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  • Women Safety Issues – Marital Rape, Domestic Violence, Swadhar, Nirbhaya Fund, etc.

    [op-ed of the day] The many problems of delayed data

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much.

    Mains level: Paper 2- Delays in NCRB data release, Increasing crime reporting, role played by the media.

    Context

    Delay in releasing the crime data by NCRB reduces the utility of the data for the policymakers.

    Formidable challenges faced by NCRB

    • The First-Casual approach of the States: The first is the lackadaisical approach of some of the States in providing data.
      • The NCRB merely assembles the figures it receives from the State police forces and does not tinker with them to reach a predetermined conclusion.
      • States’ irregularity: Data collection hits a roadblock when a few States either don’t bother to send the figures or send them much after the volume is published.
    • The second-Utility of the released data: The second problem is that questions are raised over the utility of the data.
      • There was a two-year delay in releasing the crime statistics for 2017.
      • Just two months after it was published, the ‘Crime in India’ (CII) 2018 report was released.
      • Reduced utility from a policy point of view: These numbers are only relevant to researchers, not policymakers as it does not carry us far in understanding what is happening on the ground.
      • A fossilised CII is meaningless.
    • The third- Third problem lies with the police and the public.
      • The Reluctance of the police to register the complaint: The police are notorious the world over for not registering complaints.
      • They do this so that they can present a false picture of a decline in crime.
      • The reluctance of the public: The public is also not very enthusiastic about reporting crimes to the police.
      • Catch-22 situation: Public is fearful of being harassed at the police station or do not believe that the police are capable of solving the crime. This is a Catch-22 situation.

    Crimes difficult to bury

    • The positive role played by the media: However, the problem has declined slightly over the years due to public awareness and intense media scrutiny.
      • There are a few classes of offences which are becoming increasingly difficult to bury. This is attributable to the extraordinary interest evinced by the media in reporting crime.
    • The crimes which are difficult to bury: The following cases of crime are becoming difficult to bury.
      • Homicide: The first category of crimes that is difficult to bury is of homicides.
      • Matter of distress: India reports an average of 30,000 murders every year (29,017 were registered in 2018). Every murder is a matter of distress.
      • Nevertheless, the stabilisation of the figure at 30,000 is a mild assurance.
      • The corresponding figure for the period in the U.S. was around 16,200.
      • Need to study the US decline: Though the U.S. has about one-third of India’s population, the reported decline in murders in many major U.S cities is worth studying.
      • Crime against women: The common man in India does not lag behind others in reacting strongly to attacks on hapless women and men.
      • The growth of the visual media possibly explains this welcome feature in Indian society.
      • The hope of a decrease in crime: The nationwide outrage over the gang-rape in Delhi and the subsequent tightening of laws on sexual crimes generated the hope that attacks against women would decrease.

    The issue of under-reporting

    • Under-reporting of crime in rural areas: In 2018, there were 33,356 rapes, a higher number than the previous year.
      • But these figures do not fully reflect realities on the ground.
      • There is still the unverifiable suspicion that while in urban areas sexual violence cases are reasonably well-reported, the story is different in rural India.
      • The role played by money and caste: Money power and caste oppression are believed to play a significant role in under-reporting.
      • What is more significant is that a substantial number of such crimes are committed by the ‘friends’ and families of victims.

    Conclusion

    • To be fair to the NCRB, we must concede that the organisation has more than justified its existence. The CII is used extensively by researchers.
    • Need for educating the people on realities of crime and its reporting: There is scope for more dynamism on the NCRB’s part, especially in the area of educating the public on the realities of crime and its reporting.
    • Greater pressure on the States to stick to a schedule: The NCRB will also have to be conscious of the expectation that it should bring greater pressure on States to make them stick to schedules and look upon this responsibility as a sacred national duty.

     

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  • WTO and India

     [op-ed snap] How to protect trade in a tug of war between nations

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much.

    Mains level: Paper 3- Cause of the emergence of trade disputes and how can emerging economies negotiate the deals

    Context

    Developing countries have argued for decades that the rules governing international trade are profoundly unfair. But similar complaints are now emanating from the developed countries that established most of those rules.

    Why are developed countries complaining now?

    • Competition: A simple but inadequate explanation is “competition.”
      • Turning tide: In the 1960s and 1970s, industrialized countries focused on opening foreign markets for their goods and set the rules accordingly.
      • Since then, the tide has turned.
    • Left behind communities in developed countries
      • Cheap labour-an advantage: One reason why emerging-market producers are competitive is that they pay workers less.
      • Job creation in services by developed countries: To replace lost manufacturing jobs, developed economies have been creating jobs in services.
      • Not everyone has moved to the service sector job: Unfortunately, not everyone in developed countries has been able to move to good service jobs.
      • Efforts by the left-behind bring back the manufacturing job: The left-behind former manufacturing communities have a voice in the capital city now, and it wants to bring back manufacturing.
      • Yet this explanation, too, is incomplete. The ongoing US-China trade war is not about manufacturing, it is about services.
    • Services a reason behind US-China dispute: Much of the US dispute with China is not about manufacturing. It is about services.
    • Emerging market competition increasing in services: Although eight of the top ten service exporters are developed countries, emerging-market competition is increasing.
      • New services related rules: This increased competition from emerging markets is prompting a major push by advanced-economy firms to enact new service-related trade rules.
      • An opportunity to protect the developed country producers: The new rules will ensure continued open borders for services. But it will also be an opportunity to protect the advantages of dominant developed-country producers.

