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  • Foreign Policy Watch: India-China

    What is lacking in our China policy

    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- India-China relations and border dispute

    While formulating our response to China’s aggressive policies in Ladakh, we should first understand their objectives. This article explains these objective and suggests the steps to deal with China’s policies.

    Statements on Aksai Chin and Pakistan

    • Statements over Aksai Chin and Pakistan-occupied Kashmir (PoK) by India have painted the image of India as a revanchist power in utter disregard of the country’s capabilities.
    • These statements also gave the impression that India precludes any attempt at changing the status quo on either front.
    • Though these statements were justifiable in terms of India’s legal rights to these territories, were ill-timed.

    How these statements were perceived by China

    • They were made when Beijing was feeling alarmed at the Indian government’s decision to separate Ladakh from Jammu and Kashmir.
    • The move augmented its perception that it was a prelude to India’s attempt to change the status quo in Aksai Chin.
    • India’s assertion of its claims on PoK that in China’s perception threatened the China-Pakistan Economic Corridor project.

    China’s 4 strategic objectives

    1. India and China are not equals

    • China wants India to understand that it is not in the same league as China.
    • China resorts to periodic assaults across the Line of Actual Control (LAC) if India tries to assume a position of equality.

    2. Keep India away from interfering in Indo-Pacific

    • China wants India not to actively oppose Chinese designs to dominate the Indo-Pacific region.
    • Also, China wants Indias to refrain from aligning with the U.S. and its allies — Japan and Australia, in particular — in an attempt to contain China.

    3. Keeping India preoccupied with problems

    • China’s strategy also includes keeping India preoccupied with problems in its immediate neighbourhood.
    • So with these problems, India cannot act as an alternative pole of power to China in the broader Asian region.

    4. Supporting Pakistan to neutralise India

    • As part of the last objective, China supports  Pakistan economically and militarily, including the sharing of nuclear weapons designs.
    • China uses Pakistan to neutralise India’s conventional power superiority vis-à-vis that country.

    An understanding of these objectives is essential to fashioning a realistic Indian response to China’s aggressive policies in Ladakh and elsewhere along the LAC.

    But, what about Pakistan?

    • Pakistan is at best an irritant for India. (so, focus on China)
    • Pakistan can be managed with the use of diplomatic tools, international opprobrium, and superior military force.
    • In fact, the Pakistani challenge to India has become magnified because of its nexus with China.

    What India should do?

    • India’s main strategic goal should be the adoption of carefully calculated policies that neutralise China’s diplomatic and military clout in the Asia-Pacific region.
    • While doing so, India should not appear as a surrogate for other powers.
    • And India should also ensure that in making alliances it in not sacrificing the autonomy of decision-making in foreign policy. 

    Consider the question “Understanding of China’s objective is essential to formulate a realistic response to its aggressive policies in Ladakh.” Comment.

    Conclusion

    Understanding the greater threat posed by China vis-a-vis Pakistan should be the basis of India’s policy towards China.

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  • Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

    Paying attention to condition of migrant workers

    op-ed snap | Economics | Mains Paper 3: Issues relating growth and development, employment

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Acts related to workers

    Mains level: Paper 3- Migrant workers

    Issue of migrant workers caught attention of the nation amid lockdown. This issue has wider implications for the economy. This article highlights need for formulating a program to deal with the migrant labourers’ issue in its entirety.

    Issue with many implications: Migrant labour

    • Out of the total labour force of 465 million workers, around 91 per cent (422 million) were informal workers in 2017-18.
    • The Economic Survey (2017) estimated 139 million seasonal or circular migrants.
    • Circular urban migrants perform essential labour and provide services.
    • Hence, this issue has implications for livelihoods, agriculture, food security, and safety net policy as well as programme responses.

    Existing and proposed legal provision

    • There exists The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act of 1979.
    • Despite this act, there is no central registry of migrant workers.
    • The Occupational Safety, Health and Working Conditions Code of 2019 has been introduced in Parliament.
    • This code seeks to promote the welfare of migrant workers and legal protection for their rights.
    • The code seeks to merge 13 labour laws, including the Inter-state Migrant Workmen Act, 1979 into a single law.

    One nation, one ration card

    • “One nation one ration card” addresses the problem of ration-card portability.
    • The move would benefit nearly 670 million people and will be completed by March 2021.

    Provisions in the package for migrant workers, small farmers, street vendors

    • There is a provision of Rs 30,000 crore through NABARD, in addition to the already existing Rs 90,000 crore allocation, for the rabi harvest and post-harvest rabi-related work for small and marginal farmers.
    • Further, Rs 2 lakh crore concessional credit will be provided to two crore farmers across the country.
    • About Rs 11,000 crore was allocated for the urban poor, which includes the migrant workers, for building shelter homes for the homeless.
    • Several government-funded housing projects in major cities would be developed into affordable rental housing complexes on a PPP mode.

    Free grains for two months

    • The Centre will transfer 8 lakh metric tonnes of grain and 50,000 metric tonnes of chana to state governments.
    • Form this stave will provide 5 kg of grain (wheat or rice) per labourer and 1kg of chana per family per month for two months free.
    • This is expected to benefit up to eight crore migrant workers.

    Program for growth and structural transformation

    • Devicing such a program requires a review of national legal, regulatory and institutional concerns in resettlement and rehabilitation of migrant labourers.
    • There is a need to adopt a human rights approach to address the socio-legal issues.
    • The resolution of contradictions in trade, fiscal, monetary and other policies would also require.
    • Following 3 policy changes are urgently required.
    • 1)The implementation of the report of the task force on migration (2017).
    • 2)Expansion of the outreach of the Integrated Child Development Services– to include migrant women and children.
    • 3) Inclusion of migrant children in the annual work plans of Sarva Shiksha Abhiyan.
    • Given the environment of uncertain livelihoods it is necessary to strengthen the resilience of the financial system and skill workers.
    • The issues and challenges of migrant workers require leveraging information and communication technologies and the JAM trinity.

