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Type: op-ed snap

  • Foreign Policy Watch: India-Afghanistan

    The fall of Afghanistan, the fallout in West Asia

    op-ed snap | International Relations | Mains Paper 2: India & Its Neighborhood – Relations

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Geopolitical dynamics with Taliban's formation of legitimate govt

    Three weeks after they walked into Kabul without any resistance, the Taliban now has announced an interim Council of Ministers.

    Chord with Pakistan: Crowing of its puppets

    • Pakistan appears to have got its way. This government formation has tightly controlled the head of its Inter-Services Intelligence (ISI).
    • Afghanistan’s acting PM is Mullah Hassan Akhund, a close associate of former Taliban founder Mullah Omar.
    • Abdul Ghani Baradar is his deputy, but again, this could be a token position.
    • Baradar had been arrested in 2010 by the Pakistanis for pursuing a dialogue with the Hamid Karzai government without Pakistani sanction and jailed for eight years.
    • Pakistan’s true proteges are Sirajuddin Haqqani, the acting interior minister, and Mohammed Yaqoob, the acting defence minister, a son of Mullah Omar, who is also close to Haqqani.

    The West Asian players

    Saudi Arabia, Qatar and Iran have been direct role-players in Afghan affairs for over 25 years.

    • Sheikhdom involvement: In the 1990s, the first two were supporters and sources of funding for the Taliban, while Iran was an antagonist. After 9/11, all three countries became deeply involved with the Taliban. Since 2005, the Gulf sheikhdoms have contributed millions of dollars to different Taliban leaders and factions.
    • Iran’s defiance of the US: Iran began a substantial engagement with various Taliban leaders from 2007 and provided funding, weapons, training and refuge when required. It wanted the Taliban to maintain pressure on the U.S. forces to ensure their speedy departure from the country.
    • Regional competition: In the 2010s, when the US began to engage with Iran on the nuclear issue, Saudi Arabia became more directly involved in Afghan matters to prevent Iran’s expanding influence among Taliban groups. Thus, besides Syria and Yemen, Iran and Saudi Arabia have also made Afghanistan an arena for their regional competitions.
    • Earliest acknowledgment of the Taliban: In 2012, Qatar, on U.S. request, allowed the Taliban to open an office in Doha as a venue for their dialogue with the Americans. This has made Qatar an influential player in Afghan affairs, with deep personal ties with several leaders, many of whom keep their families in Doha.

    Competitions for influence

    The low-key reactions of the Gulf countries to recent developments in Kabul reflect the uncertainties relating to the Taliban in power.

    Nature of the govt: Their ability to remain united, their policies relating to human rights, and, above all, whether the Taliban will again make their country a sanctuary for extremist groups.

    Fractionalization within terror groups: The country already has several thousand foreign fighters, whose ranks could swell with extremists coming in from Iraq and Syria, and threaten the security of all neighbouring states.

    Three sets of regional players are active in Afghanistan today:

    1. Pakistan-Saudi coalition: This has been the principal source of support for the Taliban-at-war. They would like to remain influential in the new order, but neither would like to see the Taliban revert to their practices of the 1990s that had justifiably appalled the global community.
    2. Turkey and Qatar: They represent the region’s Islamist coalition and, thus, share an ideological kinship with the Taliban. Both would like to see a moderate and inclusive administration.
    3. Iran: While many of its hardliners are overjoyed at the U.S. “defeat”, more reflective observers recall the earlier Taliban emirate which was viscerally hostile to Shias and Iran. Iran also sees itself as the guardian of the Tajik, Uzbek and Hazara minorities in the country.

    Options Available: The outlook for security

    Linking with Israel-Palestine Conflict: The region now has two options: one, an Israel-centric security order in which the Arab Gulf states would link themselves with Israel to confront Iran. This is being actively promoted by Israeli hawks since it would tie Israel with neighbouring Arab states without having to concede anything to meet Palestinian aspirations.

    Comprehensive regional security arrangement: The other option is more ambitious: The facilitators and guarantors of this security arrangement are likely to be China and Russia: over the last few years, both have built close relations with the major states of the region. i.e., Iran, Saudi Arabia, Turkey, Afghanistan and Pakistan.

    Consensus to ward away the US

    • The Gulf Cooperation Council (GCC) states led by Saudi Arabia lifted the over three-year blockade of Qatar.
    • The discussions between Iran and Saudi Arabia and plans are in place for the next meetings.
    • Turkey has initiated diplomatic overtures towards Egypt and Saudi Arabia.
    • None of these initiatives involves the Americans.

