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  • LGBT Rights – Transgender Bill, Sec. 377, etc.

    Issues faced by India’s sexual minorities

    op-ed snap | Polity | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Article 15

    Mains level: Paper 2- Rights of sexual minority

    The article highlights the plight of sexual minorities despite the landmark judgments by the Supreme Court.

    Role played by the judiciary

    • The Delhi High Court’s verdict in Naz Foundation vs Government of NCT of Delhi (2009) was a landmark in the law of sexuality and equality jurisprudence in India.
    • The court held that Section 377 offended the guarantee of equality enshrined in Article 14 of the Constitution, because it creates an unreasonable classification and targets homosexuals as a class.
    • In a retrograde step, the Supreme Court, in Suresh Kumar Koushal vs Naz Foundation (2013), reinstated Section 377 to the IPC.
    • However, the Supreme Court in Navtej Singh Johar & Ors. vs Union of India (2018) declared that the application of Section 377 IPC to consensual homosexual behaviour was “unconstitutional”.
    • This Supreme Court judgment has been a great victory to the Indian individual in his quest for identity and dignity.
    • It also underscored the doctrine of progressive realisation of rights.

    No legal sanction to same-sex marriage

    • Despite the judgments of the Supreme Court, there is still a lot of discrimination against sexual minorities in matters of employment, health and personal relationship.
    • The Union of India has recently opposed any move to accord legal sanction to same-sex marriages in India.
    • The Union of India stated that the decriminalisation of Section 377 of the Indian Penal Code does not automatically translate into a fundamental right for same sex couples to marry. 
    • The U.S. Supreme Court, in Obergefell vs Hodges (2015) underscored the emotional and social value of the institution of marriage and asserted that the universal human right of marriage should not be denied to a same-sex couple.
    • Indian society and the state should synchronise themselves with changing trends.

    Need to amend Article 15 to prohibit discrimination based on gender or sexual orientation

    • Article 15 secures the citizens from every sort of discrimination by the state, on the grounds of religion, race, caste, sex or place of birth or any of them.
    • The grounds of non-discrimination should be expanded by including gender and sexual orientation.
    • In May 1996, South Africa became the first country to constitutionally prohibit discrimination based on sexual orientation.
    • The United Kingdom passed the “Alan Turing law” in 2017 which ‘granted amnesty and pardon to the men who were cautioned or convicted under historical legislation that outlawed homosexual acts’.

    Way forward

    • Justice Rohinton F. Nariman had directed in Navtej Singh Johar & Ors., the Government to sensitise the general public and officials, to reduce and finally eliminate the stigma associated with LGBTQ+ community through the mass media and the official channels.
    • School and university students too should be sensitised about the diversity of sexuality to deconstruct the myth of heteronormativity.
    • Heteronormativity is the root cause of hetero-sexism and homophobia.

    Conclusion

    It is time for change, but the burden should not be left to the powers that be. The onus remains with the civil society, the citizenry concerned and the LGBTQ+ community itself.

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  • Where is the Indian rupee headed?

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Factors affecting currency's value

    Mains level: Paper 3- Factors affecting rupee's value

    The article explains the factors affecting the Indian rupee’s value against the dollar in implications of change in value for the Indian economy.

    Factor’s affecting rupee’s value

    • First, India’s foreign exchange reserves need to be considered, which have been increasing quite rapidly.
    • Second, there are daily fluctuations caused by foreign portfolio investment (FPI) flows.
    • Third, there is the external factor of the dollar, when the US currency strengthens against the euro, the rupee tends to decline and vice-versa.
    • Fourth, there is the concept of the real effective exchange rate (REER), a construct of economists in which relative inflation comes into play.
    • If inflation in India is higher than in countries associated with its export basket of currencies, then the rupee is overvalued and will correct through depreciation.
    • Fifth, at what stage will the RBI intervene by buying or selling dollars to stabilize the Indian currency also matters.

    Let’s look at some of these factors in detail.