    Consider the question “Migrant workers issue is an issue with many implications. This issue needs to be considered in its entirety to formulate a speedy and effective response. In light of this suggest the required policy changes.”

    Conclusion

    The debilitating physical effects of the coronavirus necessitate coordinated and concerted efforts by all stakeholders to meet the challenges of the present and the expectations of the future. We shall overcome.

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  • Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

    Reshaping the gig economy

    op-ed snap | Economics | Mains Paper 3: Issues relating growth and development, employment

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Gig economy

    Mains level: Paper 3- Gig economy and issue it faces

    3 min

    The shockwave that pandemic sent through the economy has been reshaping the global job market. Gig economy would have to accommodate the new entrants. This article underlines the changes in the gig economy after the pandemic. Four areas that need attention are also discussed here.

    What constitutes gig economy?

    • The word “gig” includes in its current parlance all freelancers, disconnected from the workplace.
    • Example: drivers of Uber, delivery boys of Zomato, plumbers and electricians of Urban Clap.
    • The gig economy is not confined to low-skilled jobs. Skilled professionals are also part of it.

    How pandemic is reshaping the gig economy

    • Aviation, hospitality, automobile entertainment and retail are some of the hardest hit sectors.
    • The classic gig anchors- Uber and AirBnB, have laid off thousands of people.
    • In contrast to this, highly skilled professionals —laid off by employers — are joining the gig bandwagon.
    • Surely, job demand will far outstrip supply, at least in the short-term.

    What does the future hold?

    • A Deloitte report from April notes that Indian organisations are considering to expand the share of gig workers.
    • Declining full-time jobs will lead to increased assignment-based hiring.
    • For instance, a graphic designer working from home could be in demand with a media house or Netflix may hire AI designer paid by an hour to personalize streaming.
    • But, what is missing in picture? The national database is missing.

    4 focus areas of gig economy

    1. National database: A missing link

    • National database of job seekers and job creators can connect firms with qualified candidates.
    • A prospective employee would need access to a job database, sorted by skill, geography, duration and emoluments.
    • Companies should be able to dip into the data pool of talent, experience, location, qualification and expectation.
    • Currently, both data sets are fragmented and stored in silos.
    • The government could play the role of a facilitator, in partnership with the private sector.

    2. Regulatory protection to gig workforce

    • The gig economy increases employee vulnerability.
    • This segment of the economy so far has been outside the ambit of regulatory labour policies.
    • Social protection like wage protection, health benefits and safety assurance should be made available to gig workers.
    • The Karnataka government has considered introducing a new labour legislation focused on the gig economy.

    3. Prepare college students for freelancing

    • Apart from regular campus placements, the placement cells need to reorient and focus on preparing students for freelancing opportunities.
    • For the educated youth, this could be the first step towards entrepreneurship.

    4. Gender equality

    • Gender is another crucial dimension of the digital labour markets.
    • The low enrolment of girls for higher education in science, technology, engineering and math would constrict their opportunity in the gig world.
    • Going ahead, this would need greater policy attention to ensure gender parity.

    Consider the question “What is the gig economy? Suggest the policy measures to make it more resilient in the present economic context disrupted by the pandemic.”

    Conclusion

    The government and the private sector would need to collaborate along with academia to build adequate safeguards in the unfolding eco-system.

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  • Climate Change Impact on India and World – International Reports, Key Observations, etc.

    Revealing the secrets Arctic holds

    op-ed snap | Enviro & Biodiversity | Mains Paper 1: Important Geophysical Phenomena

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Icesat 2, Cryosat 2

    Mains level: Paper 1- Arctic ice and how it influence climate change

    This article is about Polarstern, is an icebreaker, which traversed the Arctic Ocean to study the aspects related to ice there. Here, we will look at some of these aspects. These aspects are-monitoring of the ice, difficulty in measuring the thickness, rate of melting of ice and relations with cloud formation.

    Arctic: A recorder and driver of climate change

    How is it a recorder of climate change?

    • It is a recorder because of two co-related factors, these are-
    • 1) The visible difference between ice and water.
    • 2) The obvious relationship between global temperatures and the amount of ice around.
    • Two factors together shows in an easily graspable way how things are changing.
    • The extent of the Arctic sea ice in summer has declined by 30% in the past 30 years, and that loss is accelerating (see chart).

    How is it a driver of climate change?

    • The Arctic is also a driver of climate change, because the whiteness of ice means it reflects sunlight back into space, thus cooling Earth.
    • Whereas the darkness of open water means it absorbs that light.
    • The less of the reflection of sunlight and the more absorption of light will result in a faster rise in global temperatures.

    Monitoring the Arctic’s ice

    • At the moment this is monitored mainly by satellite.
    • Measuring the extent of the Arctic’s ice from space is easy.
    • Measuring its thickness is trickier.
    • From orbit, this is done by a mixture of radar and laser beam.
    • Icesat 2, an American craft, provides laser-altimeter data that record the height above sea level of the top of the snow that overlies the ice.
    •  Cryosat 2, a European one, uses radar to penetrate the snow and measure the height of the top of the ice itself.
    • The thickness of the ice in a particular place can then be calculated by applying Archimedes’ principle of floating bodies to the mixture of ice and snow, and subtracting the thickness of the snow.
    • But there is a view that the data collected by these two satellites may be inaccurate, leading to an overestimation of the ice’s thickness.

