors.
    • Value maximisation: So, the IBC maximises the value of existing assets, not of assets that probably existed earlier.
    • Market determined value: The IBC enables and facilitates market forces to resolve stress as a going concern.
    • Resolution applicants, who have many options for investment, including in stressed companies, compete to offer the best value.
    • If the best value offered by the market is not acceptable to creditors, the company is liquidated.
    • Maximum realisation: In addition to rescuing the company, the IBC realises, of the available options for creditors, the highest in percentage terms.

    Conclusion

    It is a tool in the hands of stakeholders to be used at the right time, in the right case, in the right manner.

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    Back2Basics: Avoidable Transactions in IBC 2016

    • The UNCITRAL Legislative Guide on Law of Insolvency defines avoidance proceedings as “provisions of the insolvency law that permit transactions for the transfer of assets or the undertaking of obligations prior to insolvency proceedings to be cancelled or otherwise rendered ineffective and any assets transferred, or their value, to be recovered in the collective interest of creditors.”
    • It is very important for the Resolution Professional (RP) or the liquidator to identify such transaction and file applications to avoid it so that creditors can collect their claims.
    • The Insolvency and Bankruptcy Code, 2016 (IBC) contains four types of avoidable transactions- preferential, undervalued, defrauding creditors and extortionate transactions.
    • Usually, the avoidable transactions should be made within the prescribed relevant time or look back period.
    • Look back period is the relevant time up to which an RP or a liquidator can go back to scrutinize an expected avoidable transaction.

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  • Parliament – Sessions, Procedures, Motions, Committees etc

    Role of Speaker

    op-ed snap | Polity | Mains Paper 2: Parliament & State Legislatures

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Power of the Speaker

    Mains level: Paper 2- Need to make Speakers independent and impartial

    Context

    The decline in the functioning of India’s Parliament — and state assemblies as well — is caused by one primary reason: The lack of independence and impartiality of the Speaker.

    Important role of the Speaker

    • Our Constitution, after extensive debate, adopted the Westminster model of governance.
    • In the Lok Sabha, as in the United Kingdom, the Speaker is the supreme authority; he has vast powers and it is his primary duty to ensure the orderly conduct of the business of the House.
    • Constitutional law points out the two essential qualities of a Speaker: Independence and impartiality.
    • As the principal spokesperson of the Lok Sabha, the Speaker represents its collective voice.
    • Indeed, the supremacy of Parliament is emphasised by Article 75(3) of the Constitution: “The Council of Ministers shall be collectively responsible to the House of the People”.
    •  Pandit Nehru referred to the Speaker as “the symbol of the nation’s freedom and liberty” and emphasised that Speakers should be men of “outstanding ability and impartiality”.

    How role of Speaker matters in functioning Legislature

    • Power to allow debate or discussion: It is the Speaker’s duty to decide what issues will be taken up for discussion.
    • He has the sole discretion to permit an adjournment motion to be tabled or to admit a calling attention notice, if the issue is of urgent public importance.
    • The present practice of the Speaker continuing to be an active member of the ruling party has the inevitable result of his refusing to allow any debate or discussion that may be essential in national interest but may embarrass the ruling party.
    • This inevitably leads to constant disruption of Parliament by the Opposition.
    • The stalling of parliamentary proceedings has led to the passing of important bills in several sessions without any discussion.
    • Violation of separation of power between legislature and executive: The most dangerous consequence is the vastly increased powers that the executive — the bureaucracy — begins to command by default.
    • In 1951, a nine-judge bench of the Supreme Court (In Re Delhi Laws Act Case) held that essential legislative functions cannot be delegated to the bureaucracy; law-making must remain the domain of the legislature.
    • This constitutional mandate is now increasingly and consistently being violated by issuing rules and notifications that have far-reaching consequences.
    • The new rules on information technology and electronic commerce are clear instances of changes that should have come about by a parliamentary law.
    • And worse still is the power given to the executive to issue retrospective notifications — a step unknown to any civilised democracy.
    • Partisan conduct in anti-defection law issues: Several judgments on the anti-defection law have been rendered by the Supreme Court.
    • A common factor that shows up in these rulings is the blatant, partisan conduct of speakers in state assemblies.

