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  • Foreign Policy Watch: India-China

    India will have to manage its conflict on its own

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much.

    Mains level: Paper 2- India-China relations

    The Galwan incident marked the new low in the India-China relations. Following it, there have been talks of a closer alliance with the U.S. This article analyses the utility, potential and the limitations of this approach.

    Exploring the strategic options

    • As the border stand-off with China deepens, India will have to think of all possible strategic options that gives it leverage.
    • One of the options is new arrangements with other powers.
    • This is the right moment to mobilise international opinion on China.
    • But can this be translated into concerted global action to exert real pressure on China?

    Things India should consider while forming alliance with the US

    • International relations are formed in the context of a country’s development paradigm.
    • India’s primary aim should be to preserve the maximum space for its development model, if it can actually formulate one.
    • India is not unique in this respect.
    •  The question for India is not just whether the US has a stake in India’s development, which it might.
    • But it is, rather, to ask whether India’s development needs will fit into the emerging US development paradigm.
    • Will the very same political economy forces that create a disengagement with China also come in the way of a closer relationship with India?
    • Some sections of American big business might favour India.
    • But the underlying political economy dynamics in the US are less favourable.
    • Will the US give India the room it needs on trade, intellectual property, regulation, agriculture, labour mobility, the very areas where freedom is vital for India’s economy?
    • Will a US hell-bent on bringing manufacturing jobs back to the US, easily gel with an “atma nirbhar” Bharat?
    • To see what is at stake, we just need to look how the development paradigm is driving tensions on trade, taxation and regulatory issues between the US and EU.

    Why India avoided alignment with the US in the past

    •  But the drivers of this have often been legitimate differences over development, including climate change.
    • It has also been that, at various points, that alignment was against India’s other strategic commitments.
    • India was wise to stay out of the war in Iraq, it was wise not to upset Russia.
    • It is wise not to throw its weight behind the US’s Iran policy.
    • There is more maturity in the US to understand India’s position.

    Global reluctance in collective action against China

    • It is an odd moment in global affairs, where there is recognition of a common challenge emanating from China.
    • But there is no global appetite to take concerted action.
    • An interesting example might be the global response to the BRI.
    • Many countries are struggling to meet their BRI debt obligations.
    • But it is difficult to see the rest of the international community helping all these countries to wean their regimes away from dependence on Chinese finance.
    • Similarly, there are now great concerns over frontier areas of conflict like cyber security and space.
    • It is difficult to imagine concerted global action to create rules in these area, partly because Great Powers like the US and Russia will always want to maintain their exceptionalism.

    Limitations of global alliance and public opinion in solving local conflicts

    • 1) The international community has not been very effective in neutralising
    •  exercised by some powers.
    • This is the tactic Pakistan has used.
    • 2) Don’t count on the fact that the world will support an Indian escalation beyond a point.
    • The efforts of the international community, in the final analysis, will be to try and throw cold water on the conflict.
    • No one has a serious stake in the fate of the terrain India and China are disputing.
    • At the end of the day, India has to manage China and Pakistan largely on its own.

    Conclusion

    Even as we deal with the military situation on the border, the test of India’s resolve will be its ability to return to some first principle thinking about its own power.

  • Food Procurement and Distribution – PDS & NFSA, Shanta Kumar Committee, FCI restructuring, Buffer stock, etc.

    Universalising the PDS

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 3- PDS and related issues

    • The Public distribution system (PDS) is an Indian food Security Systemestablished under the Ministry of Consumer Affairs, Food, and Public Distribution.
    • PDS evolved as a system of management of scarcity through distribution of food grains at affordable prices.
    • PDS is operated under the joint responsibility of the Central and the State Governments.
      • The Central Government, through Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation and bulk allocation of food grains to the State Governments.
      • The operational responsibilities including allocation within the State, identification of eligible families, issue of Ration Cards and supervision of the functioning of Fair Price Shops (FPSs) etc., rest with the State Governments.
    • Under the PDS, presently the commodities namely wheat, rice, sugar and keroseneare being allocated to the States/UTs for distribution. Some States/UTs also distribute additional items of mass consumption through the PDS outlets such as pulses, edible oils, iodized salt, spices, etc.
  • Foreign Policy Watch: India-China

    Three pronged strategy to deal with China

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much.