    Trade disputes- The combined effects of the two factors

    • There are no easy trade deals anymore.
      • Two conflicting factors: In sum, two factors have increased the uneasiness over international trade and investment arrangements.
      • First-Left behind community: Ordinary people in left-behind communities in developed countries are no longer willing to accept existing arrangements.
      • They want to be heard, and they want their interests protected
      • Second-emerging economy demanding access to service sector: At the same time, emerging-economy elites want a share of the global market for services and are no longer willing to cede ground there. So, there is no easy trade deal anymore.
    • Trade disputes-exercise in power politics
      • High tariffs and ram tactics: Threats of sky-high tariffs to close off markets, for example, and battering-ram tactics to force “fairer” rules on the weaker party.
      • The important difference from the past: One important difference is that the public in emerging markets is more democratically engaged than in the past.
      • Short timed victory: Any success that rich countries have in setting onerous rules for others today could prove pyrrhic.
      • No consensus on the rules: For one thing, it is unclear that there is a consensus on those rules even within developed countries. For example- rules to regulate social media.

    Way forward

    How should developed countries respond to domestic pressures to make trade fairer?

    • Demand lower tariffs from developed countries: For starters, it is reasonable to demand that developing countries lower tariffs steadily to an internationally acceptable norm.
    • Challenge the discriminatory barriers: Discriminatory non-tariff barriers or subsidies that favour their producers excessively should be challenged at the World Trade Organization.
    • Go for less intrusive treaties: To go much beyond these measures—to attempt to impose one’s preferences on unions, regulation of online platforms, and duration of patents on other countries—will further undermine the consensus for trade.
      • Less intrusive trade agreements today may do more for the trade tomorrow

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

    [op-ed snap] Examining the slowdown

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much.

    Mains level: Paper 3- Reasons for the slowdown in the Indian economy, declining household saving, consumption driven growth.

    Context

    Setting aside the gloomy projections based on short-term economic trends, the long-term and comparative evidence reveal interesting trends about the health of the Indian economy.

    Performance of the Indian economy after 1991

    • Higher growth plateau reached after 1991: After the 1991 economic reforms, the Indian economy reached a higher growth plateau of 7% compared to a prior rate of 3. 85%.
      • The high growth rate during 2003-2011: India witnessed a high growth momentum during 2003-04 and 2010-11 with a period average of 8.45% (GDP with base 2004-05) or 7% (base 2011-12).
      • Ups and downs after 2012: The momentum lost steam in 2011-12 and 2012-13, gradually picked up again gradually to reach the 8% mark in 2015-16, and then started falling consistently to reach 6.63% in 2018-19.
      • Structural dimension? This trend suggests that India’s current growth challenge has a structural dimension as it began in 2011-12.
    • Comparison with China and the world
      • Average at 7.07% after 2011-12: Despite these fluctuations from 2011-12, on average, India clocked a growth rate of  7.07% from 2011 to 2019, a decent figure compared to China’s and the world’s economic growth rates.
      • Whereas like India, the growth of the world economy was fluctuating since 2011, China’s growth declined consistently from 10.64% in 2010 to 6.60% in 2018.

    Why couldn’t India’s growth momentum be sustained after 2010-11?

    • Analysis of five variables: To answer the above question, an in-depth analysis of trends in five key macroeconomic variables was done for two different periods: 2003-04 to 2010-11 and 2011-12 to 2018-19.
      • Consumption.
      • Investment.
      • Savings.
      • Exports.
      • Net foreign direct investment (NFDI) inflows.
    • What emerged from the analysis: The results reveal that compared to 2003-2011, investment and savings rates and exports-GDP ratio declined in the 2011-2019 period.
      • How much the investment declined? The investment rate declined from 34.31% of GDP in 2011-12 to 29.30% in 2018-19.
      • Household vs. corporate sector decline: The investment decline was caused mainly by the household sector and to some extent by the public sector, but not the corporate sector.
      • The decline in investment compensated by NFDI: The slump in the domestic investment rate in the 2011-2019 period was compensated by increased NFDI inflows.
      • On average, NFDI inflow was 1.31% of GDP during 2011-2019 compared to 0.89% during 2003-2011.

    Why tax-cut not help the economy

    • The justified policy of reviving the housing sector: The decline in household sector investment justifies the package of measures introduced by the Central government to revive the housing sector.
    • Why corporate tax cut won’t help much? The questionable policy, however, is the steep cut in the corporate income tax rate from 30% to 22%, aimed at boosting private investment.
      • Given that the corporate investment rate has not eroded severely during 2011-2019, the tax cut would help economic revival.
      • Lost opportunity to spur rural consumption: A part of the largesse offered to Corporate India could have been used to spur rural consumption.