    Let’s understand why the data about thickness could be inaccurate

    • When all is working perfectly, the return signal for Cryosat 2 comes exactly from the boundary between the ice and any overlying snow.
    • But, that this is not always what happens.
    • Variables such as layering within the snow, along with its temperature and salinity, might affect the returning radar signal by changing the snow’s structure and density.
    • This could cause the signal to be reflected from inside the snow layer, rather than from the boundary where it meets the ice.
    • If that were happening, it would create the illusion that the ice beneath the snow is thicker than is actually the case.

    How topography of Arctic ice matters

    • Though sea ice is solid, it is not rigid.
    • It forms but a thin skin on the ocean—varying in depth from around 30cm in summer to a couple of metres in winter—so is readily moved by wind and current.
    • As the ice moves it stretches and cracks in some places.
    • Large cracks formed in this way are called leads, because they are wide enough to “lead” a ship.
    • In other places, by contrast, movement makes the ice thicker.
    • As individual panes of ice butt up against each other, they create ridges that can be metres high.
    •  But even from the ship’s deck one can watch leads opening and ridges forming around the vessel.
    • Observations suggest that winter the ice has been particularly mobile—and has thus become particularly rough, with a surprising number of ridges.

    So, how these ridges affect the rate at which ice melts?

    • These ridges may affect the rate at which the ice melts—but to complicate matters, this could happen in two opposing ways.
    • Ridges make ice thicker, and thicker ice melts more slowly.
    • On the other hand, a ridge projects down into the sea as well as up into the air (Archimedes, again), so it may stir up water from below the surface.
    • Deep water is warmer than the surface layer, so this stirring would serve to increase melt rates.
    • Moreover, to add to the confusion, ridges are prone to having pieces of ice fall off them into the sea, to form small blocks known as brash.
    • This brash, having more surface area per unit volume than unbroken ice, melts faster.

    How cloud formation is affected by cracks in Arctic ice

    • On most parts of Earth clouds form as droplets of water condense around “seeds” of dust or organic molecules.
    • In the Arctic, there is little dust.
    • Biological activity, too, is in short supply compared with elsewhere—and is, moreover, conducted mainly below the barrier of the sea ice.
    • It might, therefore, be expected that there would be few seeds present for clouds to form around.
    • And yet, clouds are present.
    • Cloud seeds there tended to be compounds containing sulphur, nitrogen, chlorine, bromine or iodine.
    • Presence of these molecules suggests their link with cracks in the ice sheets.
    • This means that more cracks in the ice sheet could lead to more clouds in the Arctic.
    • What overall effect that might have on the climate is unclear.
    • Summer clouds would reflect sunlight back into space, cooling the planet.
    • Those formed in winter, when the sun is below the horizon, would serve as insulation, warming it.
    •  Two opposite outcomes are possible—or perhaps the net effect will be that they cancel each other out.

    Conclusion

    Properly disentangling the interactions between Arctic ice, atmosphere and ocean life will require data collected across a full year—for the contrast between winter and summer at the poles is greater than anywhere else on the planet.

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  • Coronavirus – Economic Issues

    We must aspire for nurturing economy

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 3- Issues of inclusive growth

    The sight of thousands of migrant workers walking thousands of kms back home after lockdown has been the watershed moment for the collective conscience of our country. This made us think about the present economic model and policies we have been adopting. So, the answer to the problems created by the present model lies in building “nurturing economy”. What is nurturing economy? Read to know…

    Broadly, we can summarise the impact of pandemic as-

    • Unemployment is shooting up.
    • Supply chains of food and essentials have been disrupted.
    • Dark clouds of economic recession are on the horizon.

    Invisible cost of pandemic

    • The visible cost of the pandemic in terms of the lives lost are being counted by the day.
    • But the invisible cost of hunger and impoverishment of the most vulnerable sections is yet to be effectively addressed.
    • Vulnerable section- our workers, the poor and the migrants, particularly women, are at receiving end of these invisible cost.

    Health of economy before pandemic

    • The pandemic came at one of the worst possible times.
    • India’s economy has been in deep trouble since 2016.
    • In 2019-20, even before the pandemic happened, our GDP growth had dropped to 4.2 per cent, lowest growth seen in the last 11 years.
    • Even the oil prices dropped at their historic low.
    • Non-food bank credit is a good indicator of overall economic robustness.
    • By December 2019, the growth of non-food bank credit had dropped to below 7 per cent. ( lowest in the last 50 years.)

    What happened to economy after the pandemic?

    • After the pandemic arrived, matters, of course, got worse.
    • In March, $16 billion of foreign capital exited the country, which is an all-time record for India.
    • India’s unemployment rate shot up to a record high of 23.8 per cent in April.
    • In the same month, Indian exports dropped by 60 per cent.
    • This was one of the biggest drops seen in any emerging market economy in the world.
    • There is a genuine risk that this year our growth will drop to an all-time low, beating the record plunge of 1979-80.

    So, the pandemic has forced us to think about the building a nurturing economy, one in which Gandhiji’s Talisman is followed in word and spirit, one in which John Rawls ideas are implemented.

    So, What building a nurturing economy involves?

    • Our economic and political policies must not be ends in themselves.
    • Instead, these policies should involve instruments for building a society that is secular, inclusive and nurturing.
    • It should be a society where people of all religions, caste, race and gender feel wanted and at home.
    • Environment sustainability and focus on green economy is also part of nurturing economy.
    • We should strive to create a society that respects knowledge, science and technology, and culture.

    Threefold crisis emerging out of our exploitative behaviours

    • The outcome of our exploitative behaviour is a threefold crisis which describes India’s current predicament.
    • 1) Rising poverty and unemployment despite abundance.
    • 2) Rising intolerance and violence.
    • 3) Environmental catastrophe.

