💥UPSC 2026, 2027, 2028 UAP Mentorship (March Batch) + Access XFactor Notes & Microthemes PDF
Talk to mentor

Civilsdaily

Login

Type: op-ed snap

  • Pharma Sector – Drug Pricing, NPPA, FDC, Generics, etc.

    What are Biosimilars?

    op-ed snap | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Biosimilars

    Mains level: Paper 3- What are the bio-similar molecules and their applications in the pharma sector?

    Recently an Indian pharma company has been granted a USFDA approval for Insulin Glargine, a biosimilar. This article briefly introduces us to this term, complexities involved in its manufacturing and also explains why the USFDA approval create hype.

    The story of simple molecules and some difficult diseases

    • Ever since modern medicine started to emerge post the Industrial Revolution, simple molecules have been used to treat most diseases.
    • While these formulations are highly effective against some illnesses, they aren’t particularly effective against more complex diseases like cancer.
    • Our immune system has evolved over millions of years to specifically defend against outside intruders.
    • But cancer isn’t like most diseases.
    • It’s not caused by an invasion of a foreign pathogen.
    • Instead, it’s a byproduct of rogue cells that destroy our bodies from within.
    • To this end, using simple molecules to defend against a barrage of mutating versions of our own cells is an exercise in futility.

    What is biologic?

    • A biologic is manufactured in a living system such as a microorganism, or plant or animal cells. Most biologics are very large, complex molecules or mixtures of molecules. Many biologics are produced using recombinant DNA technology.
    • What we probably need is a biologic or a complex protein isolated from natural sources that can mimic our immune cells.
    • Maybe this would help us in fighting cancer.

    So, Biosimilars are..

    • A biosimilar is a biological product that is developed to be similar to an already FDA-approved biologic, known as the reference product. It can be tempting to think of a biosimilar as a “generic” version of the reference product.
    • But biosimilar is not an exact duplicate of another biologic. There is a degree of natural variability in all biological products; it is not possible to generate a precise copy of a product that comes from living cells. All biologics—including reference products—show some batch-to-batch variation.

    Utility of patents in the pharmaceutical industry

    • Success in this market is deeply intertwined with the research and development process that characterizes the pharmaceutical industry.
    • It might take 5 years for you to develop a new drug and you might still need another 10 years to clinically test the product and get the necessary approvals from the regulatory agencies.
    • This is a capital intensive process and the only way to remunerate the pharma company’s contribution is to protect their investment through patent laws.
    • This way the companies can be incentivised to invest more in research and we can ensure a steady supply of new drugs that could cure the greatest maladies of modern time.

    What happens when the patent expires?

    • Once the patent expires, other companies can market their own version of the drug (copycats) if they can figure out how to synthesize it.
    • Consider — Aspirin. It’s a simple molecule drug and it’s quite easy to replicate the manufacturing process.

    Why biologics would be difficult to replicate after the patent expires

    • Biologics are harvested from living cells and are often produced using complicated manufacturing processes.
    • Most modern biologics are assembled inside vats — or bioreactors — that house genetically engineered microbes or cell cultures and can often take a whole decade of research to perfect.
    • So replicating the process isn’t exactly a cakewalk.
    • Meaning if you want to market your own version of a “biologic” once all the patents expire, you need some expertise and India’s Biocon is at the forefront of this revolution.
    • For the past few years, they’ve been building a “biosimilar pipeline” — copycats of famous biologics and they’ve been using it to fight cancer, diabetes, and arthritis.
    • And it’s not all that easy for most pharma companies to enter this market.

    Why marketing a drug in the US gather headline?

    • Because the US provides an opportunity like no other.
    • Buying drugs here is expensive and pharmaceutical companies make a killing in the process.
    • It might not necessarily bode well for consumers.
    • But it does provide a lucrative market for potential Indian manufacturers who are looking to sell their products elsewhere.

    Consider the question “What is biosimilar technology? How is it different from generic medicine? Discuss its application.”

    Conclusion

    Growing expertise of Indian pharmaceutical companies in the complex research area bodes well for the Indian pharma sector which is known otherwise for the manufacturing of generic medicines.

     

    Reference Source: https://finshots.in/archive/biocon-and-the-world-of-biosimilars/

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Skilling India – Skill India Mission,PMKVY, NSDC, etc.

    Skill University

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: UGC Act of 1956, NAAC regulations

    Mains level: Paper 3- Issues with employment and skill developement

    This article highlights the utility of skill education in India. There are several benefits in its adoption. But it would require several regulatory changes. So, what are these changes?Read to know…

    3 issues with our university education

    •  The differential lockdown outcomes for skilled and unskilled workers highlight our university system’s pre-existing conditions. These are-
    • 1) Broken employability promises.
    • 2) Poor employer connectivity.
    • 3) Poor return on private investment that frustrate parents and students.

    4 ways in which skill university differs from traditional university

    • A skill university differs from a traditional university in four ways.
    • 1) It prays to the one god of employers; for governance, faculty, curriculum, and pedagogy.
    • 2) It has four classrooms; on-campus, on-line, on-site, and on-the-job.
    • 3) It offers modularity between four qualifications; certificates, diplomas, advanced diplomas, and degrees.
    • 4) And it has four sources of financing — employers, students, CSR, and loans though employers contribute more than 95 per cent of the costs.
    • Fro example,  in the case of Gujrat government’s skill university, 97 per cent of the university’s budget comes from employers.

