Note4Students
From UPSC perspective, the following things are important :
Prelims level: Aksai Chin
Mains level: Paper 2- Border conflict with China
Context
In a recent television interview, the Indian Army Chief, General M.M. Naravane, argued that “out of the five or six friction points (in Ladakh), five have been solved”.
Friction points in Ladakh
- ‘Friction point’ are the points of Chinese ingress into hitherto India-controlled territory in Ladakh, where this control is exercised by the Army and the Indo-Tibetan Border Police (ITBP) through regular patrols to the claimed areas.
- These ‘friction points’ are Depsang, Galwan, Hot Springs, Gogra, North bank of Pangong Tso, Kailash Range and Demchok.
- By asserting that only one of the friction points is remaining to be resolved — Hot Springs or PP15, Army Chief implicitly ruled out Depsang as an area to be resolved.
- This attempt to delink the strategically important area of Depsang from the ongoing Ladakh border crisis is worrying.
Significance of Depsang
- Depsang is an enclave of flat terrain located in an area the Army classifies as Sub-Sector North (SSN), which provides land access to Central Asia through the Karakoram Pass.
- The Army has always identified Depsang plains as where it finds itself most vulnerable in Ladakh, devising plans to tackle the major Chinese challenge.
- SSN’s flat terrain of Depsang, Trig Heights and DBO — which provides direct access to Aksai Chin — is suited for mechanised warfare but is located at the end of only one very long and tenuous communication axis for India.
- China, in turn, has multiple roads that provide easy access to the area.
- This leaves SSN highly vulnerable to capture by the PLA, with a few thousands of square kilometres from the Karakoram Pass to Burtse, likely to be lost.
- Nowhere else in Ladakh is the PLA likely to gain so much territory in a single swoop.
- SSN lies to the east of Siachen, located between the Saltoro ridge on the Pakistani border and the Saser ridge close to the Chinese border.
- On paper, it is the only place where a physical military collusion can take place between Pakistan and China — and the challenge of a two-front war can become real in the worst-case scenario.
- If India loses this area, it will be nearly impossible to launch a military operation to wrest back Gilgit-Baltistan from Pakistan.
Dangers of delinking Depsang
- Invalidation of Indian claims: The biggest danger of delinking Depsang from the current border crisis in Ladakh, however, is of corroborating the Chinese argument, which invalidates the rightful Indian claim over a large swathe of territory.
- In sparsely populated areas like Ladakh, with limited forward deployment of troops, the only assertion of territorial claims is by regular patrolling.
- By arguing that the blockade at Y-junction predates the current stand-off — a ‘legacy issue’ that goes back years — the Chinese side can affirm that Indian patrols never had access to this area and thus India has no valid claim on the territory.
Conclusion
As was demonstrated by China in the aftermath of the 1962 War, there should be no holding back in painstakingly asserting one’s claims when it comes to safeguarding the territory.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: AI
Mains level: Paper 3- Climate cost of AI
Context
While there is an allure to national dreams of economic prosperity and global competitiveness, underwritten by AI, there is an environmental cost.
Issues with AI
- Unfair race for dominance in AI: A few developed economies possess certain material advantages right from the start, they also set the rules.
- They have an advantage in research and development, and possess a skilled workforce as well as wealth to invest in AI.
- Inequality in terms of governance: We can also look at the state of inequity in AI in terms of governance: How “tech fluent” are policymakers in developing and underdeveloped countries?
- What barriers do they face in crafting regulations and industrial policy?
- At the same time, there is an emerging challenge at the nexus of AI and climate change that could deepen this inequity.
Climate impact of AI
- The climate impact of AI comes in a few forms: The energy use of training and operating large AI models is one.
- In 2020, digital technologies accounted for between 1.8 per cent and 6.3 per cent of global emissions.
- In November 2021, UNESCO adopted the In November 2021, UNESCO adopted the Recommendation on the Ethics of Artificial Intelligence, calling on actors to “reduce the environmental impact of AI systems, including but not limited to its carbon footprint.” , calling on actors to “reduce the environmental impact of AI systems, including but not limited to its carbon footprint.”
Inequitable access to resources
- Both global AI governance and climate change policy (historically) are contentious, being rooted in inequitable access to resources.
- Developing and underdeveloped countries face a challenge on two fronts:
- 1] AI’s social and economic benefits are accruing to a few countries.
- 2] Most of the current efforts and narratives on the relationship between AI and climate impact are being driven by the developed West.
Way forward
- Assess technology-led priorities: Governments of developing countries, India included, should also assess their technology-led growth priorities in the context of AI’s climate costs.
- It is argued that as developing nations are not plagued by legacy infrastructure it would be easier for them to “build up better”.
Consider the question “How Artificial Intelligence technologies could transform the world as we know it? What are the concerns with it?
Conclusion
It may be worth thinking through what “solutions” would truly work for the unique social and economic contexts of the communities in our global village.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Pradhan Mantri Poshan Shakti Nirman
Mains level: Paper 2- Low allocation for social sector
Context
India continues to rank poorly in various global indices that reflect the quality of life, human capital or human development in the country. In this context, it was expected that the current Budget would see an expansion in government spending on the social sector.
Need for greater spending on social sector
- In Human Development Index, India ranks 131 out of 189 countries and on the Global Hunger Index, it ranks 101 out of 116 countries.
- The pandemic over the last two years has had a severe impact on the health, education and food security of the poor and informal sector workers.
- The country has been experiencing increasing inequality over the last couple of decades.
Marginal increase in allocation for school education
- In the budget, the government announced that it will expand its ‘one class, oneTVchannel’ scheme instead of announcing enhanced allocations for schools the government announced that it will expand its ‘one class, oneTVchannel’ scheme instead of announcing enhanced allocations for schools so that they can reopen with vigour.
- The budget for school education at ₹63,449 crore is a slight improvement over last year’s ₹54,873 crore (2021-22 budget estimates, BE) and a mere increase of 6% in nominal terms compared to 2020-21 BE of ₹59,845 crore.
- After rechristening the school mid-day meal scheme as Pradhan Mantri Poshan Shakti Nirman, simply called PM Poshan, the allocation for the scheme has reduced from ₹11,500 crore last year to ₹10,233 crore this year.
Low allocation for health
- Despite repeated statements about strengthening the public health system, the overall budget for the Department of Health and Family Welfare at ₹83,000 crore has gone up by only 16% over the BE for 2021-22 and by less than ₹1,000 crore compared to the RE for 2021-22, which is ₹82,921 crore.
- However, by including water and sanitation in the budget for health, there is an increase being shown in health spending as a proportion of GDP.