    Way forward

    • Speaker should resign from Party: It should be made mandatory that the Speaker ought to resign from his party and his sole allegiance must be to the Constitution and to maintaining the dignity of the House.
    • The separation of powers is part of the basic structure of our Constitution.
    • It is imperative that the Speaker of every legislature resigns from his party to honour his constitutional obligation of independence and impartiality. 
    • This must be accepted as the primary responsibility of every ruling party, both at the Centre and in each state, and made into a constitutional convention.

    Conlcusion

    The option is a binary: Either allow Parliament and state legislatures to descend into terminal decline or make the Speaker truly independent and let every legislature perform its constitutional function.

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  • Foreign Policy Watch: India-Afghanistan

    Understanding the strategic flux and humanitarian crisis in Afghanistan

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: UN Security Council

    Mains level: Paper 2- Afghanistan issue

    Context

    The Afghan government and its defence forces have completely collapsed. The world over, television screens are full of images of the extraordinary takeover of Afghanistan by the Taliban.

    Background of the US intervention in Afghanistan

    • The original trigger for the US military intervention in Afghanistan was the 9/11 attacks.
    • The objective then was to eliminate the al Qaeda sanctuaries hosted by the Taliban.
    • That goal was quickly attained, as was another one — the elimination of Osama Bin Laden in Abbottabad, Pakistan, in 2011.
    • The US was thereafter stuck into a vortex in which its mission oscillated between counter-terrorism and counter-insurgency. 
    • The military presence in Afghanistan has been questioned by the US political firmament for a decade.

    Factors driving the US exit

    • China factor: The US now regards China as its principal strategic competitor.
    • China’s muscle-flexing in the East and South China Seas calls for a renewed effort by the US to protect its stakes.
    • The rise of China is the main geo-strategic threat for the US.
    • In 2001, the US had taken its eye off the ball in diverting its attention to the global war on terror.
    • Beginning with Afghanistan, it meandered through Iraq, Libya and Syria, with mixed results.
    • Taiwan: China’s recent ratcheting up of pressure on Taiwan has also sounded the alarm.

    Implications of Taliban’s return for region

    • The new regime in Kabul is likely to open the door to economic investments from China.
    • At the geopolitical level, the BRI may well receive a boost, given China’s interests in connectivity that could straddle the region, from Pakistan to Iran.
    • Pakistan has shown alacrity in welcoming the change of guard in Kabul.
    • The change in Afghanistan has security implications for India and the region at large.
    • A spill-over of any chaos and instability in Afghanistan beyond its borders could give terrorism a shot in the arm.
    • It could also singe Pakistan if it does not review its malevolent practices, which favour terror as an instrument of state policy.

    Way forward for India

    • India should prioritise the welfare of the Afghan people, whenever the opportunity presents itself.
    • Currently, about 2,500 Afghan students are enrolled in educational and vocational institutions across India.
    • They will no doubt wish to extend their scholarships.
    • As a close neighbour, India has keen stakes in ensuring a stable, secure and developed Afghanistan.
    • As the rotational President of the UN Security Council for August, India has an opportunity to engage important stakeholders on the way forward.
    • Beyond that too, India’s presence in the UN Security Council till the end of 2022 will provide a platform to explore options with greater flexibility.

    Conclusion

    The global community needs to underscore the continued participation of women in governance in Afghanistan and keep an eye on violations of human rights and international humanitarian law.

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  • Animal Husbandry, Dairy & Fisheries Sector – Pashudhan Sanjivani, E- Pashudhan Haat, etc

    Sub-Mission on Fodder and Feed

    op-ed snap | Agriculture | Mains Paper 3: Agriculture and related issues,Economics Of Animal-Rearing

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: National Livestock Mission

    Mains level: Paper 3- Addressing the lack of quality and affordable fodder and feed through Sub-Mission on Fodder and Feed

    Context

    The government recently announced a Sub-Mission on Fodder and Feed.

