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Type: op-ed snap

  • Important Judgements In News

    Biocentric jurisprudence for nature

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Article 21

    Mains level: Paper 2- Biocentric jurisprudence

    Context

    In a recent ruling, the Supreme Court of India has sought to move away from an anthropocentric basis of law.

    Biocentrism Vs. Anthropocentrism

    • Anthropocentrism argues that of all the species on earth humans are the most significant and that all other resources on earth may be justifiably exploited for the benefit of human beings.
    • The philosophy of biocentrism holds that the natural environment has its own set of rights which is independent of its ability to be exploited by or to be useful to humans.
    • Biocentrism often comes into conflict with anthropocentrism.

    Supreme Court of India upholds biocentric principles

    • The Great Indian Bustard is a gravely endangered species, with hardly about 200 alive in India today.
    • The overhead power lines have become a threat to the life of these species as these birds frequently tend to collide with these power lines and get killed.
    • Recently, the Supreme Court in M.K. Ranjitsinh & Others vs Union of India & Others, said that in all cases where the overhead lines in power projects exist, the governments of Rajasthan and Gujarat shall take steps forthwith to install bird diverters.
    • In protecting the birds, the Court has affirmed and emphasised the biocentric values of eco-preservation.
    • A noteworthy instance of the application of anthropocentrism in the legal world is in that of the “Snail darter” case in the United States.
    • The Supreme Court of the United States of America in Tennessee Valley Authority vs Hill, had held that since the “Snail darter” fish was a specifically protected species under the Act, the executive could not proceed with the reservoir project.

    Human role in extinction of species

    • About 50 years ago, there were 4,50,000 lions in Africa. Today, there are hardly 20,000.
    • Indiscriminate monoculture farming in the forests of Borneo and Sumatra is leading to the extinction of orangutans.
    • Rhinos are hunted for the so-called medicinal value of their horns and are slowly becoming extinct.
    • From the time humans populated Madagascar about 2,000 years ago, about 15 to 20 species of Lemurs, which are primates, have become extinct.
    • The compilation prepared by the International Union for Conservation of Nature lists about 37,400 species that are gravely endangered; and the list is ever growing.

    Evolution of Right of Nature laws in Constitutions

    • Pieces of legislation are slowly evolving that fall in the category of the “Right of Nature laws”.
    • These seek to travel away from an anthropocentric basis of law to a biocentric one.
    • The Constitution of India is significantly silent on any explicitly stated, binding legal obligations we owe to our fellow species and to the environment that sustains us.
    • It is to the credit of the Indian judiciary that it interpreted the enduring principles of sustainable development and read them, inter alia, into the precepts of Article 21 of the Constitution.
    • In September 2008, Ecuador became the first country in the world to recognise “Rights of Nature” in its Constitution.
    • Bolivia has also joined the movement by establishing Rights of Nature laws too.
    • In November 2010, the city of Pittsburgh, Pennsylvania became the first major municipality in the United States to recognise the Rights of Nature.
    • These laws, like the Constitution of the countries that they are part of, are still works in progress.

    Conclusion

    In times like this the Supreme Court’s judgment in M.K. Ranjithsinh upholding the biocentric principles of coexistence is a shot in the arm for nature conservation. One does hope that the respective governments implement the judgment of the Court.

  • Indian Army Updates

    Challenging China

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Gulf of Hormuz

    Mains level: Paper 3- Leveraging advantageous geography to counter China

    Context

    The Chinese are about to extend their geographical advantage by building a new high-speed rail from Chengdu, running close by and parallel to the Arunachal border, up to Lhasa.

    Manpower and Defence Budget: Comparison with China

    • The Indian army, according to diverse sources, numbers between 12,50,000 and 14,00,000 officers and men.
    • Chinese PLA actually has only 9,75,000 officers and men.
    •  They have downsized their army.
    • China is an aspiring world power that spends $252 billion on its defence budget, as compared to $72.9 billion that India spends.
    • Both countries limit their budget to around 2 per cent of their GDP, which in China’s case is five times our size.