    Conclusion: A new order is in making

    • These developments suggest that the germ of a new regional security order in West Asia is already sown in fertile ground.

    Way forward for India

    • The Indian policies are at a crossroads. Continued bandwagoning with the US makes no sense.
    • Indian diplomacy should harmonize with the regional capitals, including Beijing, which can be a natural ally on issues of terrorism.
    • The bottom line is that India’s vital interests remain to be secured.
    • Demonizing the Taliban can only be counterproductive.

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  • Foreign Policy Watch: India – Germany

     How India and Germany can work together to tackle climate change?

    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: India-Germany relations

    Both nations, India and Germany with innovative economies and many highly-trained people can tackle the climate challenge.

    India-Germany Relations: A backgrounder

    Freedom struggle: Subhas Chandra Bose, a prominent freedom fighter for Indian independence, made a determined effort to obtain India’s independence from Britain by seeking military assistance from the Axis powers. The Indische Legion was formed to serve as a liberation force for British-ruled India principally made up of Indian prisoners of war.

    Diplomacy: India maintained diplomatic relations with both West Germany and East Germany and supported their reunification in 1990. Contrary to France and the UK, Germany has no strategic footprint in Asia.

    Past contentions: Germany condemned India for liberating Goa from Portuguese rule in 1961 and supported Portugal’s dictatorial regime under Salazar against India. It was critical of India for intervening in the 1971 Bangladesh Liberation War.  It rejected India’s 1998 nuclear tests.

    Quest for UNSC: India and Germany both seek to become permanent members of the UNSC and have joined with Japan and Brazil to coordinate their efforts via the G4 collective.

    Cultural ties: Germany has supported education and cultural programs in India. Germany helped establish the IIT Madras after both governments signed an agreement in 1956 and increased its cooperation and supply of technology and resources over the decades to help expand the institution

    Trade and investment: Germany is India’s largest trading partner in Europe. Germany is the 8th largest foreign direct investor (FDI) in India.

    Common concerns

    • In South Asia and Europe, we have become used to extremely hot weather, flooding, dramatic depletion of groundwater tables, and drought.
    • The EU has adopted an ambitious Green Deal to achieve net-zero greenhouse gas emissions by 2050 and to decouple economic growth from the consumption of natural resources.

    Why the two?

    • India is one of few countries that looks set to deliver on the national goals it set itself as part of the Paris agreement.
    • Compared to other G20 countries, its per capita emissions are very low.
    • Germany recently adopted laws on reducing greenhouse gases more quickly, achieving climate neutrality by 2045 and stopping the use of coal for electricity production by 2038.

    Collaborated efforts to date

    • In 2015, India’s PM and Germany’s Federal Chancellor agreed to further strengthen the two countries’ strategic partnership.
    • On this basis, Germany and India have succeeded in building up a cooperation portfolio worth almost 12 billion euros.
    • Already, nine out of 10 measures support climate goals and SDGs together.

    Indo-German development cooperation focuses on three areas:

    1. Transition to renewable energies
    2. Sustainable urban development and
    3. Sustainable management of natural resources

    What does Germany have to offer?

    • As a pioneer of the energy transition, Germany is offering knowledge, technology transfer, and financial solutions.
    • The pandemic has shown global supply chains are vulnerable.
    • Yet, when it comes to agriculture and natural resources, there are smart solutions that are being tested in India and Germany for more self-reliance, including agroecological approaches and sustainable management of forests, soils, and water.
    • Experience in India has shown that these methods also boost incomes for the local population and make them less dependent on expensive fertilizers, pesticides and seeds.

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

    How India’s food systems must respond to the climate crisis

    op-ed snap | Agriculture | Mains Paper 3: Agriculture and related issues,PDS, Buffer Stock & Food Security

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: EAT-Lancet diet

    Mains level: Paper 3- Food system issues

    Context

    This month, the UN Secretary-General will convene the Food Systems Summit. There is a proposal to have an International Panel on Food and Nutritional Security (IPFN) — an “IPCC for food,” similar to the panel on climate change.

    Issues with India’s agriculture?

    • What is a food system? According to the Food and Agriculture Organisation (FAO), food systems encompass the entire range of actors involved in the production, aggregation, processing, distribution, consumption and disposal of food products.
    • Effects of Green Revolution: The Green Revolution succeeded in making India food sufficient, however, it also led to water-logging, soil erosion, groundwater depletion and the unsustainability of agriculture.
    • Deficit mindset: Current policies are still based on the “deficit” mindset of the 1960s.
    • Biased policies: The procurement, subsidies and water policies are biased towards rice and wheat.
    • Three crops (rice, wheat and sugarcane) corner 75 to 80 per cent of irrigated water.
    • Lack of diversification: Diversification of cropping patterns towards millets, pulses, oilseeds, horticulture is needed for more equal distribution of water, sustainable and climate-resilient agriculture.