- Also, even though the budget for the Jal Jeevan Mission has increased from ₹50,000 crore to ₹60,000 crore, only 44% of the allocated funds to the Department of Water and Sanitation for 2021-22 has been spent as on end December 2021.
No indication of plan to extend the PMGKAY
- 60% of the population are covered by ration cards currently under the National Food Security Act.
- Those who were eligible benefited from the additional free foodgrains that they have been given under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).
- However, the food subsidy (BE) for 2022-23 at ₹2.06 lakh crore is only enough to cover the regular NFSA entitlements.
- The indication is that there is no plan to extend the PMGKAY.
- The food subsidy RE for 2021-22 is ₹2.86 lakh crore.
Other schemes
- Budgets for important schemes such as Saksham Anganwadi, maternity entitlements and social security pensions are around the same as the allocations for last year.
- The allocation for MGNREGA at ₹73,000 crore also does not reflect the increased demand for work or thethe pending wages of ₹21,000 crore.
Continued negligence
- The resources allocated for crucial government schemes in the fields of health, education, nutrition, and social protection have remained stagnant or show negligent increase.
- In fact, the budgets for these schemes have been declining in real terms since 2015.
- The World Social Protection Report 2020-22, brought out by the International Labour Organization, shows that the spending on social protection (excluding health) in India is 1.4% of the GDP, while the average for low-middle income countries is 2.5%.
Conclusion
This continued negligence does not bode well for inclusive development in India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CAA
Mains level: Paper 2- Pendency of important cases
Context
Unless the Court strives in every possible way to assure that the Constitution, the law, applies fairly to all citizens, the Court cannot be said to have fulfilled its custodial responsibility.
Landmark judgments
- In the last few years, the Indian Supreme Court has delivered some judgments of far-reaching consequence.
- It declared the right to privacy a fundamental right; decriminalized consensual sexual conduct between adults of the same sex; recognized transgender persons as the third gender; and outlawed triple talaq.
- These decisions shore up the belief in republican values like liberty and equality reified in our Constitution.
Important cases pending in the Supreme Court
- Constitutionality of CAA: Many petitions were filed before the Supreme Court challenging the constitutionality of the Citizenship (Amendment) Act, 2019, that provides non-Muslim communities from Bangladesh, Pakistan, and Afghanistan a fast-track route to Indian citizenship.
- More than two years later, the matter continues to languish in the apex court.
- Dilution of Article 370: Innumerable petitions have been filed challenging the Presidential Order of August 5, 2019, that effectually diluted Article 370 of the Constitution.
- To date, the court has done precious little to decide this vexed question of law.
- Constitutionality of 103rd amendment: Petitions challenging the constitutionality of the Constitution(One Hundred and Third Amendment)Act,2019 that provides reservations in public educational institutions and government jobs for economically weaker sections are also languishing in the Supreme Court.
- Challenges to the electoral bond scheme: The Supreme Court has failed to accord proper hearing in the last four years to the constitutional challenge to the electoral bonds scheme.
Conclusion
Unless the Court strives in every possible way to assure that the Constitution, the law, applies fairly to all citizens, the Court cannot be said to have fulfilled its custodial responsibility”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- P5 joint statement on nuclear weapons
Context
The leaders of five nuclear-weapons States — the US, Russia, China, the UK, and France, also known as the P5 issued a joint statement on preventing nuclear war and avoiding the ongoing global arms race.
Overview of the P5 statement
- It is not a binding resolution and reiterates some of the core obligations of the NPT.
- The P5 statement reaffirms that a “nuclear war cannot be won and must never be fought” because of its “far-reaching consequences”.
- The statement also expresses a commitment to the group’s Treaty on the Non-Proliferation of Nuclear Weapons (NPT) obligations and “to prevent the unauthorized or unintended use of nuclear weapons”.
- Declaring that an arms race would benefit none and endanger all, the P5 have undertaken to:
- (1) work with all states to create a security environment more conducive to progress on disarmament with the ultimate goal of a world without nuclear weapons.
- (2) continue seeking bilateral and multilateral diplomatic approaches to avoid military confrontations, strengthen stability and predictability, increase mutual understanding and confidence”.
- (3) pursue “constructive dialogue with mutual respect and acknowledgment of each other’s security interests and concerns”.
Bold action on 6 measures
- Bold action on six fronts is necessary.
- 1) Chart a path for nuclear disarmament: That member states should chart a path forward on nuclear disarmament.
- 2) Transparency and dialogue: They should agree to new measures of “transparency and dialogue”.
- 3) Address nuclear crises: They should address the “simmering” nuclear crises in the Middle East and Asia.
- 4) Strengthen global bodies: They should strengthen the existing global bodies that support non-proliferation, including the International Atomic Energy Agency (IAEA).
- 5) Peaceful use of nuclear technology: They should promote the peaceful use of nuclear technology.
- 6) Elimination of nuclear weapons: they should remind “the world’s people that eliminating nuclear weapons is the only way to guarantee that they will never be used.
Peace education and the right to peace
- Peace is necessary for rights, freedom, equality, and justice, and for that reason, we need what Justice Oliver Wendell Holmes Jr. called “education in the obvious”— namely, peace education.
- This is required at multiple levels, ranging across the planetary, global, supranational, regional, national, and local levels of social cognition and action.
- UN Resolution 39/11 (November 12, 1984) proclaims that the peoples of our planet have a sacred right to peace and equally solemnly declares that the “preservation of the right of peoples to peace and the promotion of its implementation constitute a fundamental obligation of each State”.
- The subsequent UN Resolution 53/243 B, declaring a program of action for a culture of peace (1999) also owes a great deal to Gandhi’s legacy and mission.
Conclusion
The statement is politically significant given the unimaginable danger posed by the 13,000 nuclear weapons currently believed to be held by a handful of countries, and the growing specter of loose nukes, which may be deployed by armed terrorist groups for nefarious purposes.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Adapting to geopolitical and geoeconomic changes
Context
As India returns to a high growth path after a slowdown in the last decade, its geopolitical salience in the world will continue to rise.
India’s growth story
- Today, India’s GDP is $3.1 trillion and could cross, according to some estimates, $8 trillion by the end of this decade.
- India’s total trade, which was about $38 billion in 1991-92, is expected to touch $1.3 trillion this year.
- This is about 40 percent of India’s GDP and underlines the fact that India is more deeply tied to the world than ever before.
- The world itself is in a geo-economic churn making the transition to $8 trillion a challenging one.
Geo-economic and geopolitical changes in the global order
Geo-economic changes
- It was Edward Luttwak, the well-known American strategist, who triggered a global discourse on the idea of geoeconomics in a seminal article in 1990 amidst the end of the Cold War.