    Consider the question “Pandemic and the predicament of migrant labours has highlighted the lack of inclusive growth in our economy. And we must look for the solution to such shortcomings in our approach. In light of this, suggest the changes that our economy must embrace to ensure inclusive growth.”

    Conclusion

    Our ambition should not be to make India the richest nation in the world. India should be an example of an equitable society, where people are not abandoned without income and work, where no one feels the insecurity of being a minority, and of being discriminated against.

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  • Foreign Policy Watch: India-China

    Multilateralism post COVID-19

    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: WIPO, UNIDO

    Mains level: Paper 2-Multilateralism in the post-Covid world

    What is the future of multilateralism? This is the question we have come across many times recently. Given the chaos that we are witnessing in the global order, multilateral seems to be headed for either collapse or capture by China. But, the author of this article suggests that it would be a mistake to consider the choice as binary. Between the collapse and the capture, there are many stakeholders working for its sustenance. So, multilateralism will endure.

    International institutions performing below par

    • The COVID-19 outbreak has placed all international institutions under a magnifying glass.
    • By any measure, most have performed below par.
    • Such is the caution espoused that multilateralism today seems to have reverted to its version 0.1.
    • The General Assembly now passes resolutions through no-objection procedure.
    • The Security Council has been found wanting in no small measure.
    • The 75th session’s ‘leaders week’ runs the risk of being reduced to a video playback session.

    Pursuit of change by threatening to leave

    • It is true that functioning of multilateral institutions requires reform.
    • They need to adapt to new realities.
    • However, the pursuit of change by threatening to leave multilateral institutions is a phenomenon we witnessed only during the period of the League of Nations.
    • One state followed another in bidding goodbye, until the League’s final demise.

    Why post Second World War institutions survived departures

    • The post Second World War multilateral institutions have survived such departures.
    • The United Nations Educational, Scientific and Cultural Organization (UNESCO) in Paris and the Human Rights Council in Geneva have survived the departure of the U.S.
    • The United Nations Industrial Development Organization (UNIDO) in Vienna continues despite the withdrawal of the U.S. and many others.
    • The World Health Organization (WHO), notwithstanding its visible shortcomings, will survive U.S. threats.
    • The reasons are simple.
    • Multilateral organisations serve desperately felt global needs of the vast membership.
    • The pandemic has reinforced the desire for greater global cooperation amongst most states.

    So, will the current multi-lateral order survive China’s onslaught?

    •  It is true that Chinese nationals head four multilateral organisations.
    • It is also true that Chinese nationals have failed in campaigns to head UNESCO and the World Intellectual Property Organization (WIPO).
    • Despite contributing nearly 10% of the UN’s budget, Chinese nationals are not exactly over-represented in terms of staff positions.
    • China has certainly risen up the multilateral pantheon and is able to better promote its interests.
    • It has warded off attacks against it in multilateral fora, at times with the aid of the heads of these organisations.
    • However, it is yet to display an ability to set the multilateral agenda and dominate the discourse on an array of issues, in the manner that the U.S. once indispensably did.
    • China’s flagship venture, the Belt and Road Initiative, remains only on the fringes of multilateral fora.
    • Neither in monetary terms nor in substantive inputs are there portents of a ‘Chinese takeover’.
    • Amidst this, multilateral bodies are populated by a plethora of small and middle states quietly working to restore equilibrium, when the balance tends to shift.
    • The capture of the existing multilateral order by a new hegemon is antithetical to the ethos of multilateralism.
    • Multilateralism thrives on the notion of the Lilliputians tying up Gulliver — old or new.

    Evolving multilateralism is not a choice between collapse and capture

    • Between collapse and capture, there are other pathways.
    • Multilateral architecture places a premium on structures over functions, processes over substance.
    • It slows down the change of any sort.
    • The same processes that have stalled change in the past will militate against a takeover in the future.
    • Does that mean that multilateralism will meander meaninglessly?
    • It will meander, but perhaps not meaninglessly.
    • The ‘pluri-laterals’ and the emerging ‘mini-laterals’ each have their place in terms of international agenda-setting, but global norm-setting requires inclusivity that they lack.

    Opportunity for India

    • Being able to shape the discourse at an incipient stage is a good perch to be on.
    • Issue-specific ‘coalitions of the willing’ are catalysts.
    • As a growing power, India needs to avail of such avenues.
    • However, by themselves, these will not do justice to the depth and variety of India’s interests and our stakes in global cooperation.
    • Also, they are not holistic solutions in ensuring global acceptance of norms.

    Understanding the essence of multilateralism

    • Responses of states during the COVID-19 crisis point to more emphasis on sovereign decision making than before.
    • The imprimatur for acting on behalf of the global community is not going to be available easily.
    • On myriad issues, from sustainable development to the environment, from climate change to pandemics and cyberspace to outer space, the demands for ‘nothing about us without us’ are likely to increase.
    • Since stakeholders perceive that their stakes have risen, they will call for enhanced engagement.
    • Convening such stakeholders in pursuit of global goals is the essence of multilateralism.

    Consider the question “In the world afflicted by Covid, multilateralism seems to be headed for collapse or capture by a hegemon. Critically examine.”

    Conclusion

    We need to patiently promote reforms while building partnerships to avail opportunities which may arise for more fundamental change. We need to bide our time without hiding our intent.

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

    Issues with the ordinances on agriculture

    op-ed snap | Agriculture | Mains Paper 3: Transport & Marketing Of Agricultural Produce

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: ECA, APMC Act

    Mains level: Paper 3- Agri-marketing and issues with it

    Following the announcement of reforms in the agri-sector, the government issued ordinances to make good on its promise. These ordinances deal with- ECA-1955, APMC Act and Contract farming. The author in this article examines whether these ordinances deliver on the promises made or not.