    What the decline in saving rate mean?

    • Importance of savings: The savings rate declined almost consistently from 27% of GDP to 30.51% between 2011 and 2018.
      • This was also caused by a significant fall in the savings of the household sector in financial assets. Corporate savings did not fall.
      • Why the fall in household financial savings needs to be increased? The fall in household financial savings is alarming and needs to be arrested.
      • Savings are required to meet the requirements of those who want to borrow for their investment needs.
      • Saving-investment relation: Lower household savings imply lesser funds available in the domestic market for investment spending.
    • Economic growth powered by consumption: The decline in household savings has pushed up private final consumption expenditure consistently
      • Private final consumption rose from 56.21% of GDP in 2011-12 to 59.39% in 2018-19.
      • Consumption driven economic growth in 2011-19: The increase in private consumption suggests that economic growth during 2011-2019 was powered by consumption, not investment.
      • Investment driven growth during 2003-2011: In contrast, during 2003-2011, growth was powered by investments.
    • So, declining saving rate means a slowdown in the economy may not be due to structural issues.
      • Re-examination of popular view: Thus, the popular view that economic slowdown was caused due to a slowdown in consumption demand needs to be re-examined.
      • There is no concrete evidence to suggest that the economy is facing a structural consumption slowdown.

    Export-GDP ratio decline and what it means

    • Export-GDP decline from 24.54% to 19.74%: India’s exports-GDP ratio declined from 24.54% to 19.74% during 2011-2019.
    • A trend similar to the rest of the world: The decline started from 2014-15, coinciding with a similar trend in the world export-GDP ratio.
      • However, the drop in India’s exports was significantly larger than the world, a cause for concern.
      • The exports- and NFDI-GDP ratio has deteriorated sharply and consistently in China after 2006.
    • Indian economy doing better than China: Sharp decline in China’s export-GDP and NFDI-GDP, together with the consistent fall in China’s GDP growth after 2010, proves that the Indian economy is doing better than China.

    Conclusion

    The popular view that the slowdown in the Indian economy is due to the structural problems needs a re-examination in the view of the decline in investment in tandem with the world.

     

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  • Disinvestment in India

    [op-ed of the day] Strategic disinvestment does not deserve the criticism it gets

    op-ed snap | Economics | Mains Paper 3: Investment Models

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much.

    Mains level: Paper 3- Pros and cons of strategic disinvestment.

    Context

    Air India is on the block.

    Why disinvestment is not such a bad idea?

    • Wisdom lies in the use of resources to meet the emergent needs: True wisdom lies in the use of resources, including the so-called “family silver”.
      • To meet emergent needs.
      • As also for better returns.
      • Even individuals and private sector organizations committed to meeting their obligations or optimizing wealth creation take such initiatives routinely.
    • The weakening of Indian economy
      • This fiscal year’s second quarter growth in the gross domestic product (GDP) slipped to 4.5% and the portents of a slowdown have been quite apparent.
      • Private sector investment is sagging. Gross capital formation has dipped.
      • Aggregate demand has contracted.
      • Public sector expenditure is the single engine that’s driving economic growth.
    • Clamour for the government to open its purse and limited fiscal room.
      • Shrunk revenue growth: There is a clamour for the government to open its purse and help out. However, its revenue growth has shrunk.
      • Low direct tax collection: Direct tax collections registered a growth of only a little more than 6%.
      • The cautious approach by the RBI: The Reserve Bank of India has taken a rate cut pause, inter alia, to watch the government’s approach to the fisc.
      • Commitment to low inflation: The political executive seems determined to honour its commitment to low inflation and macroeconomic stability.
      • India facing Hobson’s Choice: India is thus faced with a Hobson’s choice—either to significantly revise its fiscal deficit target or monetize state assets.
    • The liberalized markets and optimizing wealth.
      • Perception in the capital market: Capital markets operate on perceptions. Valuations of public sector enterprises tend to be much lower than those of private sector companies even if their profit numbers are the same.
      • Why should India suffer suboptimal wealth creation?: The liberalized market philosophy that the country has pursued aims at optimizing wealth creation. In case a change in ownership structure can deliver higher wealth, why should Indian society retain the current ownership frame and suffer suboptimal wealth creation?
      • Need to make policies aimed at value creation: Given the limits on India’s resources, it is all the more important to see that policies are geared to ensure that value is created.
      • Stake sales can achieve value creation: For validation of this surmise, look at the rapid rise in the enterprise value of Bharat Petroleum, as indicated by its share price, since the announcement of its strategic disinvestment.
    • Not all private sector companies perform well: In those cases, the losses are not funded by innocent taxpayers.

    Twin angles to welcome strategic disinvestment

    • One: The need for India to invest in fresh asset creation.
    • The fresh asset can be created by way of roads, ports and airports that would result in a cascade effect for the economy’s growth.
    • Two: The optimization of wealth generation from the country’s assets.
      • This, incidentally, will benefit individual shareholders, including employees with shares, who have invested in the equity of listed public-sector companies such as Bharat Petroleum.
      • Energy security of the country not harmed: As there are other state-owned petroleum companies undertaking exactly the same activities, such as refining and marketing crude oil, the sale of one company does not tamper with the energy security of the country.