- Using economic dominance for political gain: The rapid economic rise of China in the last three decades and Beijing’s success in leveraging its growing economic clout for political gain is widely seen as a classic example of geoeconomics.
- Economic interdependence: Luttwak’s warning against illusions of economic interdependence and globalization have been borne out by major changes in US-China relations in recent years.
- The dramatic expansion of economic interdependence between China and America over the last four decades — what some called “Chimerica” — was the principal evidence for the thesis that geopolitics and ideology no longer mattered.
- Chimerica was held up as an efficient economic fusion that underscored the virtues of economic globalization.
- However, economic nationalism has re-emerged in both countries today.
- The US is also strengthening domestic research and industrial capabilities to compete more effectively with China.
- China too has adopted the economic strategy of “dual circulation” that focuses on strengthening domestic capabilities and reducing exposure to external factors.
How geopolitical and geoeconomic changes are influencing India’s free trade policies
- At the end of 2019, India has walked out from the Regional Comprehensive Economic Partnership (RCEP) suggesting that the costs of joining a China-centered regional economic order are unacceptable.
- Deepening engagement with complementary economies: India’s move towards free trade agreements with countries like Australia, Britain, UAE, and Israel.
- Domestic orientation: Much like the US and China, India is now taking a number of initiatives to promote domestic manufacturing in a range of sectors under the banner of “Atmanirbhar Bharat”.
Way forward for India
- Until now, India had the luxury of treating its foreign, economic, and strategic policies as separate domains.
- An integrated approach to policies: Adapting to the current global geo-economic churn demands that Delhi finds better ways to integrate its financial, trade, technological, security, and foreign policies.
- Above all India needs a strategy that can respond to the imperatives of building domestic capabilities, developing geo-economic partnerships, and constructing geopolitical coalitions with like-minded countries.
Consider the question “How the current geo-political and geo-economic policies are shaping India’s trade policies? Suggest the approach India need to adapt to the structural changes taking place in the global order?”
Conclusion
India’s selective trade arrangements and the policies to promote domestic manufacturing have drawn much criticism. While those arguments must continue, they must be related more closely to the structural changes in the international economic order.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Health Authority
Mains level: Paper 2- Health system transformation
Context
After decades of low government expenditure on health, the Covid pandemic created a societal consensus on the need to strengthen our health system.
Steps to strengthen our health system
- The Fifteenth Finance Commission recommended greater investment in rural and urban primary care, a nationwide disease surveillance system extending from the block-level to national institutes, a larger health workforce and the augmentation of critical care capacity of hospitals.
- The Union budget of 2021 reflected these priorities in a proposed Pradhan Mantri Aatmanirbhar Swasth Bharat Yojana (PMASBY) to be made operational over six years, with a budget of Rs 64,180 crore.
- Broader vision of health: The Finance Minister also projected a broader vision of health beyond healthcare by merging allocations to water, sanitation, nutrition and air pollution control with the health budget.
- Under the Ayushman Bharat umbrella the Digital Health Mission was launched in September 2021.
- The Health Infrastructure Mission, launched in October 2021, was a renamed and augmented version of the PMASBY.
- These missions join the two other components of Ayushman Bharat launched in 2018.
- The Comprehensive Primary Health Care (CPHC) component is nested in the National Health Mission (NHM) while the Pradhan Mantri Jan Arogya Yojana (PMJAY) is steered by the National Health Authority (NHA).
Way forward
- While much of the following needs to be done by the states, the Centre should incentivise and support such efforts by the states.
- Link synergically: Primary healthcare services under the CPHC and linkage with water, sanitation, nutrition and pollution control programmes will strengthen the capacity of the health system for health promotion and disease prevention.
- The budget of 2022 must not only fund these missions adequately but indicate how they will link synergically while functioning under different administrative agencies.
- Allocate more funds: The NHM received only a 9.6 per cent increase in the 2021 budget.
- PMJAY did not see an increase in allocation last year, because its utilisation for non-Covid care declined sharply in the previous year.
- More importantly, limiting cost coverage to hospitalised care reduces the PMJAY’s capacity to significantly lower out-of-pocket expenditure (OOPE) on health, which is driven mostly by outpatient care and expenditure on medicines.
- Focus on Digital Heath Mission: The Digital Health Mission can enhance efficiency of the health systems in a variety of ways.
- These include better data collection and analysis, improved medical and health records, efficient supply chain management, tele-health services, support for health workforce training, implementation of health insurance programmes, real time monitoring and sharper evaluation of health programme performance along with effective multi-sectoral coordination.
- Improve the skill and number of healthcare workers: We need to increase the numbers and improve the skills of all categories of healthcare providers.
- While training specialist doctors could take time, the training of frontline workers like Accredited Social Health Activists (ASHAs) and Auxiliary Nurse Midwives (ANMs) can be done in a shorter time.
- Upgrade district hospitals: District hospitals need to be upgraded, with greater investment in infrastructure, equipment and staffing.
- In underserved regions, such district hospitals should be upgraded to become training centres for students of medical, nursing and allied health professional courses.
Conclusion
The expanded ambit of health, as defined in last year’s budget, must continue for aligning other sectors to public health objectives. The Union budget of 2022 can add further momentum to our health system transformation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Electoral bonds
Mains level: Paper 2- Issues with electoral bonds
Context
Ever since its introduction, the electoral bond scheme has envenomed the democratic process, by destroying altogether any notion of transparency in political funding.
Issue of anonymity in electoral bond
- The electoral bond scheme is designed to allow an individual, or any “artificial juridical person”, including body corporates, to purchase bonds issued by the State Bank of India during notified periods of time.
- These instruments are issued in the form of promissory notes, and in denominations ranging from ₹1,000 to ₹1 crore.
- Once purchased, the buyer can donate the bond to any political party of their choice and the party can then encash it on demand.
Supreme Court’s opinion
- The Supreme Court has allowed the scheme to continue unabated and has denied an interim stay on its operation.
- In one such provisional order, the Court asserted that the bonds were not, in fact, anonymous.
- According to the Court, since both the purchase and the encashment of bonds are made through banking channels, all it would take for a person to glean the identity of a donor was for her to look through every corporation’s financial statement — these records, the Court said, ought to be available with the Registrar of Companies.
- What the order ignored was that there is no attendant obligation on political parties to provide details to the public on each donation received by them through electoral bonds.
- Companies are also under no obligation to disclose the name of the party to whom they made the donation.
Violation of voter’s right
- The Supreme Court has consistently held that voters have a right to freely express themselves during an election and that they are entitled to all pieces of information that give purpose and vigour to this right.
- Surely, to participate in the electoral process in a meaningful manner and to choose one’s votes carefully, a citizen must know the identity of those backing the candidates.