    1) Ordinance for amendment of APMC Act

    • ‘Farming Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020.’ seek to address the problems farmers face in selling their produce.
    • Due to the unionisation of middlemen (arhatias) and their financial clout, politicians in the states have been reluctant to amend agriculture marketing laws which are exploitative and don’t allow farmers to receive a fair price.
    • Rather than coax the states financially to correct the markets, an unregulated marketplace has been created where 15 crore farmers will be exposed to the skulduggery of traders.
    • Imagine the mayhem in stock markets if ROC and SEBI were similarly made redundant.

    Issues and benefits

    • Rather than replicate Punjab’s successful agriculture mandi model, now states will lose vital revenue to even upgrade and repair rural infrastructure.
    • The ordinance may be challenged by the states for its constitutional overreach.
    •  But, on the flip side, over time, the largest informal sector in the country will begin to get formalised and new business models will develop.
    • A different breed of aggregators will create the much-needed competition to the existing monopoly of local traders.
    • Additionally, henceforth, when farmers sell agricultural produce outside of APMC market yards, they cannot legally be charged commission on the sale of farm produce.
    • To survive, the APMCs across the nation will have to radically standardise and rationalise their mandi fee structure and limit the commission charged by traders on sale of farmers’ produce.

    2) ECA 1955: Not enough has been done

    • Here, the amendment was supposed to allay the genuine fears of traders emitting from the bureaucracy’s draconian powers to arbitrarily evoke stockholding limits etc.
    • Rather than forego its own powers for the larger good, the amendment’s fine print makes it ambiguous and leaves space for whimsical interpretations as before.
    • The trader’s uncertainty is compounded by the arbitrary import-export policy decisions which dilute the purpose of the amendment itself.

    3) Ordinance on Contract farming

    •  “The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020” tries to placate the fears of both the farmer and the contractor when they sign an agreement.
    • For the farmer, the legal recourse is never a practical choice as the persuasive powers of the aggregators’ deep pockets cast a dark shadow over the redressal process.
    • Likewise, the tediously stretched legal proceedings are dissuasion enough to either not seek redressal or settle for unfavourable terms.
    • That produce derived from contract farming operations will not be subject to any obstructionist laws is a very good step.
    • Farmer-producer organisations and new aggregators will get a boost with these laws, and become harbingers of prosperity in some small corners of the countryside.
    • There are green shoots in the ordinances, but the downside dwarfs the upside.

    So, what are the implications of these 3 reforms?

    • The union of the three ordinances appears to be a precursor to implementing the Shanta Kumar Committee recommendations to dilute and dismantle FCI, MSP & PDS which will push farmers from the frying into the fire.
    • It may also be interpreted to mean that now the sugar industry needn’t pay farmers the central government FRP or the state government SAP price for sugarcane.

    Consider the question ” There was a mention of reforms related to agri-sector in the recently announced stimulus package. Examine the issues with segments of agri-sector which necessitated these reforms.”

    Conclusion

    The reforms in these 3 areas if carried out earnestly could go a long way in helping the farmers get out of the misery and help achieve the goal of doubling of farmers income in the set time frame.

    Back2Basics: Agriculture Produce Marketing Committee Regulation (APMC) Act.

    • All wholesale markets for agricultural produce in states that have adopted the Agricultural Produce Market Regulation Act (APMRA) are termed as “regulated markets”.
    • With the exception of Kerala, J & K, and Manipur, all other states have enacted the APMC Act.
    • It mandates that the sale/purchase of agricultural commodities notified under it are to be carried out in specified market areas, yards or sub-yards. These markets are required to have the proper infrastructure for the sale of farmers’ produce.
    • Prices in them are to be determined by open auction, conducted in a transparent manner in the presence of an official of the market committee.
    • Market charges for various agencies, such as commissions for commission agents (arhtiyas); statutory charges, such as market fees and taxes; and produce-handling charges, such as for cleaning of produce, and loading and unloading, are clearly defined, and no other deduction can be made from the sale proceeds of farmers.
    • Market charges, costs, and taxes vary across states and commodities.

    Essential Commodities Act 1955

    • The ECA is an act which was established to ensure the delivery of certain commodities or products, the supply of which if obstructed owing to hoarding or black-marketing would affect the normal life of the people.
    • The ECA was enacted in 1955. This includes foodstuff, drugs, fuel (petroleum products) etc.
    • It has since been used by the Government to regulate the production, supply and distribution of a whole host of commodities it declares ‘essential’ in order to make them available to consumers at fair prices.
    • Additionally, the government can also fix the maximum retail price (MRP) of any packaged product that it declares an “essential commodity”.
    • The list of items under the Act includes drugs, fertilizers, pulses and edible oils, and petroleum and petroleum products.
    • The Centre can include new commodities as and when the need arises, and takes them off the list once the situation improves.

    How ECA works?

    • If the Centre finds that a certain commodity is in short supply and its price is spiking, it can notify stock-holding limits on it for a specified period.
    • The States act on this notification to specify limits and take steps to ensure that these are adhered to.
    • Anybody trading or dealing in the commodity, be it wholesalers, retailers or even importers are prevented from stockpiling it beyond a certain quantity.
    • A State can, however, choose not to impose any restrictions. But once it does, traders have to immediately sell into the market any stocks held beyond the mandated quantity.
    • This improves supplies and brings down prices. As not all shopkeepers and traders comply, State agencies conduct raids to get everyone to toe the line and the errant are punished.
    • The excess stocks are auctioned or sold through fair price shops.