    Mains level: Paper 2- India-China border dispute

    The LAC has been exploited by China as leverage against India. And failure on our part to understand long-term strategic aims and objective of China makes the problem hard to solve. This article suggests a three-pronged approach to deal with China.

    Incomprehension of aims and objectives

    •  There is incomprehension among our decision-makers of the long-term strategic aims and objectives that underpin China’s belligerent conduct.
    • We have not devoted adequate intellectual capital, intelligence resources and political attention to acquisition of a clear insight into China and its motivations.
    • Even when intelligence is available, analysis and dissemination have fallen short.

    What China’s Defence White Papers suggest

    • These thematic public documents articulate China’s national security aims, objectives and vital interests and also address the “ends-ways-means” issues related to its armed forces.
    • The 11 DWPs issued so far are a model of clarity and vision, and provide many clues to current developments.
    • No Indian government since Independence has deemed it necessary to issue a defence white paper, order a defence review or publish a national security strategy.
    • Had we done so, it may have prepared us for the unexpected and brought order and alacrity to our crisis-response.

    China uses LAC as strategic leverage

    • In order to show India its place, China had administered it a “lesson” in 1962.
    • And it may, perhaps, be contemplating another one in 2020, with the objective of preventing the rise of a peer competitor.
    • For China, the line of actual control or LAC, representing an unsettled border, provides strategic leverage.
    • Leverage it can use to keep India on tenterhooks about its next move while repeatedly exposing the latter’s vulnerabilities.

    1993 Agreement didn’t benefit India

    • Our diplomats derive considerable satisfaction from the 1993 Border Peace & Tranquility Agreement.
    • This agreement, according to former foreign secretary, Shivshankar Menon, “…effectively delinked settlement of the boundary from the rest of the relationship”.
    • But by failing to use available leverage for 27 years, and not insisting on bilateral exchange of LAC maps, we have created a ticking time-bomb, with the trigger in China’s hands.
    • While “disengagement” may soon take place between troops in contact, it is most unlikely that the PLA will pull back or vacate any occupied position in Ladakh or elsewhere.
    • In which case, India needs to consider a three-pronged strategy.

    What should be India’s three-pronged strategy?

    1. Reinforce at ground level

    • At the ground-level, we need to visibly reinforce our positions, and move forward to the LAC all along.
    • We should enhance the operational-tempo of the three services as a measure of deterrence.
    • Indian warships should show heightened presence at the Indian Ocean choke-points.
    • Cyber emergency response teams country-wide should remain on high alert.
    • We should build-up stocks of weapons, ammunition and spares.
    • The Ministry of Defence should seize this opportunity to urgently launch some long-term “atma-nirbharta” schemes in defence-production.

    2. At strategic level: Modus vivendi

    • At the strategic level, the government should consider sustained process of engagement with China at the highest politico-diplomatic echelons.
    • The negotiations should seek multi-dimensional Sino-Indian modus-vivendi; encompassing the full gamut of bilateral issues like trade, territorial disputes, border-management and security.
    • Simultaneously, at the grand-strategic level, India should initiate a dialogue for the formation of an “Indo-Pacific Concord for Peace and Tranquility”.
    • This Concord should involve inviting four members of the Quad as well as Vietnam, Indonesia, Philippines and Malaysia.

    3. Political pragmatism

    • As a nation, we need to be pragmatic enough to realise that neither conquest nor re-conquest of territory is possible in the 21st century.
    • Parliament should, now, resolve to ask the government, “to establish stable, viable and peaceful national boundaries”.

    Consider the question “With changing relations with China, India needs to overhaul its strategy on the ground, strategic and political levels in dealing with China”

    Conclusion

    This three-pronged approach while comprehending the Chines objectives and goals can help India in dealing successfully with the challenge posed by China.

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

    We need National Plan for Covid-19

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: PM CARES

    Mains level: Paper 3- Disaster Management Act, National Plan

    The Disaster Management Act (DMA) 2005 has been invoked by the government to deal with the pandemic. However, National Plan as provided under the Act to deal with Covid-19 is nowhere to be found. Also, the creations of PM CARES violated the provision of the DMA-2005. These two issues are discussed here.

