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Type: Op-ed

  • Making use of technology to trace Covid-19 cases

    The article argues for the greater adoption of technology in tracing the Covid-19. Taking a cue from the success of JAM and UPI, recently launched app Aarogya Setu could also be the next game-changer in the fight against the pandemic. However, there are several challenges that are also discussed here.

    Success story of domestic digital platforms

    • The success of two domestic digital payment platforms offers us an opportunity to show how the tracing of COVID-19 cases can be done at scale and with greater speed.
    • The JAM (Jan Dhan-Aadhaar-Mobile) trinity for DBTs (Direct Benefit Transfers) and UPI (Unified Payments Interface) have made India a technology leader in money transfers.
    • The JAM has lent efficiency to the transfer of funds to the needy.
    • It was drafted into action recently to channel payments to the more vulnerable who need help in dealing with the adverse economic consequences of the lockdown.
    • The UPI is emerging as a transaction vehicle of choice for all retail payments.
    • In March, 148 banks were on the UPI platform, helping process over 120 crore transactions worth over Rs 2 lakh crore.

    The success story of the UPI and JAM is important from the UPSC point of view. Riding on the success of these two, the Aarogya Setu could also become the third and help in the fight against the epidemic. So, we should be aware of the basics of its working and problems the app could face.

    How the Aarogya Setu works?

    • Widespread adoption is required: The success of India’s Aarogya Setu mobile application will depend on its widespread adoption.
    • Based on bluetooth technology: The app relies on bluetooth technology to map and deconstruct the contact history of individuals who may have come in contact with potential carriers of the coronavirus.
    • Exchange of information between apps: If two individuals are at the same place at the same time, their apps can exchange information-up to a maximum distance of about 15 feet.
    • Exchange of the above information is without the server knowing anything about it.
    • The app notifies users and authorities of individuals who are at risk.
    • Privacy safeguards: Some privacy safeguards have been put in place to ensure that individuals do not share personally identifiable information with each other but only with authorities — that too, in select cases.
    • A confidence-building measure would be to release the code for public scrutiny with the aim of further bolstering privacy standards.

    What are the possible challenges in the success of Aarogya Setu?

    • The distribution of the detection framework necessitates a rethink, beyond an app.
    • Issues with app download in India: Nandan Nilekani has underlined that app downloads in India are perhaps the most expensive compared to any other developed or fast-developing nation.
    • Despite the falling cost of data, Indian users consider several factors before downloading an app such as required storage space, the potential impact on battery and data usage.
    • Given India’s open internet, several publishers from across industries and geographies are vying for smartphone real estate.
    • Challenge involved: In such a situation, drawing attention to particular use-cases i.e. Aarogya Setu-howsoever urgent-is challenging.

    Following are the suggestions to overcome the shortcoming of the Aarogya Setu. Though they are for Aarogya Setu, we can apply these in other situations in which mobile technology bases app is used by the government in the larger public interest such as rescue operation or warnings in case of disaster.

    So, what could be the alternate strategy?

    • The alternative strategy involves using the reach of the other famous apps (for ex. Paytm) to do what we want to do i.e. tracing by delinking.
    • Delinking involves separating the technology we want to use for tracing (the backend) from the channels (the front end).
    • A fine-tuned backend can be pushed to, and used by, publishers (other apps) who already have the reach.
    • Similarity with UPI: This is akin to the UPI being used by several banks and technology firms for payment.
    • The government did build its frontend in the form of the BHIM (Bharat Interface for Money) app but mostly for signalling purposes.
    • In the current context, the government can consider using its own app for tracing and for additional use-cases such as passes and approvals for movement when the lockdown is gradually eased out.
    • It could even host other health-related features.
    • Expanding its ambit and making it a conduit like JAM will likely increase the incentive for people to embrace it.

    Limitations of using GPS and Bluetooth for tracing in India

    • Another area where improvisations are called for is the tooling for tracking.
    • While reports have indicated that the developers are using bluetooth for tracing and are also capturing GPS coordinates, both users and device manufacturers limit their usage of these technologies in favour of other optimisations.
    • Users are concerned with both data and battery usage while device manufacturers kill background jobs even if the publishers have sought and secured permissions from users.
    • These tendencies are pronounced on Android, the dominant mobile operating system in India.
    • What are the other options? In such a scenario, developers ought to think about using other techniques.
    • For instance, using cell tower data and WiFi identifiers to bolster tracing efforts.
    • This is especially important in a context where only a third of our population has smartphones and even fewer people have devices with bluetooth capability.
    • Even the recently announced Google-Apple partnership may not have meaningful results in this setting.

    Conclusion

    With the potential ramifications of COVID-19’s spread in India and across the globe, the nation’s recent history of technological successes and a government committed to agile governance, the pandemic presents an opportunity for the country to show its people and the world how technology is a force of good.

  • Using knowledge-era technology to bridge the urban-rural gap

    This article puts forward the idea of using knowledge-era technology to minimise the difference between rural and urban areas. In the first part, it elaborates the reasons and circumstances that led to the neglect of rural areas and development in urban areas. In the next part, the idea of using knowledge-era technologies to close the gaps between rural and urban areas is explored.

    Why Urbanisation is spreading and how it led to the neglect of rural areas?