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  • Foreign Policy Watch: India-Nepal

    Changing Nepal and changing ties with India

    op-ed snap | International Relations | Mains Paper 2: India & Its Neighborhood – Relations

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Indian states sharing border with Nepal

    Mains level: Paper 2- India-Nepal ties and border issue

    Of late, India’s bilateral relations with Nepal has been going south. The latest trigger has been the changes made by Nepal in the map. This article explores the transformation of Nepal and its impact on India-Nepal relations. Despite the efforts by Nepal to explore the options beyond India, ties are still robust between the two countries and this is reflected in more than one ways.

    Let’s map the changes in  Nepal with one constant factor: nationalism

    1. Democracy

    • The obvious change in Nepal is that it is now a democratic republic after nearly 250 years of being a monarchy.
    • The Nepali Congress and Maoist leader, Prachanda, claim democracy (1990) and the abolition of monarchy (2008) as their legacies.

    2. Societal change due to exposure to globalisation

    • More pervasive is the societal change from Nepal’s exposure to globalisation.
    • Geography, too, stands to change, with the Chinese now having the potential to bore through the Himalayas and exhibiting their presence in Kathmandu in economics and politics.

    3. Nationalism

    • The constant in Nepal is nationalism which is really a mask for anti-India sentiment.
    • Politicians use it for personal gain, and it is deeply ingrained in the bureaucracy, academia and the media.
    • Today, Prime Minister K.P. Sharma Oli is cementing his legacy as a nationalist by extending Nepal’s map into Indian territory.
    • The cartographic aggression and the embedding of the new map in the country’s national emblem and Constitution are untenable and should have been avoided under all circumstances.
    • In 2015, the Nepali Congress government adopted the new Constitution, ignoring India’s concerns.

    4. Identity politics

    • Identity politics with India is also visible within the country.
    • Nepali citizens from the Terai (Madhesis) feel discriminated as being “Indian”.

    To Nepal, their attitudes reflect the angst of a small state. To India, Nepal appears incorrigible.

    Let’s understand how globalisation changed Nepal

    • After democracy was restored in 1990, passports were more liberally issued, and Nepalis began looking for work opportunities globally, beyond just India.
    • West Asia and South-East Asia specifically became major destinations for labour migration.
    • Security uncertainties with the Maoist insurgency at home also propelled the trend of migration.
    • Students and skilled personnel began moving to Europe, the United States, Australia, Thailand and even to Japan and South Korea.
    • As of 2019, nearly a fifth of Nepal’s population, from all parts of the country, were reportedly overseas.
    • At an estimated $8 billion, global remittances account for nearly 30% of Nepal’s nominal GDP.
    • This makes Nepal one of the most remittance-dependent countries in the world.
    • Leftist ideology and the prominent presence of international non-governmental organisations — ostensibly there to resolve conflict and alleviate poverty — have added to Nepal’s exposure to the world.
    • Nepal’s 2011 Census shows that over 80% of its 28 million-strong population were Hindus, and since 1962, it had formally been a Hindu kingdom.
    • The new Constitution in 2015 makes Nepal a secular country.
    • The proliferation of communication technology has also spread a certain cosmopolitanism but without the accompanying metropolitanism.

    Nepal exploring options beyond India

    • Kathmandu has continued its long-standing efforts to spread Nepal’s options beyond India.
    • Multilateral development banks are by far the biggest lenders and players in the country’s development efforts.
    • And in fact, one of Nepal’s largest aid donors is the European Union.
    • India and China are not the only players for big projects either.
    • A long-delayed project to pipe water into Kathmandu was with an Italian company.
    • Major investments in the telecom sector are coming from Malaysia, and the largest international carrier in Nepal is Qatar Airways.

    Weakening of natural bond and responsible factors

    • The outward movement of students, along with with the growth of institutions of higher learning at home, has meant that most young people in Nepal, including emerging contemporary leaders in politics, business or academics, have not studied in India.
    • This lack of common collegiate roots removes a natural bond of previous generations that had provided for better understanding and even empathy.
    • While most Nepalis understand Hindi, because of the popularity of Bollywood, articulation is quite another matter.

    Robust ties with India, despite diversification

    • Despite Nepal’s efforts to diversify its options globally, its linkages with India remain robust.
    • Nepal’s trade with India has grown in absolute terms and continues to account for more than two-thirds of Nepal’s external trade of around $12 billion annually.
    • This clearly reflects the advantages of geography, both physical and societal.
    • India continues to be the largest aggregate investor in Nepal.
    • The massive under-construction Arun-III 900 MW hydro-electric project is slated to singly produce as much power, when completed in five years, as Nepal produces today.
    • Moreover, the peg with the Indian Rupee provides unique stability to the Nepali Rupee.

    Unique advantage to Nepal

    • Nepal’s per-capita income is just above $1,000.
    • While the huge remittance economy has brought a semblance of well-being, the country has a long way to go in reaching prosperity.
    • The relationship with India, with open borders and Nepalis being allowed to live and work freely, provides Nepal a unique advantage and an economic cushion.
    • The latter is particularly important today with COVID-19-caused global contraction positioned to pop the remittance bubble.
    • Neither the Chinese nor any others are likely to write blank cheques.
    • India for its part should also focus on developing its border areas with Nepal, with better roads and amenities of interest (such as shopping malls) to the burgeoning Nepali middle class.
    • This would have economic plusses for both sides and keep ties strong at the people’s level. It would also be an image makeover.

    Consider the question “Despite intermittent disagreements over certain issues, India-Nepal ties remain robust. In light of this, elaborate on the ties between the two countries and suggest ways to find the solution to the latest border dispute between the two countries.”