    Impact of the U.S. economy and Fed

    • The dollar is driven by the US economy as well as its Federal Reserve’s policies.
    • The Fed’s recent indication that it would raise its policy rate of funds in the years ahead was enough to strengthen the dollar and weaken the rupee.  As an increase in US rates could see global investor money flocking back to the US, the dollar gained in relative value.
    • The dollar should logically be strengthening, given improving US growth, now reinforced by the Fed.

    Inflation factor

    • The inflation factor, however, has been curious.
    • Indian inflation will be high in India and hence also the rupee’s REER.
    • To the extent the market understands this concept and uses it for valuation, it should be pushing the rupee downwards.
    • But the pressure will be less this time as global inflation is also being raised by rising commodity prices.
    • Indian inflation may not be so much higher as to warrant a deep depreciation.

    Increase in Forex reserves

    • An increase in forex reserves is an indication that India is getting in more dollars than we are spending.
    • This also means that our combined current and capital accounts are in surplus zone.
    • However, India’s current account will go into a deficit this year, as imports will be greater than exports, but will not be very high. Maybe 0.5-1% of GDP.
    • The capital account can get tricky.
    • Inward foreign direct investment was high in 2020-21.
    • At $60 billion in equity and $80 billion overall, it was one of the world’s highest.
    • Therefore, capital flows should remain strong.
    • External commercial borrowings could slow down amid weak investment within India.
    • So the fundamentals suggest that the rupee should be stable, with a tilt towards depreciation.

    The RBI intervention

    • The RBI’s surplus liquidity and accommodative stance have not worked in favour of the rupee.
    • In response to its April policy, when RBI affirmed its dovish stance, the rupee began falling on expectations that if RBI kept rates low at a time of high inflation and excessive market borrowing by the government, investors will potentially move out.
    • This pushed the rupee towards the 75 level against the dollar, but reverted with time as RBI kept infusing liquidity and managed the yield curve.
    •  In April, RBI bought $4.2 billion worth of the US currency.
    • Exports have grown smartly in the first two months of 2021-22, and at this stage, the central bank would not want to that trend by stalling the rupee’s depreciation.

    Conclusion

    Taking all these factors into account, one can foresee the rupee moving in the range of ₹74-75 to the dollar, unless there’s a shock of some sort, though none looks likely at present.

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  • Microfinance Story of India

    Microfinance institutions

    op-ed snap | Economics | Mains Paper 3: Inclusive Growth & Issues,Indian Economy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: MFIs

    Mains level: Paper 3- Freeing up microfinance institutions

    The microfinance institutions (MFI) faced several restrictions by RBI which were not applicable to banks, NBFC and small finance banks. This denied the MFIs level playing field. A recent Consultative document by the RBI frees MFIs from such restrictions. The article explains this in detail.

    Background of regulation of MFI’s  by RBI

    • RBI first allowed informal self-help groups to open savings accounts in banks and bank lending to these groups in 1991-92.
    • In 2000, RBI permitted all types of institutions to offer microcredit and bank loans extended to these institutions for on-lending were treated as part of the priority sector lending.
    • Beyond these, RBI was unwilling to bring in any regulations on the plea that as long as these are not deposit-taking institutions there is no need to regulate them. 
    • That was the stand of various RBI-appointed committees too, including the Vyas Committee of 2004.
    • Based on the Malegam Committee recommendations, RBI came out with detailed guidelines for microfinance institutions (not the microfinance sector) in 2011.
    • These guidelines introduced a new category of NBFCs, viz NBFC-MFIs (microfinance institutions).
    • It also set norms for income criteria for clients of MFIs, repayment period, borrower loan limits, interest rate norms and caps, limits on a number of lenders to a borrower and a host of other norms and criteria.

    How these norms created the issue of a level playing field?