    5 ways in which the universities are broken globally

    • First is broken promises.
    • The world produced more graduates in the last 35 years than 700 years before.
    • Second is broken financing.
    • More than 50 per cent of $1.5 trillion in student debt was expected to default even before the COVID pandemic.
    • Indian bank education loans have high NPAs.
    • The third is broken inclusiveness.
    • The system works for privileged urban males studying full-time, but today’s students are likely to be female, poor, older, rural, or studying part-time.
    • Fourth is broken flexibility.
    • Employed learners will cross traditional learners in three years, but they need on-demand, on-the-go, always-on, rolling admissions, continuous assessment, and qualification modularity.
    • And finally is broken openness. 
    • Google knowing everything makes learning how to learn a key 21st-century skill.
    • Yet too many universities are stuck in knowing.

    Let’s look into the regulatory changes needed for the Skill University

    • Skill universities are a scalable, sustainable, and affordable vehicle to massify higher education by innovations in finance.
    • But they need regulatory change.

    Following are the 3 types of regulatory changes needed

    1. Changes needed in the  UGC Act of 1956

    •  Clause 8.2.6 needs to be rewritten to equalise four classrooms -online, on-site, on-campus, and on-job-and section 22 (3) to recognise apprenticeship linked degree programmes.
    • The UGC Teacher Regulations of 2018 need rewriting: Clause 3.3.(I),(II) to redefine the qualifications, roles and numbers of teachers required, and clause 4 to recognise industry experience as a teaching qualification.
    • The UGC Online Regulations 2018 need to be rewritten: Clause 4(2) and 7(2)(3) to allow innovation, flexibility, credit frameworks, and relevance in online curriculums.
    • Clause 7(2)(2) to allow universities to work with any technology platforms.

    2. Changes needed in NAAC IQAC regulations

    • Criteria 1 and 1.2.2 to include work-based learning and work integrated learning.
    • Criteria 1.1.3 to include life skills and proctored/evaluated internships.
    • Criteria 2 and 2.3.1 to integrate online learning with university programmes.
    • Criteria 2 and 2.4.1, 3 and 6 need to be modified to recognise teachers with industry experience, and include industry-based research.
    • Criteria 4 and 4.1.2 to include industry workplaces and online classrooms as campus extensions.
    • Criteria 5 and 5.2.1 needs to be rewritten to incorporate apprenticeships.

    3. Changes needed in Apprenticeship Act of 1961

    • Clause 2, 8, 9, 21 and 23 of The Apprenticeship Act of 1961 also needs to be modified to allow and lift the licence raj for degree-linked apprentices and recognise skills universities.

    Consider the question “Skill universities, which would go a long way in increasing the employability in India are need of the hour. In light of this, examine the issues that the skill education faces and suggest the changes our education system needs to impart the proper skill education.”

    Conclusion

    Covid crisis has amplified the problems with our education system. So, the adoption of skill universities will help us improve the skill of our youth and achieve more inclusive employment, employability and education.

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Finance Commission – Issues related to devolution of resources

    Need for fiscal decentralisation

    op-ed snap | Polity | Mains Paper 2: Constitutional Bodies,Federalism

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Finance Commission and its role

    Mains level: Paper 2- Fiscal decentralisation.

    Covid pandemic has turned the fiscal health of states from bad to worse. This article highlights the role of the Finance Commission as a neutral arbiter in the Centre-state relation in achieving the delicate balance. It has highlighted certain issues that the commission has to consider when it submits its report. So, what are those issues? Read to know…

    Disruption in fiscal consolidation and impact on Centre-state relations

    • Due to COVID, there is a  collapse in general government revenues and the consequent rise in the deficit levels.
    • It has disrupted the glide path of fiscal consolidation.
    • But it has also deepened the faultlines in Centre-state fiscal relations. 
    • The Centre is trying to claw back the fiscal space ceded to the states and assert its dominance over the country’s fiscal architecture.
    • This coupled with the fiscal constraints exposed by the pandemic have made it harder to maintain the delicate balance needed to manage the contesting claims of the Centre and the states

    Why the 15th Finance Commission report is critical for decentralisation

    • It will be ironic if the ongoing health crisis that has ended up exposing the limitations of a centralised approach, ends up reversing the trend towards fiscal decentralisation.
    • The Commission’s report will be critical on two counts:
    • First, it will determine how India’s fiscal architecture is reshaped.
    • Second, how Centre-state relations are reset as the country attempts to recover from the COVID-19 shock.

    1. Will the burden of reducing debt/gdp  fall equally on Centre and state?

    • The glide path of fiscal consolidation laid out by the FRBM review committee had envisaged bringing down general government debt to 60 per cent of GDP by 2022.
    • This is unlikely to materialise now.
    • Factoring in the additional borrowings, the debt-to-GDP ratio may well be over 80 per cent this year.
    • Thus the fiscal consolidation roadmap will have to be reworked.
    •  As per its terms of reference, the Finance Commission will lay out the new path to be followed by both Centre and states.
    • But the question is: Will the burden of debt reduction fall equally upon the Centre and states?
    • Or will the Commission allow the Centre to have greater leeway when it comes to fiscal consolidation?

    2. Will the conditional extension of borrowing limit be formalised?

    •  Recently, the Centre eased the states’ budget constraint, allowing them to borrow more this year.
    • But this extra borrowing was conditional upon states implementing reforms in line with the Centre’s priorities.
    • Despite protests, most states are likely to comply with the conditions, to varying degrees.
    • But the issue is: As the hit from the ongoing crisis spreads over multiple years, state governments may want to maintain their expansionary fiscal stance next year as well.
    • Then, will the Finance Commission, in line with its terms of reference, go along with the Centre’s stance and recommend imposing conditions on additional borrowing and formalise this arrangement?
    • It is difficult to see such an arrangement being rolled back once formalised.