    Provisions of DMA 2005

    • The Act, along with other things provides the constitution of a National Authority, a National Executive committee.
    • It also provides for the constitution of an advisory committee of experts in the field to make recommendations and to prepare a national plan.
    • This plan must provide for measures for prevention or mitigation.
    • The Act lays down “guidelines for minimum standards of relief, including ex gratia assistance.

    Provision of various Funds under DMA 2005

    • It enables the creation of a National Disaster Response Fund in which the central government must make due contribution.
    • It also requires “any grants that may be made by any person or institution for the purpose of disaster management” to be credited into the same Fund.
    • It also provides for a National Disaster Mitigation Fund, exclusively for mitigation.
    • The Act also provides for State and local-level plans and for creating State Disaster Response Fund among others.

    Provision of disaster management plan

    • After the direction by the SC, the government came out with a National Disaster Management Plan (NDMP), 2016.
    • This Plan dealt with various kinds of disasters; it was amended in 2019.
    • Bu this National Plan not in place now.
    • Without it, the fight against COVID-19 is ad hoc and has resulted in thousands of government orders.
    • These orders are confusing those who are to enforce them as well as the public.

    NDRF and PM CARES issue

    • On April 3, 2020, the government of India agreed to contribute its share to the NDRF.
    • But a public charitable trust under the name of Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) was set up to receive grants made by persons and institutions out of the NDRF, in violation of Section 46 of the Act.
    • The crores being sent to this fund are not even audited by the Comptroller and Auditor General (CAG) of India.
    • It is a totally opaque exercise.
    • The government of the day has not only ignored the binding law but also circumvented it.
    • The government has been fighting the crisis in an ad hoc and arbitrary manner instead of the organised steps as mandated by the Act.
    • In so doing, the experts have been sidelined.

    Consider the question “Describe the various provision of the DMA 2005 to deal with the disaster. In light of this, examine whether the creation of PM CARES conflicts with the provision of his act”

    Conclusion

    The national plan to deal with the pandemic and making PM CARES more transparent would help the government in its fight against the corona crisis.

  • Foreign Policy Watch: India-China

    Future of relations with China

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Galwan river, Shyok River

    Mains level: Paper 2- India-China relations

    This article calibrates the changes our future engagement with China will experience following the Galwan incident. The first casualty has been the trust between the two countries. And next could be strategic communications between the two countries. So, India’s response to the incident should be based on these changes.

    What explains China’s aggression

    • Hubris, internal insecurities in China, the COVID-19 pandemic and the complex and confused external environment explains it.
    • Challenge posed by India from the ideological, strategic and economic points of view can be the other factor.

    Violation of many agreements

    • China’s recent military actions in Ladakh clearly violate the signed agreements of 1993, 1996, 2005, etc on maintaining peace and tranquillity along the LAC.
    • These actions are in violation also of other signed agreements, including at the highest level.
    • It also contradict positions taken by Xi himself at the informal Wuhan and Chennai summits in 2018 and 2019.
    • In 2003, two countries signed a Declaration on Principles for Relations and Constructive Cooperation between our two countries.
    • The third principle states: “The two countries are not a threat to each other. Neither side shall use or threaten to use force against the other.”
    •  This was more than reiterated in the agreement signed in April 2005 on the Political Parameters and Guiding Principles for settlement of the India China boundary question.
    • . Article 1 states, inter alia: “Neither side shall use or threaten to use force against the other by any means.”

    Doklam and informal summits

    • .A qualitative change though occurred in Chinese perceptions after the Doklam face-off.
    • That necessitated the first informal summit at Wuhan in April 2018.
    • One important outcome of that summit was the agreement to continue to meet at the highest level and to enhance trust and strengthen strategic communication.
    • The second informal summit took place between Xi and Narendra Modi in Chennai in October 2019.
    • It was in the aftermath of the revocation of Article 370 by India and China’s unnecessary and unsuccessful attempt to raise the issue in the UN Security Council.
    • By then, many other developments — both internal and external — had added pressure on China.
    • At Chennai, the Chinese undoubtedly drew some red lines.