    • After 2015-16, the entry of small finance banks, eight of which were MFIs, into the microfinance space started to create issues.
    • MFIs discovered to their dismay that while they had to adhere to a set of regulations, it was a free-for-all for non-MFIs (banks, SFBs and NBFCs).
    • The main issue was that non-MFIs need not adhere to the norm of number of lenders (two in the case of NBFC-MFIs) and per-borrower loan limits.
    • It prompted non-MFIs to target borrowers identified and nurtured by MFIs with higher loan amounts, leading to high levels of borrower indebtedness.
    • In addition, the interest rate cap (2.75 times the base rate declared quarterly by RBI) was squeezing the margins of small and medium MFIs, as none of them get loans from the biggest banks.

    Way forward

    • The recent Consultative Document by RBI frees MFIs from the restriction imposed by the 2011 regulations and gives them a level-playing field.
    • Another important feature for MFIs is that by doing away with the 50% income generation loans criteria and the repayment period norms.
    • RBI is facilitating credit flow into lifecycle needs like housing, water sanitation, education, health, renewable energy, etc, which are now as important as income generation.
    • On the interest rate front, initially, some upward correction could be there by medium and small MFIs based on their borrowing rates.
    • The document enhances the role for the regulator as the adoption of Board-approved policies to determine the norms of household indebtedness and to fix a transparent rate of interest by each institution and their implementation need a rigorous supervisory oversight

    Conclusion

    Providing a level playing field to the MFI is critical to their development, the document by RBI rightly does that. It will help in providing credit to those who remain outside the formal banking network.

    Source:

    https://www.financialexpress.com/opinion/unfettering-microfinance-recent-rbi-consultative-document-frees-mfis-from-shackles-imposed-by-2011-regulations/2277925/

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  • NPA Crisis

    Bad bank

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Bad bank

    Mains level: Paper 3- Lessons from China as India operationalise its new bad bank

    The article suggests drawing the lessons from China’s experience with the bad bank as India India gets ready to operationalise a new bad bank.

    Bad bank in China and issues

    • In the aftermath of the Asian financial crisis, China set up dedicated bad banks for each of its big four state-owned commercial banks.
    • These bad banks were meant to acquire non-performing loans (NPLs) from those banks and resolve them within 10 years.
    • In 2009, their tenure was extended indefinitely.
    • Chinese banks can currently transfer NPLs only to the national or local bad banks.
    • One of China’s biggest bad banks is the China Huarong Asset Management Co. Ltd. (Huarong).
    • The Chinese government is its principal shareholder.
    • Recently this bad bank stoked financial stability concerns when it skirted a potential bond default.
    • An incentive to conceal: Recent research at the National University of Singapore and others highlights that Chinese bad banks effectively help conceal Non-Performing Loans.
    • The banks finance over 90 per cent of NPL transactions through direct loans to bad banks or indirect financing vehicles.
    • The bad banks resell over 70 per cent of the NPLs at inflated prices to third parties, who happen to be borrowers of the same banks.
    • The researchers conclude that in the presence of binding financial regulations and opaque market structures bad bank model could create incentives to hide bad loans instead of resolving them.
    • Broadening of tenure: In case of Huarong, the main source of the problem appears to be the gradual broadening of the original mandate and tenure of Chinese bad banks.

    Four lessons for India

    • India is about to operationalise a new bad bank, the National Asset Reconstruction Company Ltd. (NARCL).
    • The Chinese experience holds four important lessons for India.

    1) Finite tenure of bad bank

    • A centralised bad bank like NARCL should ideally have a finite tenure.
    • Such an institution is typically a swift response to an abrupt economic shock (like Covid) when orderly disposal of bad loans via securitisation or direct sales may not be possible.
    • The banks could transfer their crisis-induced NPLs to the bad bank and focus on expanding lending activity.
    • The bad bank in turn can restructure and protect asset value.
    • Over time, it could gradually dispose of the assets to private players.

    2) Narrow mandate

    •  A bad bank must have a specific, narrow mandate with clearly defined goals.
    • Transferring NPLs to a bad bank is not a solution in itself.
    • There must be a clear resolution strategy.
    • Otherwise, allowing a bad bank to exist in perpetuity risks a potential mission creep, which might in the long run threaten financial stability itself.