    Issues with various elements of India’s food system

    1) Changes needed in India’s agriculture

    • The narrative of Indian agriculture has to be changed towards more diversified high-value production, better remunerative prices and farm incomes.
    • Inclusive: It must be inclusive in terms of women and small farmers.
    • Similarly, women’s empowerment is important particularly for raising incomes and nutrition.
    • Women’s cooperatives and groups like Kudumbashree in Kerala would be helpful.
    • Small farmers require special support, public goods and links to input and output markets.
    • Better remunerative prices: Farmer producer organisations help get better prices for inputs and outputs for small-holders.
    • The ITC’s E-Choupal is an example of technology benefiting small farmers.
    • Innovation: One of the successful examples of a value chain that helped small-holders, women and consumers is Amul (Anand Milk Union Ltd) created by Verghese Kurien.
    • Such innovations are needed in other activities of food systems.

    2) Hunger and malnutrition in India

    • The NFHS-5 shows that under-nutrition has not declined in many states even in 2019-20. Similarly, obesity is also rising.
    • A food systems approach should focus more on the issues of undernutrition and obesity.
    • Safe and healthy diversified diets are needed for sustainable food systems.
    • The EAT-Lancet diet, which recommends a healthy and sustainable diet, is not affordable for the majority of the population in India.
    • Animal-sourced foods are still needed for countries like India. For instance, per capita consumption of meat is still below 10 kg in India as compared to 60 to 70 kg in the US and Europe.

    3) Ensuring sustainability of food system

    • Estimates show that the food sector emits around 30 per cent of the world’s greenhouse gases.
    • Sustainability has to be achieved in production, value chains and consumption.
    • How to achieve sustainability? Climate-resilient cropping patterns have to be promoted.
    • Instead of giving input subsidies, cash transfers can be given to farmers for sustainable agriculture.

    4) Health and social protection

    • Food systems also need health infrastructure.
    • The Covid-19 pandemic has exposed the weak health infrastructure in countries like India.
    • Inclusive food systems need strong social protection programmes.
    • India has long experience in these programmes. Strengthening India’s National Rural Employment Guarantee Act, public distribution system (PDS), nutrition programmes like ICDS, mid-day meal programmes, can improve income, livelihoods and nutrition for the poor and vulnerable groups.

    5) Role of non-agriculture

    • Some economists like T N Srinivasan argued that the solution for problems in agriculture was in non-agriculture.
    • Reduce pressure on agriculture: Therefore, labour-intensive manufacturing and services can reduce pressure on agriculture.
    • Income from agriculture is not sufficient for smallholders and informal workers.
    • Strengthening rural MSMEs and food processing is part of the solution.

    Conclusion

    India should also aim for a food systems transformation, which can be inclusive and sustainable, ensure growing farm incomes and nutrition security.

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  • Renewable Energy – Wind, Tidal, Geothermal, etc.

    Green hydrogen, a new ally for a zero carbon future

    op-ed snap | Economics | Mains Paper 3: Awareness in various sc and tech fields,Conservation, Environmental Pollution & Degradation, Eia

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Pink hydrogen

    Mains level: Paper 3- Green hydrogen

    Context

    The forthcoming 26th UN Climate Change Conference of the Parties (COP26) in Glasgow from November 1-12, 2021 is to re-examine the coordinated action plans to mitigate greenhouse gases and climate adaptation measures.

    How Green hydrogen as a fuel can be a game changer?

    • Hydrogen is the most abundant element on the planet, but rarely in its pure form which is how we need it.
    • High energy density: It has an energy density almost three times that of diesel.
    • ‘Green hydrogen’, the emerging novel concept, is a zero-carbon fuel made by electrolysis using renewable power from wind and solar to split water into hydrogen and oxygen.
    • Best solution to remain under 1.5° C: The International Energy Agency (IEA) forecasts the additional power demand to be to the tune of 25%-30% by the year 2040.
    • Thus, power generation by ‘net-zero’ emission will be the best solution to achieve the target of expert guidelines on global warming to remain under 1.5° C.
    • Untapped potential: Presently, less than 0.1% or say ~75 million tons/year of hydrogen capable of generating ~284GW of power, is produced.