    • Better opportunities: The tendency to migrate to urban areas has been a natural consequence of better opportunities that got created there — in contrast to life in rural areas becoming increasingly unsustainable.
    • Centralisation: The industrial-era dynamics that led to centralisation in support of mass production or massive scale-up was clearly a major one.
    • This, in turn, also led to the concentration of higher education/capacity building processes to urban centres where there was job growth, quite to the detriment of the much larger rural area.
    • Problems in education and training: The education and training environment became myopic, essentially meeting the manning requirements to run systems created by others.
    • Our education with its inherent problems led to little confidence in creating one’s own systems to address needs independent of others.
    • Demographic dividend: India’s importance grew primarily because of her demographic dividend and the large market that her people constituted and not because of the systems and technologies.
    • Neglect of rural India: Rural India suffered severe neglect in the process, probably as a result of poor job opportunities there and education having lost its role as an enabler of local development.
    • However, the country is learning to create systems and technologies to address her needs. The exercise is, by and large, urban-centric.

    UPSC asked about the quality of urban life in 2014, and the trends of labour migration in 2015. This article touched upon both of these themes.

    Using the knowledge-era technology to close the urban-rural gap

    • We are now in the knowledge era.
    • And knowledge-era technologies, in contrast to industrial-era technologies, promote democratisation (social media, for example) and facilitate decentralisation (work from home).
    • It should thus be possible for an adequately educated and trained youth residing in a rural domain to support a significant part of the manufacturing and service needs of urban areas.
    • Just as an urban youth can support a significant part of the knowledge and application needs in rural areas.
    • With technologies like additive manufacture, internet of things, and artificial intelligence, well-trained people can address needs in both urban and rural areas from wherever they are.
    • Thus, the knowledge era should, in principle, become a significant income leveller between the urban and rural domains, with a large rise in the overall national income.
    • As we focus on capacity building of rural youth, the opportunities in rural areas should, in principle, become higher than those in urban areas since the rural segment can now benefit from all three sectors of the economy- agriculture, manufacturing and services.

    The idea of “cillage”

    • In the knowledge era, with emphasis on capability and capacity building of rural youth in terms of holistic education, appropriate technology and enhanced livelihood, there is a possibility for a more balanced distribution of income as well as population.
    • This would, however, need knowledge bridges to be built between cities and villages, and the creation of an ecosystem which has been conceptualised as a “cillage” — a synergistic combination of city and village.
    • Bridging the knowledge gap between a city and a village would also bridge the income gap between the two.
    • This will also lead to a faster bridging of the gap between the average individual income in India and that in industrially advanced countries.
    • Democratisation promoted by knowledge technologies, if properly leveraged, can in principle reduce disparities, which, unfortunately, are on the rise today.

    How to realise the idea of cillage?

    • Integrated and holistic approach: Developing a “cillage” ecosystem would need a rooted and integrated approach to holistic education and research, technology development and management, as well as technology-enabled rural livelihood enhancement.
    • It would take a while for the rural youth to become empowered enough to convert the challenges into opportunities in rural areas.
    • The emergence of a new-age society is an inevitability.
    • How soon the rural domain can embrace it and how concurrently, comprehensively that can happen, is the real challenge.
    • That will decide whether India will gain in the knowledge era or lag as it did in the industrial era.

    Look at one more question from 2015-“Smart cities in India cannot sustain without smart villages. Discuss this statement in the backdrop of rural-urban integration”.  The ideas discussed here in this article help us to deal with such questions.

    Can Covid-19 speed up the realisation of cillage?

    • The process could also be seen as the migration of a set of experiences and skills to villages.
    • We can look at this as a potential two-way bridge for a new relationship between cities and villages.
    • It will be the bridge in which not all need to return to cities, but can rather meet the needs of cities as well as villages by remaining in villages.
    • Several initiatives will be needed to realise such a possibility.
    • Facilitating a number of new skills, technologies and support systems that can further leverage current capabilities of these people for starting a new enterprise would be important.
    • Immediate arrangements to facilitate their livelihood, and leveraging their present capabilities could help retain at least some of these people in villages.
    • It could trigger a faster movement towards an inevitable long-term equilibrium.
    • Going forward, we should take knowledge activities to a higher level so that the products and services created by these people become more competitive.
    • Looking at disruptive technologies for exploiting local opportunities should follow.

    Conclusion

    Given that the new normal after Covid-19 would, in any case, be quite different, the right course would be to channelise the stimulus caused by this crisis towards accelerating the shift to a new normal. This will not only help a more dispersed population, but will also reduce disparities and lead to faster growth of the economy.

  • How IS regroups and its threat to India

     

    IS has shown its ability to strike by regrouping and co-opting local affiliates be it the case of Ester Sunday attack in Sri Lanka or a recent attack on a  Gurudwara in Afghanistan. For India, the presence of sleeper cells and their links with the Islamic jihad group has internal security implications. We have covered an op-ed dealing with the Gurudwara attack and discussed the futility of the US-Taliban peace deal.

    Security threat of IS to India and South Asia

    • In the immediate aftermath of 9/11, there was speculation about the degree to which al-Qaeda had been able to make inroads in India.
    • In recent years, the focus has shifted to the IS.
    • The creation of an IS-Khorasan (IS-K) in early 2015 with a visible presence in Afghanistan-Pakistan, seemed to suggest that the group is now targeting South Asia.
    • The recent terror attack on a gurdwara in Kabul (March 25) was also claimed by the IS. The IS released a photograph of one of a resident of Kasargod in Kerala
    • According to India’s leading terrorism think-tank SATP (South Asia Terrorism Portal), 99 persons from India were confirmed to have joined the IS in Iraq, Syria and Afghanistan.

    Question about the ” Over-ground worker” of the terrorist organisation was asked by the UPSC in 2019.