    Which red lines does China feel India has crossed

    • One fundamental red line is China’s long-held and strategic interest in parts of Jammu and Kashmir.
    • Jammu and Kashmir border Xinjiang and Tibet and allow connectivity between the two.
    • It is wrongly argued that it is Pakistan that is the issue in J&K.
    • China is as big an issue but has quietly hidden behind Pakistan’s cover.
    • That is no longer feasible as democratic India becomes economically and otherwise stronger.

    Future of Special Representative process

    • The Special Representatives process to address the boundary question seems stalemated and its usefulness needs review.
    • The 2005 agreement contains the necessary parameters for a boundary settlement but there is obviously not adequate common ground.
    • Some positivity can, however, be brought in if the LAC clarification process is revived and completed in a time-bound manner.
    • But this is easier said than done in the prevailing circumstances.
    • Patrolling procedures will need to be revised, preferably by mutual agreement.

    Unsustainable economic partnership

    • The current nature of the economic partnership between India and China is not sustainable.
    • India’s annual trade deficit with China in recent years virtually finances a CPEC a year!
    • China has still not fulfilled all its commitments to India on joining the WTO in 2001.

    What should be our trade policy

    • Indian business and industry must stop taking the easy option.
    • Some costs will no doubt go up but there can be environmental advantages of switching to other sources of technology and equipment.
    • There is more than one available source of financial investments in Indian ventures.

    What will be the nature of bilateral dialogue

    • Bilateral dialogue mechanisms will continue their desultory course.
    • On issues of interest to India such as terrorism, we get no support from China.
    • Cooperation on river waters has not evolved.
    • On the global agenda, on issues such as climate change, dialogue and cooperation will continue in multilateral fora depending on mutual interest.

    What should be the nature of governments response

    • The response to China’s recent actions in Ladakh must be an all-of-government one, indeed an all-India one.
    • It should be covering all sectors including heightened security and be coordinated, consistent.
    • This is not a question of nationalism or patriotism but of self-esteem and self-respect.

    Consider the question “What should be the basis of India’s evolving policy response to China’s new approach to the border dispute?”

    Conclusion

    Bilateral relations between India and China cannot progress unless there is peace on the borders and China recognises that India too has non-negotiable core concerns, aspirations and interests.

  • Indian Army Updates

    Time to revisit the strategies on northern borders

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 3-Northern border security issue

    Two issues have been discussed in this article:change in strategy on northern border and the role of political leaders. Leveraging LAC for premeditated aggression has been part of China’s policy. This makes the change in our policy an imperative.

    LAC as leverage against India

    • India and China have had parleys since 1981, meetings of Joint Working Groups from 1988 to 2005 and 22 rounds of Special Representatives talks, in addition to many summit-level meetings.
    • Despite nearly four decades of discussions delineation and demarcation of the boundary has not been possible.
    • Throughout this period CMC/PLA had been at the helm of the defence and foreign policy decision-making,
    • The intrusion at Finger 4/5 of Pangong Tso and the transgression up to LAC in Galwan are instructive.
    • Out of the blue, most inexplicably and without any historical basis, the official Chinese statement came out seeking the “estuary” of Shyok and Galwan rivers.
    • The Chinese have deliberately ensured that the nebulous nature of the LAC is retained as leverage against India.

    Modernisation of PLA: So, was Galwan a testbed?

    • The PLA is at the threshold of achieving its interim modernisation goals of informatised, integrated joint operations by 2021.
    • It is well likely that the events of Eastern Ladakh of May-June 2020 are part of a larger testbed.
    • Over the years, the face-offs have witnessed PLA’s jostling and pushing, posse of horses intruding, and scant disregard for the treaties with India.
    • Pangong Tso and Galwan showed a new picture.

    Need to strategise and revisit the rules of engagement

    • For the Indian Army units and formations in Eastern Ladakh or elsewhere facing the PLA, there are limits to adherence to good faith and honour.
    •  The Indian Army has to strategise and should revisit its rules of engagement on the Northern Borders.
    • It has to be mindful that troops in tactical situations cannot be shackled by past treaties, which the PLA deals with disdain.
    • The Indian Army has to remain prepared to militarily handle the situations that will arise.
    • PLA has always shown extraordinary interest in Eastern Ladakh, especially Daulat-Beg-Oldi, the Chip-Chap river, Track Junction and Karakoram Pass.
    • The management practices for the Northern Borders have to be revisited, like placing the nearly division-sized force of ITBP in Eastern Ladakh under the army operationally.
    • Real-time intelligence, surveillance equipment and satellite imageries must be available to field formations that need to act on it.
    • This should not be delayed by the bureaucratic maze.