    Why does India need to reduce manpower in defense?

    • Expensive:  A major portion of the budget is spent on manpower, 81 percent of the army budget goes into manpower and maintenance. Gradually, manpower is going to get increasingly expensive.
    • Also, our strategic options get constrained because the army gets 61 percent of the defense budget.
    • We need to downsize the army by 2,00,000 men over five years through retirement and reduced recruitment.
    • The reduction in manpower will save approximately Rs 30,000 crore, which can be equally divided between the three services.

    Way forward: Bigger role to navy and air force

    • We can achieve better conventional deterrence against China by giving bigger roles to the navy and air force.
    • The first step is to accept that we are an asymmetric power and leverage the RMA (Revolution in Military Affairs) so that numerical inferiority is of no consequence.
    • They are invulnerable on land, and their only strategic weakness is their reliance on the Indian Ocean SLOCs (sea lines of communications) for 70 percent of their imported oil.
    • The only guarantee of Chinese non-aggression and good behavior is a well-crafted threat to their oil tankers and a complete naval mastery of the escalation that is bound to follow.
    • India can also leverage the QUAD resources in various ways such as information.
    • Build up the Car Nicobar airfield into a full-fledged airbase.
    • We could negotiate with Oman for the use of the old RAF airbase at Masirah to dominate the Gulf of Hormuz and threaten the Chinese base at Djibouti.

    Conclusion

    China cannot be countered by throwing expensive manpower at the problem, but only by shifting the battlespace to advantageous geography, by a united navy and air force effort, while a technically advanced army holds the Himalayan border.

  • Pegasus scandal and implications for privacy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Zero click attack

    Mains level: Paper 2- Issues with surveillance

    Context

    The Pegasus spyware, created by NSO Group in Israel has created a political storm in India over its alleged use by the government.

    About the Pegasus spyware controversy

    • It uses a “zero-click” attack which allows the device to be taken over remotely by exploiting software and hardware vulnerabilities.
    • The Israeli Defence Ministry’s stated that Pegasus and other cyber products are exported “exclusively to government entities” and are only for the purpose of preventing and investigating crime and counter terrorism.
    • Pegasus has been used to illegally hack into people’s lives and to obtain private information outside the boundaries of the law.
    • Those who were supposedly targeted range from the uppermost echelons of the judiciary, Opposition party leaders, activists and journalists.

    How it harms freedoms and rights guaranteed by the Constitution

    • A person has the basic fundamental rights of liberty, privacy, speech and expression amongst others.
    • These rights go hand in hand with each other.
    • The alleged use of Pegasus to illegally hack into persons’ lives, listen in on private conversations, to thereafter use this private information against said persons in hope of gaining undue advantage, are all outside the boundaries of the law.
    •  Surveillance on this level would have the effect of instilling fear and directly hampering a person’s ability to freely make their own decisions.
    • The effect is that a person does not have the freedom to think, to speak or even be in the privacy of their own homes.

    Legal provisions for surveillance

    • In December 2018, the government authorised 10 security and intelligence agencies to intercept, monitor and decrypt any information generated, transmitted, received or stored in any computer resource.
    • The authorisation is required before any of the 10 notified agencies can intercept, monitor or decrypt any information.
    • This and other grounds are being taken by the government before the Supreme Court to defend its stance.
    • The Data Protection Bill (yet to be passed by Parliament) offers no protection in respect of surveillance. 
    • Sections 43 and 66 of the Information Technology Act, 2000 criminalise hacking.

    Conclusion

    The majority is not always right. A democracy has the indelible right to question, to demand answers and explanations. The government has many questions to answer and steps to take to protect the rights and freedoms of its citizens.