    Conclusion

    It is important that we update the prism through which we view our relationship with our Himalayan neighbour. We must not forget the past nor turn away from it but, instead, must be mindful of the realities of a changing India and a changing Nepal.

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

    What explains the new mark crosses by our Forex reserves

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Forex reserves and exchange rates

    Mains level: Paper 3- India's Forex reserves touched ceiling of half-trillion

    At first, it seems almost contradictory. And so it is. Our foreign exchange reserves touched new high of $500 billion for the first time, but the time in which this has happened makes it paradoxical. At the time when economies around the world are touching new lows, this rise in the Forex seems all but usual. In this article, you’ll learn about the 4 factors that made it happen.

    1. Decreased oil imports

    • Usually, we import a lot of oil.
    • But the payment here is dollar-denominated since very few countries are going to accept our currency (Rupee) as is.
    • So, you have to expend dollars i.e. the foreign exchange reserves to keep the flow of crude oil intact.
    • However, with the nationwide lockdown in place, our import bill has reduced drastically.
    • We simply don’t need as much oil anymore.
    • And considering oil prices have also taken a beating simultaneously, our Forex Reserves have been piling up.
    • Less oil import. More Forex reserves.

    2. Dollars coming with foreign investors

    • Contrary to popular opinion, foreign investors have been pouring money into India of late.
    • You could attribute a bulk of these inflows to Reliance Jio.
    • They’ve been enticing investors all over the world and they’ve been doing it at a pace that belies all rational expectations.
    • They’ve raised close to $15 Bn over the course of a few months and it doesn’t look like they’re stopping anytime soon.
    • So technically, dollar inflows have spiked and therefore, Forex reserves get a boost once again.

    3. RBI preparing itself for a bad time

    • Another popular explanation is that the RBI is preparing a war chest to stave off future uncertainties.
    • At a time when the world economy is reeling from an unprecedented crisis, it’s perhaps prudent to build up reserves for a rainy day.
    • So the RBI buys gold and dollar-denominated assets using our national currency and builds up the foreign exchange reserves.
    • Inadvertently, this increases the money supply within the economy.
    • There will be more “Rupees” floating around.
    • As more Indian currency keeps entering the ecosystem, the value of the rupee depreciates.
    • And yes, the value of rupee has tumbled recently, but we are not in dire straits yet.
    • But if India’s economy takes a turn for the worse, it becomes incumbent on the RBI to ensure price stability.
    • Imagine the value of the rupee starts fluctuating wildly because of economic uncertainties.
    • The RBI has to intervene.
    • It has to exchange the foreign reserves for the Indian currency.
    • If they keep mopping up the excess Rupees floating in the system, they could ensure the value of the rupee remains stable.
    • So long as the value of the rupee remains stable, prices of commodities will follow the same cue, all things remaining equal that is.
    • Now, there’s still no clear consensus on what kind of reserves we might need if things do go south.
    • Although there have been recommendations made in the past about hoarding too much, it’s still the RBI’s call at the end of the day.

    4. The RBI is doing it for the government

    • The RBI can turn a profit if it wants to.
    • And once it does turn a profit, it can transfer a part of the surplus to the government — as dividends.
    • Now if the RBI wanted to offer the government a higher dividend, it has to simply turn a higher profit.
    • One way to accomplish this is to simply let the value of the rupee depreciate. Do not intervene.
    • Do not forego the reserves. Let the rupee tumble.
    • And so long as you don’t intervene, all the dollar-denominated assets you own will be worth more in rupee terms.
    • Consider the hypothetical example-suppose the exchange rate was 1$= Rs. 71 in March 2020, then the rupee loses value and you see the same line item once again in June 2020 will be 1$=Rs. 76.
    • The extra ₹ 5 is treated as a profit. And this profit could be ploughed back to the government.

    Consider the question “With the economy in the tailspin amid pandemic, the news of India’s Forex reserves touching the $500 billion mark for the first time provided the semblance of solace. Examine the factors that could explain this increase.”

    Conclusion

    Though there will always be the debate over the optimum value of the Forex reserves, the new level it reached in such an uncertain time for the economy is, nonetheless, a cause for celebration.

     

    Reference Source : https://finshots.in/archive/india-foreign-exchange-reserves/

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  • Contention over South China Sea

    Why South China Sea matters to India

    op-ed snap | International Relations | Mains Paper 2: Effect Of Policies & Politics Of World On India’S Interests

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: South China Sea

    Mains level: Paper 2-South China Sea dispute and impact on India

    What happens in the South China Sea has bearing on India. So far, the U.S. played a major role in the prosperity and security of the Indo-Pacific, but after the Covid, it may be forced to reconsider its stand over the region. So, what is at stake for India? And what are the options available with ASEAN countries and Indian in such a situation? Read to know…

    Dilemma the Indo-Pacific countries faces

    •  As the two most consequential powers of the world, the United States and China which are engaged in a fundamental transformation of their relationship rest of the countries in the region face a dilemma.
    • Almost nobody any longer thinks that China will conform to the US worldview, or that China’s rise from hereon will be unchallenged.
    • The Singapore Prime Minister Lee Hsien Loong’s essay in the latest issue of Foreign Affairs cogently spells out this dilemma.

    How the U.S. contributed to the region’s prosperity

    • The Indo-Pacific has prospered under American hegemony for the previous 40 years not just because of their huge investments.
    • U.S. invested $328.8 billion in the Association of Southeast Asian Nations (ASEAN) alone and a further $107 billion in China.
    • However, it’s not the investment but also because of the security blanket that it provides.
    • China might have replaced the US as the primary engine of growth in the last decade, but it has come with a cost — the assertion of Chinese power.
    • The benign American military presence has afforded countries the opportunity to pursue economic prosperity without substantial increases in their own defence expenditures or having to look over their shoulders.
    • No group of nations has benefitted more from the presence of the US than the ASEAN.