    3) Diversify the sources of funds for ARC

    • Indian banks remain exposed to these bad loans even after they are transferred to asset reconstruction companies (ARCs).
    • The RBI Bulletin (2021) notes that sources of funds of ARCs have largely been bank-centric.
    • The same banks also continue to hold close to 70 per cent of the total security receipts (SRs).
    • To address this problem, RBI has tightened bank provisioning while liberalising foreign portfolio investment norms.

    4) Resolution of bad loans should be through market mechanism

    • In a steady state, the resolution of bad loans should happen through a market mechanism and not through a multitude of bad banks.
    • In India, the Narasimham Committee (1998) had envisaged a single ARC as a bad bank.
    • Yet, the SARFAESI Act, 2002 ended up creating multiple, privately owned ARCs.
    • As a result, regulations have treated ARCs like bad banks, although functionally they are closer to stressed asset funds registered as Alternative Investment Fund Category II (AIFs).
    • With the setting up of NARCL as a centralised bad bank, the regulatory arbitrage between ARCs and AIFs must end.
    • While AIFs should be allowed to purchase bad loans directly from banks and enjoy enforcement rights under the SARFAESI Act.
    • ARCs should be allowed to purchase stressed assets from mutual funds, insurance companies, bond investors and ECB lenders.
    • ARC trusts should be allowed to infuse fresh equity in distressed companies, within IBC or outside of it.
    • Lastly, the continued interest of the manager/sponsor of ARCs should be at par with AIFs, that is, at least 2.5 per cent in each scheme or Rs 5 crore, whichever is lower.

    Conclusion

    The Chinese experience should nudge Indian policymakers to limit the mandate and tenure of NARCL, while facilitating market-based mechanisms for bad loan resolution in a steady state.

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  • Higher Education – RUSA, NIRF, HEFA, etc.

    Blended mode of teaching

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Blended learning

    Mains level: Paper 2- Blended learning and related issues

    Blended mode of teaching and its advantages

    • A recent circular by the University Grants Commission (UGC) proposes that all higher educational institutions (HEI) teach 40% of any course online and the rest 60% offline termed as blended learning (BL).
    • The UGC argues that this “blended mode of teaching” and learning paves the way for:
    • 1) Increased student engagement in learning.
    • 2) Enhanced student-teacher interactions.
    • 3) Improved student learning outcomes.
    • 4) More flexible teaching and learning environments, among other things.
    • 5) Other key benefits such as the increased opportunity for institutional collaborations at a distance and enhanced self-learning accruing from blended learning (BL).
    • 6) BL benefits the teachers as well. It shifts the role of the teacher from being a “knowledge provider to a coach and mentor”.
    • 7)  The note adds that BL introduces flexibility in assessment and evaluation patterns as well.

    Challenges

    • All India Survey on Higher Education (2019-20) report shows that 60.56% of the 42,343 colleges in India are located in rural areas and 78.6% are privately managed.
    • Only big corporates are better placed to invest in technology and provide such learning.
    • Second, according to datareportal statistics, Internet penetration in India is only 45% as of January 2021.
    • This policy will only exacerbate the existing geographical and digital divide.
    • Third, BL leaves little room for all-round formation of the student that includes the development of their intelligent quotient, emotional quotient, social quotient, physical quotient and spiritual quotient.
    • The listening part and subsequent interactions with the teacher may get minimised.
    • Also, the concept note assumes that all students have similar learning styles and have a certain amount of digital literacy to cope with the suggested learning strategies of BL.
    • This is far from true. Education in India is driven by a teacher-centred approach.