    Why availability of good and affordable quality feed and fodder matters

    • A study by the Indian Grassland and Fodder Research Institute has observed that for every 100 kg of feed required, India is short of 23.4 kg of dry fodder, 11.24 kg of green fodder, and 28.9 kg of concentrate feed.
    • Low milk productivity: The lack of good quality feed and fodder impacts the productivity levels of cattle.
    • This is one of the chief reasons why Indian livestock’s milk productivity is 20%-60% lower than the global average.
    • High input cost: If we break down the input costs, we find that feed constitutes 60%-70% of milk production costs.
    • When the National Livestock Mission was launched in 2014, it focused on supporting farmers in producing fodder from non-forest wasteland/grassland, and cultivation of coarse grains.
    • However, this model could not sustain fodder availability due to a lack of backward and forward linkages in the value chain.

    Why Sub-Mission on Fodder and Feed is significant

    • As about 200 million Indians are involved in dairy and livestock farming, the scheme is important from the perspective of poverty alleviation.
    • The Sub-Mission on Fodder and Feed intends to create a network of entrepreneurs who will make silage (the hub) and sell them directly to the farmers (the spoke).
    • Bringing down the input cost: The large-scale production of silage will bring down the input cost for farmers since silage is much cheaper than concentrate feed.
    • Objective: The revised scheme has been designed with the objectives of increasing productivity, reducing input costs, and doing away with middlemen (who usually take a huge cut).
    • Since India has a livestock population of 535.78 million, effective implementation of this scheme will play a major role in increasing the return on investment for our farmers.

    About the Sub-Mission on Fodder and Feed

    • The scheme will provide 50% capital subsidy up to ₹50 lakh towards project cost to the beneficiary for infrastructure development and for procuring machinery for value addition in feed such as hay/silage/total mixed ration.
    • Private entrepreneurs, self-help groups, farmer producer organizations, dairy cooperative societies, and Section 8 companies (NGOs) can avail themselves of the benefits under this scheme.
    • The scheme can be used for covering the cost of infrastructure/machinery such as bailing units, harvester, chaff cutter, sheds, etc.

    Challenges and solution

    • Seasonal availability: A major challenge in the feed sector emanates from the fact that good-quality green fodder is only available for about three months during the year.
    • Fermenting green fodder: Ideal solution would be to ferment green fodder and convert it into silage.
    • Hence, under the fodder entrepreneurship program, farmers will receive subsidies and incentives to create a consistent supply chain of feed throughout the year.

    Conclusion

    The mission will help marginal farmers reduce their input costs and help them in increasing the return on capital employed.

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

    The message from the IPCC report

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: IPCC

    Mains level: Paper 3- What IPCC report seeks to convery

    Context

    The Intergovernmental Panel on Climate Change (IPCC) recently released the Working Group I contribution to the Sixth Assessment Report (AR6). It is the first of four that the Panel will issue over the next one and a half years.

    What does the report say?

    • Global surface temperature is now higher by 1.07oC since the pre-industrial era.
    • The impact of climate change on the atmosphere, oceans and land is unmistakably of human origin and this impact is picking up pace.
    • Carbon dioxide is the dominant source of warming.
    • Aerosols contribute to reducing the impact of warming by other greenhouse gases, by almost a third.
    • Methane reduction, while needed overall, is particularly significant only as part of the endgame as the drastic reduction of aerosols actually leads to an increase in warming.
    • The report expectedly projects an increase in climate extremes due to global warming, with heatwaves, extreme rainfall events and occurrence of extreme sea levels all expected to intensify and be more frequent.
    • A major finding of the report is that air pollution reduction and steep climate change mitigation are not complementary goals but require independent efforts over the short and medium-term
    • With the inclusion of the Indian Institute of Tropical Meteorology’s Earth System Model among the climate models used in AR6, India too has joined the climate modelling fraternity.

    About the net-zero emission targets

    •  The report’s clear message is that reaching net zero was not the determining factor for the world to limit itself to a 1.5oC , or 2oC, or indeed any specific temperature increase.
    • The report is clear that it is the cumulative emissions in reaching net zero that determine the temperature rise.
    • India’s Ministry for Environment, Forest and Climate Change was quick to note this point about net zero in a statement, adding that “historical cumulative emissions are the cause of the climate crisis that the world faces today”
    • The limitations of the remaining carbon budget for 1.5oC are so stringent — a mere 500 billion tonnes of carbon dioxide for an even chance of keeping to the limit — that they cannot be met by promises of net-zero 30 years from now.
    • Equally, the disconcerting finding is that the world is set to cross the 1.5oC limit within 10-15 years.