    Back2Basics: Zero-click attack

    • A zero-click attack is a remote cyber attack which does not require any interaction from the target to compromise it.
    • Pegasus spyware eliminates the need for human errors to compromise a device and instead relies on software or hardware flaws to gain complete access to a device.
    • Zero-click attacks occur only when an attacker is able to takeover a device remotely after successfully exploiting vulnerabilities in the software and hardware of the phone.
    • To make this kind of attack successful, an attacker needs to exploit flaws in a device, whereas spear phishing is a social engineering attack.
  • e-Commerce: The New Boom

    Open Network for Digital Commerce could disrupt India’s e-commerce space

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: ONDC

    Mains level: Paper 3- Advantages and challenges in the Open Network for Digital Commerce project

    Context

    The Department for Promotion of Industry and Internal Trade (DPIIT) recently issued orders appointing an advisory committee for its Open Network for Digital Commerce (ONDC) project.

    About ONDC project

    • The Open Network for Digital Commerce (ONDC) project aims to make e-commerce processes open-source.
    • In simple terms, it aims at creating a platform that can be utilised by all online retailers.
    • This is another effort by the government to facilitate the creation of shared digital infrastructure, as it has previously done for identity (Aadhaar) and payments (Unified Payments Interface).
    • It will digitise e-commerce value chains, standardise operations, promote inclusion of suppliers, and derive efficiencies in logistics.

    What are its advantages?

    • Level playing field: When done well, this approach can level the playing field and create value for users. 
    • Curb monopoly: The market is dominated by a few players who are facing investigations for unfair trade practices in many countries.
    • Prevent market failure: The sector is characterised by many small players who individually do not have the muscle to have an equitable bargain with e-commerce companies.
    • Economists call this a “market failure”, and it presents a legitimate case for intervention.

    The three layers of an open digital ecosystem and their conceptual framework for adoption and safeguards

    1) Tech layer

    • The “tech layer” should be designed for minimalism and decentralisation.
    • The government should restrict its role to facilitating standards and protocols that provide open access, and in getting them adopted organically.
    • Building an entire tech platform should happen only if a standards-based approach doesn’t suffice.
    • If built, the platform should be built on “privacy by design” principles.
    • It should collect minimal amounts of data (especially personal data) and store it in a decentralised manner.
    • Tools like blockchain could be used to build technical safeguards that cannot be overridden without active consent.

    2) Governance layer

    • Avoid excessive government intervention: The “governance layer” around this should allay business fears of excessive state intervention in e-commerce.
    • Legal provision: Any deployment of standards or tech should be accompanied by law or regulation that lays out the scope of the project.
    • Independent regulator for personal data: If collection of any personal data is required, passing the data protection bill and creating an independent regulator should be a precondition.
    • Handling by independent society: To assure the industry of fairness, the government could hand over the stewardship of the standards or platform to an independent society or non-profit.

    3) Community layer

    • A community layer can foster a truly inclusive and participatory process.
    • This may be achieved by making civil society and the public active contributors and seeking wide feedback on drafts of the proposal.
    • Once the framework is implemented, ensuring quick and time-bound redressal of grievances will help build trust in the system.

    Concerns with government creating shared digital infrastructure

    • This approach also comes with risks and we should tread with caution.
    • In general, governments should intervene in markets only when there is a clearly identifiable market failure or massive societal benefits from creating shared infrastructure.

    Way forward

    • The government’s championing of open-source technology for digital commerce is commendable.
    • It should also push the envelope on the other principles of the open-source movement — transparency, collaboration, release early and often, inclusive meritocracy, and community.
    • Even if we do all things right, an infrastructure-led approach may not be sufficient.
    • Therefore, we need to supplement infrastructure with tightly-tailored regulation.
    • We need to explore the concept of interoperability, that is, mandating that private digital platforms like e-commerce firms enable their users and suppliers to solicit business on other platforms.
    • To drive the adoption of an open e-commerce platform in a sector with entrenched incumbents we need to create “reference applications”, and financial or non-financial incentives.
    • Useful learnings can be drawn from the adoption of UPI: The government supported the rollout of BHIM as a reference app, and offered incentives.

    Consider the question “How the Open Network for Digital Commerce project can help deal with the issues with the e-commerce sector? Suggest the approach the project should adopt to make it a success.”