    Close intelligence cooperation within and beyond South Asia

    • Last October, the NIA disclosed that it had arrested 127 IS sympathisers from across India since 2014, and the highest number of 33 were from Tamil Nadu.
    • The arrests by NIA were made throughout the country and not from a specific region.
    • This degree of spread is testimony to the close watch the Indian security agencies are maintaining concerning the IS.
    • One may conjecture that close intelligence cooperation has been established within and beyond South Asia.
    • The pattern that now obtains is that countries like Sri Lanka, Bangladesh and Afghanistan have their own internal surveillance in place to monitor the activities of the IS-K.

    Ability of IS to regroup and ally with a domestic affiliate

    • The IS has demonstrated a proclivity to re-group by co-opting or merging with credible domestic affiliates, even if they are little-known.
    • In Afghanistan, the IS-K has sought to position itself favourably in the factional tussle, and the Kabul gurdwara attack is seen as part of this murderous strategy.
    • Pakistan connection: Islamic terror groups in the Af-Pak region are deemed to be as credible as the support that they receive from the deep-state in Pakistan.
    • It is pertinent that the main accused in the Kabul gurdwara attack is Aslam Faroqi, a Pakistani national.

    Conclusion

    The ability of IS to co-opt a local affiliate makes it a credible threat for India where there is a significant presence of the sleeper cells. In the light of that threat India and the other affected nations will have to strive individually and collectively to foil such nefarious designs.

  • COVID-19 and the crumbling world order

    Theme of this article is the failure of the world order in mounting a collective fight against the epidemic that has become the global problem. Role of WHO has also come under the scanner. Functioning and reluctance of UNSC to discuss the pandemic have raised questions over its relevance. The issue of China’s growing influence and implications for the rest of the world are being discussed. In the past week, some newspaper articles have covered the same issue for instance-“The deep void in global leadership” in the Hindu.

    Failure of the world order and global institutions

    • The contemporary global order and institutions were a hegemonic exercise meant to deal with isolated political and military crises and not serve humanity at large.
    • COVID-19 has exposed this as well as the worst nativist tendencies of the global leadership in the face of a major crisis.
    • That the United Nations Security Council took so long to meet (that too inconclusively) to discuss the pandemic is a ringing testimony to the UN’s insignificance.

    The above para. indicates that global order we are living in was made for entirely different purpose i.e. to maintain the peace and they are not capable to deal with the Covid-19  like challenges. So, from UPSC mains point of view you must take note of this.

    Failure of regional groupings

    • Regional institutions haven’t fared any better.
    • Prime Minister Narendra Modi’s SAARC initiative, curiously resurrecting a practically dead institution, was short-lived.
    • The EU, the most progressive post-national regional arrangement, stood clueless when the virus spread like wildfire in Europe.
    • Its member states turned inward for solutions: self-help, not regional coordination, was their first instinct. Brussels is the loser.

    What these failures indicate?

    • These failures are indicative of a deeper malaise: the global institutional framework is unrepresentative, a pawn in the hands of the great powers, cash-strapped, and its agenda is focused on high-table security issues.
    • The global institutional architecture of the 1940s cannot help humanity face the challenges of the 2020s.
    • What can be the solutions? Nothing less than a new social contract between states and the international system can save our future.

    Here we come across  the reasons for the failure of the world order and institutions. UPSC has asked questions related to UNESCO in 2019, who knows next could be the WHO.

    Factors that will help China come out stronger from the pandemic

    • Reports indicate that China has now managed the outbreak of COVID-19, and its industrial production is recovering even as that of every other country is taking a hit.
    • The oil price slump will make its recovery even faster.
    • When the greatest military power found itself in denial mode and the members of the EU were looking after their own interests, China appeared to use its manufacturing power to its geopolitical advantage.
    • Beijing has offered medical aid and expertise to those in need; it has increased cooperation with its arch-rival Japan.
    • This will aid Beijing’s claims to global leadership, push Huawei 5G trials as a side bargain, and showcase how the Belt and Road Initiative is the future of global connectivity.
    • COVID-19 will further push the international system into a world with Chinese characteristics.

    As China comes to dominate the emerging world order, we must pay attention to things related to China. Here, we can note down the factors that could help China emerge out stronger from the corona crisis.

    Implications for globalisation: the rise of protectionism and hypernationalism

    • Neoliberal economic globalisation will have taken a major beating in the wake of the pandemic.
    • Economists are warning of a global recession.
    • How the world reacted? The first instinct of every major economy was to close borders, look inwards and
    • The pre-existing structural weakness of the global order and the COVID-19 shock will further feed states’ protectionist tendencies fueled by hypernationalism.
    • A more inclusive global political and economic order is unlikely any time soon, if ever.
    • Instead, as former National Security Adviser Shivshankar Menon warns, “we are headed for a poorer, meaner, and smaller world.”
    • How this epidemic impact big corporations? The ability of big corporations to dictate the production, stocks, supply chains and backup plans will be limited by increased state intervention to avoid unpredictable supply sources, avoid geopolitically sensitive zones, and national demands for emergency reserves.
    • The profits of big corporations will reduce, and the demand for stability will increase.
    • Will the world after Covid-19 be more balance? State intervention in economic matters and protectionism are the easy way out, and that’s precisely what states will do once the crisis is over.
    • It would be a return of the ‘Licence Raj’ through the backdoor, not a push for inclusive and responsible globalisation with its associated political benefits.

    It is clear now that post-Covid-19 world would be different from the world we know today. Globalisation would take a significant beating. And globalisation is important topic from mains point of view. So, pay close attention to the points mentioned here.

    Will post-Covid-19 world lead to some positive controls?

    • Rise of state-led models: With the severe beating that globalisation has taken, state-led models of globalisation and economic development would be preferred over (big) corporates-led globalisation.
    • Will this enable some positive controls over the inherent deficiencies of globalisation? We will have to wait and see.
    • The relation between capitalists and the states: But the more important question is whether the state has any incentive to take on big capital.
    • Given the symbiotic relationship between the state and big capital, states have become used to protecting the interests of their corporations, often at the cost of the general public.
    • States preferred capital over health: Consider, for instance, that the first response of many Western states was to protect their capital markets than be concerned about public health.