Electoral bond does not eliminate the role of black money in funding elections
- As affidavits filed by the Election Commission of India in the Supreme Court have demonstrated, the scheme, if anything, augments the potential role of black money in elections.
- It does so by, among other things, removing existing barriers against shell entities and dying concerns from donating to political parties.
- Moreover, even if the bonds were meant to eliminate the presence of unaccounted currency, it is difficult to see what nexus the decision to provide complete anonymity of the donor bears to this objective.
- It is for this reason that the Reserve Bank of India reportedly advised the Government against the scheme’s introduction.
Conclusion
The worries over the electoral bond scheme, however, go beyond its patent unconstitutionality. This is because in allowing anonymity it befouls the basis of our democracy and prevents our elections from being truly free and fair.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Credit to GDP ratio
Mains level: Paper 3- How to generate high growth
Context
Although the impact of Omicron is less on the economy, the loss of GDP in the last two years is high. Also note that the pre-Covid year FY20 had a low base with 4 per cent growth of GDP. Therefore, the need to focus on higher growth in the forthcoming budget and in the medium term, that is, beyond India@75, is obvious.
Challenges in creating quantity and quality of jobs in the economy
- Unemployment rate is high in both rural and urban areas;
- Decline in work participation rates, particularly for women;
- Recovery in employment is still below the levels of the pre-Covid period.
- 85 per cent of the workforce is still in informal sector.
- Lack of skill: Less than 5 per cent of India’s workforce has formal skill training.
- Need for structural change: Manufacturing and services need structural change.
- Focus on MSME sector is needed for higher employment.
Policies needed to achieve higher economic growth and jobs
1] Capital expenditure and infrastructure
- The government outlined an infrastructure project pipeline worth more than Rs 102 lakh crore and asset monetisation pipeline of Rs 6 lakh crore to be implemented in the medium term.
- Continuing focus on infrastructure and capex by the government is important as it is a key driver for the “future of India”.
2] Focus on export growth
- It is well known that rise in exports is one of the main engines of growth and also important for employment creation.
- Export growth in India has increased and is expected to reach $400 billion by the end of FY22.
- One worrying aspect of India’s export performance is the failure in expanding the share of labour intensive products in the export basket.
- Protectionist trade policy: However, one problem in recent years is that India’s trade policy has become more protectionist by increasing import tariffs.
- Join RCEP: India should also join the Regional Comprehensive Economic Partnership (RCEP) for integrating our industries with the value chains in Asia.
3] Manufacturing and service sector growth
- The share of manufacturing in GDP and employment has hardly increased over time.
- Production Linked Incentive (PLI) schemes can improve performance.
- However, more efforts are required to improve the manufacturing sector.
- Similarly, there are a lot of opportunities for India in the service sector.
- Brand and customer centricity are important here.
- India can also think of more business in the service sector.
- Growing startups including unicorns in manufacturing and services is part of this effort.
4] Banking reforms
- Banking reforms are important as bank credit growth is a key indicator of economic growth.
- Low credit-to-gdp ration in India: Credit to GDP ratio in India is only around 55 per cent compared to 100 per cent and 150 per cent in many other countries.
- Credit should flow to all categories of economic agents like firms, households etc.
- The bad bank, a key initiative of the last budget, is yet to take shape.
- The role of fintech companies in the financial sector has increased significantly.
- They may not be able to replace banks although they are competing on payments.
- The banks also have to focus now on ESG (environment, social and governance) while giving credit.
- Big technology and digital push is also needed for banks.
5] Deal with K-shaped recovery
- The K-shaped recovery of the economy is still continuing.
- The policies have to focus on giving a push to the MSME sector, increasing investment in agriculture and rural infrastructure, a social sector push including bridging divides in health and education, social protection measures like foodgrain distribution, cash transfers, MGNREGA in rural areas, urban employment guarantee schemes etc.
- This will also create demand for the economy.
Conclusion
In the near term, fiscal policy has to play an important role in achieving the objectives of growth and jobs by expanding fiscal space while the fiscal deficit can be stabilised in the medium term. Increase in private investment may take some more time.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Defining formal sector
Mains level: Paper 3- Challenges of formalisation
Context
Despite efforts by the government, formalisation of economy still eludes us.
Prevalence of informality in India
- Despite witnessing rapid economic growth over the last two decades, 90% of workers in India have remained informally employed, producing about half of GDP.
- Combining the International Labour Organization’s widely agreed upon template of definitions with India’s official definition (of formal jobs as those providing at least one social security benefit — such as EPF), the share of formal workers in India stood at 9.7% (47.5 million).
- The prevalence of informal employment is also widespread in the non-agriculture sector.
- About half of informal workers are engaged in non-agriculture sectors which spread across urban and rural areas.
- Industries thriving without paying taxes are only the tip of the informal sector’s iceberg.
- What remains hidden are the large swathes of low productivity informal establishments working as household and self-employment units which represent “petty production”.
- To conflate the two distinct segments of the informal sector would be a serious conceptual error.
Fiscal perspective of formalisation
- Efforts to encourage formalisation: Currency demonetisation, introduction of the Goods and Services Tax (GST), digitalisation of financial transactions and enrolment of informal sector workers on numerous government Internet portals are all meant to encourage the formalisation of the economy.
- The formal sector is more productive than the informal sector, and formal workers have access to social security benefits.
- The above-mentioned efforts are based on the “fiscal perspective” of formalisation.
- This perspective appears to draw from a strand of thought advanced by some international financial institutions such as the International Monetary Fund, which foregrounds the persistence of the informal sector to excessive state regulation of enterprises and labour which drives genuine economic activity outside the regulatory ambit.
- Hence, it is believed that simplifying registration processes, easing rules for business conduct, and lowering the standards of protection of formal sector workers will bring informal enterprises and their workers into the fold of formality.
Issues with fiscal perspective
- Early on, in an attempt to promote employment, India protected small enterprises engaged in labour intensive manufacturing by providing them with fiscal concessions and regulating large-scale industry by licensing.
- Such measures led to many labour-intensive industries getting diffused into the informal/unorganised sectors.
- Further, they led to the formation of dense output and labour market inter-linkages between the informal and formal sectors via sub-contracting and outsourcing arrangements (quite like in labour abundant Asian economies).
- While such policy initiatives may have encouraged employment, bringing the enterprises which benefited from the policy into the tax net has been a challenge.
- Political and economic reasons operating at the regional/local level in a competitive electoral democracy are responsible for this phenomenon, too.
Role of underdevelopment
- Global evidence suggests that the view that legal and regulatory hurdles alone are mainly responsible for holding back formalisation does not hold much water.