    Role of political leadership

    • At political level, there are representative forums like Parliament, the committees and regular briefings to seek clarifications, which is the right of politicians.
    • On national security issues, there must be national unity.
    • There ought to be faith in those at the helm that the issues of national security will not be sacrificed for political gains.
    • Similarly, within the norms and constraints of national security, the establishment must keep the nation informed, to avoid an information vacuum.

    Conclusion

    We need to strategise for the future, including the modern manifestations of non-contact, non-kinetic warfare. We must avoid unnecessary nitpicking on semantics of statements made in a particular context.

  • Coronavirus – Economic Issues

    Different response to a different economic crisis

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Fiscal deficit

    Mains level: Paper 3- Monetary and fiscal policy response to deal with the crisis.

    The economic crisis in the wake of the pandemic is different from past crises. In the past, the financial crisis led to economic shock. This time its economic shock that that is causing the financial crisis. This also means that our response to this crisis should also be different. This article elaborates on the fiscal and monetary policy response to the crisis.

    Pattern followed by economic crises

    • There is a well-established pattern to economic crises in emerging markets (EMs).
    • First, because of loose fiscal and monetary policies, the economy goes into a demand overdrive.
    • Demand overdrive spikes inflation and widens the current account deficit (CAD).
    • Then, CAD is financed by foreign capital chasing the promise of even higher growth and asset prices.
    • At some point, the overdrive is perceived as unsustainable, which triggers a reassessment of growth, inflation, and financial stability.
    • Domestic and foreign investors stop new investments, large capital outflows ensue.
    • Banks stop giving new loans and rolling over old ones on fears of worsening credit quality.
    • Growth collapses and a full-blown economic crisis follows.
    • The 1995 Mexican, the 1997 Asian, the 1999 Russian, the 2008 sub-prime, and the 2013 Taper Tantrum are all examples of such crises.
    • In the case of India, the 1981-82, the 1991-92, and the 2013 crises all had the same characteristics.

    Pattern in response to such crises

    • The first response is to restore confidence in policymaking.
    • It means large increases in interest rates, massive withdrawal of liquidity, and deep cuts in fiscal deficit.
    • Just before the crisis assets [which reflects in bank’s balance sheets] are severely overvalued on inflated views of growth, profits, and income prior to the crisis.
    • So, the second step is to restart the economy by restructuring the tattered balance sheets of banks, firms, and households.
    • This means debt restructuring and bank recapitalisation aided by privatisation, closures, and mergers.
    • These measures often need to be bolstered by structural reforms.
    • The economic crisis makes it easier to forge the political consensus for the reforms.

    But the economic crisis caused by pandemic is different

    • Why is it different?
    • Because, before the COVID-19 outbreak far from overheating, Indian economy was slowing down.
    • The financial system had virtually shut off the flow of credit as it wrestled with its bad debt burden.
    • This is not an instance of a financial crisis turning into an economic shock weighed down by damaged balance sheets.
    • Instead, this is an instance of an economic shock that could turn into a financial crisis if the damaged balance sheets are not repaired.

    So, should the response also be different?

    • Yes.
    • Do the opposite of what is done in a typical EM crisis: Cut interest rates, increase liquidity support, and allow the fiscal deficit to widen.
    • The RBI has done the first two generously, although with the coming disinflation, it needs to cut interest rates much more.
    • But, what about the fiscal policy of the government?

    Fiscal policy of the government: Doing not enough

    • The government’s approach to fiscal policy, however, seems ambivalent.
    • The overall fiscal support from the government will be limited to 2 per cent of the GDP.
    • So all the revenue shortfall and the pandemic-related budgetary support must add up to 2 per cent of the GDP.
    • If the revenue shortfall is more than 2 per cent of GDP, then total spending will need to be cut.

