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  • Foreign Policy Watch: India-SCO

    Can the SCO be the regional body that stabilizes Afghanistan?

    IOCRop-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: SCO

    Mains level: Role of SCO in Afghan Peace

    On the face of it, the summit meeting of the Shanghai Cooperation Organisation (SCO) this week in Dushanbe, Tajikistan, is well placed to lead the stabilization of Afghanistan after the American retreat.

    About SCO

    • After the collapse of the Soviet Union in 1991, the then security and economic architecture in the Eurasian region dissolved and new structures had to come up.
    • The original Shanghai Five were China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan.
    • The SCO was formed in 2001, with Uzbekistan included. It expanded in 2017 to include India and Pakistan.
    • Since its formation, the SCO has focused on regional non-traditional security, with counter-terrorism as a priority.
    • The fight against the “three evils” of terrorism, separatism and extremism has become its mantra. Today, areas of cooperation include themes such as economics and culture.

    India’s and the SCO

    • India and Pakistan both were observer countries.
    • While Central Asian countries and China were not in favor of expansion initially, the main supporter — of India’s entry in particular — was Russia.
    • A widely held view is that Russia’s growing unease about an increasingly powerful China prompted it to push for its expansion.
    • From 2009 onwards, Russia officially supported India’s ambition to join the SCO. China then asked for its all-weather friend Pakistan’s entry.

    Afghanistan and SCO

    • Afghanistan has been engaged with the SCO for over 15 years.
    • In 2012, Afghanistan became an observer in the SCO when then-Afghan president Hamid Karzai visited China.
    • In 2015, Kabul applied for full membership in the group.
    • Kabul sought to be a member of the SCO as it believes that it is a natural candidate.
    • Geographically, Afghanistan is a part of the SCO region.

    Limited (or No) progress made by SCO

    • For all the political hype, the SCO has not deepened regionalism in Central Asia.
    • Two decades after its formation — it was set up just weeks before the 9/11 attacks on New York and Washington — the institutional promise of the SCO remains just that — a promise.
    • Seen from the subcontinent, the SCO certainly looks better than the South Asian Association of Regional Cooperation (SAARC).
    • That India and Pakistan, whose differences have prevented even regular meetings of SAARC, are actively participating in the SCO, would point to its attractiveness.
    • But then SAARC is such a low bar.

    Opportunities for role-play in Afghanistan

    The crisis in Afghanistan presents a major opportunity for the SCO to realize its regional ambitions.

    • Involvement of regional superpowers: The SCO’s importance for Afghanistan seems self-evident when you look at its sponsors and members. Its founding leaders are the two great powers of the east — Russia and China.
    • Neighborhood are members: Its other initial members were Uzbekistan, Tajikistan, Kyrgyzstan, and Kazakhstan to the north and northeast of Afghanistan.
    • Observers vested interest: Besides Afghanistan, Iran, Belarus and Mongolia are observers. Iran is said to be on track for full membership.
    • Many dialogue partners: The SCO has a number of “dialogue partners”. They include Armenia and Azerbaijan from the neighboring Caucasus region and Turkey a step further to the West. Nepal and Sri Lanka from the subcontinent and Cambodia from southeast Asia are also dialogue partners.

    Issues with SCO

    • China centrism: For an organization that bears the name of Shanghai, but is focused on Central Asia, its associates look disparate.
    • Lack of coherence: The Central Asian members of the SCO have quarrels of their own, and have struggled to develop collective approaches to their common regional security challenges.
    • Dint go beyond dialogues: As it broadened its membership, the SCO has, unsurprisingly, struggled to deepen institutional cooperation.
    • Not comprehensive: There is also one important country missing in the mix. It is Turkmenistan, which shares an 800 km border with Afghanistan and a 1,150 km border with Iran.
    • Neutrality of members: The organizing principle of Turkmenistan rulers is absolute “neutrality” — think of it as an extreme form of “non-alignment”. It refuses to join any regional institution, political or military.
    • Individual interests: Russia’s effort to build a regional institution in its Central Asian periphery ran parallel to its plans for the so-called “strategic triangle” with China and India. India and Pakistan, needless to say, are poles apart on the Taliban.

    No common interest in Afghan Peace

    • The US military retreat from Afghanistan has brought cheer to both Moscow and Beijing, although publicly they criticize President Joe Biden’s hasty retreat.
    • The US retreat might weaken the glue that binds Moscow and Beijing in Central Asia or tightens it.
    • Although Russia and China are closer to each other than ever before, their interests are not entirely the same in Central Asia.