    Implications for India

    •  India has contributed less than 5% of global cumulative emissions to date, with per capita annual emissions a third of the global average.
    • India is also the only nation among the G20 with commitments under the Paris Agreement that are even 2oC warming-compatible.
    • India needs its development space urgently to cope with the future, one where global temperature increase may be closer to 2oC.
    • Even if India completely stops its emission which is 3 billion tonnes in carbon dioxide equivalent terms, for the next 30 years, with others’ emissions remaining the same, will buy the world less than two years of additional time for meeting the Paris Agreement temperature goals.

    Way forward

    • Equity: Focusing on definite cumulative emission targets keeping equity and historical responsibility in view,
    • Immediate reduction by developed countries: Immediate emission reductions by the developed countries with phase-out dates for all fossil fuels.
    • Investment: Massive investment in new technologies and their deployment,
    • Climate finance: a serious push to the mobilisation of adequate climate finance is the need of the hour.

    Conclusion

    This is the message that the IPCC report has sent to this year’s climate summit and the world. The message is a dire warning, all the stakeholders should heed the warning.

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  • Foreign Policy Watch: India-Afghanistan

    For India, there will be no dearth of balancing opportunities in Afghanistan

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- Implications of situation in Afghanistan for India

    Context

    The rapid fall of Afghanistan after the withdrawal of the US sent shockwaves across the region.

    Cause of concern for India

    • The Taliban’s entry into Kabul, marks the beginning of a new phase in the relationship between Afghanistan and India.
    • Recent developments in South Asia certainly point to a recurring dynamic between Afghanistan and India.
    • The restoration of Taliban rule in Afghanistan with Pakistan’s support undoubtedly presents some very serious potential challenges for Indian security.
    • However, a measure of strategic patience could help India cope with the adverse developments in Afghanistan and find ways to secure its interests in the near future.
    • For India, a bigger question mark will be about the Taliban’s renewed support for international terrorism and Pakistan’s re-direction of jihadi groups that have allegedly fought with the Taliban towards India.

    Afghanistan from 1979 to 2001 and how it changed the subcontinent

    • At the end of 1979, the Soviet Union launched a massive military invasion to protect a communist regime in Kabul.
    • The US and Pakistan responded by unleashing a religious jihad that compelled Russia to withdraw by 1989.
    • Pakistan’s critical role in the Afghan war against Russia allowed Pakistan to secure the political cover for the country’s acquisition of nuclear weapons.
    • The Pakistan army turned the jihadi armies to gain control of Afghanistan and launched a proxy war against India, especially in the Punjab and Kashmir regions.
    • The turbulence of the 1990s saw deepening conflict between India and Pakistan.
    • Al Qaeda, hosted by the Taliban, launched terror attacks against the US on September 11, 2001.
    • Swift US retribution brought an end to Taliban rule and compelled Pakistan to reconsider its policies.
    • After 2001, there has also been a significant expansion of the India-US strategic partnership.
    • By the end of the decade, though, the Pakistan Army had swung back to its default positions — renewed support for the Taliban in Afghanistan.
    • Pakistan also teased an increasingly war-weary Washington into a negotiation with the Taliban for a peace settlement.

    Way forward for India

    • Patience: Like all radical groups, the Taliban will have trouble balancing its religious ideology with the imperatives of state interests.
    • India would want to carefully watch how this tension plays out.
    • Watch the relation between Pakistan and Taliban: Equally important is the nature of the relationship between the Taliban and Pakistan.
    • The Taliban is bound to seek a measure of autonomy from Pakistan, India will have to wait.
    • Prepare for cross-border terror: India must fully prepare for a renewal of cross-border terror, but there is a lot less global acceptance of terrorism today than in the permissive 1990s.
    • No major power would like to see Afghanistan re-emerge as a global sanctuary of terror.
    • The world has also imposed significant new constraints on Pakistan’s support for terror through mechanisms like the Financial Action Task Force.
    • Unlike in the 1990s, when Delhi simply absorbed the terror attacks, it now shows the political will to retaliate forcefully.
    • Regional geopolitical alignment: It is also important to note that the US and the West will continue to have a say in shaping the international attitudes towards the new regime.
    • The Taliban and Pakistan appear to be acutely conscious of this reality.

