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Type: op-ed snap

  • Electoral Reforms In India

    Comparing the mandates of election commissions of India and the U.S.

    op-ed snap | Polity | Mains Paper 2: Comparison Of The Indian Constitutional Scheme With That Of Other Countries

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Power of the ECI

    Mains level: Paper 2- Comparing the powers of the Election Commission of India to its counterpart in the U.S.

    In the recently concluded presidential election in the U.S., the delay in announcing the result and issue of denial of the election results by the incumbent has brought into focus the role played by flaws in the Americal democratic system in the conduct of the election. This article compares the powers of the elections bodies in the U.S. and India.

    Powers of ECI

    • Indian Constitution has given the ECI enormous power to be exercised during the course of elections, and strictly on other election-related matters.
    • By virtue of being the custodian of the electoral roll, all matters related to keeping the roll updated, fall under the ECI’s domain.
    • Even the higher judiciary does not interfere during the course of the election process.
    • Our Constitution’s fathers decided to limit the role of the judiciary in India to the post-election period, when election petitions may be filed.
    • This was done to avoid the impeding of the election process and delay election results interminably.

    Comparing the powers

    • The U.S. Federal Election Commission has a much narrower mandate than its Indian equivalent-Election Commission of India.
    • The Federal Election Commission was established comparatively recently — 1975, with the special mandate to regulate campaign finance issues.
    • As a watchdog, it is meant to disclose campaign finance information, to enforce the law regarding campaign contributions, and oversee public funding of the presidential election.
    • The Federal Election Commission is led by six Commissioners.
    • These six posts are supposed to be equally shared by Democrats and Republicans, and too have to be confirmed by the Senate.
    • This leads to decision making divided on partisan lines.

    What India can learn From the election process in the U.S.

    • In the 2016 U.S. election, almost a quarter of the votes counted arose from postal and early balloting.
    • In India we have confined postal ballots to only a few categories, of largely government staff (for example those on election duty) as well as the police or armed forces.
    • In these difficult times of the novel coronavirus pandemic, we need to widen this base to include all senior citizens and anyone else who may find it convenient to cast their vote early.

    Consider the question “Powers of the Election Commission of India are wider when compared with its counterpart in the U.S. In light of this, compare the powers of the two bodies and how these wide powers have enabled smooth power transfers in India.” 

    Conclusion

    In its functioning, Election Commission of India has broad powers as compared to its counterpart in the U.S. which has helped India see a smooth power transfer from the first election in India in 1951-52 and every single election since.

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  • Goods and Services Tax (GST)

    Taxes and the fundamental rights

    op-ed snap | | Mains Paper 2: Executive & Judiciary,Parliament & State Legislatures

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: GST

    Mains level: Paper 2- Testing the legitimacy of tax

    The article deals with the issue of a petition challenging the imposition of 5% GST on mobility aids used by disabled citizens.

    Background

    • The petitioner, in Nipun Malhotra vs. Union of India, argued in Supreme Court that the tax imposed on mobility aids used by disabled citizenswas patently discriminatory.
    • A decision to impose a tax, the Court said, was a matter of policy over which the judiciary ought not to ordinarily interfere.
    • In adjourning the case, it suggested that the petitioner exhaust his options by submitting his grievances to the GST Council, which is the governing body responsible for determining which products are taxed, and at what rate.

    Should the Courts test the legitimacy of the tax

    • It might be keen to ensure that the judiciary does not sit on judgment over matters that fall within the domain of legislative and executive competence.
    • There is nothing inherently distinct about taxing laws; they are in no way plenary and unamenable to judicial review.
    • Quite to the contrary, taxes have a direct bearing on how society is arranged.
    • The nature and rate of tax imposed on a product can impinge both on a person’s freedom and on a person’s right to be treated with equal care and concern.
    • Therefore, it ought to be well within an independent judiciary’s province — as the top courts in Canada and Colombia, among others, have recently held — to examine whether or not an imposition of a tax violates a fundamental right.

    Why government impose tax on mobility aids?