    Conclusion

    It is timely that India is exploring innovative ways to bridge the gaps in e-commerce markets. But the boldness of this vision must be matched by the thoughtfulness of the approach.


    Back2Basics: What is ‘Privacy by Design?

    • Privacy by design is a concept that integrates privacy into the creation and operation of new devices, IT systems, networked infrastructure, and even corporate policies.
    • Developing and integrating privacy solutions in the early phases of a project identifies any potential problems at an early stage to prevent them in the long run.
  • Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

    A cardinal omission in the COVID-19 package

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- Importance of medical workforce in making the healthcare system robust

    Context

    On July 8, 2021, the Union government announced the “India COVID-19 Emergency Response and Health Systems Preparedness Package: Phase II”. But it lacks provision for the medical workforce.

    Objectives of the package

    • The stated purpose of the package is to boost health infrastructure and prepare for a possible third wave of COVID-19.
    • There is plan to increase COVID-19 beds, improve the oxygen availability and supply, create buffer stocks of essential medicines; purchase equipment and strengthen paediatric beds.

    What is lacking in the package?

    • Workforce shortage: The package barely has any attention on improving the availability of health human resources.
    • As reported in rural health statistics and the national health profile there are vacancies for staff in government health facilities, which range from 30% to 80% depending upon the sub-group of medical officers, specialist doctors to nurses, laboratory technicians, pharmacists and radiographers, amongst others.
    • Interstate variation: In addition, there are wide inter-State variations, with States that have poor health indicators with the highest vacancies.

    Way forward

    • Package for filling the existing vacancies: The COVID-19 package II needs to be urgently supplemented by another plan and a similar financial package (with shared Union and State government funding) to fill the existing vacancies of health staff at all levels. 
    • An objective approach to assess the mid-term health human resource needs could be the Indian Public Health Standards (IPHS).
    • IPHS prescribes the human resources and infrastructure needed to make various types of government health facilities functional.
    • The pandemic should be used as an opportunity to prepare India’s health system for the future.
    • Scrutiny of the progress on policy decision: The progress on key policy decisions, for the last few years, to strengthen India’s health system, including those in India’s national health policy of 2017, need to be objectively scrutinised.
    • These two sets of policy decisions should be reviewed and progress monitored, through a meeting of the Central Council of Health and Family Welfare, of which the Health Ministers of the States are members.

    Conclusion

    India’s health system will not benefit from ad hoc and a patchwork of one or other small packages. It essentially needs some transformational changes.

  • Foreign Policy Watch: India-Afghanistan

    ‘Open talks’ with the Taliban is India’s strategic necessity

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Mazar-e-Sharif, Kandahar

    Mains level: Paper 2- Engaging the Taliban

    Context

    With over a third of Afghanistan’s more than 400 districts under Taliban control, the talk-to-the-Taliban option is indeed the best of the many less than perfect options available to India.

    India need a reset in its Afghanistan policy

    • India has ‘temporarily’ closed its consulate in Kandahar.
    • This follows the decision to suspend operations in the Indian consulates in Jalalabad and Herat.
    • India’s decision to partially “withdraw” from Afghanistan shows that betting only on the government in Kabul was a big mistake,
    • It also shows that India realises the threat the Taliban poses to Indian assets and presence in Afghanistan.
    • To safeguard its civilian assets there as well as to stay relevant in the unfolding ‘great game’ in and around Afghanistan, India must fundamentally reset its Afghanistan policy.
    • India must, in its own national interest, begin ‘open talks’ with the Taliban before it is too late.
    • Open dialogue with the Taliban should no longer be a taboo; it is a strategic necessity.

    Reason for avoiding open talks with Taliban

    • There are at least five possible reasons why India appears to want to keep the Taliban engagement slow and behind closed doors.
    • First, if India chooses to engage the Taliban directly, it could make Afghanistan President Ashraf Ghani, to look towards China and the Shanghai Cooperation Organisation (SCO) for national security and personal political survival.
    • Second, India is also faced with the dilemma of who to talk to within the Taliban given that it is hardly a monolith.
    • Third, given the global opprobrium that Taliban faced in its earlier avatar and the lack of evidence about whether the outfit is a changed lot today, New Delhi might not want to court the Taliban so soon.
    • Fourth, there is little clarity about what the Taliban’s real intentions are going forward and what they would do after ascending to power in Kabul.
    • Fifth, it would not be totally unreasonable to consider the possibility of Pakistan acting out against India in Kashmir if India were to establish deeper links with the Taliban.

