Note4Students
From UPSC perspective, the following things are important :
Prelims level: Replacement rate
Mains level: Paper 1- Factors influencing fertility rate
Context
The National Family Health Survey (NFHS) 5 report that was awaited for nearly six months is finally out. And it provides a heartening outlook.
About NHFS
- Started in 1992-93, it has culminated in the fifth round 2019-21.
- The NFHS is a large, multi-round survey that, inter alia, provides information on fertility, infant and child mortality, the practice of family planning, reproductive health, nutrition, anaemia, quality and utilisation of health and family planning services.
- The surveys provide essential data needed by the Ministry of Health and Family Welfare and other agencies for policy and programme purposes.
- The Ministry assigned the nodal responsibility for the task to the International Institute for Population Sciences(IIPS), Mumbai.
- Several international agencies are involved in providing technical and financial assistance, mainly USAID, DFID, UNICEF, and UNFPA.
Replacement rate achieved
- Replacement rate achieved: The report shows that India has finally achieved the replacement rate of 2.1TFR (Total Fertility Rate is the total number of children a woman will bear in her lifetime).
- In fact, it has gone below the mark to 2.0.
- There are, of course, large interstate variations.
- The lagging states are UP, Bihar, Jharkhand, Manipur and Meghalaya.
- Significantly, there were four states which were keeping the figures poor, namely, Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh.
- Two states, Rajasthan and MP, have struggled to get out of this group, while Jharkhand and the two northeastern states have replaced them.
- UP and Bihar because of their sheer size are pulling down the national average.
- Rajasthan and MP have reached the TFR of 2, which shows the success of their efforts.
Influencing factors
- It is not religion as commonly propounded but literacy, especially of girls, income and delivery of family planning, and health services.
- 1] Delivery of services: The figures would have been even better if all those who have been made aware of the benefits of family planning had received the services they desire.
- Making people informed of the need and methods of family planning and motivating them to adopt family planning is difficult enough.
- Having achieved the difficult task, we are not able to provide the services communities need — the “unmet need” — which is still very high at 9.4 per cent.
- If we focus on this issue in a mission mode, the family planning performance will dramatically improve.
- 2] Male attitude towards family planning: They tend to put the onus for birth control on women.
- As many as 35 per cent men believe that using contraceptives is a woman’s responsibility. They ignore the fact that male vasectomy is a much simpler procedure than female tubectomy.
- 3] Acceptance of family planning: Muslim acceptance of family planning has continued through the five surveys spread over three decades at a rate faster than all other communities.
- Though birth control practice among Muslims is still the least – 47.4 per cent (up from 45 per cent in NFHS-4).
- Other communities — for example, Hindus — are not far behind with 58 per cent (up from 56 per cent).
- This means that 42 per cent of the 80 per cent of the population are not practising family planning.
- Education: Women who have not attended school have 2.8 TFR as against 1.8 for those who have completed class XII.
- Poverty: Similar gap of figure one is visible in the context of poverty with the poorest segment having higher TFR than the richest.
Conclusion
The time has come to leave politics behind and work together for achieving the goals set by National Population Policy 2000. Instead of misleading narratives, we need to address the real determinants of fertility behaviour – literacy, income generation and improvement of health and family planning services.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- US's commitment to the Indo-Pacific
Context
When Russian President Vladimir Putin invaded Ukraine at the end of February, it was widely asked in Delhi if the new challenges of European security would result in a dilution of the US’s strategic commitment to the Indo-Pacific.
The Challenge of balancing China and Russia
- There are two parts of Biden’s answer to the Europe-Asia or Russia-China question.
- 1] Engagement with allies: When Russian President Vladimir Putin invaded Ukraine at the end of February, it was widely asked in Delhi if the new challenges of European security would result in a dilution of the US’s strategic commitment to the Indo-Pacific.
- Biden came to power with a determination to make the Indo-Pacific the highest priority of his foreign policy.
- He is not going to abandon that objective in dealing with the unexpected crisis in Europe.
- The assumption that China was the principal challenge and Russia was less of a threat led Biden to meet Putin in June 2021 to offer prospects for a reasonable relationship with Russia in order to devote US energies to the China question.
- But Putin’s calculations led him towards a deeper strategic partnership with China
- But America’s assessment of the Russian and Chinese threats has not changed since the war began in Ukraine.
- The idea that China will gain from the Russian war in Ukraine has also proven to be false.
- Expectations that Russia’s triumph in Ukraine will be followed by a successful Chinese invasion of Taiwan have begun to dissipate.
- Meanwhile, China is reeling under self-inflicted problems, most notably Xi Jinping’s zero Covid strategy and his crackdown on the large internet companies.
- The costly foreign policy of China: Beijing’s prospects look a lot less rosy than before as the Chinese economy slows down and XI’s foreign policy turns out to be quite costly for China.
- The muscular approach of China: In Asia, China’s muscular approach to disputes with its neighbours has helped strengthen the US alliances, create new forums like the AUKUS, elevate old ones like the Quad to a higher level, and consolidate the strategic conception of the Indo-Pacific.
- 2] Coordination with allies and partners: Biden’s lemma to the theorem on a two-front strategy is a simple one — that Washington will address the simultaneous challenge in Europe and Asia not by acting alone but in coordination with allies and partners.
- The idea was rooted in the recognition that alliances and partnerships are America’s greatest strength and most important advantage over Russia and China.
Engagement with Asia
- ASEAN: This week’s summit level engagement with the ASEAN comes after sustained high-level US outreach to the region since the Biden Administration took charge.
- In northeast Asia, the election of Yoon Suk-yeol as the president of South Korea has tilted the scales slightly towards the US in the continuing battle for influence between Beijing and Washington.
- The US is also actively trying to reduce the differences between its two treaty allies in the region — South Korea and Japan.
- Asia’s new coalitions are a response to Xi Jinping’s unilateralism and his quest for regional hegemony.
- India’s enthusiasm for the Quad can be directly correlated to Xi’s military coercion on the disputed frontiers with India.
Implications for India
- The two parts of Biden’s answer to the Europe-Asia or Russia-China question have worked well for India.
- Tolerance toward India-Russia engagement: For one, the US’s emphasis on the long-term challenge from China has meant that Washington is willing to tolerate India’s engagement with Russia.
- Time for the diversification of defence ties: This gives India time to diversify its defence ties that have been heavily dependent on Russia.
- The US emphasis on partnerships rather than unilateralism in dealing with the China challenge means India’s agency in the region can only grow.
- The Quad allows Delhi to carve out a larger role for itself in Asia and the Indo-Pacific in collaboration with the US and its allies.
Conclusion
Contrary to the initial assumptions that America is on the retreat and the West is in disarray, it is Moscow and Beijing that are on the defensive as the war in Ukraine completes three months.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Significance of emigrants
Context
Though the phenomenon of Indian-origin executives becoming CEOs of top U.S. companies highlights the contribution of Indian talent to the U.S. economy, the role played by Indian semi-skilled migrant labour in the global economy is no less illustrious.
Destinations of Indian migrants
- Every year, about 2.5 million workers from India move to different parts of the world on employment visas
- According to the Ministry of External Affairs, there are over 13.4 million Non-Resident Indians worldwide.
- Significance of GCC: Of them, 64% live in the Gulf Cooperation Council (GCC) countries, the highest being in the United Arab Emirates, followed by Saudi Arabia and Kuwait.
- Low and semi-skilled: Almost 90% of the Indian migrants who live in GCC countries are low- and semi-skilled workers, as per International Labour Organization estimates.
- Other significant countries of destination for overseas Indians are the U.S., the U.K., Australia, and Canada.