    • Until the advent of the GST, mobility aids were almost entirely immune from indirect taxes.
    • In virtually every State, exemptions were granted on the payment of value-added-tax on such goods.
    • However, under GST 18% tax was imposed on these devices and subsequently reduced to 5%.
    • The government claims that it cannot relieve mobility aids from taxation, because to do so will disincentivise domestic manufacturers.
    • Domestic manufacturers can claim “input tax credit” on taxes paid on raw material in the process of manufacturing when it remits the levy collected from the eventual purchaser of the product.
    •  The State’s argument is that in the absence of a levy of GST on the final product, the manufacturer will be burdened with input taxes.
    • Since it cannot claim any credit for those taxes paid, the prices of the final product would have to be concomitantly higher.
    • As a result, the manufacturer will be placed in a relative position of disadvantage to foreign makers.

    Issues with the government’s argument

    • This argument, though, suffers from at least two fallacies. First, a reading of the various notifications issued by the GST Council shows that many other products that are essential to human needs are exempt from tax.
    • Second, that the grant of an exemption in cases such as these would disentitle manufacturers from claiming input tax credit is a matter of legislative design.

    Way forward

    • Parliament can find other ways to ensure that domestic manufacturers are granted credit for the taxes that they pay on inputs.
    • A decision taken on exempting goods from taxation is a matter of classification.
    •  Given that the classification rests on a state of disability, it must be seen, on any sensible consideration of our equality jurisprudence, as, at least facially, inequitable.
    • The onus must, therefore, rest on the government to show the Court that it had cogent reasons for treating these goods as distinct from other commodities that are exempt from tax.
    • A failure to discharge this onus ought to render the levy illegitimate.
    • The GST Council can take a leaf out of the books of Canada and Australia, and grant a complete exemption on the levy imposed on mobility aids.

    Conclusion

    It is time we recognised that an unreasonable levy can deeply compromise fundamental human needs. To free taxing statutes from the ramparts of the Constitution is to risk the entrenching of inequality.

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  • Foreign Policy Watch: India-SAARC Nations

    Sharing Indo-Pacific vision in the region

    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: Indo-Pacific construct

    Mains level: Paper 2- India's Indo-Pacific vision

     Where do we geographically place the Indo-Pacific?

    • Term “Indo-Pacific” has come into prominence in the past decade.
    • India has used it in joint statements with a series of partner countries, including but not limited to the United States, Australia, France, Indonesia, Japan, and of course the United Kingdom.
    • It figures in meetings with our ASEAN and has helped advance the Quad consultations.
    • Indian Foreign Ministry has recently set up an Indo-Pacific Division as well as an Oceania Division a sign of India’s commitment to this critical geography.
    • This has encouraged other countries to perceive and define the region in its full extent.
    • For India, the Indo-Pacific is that vast maritime space stretching from the western coast of North America to the eastern shores of Africa.
    • Today, more and more countries are aligning their definition of the Indo-Pacific with Indias.

    Historical background

    • During the Cold War, the Indo-Pacific was divided into different spheres of influence and military theatres.
    • Whether it was the monsoon winds– or our maritime and trading history, we found it impossible to see the Horn of Africa and the Straits of Malacca on the other as disconnected.
    • The first for this is that the Indian peninsula, which thrusts into the Indian Ocean and gives us two magnificent coasts and near limitless maritime horizons to both our east and our west.
    • Monks and merchants, culture and cargo have travelled from India on those waters, to our east, west and south.
    • India’s great religious traditions, such as Buddhism, spread far and wide in the Indo-Pacific.
    • These experiences are our past and are our future; these experiences determine our concept of the Indo-Pacific.

    Why is the Indo-Pacific crucial?

    • The interconnectedness of the Indo-Pacific is finally coming into full play.
    • A motivating factor is the region’s emergence as a driver of international trade and well-being.
    • The Indo-Pacific ocean system carries an estimated 65 per cent of world trade and contributes 60 per cent of global GDP.
    • Ninety per cent of India’s international trade travels on its waters.
    • For us, and for many others, the shift in the economic trajectory from the Atlantic to the Indo-Pacific has been hugely consequential.
    • The rise of China and the imperative for a global rebalancing have added to the mix.
    • A rules-based international order is achievable only with a rules-based Indo-Pacific.