    Reasons India should engage with the Taliban openly

    • Wide international recognition: Whether we like it or not, the Taliban, is going to be part of the political scheme of things in Afghanistan, and unlike in 1996, a large number of players in the international community are going to recognise/negotiate/do business with the Taliban.
    • Countering Pakistan: The Taliban today is looking for regional and global partners for recognition and legitimacy especially in the neighbourhood.
    • So the less proactive the Indian engagement with the Taliban, the stronger Pakistan-Taliban relations would become.
    • A worldly-wise and internationally-exposed Taliban 2.0 would develop its own agency and sovereign claims including perhaps calling into question the legitimacy of the Durand Line separating Pakistan and Afghanistan, something Pakistan was always concerned about. T
    • The Taliban would want to hedge their bets on how far to listen to Pakistan.
    • That is precisely when New Delhi should engage the Taliban.
    • Security of civilian assets: India needs to court all parties in Afghanistan, including the Taliban if it wants to ensure its security of its civilian assets there.
    • It makes neither strategic nor economic sense to withdraw from Afghanistan after spending over $3 billion, something the Government seems to be prepared to do
    • Being a part of Afghanistan’s future course: If India is not proactive in Afghanistan at least now, late as it is, Russia, Iran, Pakistan and China will emerge as the shapers of Afghanistan’s political and geopolitical destiny, which for sure will be detrimental to Indian interests there.
    • Continental grand strategy:  Backchannel talks with Pakistan and a consequent ceasefire on the Line of Control, political dialogue with the mainstream Kashmiri leadership, secret parleys with Taliban all indicate that India is opening up its congested north-western frontier.
    •  Except for the strategic foray into the Indo-Pacific, India today is strategically boxed in the region and it must break out of it. Afghanistan could provide, if not immediately, India with such a way out.

    Consider the question ” India’s Afghan policy is at a major crossroads; to safeguard its civilian assets there as well as to stay relevant in the unfolding ‘great game’ in and around Afghanistan, New Delhi must fundamentally reset its Afghanistan policy. Comment.” 

    Conclusion

    In the end, India’s engagement with the Taliban may or may not achieve much, but non-engagement will definitely hurt Indian interests.


    Back2Basics: Durand Line

    • Durand Line, boundary established in the Hindu Kush in 1893 running through the tribal lands between Afghanistan and British India, marking their respective spheres of influence.
    • In modern times it has marked the border between Afghanistan and Pakistan.
    • The acceptance of this line—which was named for Sir Mortimer Durand, who induced ʿAbdor Raḥmān Khān, amir of Afghanistan, to agree to a boundary—may be said to have settled the Indo-Afghan frontier problem for the rest of the British period.
  • FDI in Indian economy

    For Cairns dispute, international arbitration is not the way forward

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: BITs

    Mains level: Paper 3- Cairn Energy case

    Context

    The recent move by Cairn to seize India’s sovereign assets in order to enforce its arbitration award has brought into focus the dispute and the related issues.

    Utility of Bilateral Investment Treaties (BIT)

    • After the World Wars, as more countries gained sovereignty, they tended to look at foreign investments as a form of neo-colonialism.
    • Bilateral investment treaties became the primary tool to forge relationships between developed and developing countries.
    • The BITs help to adopt standards for prompt, adequate and effective compensation in case of expropriation.
    • With the advent of globalisation, BITs became the means for foreign investment in developing countries.
    • Although the impact of investment agreements on foreign investments remains highly contextualised and inconclusive, these came to govern international investment relations.
    • The BITs retained the old-world construct that allowed international arbitration.
    • However, many developing countries view arbitration of tax matters as a breach of their sovereign right to tax.