    Way forward

    • Caution against undervaluation: The government, however, must ensure that it is not taken for a ride. It must make a good judgment of the value of the company it decides to disinvest from and if the market conditions are not favourable for the move it must wait for the opportune moment.
    • Asset creation from the proceeds: Instead of using the proceeds from the disinvestment to fund revenue deficit the proceeds must be utilized strictly for new asset creation.

     

     

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  • Government Budgets

    [op-ed snap] The stress in state finances

    op-ed snap | Economics | Mains Paper 3: Government Budgeting

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much.

    Mains level: Paper 3- Effects of low growth rate on the State's finances.

    Context

    Lower tax devolution, delays in GST compensation are potential risks to the states.

    Trends in the finances of the state

    • The unaudited fiscal data of 21 states:
      • These states account for around 90 per cent of India’s GDP in 2017-18. The data reveal some trends.
    • First Trend: Revenue receipt sliding down
      • From 15.6 to 4.6 %: At the aggregate level, revenue receipts of these 21 states have grown by a mere 4.6 per cent, sliding down from 15.3 per cent over the same period last year.
      • Decrease in Central tax devolution: The analysis shows that the states’ share in Central tax devolution has slowed the most, contracting by 2.3 per cent during this period, after having grown by 12.1 per cent over the same period last year.
    • Second trend: The Centre’s gross tax revenues are expected to fall short of the budgeted target by a considerable Rs 3- 3.5 trillion this fiscal year.
      • The aggregate tax devolution to all states may be as much as Rs 1.7 – 2.2 trillion lower in the current fiscal year than what was budgeted.
      • This is a key revenue risk staring at the state governments this year.
    • Third trend: States own tax and non-tax revenue contracting.
      • The states’ own non-tax revenues have contracted by 5 per cent during the first eight months of this fiscal year, after an expansion of 15.3 per cent over the same period last year.
      • Decreasing tax revenue: Growth of states’ own tax revenues, the largest source of their revenue receipts, eased to a tepid 2.2 per cent during this period from a healthy 16 per cent over the same period last year.
      • This is in part by the modest rise in collections of the State Goods and Services Tax (SGST).
    • Fourth trend: Increase in the grants from the Centre
      • The primary factor boosting the GST compensation seems to be the low growth in states’ GST revenues relative to the mandated 14 per cent annual growth for the five-year transition period.

    Delay in receipt of the GST collection and the risk

    • Some state has voiced concerns over the delays in receipt of the compensation amount in recent months.
      • The delay has complicated their fiscal position and cash flow management.
      • Risk for the states: The timing of receipt of the compensation is the second major revenue risk facing state governments.
      • If compensation gets delayed to the next fiscal year, we may well find some traditionally revenue surplus states staring at a revenue deficit
      • Case of no GST compensation: But it seems states will have to start gearing up for life without the GST compensation.

    The Rise in State Development Loans or Market borrowing by states

    • SDL rising in first three quarters: According to ICRA’s estimates, net SDL issuance of all states and UTs rose by 15.5 per cent to Rs 2,806 billion in the first three quarters of this fiscal year, up from Rs 2,429 billion last year.
      • The combined gross SDL issuance has expanded by a significant 34.9 per cent to Rs 3,874 billion this fiscal year (April-December), up from Rs 2,872 billion last year.
      • The calendar for state government market borrowings for the fourth quarter indicates tentative gross SDL issuances of Rs 2,086 billion in the quarter, implying a moderate 9.1 per cent growth.
      • But, this conceals a large dip in redemptions.
      • Net SDL issuances will expand by a staggering 55.7 per cent to Rs 1,766 billion in Q4FY20, up from Rs 1,134 billion last year, underlining the stress in state government finances this year.
    • About 25 % rise in borrowing this fiscal: If market borrowings in the fourth quarter are in line with the amounts indicated, total gross borrowing this fiscal year would rise by 24.6 per cent to nearly Rs 6 trillion, up from Rs 4.8 trillion last year.
    • Net borrowing by states as large as Central govt. borrowing: Net borrowings by states would rise by an even sharper 28.3 per cent to Rs 4.6 trillion this year, becoming nearly as large as the Central government’s net market borrowings of Rs 4.7 trillion that have been announced so far for this year.

    Conclusion

    The figure and the trends indicated the financial risk the states are staring at. The government must take measure to revive the economy in order to address the problems faced by the states and ensure that the states are not left in lurch while SGT compensation receipts get delayed.

     

     

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  • Promoting Science and Technology – Missions,Policies & Schemes

    [op-ed snap] Here’s looking at you

    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: Not much.

    Mains level: Paper 3- Facial recognition technique and issues associated with it.

    Context

    Face recognition technology calls for a more comprehensive domestic framework that promotes the use of new technologies for the public good as well as imposes necessary constraints against their abuse.