    India’s Indo-Pacific strategy

    • India’s Indo-Pacific strategy was enunciated in 2018 as the SAGAR doctrine.
    •  SAGAR is an acronym for “Security and Growth for All in the Region”.
    • This aspiration depends on securing end-to-end supply chains in the region; no disproportionate dependence on a single country; and ensuring prosperity for all stakeholder nations.
    • An Indo-Pacific guided by norms and governed by rules, with freedom of navigation, open connectivity, and respect for the territorial integrity and sovereignty of all states, is an article of faith for India.
    • Using this Initiative, India plans to support the building of a rules-based regional architecture resting on seven pillars. These are:1) Maritime security
      2) Maritime ecology
      3) Maritime resources
      4) Capacity building and resource sharing
      5) Disaster risk reduction and management
      6) Science, technology and academic cooperation
      7) Trade connectivity and maritime transport
    • We have sought to strengthen security and freedom of navigation in the Indo-Pacific by becoming a net security provider – in the Gulf of Aden.
    • Sharing what we can, in equipment, training and exercises, we have built relationships with partner countries across the region.
    • In the past six years, India has provided coastal surveillance radar systems to half a dozen nations – Mauritius, Seychelles, Sri Lanka, Maldives, Myanmar and Bangladesh.
    • All of these countries also use Indian patrol boats, as do Mozambique and Tanzania.
    •  Mobile training teams have been deputed to 11 countries.
    • Located just outside New Delhi, the Indian Navy’s Information Fusion Centre for the Indian Ocean Region has enhanced maritime domain awareness among partner countries.
    • India has also promoted and contributed to infrastructure, connectivity, economic projects and supply chains in the region.

    Humanitarian assistance and disaster relief

    • Notable humanitarian assistance and disaster relief (HADR) missions in the Indo-Pacific in recent years have included Operation Rahat in Yemen in 2015.
    • Whether it was the cyclone in Sri Lanka in 2016 or deaths and large-scale displacement of people that occurred in Madagascar in January this year, Indian assistance and an Indian ship have never been far away.
    • The Coalition for Disaster Resilient Infrastructure (CDRI)is intrinsic to India’s regional and global commitment to taking on climate change.

    Conclusion

    Whatever the navigation map, the fact that the Indo-Pacific is the 21st century’s locus of political and security concerns and competition, of growth and development, and of technology incubation and innovation is indisputable.

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  • Disasters and Disaster Management – Sendai Framework, Floods, Cyclones, etc.

    Using the crucial expertise of CAPFs

    op-ed snap | Enviro & Biodiversity | Mains Paper 3: Disaster Management,Various Security Forces, Agencies & Their Mandates

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: CAPFs

    Mains level: Paper 3- Role of CAPFs in disaster management.

    The article emphasises the role played by the CAPFs in dealing with the disasters.

    Dealing with the disasters

    • When disaster strikes our country, be it natural or man-made, the government summons the Central Armed Police Forces (CAPFs) to carry out the task of overcoming the disaster.
    • The CAPFs help in carrying out rescue and relief operations, and also mitigates the pains and problems arising out of the disaster.

    Role played by CAPFS during Covid

    • CAPFs comprise the Central Reserve Police Force (CRPF), Border Security Force, Central Industrial Security Force, Sashastra Seema Bal, Assam Rifles and the ITBP.
    • Even before the country got to know about the COVID-19, the Indo-Tibetan Border Police (ITBP) had already set up its 600-bed quarantine centre in Chawla on the outskirts of New Delhi.
    • The Union Ministry of Health and Family Welfare had roped in specialists from the Safdarjung Hospital to coordinate with ITBP officials.
    • Doctors and paramedical personnel of other CAPFs were also roped in.
    • The expertise acquired by ITBP personnel and the Standard Operating Procedure prepared by the ITBP came handy for the States and other police forces in establishing their own quarantine centres and COVID-19 hospitals.