    3. GST compensation cess

    • The GST council, in which the Centre effectively has a veto, is yet to clearly spell out its views on the extension of the compensation cess to offset states losses beyond the five-year period.
    • The Commission will have to weigh in on this too.
    • At this time the Centre is struggling to fulfil its promise of assuring states their GST revenues.
    • In such situation, will the Commission argue in favour of extending the compensation period, as states desire, but, perhaps, lowering the assured 14 per cent growth in compensation and linking it to nominal GDP growth?
    • As GST revenue accounts for a significant share of states’ income, how this plays out will also have a bearing on their ability to bring down their debt levels.

    4. Issue of tax devolution

    • In some sense, accepting the recommendations of the 14th Finance Commission was a fait accompli.
    • The terms of reference of the 15th Finance Commission points to the present government’s desire to claw back the fiscal space offered to the states.
    • But is clawing back fiscal space now a prudent approach?
    • A cash-strapped Centre will surely welcome greater say over the diminished resources.
    • And there a strong argument for the Centre to have far greater fiscal space than it currently enjoys.
    • This is partly because the fiscal multiplier of central government capital spending is greater than that by the states.
    • But also the nature of politics may well push in that direction.
    • Centralisation of political power may well lead to demands for centralisation of resources.
    • However, surely fiscal space can be created by a review of the Centre’s own spending programme.

    Need to relook at the Centre’s expenditure priorities

    • Over the past decades, there has been a substantial increase in the Centre’s spending on items on the state and concurrent list.
    •  This shift has occurred even as grants by the Centre to states exceed the former’s revenue deficit.
    • This, as some have pointed out, effectively means that the Centre is borrowing to transfer to states.
    • Surely, a relook at the Centre’s expenditure priorities would create greater fiscal space for it.

    What the Finance Commission can do?

    • Any attempt to shift the uneasy balance in favour of the Centre will strengthen the argument that this government’s talk of cooperative federalism serves as a useful mask to hide its centralising tendencies.
    • As a neutral arbiter of Centre-state relations, the Finance Commission should seek to maintain the delicate balance in deciding on contesting claims.
    • This may well require giveaways especially if states are to be incentivised to push through legislation on items on the state and concurrent list.
    • The fiscal stress at various levels of the government necessitates a realistic assessment of the country’s macro-economic situation, the preparation of a medium-term roadmap, as well as careful calibration of the framework that governs Centre-state relations.
    • At this critical juncture, the Finance Commission should present the broad contours of the roadmap.
    • Though it could request for another year’s extension to present its full five-year report citing the prevailing uncertainty.

    Consider the question “COVID pandemic has put the States in the dire fiscal position. What we need is more of the fiscal decentralisation now.” In light of this, along with other factors, elaborate on the role 15th Finance Commission could play in this regard.

    Conclusion

    Finance Commission has to play an important role in achieving the delicate balance in the conflicting domain of finance by addressing the concerns of both the players.

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Coronavirus – Health and Governance Issues

    Tracking the epidemic

    op-ed snap | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters,Health & Education

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: PCR Corona test

    Mains level: Paper 2- Decentralisation of governance.

    This article suggests the innovative indicators for the classification of areas. Also, the need for decentralisation of science and governance is stressed. So, how could decentralisation help? What should form the basis of indicators at the local level? Such questions are answered in this article.

    States are better placed to deliver on public health

    • They are, of course, better placed to deliver on public health and welfare. They are also generally more accountable.
    • According to the recent ICMR serological sample study conducted in mid-May, barely 1 per cent of non-metropolitan India was infected.
    • Thus, as the infection spreads and eventually stabilises, there is a lot of heavy lifting that the states must do.

    The measure of prevention and containment zone

    • After lockdown,  the message of prevention and the device called containment zones are the only ways left to manage the epidemic.
    • This includes allied activities: The demarcation of the boundary, testing, treatment, tracing and quarantine.
    • Hidden inside this box of practices are the answers to questions such as: Why is Karnataka doing better than Maharashtra in terms of mortality?

    What went wrong with colour-coded zones at district levels?

    • The older colour-coded zone label, introduced by the Centre on April 14, was at the district scale.
    • That quickly became a collective punishment with little measurable benefits.
    • One consequence was that districts were unhappy with the return of migrants simply because that could change their colour.
    • The second problem was that the red-ness of a region was equated with the need for lockdowns, since that was the only visible instrument.

    Let’s explore the ward and community level base strategy

    • Well designed metrics at the ward and community scale will help the science develop.
    • They can guide the people and the administration and allow the states to compare practices and learn from each other.

    Let us see what can be achieved within this framework: Focusing on measurement

    1. Classified should include socio-economic and demographic factors

    • Any area classification must include key socio-economic and demographic determinants, for example, the density of the area, number of people in dwellings with one room or less, or the fraction of people using community toilets.
    • As we know, much of the infection is spreading within dense clusters.
    • Such metrics would indicate vulnerable areas and the limits to reduction in contact rate through policing.
    • Here, decongestion measures such as out-migration may be required.
    • This will also serve as a guide to the future of the locality or ward.

    2. Designing indicator from data collected so far

    • An important document is the Specimen Referral Form (SRF) designed by the ICMR which must be filled to undertake the PCR Corona Test.
    •  In that, the possible patient backgrounds for recommending the test, are recorded.
    •  In that, symptomatic cases with no known contact are already a large fraction of those infected.
    • This and other fields in the SRF such as age, location and symptoms, would give us substantial insights into the dynamics and severity of the disease and the efficacy of our procedures.
    • This data should be made available immediately.

    3. Measuring the risk from migrants

    • The recent inclusion of migrants in the SRF is indeed welcome.
    • This, coupled with other quarantine data in the SRF, gives us the risk from migrants to the community at large.
    • Also welcome is the setting up of a National Migrant Information System (NMIS) on the NDMA database.
    • Hopefully, we may now know the fraction of migrants who have safely reached home and the state-wise status of those who haven’t and the reasons for the same.
    • In any case, the number of infected migrants, if suitably quarantined, must be subtracted from the total number of positive cases for that area/district, for they did not arise there and they are outside the infective load in the area.
    • This will help reduce the stigma on migrants and instead put more focus on quarantine arrangements for them.