    Russian alternatives to SCO

    (1) Central Security Treaty Organisation

    • While military confidence-building measures have grown under the SCO banner, Russia had its own security organisation for the region, called the Central Security Treaty Organisation (CSTO).
    • Three of the SCO members — Kazakhstan, Kyrgyzstan, and Tajikistan — along with Armenia and Belarus are members of the CSTO.
    • Russia sees itself as the sole protector of the former Soviet Republics and may not be ready to share that role with China — “yes” to coordination, but “no” to a Sino-Russian security dyarchy.

    (2) Eurasian Economic Union

    • Moscow also appears reluctant to back Chinese proposals to promote trade integration under the SCO banner; it prefers the Eurasian Economic Union (EAEU) under its own leadership.
    • China is not a member of either CSTO or EAEU. This is one reason for the weakness of SCO regionalism.

    Other deterrents

    (1) Affinity with Taliban

    • China has openly admitted to cooperating with the Taliban by restoring all formal diplomatic ties. It is the first such country to acknowledge the Taliban.
    • Turkmenistan too, which is not part of SCO, has been quite open to engaging the Taliban in sync with its principles of neutrality.
    • Some Russian analysts see Turkmenistan as the potential weak link in the defense against the Taliban’s potential threats to the region.
    • Uzbekistan seems open to a cautious engagement with the Taliban.

    (2) Iranian aspirations for unwarranted interference (just like Turkey does regarding Kashmir)

    • Iran, which has ethnic and linguistic links with the Persian-speaking Tajiks, appears equally worried about the Taliban’s policies towards minorities.
    • As Moscow and Beijing, Tehran was happy to see the Americans leave in humiliation and appeared hopeful of a positive engagement with the Taliban.
    • Those hopes may have been suspended for now, if not discarded.

    What can the SCO do now?

    • The Afghanistan debacle presents an opportunity for the SCO to play a constructive role in meeting the region’s burgeoning security challenge.
    • Providing humanitarian relief, tending to refugees, facilitating an inclusive dialogue and national reconciliation constitute immediate and long-term goals in which the organization can fill a role.
    • The SCO can also pressure the Taliban to share power with other domestic actors and refrain from providing sanctuary to foreign terror organizations (through foreign funds from Saudi*).
    • It can suspend Afghanistan’s observer status, curtail border traffic or withhold recognition, investments, and aid, should Kabul be found wanting.

    Way forward

    • While the SCO is not an impressive regional institution, it remains an important diplomatic forum.
    • India has sought to make full use of the SCO’s diplomatic possibilities without any illusions about its effectiveness.
    • At the SCO summit this week, PM Modi would remind other leaders of the “three evils” that the SCO set out to defeat — terrorism, extremism, and separatism.
    • Few would disagree that the Taliban embodied all the three sins in the past. Today, the Taliban and its mentor Pakistan say the sinner wants to become a saint.
    • India must focus on finding common ground with those members of the SCO who do share India’s concerns about Afghanistan.

    Conclusion

    • Given this divergence, it is unlikely that the SCO can come up with a “regional solution” for the Afghan crisis.
    • The only real Afghan convergence today is between Pakistan and China.
    • Expect them to try and nudge the SCO towards a positive engagement with the Taliban.

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  • Temple entry for women : Gender Equality v/s Religious Freedom

    State control over Temples

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Article 25 and 26

    Mains level: Paper 2- Evolution of rights-bases jurisprudence

    Context

    On August 14, 2021, the Tamil Nadu government appointed 24 trained archakas (priests) in temples across the State. In the weeks since, a series of writ petitions have been filed before the Madras High Court assailing these appointments.

    Administration of  Hindu temples in Tamil Nadu by government and challenges to it

    • The Hindu Religious and Charitable Endowments (HR&CE), 1959, is the governing law on the administration of Hindu temples and religious institutions.
    • In 1971, Section 55 of the HR&CE Act was amended to abolish hereditary priesthood.
    • Removal of caste-based discrimination: In 2006, the amendment provided for the appointment of sufficiently trained Hindus irrespective of their caste as archakas to Hindu temples by the government.
    • Challenges in the Court: Challenges to both amendments were taken to the Supreme Court, which upheld the law, as amended.
    •  In Seshammal v. Union (1972), the Supreme Court observed that the amendment to the HR&CE Act abolishing hereditary priesthood did not mean that the government intended to bring about any “change in the rituals and ceremonies”.
    • Constitutional legitimacy: In Adi Saiva Sivachariyargal v. Govt. of Tamil Nadu (2015), the Supreme Court observed that “the constitutional legitimacy, naturally, must supersede all religious beliefs or practices”.
    • The Court further went on to state that appointments should be tested on a case-by-case basis and any appointment that is not in line with the Agamas will be against the constitutional freedoms enshrined under Articles 25 and 26 of the Constitution.