Contribution of Indian migrant workers
- Besides being involved in nation-building of their destination countries, Indian migrant workers also contribute to the homeland’s socioeconomic development, through remittances.
- Highest remittances: As per a World Bank Group report (2021), annual remittances transferred to India are estimated to be $87 billion, which is the highest in the world, followed by China ($53 billion), Mexico ($53 billion), the Philippines ($36 billion) and Egypt ($33 billion).
- Remittances in India have been substantially higher than even Foreign Direct Investment (FDI) and the flow of remittances is much less fluctuating than that of FDI.
- Still, remittances’ contribution of 3% in GDP is lower than that of countries such as Nepal (24.8%), Pakistan (12.6%), Sri Lanka (8.3%) and Bangladesh (6.5%), as per a World Bank report.
- Hedging strategy against risk: Besides being a win-win situation for both the destination and source country, labour migration is good hedging strategy against unsystematic risks for any economy.
Way forward
- Human capital should also be invested in a diversified portfolio akin to financial capital.
- Promoting labour mobility: For many countries, remittances have been of vital support to the domestic economy after a shock.
- India should aim to increase remittances to say 10% of GDP.
- The Philippines’ model of promoting labour mobility be replicated in India.
- Reducing the costs involved: Both the cost of recruitment of such workers and the cost of sending remittances back to India should come down.
- Skilling: The number of migrant workers need not go up for remittances to increase if the skill sets of workers are improved.
- Regulation of recruitment agencies: Recruitment agencies should also be regulated by leveraging information technology for ensuring protection of migrant workers leaving India.
- An integrated grievance redressal portal, ‘Madad’, was launched by the government in 2015.
- Proposed Emigration Bill 2021: The Indian government proposed a new Emigration Bill in 2021 which aims to integrate emigration management and streamline the welfare of emigrant workers.
- It proposes to modify the system of Emigration Check Required (ECR) category of workers applying for migration to 18 notified countries.
- The Bill makes it mandatory for all categories of workers to register before departure to any country in the world to ensure better protection for them, support and safeguard in case of vulnerabilities.
- The proposed Emigration Management Authority will be the overarching authority to provide policy guidance.
- Besides workers, as about 0.5 million students also migrate for education from India every year, the Bill also covers such students.
Conclusion
For India to increase remittances’ contribution to GDP, it doesn’t need more workers but skilling and better management.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Judicial corruption and pendency
Context
Departures from substantive and procedural justice need deep scrutiny as the fallout could severely imperil governance.
Judicial corruption in India in lower judiciary
- According to Transparency International (TI 2011), 45% of people who had come in contact with the judiciary between July 2009 and July 2010 had paid a bribe to the judiciary.
- The most common reason for paying the bribes was to “speed things up”.
- The Asian Human Rights Commission (AHRC) (April 2013) estimates that for every ₹2 in official court fees, at least ₹ 1,000 is spent in bribes in bringing a petition to the court.
- Freedom House’s ‘Freedom in the World 2016 report for India’ states that “the lower levels of the judiciary in particular have been rife with corruption” (Freedom House 2016).
- Allegations of corruption against High Court judges abound.
- Worse, there are glaring examples of anti-Muslim bias, often followed by extra-judicial killings by the police.
- Anti-Muslim bias alone may not result in erosion of trust but if combined with unprovoked and brutal violence against them (e.g., lynching of innocent cattle traders) is bound to.
Forms of judicial corruption
- Pressure and bribery: Judicial corruption takes two forms: political interference in the judicial process by the legislative or executive branch, and bribery.
- Despite the accumulation of evidence on corrupt practices, the pressure to rule in favour of political interests remains intense.
- Court officials coax bribes for free services, and lawyers charge additional “fees” to expedite or delay cases.
Case pendency
- According to the National Judicial Data Grid, as of April 12, 2017, there are 24,186,566 pending cases in India’s district courts, of which 2,317,448 (9.58%) have been pending for over 10 years, and 3,975,717 (16.44%) have been pending for between five and 10 years.
- Vacancies: As of December 31, 2015, there were 4,432 vacancies in the posts of [subordinate court] judicial officers, representing about 22% of the sanctioned strength.
- In the case of the High Courts, 458 of the 1,079 posts, representing 42% of the sanctioned strength, were vacant as of June 2016.
- Thus, severe backlogging and understaffing persisted, as also archaic and complex procedures of delivery of justice.
Understanding the substantive and procedural justice
- Substantive justice is associated with whether the statutes, case law and unwritten legal principles are morally justified e.g., freedom to pursue any religion,
- Procedural justice is associated with fair and impartial decision procedures.
- Outdated laws: Many outdated/dysfunctional laws or statutes have not been repealed because of the tardiness of legal reform both at the Union and State government levels.
- Worse, there have been blatant violations of constitutional provisions.
- The Citizenship (Amendment) Act (December 2019) provides citizenship to — except Muslims — Hindus, Buddhists, Sikhs, Jains, Parsis and Christians who came to India from Pakistan, Bangladesh and Afghanistan on or before December 31, 2014.
- But this goes against secularism and is thus a violation of substantive justice.
- Alongside procedural delays, endemic corruption and mounting shares of under-trial inmates with durations of three to five years point to stark failures of procedural justice and to some extent of substantive justice.
Conclusion
Exercise of extra-constitutional authority by the central and State governments, weakening of accountability mechanisms, widespread corruption in the lower judiciary and the police, with likely collusion between them, the perverted beliefs of the latter towards Muslims, other minorities and lower caste Hindus, a proclivity to deliver instant justice, extra-judicial killings, filing FIRs against innocent victims of mob lynching have left deep scars on the national psyche.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Poverty in India
Mains level: Paper 2- Poverty reduction in India
Context
A recent World Bank Report has shown that extreme poverty in India more than halved between 2011 and 2019 – from 22.5 per cent to 10.2 per cent. The reduction was higher in rural areas, from 26.3 per cent to 11.6 per cent.
What explains the reduction in poverty?
- Poverty has reduced significantly because of the government’s thrust on improving the ease of living of ordinary Indians through schemes.
- These schemes include the Ujjwala Yojana, PM Awas Yojana, Swachh Bharat Mission, Jan Dhan and Mission Indradhanush in addition to the Deendayal Antyodaya Yojana-National Rural Livelihood Mission and improved coverage under the National Food Security Act.
- It is important to understand how poverty in rural areas was reduced at a faster pace.
- Much of the success can be credited to all government departments, especially their janbhagidari-based thrust on pro-poor public welfare.
Contributing factors
1] Identification of beneficiaries through SECC 2011
- The identification of deprived households on the basis of the Socioeconomic and Caste Census (SECC) 2011 across welfare programmes helped in creating a constituency for the well-being of the poor, irrespective of caste, creed or religion.
- Deprivation criterion: Since deprivation was the key criterion in identifying beneficiaries, SC and ST communities got higher coverage and the erstwhile backward regions in Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh, Jharkhand, Odisha, Chhattisgarh, Assam, Rajasthan and rural Maharashtra got a larger share of the benefits.
- Gram Sabha Validation: Social groups that often used to be left out of government programmes were included and gram sabha validation was taken to ensure that the project reached these groups.
2] Widened coverage of women
- The coverage of women under the Deendayal Antyodaya Yojana and Self Help Groups (SHG) increased from 2.5 crore in 2014 to over 8 crore in 2018 as a result of more than 75 lakh SHGs working closely with over 31 lakh elected panchayati raj representatives, 40 per cent of whom are women.
- This provided a robust framework to connect with communities and created a social capital that helped every programme.
- The PRI-SHG partnership catalysed changes that increased the pace of poverty reduction and the use of Aadhaar cleaned up corruption at several levels and ensured that the funds reached those whom it was meant for.