    4. Measuring preparedness

    • Ensuring that our villages and towns are prepared to meet the disease is an important objective.
    • One metric to measure preparedness is the number of beds, doctors and ambulances per 1,000.
    • This may then be compared with the active cases in the region.
    • In fact, the adverse mortality in some areas is directly correlated with the local shortage of medical care.
    • For most districts in Maharashtra, shortages would start biting at about 200 cases per day.
    • An important addition would be village-level data on the running of the local quarantine, the functioning of the PDS and availability of drinking water.

    5. Measuring the prevalence and social distance

    • Coming to prevention, the importance of masks, distance and open ventilation is still not appreciated.
    • A simple statistical metric is to measure the prevalence of masks in an area.
    • This can be done by installing cameras in suitable locations and counting people with masks.
    • Social distance measures are also amenable to indicators.
    • For example, the fraction of buses which have installed a sheet between the driver and the passengers, or recording innovative ways of ticket vending.

    The popularity of the colour-coding based on such indicators may be effective in social mobilisation.

    Social comprehension and local solution

    • Mitigation and adaptation require social comprehension and local solutions.
    • These need scientific studies by regional institutions and partnerships with civil society.
    • Creating and supporting good metrics and providing data is an important step in that direction.
    • This will not only save lives, it will reduce fear and help re-start normal life.

    Decentralisation of science and governance

    • The epidemic has underlined that publicness and decentralisation of science and governance is the only way of creating knowledge and the professional ability to solve our own problems.
    • Without this, the post-corona Indian society would be an unhappy attempt at making the old arrangement work in a degraded reality of fearful and angry people.

    Consider the question “Corona pandemic and subsequent measures to contain it has highlighted the need for decentralisation of governance. Elaborate.”

    Conclusion

    We must learn to live with the virus, but we must also find joy. Only through constant engagement and adaptation will we overcome fear and forge a new society that will sustain both life and happiness.

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

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

    MOOC can’t be the substitute for learning in the classroom

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: MOOC

    Mains level: Paper 2- Adoption of MOOC and issues with it.

    Massive open online courses (MOOC) could not be panacea for the problems education faces. It can’t be the replacement for the learning in the classrooms. This article highlights the issues with adoption of MOOC and why it can’t be the replacement for learning in the classrooms.

    UGC circular to adopt MOOC

    • In the wake of the COVID-19 pandemic, the University Grants Commission had issued a circular to universities.
    • Through this circular, it encouraged them to adopt massive open online courses (MOOCs) offered on its SWAYAM platform for credit transfers in the coming semesters.
    • But the move poses a great danger.
    • But why it’s danger? Because it is also being seen as an instrument to achieve the country’s target Gross Enrolment Ratio (GER) in higher education.
    • GER in higher education is envisioned to be 30% by 2021; it was 25.8% in 2017–18.

    Issues with MOOC and what classrooms offers

    • MOOC-based e-learning platforms tend to reinforce a top-down teacher-to-student directionality of learning.
    • This misses the point that teaching and learning are skills that are always in the making.
    • The teacher is after all “an intellectual midwife” who facilitates in the birth of students’ ideas and insights through engaging in critical dialogue.
    • In a conducive classroom environment, this role is often switched and the student plays intellectual midwife to the teacher’s ideas.
    • Moving to a MOOC-based degree system would rob young teachers and students of these essential lessons in teaching and learning from each other.
    • Policymakers behind the SWAYAM platform have left out courses in engineering, medicine, dental, pharmacy, nursing, architecture, agriculture, and physiotherapy on the grounds that they involve laboratory and practical work.
    • This move makes sense.
    • But it seems to suggest that the pure sciences, the arts, the social sciences, and humanities curricula are largely lecture- and theory-based, and, therefore, readily adaptable to the online platform.
    • Nothing can be farther from such a misconception.
    • Implicit in every curriculum is the tacit assumption that the classroom is a laboratory for hands-on testing of ideas, opinions, interpretations, and counterarguments.
    • A diverse and inclusive classroom is the best litmus test for any theory or insight.
    • Multidisciplinarity happens more through serendipity — when learners across disciplines bump into each other and engage in conversations.
    • Classroom and campus spaces offer the potential for solidarity in the face of discrimination, social anxiety, and stage fear, paving the way for a proliferation of voluntary associations that lie outside the realm of family, economy, and state.
    • In the absence of this physical space, teaching and learning would give way to mere content and its consumption.
    • Without a shared space to discuss and contest ideas, learning dilutes to just gathering more information.
    • This could also dilute norms of evaluation, whereby a “good lecture” might mean merely a lecture which “streams seamlessly, without buffering”. 

    Online mode: add more value to the classroom education

    • One could think of greater value-sensitive and socially just architectures and technologies that further foster classroom engagement.
    • It also makes it accessible for students of various disabilities and challenges, thereby adding more value to the existing meaning of education.
    • But public education modelled on social distancing is a functional reduction and dilution of the meaning of education.
    • It could add value only as an addendum to the classroom. 

    Consider the question “Examine the issues with wide adoption of the MOOC to address the problems education  sector in India faces.”

    Conclusion

    Such platforms must be seen only as stop-gap variants that help us get by under lockdown situations and complement classroom lectures.