    Rise of racism in post-Covid-19 world

    • Yet another undesirable outcome of the pandemic would be a spike in various forms of discrimination.
    • Globally, societies could become more self-seeking and inward-looking leading to further pushback against liberal policies regarding migration and refugees.
    • Implications for world trade: New questions are likely to be asked about the source of goods. More stringent imposition of phytosanitary measures by advanced states on products emanating from the less developed countries might become the new normal.
    • Lockdowns and travel restrictions could potentially legitimise the rhetoric around border walls in more conservative countries.
    • Tragically, therefore, while one answer to global pandemics is political globalisation, COVID-19 might further limit it.

    Conclusion

    The world order needs to wake up to new reality take measures to avoid the above listed undesired fallouts that could emerge in the post-Covid-19 world, and before that there is an urgent need for the global coalition to deal with the pandemic.

     

  • Use the COVID crisis to transform the agri-marketing system

    This article discusses the impact of lockdown on farmers and how the disruption of the supply chain is adding to their difficulties in selling their produce in the markets.

    In the last two weeks or so, we have been reading about farmers and issues around the agri-marketing supply chain. If you have been following the story on Agriculture Marketing Reforms, you would remember us talking about it in the op-ed titled “A smarter supply line”

    There are 6 suggestions to overhaul our agri-marketing system. These are-

    1. Abolish/reframe the APMC Act

    • There is an urgent need for abolishing or reframing the APMC Act and encourage direct buying of agri-produce from farmers/farmer producer organisations (FPOs).
    • The companies, processors, organised retailers, exporters, consumer groups, that buy directly from FPOs need not pay any market fee as they do not avail the facilities of APMC yards.

    APMC Act restrict the farmers from selling their produce outside the market yard, so in the present context of Covid-19 this is a counterproductive restrictions. UPSC asked question on in in 2014.

    2. The warehouses can also be designated as markets.

    • The warehouse receipt system can be scaled up.
    • The private sector should be encouraged to open mandis with modern infrastructure, capping commissions.

    3. The futures trading should be encouraged by allowing banking finance to hedge for commodity price risks.

    A futures contract is a standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future, encouraging this would help farmers assurance of price and help in making decion for the sowing based on price signal from he markets.

    4. Promote e-NAM through proper assaying and grading the produce and setting up dispute settlement mechanism; rope in major logistics players for delivery of goods.

    5. Avoiding rush in the markets: Procurement must be staggered through coupons and incentives that give farmers an additional bonus for bringing the produce to the market after May 10, or so.

    6. The amount provided under PM Kisan should be increased from Rs 6,000 to at least Rs 10,000 per farming family to partially compensate them for their losses.

    Way forward

    • Besides these, Prime Minister would benefit by taking a leaf out of the book of President Donald Trump. Modi should lead from the front by holding daily press briefings and announce a country-wide relief package amounting to around 8-10 per cent of GDP.
    • Whatever the causes of this disaster are, it is clear that the WHO failed in its duty to raise the alarm in time. India must ask for fundamental reforms in the UN System, including the WHO, making it more transparent, competent, and accountable.

  • A plan for the aftermath

    Context

    Everyone is agreed that the whole world is hurtling towards an unprecedented economic recession. India, already facing a massive slowdown, is going to get hurt perhaps more than the others, because our economic immune system is already weak.

    Three things that we must do in the present situation

    • The first is containing the spread of the virus.
    • Apart from the manpower, medicines, protective equipment for frontline workers and other methods, it will need massive resources to tackle it.
    • Second, the poor are already suffering in more ways than one, including the daily wage earners. They will have to be taken care of, again needing massive resources.
    • Third, economic activity will have to be revived as soon as conditions return to normal or near-normal, for which businesses will have to be helped, again needing massive resources; both in terms of revenue foregone and actual cash outgo.
    • The question, therefore, on everyone’s mind is how much money will be needed for all this and where will it come from?
    • What the government and the RBI have done so far is clearly awfully inadequate. Other countries have done much more. India can be no exception.

    Where will the government will get resources?

    • Partly from market and partly form RBI: Broadly speaking, resources will come partly through market borrowings and partly from the RBI.
    • Manmohan Singh had decided in 1994 that in future the government of India would not monetise its deficit; in other words, would not borrow from the RBI but go to the money market and borrow from there.
    • Borrow from the RBI: In these unprecedented times, we may take leave from that very sound principle, which all governments have followed religiously since then, and borrow from the RBI.
    • What does it mean? This means printing of more currency notes with all its attendant problems including inflation.
    • Government of India will have to take the steps necessary to tackle the after-effects to the extent possible. It must ensure that the supply chains work smoothly.

    How will the money be spent?

    • The Important role of states: The states will have to play a very important role in this, as much of the work will have to be done by them.
    • Responsibility of finance commission: Since the finance commission continues to be in existence and has a clear idea of the state finances, it should be immediately tasked with the responsibility of discussing this matter with the state governments and making its recommendations available within a period of one month.
    • The task force under the finance minister could work out the needs of businesses and the government of India both in the short as well as the medium term.
    • Spending money properly and efficiently: It should not be wasted and each rupee spent creates its own multiplier effect.
    • Our system leaves much to be desired. And the moment it is known that funding is not a constraint, the system can go berserk.
    • We must guard against that and ensure that rules are in place, specially at the field level to ensure the proper use of resources.