    Debate on finding the balance between regulation and promotion

    • Google calls for partial ban: TheGoogle CEO’s recent support for a temporary ban on facial recognition technologies seems uncharacteristic.
      • It is not often that companies developing a technology call for its ban.
      • Their interest is in promoting the use of technology, not proscribing it.
      • Not every one of the leading tech companies agrees with Google on facial recognition.
    • Microsoft against the ban: Microsoft has questioned the idea of a ban. Calling facial recognition a “young technology”, it said “it will get better.
      • To get better the technology has to be used: The only way to make it better is actually to continue developing it.
      • And the only way to continue developing it actually is to have more people using it.
    • IBM’s precision regulation: IBM has taken a step forward in developing the policies for the use of technology by setting up a “lab”.
      • The lab will generate actionable ideas for policymakers to manage the emergence of new technologies like facial recognition that are shaping our digital future.
      • Precision regulation vs. complete ban: The idea is to develop “precision regulation” rather than enforce “blunt” instruments like the ban.
    • The EU’s plans for temporary ban: The debate on finding the right balance between regulation and promotion of emerging technologies comes in the wake of leaked plans of the EU to issue a temporary ban.
      • The ban could be up to five years.
      • Ban on use in public places only: The proposed ban is not a comprehensive one and will be applicable to the use of facial recognition in public spaces.
    • India’s own plans for law enforcement agencies: The intensifying global debate also coincides with India’s own plans to roll out a massive project on deploying facial recognition technologies, essentially for law enforcement.
      • The international discourse provides the context for developing a broad and effective Indian policy framework for the use of facial recognition.

    Background of the backlash against the tech companies

    • Techlash: Well before the EU had begun to discuss a temporary ban on facial recognition, there has been a “techlash” against the companies.
      • The companies faced backlash because they have so dramatically altered our lives in the last few years.
    • The idea of “digital is different”: For nearly two decades, the idea that “digital is different” and does not need public oversight had triumphed in most capitals of the world.
    • Problems with regulations: The main argument was that regulation constrains technological innovation and retards progress.
    • AI and Big data:  The urge to regulate has triggered widespread concerns about the dangers of digitalisation, especially the use of big data and AI by private companies as well as governments.

    Major concerns against facial recognition

    • Surveillance capitalism and surveillance state: The companies were seen as monetising the data generated by the widespread use of digital platforms like Google and Facebook.
      • Surveillance state:  China became the prime example of states using data and information to exercise ever more control over its citizens.
    • Accuracy: At the other end are concerns that facial recognition is not entirely accurate and could lead to punitive actions against innocent people.
    • Racial bias misogyny: There is also a concern in the US that the algorithms behind facial recognition carry the baggage of racism and misogyny.
    • Concerns in India: It also remains a fact that the Indian state has always been tempted to empower itself against its citizens in the name of collective security.
      • It has also tended to weaponise information against political opponents and dissidents.

    Potential Advantages

    • In the control of crime.
    • Better border controls and countering terrorism.
    • Aid the Police: In India, a severely under-policed nation, facial recognition surely offers many benefits.

    Conclusion

    The foreign office must reclaim India’s place in the international discourse on AI and facial recognition and develop a productive alignment between India’s national interests and the development of new digital norms.

     

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  • Issues related to Economic growth

     [op-ed of the day] The convergence of rich nations with the rest has gone off track

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much.

    Mains level: Paper 3- Globalisation-Convergence of the rich and the poor economies- hopes and the reality.

    Context

    Sound policies are needed to put emerging economies back on a higher growth path and ameliorate regional inequalities.

    The theory of convergence

    • The theory of convergence is one of the most powerful and noblest ideas in economics.
      • What is it? It is the concept that other things being equal, poorer economies should catch up with richer ones so that inequality between the rich and the poor attenuates, and conceivably even disappears over time.
    • Capital is more productive in poor economies: The premise driving convergence is that capital (whether physical or human) is more productive in poor economies than rich ones due to what economists call “diminishing marginal productivity”.
      • In layman’s terms, a small amount of investment yields a greater increase in output where there is less capital than where there is more.
      • Lesser the development more the development: Even more simply, the rate of return on investment is inversely related to the level of economic development.
    • Experience of Japan and Germany after WW 2: The experience of advanced economies gave economists reason to be optimistic that convergence occurs according to the script.
      • Thus, the devastated economies of Europe, along with Japan, quickly caught up with the advanced economies that had not been ravaged by World War II, most notably, the US.
      • Germany and Japan closing the gap: At the end of the war, with their capital stocks destroyed, Germany and Japan were much poorer than the US; by the 1960s, they had closed the gap.

    Globalisation and the unfulfilled hopes of convergence

    • Replication of the rise of Japan and Germany? At one time, it appeared that the same play was at work between emerging economies and advanced economies.
      • Rise of India and China: Economies such as China and India, as well as others, were far outstripping the growth rates of the US and other rich economies,
      • Hope of closing gap: India and China gave hope that at least the more rapidly growing of the emerging economies would close the gap with the rich world within decades rather than centuries.
    • Adoption of technology at low cost: There was presumed to be an additional powerful force working toward convergence.
      • Poorer economies are, almost by definition, far away from the technological frontier at which the richest economies operate.
      • There is thus ample room to absorb newer technologies at relatively low cost and in a relatively short span of time, without encountering slowing growth like the rich economies,
      • In simpler terms, it is difficult and costly to innovate the latest Apple iPhone, but relatively easy to reverse engineers at least some of Apple’s technology.