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Coronavirus – Health and Governance Issues

    Migrants and COVID

    op-ed snap | Governance | Mains Paper 1: Population & Associated Issues,Urbanization, Their Problems & Remedies

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Data on migrants in India; Organizations which study migration and reports

    Mains level: The issues faced by migrants in India and associated solutions

    In this Article, we highlight some facts about migration in India, summarize key relief measures announced by the government and directives issued by the Supreme Court for the migrant population in relation to the lockdown.
    ———————————————————————————
    Reference source: https://www.prsindia.org/theprsblog/migration-india-and-impact-lockdown-migrants

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Insolvency and Bankruptcy Code

    Faults in section inserted for the suspension of IBC amid pandemic

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: IBC

    Mains level: Paper 3- Problems with IBC

    Following the lockdown, the government announced the suspension of some provision of IBC to soften the blow of economic crisis. Section 10A was inserted to suspend the provision. But it giver rise to other questions. What are these questions? Read the article to know…

    What changes were made?

    • In mid-May, the Finance Minister announced that the government was planning to bring in an ordinance to suspend provisions enabling filing of fresh insolvency cases for a period of one year..
    • Finally, on June 5, the government promulgated an ordinance which inserted Section 10A in the IBC.
    • The government said the ordinance was promulgated because the lockdown has caused business disruptions which may lead to default on debts pushing such companies into insolvency.
    • Therefore, it felt that suspending Sections 7, 9 and 10 of the IBC would be the right course of action.

    What are the issues with section 10A?

    • Section 10A provides that “no application for initiation of corporate insolvency resolution process of a corporate debtor shall be filed, for any default arising on or after 25th March, 2020 for a period of six months or such further period, not exceeding one year from this period, as may be notified in this behalf”.
    • This means that these provisions shall remain suspended from March 25 till September 25, unless extended for another six months, which would extend the suspension up till March 25, 2021.
    • However, the proviso to the section states that no application for insolvency resolution shall ever be filed against a corporate debtor for any default occurring during the suspension period.
    • While the main Section 10A suspends such applications for a limited period, the proviso enlarges the scope to provide complete amnesty under the IBC for any default occurring during such period.
    • The role of a proviso in a statute is to restrict the application of the main provision under exceptional circumstances.
    • However, the proviso here expands the substantive provision in the main section.
    • Further, if the main provision is unclear, a proviso may be given to explain its true meaning.
    • In this case the main provision appears clear, only to be obfuscated by the proviso.
    • The proviso therefore does not appear to be legally tenable.
    • As creditors can still approach courts, and as banks/FIs can still approach Debt Recovery Tribunals, the protection given by this proviso seems illusory.
    • But Section 10A also suspends provisions of Section 10 of the IBC which enables voluntary insolvency resolution.
    • This is difficult to understand as such voluntary insolvency resolution should have been made easier for companies facing distress.

    Painting all defaults with the same brush

    • The ordinance appears to consider every default occurring during the suspension period to be a consequence of the pandemic.
    • There could be cases where defaults were imminent due to other reasons, but which will now still enjoy this protection.
    • The ordinance should have protected only such defaults which may occur as a direct consequence of the pandemic or the lockdown and should have left this determination to the National Company Law Tribunal.
    • Also, a company defaulting on its payment obligations on March 24 (a day before the lockdown started) would not be provided any relief under the IBC as compared to a company defaulting on or immediately after March 25 due to similar reasons.
    • This makes the suspension, in the absence of definition of a COVID-19 default, prima facie arbitrary.

    Issue with increasing the default amount limit

    • Earlier, the government increased the minimum default amount to trigger corporate insolvency resolution from ₹1 lakh to ₹1 crore.
    • This was purportedly done to protect MSMEs from insolvency petitions.
    • However, this also operates against such MSMEs because they will now be forced to approach civil courts to recover undisputed debts below ₹1 crore.
    • The suspension of these provisions would now impact even claims above ₹1 crore for at least six months to a year.

    Conclusion

    The ordinance has opened itself up to a legal challenge on grounds of arbitrariness and untenability of the proviso due to the flaw in its drafting. It is unfathomable how these flaws arose despite the government having ample time to think this through.

    B2BASICS:

     Insolvency and Bankruptcy Code, 2015

    The code contains a clear speedy mechanism for early identification of financial distress and initiates revival/re-organisation of the company if it is viable.

    Timeline

    • The bill proposes a timeline of 180 days to deal with the applications for insolvency resolution with an option of extending it by 90 days for exceptional cases.

    Insolvency Resolution Plan

    • The insolvency resolution plan has to be approved by 75% of the creditors. If the plan is approved, then the adjudicating authority will give its sanction. In case of rejection of insolvency resolution plan, the adjudicating authority will pass an order for liquidation.

    Insolvency Professionals (IPs) & Insolvency Professional Agencies (IPAs)

    • The resolution processes will be conducted by licensed insolvency professionals (IPs).  These IPs will be members of insolvency professional agencies (IPAs).  IPAs will also furnish performance bonds equal to the assets of a company under insolvency resolution.

    Information Utilities

    • Information utilities (IUs) will be established to collect, collate and disseminate financial information to facilitate insolvency resolution.

    Bankruptcy and Insolvency Adjudicator

    • The National Company Law Tribunal (NCLT) will adjudicate insolvency resolution for companies.  The Debt Recovery Tribunal (DRT) will adjudicate insolvency resolution for individuals.
    • The Debt Recovery Tribunal (DRT), which has jurisdiction over individuals and unlimited liability partnership firms. Appeals from the order of DRT shall lie to the Debt Recovery Appellate Tribunal (DRAT).

    Insolvency regulators

    • The Insolvency and Bankruptcy Board of India will be set up to regulate functioning of IPs, IPAs and IUs.

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • G20 : Economic Cooperation ahead

    Expanding the G7

    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: G7 countries

    Mains level: Paper 2- Should India join expanded G7 if invited to join as a member?