3] Creation of basic infrastructure
- Finance Commission transfers were made directly to gram panchayats leading to the creation of basic infrastructure like pucca village roads and drains at a much faster pace in rural areas.
- The high speed of road construction under the Pradhan Mantri Gram Sadhak Yojana created greater opportunities for employment in nearby larger villages/census towns/kasbas by improving connectivity and enhancing mobility.
4] Availability of credit through SHGs
- The social capital of SHGs ensured the availability of credit through banks, micro-finance institutions and MUDRA loans.
- Livelihood diversification: The NRLM prioritised livelihood diversification and implemented detailed plans for credit disbursement.
5] Implementation of social sector schemes
- In the two phases of the Gram Swaraj Abhiyan in 2018, benefits such as gas and electricity connections, LED bulbs, accident insurance, life insurance, bank accounts and immunisation were provided to 63974 villages that were selected because of their high SC and ST populations.
- The performance of line departments went up manifold due to community-led action.
- The gains are reflected in the findings of the National Family Health Survey V, 2019-2021.
6] Universal coverage schemes
- The thrust on universal coverage for individual household latrines, LPG connections and pucca houses for those who lived in kuccha houses ensured that no one was left behind. This created the Labarthi Varg.
7] Increase in fund transfer to rural area
- Seventh, this was also a period in which a high amount of public funds were transferred to rural areas, including from the share of states and, in some programmes, through extra-budgetary resources.
8] Community participation
- The thrust on a people’s plan campaign, “Sabki Yojana Sabka Vikas” for preparing the Gram Panchayat Development Plans and for ranking villages and panchayats on human development, economic activity and infrastructure, from 2017-18 onwards, laid the foundation for robust community participation involving panchayats and SHGs, especially in ensuring accountability.
9] Social and concurrent audit
- Through processes like social and concurrent audits, efforts were made to ensure that resources were fully utilised.
- Several changes were brought about in programmes like the MGNREGS to create durable and productive assets.
10] Focus of states on improving livelihood diversification
- The competition among states to improve performance on rural development helped.
- Irrespective of the party in power, nearly all states and UTs focussed on improving livelihood diversification in rural areas and on improving infrastructure significantly.
Conclusion
All these factors contributed to improved ease of living of deprived households and improving their asset base. A lot has been achieved, much remains to be done.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Rarest of rare case
Mains level: Paper 2- Capital punishment jurisprudence
Context
A recent trend in the evolution of jurisprudence around the death penalty in India may reset judicial thinking around sentencing and have long-term ramifications in the awarding of capital punishment.
New thinking in the jurisprudence around capital punishment
- Capital punishment once delivered by the court of sessions (“sentencing court”) is required under law, specifically Chapter 28 of the Code of Criminal Procedure, to be confirmed by the jurisdictional High Court (“confirming court”).
- Over the last six months or so, while dealing with appeals against confirmation of the death sentence, the Supreme Court of India has examined sentencing methodology from the perspective of mitigating circumstances more closely.
- The Court has also initiated a suo motu writ petition (criminal) to delve deep into these issues on key aspects surrounding our understanding of death penalty sentencing.
- Bachan Singh vs State of Punjab (1980), the leading case on this point, calls for mitigating and aggravating circumstances to be balanced against each other and laid down the principle that the death penalty ought not to be awarded unless the alternative of life imprisonment is “unquestionably foreclosed”.
- It is also an equally well-established legal principle that in a sentencing hearing, the accused must necessarily be provided with sufficient opportunity to produce any material that may have bearing on the sentencing exercise.
- When read in conjunction with the ratio decidendi of the Bachan Singh case, it is incumbent upon the sentencing court and the confirming court to ensure that the question of reform and rehabilitation of a convicted person has been examined in detail for these courts to come to a definitive conclusion that all such options are unquestionably foreclosed.
Lack of judicial uniformity
- A report by the National Law University Delhi’s Project 39A (earlier known as the “Centre on the Death Penalty”) titled ‘Matters of Judgment’ found that there is no judicial uniformity or consistency when it comes to awarding the death sentence.
- In the report titled ‘Death Penalty Sentencing in Trial Courts’ (also authored by Project 39A), findings reported from a study of cases involving death sentencing between 2000 and 2015 in Delhi, Maharashtra and Madhya Pradesh have showed that courts have been lax in assessing the aspect of reformation while undertaking the sentencing exercise.
- The Court, in Mofil Khan vs State of Jharkhand (2021), held that the “the State is under a duty to procure evidence to establish that there is no possibility of reformation and rehabilitation of the accused.
- Undoubtedly, the onus has been placed on the State to lead evidence to show that no reformation is possible and for the sentencing courts to be satisfied that a thorough mitigation analysis was done before the death sentence is awarded.
Mitigation investigation
- For a complete mitigation investigation, professionals trained in psychology, sociology and criminology are required in addition to legal professionals.
- Taking cognisance of the value of a holistic approach to mitigation investigation, the Court in Manoj & Ors vs State of Madhya Pradesh (2022) issued directions to the State to place before the court all “report(s) of all the probation officer(s)” relating to the accused and reports “about their conduct and nature of the work done by them” while in prison.
- The order also directs that a trained psychiatrist and a local professor of psychology conduct a psychiatric and psychological evaluation of the convict.
Conclusion
The intervention of the Supreme Court of India in, hopefully, framing guidelines around incorporation of a mitigation analysis and consideration of psycho-social reports of the prisoner at the time of sentencing is timely and necessary.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Non-tariff barriers
Mains level: Paper 3- Trade opportunities for India
Context
Slower global growth, an adverse geopolitical environment, the shadow of recurring waves of the pandemic and prolonged supply chain issues are likely to weigh on export growth this year.
Trade growth in 2021 and uncertainties in 2022
- The year 2021 was a record one for trade despite the pandemic.
- In terms of volumes, merchandise trade rose 9.8 per cent, while in dollar terms, it grew 26 per cent.
- The value of commercial services trade was also up 15 per cent.
- India has had a good export run in line with global trends, witnessing record goods exports of $419 billion, while touching $250 billion in services exports.
- However, global growth forecasts have now been pared down.
- Slower global growth, an adverse geopolitical environment, the shadow of recurring waves of the pandemic and prolonged supply chain issues are likely to weigh on export growth this year.
Taping into opportunities
- Ukraine and Sri Lanka are major exporters of agricultural products and the vacuum created by their limited presence in global trade will open up agricultural export opportunities for India.
- This will not only spur overall exports but will also help to support the recovery of the agrarian economy through higher realisations.
- Tea and wheat: As many as 25 African countries import more than one-third of their wheat from Russia and Ukraine and for 15 of them, the share exceeds 50 per cent.
- Sri Lanka is also a major player in the global tea market and produces around 300 million kg annually.
- Almost 98 per cent of its annual production is exported.
- India, the second-largest producer of tea with an annual production of 900 million kg, is in a good position to exploit the opportunity and fill the gap.
- Textile: Apart from tea and wheat, newer export opportunities have arisen for textiles.
- Sri Lanka exports $5.42 billion worth of garments and prolonged power cuts in the island nation will hurt its production and export capacity.
Suggestions
- 1] Work on non-tariff barriers: One, work on non-tariff barriers for agricultural trade with a special focus on harmonising the sanitary and phytosanitary (SPS) requirements.
- 2] Autonomy in tea sector: To support tea exports, traditional tea boards are seeking a greater role and autonomy for optimising the development, promotion, and research in the sector.
- Quicker implementation of the proposed Tea Promotion and Development Act is of utmost importance.