    Role of NDRF during Covid-19

    • NDRF personnel are wholly drawn from the CAPFs.
    • So, they form a good reserve of trained personnel when they go back to their parent force after their stint with NDRF.
    • With 12 battalions of the NDRF— each comprising 1,149 personnel — spread across the country, its experts have the core competency to tackle biological disasters like COVID-19.
    • Such personnel can be deployed at quarantines centres after short-term courses.
    • A proposal mooted by NITI Aayog last year, to conduct a bridge course for dentists to render them eligible for the MBBS degree, could be revived, and such doctors could be on stand-by to help in such emergency crises.

    Conclusion

    It is these CAPF personnel who give a semblance of existence of government administration even in the remotest corners of the country. Their versatile experience can be utilised to the nation’s advantage.

    B2BASICS:

    CAPF

    The Central Armed Police Forces refers to uniform nomenclature of five security forces in India under the authority of Ministry of Home Affairs. Their role is to defend the national interest mainly against the internal threats.

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

    Equity in education matters

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- Equity in education and impact of digital education on it

    Fairness and inclusiveness are two important aspects of education system. Growing shift toward digital education in India has implications for these two aspects. The article suggests ways to make the education system fair and inclusive.

    Knowledge economy in India

    • The new National Education Policy (NEP) as well as other factors have lately brightened up education landscape in India..
    • The rise of education technology (ed-tech) incorporating VR, AR, ‘gamification’, 3D immersive learning, etc, is contributing to the knowledge economy’s potential for large market size, calling for requisite policy support.

    Barriers to equity in education

    • The Organization for Economic Co-Operation and Development (OECD) defines two dimensions of equity in education.
    • First is “fairness”, which means ensuring that personal and social circumstances do not prevent students from achieving their academic potential.
    • The second is “inclusion”, which means setting a basic minimum standard for education that is shared by all students regardless of their background.
    • The barriers that make equity difficult to foster in India are varied and complex.

    Loss of learning during Covid pandemic

    • The latest Annual State of Education Report (ASER) reveals that 20% of rural students lacked textbooks.
    • Only one in ten students had access to online classes during the Covid-19 pandemic.
    • The Survey provides a glimpse into the levels of learning loss that students in rural India, particularly in states like Bihar, West Bengal, UP, and Rajasthan, are suffering, resulting in sharp digital divides in education.
    • Unless remedied with urgency, the digital split may disrupt learning, and jeopardise our hard-won gains resulting in large scale school drop-outs, particularly of adolescent girls.

    How to remove barriers to equity?

    • To remove these barriers we need to look at several aspects like monetary resources, academic standards, academic content and support.
    • Apart from inequality in internet access and access to devices, even the quality of connection and related services and subscription fees exacerbate the digital divide.
    • For education to be availed as a social good, access at an affordable cost and reasonable quality is a precondition.
    • The availability of content in vernacular languages is yet another issue.
    • In digital education along with demand-side issues, supply-side issues need fixing, such as training of teachers in ICT, new learning devices and handling the evolved curriculum.
    • Teachers and academic institutions need to ensure that the content they are using is lucid, appropriate, fact-based and relevant.
    • Access to education loans from banks and financial institutions are a great support in the cause of education, particularly higher education.
    • Education is on the Concurrent List. A cooperative and collaborative spirit will thus be critical to realise the goals.
    • The Centre has a task well cut for building consensus on NEP2020.

    Consider the question “Fainess and inclusiveness are two important dimensions of equity that should be pursued by any education system. However, push towards digital educations threatens these two dimensions of the education system in India. Comment” 

    Conclusion

    With strong corporate commitment, states’ support, backed by strong policy push and intent by the Centre, and value addition by other stakeholders, the roadblocks on the path of equity and inclusiveness in education, though daunting, could be addressed.

    Source-

    https://www.financialexpress.com/opinion/equity-in-education-matters/2121998/

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  • Electric and Hybrid Cars – FAME, National Electric Mobility Mission, etc.

    Green Hydrogen based vehicular fuel

    op-ed snap | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia,S&T – Applications In Everyday Life

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Hydrogen fuel cell, H-CNG

    Mains level: Paper 3- Adoption of hydrogen as vehicular fuel

    Transport sector has been a major contributor of Green House Gases in India. Moving towards cleaner fuels brings to fore two options battery-operated electric vehicle (EV) and hydrogen fuel cell EV. The article compares the two.