    There has been a call for expansion of G7 by the U.S. President. Against this backdrop, this article examines the historical background in which the group emerged. But a lot has changed since. So, it would be appropriate for G7 to adjust to the new reality. But what would be the focus of a new mechanism? What are the areas in which India would be interested? All such questions are answered in this article.

    Call for expansion of G7 and China’s objection

    • Recently, the U.S. President proposed the expansion of G7 to G10 or G11,  with the inclusion of India, South Korea, Australia and possibly Russia.
    • Elaborating this logic, the White House Director of Strategic Communications said the U.S. President wanted to include other countries, including the Five Eyes countries.
    • Five Eye is an intelligence alliance comprising Australia, Canada, New Zealand, the United Kingdom and the United States.
    • The U.S. also stressed said the expanded group should talk about the future of China.
    • A Chinese Ministry of Foreign Affairs official immediately reacted, labelling it as “seeking a clique targeting China”.

    Should India care about China’s objection if invited to join?

    • China’s objection to an expanded G7 is no reason for India to stay away from it, if invited to join.
    • India has attended several G7 summits earlier too, as a special invitee for its outreach sessions.
    • India’s Prime Minister was guest invited to Biarritz, France to the G7 summit last year, along with other heads of government.

    The historical background of G7

    • The G7 emerged as a restricted club of the rich democracies in the early 1970s.
    • The quadrupling of oil prices just after the 1973 Arab-Israeli War, when  OPEC imposed an embargo against Canada, Japan, the Netherlands, and the United States, shocked their economies.
    • Although the French were spared the embargo, the chill winds of the OPEC action reverberated around the world.
    • So, French President invited the Finance Ministers of five of the most developed members of the Organisation for Economic Cooperation and Development, the United States, Germany, Japan, Italy, and the United Kingdom, for an informal discussion on global issues.
    • This transformed into a G7 Summit of the heads of government from the following year with the inclusion of Canada in 1976.
    • And the European Commission/Community (later Union) joined as a non-enumerated member, a year later.
    • On the initiative of U.S. President Bill Clinton and British Prime Minister Tony Blair, the G7 became the G8, with the Russian Federation joining the club in 1998.
    • This ended with Russia’s expulsion following the annexation of Crimea in 2014.

    Declining share G7 and rising of E7 in world GDP

    • When constituted, the G7 countries accounted for close to two-thirds of global GDP.
    • According to the 2017 report of the accountancy firm, PwC, “The World in 2050”, they now account for less than a third of global GDP on a purchasing power parity (PPP) basis.
    • And less than half on market exchange rates (MER) basis.
    • The seven largest emerging economies (E7, or “Emerging 7”), comprising Brazil, China, India, Indonesia, Mexico, Russia and Turkey, account for over a third of global GDP on purchasing power parity (PPP) terms.
    • And over a quarter on MER basis.

    Predictions for India

    • India’s economy is already the third largest in the world in PPP terms, even if way behind that of the U.S. and China.
    • By 2050, the PwC Report predicts, six of the seven of the world’s best performing economies will be China, India, the United States, Indonesia, Brazil, and Russia.
    • Two other E7 countries, Mexico and Turkey, also improve their position.
    • It projects that India’s GDP will increase to $17 trillion in 2030 and $42 trillion in 2050 in PPP terms, in second place after China, just ahead of the United States.
    • This is predicated on India overcoming the challenge of COVID-19, sustaining its reform process and ensuring adequate investments in infrastructure, institutions, governance, education and health.

    Limitations of G7

    • The success or otherwise of multilateral institutions are judged by the standard of whether or not they have successfully addressed the core global or regional challenges of the time.
    • The G7 failed to head off the economic downturn of 2007-08.
    • This failure led to the rise of the G20.
    • In the short span of its existence, the G20 has provided a degree of confidence, by promoting open markets, and stimulus, preventing a collapse of the global financial system.
    • The G7 also failed to address the contemporary issues, such as the COVID-19 pandemic, climate change, the challenge of the Daesh, and the crisis of state collapse in West Asia.
    • It had announced its members would phase out all fossil fuels and subsidies, but has not so far announced any plan of action to do so.
    • And their coal fired plants emit “twice more CO2 than those of the entire African continent”.

    Turmoil in West Asia and failure of Europe to act

    • Three of the G7 countries, France, Germany, and the U.K., were among the top 10 countries contributing volunteers to the ISIS.
    • West Asia is in a greater state of turmoil than at any point of time since the fall of the Ottoman Empire.
    • This turmoil has led to a migrants crisis.
    • Migrant crisis persuaded many countries in Europe to renege on their western liberal values, making the Mediterranean Sea a death trap for people fleeing against fear of persecution and threat to their lives.

    So, to deal with the unprecedented challenge, we need new institution

    • The global economy has stalled and COVID-19 will inevitably create widespread distress.
    • Nations need dexterity and resilience to cope with the current flux, as also a revival of multilateralism, for they have been seeking national solutions for problems that are unresolvable internally.
    • Existing international institutions have proven themselves unequal to these tasks.
    • A new mechanism might help in attenuating them.
    • It would be ideal to include in it the seven future leading economies, plus Germany, Japan, the U.K., France, Mexico, Turkey, South Korea, and Australia.
    •  The 2005 ad hoc experiment by Prime Minister Tony Blair in bringing together the G7 and the BRICS countries was a one-off.

    What should be the focus of this new institution?

    • A new international mechanism will have value only if it focuses on key global issues.
    • A related aspect is how to push for observing international law and preventing the retreat from liberal values on which public goods are predicated.
    • Global public health and the revival of growth and trade in a sustainable way -that also reduces the inequalities among and within nations- would pose a huge challenge.

    What should be India’s priority in new institution?