- A well-regarded study, ‘Informality and Development’ argues that the persistence of informality is, in fact, a sign of underdevelopment.
- The finding suggests that informality decreases with economic growth, albeit slowly.
- A similar association is also evident across major States in India, based on official PLFS data.
- Hence, the persistence of a high share of informal employment in total employment seems nothing but a lack of adequate growth or continuation of underdevelopment.
Impact of pandemic
- Research by the State Bank of India recently reported the economy formalised rapidly during the pandemic year of 2020-21, with the informal sector’s GDP share shrinking to less than 20%, from about 50% a few years ago — close to the figure for developed countries.
- These findings of a sharp contraction of the informal sector during the pandemic year (2020-21) do not represent a sustained structural transformation.
- They are a temporary (and unfortunate) outcome of the pandemic and severe lockdowns imposed in 2020 and 2021.
Way forward
- Policy efforts directed at bringing the informal sector into the fold of formality fail to appreciate that the bulk of the informal units and their workers are essentially petty producers eking their subsistence out of minimal resources.
- The economy will get formalised when informal enterprises become more productive through greater capital investment and increased education and skills are imparted to its workers.
Consider the question “What are the reasons for persistent informality in India? Suggest the way to ensure the smooth transition to the formality.”
Conclusion
Policy efforts to formalise the economy will have limited results as the bulk of informal units are petty producers.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Amendment to IAS cadre rules
Context
There are recent reports in the media about serious concerns of several state governments on Government of India’s proposed move to amend the IAS service rules to meet the shortage of officers at various levels at the Centre.
How does central deputation work?
- Voluntary: Under the current dispensation, officers opt for central deputation from the states voluntarily.
- The Centre then makes a selection from among these officers for posts which are vacant or are likely to be vacant in the near future.
- While doing so, it considers the suitability of the officer based on his/her past experience.
- Once the selection is finalised, orders are issued, requesting the state government to relieve the officer concerned.
- Quota for each state: Each state has a certain quota beyond which its officers are not accepted by the Centre.
Shortage of officers on central deputation
- In the last decade, there has been a gradual decline in the number of officers who opt for central deputation.
- Generally, of the total cadre strength of the states, about 25-30 per cent used to be on central deputation.
- Currently, less than 10 per cent are working in various central ministries.
- According to certain reports, in states like UP, Bihar, Odisha and Tamil Nadu and Kerala, the number is between 8 per cent and 15 per cent.
- One of the reasons for this non-availability of officers for central deputation is the inadequate recruitment more than a decade and half ago.
- But an important reason is also the comparatively better service conditions in the states.
So, what do the proposed rules seek to achieve?
- While fixing the cadre strength of states, about 40 per cent posts of senior duty are earmarked for central deputation.
- Shortage to be shared equitably: Considering that recruitments in the past were not adequate, the proposed change in rules provides for shortage to be shared equitably between the Centre and states.
- Time limit to relieve officers: Also, since vacancies need to be filled in time, there is a suggestion of a time limit in which states must respond and relieve the officer selected.
Way forward
- Respect the views of State: It has to be clearly understood that when states give the list of officers they wish to offer for central deputation, it will be the decision of the states alone.
- The Centre, if it wishes to have an officer work for it, can suggest so to the state.
- If the state does not wish to suggest his name for deputation, the Centre should respect their views, even though they have the power under cadre rules to do so.
- Improving working conditions for officers: The Centre has to realise that improving working conditions for officers at the deputy secretary and director levels is critical to the success of cadre management.
- Many of the officers at this level have concerns regarding education of their children, transport and the higher cost of living in Delhi.
- A deputation allowance for the period of deputation in Delhi could be an option.
- Non-adversarial manner: The states also have to look at this issue in a non-adversarial manner, where needs of both the Centre and the state have to be matched and met.
- The Centre should dispel fears of states about misuse of central power.
Conclusion
Proposed amendment to service rules is needed to meet shortage of personnel, but Centre must dispel states’ fears about overreach.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: PLIS
Mains level: Paper 3- Food processing industry in India
Context
One of the largest producers of fruits and vegetables in the world to boost processed food in large quantities, India has formulated a unique Production-Linked Incentive Scheme (PLIS) which aims to incentivise incremental sales.
Progress made so far
- A sum of ₹10,900 crore has been earmarked for the scheme.
- Beneficiaries have been obliged to commit a minimum investment while applying for the scheme.
- Under Category 1, firms are incentivised for incremental sales and branding/marketing initiatives taken abroad.
- Assuming the committed investment as a fixed ratio of their sales and undertaking execution of at least 75% of the projects, the sector is likely to witness at least ₹6,500 crore worth of investment over the next two years.
- New alternatives are being explored which have immense potential in replacing the staples of rice and wheat in the form of Nutri-cereals, plant-based proteins, fermented foods, health bars and even fresh fortified foods for pets.
- By welcoming the new brands in the category, PLIS aims to create an enabling ecosystem for innovation in both food products and processes.
Way forward
1] Improve infrastructure
- A study in the United States concluded that a 1% increase in public infrastructure increased the food manufacturing output by 0.06% in the longer run (https://bit.ly/3rOeE0l).
- This correlation holds good for India too as a higher investment is being concentrated in States such as Andhra Pradesh, Gujarat, Maharashtra, Tamil Nadu and Uttar Pradesh.
- These States as reported by the Good Governance Index 2020-21, ranked among the highest in the ‘Public Infrastructure and Utilities’ parameter with ‘Connectivity to Rural Habitations’ showing the highest improvement.
2] Improve profitability in export
- For the exports market, it is now established that sales promotion is positively related to increased sales volume, but inversely related to profitability.
- To bridge this gap, of the 13 key sectors announced under the PLIS, the ‘Food Processing PLIS’ earmarks a dedicated Category 3 for supporting branding and marketing activities in foreign markets.
- This ensures that India’s share of value-added products in the exports basket is improved, and it may leverage on its unique geographical proximity to the untapped markets of Europe, the Middle East/West Asia, Africa, Oceania and Japan.
3] Access to credit
- The access of micro, small, and medium enterprises (MSMEs) to finance is a perennial problem in the country, predominating due to a lack of proper credit history mechanism for MSMEs.
- Smart financing alternatives such as peer-to-peer (P2P) lending hold potential for micro-food processors.
- Access to working capital has in theory been addressed by the Trade Receivables Discounting System (TReDS), a platform for facilitating the financing/discounting of trade receivables of MSMEs through multiple financiers.
Conclusion
With growing populations, changing food habits and unrestricted use of natural resources, nations must come together and lay out a road map for a common efficient food value chain.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Issues with rapid transition to green energy
Context
Europe’s push for renewable energy at the cost of conventional fuel may end up causing a global food crisis.