    Challenges: Production and storage cost

    • The challenge is to compress or liquefy the LH2 (liquid hydrogen); it needs to be kept at a stable minus 253° C.
    • This leads to its ‘prior to use exorbitant cost’.
    • The ‘production cost’ of ‘Green hydrogen’ has been considered to be a prime obstacle.
    • The production cost of this ‘green source of energy’ is expected to be around $1.5 per kilogram (for nations having perpetual sunshine and vast unused land), by the year 2030; by adopting various conservative measures.

    Experiments in India

      • The Indian Railways have announced the country’s first experiment of a hydrogen-fuel cell technology-based train by retrofitting an existing diesel engine; this will run under Northern Railway on the 89 km stretch between Sonepat and Jind.
    • The project will not only ensure diesel savings to the tune of several lakhs annually but will also prevent the emission of 0.72 kilo tons of particulate matter and 11.12-kilo tons of carbon per annum.

    Way forward for India

    • India is the world’s fourth-largest energy-consuming country (behind China, the United States and the European Union), according to the IEA’s forecast, and will overtake the European Union to become the world’s third energy consumer by the year 2030.
    • It is high time to catch up with the rest of the world by going in for clean energy, decarbonising the economy and adopting ‘Green hydrogen’ as an environment-friendly and safe fuel for the next generations.

    Conclusion

    In order to achieve the goal of an alternative source of energy, adopting a multi-faceted practical approach to utilise ‘Green hydrogen’ offers a ray of hope.

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  • Needed: A tribunal for CAPF

    op-ed snap | Security Issues | Mains Paper 3: Various Security Forces, Agencies & Their Mandates

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Security Force Court

    Mains level: Paper 3- Tribunal for CAPF

    Context

    There have been numerous cases of Central Reserve Police Force (CRPF) officers overstaying leave. The Ministry of Home Affairs (MHA) to issue orders to the CRPF headquarters to “include the provisions of Security Force Court (SFC), for initiating disciplinary action against the delinquent officers.

    Departmental enquiries Vs SFC

    • The SFC is a purely judicial process where the guilt must be proved beyond reasonable doubt and the charged official is at liberty to engage a legal practitioner to defend him.
    • Departmental enquiry is a quasi-judicial proceeding where the mere element of the preponderance of probability is enough to determine guilt.
    • Though the Central Reserve Police Force Act of 1949 provides for conducting judicial trial by a Commandant in his capacity as a Magistrate, seldom is it exercised as it gets into the realm of the judicial process.
    • Hence, the conduct of a departmental enquiry is the better option.

    What leads to delay in departmental enquiries against gazetted officers?

    • CRPF rules lay down the procedure for the conduct of departmental enquiries against non-gazetted ranks, and in normal circumstances, the departmental enquiries are completed within three to six months.
    • But when gazetted officers are charge-sheeted, the time taken to order the enquiries is longer.
    • Delay due to getting the views of other institutions: In the case of a gazetted officer, the other institutions like the Union Public Service Commission, the Central Vigilance Commission, the Department of Personnel and Training, and the MHA are also roped in for their views and legal opinion.
    • Dealy due to postponement: When the delinquent officers appear before the inquiring authority presence of the presenting officer and the defence assistant of the charged official is also required.
    • Even if one of them fails to appear for the hearing, the conduct of enquiry must be postponed.
    • Procedural delay: Often, the enquiry is conducted ex parte (without the presence of the charged official), so the recorded statements and other documents must be sent to the charged official.
    • Quite often, delays occur in providing certain prosecution documents to the charged official who may demand them for preparing his own defence.
    • Postal delays further aggravate the matter.
    • Since most officers are busy with operational matters, which gain priority over everything else.

    Way forward

    • Appoint retired officers as inquiring authorities: The solution lies in appointing retired officers as inquiring authorities, who can afford to devote their time to the conduct of enquiries as is being done in most departments of the government.
    • Tribunal for CAPF: With increasing cases being filed in the High Courts across the country in service matters, it is high time the government considered the setting up of tribunals for the CAPFs on the lines of the Armed Forces Tribunal for defence services.
    • Retired officers of the rank of Inspectors General and Additional Directors General from the CAPFs could be part of these tribunals along with retired judges of High Courts.

    Conclusion

    Taking the steps suggested here would ensure the speedy delivery of justice and reduce the burden of the High Courts.

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  • The economic reforms — looking back to look ahead

    op-ed snap | 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: HRC

    Mains level: Paper 3- Reforms to deal with the issues after 1991 reforms

    Context

    The economic reforms, so far, have been more focused on the technical nature of the economy than the system, process and people. The fundamentals need to be set right with a focus on human capital, technology readiness and productivity.