    • India would be vitally interested in three: 1) international trade, 2) climate change, 3) the COVID-19 crisis.
    • Second order priorities for India would be cross-cutting issues such as counter-terrorism and counter-proliferation.
    • An immediate concern is to ensure effective implementation of the 1975 Biological Weapons Convention .
    • And the prevention of any possible cheating by its state parties by the possible creation of new microorganisms or viruses by using recombinant technologies.
    • On regional issues, establishing a modus vivendi with Iran would be important to ensure that it does not acquire nuclear weapons and is able to contribute to peace and stability in Afghanistan, the Gulf and West Asia.
    • The end state in Afghanistan would also be of interest to India.
    • And also the reduction of tensions in the Korean Peninsula and the South China Sea.

    Consider the question “There has been a clamour for expanding G7 and India is being considered as one of the prospective candidates in the expanded group. In light of this examine the challenges and opportunities for India if it gets entry into the expanded group.”

    Conclusion

    The decaying influence in geopolitics and declining share in the world GDP calls for the formation of the new institution. IF and when that institution comes into being India should try to address its immediate concern with the help of new mechanism based on values.

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

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

    Will leaders act on the climate crisis as they did Covid-19?

    op-ed snap | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Carbon Dioxide concentration in atmosphere

    Mains level: Paper 3- Climate change

    In the context of climate change, the rising concentration of carbon dioxide and rising global temperature are inextricably linked with each other. This article elaborates on two interlinked and rising curves-CO2 and temperature. The article is concluded on the positive note that leaders would act on climate change with same urgency as Covid.

    The upward journey of two curves

    • Two interrelated curves began their upward trend two centuries ago with the advent of the industrial age.
    • The first curve was the atmospheric concentration of carbon dioxide or, more generally, all greenhouse gases, GHGs.
    • And the second was the average global temperature curve.

    CO2 concentration at 407 ppm: But did we get here?

    • Actually, the CO2 curve began its upward march about 18,000 years ago when it was a little under 200 parts per million (ppm).
    • And earth was much colder back then.
    • By the time it reached 270 ppm about 11,500 years ago, the warmer conditions accompanying this curve made it possible for the emergence of agriculture.
    • Over the past million years, CO2 levels never exceeded 280-300 ppm.
    • They always went back to 200 ppm before rising again in a cyclical fashion.
    • They remained steady at close to 280 ppm for 10,000 years until, beginning in the mid-19th century.
    • They began to rise again as humans burnt coal and oil to fuel the industrial revolution, and burnt forests to expand agriculture and settlements.
    • From a mere 0.2 billion tonnes of CO2 emissions in 1850, annual emissions increased to 36 billion tonnes by 2018.
    • If all this CO2 had accumulated in the atmosphere, we can say that human life would have been altered beyond recognition.
    • Nature has been rather kind to us so far — about one-half of all CO2 emissions have been sanitised from the atmosphere, equally by growing vegetation on land and by absorption in the oceans.
    • Thus, the levels of CO2 in the atmosphere reached 407 ppm in 2018, a level last experienced by earth some three million years ago.

    Global temperature up by 1 degree Celcius

    •  From 1850 onwards, for over a century, the global temperature showed a slight warming trend.
    • But there was nothing suggestive of anything serious.
    • From 1975 onwards, the temperature graph has shown a distinct, upward trend.
    • By 2015, the globe had heated by a full degree Celsius relative to a hundred years previously.
    • Climate modellers unequivocally project that under the current trends of emissions the globe will heat up by 4˚C by the end of the century.
    • he 2003 European heat wave killed over 70,000 people.
    • The years 2015-19 have globally been the warmest years on record.
    • Leave aside the Amazon fire of 2019, the bush fires of 2019-20 in Australia were unprecedented in their scale and devastation.
    • March 2020 has been the second warmest March on record.

    But climate change is not just about temperature rise

    • Climate change involves not just a change in temperature but every other component of weather, including rainfall, humidity and wind speed.
    • Indirect effects follow, such as a rise in sea levels from melting glaciers.
    • Globally there have been several extreme weather events such as hurricanes, heat waves or droughts.
    • While no single event can be directly attributed to climate change, the collective trends are consistent with climate change predictions.

    Warning for India

    • The Climate Impact Lab at the University of Chicago put out a warning for India last year.
    • It says that if global CO2 emissions continue to gallop at the present rate, average summer temperatures would rise by 4˚C in most States.
    • Extremely hot days (days above 35˚C), which were only five days in 2010, would increase to 15 days by 2050 and to 42 days by 2100 on average across all districts.
    • A more moderate emissions scenario, as a result of countries largely fulfilling their commitments under the Paris Agreement, would keep average global temperature rise below 2˚C compared to pre-industrial levels.

    Let’s look into the financial dimension of tackling climate change

    • The most common excuse is that the world cannot afford to curb GHG emissions for fear of wrecking the economy.
    • An article in Nature in 2019 highlighted the financial dimensions of tackling the looming climate crisis.
    • Apparently, the wealthy nations are spending over $500 billion each year internally on projects aimed at reducing emissions.
    • The Intergovernmental Panel on Climate Change, however, estimates that a sustained annual investment of $2.4 trillion in more efficient energy systems is needed until 2035 in order to keep warming below the more ambitious 1.5˚C relative to pre-industrial levels.
    • To put this in perspective, that is about 2.5% of the global GDP.

    What happened to the $100 billion per year aid to poor countries?