    Role of banks, financial institutions and MGNREGA

    • The banks and other financial institutions will have to be provided with resources to help the private sector, especially the agricultural and MSME sectors.
    • In the rural areas, we must ensure that durable assets are created out of the funds made available.
    • The rules governing the MGNREGA scheme should be tweaked to the extent necessary in order to ensure that more material than labour is used wherever necessary.

    Conclusion

    India should and can come out of the present crisis with as little damage as possible if we tackle it together. We cannot control what happens in other countries, but we can surely learn from them and adopt their best practices. We must also play our role in defining the new global order because the world is more intertwined now than ever before.

  • The new multilateralism

    Context

    As the major global institutions — from the WHO to the WTO — are experiencing unprecedented turmoil India needs to be pragmatic and fleet-footed.

    Reorientation of India’s multilateral strategy

    • As many international institutions, including the World Health Organisation and the United Nations Security Council, come under great stress in the corona crisis, Delhi’s multilateral strategy is going through a rapid reorientation.
    • Realists in Delhi recognise that India’s engagement with the UN is not about the pursuit of some higher ideological calling, but the navigation of hardball geopolitics.

    China’s growing influence and implications for India

    • China’s role on Kashmir question: China repeatedly pressed the UN to discuss the Kashmir question after Delhi changed the constitutional status of the region last August.
    • China avoiding discussion on Covid crisis: But through last month, as the rotating chair of the UNSC, China blocked any discussion of the Covid crisis.
    • Beijing insisted that the crisis was not a matter of international peace and security that the UNSC ought to bother itself with.
    • A mere internal administrative change in Kashmir, Beijing continues to insist, is a grave threat to international peace and security.
    • With its veto power, Beijing can simply prevent the UNSC from doing anything against China.

    Why the credibility of the UN and WHO bureaucracy is under cloud?

    • Secretary-General Antonio Guterres, jumped quickly into the Indo-Pak arguments over Kashmir, and raised concerns over India’s Citizenship Amendment Act and the National Register of Citizens.
    • Guterres went on an extended visit to Pakistan in February and made an ostentatious public offer to mediate between Delhi and Islamabad on Kashmir.
    • But when it comes to China’s role in the spread of the coronavirus, Guterres can’t seem to find the words.
    • The situation at the WHO is a lot worse.
    • The Director-General of WHO, Tedros Adhanom Ghebreyesus warns against the dangers of “politicising” the Covid crisis.
    • Many in Europe and the US think that is exactly what Tedros has done at the WHO in the last few months.
    • Breakdown of the multilateral system: What we are witnessing is the breakdown of the multilateral system that emerged from the ashes of the Second World War amidst the deepening contestation between the world’s foremost powers — the US and China.

    NEW MULTILATERALISM adopted by India

    • India’s new multilateralism — as a pragmatic response to external change — involves downplaying some past associations and strengthening new partnerships.
    • Take, for example, two innovations India has made since the end of the Cold War.
    • One was the BRICS forum with Brazil, Russia, China and South Africa and the other was the so-called Quad — a coalition of democracies with Australia, Japan and the US.
    • Actions of BRICS members with respect to India: As India reorders its multilateral priorities amid the corona crisis, the BRICS forum is losing some of its salience and the Quad is gaining traction.
    • Preventing discussion on COVID crisis: Two of India’s partners in BRICS — Russia and South Africa — had reportedly backed the efforts of a third, China, to prevent a discussion of the COVID crisis in the UNSC.
    • If Delhi were sitting in the UNSC right now as a non-permanent member, it would have had every interest in pressing for a discussion of the COVID crisis that has severely damaged India’s economic and social prospects.
    • Meanwhile, India is in regular consultations on managing the corona crisis with the “Quad Plus” grouping that draws in South Korea, Vietnam and New Zealand.
    • Neither the BRICS nor the Quad square with the conventional narrative on India’s multilateralism that was dominated in the past by the Non-Aligned Movement (NAM) and the G-77.
    • As circumstances change, India is finding new international partners to secure its interests.

    Context which gave rise to BRICS

    • It started out as a triangular coalition with Russia and China in the mid-1990s.
    • India’s interest in the RIC was borne out of fear of the unipolar moment and Russia’s relentless efforts to draw it into a “strategic triangle” that would resist “American hegemony”.
    • In the early 1990s, Delhi was rather wary of the Bill Clinton Administration’s plans to relieve India of its nuclear and missile programmes.
    • What made matters worse was the Clinton Administration’s formulation that “Kashmir is the world’s most dangerous nuclear flashpoint”.
    • This was not just a description; it was accompanied by a prescription for Delhi: Resolve the Kashmir question by sitting down with Pakistan and the Hurriyat.
    • If Delhi needs any help, Washington will be happy to chip in.
    • Balancing the US pressure: Going into a political tent with Russia and China seemed a sensible bet to ward off American pressures on the nuclear and Kashmir questions.

    Two decades after BRICS-Changes in circumstances

    • Two decades later, we are in a very different place.
    • Take the same two issues — Kashmir and the nuclear programme — that drove India into the BRICS.
    • China’s role on Kashmir issue: It is Beijing that wants the UNSC to take up the Kashmir question, and it is Paris and Washington that are preventing it.
    • NSG membership blocked by China: China has also resolutely blocked India’s effort to become a full member of the global nuclear order by joining the Nuclear Suppliers Group.
    • On the nuclear front too, it was France and the US that helped India break the nuclear blockade.
    • Shielding of Pakistan by China: China shields Pakistan from international pressures to end cross-border terrorism.
    • And it is India’s partners in the West and the Muslim world that are helping Delhi cope better with violent extremism.