    Judicial balancing of the various rights by the Supreme Court

    • In Indian Young Lawyers’ Association v. State of Kerala (the Sabarimala case) and Joseph Shine v. Union of India (2018), the Supreme Court reiterated the need to eliminate “historical discrimination which has pervaded certain identities”’, “systemic discrimination against disadvantaged groups”.
    • In these cases the Supreme Court rejected stereotypical notions used to justify such discrimination.
    • In all these cases, the Court prioritised judicial balancing of various constitutional rights.
    • The constitutional order of priority: In the Sabarimala case, it held that “in the constitutional order of priorities, the individual right to the freedom of religion was not intended to prevail over but was subject to the overriding constitutional postulates of equality, liberty and personal freedoms recognised in the other provisions of Part III”.

    Way forward

    • Building on the Sabrimala case: The constitutional courts will now be called upon to build on the gains of the Sabarimala case when it comes to administration of temples, insofar as it concerns matters that are not essentially religious.
    • Dealing with the gender bias: The Supreme Court, in Navtej Singh Johar v. Union of India (2018), interpreted Article 15 as being wide, progressive and intersectional.
    • Today, while most of the debate is around whether men from all caste groups can become archakas, we have failed to recognise the gender bias inherent in these discussions.

    Consider the question “We have been witnessing the evolution of rights-based jurisprudence in the various judgements of the Supreme Court. This will help to eliminate “systemic discrimination against disadvantaged groups”, and reject stereotypical notions used to justify such discrimination. Comment.”

    Conclusion

    At once, caste orthodoxy and patriarchy entrenched within the realm of the HR&CE Act can be eliminated and supplanted with a vision of a just, equal and dignified society.

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  • North-East India – Security and Developmental Issues

    In Manipur, a case for asymmetric federalism

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Autonomous districts, Sixth Schedule

    Mains level: Issues related to Assymetric Federalism in India

    As a normative idea and an institutional arrangement that supports the recognition and provision of an expansive ‘self-rule’ for territorially concentrated minority groups, asymmetric federalism has recently received bad press in India.

    India’s Federalism: A backgrounder

    • Nations are described as ‘federal’ or ‘unitary’, depending on the way in which governance is organised.
    • In a unitary set-up, the Centre has plenary powers of administration and legislation, with its constituent units having little autonomy.
    • In a federal arrangement, the constituent units are identified on the basis of region or ethnicity and conferred varying forms of autonomy or some level of administrative and legislative powers.
    • In India, the residuary powers of legislation, that is the power to make law in a field not specified in the Constitution, is vested in Parliament.
    • Hence India has a quasi-federal framework.

    Why is it said that India has asymmetric federalism?

    • The main forms of administrative units in India are the Centre and the States.
    • Just as the Centre and the States do not have matching powers in all matters, there are some differences in the way some States and other constituent units of the Indian Union relate to the Centre.
    • This creates a notable asymmetry in the way Indian federalism works.
    • But there are other forms, too, all set up to address specific local, historical and geographical contexts.

    The asymmetric structure

    • Besides the Centre and the States, the country has Union Territories with a legislature, and Union Territories without a legislature.
    • When the Constitution came into force, the various States and other administrative units were divided into Parts A, B, C and D.
    • Part A States were the erstwhile provinces, while Part B consisted of erstwhile princely states and principalities. Part C areas were the erstwhile ‘Chief Commissioner’s Provinces’.
    • They became Union Territories, and some of them initially got legislatures and were later upgraded into States.
    • Himachal Pradesh, Manipur, Tripura, Mizoram, Arunachal Pradesh and Goa belong to this category.

    Power apparatus in these asymmetries: Sixth Schedule

    • The Sixth Schedule to the Constitution contains provisions for the administration of tribal areas in Assam, Meghalaya, Tripura and Mizoram.
    • These create autonomous districts and autonomous regions.
    • Any autonomous district with different Scheduled Tribes will be divided into autonomous regions.
    • These will be administered by District Councils and Regional Councils.
    • These Councils can make laws with respect to allotment, occupation and use of land, management of forests other than reserve forests and water courses.
    • Besides they can regulate social customs, marriage and divorce and property issues.

    An integrationist approach adopted by the Constituent Assembly

    • Post-independence, India was criticized for arguably becoming a ‘homogenous Hindu nation’ after Partition.
    • To counter this, the Gopinath Bordoloi Committee, a sub-committee of the Constituent Assembly sought to accommodate the distinctive identity, culture and way of life of tribal groups in the NE by envisioning ‘self-rule’.
    • This distinctive constitutional status to territorially concentrated minorities fosters centrifugal tendencies.
    • Asymmetric federalism fosters subversive institutions, political instability and breakup of States.