    Benefits and limits of economic reforms of 1991

    • Economic reforms of 1991 — and from time to time, subsequent interjections for liberalisation of economy and trade — have enabled some credible gains for the country.
    • Benefits: Foreign exchange reserves (over $600 billion), sustained manufacturing contribution in GDP, increased share in global exports (from 0.6% in the 1990s to 1.8%), robust software exports, and sustained economic growth in the range of 6%-8% are clear indicators of its success.
    • Limits: Primary drivers of the economy — human capital, technology readiness, productivity, disposable income, capital expenditure, process innovation in setting up businesses, and institutional capacity — have not got enough recognition.

    Issues affecting the Indian economy

    1) Lack of Human resource capital formation

    • The human resource capital (HRC) formation, a good determinant of labour productivity, has been missing over the entire period of reforms.
    • The HRC rank for India stands at 103; Sri Lanka is at 70, China at 34, and South Korea at 27, as brought out by the Global Human Capital Report, 2017.
    • Factors responsible for low HRC: The lack of quality education, low skilled manpower, and inadequacies in basic health care have resulted in low HRC.

    2) Low disposable income

    • The World Bank database on GDP for 2019 indicates the low per capita GDP in India, at $2,104 (at $6,997 in PPP terms, ranked 125th globally) against the world average of $11,429 (at $17,678 in PPP terms).
    • Low per capita GDP has direct links to low per capita family income.
    • Low wages: The report by Deloitte (Global Manufacturing Competitiveness Index in 2016) reflects that the hourly wages in India have been $1.7; they are $38, $24, $20.7, and $3.3 for the United States, Japan, South Korea, and China, respectively.
    • Low wages have a direct bearing on the disposable income of families, affecting demand.

    3) Low R&D expenditure

    • India’s research and development expenditure stand at 0.8% of GDP, for other fast-emerging economies such as South Korea, it is (4.5%), China (2.1%), and Taiwan (3.3%).
    • Reduced technology readiness: This low expenditure is resulting in lower capacity for innovation in technologies and reduced ‘technology readiness’, especially for manufacturing.

    4) Low labour productivity: Result of low HRC and lack of technology readiness

    • The lack of HRC and low technology readiness have impacted labour productivity adversely.
    • World Bank publication of 2018 indicates that India’s labour productivity in manufacturing is less than 10% of the advanced economies including Germany and South Korea, and is about 40% of China.
    • Low productivity has unfavourable consequences for competitiveness, manufacturing growth, exports and economic growth.

    5) Long time and more cost in setting up a business

    • There are difficulties in acquiring land for businesses, inefficient utilization of economic infrastructure, and in providing business services.
    • This results in a long time and more cost in setting up enterprises, resulting in a loss of creative energy of entrepreneurs.

    Way forward

    • Investment in human capital and technology: First, to attract large investment in manufacturing and advanced services, at a basic level, investment in human capital and technology is a prerequisite.
    • Technology readiness: The reports by McKinsey and the World Economic Forum on advanced manufacturing suggest that Industry 4.0 will be defined by new technologies such as robotics, 3-D printing, artificial intelligence (AI), the Internet of things (IoT), etc.
    • Consequently, efforts for technology readiness are very essential to stay competitive.
    • It demands enhancing public research and development expenditure to 2% of GDP over the next three years.
    • Strategies to enhance per capita income: There is a need to work on strategies to enhance per capita income by more wages for workers through higher skills and enhancing minimum wages, besides improving the social security net.
    • Promote business-centric approach: Using insights from the work of Nobel laureate (1993) Douglass C. North, it is necessary to build the capacity of public institutions to create a good environment for business and industry.
    • Policy reforms should lay an emphasis on process innovation and promote a business-centric approach to create a friendly ecosystem and for efficient internal supply chain management to integrate with the global supply chain.
    • Innovative nature in public policymaking: The future of the economy should be particularly viewed in the backdrop of a significant and irreversible shift in terms of reliance on the global supply chain as a result of the knowledge-intensive nature of businesses and exponential effects caused by advanced technologies under Industry 4.0, since the 2010s.
    • Therefore, the strategies adopted since the 1990s till now may not ensure adequate returns and call for innovative approaches in public policymaking.

    Consider the question “The economic reforms, so far, have been more focussed on the technical nature of the economy than the system. This resulted in fundamental deficiencies. Suggest the way forward to deal with these deficiencies.”