    India’s engagement with Europe

    • India has also discovered the new possibilities for engaging Europe in the multilateral arena.
    • Europe as an important partner: If India’s definition of multilateralism — Afro-Asian solidarity — immediately after Independence was defined in opposition to colonial Europe, Delhi now sees Europe as a valuable partner in rearranging the global order.
    • India has joined the “alliance for multilateralism” initiated by Germany and supported by its European partners.

    Conclusion

    India needs all the pragmatism it can muster to pursue its interests in a world where all the major global institutions — from the WHO to the WTO — are experiencing unprecedented turmoil and are heading towards an inevitable restructuring.

  • A time for extraordinary action

    Context

    The lockdown and other movement restrictions, backed by scientific and political consensus on their inevitability, have directly led to a dramatic slowdown in economic activity across the board. What is its impact on the Indian economy? This question calls for an urgent answer.

    The methodology used to estimate the impact

    • We provide an initial, quantitative response, using a methodology that is based on the technique of input-output (IO) models, first elaborated by the economist Wassily Leontief.
    • How the model works: Such models provide detailed sector-wise information of output and consumption in different sectors of the economy and their inter-linkages, along with the sum total of wages, profits, savings, and expenditures in each sector and by each section of final consumers (households, government, etc.).
    • Crucially, it pays attention to intermediate consumption, namely consumption by some sectors of the output of other sectors (as well as consumption within their own sector).
    • Advantage of the model: The key advantage of such a model is that it allows the calculation of the impact of any change in any sector in both direct and indirect terms, which has made this model somewhat ubiquitous in the computation of the economic impact of disasters.
    • This also renders it well-suited to estimating the economic consequences of COVID-19.
    • Regrettably, the last officially published IO table for India was for the year 2007-2008.
    • In our estimates, we use the IO tables for India published by the World Input-Output Database for the year 2014 that updates the IO tables for individual countries using time series of national income statistics.
    • To calculate the impact of the lockdown, there are four different scenarios of the number of workdays lost in different sectors.
    • How daily output loss is calculated? Assuming that the estimated annual output is distributed uniformly across the year, it is possible to calculate the daily output and therefore the daily output loss.
    • The direct and indirect impacts of the lockdown are then estimated using IO multipliers which are assumed to be constant.
    • We then calculate the percentage decline in the national gross domestic product (GDP) of 2019-2020 that this impact amounts to.

    What is the impact on various sectors?

    • Loss at 7% to 33% of GDP: Model (see table) shows that the loss of GDP ranges from ₹17 lakh crore (7% of GDP) in the most conservative scenario, where the average number of output days lost is only 13, to ₹73 lakh crore (33% of GDP) in the most impactful scenario, where the number of days of lost output averages 67.
    • In intermediate scenarios of 27 and 47 days of lost output, the GDP decline is ₹29 lakh crore (13% of GDP) and ₹51 lakh crore (23% of GDP), respectively.
    • OECD estimate: These estimates also accord well with other estimates, such as those of the OECD that suggest a 20% loss to GDP for India.
    • Impact of varying lockdown period: Even assuming that sectors will have varying lockdown periods, all sectors face serious losses due to their
    • If we take the scenario where a prolonged lockdown happens, averaging about 47 days across sectors, we find that the mining sector faces the largest drop of 42% in value-added despite that sector itself being shut down for, say, 35 days.
    • The electricity sector sees a 29% fall in value-added, even though it faces no shut down per se.
    • Losses are expected across all sectors in terms of both wage compensation and the availability of working capital.

    Incorporation of feedback effect in estimates

    • The linear character of our estimates, intrinsic to IO analysis, does not allow incorporation of feedback effects and assumes that output commences where it left off without further constraints.
    • An attempt has been made to correct for this by using a varying number of days of output loss across sectors, but this is quite possibly inadequate to capture the continuing economic impact.
    • We are faced today with a unique situation where both supply and demand have collapsed in several sectors.
    • Impact on agriculture: In some sectors such as agriculture, the impact may manifest in the delayed fashion, if the anti-COVID-19 measures, or the pandemic itself, affects agricultural operations in the next the kharif season, even if, as reports suggest, much of this year’s rabi has been successfully harvested.
    • The shortfall in export not accounted for: Given the database, we are using and the initial character of our analyses we have also not explicitly accounted for possible shortfalls in exports due to lack of demand elsewhere in the world, as well as the unavailability of intermediate imported goods that are crucial for the Indian economy.
    • Nor are we able to adequately separate the impact on the informal sector, that is partially aggregated with the formal sector in the database that we are using and partially unaccounted for due to lack of data.

    Need for the huge stimulus package

    • The most striking feature of even this simple calculation is the all-round pervasive impact on the economy of the anti-COVID-19 measures that we are currently undertaking and that are likely to continue in modified form for a short period.
    • Measures such as debt relief, postponement of revenue and tax collections, immediate relief in cash and kind to the poor, and revamping and scaling up public distribution are all undoubtedly necessary but far from sufficient.
    • Our numbers suggest that the resort to huge stimulus packages that developed countries have already started putting in place is by no means mistaken.