    Curious case of Manipur: Recent developments

    • Article 371 gives expansive constitutional powers to Manipur’s Hill Areas Committee (Article 371C) over tribal identity, culture, development and local administration, are exemplars.
    • The integrationist approach resonates powerfully in two recent attempts by Manipur’s government to
    1. stall the introduction and passage of the Manipur (Hill Areas) Autonomous District Council (Amendment) Bill, 2021, and
    2. induct nine Assembly members from the valley areas into the Hill Areas Committee.
    • This move is being perceived as a “malicious” and “direct assault” on the Hill Areas Committee and the constitutional protection accorded to the Hill Areas of Manipur under Article 371C.

    A determined move

    • These moves marks a calculated initiative to use this as a double-edged sword to simultaneously set apace electoral agenda for the upcoming Assembly elections in early 2022 and reclaim its agency to fortify state-level constitutional asymmetry.
    • The attempt to increase membership of the six district councils to 31 members each and secure more powers to the councils by giving more developmental mandate are welcome.

    Managing HAC: A difficult task

    • If history is any guide, the task of reclaiming the Hill Areas Committee’s agency is not going to be easy.
    • Its members often leverage tribe/party loyalty over-commitment to protect constitutional asymmetry and common tribals’ cause.
    • How the HAC and various tribal groups strategically navigate their politics to offset the majoritarian impulse to manipulate the legal and political process to dilute/dissolve extant constitutional asymmetry remains to be seen.

    Way forward

    • There should be sincere commitment to promote tribal development, identity and culture that Article 371C seeks to bridge.
    • Recognizing and institutionally accommodating tribal distinctiveness is not just as a matter of political convenience
    • This valuable and enduring good will be key to promote the State’s integrity, stability and peace in the long run.

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

    What the Q1 GDP numbers say

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Private Final Consumption Expenditure

    Mains level: Paper 3- Measures to sustain the growth momentum

    Context

    India’s GDP data for Q1 of 2021-22 was released on August 31, 2021. The data revealed the real GDP growth at 20.1% in Q1.

    Making sense of the growth

    • Base effect: Real GDP growth at 20.1% in Q1 of 2021-22 is largely because of the contraction of 24.4% in the corresponding quarter of the first COVID-19 year, that is, 2020-21.
    • The Q1 2021-22 output and GDP growth data reflect a strong base effect since the corresponding levels of Q1 of 2020-21 were significantly adversely impacted by the first wave of COVID-19.
    • Fall in magnitude: The magnitude of real GDP fell short of the corresponding level in 2019-20 by a margin of ₹3.3 lakh crore.
    • Required rate: A growth rate of 32.3% was required in Q1 of 2021-22 for achieving the same level of real GDP as in Q1 of 2019-20.
    • To achieve the annual growth of 9.5% as forecast by both the Reserve Bank of India and the International Monetary Fund for 2021-21, an average growth of 6.8% in the remaining part of the year would be required.
    •  The task would become relatively more demanding in Q3 and Q4 considering that the real GDP growth was positive at 0.5% and 1.6%, respectively, in the corresponding quarters of 2020-21.

    Analysing the demand side

    1) Private consumption growth lagging overall GDP growth

    • Largest segment: The largest segment of GDP viewed from the demand side is private final consumption expenditure (PFCE).
    • Its average share over the last three years (2018-19 to 2020-21) was 56.5%.
    • If PFCE were to reach back the 2019-20 level, it should have grown by 35.5% in this quarter.
    • The recovery in private consumption demand is lagging behind the overall GDP growth.
    • Way forward: Private consumption depends largely on income growth and its distribution.
    • Therefore, it would be useful to focus on further supporting income and employment levels for the MSMEs and informal sectors of the economy which have a higher propensity to consume.

    2) Export and investment: positive outcome in Q1

    • Noticeable positive outcomes in Q1 of 2021-22 came from exports and to some extent, from investment as reflected by gross fixed capital formation (GFCF).
    • Exports grew by 39.1% over a contraction of 21.8% in Q1 of 2020-21.
    • This differential is reflected in a positive growth of 8.7%.
    • Investment: In the case of GFCF, the base effect was quite large.
    • Despite a growth of 55.3% in Q1 of 2021-22, its magnitude was still 17.1% lower than the corresponding level in Q1 of 2019-20.

    3) Contraction in government final consumption

    • The only demand segment which contracted even with reference to Q1 of 2020-21 was government final consumption expenditure (GFCE).
    • This contraction was by a margin of (-) 4.8%.

    Analysing the output side

    1) Key service sectors

    • The key service sector — namely trade, transport, storage grew by 34.3% in Q1 of 2021-22 as compared to a contraction of 48.1% in Q1 of 2020-21.
    • However, relative to its level in Q1 of 2019-20, the output of this large service sector was significantly lower by 30.2% in Q1 of 2021-22.
    • Though public administration, defence and other services showed a growth of 5.8% in Q1 of 2021-22 over Q1 of 2020-21, they actually reflected a contraction of 5.0% as compared to Q1 of 2019-20.