    Conclusion

    For a patient, open-minded and active India, there will be no dearth of balancing opportunities in Afghanistan.

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  • Electoral Reforms In India

    Criminalisation of politics

    op-ed snap | Polity | Mains Paper 2: Representation Of People’s Act

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Powers of ECI

    Mains level: Paper 2- Electoral reforms in India

    Context

    According to the Association for Democratic Reforms (ADR), 233 MPs in the current Lok Sabha are facing criminal charges, up from 187 in 2014, 162 in 2009, and 128 in 2004. Recently, the Supreme Court has imposed fines on political parties for failing to comply with its orders regarding complete disclosure of their candidates’ criminal history.

    Order adds strength to Election Commission

    • Through the order in a recent case, the SC has put a new onus on the Election Commission to do something concrete, for example, create a phone app to display the detailed criminal history of any contesting candidate.
    • This should be accompanied with a separate cell in the ECI to monitor the compliance of all the political parties regarding this; any breach should be brought to the attention of the SC without delay.

    Why legislature and political parties are reluctant?

    • Two excuses: The legislature has been very slow in addressing this issue, and political parties remain extremely reluctant to change their ways, citing two major excuses.
    • Winnability of candidate: “Winnability” of candidates is the first reason.
    • The logic of a candidate with criminal charges doing good for the people of a constituency is dubious at best.
    • The winnability clause is an attempt by the party to absolve itself of all blame and put the onus of sending a criminally charged candidate to Parliament solely on the voter.
    • Innocent until proven guilty maxim: The other reason offered by political parties is summarised by the maxim of Indian law, which is that any accused is innocent until proven guilty.
    • It is argued that most criminally accused candidates are the victims of “vendetta politics”.

    Issues with allowing criminals to contest election

    • The logic of a candidate with criminal charges doing good for the people of a constituency is dubious at best.
    • Violation of right to equality under Article 14: There were 4.78 lakh prisoners (as of December 2019) of whom 3.30 lakh were under trial, i.e. not yet proven guilty.
    • Yet, their fundamental rights — their right to liberty, freedom of movement, freedom of occupation and right to dignity — are curbed completely.
    • An “innocent” undertrial cannot vote, but a man chargesheeted for murder can even contest election from jail.
    • These blatant double standards are a clear violation of Article 14, which guarantees to all citizens equality before the law.

    Suggestions

    • ECI suggestion on vendetta politics: The ECI has suggested some safeguards against vendetta politics.
    • First, only offences that carry an imprisonment of at least 5 years are to be considered.
    • The case against the candidate should have been filed at least six months before the scheduled elections for it to be considered.
    • And finally, a competent court must have framed the charges.
    • Fast-track court: An alternative solution would be to try cases against political candidates in fast-track courts.
    • The Supreme Court had sent a directive in 2014, directing that cases against political candidates must be completed within a year, failing which the matter should be reported to the Chief Justices of the respective High Court.
    • This is a matter entirely in the judicial domain.
    • Barring political parties: The Supreme Court has, in the recent order stopped short of drastic steps by rejected the suggestion to direct the Election Commission to bar political parties that fail to comply with criminalisation protocols by using its authority derived from Clause 16A of the Election Symbols Order.
    • This step, the SC reasons, would be going too far and infiltrating the domain of the legislature.

    Conclusion

    The legislature and the judiciary need to do more to curb the menace of criminalisation of politics.

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  • Start-up Ecosystem In India

    Startup ecosystem can help India become powerhouse of global economy

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Unicorn club

    Mains level: Paper 3- How startup ecosystem can help transform India

    Context

    With 62 per cent of the population in the working-age group and 54 per cent below the age of 25, we have the advantage of leveraging the skill and ability of our youth to drive the nation forward through productive output and innovation.