Consequences of fuel shortage in Western Europe
- Since August 2021, Western Europe has faced a problem with renewable energy – the wind doesn’t always blow when needed and the sun doesn’t always shine.
- Commodity markets across the world operate on a balance of demand and supply — even seemingly “small” changes in either side of a few percentage points can push the prices up or down sharply.
- High energy bills: Higher gas prices have pushed up energy bills for households and are expected to impact household spending and consumption as well.
- High urea prices: Natural gas is used to produce urea – if gas prices go up, fertiliser also becomes expensive.
- Some poor and middle-income countries are already starting to face problems of fertiliser availability — there are reports from several Indian states as well.
- High food prices: The impact of expensive fertiliser will be felt some months down the line as expensive fertiliser and reduced harvests push up food prices.
- India is relatively less affected as the share of natural gas in the country’s energy mix is low but will still face problems due to high food prices.
- In 2007-08, when oil prices were high, there was a push to use “biofuels” led by the US and Europe.
- The effects of the 2008 food price crisis were felt around the world, especially by the poor.
Lessons for India
- Cheap and reliable energy sources should not be abandoned until the alternatives have been stringently stress tested.
- India will be especially hard hit if oil prices spike as it imports close to 1.4 billion barrels of oil annually.
Consider the question “What are the inherent dangers in rapid transition to the green energy? Suggest the way forward for India.”
Conclusion
A blind push to shut down traditional sources of energy and move to less reliable “clean” energy can have second and third order effects.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GST Council
Mains level: Paper 2- Working of Constitution
Context
A republic is made robust and kept alive by its people. In its current form, the Indian republic marks 73 years of maintaining a dynamic balance.
Directly elected representation
- It is to the credit of our people that today we have a pyramidal three-layered elected representative system that governs us.
- This system today has over 3 million elected representatives (a million of them women), over 4,000 elected to the state legislatures and over 500 in the Parliament.
- This scale of directly elected representation, perhaps, can be seen nowhere else in the world.
Moral and spiritual basis of the Constitution
- In Pilgrimage to Freedom, K M Munshi writes, “our Constitution has a moral background — to secure justice for every section of our society; as also a spiritual basis — to preserve and protect all religions in the exercise of their functions”.
- The challenges continue in securing justice for every section of our society.
- The Backward Classes, the Scheduled Castes and the Scheduled Tribes and the poor across all categories clamour for better opportunities and affordable justice.
- What Munshi calls the spiritual basis of our Constitution in having to preserve and protect all religions is also seen under stress.
- When the right to practise one’s religion is denied or threatened, the silence of the thinking public or the media weakens that constitutionally embedded protection.
Challenges posed by social media
- Through the power of technology and its capacity to broadcast at mass scale, an otherwise useful tool, social media, has become a challenge and sometimes a threat to one or several of the rights enshrined in our Constitution.
- Curtailing them to protect the rights of citizens is seen as trampling upon the right to free speech.
- Without any action, the damage caused to social harmony by such rampant false news can result in people losing faith in the Constitution itself.
Constitution as a living, dynamic process
- Our Constitution is the most amended of all constitutions in the world.
- If there are more than 100 amendments made to the Constitution, there are more than 1,500 laws that have been repealed because they have outlived their times.
- These deadwood laws, by remaining on paper, occasionally became a weapon in the hands of rent-seekers.
- Their removal, as a part of administrative reform, has kept the role of the executive transparent and accountable.
- That the Constitution is always evolving is best exemplified by the 101st amendment which rolled out the Goods and Services Tax.
- his amendment brought in a unified indirect tax regime by subsuming most of the indirect taxes of the Centre and the states.
- Yet to complete five full years, the GST Council has stood the test of challenging times even in its initial years.
- It augurs well for cooperative federalism.
Conclusion
Our Constitution has served us well in these seven decades. Several republics in the post-imperial era have rejected their earlier constitutions and tested new ones. It is the people who can keep the republic robust and alive.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Constituent Assembly working
Mains level: Paper 2- Working of India's Constitution
Context
This year we are celebrating our 73rd Republic Day. The Constitution has been our guiding force in the journey of the nation as a mature democracy among comity of nations.
Historical background
- The Constituent Assembly undertook intensive deliberations over a period of two years, 11 months and 18 days spread over 11 sessions, during which the Constitution of India took shape.
- Our Constituent Assembly played a dual role after Independence, given the insurmountable task of nation-building.
- Our Constituent Assembly had performed the functions of the provisional Parliament of India in the interval between the time our Constitution was enforced and the day when the new Parliament was formed following the first General Elections (October 25, 1951-February 21, 1952).
- The Constituent Assembly of India acted as the first Parliament of independent India.
Role of the Parliament
- Representative institutions and democratic traditions have always been an integral part of our rich heritage
- Our Parliament has been playing a pivotal role in the all-round development of the nation by adopting many parliamentary devices for ensuring free and fair discussions and dialogue.
- We have to ensure that our institutions and governance ensure inclusivity and the participation of our population in our developmental journey, particularly our women, Scheduled Castes, Scheduled Tribes and all other marginalised sections become equal partners in our growth story.
Ensuring the best legislative practices
- Repository of the proceedings: To ensure that best legislative practices are shared, a national portal is being planned to serve as a repository of the proceedings of Parliament and all State/Union Territory legislatures in the country.
- Research support is being provided to Members to help them participate better and meaningfully in matters brought before Parliament.
- Review of the laws to make them relevant: It is also time in the journey of our nation to take stock and review laws that were enacted during the pre-Independence era so as to make them more relevant to our current requirements and future challenges.
Conclusion
Republic Day is an occasion for people’s representatives and all citizens of this proud nation to reaffirm faith in the ideals enshrined in our Constitution.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: COP26
Mains level: Paper 3- Transition to net zero-emission future
Context
While many developing countries made net-zero pledges at COP26 in Glasgow, they face enormous developmental challenges in their attempts to grow in a climate-constrained world.
Developmental challenges for India
- For India, the national context is shaped by high youth unemployment, millions more entering the workforce each year, and a country hungry for substantial investments in hard infrastructure to industrialise and urbanise.
- Growth with low emission footprint: India’s economic growth in the last three decades, led by growth in the services sector, has come at a significantly lower emissions footprint.
- But in the coming decades, India will have to move to an investment-led and manufacturing-intensive growth model to create job opportunities and create entirely new cities and infrastructure to accommodate and connect an increasingly urban population.
- All of this requires a lot of energy. Can India do all of this with a low emissions footprint?
What could India do to pursue an industrialization pathway that is climate-compatible?