    2) Agriculture

    • The key positive news came from the agricultural sector which showed a growth of 4.5% in Q1 of 2021-22, in continuation of annual growth of 3.6% in 2020-21.
    • Given agriculture’s positive growth in all the quarters of 2020-21, further contribution from this sector to the overall growth may not be expected.
    • Its average weight to the overall output is also low at about 15%.
    •  It is the high weight manufacturing sector and the two substantive service sectors — trade, transport et. al and financial, real estate et al. — which will have to support growth in the remaining part of the year.

    Way forward

    • Government should raise the demand: The Centre’s fiscal deficit in the first four months of 2021-22 amounted to only 21.3% of the budgeted target as compared to the corresponding average level of 90% over the last four years.
    • Clearly, significant policy space is opening up for the government to raise its demand and its contribution to output in the remaining part of the current fiscal year.
    • Dealing with likely third wave: Attempts should be made either to bypass or at least curb the adverse impact of COVID-19’s likely third wave.
    • Vaccination and investment in health infra:  Both the coverage of vaccination and the pace of investment in health infrastructure should be accelerated.
    • As revenues improve, expenditures can be increased.
    • There is no need to reduce the fiscal deficit below the budgeted level of 6.8% of GDP.

    Consider the question “To make up for the loss of output in the last two years India needs to embark on the path of high growth trajectory. Suggest the measure to achieve this objective.”

    Conclusion

    We need a faster rate of growth to make up for the loss of output in the previous two years from the trend rate. We must lay the foundation for faster growth in this year itself.

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  • Nuclear Diplomacy and Disarmament

    Stand-off over North Korea reinforces the hollowness of the doctrine of deterrence

    op-ed snap | International Relations | Mains Paper 2: International Institutions

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Light water reactor

    Mains level: Paper 2- North Korea's nuclear program

    Context

    The resumption of North Korea’s largest fissile material production reactor, has sparked speculation about its real and symbolic significance.

    Background of North Korea’s nuclear weapons development

    • In 1994, Pyongyang barred IAEA access to the Yongbyon complex amid suspicions that the country was generating plutonium from spent fuel.
    • 1994 Agreed Framework, an executive agreement signed by President Bill Clinton, required Pyongyang to freeze all nuclear activity and allow inspection of its military sites in return for the construction of two light water reactors.
    • The accord broke down in 2002.
    • In June 2008, in order to express its denuclearisation commitment to the U.S. and four other countries, Pyongyang blew up the cooling tower at the Yongbyon complex.
    • A few months in 2008, Pyongyang barred IAEA inspectors access to its reprocessing plant in the Yongbyon complex and eventually expelled them the following April.
    • In November 2010 American scientist Siegfried Hecker confirmed accounts that North Korea had rapidly built a uranium enrichment plant at Yongbyon.

    Why does resumption nuclear reactor matter?

    • The International Atomic Energy Agency (IAEA) has underlined that the restart of activity in Yongbyon constitutes a violation of UN Security Council resolutions.
    • Reprocessing of fuel: The reactor at the Yongbyon complex has been central to the North Korean reprocessing of spent fuel rods to generate plutonium.
    • Enrichment of fuel: Besides the production of highly enriched uranium for the development of atomic bombs.

    Way forward

    • Negotiations: The Biden administration has adopted a pragmatic path of declaring its readiness to resume negotiations with Pyongyang.
    • UN treaty on complete abolition of nuclear arms: The UN treaty on complete abolition of atomic arms, whose deliberations were boycotted by all nuclear weapons states, is the morally superior alternative.

    Conclusion

    The protracted stand-off over North Korea reinforces the hollowness of the doctrine of deterrence and begs the question whether proliferation can ever be prevented just because nuclear weapons states want to perpetuate their dominance.

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    Back2Basics: IAEA

    • The International Atomic Energy Agency is the world’s central intergovernmental forum for scientific and technical co-operation in the nuclear field.
    • It works for the safe, secure and peaceful uses of nuclear science and technology, contributing to international peace and security and the United Nations’ Sustainable Development Goals.
    • The IAEA was created in 1957 in response to the deep fears and expectations generated by the discoveries and diverse uses of nuclear technology.
    • The Agency’s genesis was U.S. President Eisenhower’s “Atoms for Peace” address to the General Assembly of the United Nations on 8 December 1953.

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

    National Edible Oil Mission (OP)

    op-ed snap | Agriculture | Mains Paper 3: Issues Related To Farm Subsidies & Msp

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: National Edible Oil Mission-Oil Palm (NEOM-OP)

    Mains level: Edible oil scarcity in India

    Last week, the government announced the minimum support prices (MSP) of rabi crops for the marketing season 2022-23.