    Suggestions

    • The government should ensure equity in access to technology and bandwidth for all HEIs across the country free of cost.
    • Massive digital training programmes must be arranged for teachers.
    • Even the teacher-student ratio needs to be readjusted to implement BL effectively.
    • This may require the appointment of a greater number of teachers.
    • The design of the curriculum should be decentralised and based on a bottom-up approach.
    • More power in such education-related policymaking should be vested with the State governments.
    • Switching over from a teacher-centric mode of learning at schools to the BL mode at the tertiary level will be difficult for learners.
    • Hence, the government must think of overhauling the curriculum at the school level as well.
    • Finally, periodical discussions, feedback mechanisms and support services at all levels would revitalise the implementation of the learning programme of the National Education Policy 2020, BL.
    • It will also lead to the actualisation of the three cardinal principles of education policy: access, equity and quality.

    Conclusion

    Government must take steps to address the concerns with blended learning before implementing it.

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

    It’s time for RBI to turn its attention to inflation

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: GDP Deflator

    Mains level: Paper 3- Impact of inflation on various stakeholders

    Recently, CPI inflation crossed the RBI’s upper limit of 6%. The article explains the implications of this for various stakeholders.

    How inflation benefits government as a borrower

    • Rising inflation hurts lenders and benefits borrowers.
    • To that extent, the government, one of the biggest borrowers, stands to benefit as high inflation will lower the national debt load in relation to the size of the economy.
    • The Union budget 2021-22 assumed a 14.4 per cent growth in nominal GDP, however, actual growth is set to exceed this.
    • The GDP deflator, which measures the difference between nominal and real GDP, is a weighted average of WPI and CPI, with a higher weightage to WPI.
    • And given that nominal GDP is used as a base for computing the fiscal ratios, all of these will get deflated.
    • The value of past debt and debt servicing costs thus gets pared in real terms as inflation rises.
    • Viewed from a debt dynamics perspective, as the gap between growth and interest rates rises, the debt/GDP ratio falls.

    Impact on other stakeholder

    • That inflation reduces purchasing power and hits private consumption is well known.
    • Overall food CPI inflation (5 per cent) was lower than non-food inflation (7.1 per cent) in May.
    • Lower food inflation, coupled with higher non-food inflation means reduced purchasing power for farmers.
    • Inflation trends, specifically input prices (reflected better by WPI), matter for corporate performance as well.
    • While producers seem to be bearing a part of the burden of rising input costs for now, these could get passed on in greater measure to consumers once demand recovers.
    • Rising inflation reduces returns on fixed income instruments, including bank deposits, which account for over 50 per cent of households’ financial savings.
    • This has already induced a shift to riskier asset classes such as equities, which has ramifications for overall financial stability.

    Way forward

    • The RBI will have to closely monitor inflation trends and calibrate its policy response.
    • It has not intervened on high inflation since the onset of the pandemic and, rightly so, in order to support growth.
    • But the current spell of inflation is over a high base and a continuation of recent trends will persuade it to turn the focus back on inflation.
    •  Given the need for monetary policy to stay accommodative, it might be time to consider other supply-side interventions such as cuts in excise rates on petroleum products to soften the inflation blow.

    Consider the question “As a one of the largest borrowers, how rising inflation benefits the government? How high inflation affects the other sections of the economy?”

    Conclusion

    Given the impact rising inflation has for the braoader sections of the economy, it is time for RBI to turn its attention to inflation.

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  • Poverty Eradication – Definition, Debates, etc.

    Why counting of poor matters?

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Poverty line

    Mains level: Paper 3- Counting the number of the poor

    Counting the number of the poor

    • If the state of the Indian economy is to be repaired, we need to meticulously count the number of the poor and to prioritise them.
    • The World Bank $2-a-day poverty line might be inadequate but it would be a start and higher than the last line proposed by the C. Rangarajan committee.
    • A survey in 2013 had said India stood at 99 among 131 countries, and with a median income of $616 per annum, it was the lowest among BRICS and fell in the lower-middle-income country bracket.
    • Since 2013 three important data points have made it clear that the state of India’s poor needs to be acknowledged if India is to be lifted.
    • The first being, the fall in the monthly per capita consumption expenditure of 2017-18 for the first time since 1972-73.
    • Second is the fall of India in the Global Hunger Index to ‘serious hunger’ category.
    • Third,  health census data or the recently concluded National Family Health Survey or NFHS-5, which had worrying markers of increased malnutrition, infant mortality and maternal health.
    • A fourth statistic, Bangladesh bettering India’s average income statistics, must also be a reason for Indians to introspect.