    Vehicular emission and steps taken to deal  with it

    • The transport sector in India contributes one-third of the total greenhouse gas (GHG) emissions, within which the lion’s share is that of road transport.
    • The government has made concerted efforts to tackle vehicular emissions with policies steps and programmes such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME I) scheme, FAME II, tax benefits, etc.

    Blending hydrogen

    • Typically, hydrogen can be produced in one of three ways, i.e., from fossil fuels (grey hydrogen), through carbon capture utilisation & storage (CCUS) application and fossil fuels (blue hydrogen), or by using renewable energy (green hydrogen). 
    • Indian Oil Corporation Limited has patented a technology that produces H-CNG (18% hydrogen in CNG) directly from natural gas, without having to undertake expensive conventional blending.
    • This compact blending process provides a 22% reduction in cost as compared to conventional blending.
    • In comparison to CNG, H-CNG allows for a 70% reduction in carbon monoxide emissions and a 25% reduction in hydrocarbon emissions.
    • The new H-CNG technology requires only minor tweaks in the current design of CNG buses.
    • However, the issue is that the  Hydrogen-spiked CNG is still being produced from natural gas-a fossil fuel.

    Electric vehicle Vs. Fuel cell

    • From a commercial viability standpoint, two cleaner fuel alternatives come to mind—battery-operated electric vehicles (BEV) and hydrogen fuel cell electric vehicles (FCEV).
    • Hydrogen FCEVs has reduced refuelling time (5 minutes versus 30-40 minutes with fast charges), higher energy density, longer range, etc.
    • However, one needs to focus on is the entire life cycle of these vehicles as opposed to restricting the analysis to just the carbon-free tailpipe emissions.
    • According to a report by Deloitte (2020) on hydrogen and fuel cells, the lifecycle GHG emissions from hydrogen FCEVs ranges between 130-230 g CO2e per km.
    • The lower end of the range depicts the case of hydrogen production from renewables while the higher end reflects the case of hydrogen production from natural gas.
    • The corresponding life cycles GHG emissions for BEV and internal combustion engine (ICE) vehicles range between 160-250 g CO2e and 180-270 g CO2e respectively.
    • The cost of lithium ion-based battery-operated vehicles has been reducing while hydrogen fuel cell technology is relatively quite expensive.
    • A hydrogen-run vehicle achieves an energy efficiency rate of 25-35% (roughly 45% of energy is lost during the electrolysis process alone).

    Way forward

    • Given that these are early days for FCEV, one can be hopeful that we will be able to achieve economies of scale and attain cost reductions.
    • Hydrogen Council (2020) on hydrogen cost competitiveness that states scaling up and augmenting fuel cell production from 10,000 to 200,000 units can deliver a 45% reduction in the cost per unit.
    • Similarly, the versatility of hydrogen allows for complementarity across its numerous applications.
    • Moreover, based on the numbers quoted by this report, fuel cell stacks for passenger vehicles are expected to exhibit learning rates of 17% in the coming future.
    • The corresponding figures for commercial vehicles stand at 11%.
    • Efforts are underway in India, and the research activities pertaining to hydrogen have been compiled and recently released in the form of a country status report.
    • In their quest for becoming carbon neutral by 2035, Reliance Industries plan to replace transportation fuels with hydrogen and clean electricity.
    • Similarly, the National Thermal Power Corporation (NTPC) is considering setting up a green hydrogen production facility in Andhra Pradesh.
    • The ministry of road transport and highways issued a notification proposing amendments to the Central Motor Vehicles Rules (1989) to incorporate safety standards for hydrogen fuel cell technology vehicles.
    • As per a policy brief issued by TERI, demand for hydrogen in India is expected to increase 3-10 fold by 2050.

    Consider the question “What are the benefits and challenges in the adoption of hydrogen as vehicular fuel?”

    Conclusion

    Against this backdrop, the future of hydrogen, particularly green hydrogen, looks promising in India.