- 3] Integration with global supply chains: India must double down on its integration with global supply chains.The commerce ministry has negotiated a slew of trade deals.
- 4] Reduce tariff rates for intermediate inputs: Tariff rates for intermediate inputs should be reduced to either zero or should be negligible for India to become an attractive location for assembly activities.
- 5] Realignment of specialisation patterns: India must persist with the creation of an enabling ecosystem that realigns its specialisation patterns towards labour-intensive processes and product lines.
- The labour market reforms must be taken to their logical conclusion.
- 6] Pro-active FDI policy: A continuous and pro-active FDI policy is also critical as foreign capital and technology are key enablers for entry into global production networks even as local firms play a role as subcontractors and suppliers of intermediate inputs to MNEs.
- 7]Power supply and logistical bottlenecks: Lastly, exports could suffer if basic issues such as availability of power and logistical bottlenecks keep rearing their ugly heads.
- The Economic Survey 2019 had recommended that low levels of service link costs (costs related to transportation, communication, and other tasks involved in coordinating the activity etc) are prerequisites to strengthen their participation in GVCs.
- This should not be neglected.
Conclusion
If India were to tap export opportunities in developed markets, it must act on the suggestions above.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Right to privacy
Mains level: Paper 2- Abortion rights
Context
The leak of an initial draft majority opinion of the US Supreme Court voting to overturn the decision in Roe v Wade has sent shockwaves across liberal and conservative quarters alike, globally.
Background of the Roe v Wade case
- Right to abortion: While locating the right of privacy within the guarantee of personal liberty enshrined in the fourteenth amendment of the American constitution, Roe embodies a supervening constitutional right to abortion emanating from this right of privacy.
- The right to abort was held to be a constitutionally protected right within the right of privacy.
- Roe, the 1973 outcome of an unmarried woman’s crusade for bodily autonomy, had declared overbroad, and consequently unconstitutional, a provision of the Texas Penal Code which permitted only those abortions that were “procured or attempted by medical advice to save the life of the mother”.
- The decision simultaneously recognised the state’s interest in protecting the life of the foetus as also the life of the mother.
- Roe is not only relevant as a progressive trailblazer for reproductive rights in the United States but is also fundamental to constitutional jurisprudence globally for the interpretative tools it employed.
Implications of overturning Roe v Wade
- Political considerations vs judicial responsibility: The overturning of Roe is more than the mere abdication of the judicial responsibility to protect individual rights — it signals a dangerous trend of courts making long-standing determinations of legal rights based on transient political considerations.
- Incursion into women’s right to abort: It would also mean legitimisation of state incursions into women’s right to abort and consequently their right to bodily autonomy and liberty, in addition to forcing them to move to states with enabling laws to procure abortions, leading to issues of access and affordability of abortions.
- While the impact of Roe’s absence would most profoundly be felt in the US, it is likely to embolden conservative anti-abortion voices across the world.
- Limits of judicial activism: It will inevitably also raise fundamental questions on the limits of judicial activism aimed at protecting the rights of persons and classes, which do not find explicit mention within a country’s constitutional framework.
- Possibility of a conservative approach to abortion cases: In 2021, the abortion laws in India underwent substantial changes, with the introduction of the Medical Termination for Pregnancy (Amendment) Act, 2021 which, in addition to destigmatising pregnancies outside marriage by introducing the nomenclature of “any woman or her partner”, also increased the upper gestational limits within which pregnancies are legally terminable.
- The Act, however, carries ambiguities and leaves room for both judicial and executive interpretation.
- As cases of subjective determination arise, the Indian judiciary will be called upon to reconcile the right to privacy recognised in Puttaswamy with the permissible limits of abortion in the Act.
How does Roe v Wade apply in the Indian context?
- In KS Puttaswamy v Union of India, Justice Chandrachud referred to Roe and Planned Parenthood while reading the right to privacy into the existing framework of constitutionally protected fundamental rights subject to “just, reasonable and fair” restrictions.
- Recognising derivative rights: In the lifetime of the Indian Supreme Court, recognising derivative rights within the existing framework of fundamental rights has been regularly witnessed — be it rights during arrest and detention, the right to express one’s sexual and gender identity, or rights against harassment at the workplace, to cite a few.
- Setback to transformative constitutionalism: In the Indian context, the overturning could be seen as a setback to the celebrated doctrine of transformative constitutionalism, which sees the Indian Constitution as a “living document” that moulds, adapts and responds to changing times and circumstances.
Conclusion
The likelihood of the overturning of Roe leading to more conservative approaches to judicial interpretation in abortion rights cases, cannot be ruled out.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Challenges for the middle powers
Context
Prime Minister Narendra Modi’s visit to European capitals should help both sides acquire a better understanding of each other’s security concerns. Whether it will fundamentally alter equations remains to be seen.
New India-EU equation
- As “Middle Powers”, countries like France, Germany and India should seek policy space for themselves and not be forced into taking positions by the Big Powers — the United States, China and Russia.
- The EU is understandably concerned about Russian aggressiveness in Europe.
- ndia is equally concerned about Chinese aggressiveness in Asia.
- Even after Russia has sought to tear down the post-Cold War security structure in Europe, India has stayed the course in its equations both with Russia and the European Union.
Division of national and group agenda and its implications for India
- While Russia’s invasion of Ukraine is the context in which Modi visited Europe and the head of the European Union visited India, the fact is that the agenda at bilateral meetings with individual European countries has generally been very different from the agenda that the EU prefers to focus on.
- While individual European nations, especially Germany and France, focus on their own strategic and business interests, including defence equipment sales, the EU retains the remit for negotiating trade and investment rules.
- Problem for India: This division of national and group agendas has often posed a problem for India because individual countries cannot offer bilateral market access in exchange for bilateral defence deals.
- So the French will sell Rafale jets in the name of strategic partnership but they cannot offer a trade and investment deal that Brussels will not allow Paris to strike with India.
- While the EU and G7 may now wish to derisk, if not decouple, from aggressively rising China, how much they would be able to do in this regard and what they would be willing to do to help a slowly rising India remains to be seen.
Way forward
- For India’s part, it is not clear at the moment how much and what it can unilaterally offer Europe beyond the promise of standing up to China or reducing dependence on Russia.
- Challenge for the three middle powers lies in combine their “strength and stability” to ensure “peace and tranquillity” in their respective neighbourhoods.
- If middle powers like Brazil, France, Germany, India, Indonesia, Japan, South Africa and others can work together they may well be able to impose some discipline on the three big powers — China, Russia and the US.
Conclusion
At a time when big powers lurking behind in seeking to stabilise and shape the global order middle powers need to act to balance the influence exerted by the big powers.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CPI and WPI
Mains level: Paper 3- Need for the review of inflation targeting model
Context
At the conclusion of the April meeting, the Monetary Policy Committee had already warned that the focus will henceforth be on inflation. Yesterday it raised the repo rate somewhat sooner than was expected by the market.
Discourse on inflation engaged in by the western central banks
- Inflation reflects an excess of output over its ‘natural’ level.
- Inflation targeting refers to the policy of controlling inflation by raising the interest rate over which the central bank has control, i.e. the rate at which it lends to commercial banks, the ‘repo rate’.
- This, it is argued, will induce firms to stay their investment plans and reduce inventories, lowering production.
- As economy-wide output declines, becoming equal to the natural level of output, inflation will cease.
- This story does not just legitimise a policy of output contraction for inflation but sees it as optimal.
- The natural level of output itself is the productive counterpart of the natural level of employment, the level that obtains in a freely functioning labour market.
- So, at the natural level of output, the economy is deemed to be at full employment.
- Salient in the context is the fact that the natural level of output is unobservable.