    Way forward

    • Package for all the sectors of the economy: We need to compensate and pump cash into the hands of not only wage workers in the formal and informal sectors, and also into the livelihood activities of the informal sector.
    • But businesses too need to be primed with handouts in the case of small and medium enterprises, and with a variety of concessions even in the case of larger businesses.
    • It is critical to preserve the productive capacities of the Indian economy across the board. The annual budget of the current year, already passed, clearly cannot cope with such a massive effort and needs to be revisited by suitable parliamentary measures.
    • Caring too much about fiscal deficit will not be helpful: Redistributing expenditure, seeking to keep the fiscal deficit “under control” as it were, through measures such as cutting back on government salaries, are unlikely to be helpful.
    • Apart from sending the wrong signal to private sector employers, who have so far been exhorted to maintain salaries and wages during the lockdown, it is quite likely to lead to further reduction in demand since the government is the biggest employer in the country.
    • Ensure the key role of the state: Finally, one must note that the current crisis is not a transformatory moment for the Indian economy, even if the scale of the impact and recovery process will undoubtedly push the economy in new directions.
    • But “greening” the economy or more radical transformative measures are not particularly relevant in its current state.
    • What is needed is ensuring the key role of the state to lift up an economy that is in danger of being brought to its knees, and to restore some semblance of its normal rhythm, by an unprecedented scale of state investment.

  • The law cannot fall silent

    Context

    Amid the many developments in the wake of Covid-19 pandemic one of the facets that is also discussed is-How to read international law in the context of the pointers to the future?

    Constitutional duty regarding international laws

    • Respect for the norms and standards of international law is among the paramount constitutional duties of the state under Article 51 of the Constitution.
    • The duty is regardless of the quibbles on whether the language here refers only to treaty/obligations or also to customary international law.
    • International norms remain relevant: Despite US President Donald Trump’s recent threat of actions against the WHO, international norms, standards, and doctrines remain relevant to making national policy and law.

    Possibility of discussion over pandemic at UNSC

    • The difference between the United Nations as a site of normative discursivity and as a site of doing global power politics is sadly manifest even now in the accelerated pace of the pandemic.
    • Discussion extremely unlikely: President Trump’s insistence on calling it a “Chinese virus” renders it extremely unlikely that the pandemic will be discussed during the current monthly presidency of the UN Security Council by China.
    • Possibility of veto: The threat of veto by China and Russia will always loom large whenever the matter is placed for discussion.

    Role of the UN in the codification of law

    • The UN is also a site of systems of norm enunciation.
    • Along with the International Law Commission, it is responsible for the progressive codification of law.
    • The UN system has developed lawmaking and framework treaties as well as provided auspices for systems of “soft” law that may eventually become the binding law.
    • There are three types of international laws which are described below.

    1. The fundamental overriding principle of international laws

    • Jus cogens: Some of the norms of international law are robust and deeply relevant. For example, the peremptory jus cogens — a few fundamental, overriding principles of international law such as crimes against humanity, genocide, and human trafficking apply to all states.
    • And Article 53 of the Vienna Convention on the Law of Treaties goes so far as to declare that a “treaty is void if, at the time of its conclusion, it conflicts with a peremptory norm of general international law”.
    • And even when ingredients of genocide remain difficult to prove, the International Court of Justice (ICJ) has held, in 2007, that states have a duty to prevent and punish acts and omissions that eventually furnish elements for the commission of crime of genocide.
    • Erga omnes: There also exist erga omnes rules prescribing specifically-determined obligations which states owe to the international community as a whole.
    • This was enunciated by the ICJ in 1970 for four situations — the outlawing of acts of aggression; the outlawing of genocide; protection from slavery; and protection from racial discrimination.
    • A great significance of this judicial dictum is that it lays down obligations which transcend consensual relations among states.
    • In addition, there are three other sets of international law obligations.
    • These are primarily derived from the no-harm principles crystallised in the International Law Commission’s 2001 Draft Articles on the Prevention of Transboundary Harm (DAPTH) and the Paris Framework Agreement on Climate Change, 2015.
    • The DAPTH has carefully developed norms of due diligence, stressing all the way that these may be adapted to contextual exigencies.
    • But due diligence obligations certainly extend beyond local and national boundaries, especially because the environmental problems have a transboundary impact.
    • Each state is obliged to observe these standards in the fight against COVID-19 as a matter of international law.

    2. International laws dealing with core human right measures

    • No law or policy to combat epidemics or pandemic can go against the rights of migrant workers, internally displaced peoples, and refugees and asylum seekers.
    • Respect for the inherent dignity of individuals in combating COVID-19 and for the rights of equal health for all, non-discrimination, and the norms of human dignity further reinforce accountability and the transparency of state and other social actors.
    • Panicky and sadist policing, including shoot-a- sight orders in collective exodus situations, and militaristic responses to food riots de-justify health lockouts and curfews.

    3. International humanitarian law

    • The third set of obligations arises out of international humanitarian law. The Biological and Toxin Weapons Convention (BTWC) is pertinent here.
    • India did not subscribe to any conspiracy or racist theory about the origins of COVID-19 — in fact, India’s foreign minister rightly affirmed the BTWC obligations on March 26 (on the 40th anniversary of that Convention).
    • Surely, this global and non-discriminatory disarmament convention deserves applause because it outlaws a whole range of weapons of mass destruction.
    • India has, and rightly so, called for “high priority” to “full and effective implementation by all states parties”.

    Conclusion

    The starting point of a determined fight against COVID-19 has to be a full-throated repudiation of an ancient Latin maxim, inter arma enim silent leges (in times of war, the law falls silent). Combating this fearsome pandemic calls for re-dedication to nested international law obligations and frameworks.

  • Financing the pandemic rescue package

    Context

    The priority for India is to ensure that it overcomes the COVID-19 pandemic and kick-starts GDP growth.