    Source:-

    https://www.financialexpress.com/opinion/fuelling-a-green-future/2121991/

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  • Foreign Policy Watch: India-United States

    The next administration will also pursue ‘America First’

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India,Effect Of Policies & Politics Of World On India’S Interests

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- India-U.S. relations and implications of the Presidential elections in the U.S.

    The voting trend in the U.S. presidential election indicates significant support for the policies pursued by President Trump. This could impact the policies the next administration pursues.

    Why U.S. election matters for the world

    • The world still has need for American leadership.
    • It remains the world’s largest net provider of global public goods.
    • It is the lynchpin of the global multilateral system.
    • If Joe Biden wins, it is possible that America will re-engage with dignity and restore mutual respect in its relations with allies and partners, beginning with the trans-Atlantic alliance.
    • However, the Trump Americans, who are the new political base, will still shape American policy irrespective of who the president is.

    ‘America first’ is here to stay

    • The American people believe that their education, employment and retirement have been impacted by the immigration, outsourcing and liberal trade policies of past administrations.
    • Trump America does not want more migrants, it will not support the outsourcing of jobs at the cost of their own.
    • It wants a fair deal on trade that does not allow cheaper imports to put small American businesses out of business.
    • Even a Biden administration cannot return America back to the days of open borders and free trade.
    • It might relax some categories of work-visas, but it cannot return to the time when outsourcing was the preferred option for American companies.
    • It might re-engage with the World Trade Organisation but it cannot tear down the trade barriers that Trump has erected in the name of Make in America.

    Foreign policy of next administration

    • The Trump Americans do not wish to spend any more taxpayer dollars on foreign wars and they want their boys and girls to come home.
    • They think America’s allies are not carrying their weight and are unfairly living off American contributions.
    • They want their allies and partners to take greater responsibility for peace and security.
    • Biden’s supporters hope that he can reverse the abdication of American global leadership and renew alliances, but as president he may find it difficult to go against the Trump Americans on issues like China, Iran and climate change, without endangering the Democratic Party’s long-term interests.
    • And if Trump is re-elected as the president, it will only be because of his core voter base and it will strengthen his resolve.

    Implications for the world

    • Whether or not America withdraws from the world, American leadership, as we know it, might be over.
    • America will become more transactional and less generous.
    • Common values like democracy or multipolarity may be of lesser importance in America’s scheme of things.
    • Whether it is Trump or Biden, the Sino-US relationship will remain complicated and rivalrous.
    • Whether it is Trump or Biden, the Obama-era nuclear deal with Iran cannot be restored.
    • Whether it is Trump or Biden, American troops will soon be gone from Afghanistan.
    • There will be less willingness to consider emerging economies as deserving beneficiaries of concessional arrangements.
    • A Biden presidency might also mean a more critical look at the record of not just authoritarian states but also democracies on issues like labour, environment and non-proliferation.

    Implications for India

    • President Trump has been good for India in terms of foreign policy, less so in terms of economic policy.
    • But Delhi should equally be prepared for the Trump administration to ratchet up pressure on trade and to tighten rules on immigration.
    • With Biden, India and the US might return to a more balanced re-engagement on trade and immigration, but should be prepared for a more accommodative policy on both Pakistan and China than Trump’s.

    Conclusion

    Whoever is the next occupant of the White House, the way Americans voted on November 3 will shape American policy and politics for years to come.

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  • Fixing the rules of economy

    op-ed snap | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth,Inclusive Growth & Issues,Indian Economy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Productivity of economy

    Mains level: Paper 3- Reforms, productivity and technology to fix the problems of economy

    The article discusses the three fundamentals which need an examination to fix the issues faced by the economy. 

    Re-examining the fundamentals

    • India has an incomes crisis: incomes of people in the lower half of the pyramid are too low.
    • The solutions economists propose are: free up markets, improve productivity, and apply technology.
    • These fundamentals of economics must be re-examined when applied to human work.