- Hence inflation as a reflection of an “overheating” economy is something that must be taken on trust.
Inflation control in India
- Not surprisingly for a theory based on an unobservable variable, the proposition that inflation is due to an overheating economy fares poorly when put to a statistical test for India.
- There is not a single demonstration of the empirical validity of the model of inflation presented in the RBI report of 2014, which recommended a move to inflation targeting.
- On the other hand inflation in India can be explained in terms of the movement of the prices of agricultural goods and, to a lesser extent, imported oil.
- How effective is monetary policy in controlling inflation: The implication of this finding is damaging for the claim that monetary policy can control inflation, for neither the price of agricultural goods nor that of imported oil is under the central bank’s control.
- The only route by which monetary policy can, in principle, control inflation is by curbing the growth of non-agricultural output, which would in turn lower the growth of demand for agricultural goods.
- As the demand for agricultural goods slows, so will inflation, but this comes at the cost of output and employment.
- At least, this is the theory.
- Whether this takes place in practice depends upon the extent to which changes in the repo rate are transmitted to commercial bank lending rates.
Way forward
- Focus on supply of agricultural goods: The implication for the policymaker that inflation is driven by agricultural goods prices, as is the case in India presently, is that the focus should be on increasing the supply of these goods.
- Growing per capita income in India has shifted the average consumption basket towards foods rich in minerals, such as fruits and vegetables, and protein, such as milk and meat.
- But the expansion of the supply of these foods has been lower than the growth in demand for them.
- So a concerted drive to increase the supply of food other than rice and wheat holds the key.
- Costly food threatens the health of the population, as people economise on their food intake, and holds back the economy, as only a small part of a household’s budget can be spent on non-agricultural goods.
Conclusion
Monetary policy manoeuvres, typified by the RBI’s raising of the repo rate is not an efficient solution for agricultural price-driven inflation. Any lasting inflation control would require placing agricultural production on a steady footing, with continuously rising productivity.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CRR
Mains level: Paper 3- Inflation targeting by the RBI
Context
The RBI has decided to take the bull by the horns. It has raised the repo rate by 40 basis points and the cash reserve ratio (CRR) by 50 basis points to fight inflation.
Why major central banks across the world are hiking rates?
- Across the world, major central banks have of late gone on a rate hike spree, waking up to the realisation of inflationary pressures not being transitory in nature.
- Record high inflation in the US: The US Fed has been on the offensive battling a 40-year high surge in prices.
- It has tapered its bond purchase programme drastically while suggesting in no uncertain terms the pace of rate hikes needed to combat inflation.
- The European Union has been slow to respond but voices are growing to correct the path at the earliest.
- Banks like the Central Bank of Brazil or the Russian Central Bank have increased the interest rate to double digits.
- Emerging economies have been doubly hit — the days of easy liquidity are well behind them even as their economic resources remain constrained to support an uneven proportion of population hit by pandemic.
- Including the RBI’s decision today to push the benchmark rate to align with the current market realities, 21 countries have increased interest rates so far.
Analysing the RBI’s decision to hike interest rates
- To this extent, the decision by the RBI to frontload the rate hikes ahead of the Fed decision is again an attempt to stem capital outflows.
- Accommodative policy stance; The most interesting aspect of the rate hike today is the continuation of the accommodative policy stance.
- The CRR hike may be just an attempt to build up a war chest on the liquidity front.
- Liquidity inflows to the financial system could be either policy induced by the central bank for example changes in reserves, open market operations etc or non-policy induced such as foreign exchange reserves, government cash balances, and currency in circulation.
- Given that non-policy induced liquidity inflows have been recently impacted (outflows of portfolio capital) and given the huge size of the government borrowing programme, the RBI also needs to support the market through some means.
- Impounding bank reserves through the CRR (Rs 87,000 crore) could give some space to the central bank to conduct open market purchases of bonds from banks and thus inject concomitant liquidity some time in the future if the need so arises.
- The CRR rate hike is thus an important tool to possibly manage G-sec yields.
Inflation dynamics in India
- The inflationary pressures can be attributed mainly to adverse cost-push factors, coming from supply-side shocks in food and fuel prices.
- The RBI statement thus cites food inflation as a major source of discomfort.
- Additionally, nominal rural wages for both agricultural and non-agricultural labourers picked up during the second half 2021-22.
- However, such wage growth has remained soft.
- Measures to ameliorate supply-side cost pressures would be thus critical at this juncture, especially in terms of a calibrated reduction of taxes on petrol and diesel.
- On the policy side, however, it would mean that even after rate hikes, inflation may continue to remain high for some time.
- The MCLR (Marginal Cost of Funds based Lending Rate) linked loans have a share of around 53 per cent in the overall loan kitty.
- With the rise in CRR and expected future hikes in the benchmark rates, there would be an increase in MCLR due to a negative carry.
Conclusion
The RBI has acted prudently in responding to market forces that could impact India’s growth prospects if inflationary concerns were not addressed now. At the same time, by pledging to remain accommodative to spur, and reinvigorate growth, it has reaffirmed its commitment to being a trusted partner in the growth of the country.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Green Hydrogen Task Force
Mains level: Paper 2- India-Germany relations
Context
Prime Minister Narendra Modi’s visit to Berlin for the sixth Indo-German Inter-Governmental Consultations (IGC) is significant for its timing and substantial results.
Strategic and economic importance of India-German ties
- The timing of the IGC, which Germany chose not to delay, showed outreach to India and the Indo-Pacific.
- Impact of pandemic on economy: The pandemic hit German economy and sanctions on Russia will further dent its prospects.
- The country requires new markets for trade and investment.
- India is an important partner in this regard due to its sustained economic growth and market size.
- Ukraine crisis: The Ukraine crisis created an urgency to engage with India as part of Germany’s fledgling Indo-Pacific policy.
Opportunities for India
- As Germany does the reassessment of China’s role in world affairs it creates an opportunity for India.
- The Bundestag will discuss the situation of Uyghurs in China’s Xinjiang on May 7.
- Any departures from China will bring business engagement to India.
- Germany and India do not have a traditional strategic partnership.
- It is a green partnership based on trade, investment, technology, functional collaboration, skill development, and sustainability.
- There are several initiatives like the Indo-German energy forum, environmental forum, partnership on urban mobility, skill development and science and technology.
- The biggest gain from the IGC has been the Joint Declaration of Intent (JDI) establishing the Green and Sustainable Development Partnership.
- This will raise the quality and quantum of the existing partnership between the two countries.
- Germany is reaching out with new and additional financing of €10 billion to fund green projects in India under public, private and PPP models.
- To support this, a ministerial segment is being introduced under the IGC.
- The IGC is the only such format that India has with any country.
- Another significant development is the JDI on Triangular Development Cooperation for projects in third countries.
- This will provide avenues to work together in the Indo-Pacific, Africa and beyond.
- The Indo-German Education Partnership, which the German Bundestag passed in 2016 as a New Passage to India, has borne fruit — from about 4,000 students in 2015, there are nearly 29,000 Indian students in Germany.
- The Indo-German Science and Technology Centre has made valuable contributions.
- Now, under the energy partnership, the Green Hydrogen Task Force will develop a Green Hydrogen Roadmap.
- This will attempt to take R&D to the level of commercialisation.
- The JDI on migration and mobility is an important step taken during this IGC.