- A coherent national transition strategy is important in a global context where industrialised countries are discussing the imposition of carbon border taxes while failing to provide developing countries the necessary carbon space to grow or the finance and technological assistance necessary to decarbonise.
- What India needs is an overarching green industrialisation strategy that combines laws, policy instruments, and new or reformed implementing institutions to steer its decentralised economic activities to become climate-friendly and resilient.
Issues with India’s domestic manufacturing of renewable technology components
- India’s industrial policy efforts to increase the domestic manufacturing of renewable energy technology components have been affected by policy incoherence, poor management of economic rents, and contradictory policy objectives.
- India managed to create just a third of jobs per megawatt that China has managed to in its efforts to promote solar PV and wind technologies.
- China has created more jobs in manufacturing solar and wind components for exports than domestic deployment.
- India could have retained some of those jobs if it were strategic in promoting these technologies.
Opportunities in decarbonising transport and industry sector
- Technologies needed to decarbonise the transport and industry sectors provide a significant opportunity for India.
- However, India’s R&D investments in these emerging green technologies are non-existent.
- PLI is a step in right direction: The production-linked incentives (PLIs) under ‘Aatmanirbhar Bharat’ are a step in the right direction for localising clean energy manufacturing activities.
- Focus on R&D: Aligning existing RD&D investments with the technologies needed for green industrialisation is crucial for realising quantum jumps in economic activities.
- Encourage private entrepreneurship: India also needs to nurture private entrepreneurship and experimentation in clean energy technologies.
- Besides China, Korea’s green growth strategy provide examples of how India could gain economic and employment rents from green industrialisation without implementing restrictive policies.
Way forward
- India should set its pace based on its ability to capitalise on the opportunities to create wealth through green industrialisation.
- India should follow a path where it can negotiate carbon space to grow, buying time for the hard-to-abate sectors; push against counterproductive WTO trade litigations on decarbonisation technologies; all while making R&D investments in those technologies to ensure that it can gain economic value in the transition.
Consider the question “What are the challenges India faces as it strives to reach the goal of net-zero emission by 2070. Suggest the strategy India should follow to maximise the developmental gains.”
Conclusion
The government should neither succumb to international pressure to decarbonise soon nor should it postpone its investment in decarbonisation technologies and lose its long-term competitiveness in a global low-carbon economy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Tax buoyancy
Mains level: Paper 3- Macroeconomic uncertainty and way ahead
Context
Macroeconomic uncertainties are mounting.
Impact of US Fed’s decision
- Against the backdrop of possible interest rate hikes by the U.S. Federal Reserve and the taper tantrum, there is pressure on the Reserve Bank of India (RBI) to increase its interest rates to prevent capital outflows.
- The monetary policy corridor is still “accommodative” to support the growth recovery.
- Globally, central banks have started increasing the interest rates.
Macroeconomic uncertainties
1] Inflationary pressure
- In India, the wholesale price index (WPI) inflation rose to a record high of 14.32% in November 2021 as per the data released by the Ministry of Commerce and Industry.
- The consumer price index (CPI) inflation now is 5.03%, though that is still within the comfort zone of the inflation targeting framework envisaged in India’s new monetary framework.
- The official nominal inflation anchor in India is 4%, with a band of variations of +/- 2.
2] Absorbing excess liquidity
- The RBI Financial Stability Report, published on December 29, 2021, revealed a possible worsening of the gross non-performing asset (GNPA) ratio of scheduled commercial banks — from 6.9% in September 2021 to 9.5% by September 2022.
- Absorbing the excess liquidity that was injected to stimulate growth as part of the pandemic response is crucial to reversing trends in non performing assets (NPAs).
- Absorption of excess liquidity was attempted by increasing the cut-off yield rate of variable rate reverse repo (VRRR) to 3.99%, and curtailing the government securities acquisition programme.
3] Interest rate structure and implications for government borrowing
- The call money market rates are below the repo rate.
- The bond yields are increasing ahead of the Union Budget 2022-23.
- The rise in bond yields will result in higher borrowing costs for the Government.
Way forward for fiscal policy
- Maintain accommodative policy stance: Given these macroeconomic uncertainties, maintaining an accommodative fiscal policy stance in the upcoming Union Budget for FY23 is crucial for a sustainable recovery.
- Don’t focus on fiscal consolidation: Any attempt at fiscal consolidation at this juncture employing capital expenditure compression rather than a tax buoyancy path can adversely affect economic growth.
- Public investment — infrastructure investment in particular — is a major growth driver through “crowding-in” of private corporate investment.
- Strengthening investments in the health-care sector is crucial at this juncture as a prolonged lockdown can accentuate the current humanitarian crisis and deepen economic disruptions.
- When credit-linked economic stimulus has an uneven impact on growth recovery, the significance of fiscal dominance cannot be undermined.
- Address unemployment: Rising unemployment needs to be addressed through an urgent policy response that strengthens job guarantee programmes.
Conclusion
The upcoming Union Budget for 2022-23 should maintain an accommodative fiscal stance in order to support the sustainability of the economic growth process and also for financing human development.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Sittwe port
Mains level: Paper 2- Why India should engage with Myanmar
Context
Notwithstanding the unfortunate developments since the Tatmadaw took over, a recalibration exercise for developing a robust relationship with Naypyidaw is the need of the hour.
Need for proactive neighbourhood policy with Myanmar
- Security and economic interests: India should implement an unbiased and proactive “Neighbourhood First” strategy that facilitates the Act East policy crucial for India’s long-term security and economic interests.
- Myanmar — regardless of who governs its polity — is not only the decisive lynchpin for India’s Act East policy but critical for the economic development and security of India’s Northeast.
- China factor: Such a policy should take into account the measures that China has taken to arm the Tatmadaw.
How to support Myanmar?
- Critical requirements: India should find ways to support Naypyidaw for its critical requirements of systems and platforms like UAVs, surveillance systems and communication equipment.
- Economic engagement: There is a need for dynamic economic engagement with Myanmar, to expedite the completion of the earlier agreement on the operationalisation of the Sittwe port, the establishment of an oil refinery and joint vaccine production facilities at a cost of $6 billion.
- People-to-people goodwill: India also needs to proactively employ the existing “people-to-people” goodwill and proximate ties between the two armies.
- Engage with military leadership to stop highhandedness: India has the singular advantage of acceptability from both factions in Myanmar and it is, therefore, imperative that it takes the lead in engaging with the ruling military leadership, to stop the highhandedness.
- The visit by India’s Foreign Secretary to Myanmar in the last week of December 2021 was significant.
- It conveyed the message that India, notwithstanding its commitment to democracy, is amenable to conduct business with the country, regardless of who is in the seat of power.