    Significance of startup ecosystem in the country

    • In 2021 alone, Indian startups have so far raised upward of $20 billion in funding.
    • Today, India is home to more than 40,000 startups and is building a robust tech and internet infrastructure.
    • The last decade-and-a-half has witnessed a significant change in the landscape — from the founding of new startups, to global investor interest, to the advances made in infrastructure and policies.
    • Global investors too are realising the potential upside in India’s huge, under-penetrated market as the country steadily makes a place for itself as a leading R&D hub for many Silicon Valley companies.
    • Amid the Covid-19 pandemic, Indian startups have rapidly innovated to provide indigenous, tech-enabled solutions to combat challenges from testing kits and ventilators to remote monitoring, and preventive technologies, as well as innovations in supply chain management, logistics, and education.

    Factors driving startup economy in India

    • The steady rise of Indian IT companies in the 2000s, a large talent pool of a skilled workforce, increased expendable income, and rising capital inflows have collectively contributed in large part.
    • Young generation: Moreover, the ability of the young generation to take risks, move fast, and disrupt things without fear, has become our biggest asset today.
    • Increasing internet use: In the next five years and likely to have an estimated 850 million internet users by 2030, the country stands at the cusp of unprecedented economic growth.

    How it helps economy

    • The proliferation of this startup economy has brought with it new business opportunities, innovation, tech-centric approaches and job creation across sectors.
    • A mature startup ecosystem, with seasoned entrepreneurs and technology-led solutions, paves the way for innovation and expanding its global footprint.
    • While value creation lies at the centre of entrepreneurship, Indian startups are also taking big strides in building synergies and partnerships with global entities, further demonstrating the evolution of the startup ecosystem and its appetite for innovation, collaboration and disruption.
    •  In fact, one of the paradigm shifts brought about through technology during the pandemic has been systemic shift to online education and remote learning at scale.
    • Solutions built by Indian startups saw widespread adoption not just domestically but also on a global scale, firmly establishing the country as a cornerstone of tech and innovation in the world.

    Suggestions

    • Educations and reskilling: In order to transition beyond the current capabilities and achieve the demographic dividend, education, and reskilling, and upskilling of our workforce is crucial.
    • Policy environment: Apart from the domestic policy environment, the global environment and technological advances are also changing, and it is imperative that India is prepared for this revolution.
    • Foster entrepreneurship: Apart from policy-level decisions that promote entrepreneurship, the onus is also on India’s corporate sector to foster entrepreneurialism, and create synergies to build impactful technology solutions, sustainable and resource-efficient growth.
    • Inclusion and sustainability: As country stands at the cusp of unprecedented economic growth, speed, inclusion, and sustainability are key elements in this mission.
    • Tap the potential of rural and semi-urban India: The collective future efforts of the public and private sectors to improve physical and digital connectivity will also help unlock the untapped potential of rural and semi-urban India to truly lead Industry 4.0 and beyond.
    • Focus on goals of national importance: In view of achieving this transformation at scale, the Indian startup ecosystem must focus on developing solutions that allow businesses in key sectors to meet goals of national importance.

    Conclusion

    Coupled with the nation’s focus on strengthening digital infrastructure in healthcare and education, and boosting employment in manufacturing, there is little doubt that India@100 will be a powerhouse of the global economy.

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  • Parliament – Sessions, Procedures, Motions, Committees etc

    Issue of the oath of an elected representative

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Third schedule of Constitution

    Mains level: Paper 2- Oath of an elected representative

    Context

    Some Cabinet Ministers in Karnataka who took oath recently stood out from the rest.  All these oaths run against the spirit of the Constitution.

    Background of agnostic Constitution

    • The public officials who took office under the Government of India Act, 1935 had to take oath which had no mention of God.
    • During the Constituent Assembly debate, B.R. Ambedkar proposed the Preamble, “We, the people of India…”.
    •  H.V. Kamath moved an amendment to the Preamble, “In the name of God, we, the people of India…”.
    • To this proposal, another member, A. Thanu Pillai said that if this amendment is accepted it would affect the fundamental right of freedom of faith.
    • He said that a man has a right to believe in God or not, according to the Constitution.
    • H.N. Kunzru opposed Kamath’s amendment stating that in a matter that vitally concerns every man individually, the collective view should not be forced on anybody.
    • The amendment was defeated, thereby excluding ‘God’ from the Preamble.
    • Thus, our founding fathers gave us an agnostic Constitution.