    Conclusion

    In sum, it necessitates a systemic approach for policy reforms for setting the economic fundamentals right and to achieve higher growth.

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  • PPP Investment Models: HAM, Swiss Challenge, Kelkar Committee

    Consequences of asset monetisation on ordinary citizens

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: NMP

    Mains level: Paper 3- Asset monetisation issues

    Context

    In the Budget for 2021-22, the Finance Minister had announced the Government’s decision to monetise operating public infrastructure assets. The National Monetisation Pipeline (NMP) was unveiled, which shows that the Government intends to raise ₹6-lakh crore over the next four years by monetising several “core assets”.

    Four issues with NMP

    1)  Assets transferred would be performing assets and not idle asset

    • Strategic and significant asset: The Government has identified “performing assets” to transfer to private entities and these are both strategic and significant.
    • These include over 26,700 kilometres of highways, 400 railway stations, 90 passenger trains etc.
    • Moreover, existing public sector infrastructure in telecoms, power transmission and distribution and petroleum, petroleum products and natural gas pipelines are included in the NMP.
    • Under the NMP, the Government intends to lease or divest its rights over these assets via long-term leases against a consideration that can be upfront and/or periodic payments.

    2) Consequences for ordinary citizens

    • There are two dimensions about the impact on common citizens.
    • Public as a stakeholder: The assets have all been created through substantial contribution by the tax-paying public, who have stakes in their operation and management.
    • Double taxation: These assets have, until now, been managed by the Government and its agencies,  which operate in public interest.
    • Therefore, charges borne by the public for using these assets have remained reasonable.
    • With private companies getting the sole responsibility of running all these assets, prices of these services will go up, as resutl the citizens of this country would be double-taxed.
    • First, they paid taxes to create the assets, and would now pay higher user charges.
    • Concern: Therefore, as the Government prepares to transfer “performing assets” to the private companies, it has the responsibility to ensure that user charges do not price the consumers out of the market.

    3) Are there other avenues to plug the revenue gap?

    • Increase tax revenue: One possibility was to increase the tax revenue, for at 17.4% in 2019-20, India’s tax to GDP ratio was relatively low, as compared to most advanced nations.
    • Improvements in tax compliance and plugging loopholes have long been emphasised as the surest way to improve tax revenue, but little has been done, as the following example shows.
    • Since 2005-06, the Government has been providing data on the profits declared and taxes paid by companies that file their returns electronically.
    • Data shows that India’s large companies have been exploiting the loopholes for reporting lower profits and to escape the tax net.

    4) Efficiency issue

    • According to NITI Aayog, the “strategic objective of the Asset Monetisation programme is to unlock the value of investments in public sector assets by tapping private sector capital and efficiencies”.
    • The NITI Aayog objective assumes that public sector enterprises are inefficient, which is contrary to the reality.
    • In 2018-19, while 28% of these enterprises were loss-making, the corresponding figure for large companies was 51%.

    Consider the question “How asset monetisation is different from the privatisation? What are the issues with the National Manetisation Pipeline that seeks to monetise the assets?”

    Conclusion

    The government should address the issues mention here associated with the roll out of the National Monetisation Pipeline to make it a success.

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  • Parliament – Sessions, Procedures, Motions, Committees etc

    Spirit of federalism lies in consultation

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Concurrent List

    Mains level: Paper 2- Federalism and Concurrent List

    Context

    Recently, various State governments raised concerns about Central unilateralism in the enactment of critical laws on subjects in the Concurrent List of the Seventh Schedule.

    Objection of the state against Centre legislating on the subject in Concurrent List without consulting States

    • Unilateral legislation on subjects in Concurrent list: Kerala Chief Minister stated that it is not in the essence of federalism for the Union government to legislate unilaterally, on the subjects in the Concurrent List.
    • Encroaching on powers of States: Tamil Nadu Chief Minister raised the issue by calling on other Chief Ministers against the Union government encroaching on powers under the State and Concurrent Lists.
    • The Kerala Legislative Assembly unanimously passed a resolution against the Electricity (Amendment) Bill, 2020.
    • The Tamil Nadu Legislative Assembly passed a resolution against the controversial farm laws.

    Background of the Concurrent List

    • The Concurrent List gives the Union and the State Legislatures concurrent powers to legislate on the subjects contained in it.
    • Purpose of Concurrent List: The fields in the Concurrent List were to be of common interest to the Union and the States, and the power to legislate on these subjects to be shared with the Union so that there would be uniformity in law across the country.