    Increase in number of poor in India

    •  In 2019, the global Multidimensional Poverty Index reported that India lifted 271 million citizens out of poverty between 2006 and 2016. 
    • Since then, the International Monetary Fund, Hunger Watch, SWAN and several other surveys show a decided slide.
    • In March, the Pew Research Center with the World Bank data estimated that ‘the number of poor in India, on the basis of an income of $2 per day or less in purchasing power parity, has more than doubled to 134 million from 60 million in just a year due to the pandemic-induced recession’.
    • In 2020, India contributed 57.3% of the growth of the global poor.
    • This has thrown a spanner in the so far uninterrupted battle against poverty since the 1970s.
    • Urgent solutions are needed within, and the starting point of that would be only when we know how many are poor.

    Debate on the poverty line

    • In 2011, the Suresh Tendulkar Committee report at a ‘line’ of ₹816 per capita per month for rural India and ₹1,000 per capita per month for urban India, calculated the poor at 25.7% of the population.
    • The anger over the 2011 conclusions, led to the setting up of the C. Rangarajan Committee.
    • In 2014, C. Rangarajan Committee estimated that the number of poor were 29.6%, based on persons spending below ₹47 a day in cities and ₹32 in villages.
    • The National Commission for Enterprises in the Unorganised Sector in 2004, had concluded that 836 million Indians still remained marginalised.
    • The Commission’s conclusion was ignored — that 77% of India was marginalised — emphasising that it was a problem of a much bigger magnitude, than the figure of 25.7% conveyed.

    Why counting the poor matters?

    1) Helps in forming public opinion

    • Knowing the numbers and making them public makes it possible to get public opinion to support massive and urgent cash transfers.
    • The world outside India has moved onto propose high fiscal support, as economic rationale and not charity.
    •  In India too, a dramatic reorientation would get support only once numbers are honestly laid out.

    2) It helps in evaluating success of policies

    •  Recording the data helps to evaluate all policies on the basis of whether they meet the needs of the majority.
    • Is a policy such as bank write-offs of loans amounting to ₹1.53-lakh crore last year, which helped corporates overwhelmingly, beneficial to the vast majority?
    • This would be possible to transparently evaluate only when the numbers of the poor are known and established.

    3) Helps in addressing the concerns of real majority

    • If government data were to honestly account for the exact numbers of the poor, it may be more realistic to expect the public debate to be conducted on the concerns of the real majority.
    • Such data would also help in creating a climate that demands accountability from public representatives.

    4) To gauge the rising inequality

    • India has clocked a massive rise in the market capitalisation and the fortunes of the richest Indian corporates, even as millions of Indians have experienced a massive tumble into poverty.
    • To say that the stock market and the Indian economy are ‘not related’ is ingenuous.
    • Indians must have the right to question whether there is a connection and if the massive rise in riches is not coincidental, but at the back of the misery of millions of the poor.
    • If billionaire lists are evaluated in detail and reported upon, the country cannot shy away from counting its poor.

    Conclusion

    The massive slide into poverty in India that is clear in domestic and international surveys and anecdotal evidence must meet with an institutional response.

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  • Foreign Policy Watch: India-China

    Why does China consistently beat India on soft power?

    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: Paper 2- Soft-power comparison with China

    The article compares India with China in terms of soft-power both countries exert based on the measures produced by Lowy Institute in Australia.

    What is soft power?

    • Joseph Nye, who gave us the notion of soft power, suggests that it consists of foreign policy, cultural and political influence.
    • Foreign policy influence comes from the legitimacy and morality of one’s dealings with other countries.
    • Cultural influence is based on others’ respect for one’s culture.
    • Political influence is how much others are inspired by one’s political values.
    • Soft power is difficult to measure.