    Why fiscal policy matters for balance sheets

    • In this crisis, the causality of damage to balance sheets runs opposite.
    • Balance sheets will be damaged not because of prior excesses but because of the collapse in incomes during the lockdown.
    • Consequently, debt doesn’t need to be restructured to resume the flow of credit and get the recovery going.
    • Instead, what is needed is adequate income support to households and firms.
    • Such support will provide the needed time and space for the recovery to take hold.
    • Which, in turn, would repair much of the damage to the balance sheets.
    • But the fiscal response so far has been inexplicably restrained.

    What should the government focus on

    •  What matters today is the assurance of medium-term growth and not a few higher or lower points in this year’s fiscal deficit.
    • To do that, the government needs to allow the deficit to rise.
    • This extra deficit should help accommodate the decline in revenue and also provide adequate income support.
    • Some have argued that the government, instead, needs to offset the decline on private demand by increasing public spending.
    • This is an odd argument.
    • It would mean letting demand collapse and then compensating it with higher government spending.
    • Instead, using the same resources to ensure that private demand did not decline was the more natural and efficient response.

    What should be the RBI’s response

    • The RBI, too, has a very large role to play.
    • As elsewhere, it is now the only entity that has a strong enough balance sheet to provide any meaningful support.
    • The RBI is keeping markets flush with liquidity and low interest rates.
    • However, the RBI also needs to undertake extensive quantitative easing to keep bond yields from spiking given the likely large increase in deficit.
    • Because of the depth of the growth shock, bad debt will rise.
    • The natural instinct of banks is to cut back credit because of worsening credit quality.
    • To prevent this from happening, the RBI will need to extend substantial regulatory forbearance on accounting norms, provisioning rules, and, if needed, even capital requirements.
    • In addition, like the US Fed and the ECB, the RBI might also need to provide liquidity directly to corporates.
    • As of now, banks are providing liquidity to corporates supported by government guarantees as proposed now.

    Consider the question “The economic crisis brought by the corona crisis is not like the ones we faced before. This crisis is about an economic shock turning into the financial crisis. So, what should be fiscal and monetary policy interventions to tackle the crisis?”

    Conclusion

    This is not a crisis like the ones before. This time around, we need to weigh not the cost of taking these measures but the cost of not taking them.

  • Foreign Policy Watch: India-China

    Faults in our China policy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- India-China realtions

    This article tracks the faultline in India’s China policy that makes it an enduring tragedy. China never bought into India’s narratives of Asian unity and untied Asian front against the West. Instead, China cultivated its relations with the West and leveraged that for furthering its interests.

    Enduring tragedy: India’s China policy

    • That tragedy is rooted in persistent political fantasies.
    • Refusal to learn from past mistakes.
    • And the belief that the US and the West are at the source of India’s problems with China.
    • The problem predates independence.
    • Each generation has been reluctant to discard the illusions that India’s China policy has nurtured over the last century.

    Historical background

    •  Tagore went to China in 1924 with the ambition of developing a shared Asian spiritual civilisation.
    • He was accused by Chines of diverting Chins’s attention away from the imperatives of modernisation and, yes, westernisation.
    •  Jawaharlal Nehru approached China as a modernist and nationalist.
    • He met a delegation of Chinese nationalists at Brussels in 1927.
    • There he issued a ringing statement on defeating western imperialism and shaping a new Asian and global order.
    •  But in Second World War, Congress was unwilling to join hands with China in defeating Japanese imperialism.
    • Indian and Chinese nationalists could not come together for they were fighting different imperial powers.

    Relations after independence

    • As India’s first PM, Nehru campaigned against the western attempt to isolate China.
    • Afro-Asian conference in Bandung, Indonesia in 1955 was attended by both.
    • Within five years war broke out in 1962.
    • Atal Bihari Vajpayee travelled to China in February 1979 to re-engage Beijing.
    • Before he could head home, Beijing had launched a war against a fellow communist regime in Vietnam.
    • That was an end of hope for Asian solidarity.
    • Rajiv Gandhi in 1988 sought to normalise relations with China while continuing to negotiate on the boundary dispute.

    Other issues: Trade entanglement

    • Amid border dispute, other issues have taken a life of their own.
    • For example, the massive annual trade deficits.
    • India’s hope that economic cooperation will improve mutual trust will help resolve other issues was also dashed.
    • India’s massive trade deficit with China is now a little over half of its total trade deficit.
    • India is finding it hard to disentangle the deep economic dependence on imports from China.