    Union government extending its control on subjects in the Concurrent List and State list

    1) Farm laws: Encroaching on the powers of States

    • Parliament passed the farm laws without consulting the States.
    • State List subject: The laws, essentially related to Entry 14 (agriculture clause) belonging to the State List.
    • However, Parliament passed the law citing Entry 33 (trade and commerce clause) in the Concurrent List.
    • Against legal principle set by the Supreme Court: The Supreme Court, beginning from the State of Bombay vs F.N. Balsara case, said that if an enactment falls within one of the matters assigned to the State List and reconciliation is not possible with an entry in the Concurrent or Union List after employing the doctrine of “pith and substance”, the legislative domain of the State Legislature must prevail.

    2) Major Port Authorities Act 2021 and Indian Ports Bill: Centre taking away the power of State

    • The Major Ports Authorities Act, 2021, was passed by Parliament earlier this year.
    • Goa objected to the law, stating that it would lead to the redundancy of the local laws.
    • Concurrent List subject: When it comes to non-major ports, the field for legislation is located in Entry 31 of the Concurrent List. 
    • The Indian Ports Act, 1908, presently governs the field related to non-major ports.
    • As per the Indian Ports Act, 1908, the power to regulate and control the minor ports remained with the State governments.
    • The new draft Indian Ports Bill, 2021, proposes the Maritime State Development Council (MSDC), which is overwhelmingly controlled by the Union government.

    3) Electricity (Amendment) Bill,2020: Centre taking away powers of State

    • Various States like West Bengal, Tamil Nadu and Kerala have also come forward against the Electricity (Amendment) Bill, 2020.
    • The field related to electricity is traceable to Entry 38 of the Concurrent List.
    • The power to regulate the sector was vested with the State Electricity Regulatory Commissions (SERCs), members of which were appointed by the State government.
    • The proposed amendment seeks to establish National Selection Committee, dominated by members nominated by the Union government that will make appointments to the SERCs.
    • The amendment also proposes the establishment of a Centrally-appointed Electricity Contract Enforcement Authority (ECEA).
    • In effect, the power to regulate the electricity sector would be taken away from the State government.

    Way forward

    • Consultation with States: The National Commission to Review the Working of the Constitution (NCRWC), or the Venkatachaliah Commission, had recommended that individual and collective consultation with the States should be undertaken through the Inter-State Council established under Article 263 of the Constitution.
    • Coordination of policy and action in concurrent jurisdiction: The Sarkaria Commission Report had recommended that there should be a coordination of policy and action in all areas of concurrent or overlapping jurisdiction through a process of mutual consultation.
    • Limit powers to ensuring uniformity: The Sarkaria Commission further recommended that the Union government, while exercising powers under the Concurrent List, limit itself to the purpose of ensuring uniformity in basic issues of national policy and not more.
    • Responsibility of Centre: The Supreme Court itself had held in the S.R. Bommai vs Union of India case, the States are not mere appendages of the Union.
    • The Union government should ensure that the power of the States is not trampled with.

    Consider the question “There has been instances of protest by the State government against Centre legislating unilaterally on subjects in Concurrent List. What are the implications of this for the federalism? Suggest the way forward.”

    Conclusion

    The essence of cooperative federalism lies in consultation and dialogue, and unilateral legislation without taking the States into confidence will lead to more protests on the streets.

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  • Disinvestment in India

    National monetisation pipeline has narrow outlook

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: NMP

    Mains level: Paper 3- Issues with National Monetisation Policy

    Context

    Recently, FM announced the National Monetisation Pipeline (NMP) to lease a slew of “brownfield” (already developed) but underutilised public sector assets to the private sector with the objective of raising Rs 6 lakh crore.

    About the NMP

    • The assets identified for lease include roads, railways, ports, power, mining, aviation, oil and gas pipelines, warehouses, hotels and even two sports stadia.
    • The idea is to create “structured public-private partnerships” to unlock value from public sector assets and to recycle the revenues so raised into new infrastructure.
    • But the move raises several concerns.

    3 concerns with NMP

    1) Government is preferring financial value of assets over public welfare

    • The design of the NMP is out of sync with existential challenges — global warming, pandemics, geopolitical chaos and fundamentalism.
    •  The assets are valued on the basis of conventional financial metrics (enterprise value, book value, net present value, the costs of comparable assets).
    • The model seemingly absolves the government from the responsibility to unlock the intrinsic “social” (to include “smart” and “clean” ) value of these assets.