    Reality: Convergence is faltering

    • Recent evidence suggests that convergence is faltering.
    • World Bank report of retarding convergence: A recent World Bank report documents a worrying slowdown in productivity growth in emerging economies, significantly retarding convergence.
      • Lower productivity: The report’s calculations suggest that emerging economies have 14% lower productivity than they would have had if previous trends of high productivity growth were maintained.
      • Lower commodity exports: For commodity exporters, this is a whopping 19%.
    • The silver lining for faltering economies: According to the World Bank, the main driver of falling productivity are-
      • Insufficient investment in physical and human capital.
      • Insufficient mobility of machines and workers from less productive to more productive sectors of the economy.
    • India’s case: The Indian case clearly bears this out, with languishing investment and unfinished productivity-enhancing reforms, especially in the country’s labour market, being the key culprits behind the sharp slowdown in growth.

    Way forward

    • Repair financial systems: Governments, including India’s, need to do the heavy lifting of repairing damaged financial systems overladen with bad debt.
    • Restore fiscal rectitude.
    • Inflation focused monetary policy: Ensure that monetary policy remains focused on stable inflation rather than being excessively loose as a risky substitute for structural reforms.
    • Reforms: Press ahead with unfinished reforms to capital, land and labour markets.
    • Address the regional disparities: There is a further critical dimension in the case of large multi-region economies such as India.
      • Not only has convergence been faltering between nations, but it has also been faltering between the richer and poorer regions of large nations such as India.

    Conclusion

    The data does not present an epistle of despair, but of hope. The pursuit of sensible and conventional sound economic policies ought to put emerging economies as a group back on a higher growth trajectory. Convergence may yet end up being a parable of promise rather than a fable of folly.

     

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  • Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

    [op-ed snap] The hype over hypersonics

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Avangard-HGV

    Mains level: Paper 3- Hypersonic Glide Vehicle, whether India go for developing it- and challenges to Indian security.

    Context

    Russia announced that its new hypersonic glide vehicle (HGV), Avangard, had been made operational.

    What HGV is and where the US and China stand

    • What is HGV and what is it capable of?
      • Speed over 5 Mach: A hypersonic delivery system is essentially a ballistic or cruise missile that can fly for long distances and at speeds higher than 5 Mach at lower altitudes.
      • Invulnerable to interception: This allows it to evade interception from current Ballistic Missile Defence (BMD).
      • High manoeuvrability: It can also execute a high degree of manoeuvres.
      • Avangard-Developed by Russia: Russia claims that this HGV can fly at over 20 times the speed of sound.
      • Invulnerable to interception: and is capable of such manoeuvring as to be invulnerable to interception by any existing and prospective missile defence means of the potential adversary.
    • China and the U.S. are also close on the heels: The U.S. has moved from the research to the development stage.
      • Where China stands: China demonstrated the DF-17, a medium-range missile with the HGV, at the military parade in October 2019.
    • What were the reasons for the development: The U.S. walked out of anti-ballistic missile treaty in 2002, prompted by the U.S. exit from the treaty and fear of the U.S. anti-ballistic missile defence system.

    How would hypersonics complicate the security concerns?

    • First complication-Increase in the possibility of miscalculation: These missiles are being added to the military capabilities of countries that possess nuclear weapons.
      • For these nations, the concern is always an attack on nuclear assets to degrade retaliation
      • Destination ambiguities: Another layer of complication is added by the fact that these missiles bring in warhead and destination ambiguities.
      • Increasing tendency to assume worst: In both cases, when an adversary’s early warning detects such missiles headed in its direction, but cannot be sure whether they are conventional or nuclear-armed, nor ascertain the target they are headed towards, the tendency would be to assume the worst.
      • For an adversary that faces a country with a BMD but itself has a small nuclear arsenal, it would fear that even conventionally armed hypersonic missiles could destroy a portion of its nuclear assets.
      • The tendency to shift to trigger-ready postures: The tendency could then be to shift to more trigger-ready postures such as launch on warning or launch under attack to ostensibly enhance deterrence.
      • Risk of miscalculation: But such shifts would also bring risks of misperception and miscalculation in moments of crisis.
    • Second complication-Offence defence spiral: According to reports, the U.S. has begun finding ways of either strengthening its BMD or looking for countermeasures to defeat hypersonics, besides having an arsenal of its own of the same kind.
      • Possibility of arms race: The stage appears set for an arms race instability given that the three major players in this game have the financial wherewithal and technological capability to play along.
      • This looks particularly imminent in the absence of any strategic dialogue or arms control.
    • Third complication-Possibility of the arms race into outer space: A third implication would be to take offence-defence developments into outer space.
      • Sensors are already placed into space: Counter-measures to hypersonics have been envisaged through the placement of sensors and interceptors in outer space.
      • While none of this is going to be weaponisation of outer space would, nevertheless, be a distinct possibility once hypersonic inductions become the norm.