    The Lowy Institute in Australia has produced various measures which correspond roughly to foreign policy influence, cultural influence and political influence.

    1) India’s foreign policy influence

    • In diplomatic influence, overall, India ranks sixth and China ranks first among 25 Asian powers.
    • On networks, India nearly matches China in the number of regional embassies it has but is considerably behind in the number of embassies worldwide (176 to 126).
    • Multilaterally, India matches China in terms of regional memberships, but, crucially, its contributions to the UN capital budget are completely dwarfed by Chinese contributions (11.7 per cent to 0.8 per cent of the total).
    • In surveys of foreign policy leadership, ambition, and effectiveness, China ranks first or fourth on four measures while India ranks between fourth and sixth in Asia.

    2) Cultural influence

    • Lowy’s overall measure of cultural influence ranks India in fourth place and China in second place in Asia.
    •  Cultural influence is then divided into three elements, of which “cultural projection” and “information flows” are the most important.
    • In cultural projection, India scores better on Google searches abroad of its newspapers and its television/radio broadcasts.
    • India also exports more of its “cultural services” defined as “services aimed at satisfying cultural interests or needs”.
    • China does better on several other indicators.
    • For instance, India has only nine brands in the list of the top 500 global brands whereas China lists 73.
    • On the number of UNESCO World Heritage sites, India has 37 while China has 53.
    • Respect for the Indian passport also lags.
    • Chinese citizens can travel visa-free to 74 countries while Indians can only do so to 60.
    • In terms of information flows, in 2016–17, India hosted a mere 24,000 Asian students in tertiary education institutions whereas China hosted 2,25,000.
    • On total tourist arrivals from all over the world, India received 17 million, while China received 63 million.

    3) Political influence

    • In 2017 the two were not ranked that far apart in political influence.
    • The governance effectiveness index shows India scoring in the top 43 per cent countries worldwide and ranked 12th and China scoring in the top 32 per cent and ranked 10th.
    • On “political stability and absence of violence/terrorism”, India ranked 21st, and China ranked 15th.

    Consider the question “What do you understand by the term soft-power? How would you assess India’s soft-power potential in terms of various parameters?”

    Conclusion

    Soft-power theorists suggest that the ability to persuade rests on the power of attraction. We in India may think we are more attractive than China. The numbers show otherwise.

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  • Important Judgements In News

    Significance of recent judgments in UAPA cases

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- Issues with UAPA 1967

    Recent judgements involving UAPA highlights the issues with certain provisions resulting in long years of undertrial imprisonment.

    Context

    In the past week, three seminal judgments involving the Unlawful Activities (Prevention) Act, 1967 (UAPA) have been delivered. While these judgments are welcome developments, they also remind us that thousands continue to languish under the UAPA regime.

    Issues with the provisions of UAPA

    • Originally enacted in 1967, the UAPA was amended to be modelled as an anti-terror law in 2004 and 2008.
    • The period of detention is increased, enlarging the period of custody prior to which default bail cannot be granted.
    • Regular bail is subject to the satisfaction of the judge that no prima facie case exists.
    • Bail apart, the dilatory trial procedures ensure lengthy periods of pre-trial incarceration for the accused who are presumed guilty of heinous terror crimes.

    NCRB data reveal long years of undertrial imprisonment

    • As per the National Crime Records Bureau (NCRB) data, a total of 4,231 FIRs were filed under various sections of the UAPA between 2016 and 2019.
    •  While the number of acquittals is low,  the real picture emerges in the pendency rates.
    • The pendency rate at the level of police investigation is very high, at an average of 83 per cent.
    • This denotes that chargesheets are filed by the police on an average in about 17 per cent of the total cases taken up for investigation.
    • The rate of pendency at the level of trial is at an average of 95.5 per cent.
    • This indicates that trials are completed every year in less than 5 per cent cases.