    Key Highlight: Hike for Oilseeds MSPs

    • The MSP for wheat is up by 2 per cent while that of rapeseed-mustard is up by 8.6 per cent.
    • This indicates that the government wants to focus more on edible oils/oilseeds than on wheat.
    • It is important to note that PM recently announced a Rs 11,000-crore National Edible Oil Mission-Oil Palm (NEOM-OP), as a part of the Aatmanirbhar Bharat Abhiyan.

    About NEOM-OP

    • This is a bold step to augment domestic edible oil supplies, given that 60 per cent of the edible oil consumed in the country is imported — more than half of this is palm oil followed by soybean and sunflower.
    • In FY 2020-21, edible oil imports touched $ 11 billion or about Rs 80,000 crore (for 13.5 million tonnes).
    • Despite these imports, edible oil inflation remains very high (July 2021 was 32.5 per cent).
    • Against this backdrop, the move to promote oil palm is a step in the right direction.

    Reasons for oil price hikes

    • Effective duty for rapeseed and cottonseed oils ranges from 38.5 per cent for crude and 49.5 per cent for refined oils.
    • It’s this high import duty, at a time when global edible oil prices have gone up by almost 70 per cent (y-o-y), that has caused high domestic inflation (32.5 per cent) in edible oils.

    Why Oil Palm?

    • It is the only crop that can give up to four tonnes of oil productivity per hectare under good farm practices.
    • But it is a water-guzzling crop, loves humidity (requires 150 mm rainfall every month) and thrives best in areas with temperatures between 20 and 33 degrees Celsius.
    • The National Re-assessment Committee (2020) has identified 28 lakh hectares suitable for oil palm cultivation in the country — the actual area under oil palm cultivation, as of 2020, is only 3.5 lakh hectares.
    • Much of this (34 per cent) is in the Northeastern states, including Assam, followed by Andhra Pradesh (19 per cent) and Telangana (16 per cent).
    • A large potential is thus waiting to be tapped.

    No reasons for farmers to switch

    • The government has a massive procurement programme for wheat, but a very meagre one for rapeseed-mustard even when the prices rule below MSP.
    • This relative incentive structure remains in favour of wheat.
    • So, we doubt if farmers will switch from wheat to mustard in any meaningful manner to bridge the edible oil deficit.

    What can be done to make NEOM-OP more effective?

    The NEOM-OP intends to focus on productivity and area expansion by supporting the farmers in the following ways:

    (A) Financial assistance

    • Input assistance for planting material, additional assistance to cover maintenance/opportunity costs of farmers, with no limits on acreage.
    • Big-budget assistance to industries that plan to set up a five tonnes/hour processing unit.
    • Such a comprehensive assistance package will attract farmers as well as incentivize the industry to work with agriculturists and augment domestic edible oil production.

    (B) Pricing mechanism for OP

    • There will be no MSP, but the FFB price for farmers would be fixed at 14.3 per cent of average landed crude palm oil price of the past five years, adjusted with the wholesale price index.
    • This is the most critical part of the pricing policy and the formula needs to be carefully calibrated.
    • However, the litmus test of pricing will be dovetailing it with the import tariff policy to protect the farmers in case landed prices fall below the cost of production.

    Way forward

    (1) Rationalizing import duties

    • The Commission for Agricultural Costs and Prices (CACP, which recommends MSP) recommended that India should keep an import duty trigger at $800/tonne (say).
    • If the import price falls below $800/tonne, the import tariff needs to go up in countercyclical manner.
    • Thus, import duty needs to be in sync with rational domestic price policy.
    • It is a necessary condition to give a fillip to aatmanirbharta in edible oils.

    (2) Neutral incentive structure

    • But the sufficient condition would be revisiting the existing incentive structure that unduly favours rice, wheat and sugarcane through heavy subsidisation of power, fertilisers and open-ended procurement.
    • The need is to devise a crop-neutral incentive structure where cropping patterns are aligned with demand patterns, and the crops are produced in a globally competitive manner.

    Conclusion

    • There is a huge deficit in edible oil production in the country.
    • Achieving self-sufficiency in edible oil production through the other oilseeds complex would require adding about 45 million hectares under oilseed cultivation.
    • This is not possible without drastically cutting down the area under cereal crops.
    • The best alternative is, therefore, to ensure proper care of palm oil crops, provide good planting material, better irrigation management, fertilizers and other inputs to raise productivity to four tonnes of oil/hectare.

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

    Why we must focus on Human Development not GDP growth?

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: GDP computation and various terminologies

    Mains level: Growth vs Development debate

    The much-anticipated estimates of gross domestic product (GDP) for the first quarter of the fiscal year 2021-22 were released on 31 August. This has seen an unprecedented decline in GDP at 24.4%.

    Why debate this?