    Financing strategy for the 1.7 lakh crores package

    • Rather than fix the weaknesses in the macroeconomy: a high fiscal deficit of 7.49% and government indebtedness that was 69% of GDP in 2019, the government wants to overcome the pandemic.
    • When COVID-19 cases began to increase, the Government of India (GoI) swung into action by announcing a 21-day national lockdown and a ₹1.7-lakh crore (approximately $22.59 billion) rescue package.
    • Financing strategy: Available in the state disaster relief fund is ₹60,000 crore, comprising ₹30,000 crore of the outstanding balance and the Central government’s allocation of a similar amount for FY2021.
    • Hence, the GoI needs to raise an additional ₹1.1-lakh crore,e., 65% of the rescue package outlay.
    • Its financing strategy should be to raise long-term funds at cost-effective rates, with flexible repayment terms that allow it to take tactical advantage of market movements.
    • Following are some of the options that the government can explore to raise the required amount.

    1. GDP-linked bonds

    • The GoI may issue listed, Indian rupee-denominated, 25-year GDP-linked bonds that are callable from, say, the fifth year.
    • What GDP-linked means? The coupon (interest) on a GDP-linked bond is correlated to the GDP growth rate and is subject to a cap.
    • The issuer, the GoI, is liable to pay a lower coupon during years of slower growth and vice-versa.
    • The callable feature from the fifth year till maturity allows the GoI to effect partial repayments during high growth years and when it earns non-recurring revenues such as proceeds from disinvestment of public sector enterprises (PSEs).
    • The listing of bonds provides investors with an exit option.
    • Examples from the world: Costa Rica, Bulgaria and Bosnia-Herzegovina issued the first pure GDP-linked bonds in the 1990s.
    • Argentina and Greece issued warrant-like instruments similar to GDP-linked bonds in 2005 and 2012 respectively. India could learn from their experience.
    • Timely GDP data is a prerequisite: Publishing reliable and timely GDP data is a prerequisite for the successful issue of GDP-linked bonds, which the GoI may use to part-finance the COVID-19 rescue package and to diversify its borrowing sources.

    2. Streamlining PSEs

    • The 15 largest non-financial central PSEs (CPSEs) in the S&P BSE CPSE index contributed approximately 75% of the GoI’s ₹48,256.41 crore dividend income from PSEs in FY2020.
    • The Union Budget projected PSE dividends to increase by 25% to ₹65,746.96 crore in FY2021.
    • This milestone is unlikely to be achieved in the current environment.
    • The 15 CPSEs have accumulated sizeable non-core assets including financial investments, loans, cash and bank deposits in excess of their operating requirements, and real estate.
    • The return on these assets (excluding real estate) is around 200 basis points lower than the returns on their core businesses.
    • These CPSEs owe the government ₹25,904 crore as of end-March 2019.
    • These non-core assets must be monetised to repay statutory dues and upstream dividends to GoI.
    • Formation of HOLDCO: While loans and excess cash and bank deposits may be monetised within three months, streamlining investments and selling real estate is a time-consuming process.
    • It is imperative for the GoI to form a PSE and public sector bank holding company (‘Holdco’) along the lines of Singapore’s Temasek Holdings and Malaysia’s Khazanah Nasional Berhad.
    • The Holdco will enable PSEs to monetise their non-core assets at remunerative prices, maximise their enterprise value and focus on their core businesses.
    • The ₹30,168 crore loans that CPSEs have extended to employees, vendors and associates may be securitised or refinanced, with CPSEs guaranteeing loans extended to weak counterparties.
    • Excess liquidity with PSEs: It is essential that businesses maintain liquidity, especially during a downturn. However, the outstanding cash and bank deposits of the 15 CPSEs (₹64,253 crore) is in excess of their operating requirements.
    • CPSEs must determine the cash they require to meet, say, six months of operating expenses and use the excess cash to repay statutory dues and upstream dividends to the GoI.
    • Banks must extend to CPSEs committed lines of credit that the latter may draw down during exigencies.
    • Financial investments of PSEs be transferred to HOLDCO: The 15 CPSEs have accumulated ₹93,562 crore financial investments comprising listed and unlisted debt, equity and mutual fund units.
    • These exclude investments in associates and joint ventures.
    • The CPSEs ought to transfer these investments to Holdco, which can manage the portfolio and transfer the returns to the original investors.
    • Real estate holdings of PSEs: One important non-core asset, whose value is likely to exceed the combined value of other non-core assets, is the real estate holdings of PSEs.
    • In September 2018, the GoI identified properties of nine PSEs (Air India, Pawan Hans, Hindustan Fluorocarbons, Hindustan Newsprint, Bharat Pumps & Compressors, Scooters India, Bridge and Roof Co, Hindustan Prefab, and Projects & Development India) to be divested.
    • The GoI must mandate all PSEs and government departments to transfer their non-core properties to Holdco, which can opportunistically sell these properties and transfer the proceeds to the owners.

    Refrain from asking RBI to pay more dividend

    • The Reserve Bank of India (RBI) has allocated ₹1 lakh crore to carry out long-term repo operations in tranches and has reduced the repo rates by 75 basis points to 4.4% to help banks augment their liquidity in the wake of the pandemic.
    • Recognising the RBI’s liquidity requirements, the GoI must refrain from asking the RBI to pay more dividends that it can viably pay.
    • During the five years ending on June 30, 2019, the RBI paid the GoI 100% of its net disposable income, with its FY2019 dividends more than trebling to ₹1.76 lakh crore from ₹50,000 crore in FY2018.
    • The Bimal Jalan panel constituted in 2019 to review the RBI’s economic capital framework opined that the RBI may pay interim dividends only under exceptional circumstances and that unrealised gains in the valuation of RBI’s assets ought to be used as risk buffers against market risks and may not be paid as dividends.

    Conclusion

    The Bimal Jalan panel recommendation must be adhered to in letter and spirit. The GoI may finance the COVID-19 rescue package by issuing GDP-linked bonds, tapping PSEs’ excess liquidity and monetising non-core assets.