Conclusion
It is of the utmost importance for India to positively engage Naypyidaw and stave off attempts to exploit Myanmar by countries inimical to India’s growth. Any ambiguity or delay in India’s constructive engagement with Myanmar would only serve the interests of anti-India forces.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NATO
Mains level: Paper 2- India-Europe relations
Context
For India, an important strategic priority today is to rebalance the Indo-Pacific. Delhi, however, recognises that this expansive challenge can’t be met by any one power, including the US. A larger European role in securing Asia therefore becomes critical.
Importance of Russia in balancing China
- Peace with Russia in Europe might be necessary for America to focus on Asia has been the key motivation behind President Joe Biden’s decision to intensify engagement with Vladimir Putin in the last few months.
- On the question of Ukraine’s membership of NATO, the US and its European allies have suggested that membership is certainly not imminent; but they are unwilling to say Ukraine will “never” be admitted.
Contradiction in Europe
- 1] Europe remains geopolitically unstable: None of the three European settlements of the 20th century — in 1919 after the First World War, in 1945 after the Second World War, and in 1991 after the Cold War — has endured.
- 2] The difficulty of integrating Russia into a European order: Russia was part of the great power system in Europe through the 18th and 19th centuries.
- If the 1917 Bolshevik Revolution put Russia and the West at odds with each other, the collapse of the Soviet Union has not resolved the contradiction.
- 3] Growing tension between the US and Europe: Since the Second World War, Europe has relied on the US for its security.
- However, Europe has never stopped resenting the American dominance over its geopolitics.
- The EU’s foreign policy chief, Josep Borrell, has repeatedly objected to the US and Russia deciding the future of Ukraine over European heads.
- But Russia does not take the EU seriously and is betting on negotiations with the US.
- 4] Europe still remains a weak security actor: While the EU has become a powerful economic entity (with its $17 trillion GDP), it remains a weak security actor.
- Whatever might be the outcome from the gathering conflict over Ukraine, these European contradictions are not going to disappear any time soon.
Why Europe remains a weak security actor?
- Dominance of the US and Russia: The ambition to construct a strong geopolitical personality for the EU is hobbled by divisions over the role of Russia and the US in the region.
- Mutual suspicions: The historically rooted mutual suspicions among European states also plays role.
- Reluctance to spend on defence: This is compounded by the reluctance to spend more on defence and the inability to develop collective defence arrangements outside of NATO led by the US.
Suggestions for India
- The contradictions in Europe demand that Delhi discard its tendency to view the region through the “East versus West” binary.
- Delhi today could profitably take a leaf out of the book of the Indian national movement.
- In the late 18th century, as European powers competed for influence in the subcontinent, many Indian princes sought to take advantage of the contradictions between Britain and France.
- Imperial Germany supported the formation of a nationalist government of India in Kabul in 1915 headed by Raja Mahendra Pratap Singh.
- Eager to accelerate Indian independence during the Second World War, Netaji turned to Germany and Japan, the world’s newest great power.
- The sharpening struggle for Indian independence, and more broadly the liberation of Asia between the two World Wars, inevitably involved exploiting the contradictions between different imperial powers.
- This was complicated, however, by rapid realignment among the major powers —friends became adversaries and enemies became allies.
- The Indian and Asian national movements were deeply divided in coping with the shifting great power dynamic.
- The world enters a similar moment today that could rearrange relations between the US, UK, Europe, Russia, China and Japan.
Consider the question “What are the contradictions in Europe today? How these contradiction can play role in India’s international relations with the European countries?”
Conclusion
Greater engagement with Europe and dealing with its multiple contradictions must necessarily be important elements of India’s international relations today.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Expenditure on education in India
Mains level: Paper 2- Increasing the expenditure on education
Context
Faced with an unprecedented education emergency, this is the time to substantially ramp up public spending on education and make it more effective.
Low allocation for education
- UNESCO’s 2030 framework for action suggests public education spending levels of between 4% and 6% of GDP and 15%-20% of public expenditure.
- A recent World Bank study notes that India spent 14.1 % of its budget on education, compared to 18.5% in Vietnam and 20.6% in Indonesia, countries with similar levels of GDP.
- But since India has a higher share of population under the age of 19 years than these countries, it should actually be allocating a greater share of the budget than these countries.
- Public spending on education in most States in India was below that of other middle-income countries even before the pandemic.
- Most major States spent in the range of 2.5% to 3.1% of State income on education, according to the Ministry of Education’s Analysis of Budgeted Expenditure on Education.
- This compares with the 4.3% of GDP that lower-middle-income countries spent, as a group, between 2010-11 and 2018-19.
- In the 2021-22 Budget, the Central government’s allocation for the Education Department was slashed compared to the previous year, even though the size of the overall budget increased.
- Of the major States and Delhi, eight either reduced or just about maintained their budget allocation for education departments in 2021-22 compared to 2020-21.
Way forward
- The vast majority of the 260 million children enrolled in preschool and school, especially in government schools, did not have meaningful structured learning opportunities during the 20 months of school closures.
- Infusion of resources: The education system now needs not only an infusion of resources for multiple years, but also a strengthened focus on the needs of the poor and disadvantaged children.
- What it is spent on and how effectively resources are used are important.
- It is clear what additional resources are required for.
- The needs include: back-to-school campaigns and re-enrolment drives; expanded nutrition programmes; reorganisation of the curriculum to help children learn language and mathematics in particular, and support their socio-emotional development, especially in early grades; additional learning materials; teacher training and ongoing support; additional education programmes and collection and analysis of data.
- Focus on teacher training: How does expenditure on technology compare with the amounts spent on teacher training, which represents just 0.15% of total estimated expenditure on elementary education?
- Teachers are central to the quality of education, so why does India spend so little on teacher training?
The opacity of education finance data in India
- The opacity of education finance data makes it difficult to comprehend this.
- For instance, the combined Central and State government spending on education was estimated to be 2.8% of GDP in 2018-19, according to the Economic Survey of 2020-21.
- This figure had remained at the same level since 2014-15.
- On the other hand, data from the Ministry of Education indicates that public spending on education had reached 4.3% of GDP in the same year, rising from 3.8% of GDP in 2011-12.
- The difference in the figures is due to the inclusion of expenditure on education by departments other than the Education Department.
- Including expenditure on education by, for example, the Ministry of Tribal Affairs, the Ministry of Social Justice and Empowerment (on Anganwadis, scholarships, etc.), the Ministry of Science and Technology (for higher education) is of course legitimate.
- However, the composition of these expenditures is not readily available.
Conclusion
The questions for this Budget should be clear. How much additional funds are being allocated for different levels of education by the principal departments in 2021-22? Are the funds being spent on the specific measures required to address the education emergency facing the children?
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