    Story of political cooperation: From unipolar to bipolar world

    • As the Cold War ended, India began political cooperation with China on global issues.
    • It was hoped that such cooperation will provide the basis for better bilateral relations.
    • It could not have been more wrong.
    • P V Narasimha Rao and his successors joined China and Russia in promoting a “multipolar world” [remember the US dominance].
    • Delhi is now struggling to cope with the emergence of a “unipolar Asia” — with Beijing as its dominant centre.
    • China’s rapid rise has also paved the way for the potential emergence of a “bipolar world” dominated by Washington and Beijing.

    Engagement with West

    • China never worked with Indian on the ideas of building coalitions against the West.
    • While India never stopped arguing with the West, China developed a sustained engagement with the US, Europe and Japan.
    • Mao broke with Communist Russia to join forces with the US in the early 1970s.
    • Deng Xiaoping promoted massive economic cooperation with the US to transform China and lay the foundations for its rise.

    Will staying away from West lead to good relations with China

    • China has leveraged the deep relationship with the West to elevate itself in the international system.
    • Delhi continues to think that staying away from America is the answer for good relations with Beijing.
    • Beijing sees the world through the lens of power.
    • Delhi tends to resist that realist prism.
    • India has consistently misread China’s interests and ambitions.
    • The longer India takes to shed that strategic lassitude, the greater will be its China trouble.

    Facts that India needs to come to terms with

    • India must also recognise that China, like the great powers before it, wants to redeem its territorial claims.
    • China also has the ambition to bend the neighbourhood to its will, reshape the global order to suit its interests.
    • China has not hidden these goals and interests, but India has refused to see what is in plain sight.

    Consider the question “Acknowledging Beijing’s rise, scale of challenge it presents, are first steps in crafting a new China policy” Comment.

    Conclusion

    Acknowledging China’s dramatic rise and recognising the scale of the challenge it presents is essential for Delhi in crafting a new China policy.

  • Innovations in Biotechnology and Medical Sciences

    Celebrating the contributors to agriculture

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Various personalities that contributed to India's food reaserch

    Mains level: Paper 3- Contributors to the India's agri-research

    This article introduces us to the Indian winners of the prize that is considered as the Nobel for research in food. Their contribution has benefited agriculture immensely.Here, we’ll get a brief idea about their work.

    Word Food Prize

    • The World Food Prize is often described as the Nobel for research in food.
    • It was set up by Ñorman Borlaug.
    • Borlaug won the Nobel Peace Prize in 1972 for his work on hybridisation of wheat and rice.
    • His work led to the Green Revolution in the mid-1960s.

    Indian winners of the award

    • The awards to eight Indians of the total of 50 given so far are a tribute to the country’s agricultural university education and research system.
    • The country should celebrate their achievements unabashedly when 7-10 million new productive jobs need to be created annually.
    • And when it accounts for a third of global undernourished.
    • The COVID-19 pandemic has made job creation and improved nutrition and health more urgent than ever.

    Let’s look at the contributions made by these personalities

     Rattan Lal

    • Rattan Lal was awarded for developing and mainstreaming a soil-centric approach to increasing food production.
    • This approach also restores and conserves natural resources and mitigates climate change.
    • His research has shown that growing crops on healthy soils produces more food from less land area, less use of agrochemicals, less tillage, less water, and less energy.

    M S Swaminathan

    • Swaminathan’s vision transformed India from a “begging bowl” to a “breadbasket” almost overnight.
    • His work helped bringing the total crop yield of wheat from 12 million tonnes to 23 million tonnes in four crop seasons.
    • Which helped in ending India’s dependence on grain imports.

    Verghese Kurien

    • Kurien, received the prize in 1989 for India’s white revolution.
    • Under his leadership, milk production increased from 23.3 million tonnes (1968-69) to 100.9 million tonnes (2006-07).
    • And now it is projected to reach 187 million tonnes for 2019-20.
    • This helped in bringing millions of small and marginal farmers, including women into the marketplace.

     Ramlal Barwale

    • Barwale, a small farmer and entrepreneur, received the award in 1996.
    • He made selling seeds of okra and sorghum “hip” and founded the Maharashtra Hybrid Seeds Company.
    • The Crop Science Society of America has called him father of the seed industry in India.
    • He introduced hybrid rice from China to India.