    Conclusion

    The induction of this technology would likely prove to be a transitory advantage eventually leading nations into a strategic trap. India needs to make a cool-headed assessment of its own deterrence requirements and choose its pathways wisely.

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  • [op-ed of snap] The four phases of constitutional interpretation

    op-ed snap | Polity | Mains Paper 2: Indian Constitution – historical underpinnings, evolution, features, amendments, significant provisions and basic structure

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much.

    Mains level: Paper 2- Evolutionary phases through which the interpretation of Constitution by judiciary passed.

    Context

    The ways in which the Constitution of India is interpreted has undergone changes through four phases.

    Constitution-An Ambitious political experiment

    • Indian Constitution was an ambitious political experiment for the following reasons-
      • Universal Adult Franchise: India began its journey with the universal adult franchise.
      • Federalism: Federalism in a region consisting of over 550 princely States.
      • The promise of Equality: The Constitution was a sort of social revolution in a deeply unequal society with the promise of equality.
      • Unique constitutional design: it was equally a unique achievement in terms of constitutional design.

    The first phase of interpretation-Focus on text

    • A textualist approach-focusing on the plain meaning of the words: In its early years, the Supreme Court adopted a textualist approach, focusing on the plain meaning of the words used in the Constitution.
      • K. Gopalan v. State of Madras (1950) was one of the early decisions in which the Court was called upon to interpret the fundamental rights under Part III.
      • The leader of the Communist Party of India claimed that preventive detention legislation under which he was detained was inconsistent with Articles 19 (the right to freedom), 21 (the right to life) and 22 (the protection against arbitrary arrest and detention).
      • Fundamental rights separate from each other: The Supreme Court decided in A. K. Gopalan case that each of those articles covered entirely different subject matter, and were to be read as separate codes rather than being read together.
    • Unlimited Amendment Power: In its early years, the Court read the Constitution literally, concluding that there were no limitations on the Parliament’s power to amend the Constitution.

    The second phase of interpretation-Focus on ‘basic structure’

    • Appeals to the structure and coherence: Appeals to the text of the Constitution were gradually overtaken by appeals to the Constitution’s overall structure and coherence.
      • Limited Amendment Power-Kesavananda Bharati case: In the leading case of Kesavananda Bharati v. State of Kerala(1973), the Court concluded that Parliament’s power to amend the Constitution did not extend to altering its “basic structure”.
      • What is the “Basic Structure”: The basic structure is an open-ended list of features that lie within the exclusive control of the Court.
      • When Parliament attempted to overturn this decision by amending the Constitution yet again, the Court, relying on structuralist justifications, decisively rejected that attempt.
    • Key takeaways from Kesavananda Bharati case
      • Limited Amendment Power: In this case, the Court pronounced that Parliament’s power to amend the Constitution is not unlimited.
      • Fundamental rights as a cohesive bill of rights: In this phase, the Court also categorically rejected the Gopalan approach in favour of a structuralist one.
      • Maneka Gandhi v. Union of India (1978):  Through decision, in this case, the Court conceived of the fundamental rights as a cohesive bill of rights rather than a miscellaneous grouping of constitutional guarantees.
      • Incremental interpretation of Right to Life: The right to life was incrementally interpreted to include a wide range of rights such as clean air, speedy trial, and free legal aid.
      • Courts playing role in governance: The incremental interpretation of Article 21 paved the way for the Supreme Court to play an unprecedented role in the governance of the nation.
    • What was common in the first two phases?
      • Interpretation done by Constitutional Benches: That significant decisions involving the interpretation of the Constitution were entrusted to Constitution Benches (comprising five or more judges of court) and were carefully (even if incorrectly) reasoned.
      • Little scope for precedential confusion: There was limited scope for precedential confusion, since matters which had been decided by Constitution Benches and which demanded reconsideration were referred to larger Constitution Benches.

    Third Phase of interpretation-Eclecticism

    • Different opinions on the same issues: In the third phase the Supreme Court started to give different opinions on the same issues-i.e. it engaged in eclecticism.
      • Lesser reasoning: The Court often surrendered its responsibility of engaging in a thorough rights reasoning of the issues before it.
      • Two factors underpinned this institutional failure.
    • First-Change in the structure of the SC: The changing structure of the Court, which at its inception began with eight judges, grew to a sanctioned strength of 31; it is currently 34.
    • It began to sit in panels of two or three judges, effectively transforming it into a “polyvocal” group of about a dozen sub-Supreme Courts.
    • Second-expansion of own role by the SC-The Court began deciding cases based on a certain conception of its own role -whether as a sentinel of democracy or protector of the market economy.
    • The focus of the judgement on the result rather than reason: This unique decision-making process sidelined reason-giving in preference to arriving at outcomes that match the Court’s perception.
    • Consequences of the eclecticism
      • Rise of doctrinal incoherence and inconsistency: The failure to give reasons contributed not only to methodological incoherence but also to serious doctrinal incoherence and inconsistency across the law.
      • Conflicting decisions and interpretations: This approach can be best described as panchayati eclecticism, with different Benches adopting inconsistent interpretive approaches based on their conception of the Court’s role, and arriving at conclusions that were often in tension with one another.
      • Decision detached from precedents and established methods: The imagery that panchayati eclecticism is meant to invoke is that of a group of wise men and women (applying the analogy, sub-Supreme Courts), taking decisions based on notions of fairness that are detached from precedent, doctrine and established interpretive methods.