Conclusion
A new period is reflecting new priorities in view of crises like the pandemic, the economic downturn and now, Ukraine. The German response to India as evidenced through the IGC has been promising. Both sides may justifiably call it a defining moment in the Indo-German partnership.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: India-Europe Trade and Technology Council
Mains level: Paper 2- India-Europe engagement
Context
As Russia, isolated by unprecedented Western sanctions, deepens its alliance with China, Europe has begun to loom larger than ever before in India’s strategic calculus. Prime Minister Narendra Modi’s visit to Berlin, Copenhagen, and Paris this week could give us a glimpse of India’s post-Russian strategic future in Europe.
Engagement with collective Europe
- In her visit to Delhi, the president of the European Commission, Ursula von Der Leyn, unveiled the new contours of the EU’s strategic partnership with India by launching the India-Europe Trade and Technology Council.
- This week, the focus is on India’s key bilateral partnerships with European majors — Germany and France — as well as a critical northern corner of Europe, the so-called Norden.
- Having built up a significant engagement with Moscow over the decades, India and Germany are under pressure to disentangle from the Russian connection.
- Modi and Scholz could also exchange notes on how their long-standing illusions about China came crashing down.
- Macron’s return to power in France offers a good moment for Modi to imagine the next phase in bilateral relations.
- For some time now it has been said that France is India’s “new Russia” — Delhi’s most important strategic partner.
- In recent years, France has emerged as a strong defender of India’s interests in the United Nations Security Council and a regional ally in the vast Indo-Pacific theatre.
- France has also been a major supplier of advanced arms to India.
- But Delhi and Paris have been some distance away from demonstrating full possibilities of their defence partnership.
- There is no doubt that Western Europe has moved from the margins to the centre of India’s foreign and security policies.
- The crisis in Ukraine, which has shattered the regional order that emerged in 1991, intensifies the imperatives for deeper strategic cooperation between India and its European partners.
India’s engagement with smaller European countries
- In Copenhagen, the bilateral talks with Danish leadership are about Delhi finally finding time for the smaller European countries.
- The Nordic summit hosted by Denmark underlines India’s discovery of the various sub-regions of Europe — from the Baltics to the Balkans and from Iberia to Mittleuropa.
- The Nordic Five — Denmark, Finland, Iceland, Norway, and Sweden — have a population of barely 25 million but their GDP at $1.8 trillion is greater than that of Russia.
- Two members of the Nordic five — Sweden and Finland — are now rushing to end their long-standing neutral status and join NATO.
- The other three — Denmark, Iceland, and Norway — have been founding members of NATO, set up in 1949.
- Listening to the Nordic leaders might help Delhi appreciate the deeply-held fears about Russia among Moscow’s smaller neighbours.
- In Copenhagen, Modi would want to build on the unique bilateral green strategic partnership with Denmark.
Germany and India’s engagement with Russia
- Berlin is tied far more deeply to Russia than India.
- Germany’s annual trade with Russia is about $60 billion while India’s is at $10 bn.
- Germany relies heavily on Russian natural gas, while Russian arms dominate India’s weaponry.
- Irrespective of their Russian preferences, Germany and India have no option but to live with circumstances over which they have no control.
- Opportunity for India: Making India an attractive new destination for German capital, now under pressure to reduce its exposure to Russian and Chinese markets, should be the highest priority for PM Modi.
- Germany is one of India’s oldest economic partners, but the full potential of the commercial relationship has never been realised.
- If there ever was a moment to think big about the future of German trade and investment in India, it is now.
Conclusion
A new paradigm is beckoning India — strong commercial and security partnerships with Europe that stand on their own merit and bring the many synergies between them into active play.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Power generation in India
Mains level: Paper 3- Coal shortage crisis
Context
The power sector in India is going through a crisis. Peak shortages in some states have reached double digits.
Chronology of the crisis
- First, with summer approaching before time, power demand has shot up to record levels.
- The second reason for the rise in power demand is that the economy is recovering, and demand from the industrial sector is going up.
- All things put together, power demand crossed 207 GW on April 29, which is about 14 per cent higher than what it was a year ago.
- Experts feel that the peak demand may even touch 215 GW in the coming months.
Coal shortage crisis
- On average, coal stocks available are only good enough for about eight days’ generation against a norm of 24 days.
- In some plants, the stocks available are just about enough to run the plant for a day or two more.
- Part of the problem of poor coal stock is also rumoured to be on account of the non-payment of dues of coal companies.
- But this is not the major cause of the shortage.
Reasons for coal shortage and fall in generation
- The fall in coal stock in power stations is because of two main reasons.
- 1] Rise in international price of coal: The first is that due to a rise in the international price of coal on account of the Ukraine crisis, all plants that were importing coal have either stopped generating completely or are generating at much lower levels.
- We have a sizeable generating capacity based on imported coal, estimated at about 16 GW to 17 GW.
- All these plants after stopping imports are now looking for domestic coal, creating pressure on domestic coal.
- 2] Non-availability of rakes with Indian railways for transporting coal: Though about 22 MT of coal may be available in power stations, if one includes the stocks available with mining companies, the figure is well over 70 MT.
- So, it is all a question of transporting the coal to the power stations.
- 3] Fall in generation from gas-based plants: To make matters worse, generation from gas-based plants has also fallen due to high gas prices in the world market.
- 4] Impact on hydro generation: Reservoirs, too, are drying up due to intense heat which will adversely affect hydro generation.
Transportation problem faced by Indian railways
- The railways have about 2,500 rakes which can be used for coal transportation.
- With a turn-around time of about four-and-a-half days which goes up to nine days for coastal regions, the railways can provide only about 525 rakes on any single day.
- Of this, about 100 rakes are used for transporting imported coal and therefore, only about 425 rakes are available on a daily basis for transporting domestic coal.
- But only 380 rakes were being provided in the first half of April this year, though efforts are on to increase this to about 415 rakes.
- The railways prefer to transport coal over short distances in order to save on the turn-around time.
- There is also the issue of availability of tracks since they are being used on a back-to-back basis.
- Thus production has to be enhanced so that the replenishment rate is higher than consumption.
- Unless we do that, the total stock of coal in the country will deplete further and it will no longer be a mere transportation problem as it is now, but a general lack of supply of coal.
Conclusion
This is the right time to enhance coal production and build adequate stocks because once the monsoon sets in, production will fall.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Opening of insurance sector in India
Mains level: Paper 3- LIC and insurance sector in India
Context
LIC is now at a transformational moment. Its listing on the bourses should lift LIC to be a part of the elite corporate community in India.
Insurance sector in India
- Opening of the insurance sector: A milestone in the history of India’s insurance industry was the opening of the sector for private participation in the year 2000 and this caused widespread concern that LIC will find the competition tough and could very well be marginalised.
- Today, there are 24 private players in the life insurance space and many of them have foreign collaborations.
- LIC has steadily grown in the past six decades and today with over 290 million policyholders and an asset value of ₹38 lakh crore ($520 billion), it ranks as one of the largest insurance companies in the world.
- Yet, LIC remains a colossus capturing 75% of the life insurance business in the country.
- Its claim settlement at 99.87% is far above the industry average of 84%.
Role of LIC in skilling and women’s employment
- LIC created large scale employment for women right from its inception in 1956.
- Thousands of women became LIC agents in the 1950s and 60s, when job opportunities were scarce.
- There was no entry barrier in terms of age or fixed time for work.
- Education requirement was a mere high school pass.
- Many of these women were housewives who could earn an extra income by selling LIC policies.
- This was a period before the arrival of digital technologies and mobile phones.
- Skill development program: LIC’s training programme with its mix of online education and real-life case studies offer the best model for India’s skill development programmes.
- LIC’s relevance comes from its track record of creating vast number of employment opportunities for ordinary Indians, male and female, urban and rural.
Policies focused on savings
- In a country of vast poverty and low income, LIC recognised from the beginning that it cannot sell insurance as a risk cover on premature death.