    Surinder Vasal

    • Vasal was given the prize in 2000 for developing quality protein maize (QPM).
    • Integrating cereal chemistry and plant breeding techniques, Vasal and Villegas of Mexico collaborated to work on “opaque-2” maize variety using molecular biology techniques.
    • In the mid-1980s, they produced a QPM germplasm with hard kernel characteristics and taste like that of the traditional grain.
    • But it has much higher quality levels of lysine and tryptophan, thereby enhancing the nutrition value.

    Mododugu Gupta

    • Gupta received the award in 2005 for starting a blue revolution.
    • He developed two exceptional approaches for increasing fish harvests among the very poor.
    • This helped in increasing the protein and mineral content in the diets of over one million of the world’s most impoverished families.
    •  Gupta’s aquaculture technologies boosted Bangladesh’s fish yields from 304 kg per hectare to over 2,500 kg per hectare in less than a year — including 1,000 kg per hectare harvests in the dry season.

    Sanjaya Rajaram

    • Rajaram, who won the prize in 2014.
    • He succeeded Borlaug in leading CIMMYT’s wheat breeding programme.
    • There he went on to develop an astounding 480 varieties that have been widely adopted by both small and large-scale farmers.
    • Rajaram was born near a small farming village in Uttar Pradesh and received his master’s degree from IARI.

    Decreasing government support

    • The awardees all come from the time of the green and rainbow revolutions (of dairy and aqua-culture).
    • It was also the time when India invested heavily in agricultural science education and research and Indian scientists shone brightly in the global galaxy of science.
    • Government support for state agricultural universities, and research conducted by the ICAR and the departments of science and technology and biotechnology has slipped in recent years.
    • Today, not a single Indian university is counted among the top 100 in the world.
    Consider the question asked by the UPSC in 2019 “How was India benefitted from the contributions of Sir M.Visvesvaraya and Dr M. S. Swaminathan in the fields of water engineering and agricultural science respectively?”

    Conclusion

    Students and faculty at ICAR and state agricultural universities can follow in their footsteps and achieve scientific excellence, if they receive the resources and their work is supported with incentives.
  • NPA Crisis

    Why bad loans won’t start piling right away

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: NPA

    Mains level: Paper 3- Issue of bad loans

    Steps taken by the government have averted the piling up of the bad loans, though for the time being only. When the moratorium period ends, we will see the spike in the bad loans. This article explains the same.

    Why bad loans are expected to increase

    •  Consumer spending has collapsed over the last few months due to the pandemic.
    • Though lately there have been some signs of revival, it will take a while before spending comes anywhere near the pre-covid level.
    • This will mean that many businesses will start running out of cash pretty soon if they have not already.
    • A company that starts running out of cash will not be in a position to repay its loans and, thus, will ultimately default.

    How individuals will be affected

    • A recent estimate by rating agency Crisil suggests that about 70% of 40,000 companies have cash to cover employee costs for only two quarters.
    • This tells us that companies will fire employees, before, during, or even after defaulting on a loan.
    • If companies do not resort to employee retrenchment, they will cut salaries and many already have.
    • Past payments and future business with vendors and suppliers will be negatively impacted.
    • In this situation, the problem at the company level will impact individuals too.
    • When individuals start having a cash flow problem, it will lead to defaults on retail loans

    But why we are not seeing the defaults happening already?

    • A moratorium is a deferment of repayment to provide temporary relief to borrowers. The loan ultimately needs to be repaid.
    • The Reserve Bank of India has let banks and non-banking financial companies (NBFCs) offer a moratorium on loans.
    • Hence, until the end of August, borrowers have an option to not repay the loans, without it being considered as a default.
    • Hence, any loan defaults will start only after August but they won’t be immediately categorized as a non-performing asset or a bad loan.
    • Bad loans are largely those loans that have not been repaid for 90 days or more.
    •  Hence, defaulted loans will be categorized as bad loans only post-November.
    • This will be revealed when banks publish their results for October to December 2020, in January-February 2021.

    Conclusion

    Even if 20% of loans that end up under a moratorium are defaulted on, the quantum of bad loans, especially those of public sector banks, will go up big time.