    What are provisions in Consitution

    • The public officials who took office under the Government of India Act, 1935 had to take oath which had no mention of God.
    • However, the framers of the Indian Constitution rejected this conception of secularism.
    • Constitution gives office-holders an option to swear in God’s name if they so wished.
    • The Supreme Court of India observed in 2012 that the oath by an elected representative should be taken “in the name of God” if the person is a believer or should be “solemnly affirmed” if the person is a non-believer.
    • The Supreme Court said that the oath of an elected representative should be in strict compliance with the wordings of the Constitution. 

    Way forward

    • As the Republic belongs to all the citizenry, irrespective of whether he is a theist, atheist or agnostic, and irrespective of his caste or religion, a person occupying a constitutional post should take oath in the format of ‘“solemnly affirm”.
    • The Constitution should be amended accordingly.

    Conclusion

    If a person takes the oath in the name of a God affiliated to a particular religion or caste, the citizenry cannot expect the absence of affection or ill-will from him. The allegiance of a person holding a constitutional post should only be to the Constitution.

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

    Learning from China

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 3- Lessons from China's economic progress

    Context

    As we look back on our own journey after independence and feel proud of our achievements, wisdom lies in also looking around to evaluate how other nations have performed, especially those which started with a similar base or even worse conditions than us.

    How India’s neighbouring countries have performed?

    • Independent India has done better than Pakistan if measured on a per capita income basis:
    • Comparison with Pakistan: India’s per capita income stood at $1,960 (in current PPP terms, it was $6,460) in 2020, as per the IMF estimates, while Pakistan’s per capita income was just $1,260 (in PPP terms $5,150).
    • Comparison with Bangladesh: Bangladesh, whose journey as an independent nation began in 1971, had a per capita income of $2,000 (though $5,310 in PPP terms), marginally higher than India, and certainly much higher than Pakistan in 2020.
    • Comparison with China: The real comparison of India should be with China, given the size of the population of the two countries and the fact that both countries started their journey in the late 1940s.
    • By 2020, China’s overall GDP was $14.7 trillion ($24.1 trillion in current PPP terms), competing with the USA at $20.9 trillion.
    • India, however, lags way behind with its overall GDP at $2.7 trillion ($8.9 trillion in PPP terms).
    • The quality of life, however, depends on per capita income in PPP terms, with the USA at $63,420, China at $17,190 and India at $6,460.

    What made the difference between India and China?

    • India adopted a socialist strategy while China took to communism to provide people food, good health, education, and prosperity.
    • China, having performed dismally on the economic front from 1949 to 1977, started changing track to more market-oriented policies, beginning with agriculture.
    • Agriculture reforms: Economic reforms that included the Household Responsibility System and liberation of agri-markets led to an annual average agri-GDP growth of 7.1 percent during 1978-1984.
    • Reform in the non-Agri sector: Success in agriculture reforms gave political legitimacy to carry out reforms in the non-agriculture sector.
    • Manufacturing revolution: The success of reforms in agriculture created a huge demand for manufactured products, triggering a manufacturing revolution in China’s town and village enterprises.
    • Population control measures: China adopted the one-child norm from 1979-2015.
    • As a result, its per capita income grew much faster.
    • India’s attempts to control its population succeeded only partially and very slowly.
    • India’s sluggish performance when compared to China raises doubts about its flawed democratic structure that makes economic reforms and implementation of policy changes more challenging, unlike China.

    Way forward for India

    • Liberating agri-markets is part of the reform package that China followed. That’s the first lesson.
    • Increase purchasing power of rural areas: Even for manufacturing to grow on a sustainable basis, we have to increase the purchasing power of people in rural areas.
    • This has to be done by raising their productivity and not by distributing freebies.
    • Investment in various areas: Increasing productivity requires investments in education, skills, health and physical infrastructure, besides much higher R&D in agriculture, both by the government as well as by the private sector.
    • Create institutional setup: This requires a different institutional setup than the one we currently have.

    Conclusion

    India’s sluggish performance when compared to China raises doubts about its flawed democratic structure that makes economic reforms and implementation of policy changes more challenging, unlike China. But India has lessons to learn from China.

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