- It, therefore, devised policies focussing on savings and the need for children’s education and daughter’s marriage which are fundamentals to family values in India.
- These policies also ensured that a part of the premium paid was returned at regular intervals before the maturity period, providing liquidity for emergencies.
- They simultaneously covered risk caused by death.
- People-centric approach: While the private players concentrated on technology-driven marketing, LIC’s approach was significantly people-centric.
- When Pradhan Mantri Jan Dhan Yojana was launched for financial inclusion of over 300 million of the rural population on August 15, 2014, LIC was already there with its policies covering a rural population of 200 million.
Conclusion
The nation must not forget the fact that LIC was built on sweat and tears, pain and sacrifice of ordinary Indians. It is these democratic credentials that remain LIC’s most valuable asset.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: World Energy Outlook Report
Mains level: Paper 3- Carbon tax
Context
Climate change is bound to impact human lives and the global economy at an exceptionally high scale in the not-so-distant future. The solution to the problem calls for government intervention.
Carbon intensive nature of India’s energy ecosystem
- After China and the United States, India, which releases 2.44 billion tonnes of carbon dioxide annually, is the third-largest emitter of this GHG, making it a key player in emissions reduction.
- The International Energy Agency’s (IEA) World Energy Outlook 2017 Report estimates that India will account for nearly one-fourth of the global energy demand by 2040.
- As per the IEA’s India Energy Outlook 2021 Report, India’s energy system is highly dependent on fossil fuels — coal, oil and bioenergy — that supply about 90 per cent of the country’s demand.
- Low electrification: About 38 per cent of primary energy is consumed for power generation, implying that the level of electrification is still low in the country.
- Power generation is highly dependent on coal — about 78 per cent of it comes from this fossil fuel — and, transportation is almost entirely dependent on oil.
- The Indian energy ecosystem is, thus, highly carbon-intensive.
Climate change as a feature of market failure
- Market failure due to climate change: Economic activities by consumers (driving or air-conditioning, for instance) and by producers (such as electricity generation and manufacturing) cause emissions, leading to pollution and global warming.
- Negative externalities: These negative externalities, causing outcomes that are not efficient, are not reflected in the costs incurred by consumers or producers.
- The true costs to the consumers, producers and society are not reflected in the market interactions.
- This leads to an uncontrolled rise in emissions and also breeds apathy towards mitigation efforts.
Way forward
- Government intervention: Achieving economic growth sustainably requires a strategy for reducing carbon emissions aggressively while also focusing on efficiency, equity, fairness and behavioural aspects.
- The solution to the problem of market failure calls for government intervention.
- Limits of emission: The most natural option of government intervention for reducing emissions is by fixing limits of emissions through regulation, taking into consideration the Nationally Determined Contribution targets set by the country under the Paris Agreement.
- Experts have shown that the wrongly set emission levels could lead to cost-inefficient outcomes.
- It makes it difficult for the regulator to obtain the information about each firm’s abatement-cost and damage-cost schedules in advance.
- Therefore, setting emission targets and regulating emissions through command and control might be good only during the initial phase of the mitigation strategy.
- Why Carbon tax is a better option? The carbon tax is a better option than regulating the pre-fixed levels of emissions.
- The marginal cost of abatement rises as the firms keep on reducing the emissions further, and the firm will stop reducing emissions and choose to pay tax at the point when the cost of abatement becomes higher than the rate of tax.
- This option will lead to near-efficient outcomes.
- The trading scheme will bring in higher efficiency as the price of certificates will be determined by allowing firms facing low and high abatement costs to compete in the free market as per their own abatement and damage cost schedules.
- The emissions trading scheme will determine the optimal and cost-efficient levels of emissions reduction by providing a choice to the firms to either mitigate or trade — the net effect of this will be a reduction in emissions.
- The low abatement-cost firms will keep reducing emissions as they would profit by trading the certificates.
- Equity in energy access: The issue of equity in energy access must be addressed by channelling the revenues generated from carbon pricing to households and firms impacted by the carbon trading and carbon tax — these could be through incentives or lump-sum transfers.
Conclusion
The socio-economic impact of decarbonising the economy and the way humans live would be crucial in setting our priorities. We have limited time and our resources are scarce.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Semicon diplomacy
Context
The current decade presents a unique opportunity to India. . India must seize this opportunity and become an attractive alternative destination for semiconductor manufacturing.
Importance of semiconductors
- Semiconductor chips are the lifeblood of the modern information age.
- The semiconductor is the cornerstone of all electronic products.
- They enable electronic products to compute and control actions that simplify our lives.
- These semiconductor chips are the drivers for ICT development and one of the key reasons for the current flattening of the world
Global cooperation driven by semiconductors
- The manufacturing cycle of a semiconductor chip from sand to a finished product, sees it change hands approximately 70 times across international borders.
- Concentrated in few geographies: The semiconductor manufacturing capacities are concentrated in a few geographies.
- Nearly all leading edge (sub 10nm) semiconductor manufacturing capacity is limited to Taiwan and South Korea, with nearly 92 per cent located in the former.
- Further, 75 per cent of the semiconductor manufacturing capacity is concentrated in East Asia and China.
Opportunity for India
- Companies are looking to diversify their supply chain and for alternatives to their bases in China.
- The chip shortages due to Covid-19 have hit automakers with a revenue loss of $110 bn in 2021.
- The Russia-Ukraine conflict and its implications for raw material supplies for the semiconductor value chain has also poised chipmakers to invest in strengthening the semicon supply chain.
- India must seize this opportunity and become an attractive alternative destination for semiconductor manufacturing.
- The way ahead is conceptualising a semicon diplomacy action plan.
- Placing semicon diplomacy at the heart of India’s foreign policy is essential both strategically and economically.
- The multiplier effect on the economy: The establishment of the value chain for semiconductors would ensure a multiplier effect on the entire economy.
- National security implications: Semiconductors are used in critical infrastructures such as communication, power transmission etc., that have implications for national security.
- Reducing the BoP: Domestic production would be saving forex and reducing the balance of payments, especially vis a vis China.
Way forward: Leveraging Semicon diplomacy
- One of the ways of leveraging semicon diplomacy is increasing multilateral and bilateral cooperation.
- Role of Quad: A key institution with immense potential in this regard is the Quad.
- Australia, being rich in raw materials required for semiconductors, can be an important supplier to fill in India’s deficits.
- The US and Japan can be leveraged for capacity building and their advanced semiconductor technology in logic and memory segments.
- Pivot India’s Act East Policy: Considering that the semiconductor manufacturing and testing bases are heavily concentrated in East Asia, the Act East policy provides an opportunity to connect and strengthen ties with key players in the region.
- Technological exchanges with ASEAN: Frequent technological exchanges between a regional bloc like ASEAN via tracks in forums like the East Asia Summit and the ASEAN regional forum will be beneficial.
- Collective growth: Attaining self-sufficiency in semiconductor manufacturing can mean collective growth of the South Asian region.
- India needs to harness its strengths, such as the strong presence of global EMS players, diaspora, world-class design ecosystem, demographic dividend, and use it as a pedestal for global partnerships and outreach.
Conclusion
India’s concept of self-reliance is not an individualistic endeavour but one that encourages growth and prosperity of all, in the spirit of Vasudhaiva Kutumbakam, meaning the entire world is one family. Similarly, we don’t have an option but to be self-reliant in semiconductors.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Tax buoyancy
Mains level: Paper 3- Fiscal impact of Russia-Ukraine conflict
Context
The Union Budget 2022-23 received a great deal of attention even before the financial year began due to the Russia-Ukraine conflict, and the consequent rise in inflation. There has been considerable speculation on whether the fiscal targets will be altered due to the evolving conditions.