    How Chinese military posture is different from the U.S.

    • Chinese military postures, on the other hand, give cause for concern ever since they unilaterally put forward the Nine-Dash Line in 2009 to declare the South China Sea as territorial waters.
    • Their territorial claim itself is tenuous, neither treaty-based nor legally sound.
    • They act in ways that are neither benign nor helpful for long-term peace and stability.
    • In the first half of 2020 alone, Chinese naval or militia forces have rammed a Vietnamese fishing boat, “buzzed” a Philippines naval vessel and harassed a Malaysian oil drilling operation, all within their respective EEZs.
    • Since 2015, they have built a runway and underground storage facilities on the Subi Reef and Thitu Island as well as radar sites and missile shelters on Fiery Cross Reef and Mischief Reef.
    • They conducted ballistic missile tests in the South China Sea in June 2019 and continue to enhance naval patrols to enforce area denial for others.

    Fundamental choices the region faces

    • Going forward, the US and China face fundamental choices.
    • But then, so do the rest of us living in the Indo-Pacific.
    • America’s role in the preservation of the region’s peace and security should not be taken for granted.
    • As COVID imposes crushing costs on all economies, the US may also be weighing its options.
    • Finding justification for Chinese actions in the South China Sea, even as countries in the region help themselves to Chinese economic opportunities while sheltering under the US security blanket, is also fraught with risk.
    • Accommodation may have worked thus far but regional prosperity has come at a mounting cost in geo-strategic terms.
    • The South China Sea is effectively militarised. In the post-COVID age, enjoying the best of both worlds may no longer be an option.

    But, ASEAN won’t change the course suddenly

    • Nobody should expect that ASEAN will suddenly reverse course when faced with possibly heightened Sino-US competition.
    • China is a major power that will continue to receive the respect of ASEAN and, for that matter, many others in the Indo-Pacific, especially in a post-COVID world where they are struggling to revive their economies.
    • ASEAN overtook the European Union to become China’s largest trading partner in the first quarter of 2020, and China is the third-largest investor ($150 billion) in ASEAN.
    • The South East Asians are skilled at finding the wiggle room to accommodate competing hegemons while advancing their interests.
    • This does not, however, mean that they are not concerned over Chinese behaviour in the South China Sea.
    • They need others to help them in managing the situation.

    Validation of the US military presence and collective efforts of stakeholders

    • A robust US military presence is one guarantee.
    • A stronger validation by the littoral states of the South China Sea helps the US Administration in justifying their presence to the American tax-payer.
    • Others who have stakes in the region also need to collectively encourage an increasingly powerful China to pursue strategic interests in a legitimate way, and on the basis of respect for international law, in the South China Sea.
    • The real choice is not between China and America — it is between keeping the global commons open for all or surrendering the right to choose one’s partners for the foreseeable future.

    What is at stake for India?

    • How the South China Sea situation plays out will be critical for our security and well-being.
    • India must consider the following factors while calibrating its approach.
    • 1) The South China Sea is not China’s sea but a global common.
    • 2) It has been an important sea-lane of communication since the very beginning, and passage has been unimpeded over the centuries.
    • 3) Indians have sailed these waters for well over 1,500 years — there is ample historical and archaeological proof of a continuous Indian trading presence from Kedah in Malaysia to Quanzhou in China.
    • 4) Nearly $200 billion of our trade passes through the South China Sea and thousands of our citizens study, work and invest in ASEAN, China, Japan and the Republic of Korea.
    • 5)  We have stakes in the peace and security of this region in common with others who reside there, and freedom of navigation, as well as other normal activities with friendly countries, are essential for our economic well-being. In short, the South China Sea is our business.
    • We have historical rights established by practice and tradition to traverse the South China Sea without impediment.
    • We have mutually contributed to each other’s prosperity for two thousand years.
    • We continue to do so.
    • The proposition that nations that have plied these waters in the centuries past for trade and other peaceful purposes are somehow outsiders who should not be permitted to engage in legitimate activity in the South China Sea, or have a voice without China’s say, should be firmly resisted.

    India needs to be responsive to ASEAN

    • India needs to be responsive to ASEAN’s expectations.
    • While strategic partnerships and high-level engagements are important, ASEAN expects longer-lasting buy-ins by India in their future.
    • They have taken the initiative time and again to involve India in Indo-Pacific affairs.
    • It is not as if our current level of trade or investment with ASEAN makes a compelling argument for them to automatically involve us.
    • They have deliberately taken a longer-term view.
    • A restructuring of global trade is unlikely to happen any time soon in the post-COVID context.
    • Regional arrangements will become even more important for our economic recovery and rejuvenation.
    • If we intend to heed the clarion call of “Think Global Act Local”, India has to be part of the global supply chains in the world’s leading growth region for the next half-century.
    • It is worth paying heed to the words from Singapore’s prime minister, who writes that something significant is lost in an RCEP without India.
    • And urges us to recognise that the value of such agreements goes beyond the economic gains they generate.
    • Singapore is playing the long game. Are we willing to do so, even if it imposes some costs in the short-term?

    Consider the question “The South China Sea has been witnessing growing militarisation day by day. And how the South China Sea situation plays out will be critical for our security and well-being. In light of this, examine the basis on which India should contest China’s unilateral claims in the area and scope of engagement with the ASEAN countries in this regard.”

    Conclusion

    Indian is a stakeholder in the South China Sea. What happens there have implications for us. In such a scenario, India must form a partnership with other players in the region and should attempt to make China follow international laws and global order.

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