    What did the courts say in various judgements?

    • The Supreme Court, in Union of India v K A Najeeb, held that despite restrictions on bail under the UAPA, constitutional courts can still grant bail on the grounds that the fundamental rights of the accused have been violated.
    • In Asif Iqbal Tanha v State of NCT of Delhi, the Delhi High Court took this reasoning a step further, holding that it would not be desirable for courts to wait till the accused’s rights to a speedy trial are entirely vitiated before they are set at liberty.
    • Courts should exercise foresight, and in cases with hundreds of prosecution witnesses where a trial will not see a conclusion for years to come, courts should apply the principles laid down in Najeeb.

    Way forward

    •  Even within the constraints of the UAPA, much can be achieved if a responsive and independent judiciary follows the basic principles of natural justice and due process.
    • But access to the judiciary remains limited for most of the thousands incarcerated under this widely-used law.

    Conclusion

    The governments need to consider the issue of pendency of cases under UAPA and take steps to address the issues by either repealing certain provisions or ensuring speedy trials.

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  • Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

    Corporates need commitment to sustainability and community alongside pursuit of profit

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: CSR norms in India

    Mains level: Paper 3- Sustainability and capitalism

    The article calls the corporates to adopt new capitalism in the aftermath of the pandemic which involves alongside the profit motives the commitment to giving back.

    Capitalism in the aftermath of Covid-19

    • The 2008 crisis was caused by the excesses of global finance, whereas the 2020 economic crisis was caused by a pandemic that spilled over to the economy.
    • While the current pandemic is the first of its kind in nine decades, the dire economic consequences are very similar to that global financial crisis just a decade ago.
    • What is also similar is the policy response that has followed both the 2008 and 2020 crises — the Keynesian prescription of the government stimulating a depressed economy by using monetary and fiscal instruments.
    • Cheap liquidity preserves the wealth of the asset-owning classes even as the real economy stalls.
    •  However, over-stretched governments head towards a debt/fiscal crisis which eventually forces austerity, hitting those dependent on government handouts.
    • It is this inequality in outcomes that is unlikely to happen this time.
    • Already, the G-7 has pledged to maintain a minimum level of corporation tax.
    • There have also been calls for additional taxation, particularly on the assets of the wealthy.

    What corporates can do

    • Instead of waiting for governments to react under popular pressure, corporates must themselves set out on a different path.
    • Covid-19 has brought home the fragility of human life and the deeply interconnected fate of humanity.
    • Outside of the pandemic, there is no better example of this than climate change which, if left uncontrolled, could devastate the world.
    • While governments negotiate, corporates must respond with voluntary commitments to mitigate climate change.
    • Climate change mitigation should be at the core of all business models going forward.
    • In addition, promoters need to come forward to pledge more of their wealth towards philanthropy.
    •  India implemented the concept of corporate social responsibility as part of its legal framework a decade ago.

    Investor pressure for action towards environment

    • The ability of the private sector to work for the greater good seems implausible.
    • But it is already happening — not because of government regulation, but because of investor pressure.
    • Progressive actions towards the environment and society are being rewarded by investors.
    • The absence of such progressive actions is being penalised.
    • Market forces are, after all, embedded in society.
    • They are perfectly capable of moving beyond profit.

    Threat of new-age tech capitalism

    • The real challenge for society, government and capitalists comes from the new-age tech capitalists.
    • They are the new monopolists or oligopolists who don’t exercise their power over society by charging a supernormal price.
    • In fact, a lot of them provide goods and services at hefty discounts.
    • Instead, what they seek is to control information and influence choices.
    • Many of the promoters of such enterprises are philanthropists but society and governments have a different set of concerns on how they exercise power.

    Conclusion

    An imperfect world is passing through a perfect storm. There will be big changes on the other side. Capitalism will survive. It could thrive by choosing its own pathway or it could stumble along under the hammer of big government fuelled by populist backlash.

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