    2) It will lead to concentration of capital

    • NMP is designed to attract deep-pocketed financial institutions (PE firms) and industrial conglomerates.
    • This is because the valuations are so high that few other entities will have the resources or the risk carrying capacity to respond.
    • The result will be a deepening of the concentration of capital and existing inequalities.
    • There will be economic and social implications.

    3) Addressing the system problem

    • The government should have asked itself a fundamental question before placing a substantial share of public assets on the block:
    • Why have these assets been so poorly managed?
    • Was it because of bad leadership, inadequate talent within the PSEs, and/or systemic and structural shortcomings?
    • If the reason for low productivity was poor leadership or lack of talent, the transfer of these assets to a different, private sector-led organisational and investment structure would make sense.
    • Structural issues: But if the reason had to do with structural impediments, then such a change may not be warranted, at least not in the first instance.
    •  The example, gas pipelines GAIL are hugely underutilized, but this is not because of the “inefficiency” of GAIL, the PSE operator.
    • It is because of structural factors such as the shortage of domestic gas supplies; the regressive taxation system; the relatively uncompetitive price of gas and the perennial tussle between the Centre and state governments over land access.
    • A similar point can be made about most of the other assets identified for monetisation.
    • Their low productivity is because their PSE operators have faced a combination of systemic hurdles related to weak dispute resolution mechanisms; regulatory miasma; lack of transparency in governance; pricing distortions and intrusive bureaucratic intervention.
    • Way forward: So, until and unless these systemic problems are addressed, the private sector will find it difficult to harness the full value of these assets and the transfer of operatorship to them will offer at best a partial palliative.

    Conclusion

    Private-public investment structures make sense, but they must be modeled to also generate social value. In today’s world, there are no shortcuts to sustainable development.

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  • Hunger and Nutrition Issues – GHI, GNI, etc.

    The nutrition-hygiene link

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Environmental enteropathy

    Mains level: Paper 2- Addressing the nutrition problem through WASH

    Context

    A recent UNICEF report stated that nearly 12 lakh children could die in low-income countries in the next six months due to a decrease in routine health services and an increase in wasting. Nearly three lakh such children would be from India.

    Problem of nutrition in India and factors responsible for it

    • The National Family Health Survey (NFHS 5) indicates that since the onset of the pandemic, acute undernourishment in children below the age of five has worsened.
    • According to the latest data, 37.9 per cent of children under five are stunted, and 20.8 per cent are wasted — a form of malnutrition in which children are too thin for their height.
    • Comparison with other countries: This is much higher than in other developing countries where, on average, 25 per cent of children suffer from stunting and 8.9 per cent are wasted.
    • Factors: Inadequate dietary intake is the most direct cause of undernutrition.
    • Several other factors also affect nutritional outcomes, such as contaminated drinking water, poor sanitation, and unhygienic living conditions.
    • According to the World Health Organisation, 50 per cent of all mal- and under-nutrition can be traced to diarrhoea and intestinal worm infections.
    • Nutrition and water, sanitation, and hygiene (WASH) are intricately linked, and changes in one tend, directly or indirectly, to affect the other.
    • Poor hygiene and sanitation in developing countries lead to a sub-clinical condition called “environmental enteropathy” in children.
    • Environmental enteropathy is a disorder of the intestine which prevents the proper absorption of nutrients, rendering them effectively useless.
    • Childhood diarrhoea is a major public health problem in low- and middle-income countries, leading to high mortality in children under five.
    • According to NFHS 4, approximately 9 percent of children under five years of age in India experience diarrhoeal disease.

    Way forward

    • Investment in WASH: The link between WASH and nutrition suggests that greater attention to, and investments in, WASH are a sure-shot way of bolstering the country’s nutritional status.
    • Addressing nutrition sanitation problems together: Both WASH and nutrition must be addressed together through a lens of holistic, sustainable community engagement to enable long-term impact.
    • One of the first instances of the link between WASH and nutrition appeared in the Convention on the Rights of the Child in 1989, which urges states to ensure “adequate nutritious foods and clean drinking water” to combat disease and malnutrition.
    • Safe drinking water, proper sanitation, and hygiene can significantly reduce diarrhoeal and nutritional deaths.
    • Multistructural approach: What we require is a coordinated, multisectoral approach among the health, water, sanitation, and hygiene bodies, not to mention strong community engagement.
    • WHO has estimated that access to proper water, hygiene, and sanitation can prevent the deaths of at least 8,60,000 children a year caused by undernutrition.

    Conclusion

    At the end of the day, all sides are working towards a common goal: A safe and healthy population and the hope that the 75th year of Independence becomes a watershed moment in India’s journey.

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