    • An increasing GDP is often seen as a measure of welfare and economic success.
    • However, it fails to account for the multi-dimensional nature of development or the inherent short-comings of capitalism, which tends to concentrate income and, thus, power.
    • The real issue thriving the Indian Economy is the relevance of GDP estimates as the sole or most important indicator of a recovery.
    • Our economy was slowing down even before the pandemic and was then devastated by it.

    GDP as an indicator

    • Economic growth assesses the expansion of a country’s economy.
    • Today, it is most popularly measured by policymakers and academics alike by increasing gross domestic product or GDP.
    • This indicator estimates the value-added in a country which is the total value of all goods and services produced in a country minus the value of the goods and services needed to produce them.
    • It is common to divide this indicator by a country’s population to better gauge how productive and developed an economy is – the GDP per capita.

    A brief history of Growth and GDP

    • The concept of economic growth gained popularity during the industrial revolution, when market economies flourished.
    • In the 1930s, Nobel laureate, Simon Kuznets wrote extensively about national statistics and propagated the use of GDP as the measure of the national income of the US.
    • Against the backdrop of a bloody world wars, governments were on the look for analytical tools to raise taxes to finance the newly minted war machine.
    • It was at the 1944 Bretton Woods conference that GDP became the standard tool for measuring a country’s economy.
    • Right from the classicals to the neo-classicals, the idea of development was intertwined with economic growth, i.e. accumulation of wealth and production of goods and services.

    Prominence of GDP today

    • GDP as a measure of economic growth is popular because it is easier to quantify the production of goods and services than a multi-dimensional index can measure other welfare achievements.
    • Precisely because of this, GDP is not, on its own, an adequate gauge of a country’s development.
    • Development is a multi-dimensional concept, which includes not only an economic dimension, but also involves social, environmental, and emotional dimensions.

    Limitations of GDP

    • One of the limitations of GDP is that it only addresses average income, failing to reflect how most people actually live or who benefits from economic growth.
    • There is also a possibility that the wealth of a society becomes more concentrated and why this is counterproductive to development.
    • If left unchecked, growing inequalities can not only slow down growth, but also generate instability and disorder in society.

    Therefore, a growing GDP cannot be assumed to necessarily lead to sustainable development.

    Relevance since COVID times

    (a) Failure to capture informal economy

    • A decline in economic activity, as captured by GDP data, is only one part of the distress caused by the slowdown and covid.
    • GDP estimates hardly capture the extent of depressed economic activity in the informal sector.
    • This makes it irrelevant to the cause of understanding the changing fortunes of workers and others who are dependent on these activities.
    • India’s informal sector is not only a significant part of the overall economy but is crucial for generating broad demand, given the significantly large proportion of our population that depends on it.

    (b) Rise in distress employment

    • Most worrisome is a reversal of the trend of non-farm diversification due to reverse migration.
    • After more than five decades, we have seen an actual increase in the proportion of workers employed in agriculture.

    (c) Farmers losses

    • Farmers have fared badly. Already suffering from low output prices, the majority of farmers have seen incomes decline as input costs rose (such as on diesel and fertilizers).
    • Even though our farm sector appears relatively unaffected by covid, the ground reality of farmer incomes is at complete variance with the aggregate statistics from the national accounts.
    • The failure to capture livelihood and income losses in the informal sector is only one aspect of our GDP data inadequacy.

    GDP can never account this

    • This failure to reflect the economic conditions of our population’s majority is partly a result of the way data on GDP is calculated, but also due to infirmities of the database itself.
    • But its limitations at the conceptual level are far more serious.

    Alternate measures

    • One expanded indicator, which attempts to measure the multi-dimensional aspect of development, is the Human Development Index (HDI) by UNDP.
    • It incorporates the traditional approach to measuring economic growth, as well as education and health, which are crucial variables in determining how developed a society is.
    • In 2018, the World Bank launched the Human Capital Index (HCI).
    • This index ranks countries’ performances on a set of four health and education indicators according to an estimate of the economic productivity lost due to poor social outcomes.

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    Back2Basics:

    National Income Accounting

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  • Terrorism and Challenges Related To It

    Two decades of 9/11

    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: US and the global war on terror

    Twenty years later, the 9/11 terror attacks look a lot less epochal than they seemed in the heat of the moment.

    Why was 9-11 a major breakthrough?

    • One major inference in the wake of 9/11 was about the power of non-state actors — demonstrated by al Qaeda’s massive surprise attack on the world’s lone superpower at its zenith.
    • Al Qaeda’s rise seemed to fit in with the age of economic globalization and the internet, which heralded the weakening of the state system and the arrival of a borderless world.
    • Two decades later, though, the system of nation-states looks quite robust after enduring the challenge from international terrorism.