    The Cairn Energy case

    • In 2012, explanations were added to the Income Tax Act 1961 — these provisions were deemed as having a retrospective effect.
    • This was more in response to the Supreme Court’s decision in the Vodafone case which denied the income tax department’s assertion of tax claims arising from the offshore transfer of interest that substantially derived their value from India.
    • The 2012 explanations to the IT Act indeed sought to fix tax avoidance. 
    • Looking into the details of the Cairn case, one can see the series of reorganisations that tip-toed around tax laws of multiple jurisdictions, resulting in the non-payment of tax. 
    • Taxing offshore indirect transfers — a structuring device to gain tax advantage from the indirect sale of assets — is not unique to India (336 tax treaties contain such an article).
    • It is also possible to see that the underlying assets of the subsidiaries were immovable assets in India.
    • The UK-India tax treaty allowed for taxation of capital gains as per Indian law.
    • India challenged the admissibility of the case before the arbitration tribunal.
    • However, the case rests on a distinction between tax and tax-related investment.
    • Surely, all investments have tax implications and the acceptance of such a distinction could create problems even where tax is explicitly carved out from the bilateral investment treaties.
    • The option of arbitration upon an unsuccessful Mutual Agreement Procedure (MAP) resolution is not available in India.
    •  For this reason, over the years, there has been a rising trend in tax disputes involving BITs.
    • The Cairn case is one such instance where arbitration was invoked especially since MAP was not an option.

    Way forward

    • The case raises many questions that administrators must address through reform.
    • India’s model BIT introduced in 2016 rectifies the issue of the distinction between tax dispute and investment-related taxation dispute through the specific exclusion of taxation.
    •  The recognition of a tax-related investment dispute, distinct from a tax dispute, should not undermine such a carve-out.

    Conclusion

    It is also important to note even if the award is enforced, the matter of tax avoidance stands pending before the High Court. Given the complexity, the only reasonable solution would be a negotiated settlement. Even if there’s a resolution in the Cairns case, questions of law would remain.

  • Capital Markets: Challenges and Developments

    India’s equity market bubble

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: FPI and FDI

    Mains level: Paper 3- Equity market bubble

    Context

    Even as the real economy returns to the doldrums after being hit by the second wave of COVID-19 infections, the continuing bull run in India’s equity market in the April-June quarter has baffled many observers.

    V-shaped recovery of equity market

    • The benchmark BSE Sensex had nosedived to below 28,000 in March-April 2020, following the nationwide lockdown.
    • The equity market posted a sharp V-shaped recovery in 2020-21.
    • The Sensex surged beyond 50,000 in February 2021 and is currently closing on the 53,000 level.

    Factors suggesting bubble in equity market

    • There was an 81%-plus growth in the Sensex between April 2020 and March 2021 in the backdrop of real GDP growth plummeting to -7.3% during the same period.
    • While output contraction had reversed from the third quarter of 2020-21, the inflation rate also rose and remained way ahead of the real GDP growth rate in the last two quarters (Chart 1).
    • It is difficult to find any rationality behind the skyrocketing BSE Sensex in the context of such stagflation in the real economy.
    • Just like the fall in the equity prices was driven by the exit of foreign portfolio investors (FPI), the return of massive FPI inflows has driven the Indian equity bubble since then (Chart 2).
    • Net FPI inflows clocked an unprecedented ₹2.74 lakh crore in 2020-21, the previous high being ₹1.4 lakh crore in 2012-13.
    • The Reserve Bank of India (RBI)’s annual report (2020-21) to state stated that: “This order of asset price inflation in the context of the estimated 8 per cent contraction in GDP in 2020-21 poses the risk of a bubble.”

    Global factors

    • The global liquidity glut, following the expansionary, easy money policies adopted by the fiscal and monetary authorities of the OECD and G20 countries, has led to equity price inflation in several markets driven by FPIs, especially in Asia.
    • Following cues from the U.S. and the U.K., Asian equity markets in Singapore, India, Thailand, Malaysia and Hong Kong are currently witnessing price-earnings (P/E) ratios significantly above their historic means.
    • The BSE Sensex’s P/E ratio of 32 in end-June 2021 is way above its historic mean of around 20.