    Three solutions and issues with them

    1) Freeing up the markets

    • It is suggested that markets should be freed up for agricultural products so that farmers can get higher prices; and freed up for labour to attract investments.
    • Without adequate incomes, people cannot be a good market for businesses.
    • In fact, it is the inadequate growth of incomes that has caused a slump in investments.
    • Ironically, the purpose of freeing up markets for labour is to reduce the burden of wage costs on investors just when wages and the size of markets must be increased.

    2) Increasing productivity

    • Productivity is a ratio of an input in the denominator and an output in the numerator.
    • The larger the output that is produced with a unit of input, the higher the productivity of the system.
    • Improvement of ‘productivity’ is key to economic progress.
    • Economists generally use labour productivity as a universal measure of the productivity of an economy.
    • Humans are the only ‘appreciating assets’ an enterprise has. They can improve their own abilities.
    • The values of machines and buildings depreciate over time, as any accountant knows.
    • Whereas human beings develop when they are treated with respect, and are provided with environments to learn.
    • For capital-scarce and human resource-abundant countries, such as many developing countries, the correct ratio of productivity is output per unit of capital.
    • This must be the driver of business as well as national strategies.
    • This was the strategy of ‘Japan Inc.’ to make Japan an industrial powerhouse.
    • This was E.F. Schumacher’s insight also.

    3) Use of technology

    • Schumacher, best known for his seminal idea ‘small is beautiful’ understood where capitalism powered with technology would be heading.
    • In his essay he wrote: “If we define the level of technology in terms of ‘equipment cost per work-place’, we can call the indigenous technology of a typical developing country (symbolically speaking) a £1-technology, while that of the modern West could be called a £1,000-technology.
    • The current attempt of the ‘developing ‘countries, supported by foreign aid, to infiltrate the £1,000-technology into their economies inevitably kills off the £1-technolgy at an alarming rate.
    • This results in destroying traditional workplaces at a much faster rate than modern workplaces can be created and producing the ‘dual economy’ with its attendant evils of mass unemployment and mass migration.
    • Schumacher had warned there was a malaise brewing beneath the drive to ‘Westernise’ and ‘technologise’ economies.

    Way forward: Social contract between society and workers

    • Workers provide the economy with the products and services it needs.
    • In return, society and the economy must create conditions whereby workers are treated with dignity and can earn adequate incomes.
    • Good jobs require good contracts between workers and their employers.
    • Therefore, the government should create a good society for all citizens, must regulate contracts between those who engage people to do work for their enterprises, even in the gig economy.
    • Goverment should push innovation in socially more beneficial directions to augment rather than replace less skilled workers.

    Conclusion

    The power balance must shift. Small enterprises and workers must combine into larger associations, in new forms, using technology, to tilt reforms towards their needs and their rights.

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  • Goods and Services Tax (GST)

    Weakening financial capacity of States

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: GST provisions

    Mains level: Paper 2- Declining financial heath of the States

    The financial health of the States has been declining in the last several years. The article explains the reasons and its implications for the States.

    Role of States in development

    • State governments drive a majority of the country’s development programmes.
    • Greater numbers of people depend on these programmes for their livelihood, development, welfare and security.
    • States need resources to deliver these responsibilities and aspirations.

    Factors responsible for declining discal capacity of the States

    1) Declining devolution to State

    • Finance Commissions recommend the share of States in the taxes raised by the Union government and recommendations are normally adhered to.
    • The year 2014-15 commenced with a shock: actual devolution was 14% less than the Finance Commission’s projection.
    • Between 2014-15 and 2019-20, the States got ₹7,97,549 crore less than what was projected by the Finance Commission.

    2) Cess and surcharge

    • Various cesses and surcharges levied by the Union government are retained fully by it, they do not go into the divisible pool.
    • This allows the Centre to raise revenues, yet not share them with the States.
    • Hence, the Union government imposes or increases cesses and surcharges instead of taxes wherever possible and, in some cases, even replaces taxes with cesses and surcharges.
    • As a result, the States lose out on their share.
    • Between 2014-15 and 2019-20, cesses and surcharges soared from 9.3% to 15% of the gross tax revenue of the Union government.
    • This systematic rise ensures that the revenue that is fully retained by the Union government increases at the cost of the revenue that is shared with the States.
    • This government has exploited this route to reduce the size of the divisible pool.