    • Some of the wrangling over money relates to the amounts that the wealthy nations, agreed to pay other countries to cope with climate change.
    • Underlying idea was that these countries have caused most of the GHGs resulting in global warming,
    • At the UN Climate Conference in 2009, the richest nations had pledged to provide $100 billion in aid each year by 2020 to the poorer countries for climate change mitigation and adaptation.
    • In 2017, for which data are available, only $71 billion had been provided.
    • And most of the money was spent on mitigation and less than 20% towards climate adaptation.
    • Such numbers had been challenged prior to the 2015 Paris Summit by many countries, including India.
    • It was challenged because much of the so-called aid provided did not come out of dedicated climate funds but, rather, development funds or simply loans which had to be repaid.
    • It thus seems unlikely that the rich countries will deliver $100 billion in tangible climate finance during 2020.

    Time to act

    • COVID-19 has unwittingly given humanity a brief respite from the climate change curve.
    • Commentators are already talking about a paradigm shift in the structure and functioning of societies once the pandemic subsides.
    • This is also a make-or-break moment for the climate trajectory which has to be flattened within a few years if we are to avoid dangerous climate change.
    • Nature’s kindness is not expected to last beyond a 2˚C rise in temperature as the carbon sequestered into vegetation will be thrown back into the atmosphere.
    • Also remember that earth has already warmed by 1˚C and we really have only another 1˚C as a safety margin or 0.5˚C if we are concerned about island nations.

    Consider the mains question asked by the UPSC in 2017-‘Climate change’ is a global problem. How India will be affected by climate change? How Himalayan and coastal states of India will be affected by climate change?

    Conclusion

    There is no substitute to reducing GHG emissions. Technologists, economists and social scientists must plan for a sustainable planet based on the principles of equity and climate justice within and across nations. It is the responsibility of leaders to alter their mindset and act on the looming climate crisis with the same alacrity they have shown on COVID-19.

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Foreign Policy Watch: India-China

    Pay attention to their objectives in dealing with China and Pakistan

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Article 370

    Mains level: Paper 2- China-Pakistans overlapping interests in Kashmir and diverging objectives.

    While their interests overlap, Pakistan and China diverge when it comes to their objective in Kashmir. Both want to keep the pressure on India to avoid it from changing the status quo. Extending this line of argument, the author in this article suggest that India should separate the policy response to China from Pakistan, as they differ in their objectives.

    Coordinated efforts to corner India?

    • Latest news on the Ladakh front suggests that Chinese and Indian forces have begun to disengage in select areas.
    • But this does not detract from the reality that in the past few weeks Beijing and Islamabad are making coordinated efforts to challenge India’s presence in the Kashmir-Ladakh region.
    • There is stepped-up activity on Pakistan’s part to infiltrate terrorists into the Valley.
    • China has undertaken provocative measures on the Ladakh front to assert control over disputed areas around the Line of Actual Control (LAC).

    Let’s see how Pakistan and China’s interests overlap

    • In Pakistan’s case the intensification in its terrorist activities is related in part to the dilution of Article 370. 
    • Dilution of Article 370 helps India de-link Ladakh from the Kashmir problem.
    • For China, the division of Ladakh from Jammu and Kashmir allows India a freer hand in contesting China’s claims in the region.
    • Increasing road-building activity on India’s part close to the LAC augments this perception.
    • In addition, Ladakh borders China’s most restive provinces of Xinjiang and Tibet.
    • Ladakh is also contiguous to Pakistan-occupied Kashmir (PoK), Gilgit and Baltistan, where the Chinese have invested hugely under the China-Pakistan Economic Corridor (CPEC) project.
    • External Affairs Minister S. Jaishankar’s remark last year that India expects to have “physical jurisdiction over (POK) one day” has alarmed Beijing which sees any such Indian move as threatening the CPEC project.
    • These factors demonstrate the overlapping interests that Beijing and Islamabad have regarding India in this region.

    The above factors explain why Pakistan and China would want India to be so preoccupied with taking defensive measures in Kashmir and Ladakh as to have little time and energy left to attempt to alter the status quo in POK or in Aksai Chin.

    But there are major differences in Pakistani and Chinese objectives regarding India

    • These differences are related to their divergent perceptions of their disputes and their different force equations with India.
    • For China, Ladakh is primarily a territorial dispute with strategic ramifications.
    • China also believes it is superior to the Indian militarily and, therefore, can afford to push India around within limits as it has been attempting to do in the recent confrontation.
    • For Pakistan, its territorial claim on Kashmir is based on an immutable ideological conviction that it is the unfinished business of partition and as a Muslim-majority state is destined to become a part of Pakistan.
    • Islamabad also realises that it is the weaker power in conventional terms and therefore has to use unconventional means, primarily terrorist infiltration, to achieve its objective of changing the status quo in Kashmir.
    • China is a satiated power in Ladakh having occupied Aksai Chin and wants to keep up the pressure on New Delhi to prevent the latter from trying to change the situation on the ground.

    Way forward-Pay attention to objectives while negotiating

    • China’s primary concern with regard to Kashmir is to prevent any Indian move from threatening the CPEC project.
    • It does not challenge the status quo in Kashmir.
    • Pakistan, on the other hand, is committed to changing the status quo in Kashmir at all cost.
    • It has been trying to do so since Partition not only through clandestine infiltration but also by engaging in conventional warfare.
    • Therefore, while it is possible to negotiate the territorial dispute with China on a give-and-take basis.
    • Doing the same is not possible in the case of Pakistan which considers Kashmir a zero-sum game.
    • India should, therefore, distinguish the different objectives on the part of Beijing and Islamabad and tailor its responses accordingly without conflating the two threats to its security.

    Consider the question “Policy response of India in dealing with Pakistan and China should consider differences in their objectives in relation to Kashmir. And clubbing them together just because of their tactical overlap should be avoided. Elaborate.”

    Conclusion

    Lumping the twin threats posed by Pakistan and China together because of a tactical overlap between them makes it difficult to choose policy options rationally. So, the policy response must understand the difference in their objectives and avoid clubbing them together.

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now