    What could burst the bubble?

    • Change in monetary policy: With COVID-19 vaccination and economic recovery proceeding apace in the U.S., the U.K. and Europe, fiscal and monetary policy stances will change soon.
    • Exit of FPIs: Once the U.S. Federal Reserve and other central banks start raising interest rates, the direction of FPI flows will invariably change bringing about corrections in equity markets across Asia.
    • India remains particularly vulnerable to a major correction in the equity market because of two reasons.
    • Low pace of vaccination: The pace of COVID-19 vaccination in India, given the vast population, lags behind most large countries.
    • In the absence of a substantial increase in the vaccination budget and procurement, large segments of the Indian population will remain vulnerable to a potential third wave of COVID-19, with its attendant deleterious impact on the real economy.
    • Weak fiscal stimulus: India’s economic recovery from the recession will remain constrained by the weak fiscal stimulus that has been delivered by the Central government.
    • Data from the IMF clearly show that while the total global stimulus consisted of additional public spending or revenue foregone measures amounting to 7.4% of global GDP, India’s fiscal measures amounted to 3.3% of GDP only.

    Consider the question “What are the factors driving equity market boom globally? What are the factors that could threaten such boom with a major correction?” 

    Conclusion

    With all agencies, including the RBI, downsizing India’s growth projections for 2021-22, it remains to be seen how long India’s equity bubble lasts.


    Back2Basics: P/E ratio

    • The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS).
    • The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.
    • To determine the P/E value, one simply must divide the current stock price by the earnings per share (EPS).

    P/E Ratio=Earnings per share / Market value per share

     

  • Freedom of Speech – Defamation, Sedition, etc.

    Surveillance reform is the need of the hour

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Article 19 and 21

    Mains level: Paper 3- Issues with surveillance by the government

    Context

    The ‘Pegasus Project’ report says that over “300 verified Indian mobile telephone numbers, including those used by ministers, opposition leaders, journalists, the legal community, businessmen, government officials, scientists, rights activists and others”, were targeted using spyware made by the Israeli firm, NSO Group.

    Threat to press freedom

    • Revelations highlight a disturbing trend with regard to the use of hacking software against dissidents and adversaries.
    • A significant number of Indians reportedly affected by Pegasus are journalists.
    • This is not surprising since the World Press Freedom Index produced by Reporters Without Borders has ranked India 142 out of 180 countries in 2021. 
    • The press requires (and in democracies is afforded) greater protections on speech and privacy.
    • Privacy and free speech are what enable good reporting.
    • This has been recognised in Supreme Court decisions.
    • In the absence of privacy, the safety of journalists, especially those whose work criticises the government, and the personal safety of their sources is jeopardised.
    • Such a lack of privacy, therefore, creates an aura of distrust around these journalists and effectively buries their credibility.

    Issues with the legal provision

    • Provisions of law under the Indian Telegraph Act of 1885 and the Information Technology (IT) Act of 2000 are used by the government for its interception and monitoring activities. 
    • While the provisions of the Telegraph Act relate to telephone conversations, the IT Act relates to all communications undertaken using a computer resource.
    • Both provisions are problematic and offer the government total opacity in respect of its interception and monitoring activities.
    • Section 69 of the IT Act and the Interception Rules of 2009 are even more opaque than the Telegraph Act, and offer even weaker protections to the surveilled.
    • No provision, however, allows the government to hack the phones of any individual since the hacking of computer resources, including mobile phones and apps, is a criminal offence under the IT Act.