    Implications of the attack

    • The state system adapted quickly to the disruptions created by 9/11.
    • There was much anxiety about terror groups gaining access to weapons of mass destruction or leveraging new digital technologies to increase their power over states.
    • The state system has succeeded in keeping nuclear weapons and material away from terrorists.
    • It has also become adept at using digital tools to counter extremism.
    • If 9/11 made air travel risky, the states quickly developed protocols to de-risk it.

    Humiliating end for the US everywhere

    • Marking the 20th anniversary of 9/11 days after the humiliating US retreat from Kabul and domestic turmoil might suggest that Al-Qaeda and its associates did succeed in ending America’s unipolar moment.
    • The choice of targets in the 9/11 attacks — the World Trade Center and the Pentagon — was not accidental.
    • They were designed to strike at the very heart of American capitalism and its famed military power.
    • American capitalism met its greatest threat not in 2001 but in the 2008 financial crisis that was triggered by the reckless ideology of deregulation.
    • America lost in Afghanistan and the Middle East because it over-determined the terror threat and put security approaches above political common sense.

    Today’s agenda for terror

    • And the ambition of the jihadists — who organized the 9/11 attacks, to destroy America has risen to a higher extent:
    1. To overthrow the Arab regimes
    2. Unleash a war with Israel
    3. Pit the believers against the infidels
    • To be sure, terrorist organizations and the religious extremism that inspires them to continue to be of concern.

    Age of ideological warfare

    • Sectarian schisms, ideological cleavages, internecine warfare, and the messiness of the real world have cooled the revolutionary ardor that the world was so afraid of after 9/11.
    • In the battle between states and non-states, the former have accumulated extraordinary powers in the name of fighting the latter.
    • All nations, including liberal democracies, have curtailed individual liberty by offering greater security against terrorism.
    • Abuse of state power has inevitably followed.

    Security narratives by the US since then

    • After 9/11, President George W Bush turned his attention to confronting an imagined “global axis of evil” — Iran, Iraq, and North Korea.
    • None of the three countries was involved in 9/11.
    • And the US rewarded Pakistan with billions of dollars in military and economic assistance that actively nurtured the Taliban and succeeded in bleeding and defeating the US in Afghanistan.

    Threats earned by the US

    • This blinded the US to an emerging challenger — China — on the horizon. Washington’s obsession with the Middle East gave Beijing two valuable decades to consolidate its rise without any hindrance.
    • Although America’s unipolar moment may have ended, the US will continue to remain the most powerful nation in the world, with the greatest capacity to shape the international system.

    What about the jihadist agenda for the Middle East?

    • The Islamist effort to destroy the Gulf kingdoms spluttered quite quickly as the Arab monarchs cracked down hard on the jihadi groups.
    • Many Arab states do not see al Qaeda and its offshoots as existential threats.
    • They worry more about other Muslim states like Turkey, Qatar, and Iran that seek to leverage Islam for geopolitical purposes.
    • These fears have pushed smaller Gulf kingdoms towards Israel and shattered the jihadi hope to trigger the final Islamic assault on the Jewish state.
    • Developments in China and Pakistan reinforce the proposition that politics among nation-states is more significant than the power of the transcendental religious forces.

    How did India Respond?

    • India has been facing the problem of Pakistan-sponsored terrorism since 1989.  Unfortunately, the USA and the UK sided with Pakistan during this time.
    • However, this changed after India’s 2nd nuclear test and the 9/11 attack in the USA. Though the USA continued to rely on Pakistan, it considered Pakistan as an unreliable partner. This was further proved when Osama bin Laden was found hiding in Pakistan.
    • Indian response to terror attacks had been that of “strategic restraint”.
    • It was limited to diplomatic actions. This was evident in attacks on the Indian Parliament (December 2001) and the Kaluchak massacre (May 2002).
    • However, now we witness that India has adopted a policy of imposing costs on Pakistan by striking across the border, e.g. Balalkot airstrikes.
    • This capacity of India has been built over its strong economy and strong global linkages. Despite the economic disaster of 1991, India emerged stronger after LPG reforms.

    Conclusion

    • The trans-national nature of the new terror groups is now countered by better border controls and greater international cooperation on law enforcement.
    • However, in the subcontinent, as elsewhere, violent religious extremism thrives only under state patronage.
    • The answers to the challenges presented by the return of the Taliban and the likely resurgence of jihadi terrorism are not in the religious domain but in changing the geopolitical calculus of Pakistan’s deep state.

    B2BASICS

    Violent Non-state actors

    • In international relations, violent non-state actors (VNSA), also known as non-state armed actors or non-state armed groups (NSAGs), are individuals and groups that are wholly or partly independent of governments and which threaten or use violence to achieve their goals.
    • VNSAs vary widely in their goals, size, and methods. They may include narcotics cartels, popular liberation movements, religious and ideological organizations, corporations (e.g. private military contractors), self-defence militia, and paramilitary groups established by state governments to further their interests.

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  • 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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