    3) GST shortfall

    • Shortfalls have been persistent and growing from the inception of GST.
    • Compensations have been paid from the GST cess revenue.
    • GST cesses are levied on luxury or sin goods on top of the GST.
    • GST compensation will end with 2021-22. But cesses will continue.
    • With the abnormal exception of this year, the years ahead will generate similar or more cess revenue.
    • Hence, many States have been insisting outside and inside the GST Council that the Union government should borrow this year’s GST shortfall in full and release it to the States.
    • The Union government will not have to pay a rupee of this debt or interest.
    • The entire loan can be repaid out of the assured cess revenue that will continue to accrue beyond 2022.
    • Of the nearly ₹3 lakh crore GST shortfall to the States, the Centre will only compensate ₹1.8 lakh crore.
    • The States will not get the remaining ₹1.2 lakh crore this year.
    • In fact, it flies against the need of the hour to revive the economy.
    • Governments ought to spend money this year to stimulate demand.

    4) Declining grants from the Centre

    • Central grants are also likely to drop significantly this year.
    • For instance,₹31,570 crore was allocated as annual grants to Karnataka.
    • Actual grants may be down to ₹17,372 crore.

    Implications for the States

    • To overcome such extreme blows to their finances and discharge their welfare and development responsibilities, the States are now forced to resort to colossal borrowings.
    • Repayment burden will overwhelm State budgets for several years.
    • The fall in funds for development and welfare programmes will adversely impact the livelihoods of crores of Indians.
    • The economic growth potential cannot be fully realised.
    • Adverse consequences will be felt in per capita income, human resource development and poverty.
    • This is a negative sum game.

    5) Loss of financial autonomy due to GST

    Consider the question “What are the reasons for the declining financial health of the States in India? What are the implications for the States? Suggest the ways to deal with the issue.”

    Conclusion

    States are at the forefront of development and generation of opportunities and growth. Strong States lead to a stronger India. The systematic weakening of States serves neither federalism nor national interest.

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  • Free speech in France

    op-ed snap | | Mains Paper 2: Comparison Of The Indian Constitutional Scheme With That Of Other Countries

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- Issues with the secularism in France

    The article analyses the secularism in France and its its implications for the French society.

    Education about secularism in France

    • In the late 19th and early 20th centuries, state school teachers were responsible for converting young people in rural France away from the heavy hand of Catholic dogma, and they spearheaded efforts to “educate” and “civilise” indigenous peoples in the French colonies.
    • In recent decades, teachers have been charged with trying to “integrate” France’s myriad ethnic minority communities.
    • Of the many things that teachers are expected to do, one of the most important is to embody the principles of laïcité.
    • Often translated as ‘secularism’, laïcité is better understood as a project of social cohesion and a key component of French citizenship.
    • It encompass the formal separation of Church and State, but also the evacuation of religious values from the public space and their replacement with secular values such as liberty, equality, and fraternity.

    How should France respond to terrorist attacks in name of Islam

    1) Compromise

    • This compromise would involve acknowledging that laïcité alone cannot fix the country’s social and political problems.
    • It would also require the French state to recognise that France has — almost without realising it — become part of the Muslim world.
    • It cannot stand apart from conflicts over religious practice that have affected countries with much larger Muslim populations, from Morocco to Indonesia.

    2) Emphasize the French values

    • Another way would be to double down on French “values”.
    • This is the path that President Emmanuel Macron has chosen.
    • He and his cabinet have spent a lot of time in recent weeks emphasising the importance of laïcité and denouncing all those who are seen to threaten it.
    • But this strategy is a risky one.
    • For a start, it is almost guaranteed to elicit a hostile response from leaders of Muslim-majority countries, many of whom are keen to find an international issue that can distract from their own domestic problems.

    Conclusion

    So, while it might seem like a good strategy to use the idea of laïcité as a shield against an amorphous Muslim threat, the danger is that this will strip it of its most positive elements and render it useless as an instrument of social integration. That, more than any terror attack, would be a tragedy for all French people.

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