    Issues with surveillance system

    • Surveillance itself, whether under a provision of law or without it, is a gross violation of the fundamental rights of citizens.
    • Violation of freedom of speech: The very existence of a surveillance system impacts the right to privacy and the exercise of freedom of speech and personal liberty under Articles 19 and 21 of the Constitution, respectively.
    • It prevents people from reading and exchanging unorthodox, controversial or provocative ideas.
    • No scope for judicial scrutiny: There is also no scope for an individual subjected to surveillance to approach a court of law prior to or during or subsequent to acts of surveillance since the system itself is covert.
    • No oversight: In the absence of parliamentary or judicial oversight, electronic surveillance gives the executive the power to influence both the subject of surveillance and all classes of individuals, resulting in a chilling effect on free speech.
    • Against separation of power: Constitutional functionaries such as a sitting judge of the Supreme Court have reportedly been surveilled under Pegasus.
    • Vesting such disproportionate power with one wing of the government threatens the separation of powers of the government.
    • The existing provisions are insufficient to protect against the spread of authoritarianism since they allow the executive to exercise a disproportionate amount of power.

    Way forward

    • There needs to be oversight from another branch of the government.
    • Judicial oversight: Only the judiciary can be competent to decide whether specific instances of surveillance are proportionate, whether less onerous alternatives are available, and to balance the necessity of the government’s objectives with the rights of the impacted individuals.
    • Surveillance reforms: Not only are existing protections weak but the proposed legislation related to the personal data protection of Indian citizens fails to consider surveillance while also providing wide exemptions to government authorities.
    • Surveillance reform is the need of the hour in India.

    Consider the question “Discuss the threats posed by the use of surveillance systems by the government. Suggest the measures to deal with these threats.”

    Conclusion

    The only solution to the problem of spyware is immediate and far-reaching surveillance reform.

  • Foreign Policy Watch: India-Afghanistan

    China’s role in stabilising Afghanistan

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- Limits on China's role in Afghanistan

    Context

    Amid the gloom that has enveloped Afghanistan, one hope for many countries has been China’s potential role in stabilising it.

    Factors that call for China to play role in Afghanistan

    • Scope for India-China cooperation: In the past, even India thought that Afghanistan would be a natural area for India and China to work together.
    • But little came out of the understanding after the Wuhan summit in 2018.
    • Northern neighbours: Afghanistan’s northern neighbours, Turkmenistan, Uzbekistan, and Tajikistan all have expanding political and economic ties with China but have traditionally relied on Russia for their security.
    • They might support a larger role for Beijing in Afghanistan in partnership with Russia.
    • Iran, Kabul’s western neighbour, also has deepening ties with China.
    • Bilateral cooperation with the U.S.: Washington, now locked in an escalating confrontation with Beijing, sees Afghanistan as a potential area of bilateral cooperation. 
    • Role of Pakistan: Beijing is indeed critical in Pakistan’s plans for Afghanistan.
    • Afghan leaders have also been eager to draw China’s BRI into their plans for economic modernisation.
    • China was also important for Kabul’s political calculus in limiting Pakistan’s quest for dominance.

    Two challenges in China playing role in stabilising Afghanistan

    1) Caution in Chinese policy

    • The first relates to the deep sources of caution in Chinese policy.
    • Neither the prospect of mining Afghanistan’s natural resources nor the vanity of being the newest superpower will compel China to rush into the Afghan vacuum.
    • China has deep concerns about Taliban’s ideology and its potential role in fomenting instability in its restive Muslim-majority province, Xinjiang. 
    • Beijing cannot depend on its special relationship with the Pakistan army to ensure the security of China’s frontiers as well as its investments in Afghanistan.
    •  The growing attacks on CPEC projects in Pakistan, underline the difficulty of pursuing economic development amid endemic violence.

    2) Priorities of Taliban

    • The second set of problems relate to the priorities of Taliban.
    • It remains to be seen whether the economic development of Afghanistan is a top priority for the Taliban or not.
    • Also, is it open to let in foreign capital and all the baggage that comes with it?
    • More fundamentally, there is no clarity on the role of economic modernisation in Taliban’s fierce insistence on the creation of an Islamic emirate in Afghanistan.

    Conclusion

    It is against this backdrop that the chances of China playing a major role in stabilising Afghanistan remain slim.