    Fourth phase- based on the purpose

    • Purpose of enactment of the Constitution as critical: In the fourth phase, the Court has acknowledged as critical to its interpretive exercise the purpose for which the Constitution has been enacted.
    • The realisation of revolutionary and transformative potential: The Court is now beginning to interpret the Constitution in accordance with its revolutionary and transformative potential.
      • Renaissance in decisions: With about a dozen significant Constitution Bench decisions from the Supreme Court since September 2018, there has been a renaissance in decision-making by Constitution Benches.
      • The most important decisions of this period include-
      • Court’s decisions striking down Section 377 and the criminal offence of adultery.
      • And including the office of the Chief Justice of India within the scope of the Right to Information Act.

    Conclusion

    With the interpretation process entering in the fourth phase-realising the purpose of enactment of the Constitution- Indian judiciary is on the right track, however, facets of phase 3 continue to linger on it. The Supreme Court must avoid getting in phase three mode to in order to realise the purpose it was entrusted with.

     

     

     

     

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

    [op-ed of the day] Food for Expediency

    op-ed snap | Agriculture | Mains Paper 3:

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much.

    Mains level: Paper 3- PDS and issue of excess food stock with FCI.

    Context

    A substantial rise in consumer food price inflation to 14.12% in December 2019, the highest ever in the past six years, has driven the retail price inflation in this country.

    Discrepancies in the fiscal deficit

    • Policy dilemma for the RBI: Though the CPI was at 14.12% in December but with the core inflation rate still not overshooting the Reserve Bank of India’s (RBI) medium-term target of 4(+/- 2)%.
      • Speculations hover as to whether the RBI monetary policy committee will go for another rate cut in the coming month.
      • This is a policy dilemma for the central bank
      • Why is the dilemma? The dilemma is because the moot issues regarding the government’s key economic estimates, such as the fiscal deficit, largely remain unresolved.
    • Discrepancies flagged by the CAG: The CAG has stated that the current figures on deficit have been kept at a 1.5% to 2% low by not including the government’s off-budget borrowings from public accounts, such as the National Small Savings Fund (NSSF).
      • According to media reports, such off-budget expenditure of the current government stands at ₹1.5 lakh crore in 2019–20.
      • The major portion of off budged expenditure on food subsidy: About three-fourths of the incremental off-budget expenditure is on account of under-recoveries in food subsidies of the Food Corporation of India (FCI).
    • Low allocation but high expenditure on food subsidy: For instance, the 2019–20 Union Budget had provisioned food subsidy at₹1.84 lakh crore.
      • While the overdue of the FCI is already at₹1.86 lakh crore.
      • For these burgeoning overdue, FCI’s ­off-budget borrowings from the NSSF have been on the rise.

    Excessive stock by the government and rising inflation

    • Issue of supply management: The issues of agricultural supply management are relegated to the background by the standard causality argument of “crop damages” caused by excessive rains and that the inflation will ease out once the new harvest comes in.
      • This argument can hold some water for horticulture crops like onions that saw an almost 200% rise in price in November and December.
      • Unable to explain inflation in wheat and other cereals: This argument may not find traction in explaining the price inflation of wheat and other cereals.
    • holding the excessive cereal stock: With the government currently stocking much higher quantities of cereals at the FCI than the buffer norms.
      • 45.8 million tonnes of wheat as against the buffer norm of 27.5 million tonnes and nearly double the amount of rice vis-à-vis the buffer norm of 13.5 million tonnes.
      • India is now a cereal surplus economy.
      • Why then the inflation in cereal prices? Is this artificially created by the government through its irrational stocking practice?
      • Some fundamental concerns are triggered at this juncture.
    • Concerns with excess stocks
      • First-Higher stock means higher subsidy bill-With the economic costs of the FCI being 12 times or more than the allocation cost of the grains through the public distribution system-higher stocks would imply higher subsidy bills.
      • Second–No benefit of the stock: In tandem with the first, ad hoc releasing of the stocks will not bring about any major changes in the situation.
      • Third–Hiding fiscal deficit from the public: In this context, off-budget borrowing can serve various politically expedient purposes.
      • It has enabled the government to showcase a consistently low share (below 1%) of subsidies in national income.
      • Thereby diverted the public attention from two critical facts: the FCI’s tipping financials and the country’s (grossly) underestimated fiscal deficit.

    Conclusion

    The government must recall that the “illusion” of this acceptable limit of inflation potentially rests upon the savings of the common consumers, which is being unduly misemployed by the government.

     

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