Estimate of GDP
- The critical estimate of GDP growth assumed for this year has certainly changed, with the RBI also adjusting its earlier forecast.
- However, the budget was conservative to begin with, assuming an 11.1 per cent growth estimate on which its revenue collection targets were based.
- Given that real GDP growth has been scaled down by the RBI to 7.2 per cent, and as inflation has gone up, on balance, the 11.1 per cent assumption looks tenable.
- Hence, inflation has been a positive for the government in this respect.
Tax collection
- Another positive that emerged last year was that overall tax collections were even more buoyant than expected.
- From the budgeted figure of Rs 22.17 lakh crore, the revised estimates raised the target to Rs 25.16 lakh crore.
- In comparison, actual collections have turned out to be even higher at Rs 27.07 lakh crore.
- If this buoyancy is maintained, then the government can expect the 2022-23 target of Rs 27.57 lakh crore to be exceeded by around Rs 2.5 lakh crore (of this, around 30 per cent will go to the states).
- This additional revenue would ideally flow from enhanced GST collections, corporate tax, and customs.
- Central to GST collections increasing is private consumption.
- Today, high inflation erodes the purchasing power of households, which will divert a larger portion of their incomes for necessities that have become expensive.
- Therefore, there will be uncertainty here.
- Corporates did well last year as they did manage to pass on higher input costs to the consumers, especially in the second half of the year.
- Can they do it for the second time is the question.
- High growth in trade volumes led to the government raking in higher customs collections. W
- ith global growth set to slow down in 2022, a similar flow is unlikely.
Excise collection and challenges
- The government will be watchful of excise collections as it is possible that rising fuel prices will lead to lower consumption.
- Also, in case crude oil continues on the current path and remains in the region of $100-120/barrel, a call may have to be taken by the government on the excise duty: Once the prices of diesel and petrol remain at a new threshold, there will be a tendency for freight rates to be increased permanently.
- This will have a secondary impact on inflation.
Disinvestment challenges
- On the revenue side, the LIC disinvestment that was to happen last year will materialise this year.
- The disinvestment has been pushed through for May, but would be of a much lower amount (around Rs 21,000 crore) than envisaged earlier.
- It will be interesting to see if this would be a part of the Rs 65,000 crore target for this year.
Uncertainty on the expenditure side
- The biggest concern will be the fertiliser subsidy, which has been a volatile expenditure item.
- Higher prices of natural gas have meant that fertilisers have been more expensive and so, the budgeted amount of Rs 1.05 lakh crore will have to be revisited.
- With inflation already high and agriculture expected to be the bright spot again, the government cannot risk ignoring the subsidy element on fertilisers because there can be an impact on farm product prices.
- The food subsidy will also need to be examined.
- The present rise in food prices globally has meant that there is a good global market, especially for wheat.
- Exports for wheat and maize might rise but can distort the procurement process.
Interest rate and its implications for borrowing
- The budget had assumed that interest rates would be stable.
- However, conditions have changed quite quickly with bond yields moving up by almost 50 bps for the 10-year G-secs.
- This will mean that the entire Rs 15.95 lakh crore of gross borrowing will have to be carried out at a higher cost.
- This can result in an additional Rs 8,000 crore of interest if the 50 basis points increase holds through the year. There could be an upward bias if rates go up further.
Conclusion
The longer the conflict continues the greater will be the impact. While the government has adeptly managed the fiscal numbers in the last couple of years, this year will be particularly challenging considering the nature of the shock.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: RTE
Mains level: Paper 2- Importance of better public schools
Context
The pandemic has thrown a harsh light on the vulnerabilities and challenges faced by the world in education. There is an immense learning gap due to existing inequalities.
Need for investment in learning systems
- In India, we have to accept that unless we mobilise learning resources and institutions at the government level, the divides will continue to expand and learners will continue to fall between the cracks.
- Systems have to be put into place to find a variety of methods to equip all learners — privileged, poor, middle-class and alternatively-abled.
- The challenge is about returning to school.
- In wealthier nations, schools have always been the first to open and last to close and citizens have benefited from the public school system.
- In India, across states, there is a sense of despair due to unemployment and lack of financial resources, which has snowballed due to the pandemic, resulting in greater inequality.
- Sending children to school, as opposed to keeping them at home, is a huge financial investment, particularly in the private school system.
- Parents have refrained from sending their children back to school due to a lack of funds.
Viewing education through government school lens
- The big shift that we as a nation have to make is viewing education through a government school lens.
- This will only take place if states provide the opportunity for free, compulsory, neighbourhood education.
- Radical reforms have to be implemented to restructure government schools and ensure quality.
- The government, both at the Centre and in the states, should build good-quality primary, middle and high schools and provide facilities that the best private schools have to offer.
- Online learning is not the way forward: We are subsumed by the myth that technology has expanded potential.
- The concern is that online learning will create greater inequality, not only in the global South but even in the most well-resourced corners of the planet.
- Online learning is not the way forward.
- The UNESCO’s International Commission on the Futures of Education states in its report, “the core commitments that should always be remembered are public education and common good”.
- It says, “This is not the time to step back and weaken these principles but rather to affirm and reinforce them.”
- We must take the opportunity to protect and advance public education.
- We cannot allow the government health system and government education to be opposed to one another. Their synergies must overlap
Conclusion
Public education is crucial to societies, communities and individual lives. It is the only thing that will enable us to live with dignity and purpose.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Core inflation
Mains level: Paper 3- Inflation challenge
Context
Expectations that commodity and oil prices would cool down in 2022 as the pandemic ebbed were belied by the Russia-Ukraine conflict, which exacerbated existing pressures. Fresh lockdowns in China are also extending the pandemic-induced supply-chain bottlenecks.
Challenges for central banks
- Systemically important central banks that viewed the consistent uptick in inflation as transitory — caused by post-pandemic supply shocks — are now finding it hard to bottle the genie.
- Inflation in the time of weak growth: What central banks like even less is having to deal with rising inflation in times of weak growth.
- Because the primary tool they have to fight it — the interest rate hike — can be recessionary.
Inflation in India
- CPI inflation averaged 6.3 per cent in the January-March 2022, above the RBI’s target range of 2-6 per cent.
- The RBI forecasts inflation for April-June at 6.3 per cent.
- One more quarter over the 6 per cent mark, and the central bank would owe the government an explanation.
- Factors driving inflation: Fiscal 2021-In fiscal 2021, inflationary pressures came largely from food and, to some extent, core which excludes fuel and food.
- Fiscal 2022- In fiscal 2022, crude prices hardened to emerge as the new driver. Core inflation firmed up further.
- But the drop in food inflation offset this, so overall inflation was lower at 5.5 per cent compared with 6.2 per cent the previous year.
Understanding inflation in fiscal 2023
- What makes this fiscal worrying is, all three-fule, food and core are firmly pointing in the same direction — up.
- Fuel inflation, in double digits for a year now, shows no signs of easing.
- Energy prices have risen sharply across the board — from crude oil to coal and natural gas.
- The cut in excise duties on petrol and diesel in November 2021 is insufficient to bring down fuel inflation, in the event crude prices stay above $90 per barrel this fiscal.
- Food inflation: Food is the most volatile component and biggest mover of CPI inflation, given that it occupies 39 per cent weight in the average consumption basket.
- On the positive side, India looks set to enjoy a fourth successive year of normal monsoon and still has good buffer stocks of rice and wheat.
- What is certain, though, is the rising cost of food production.
- Prices of fertilisers, pesticides, diesel and animal feed are all surging.
- Already pricey edible oils are set to get even costlier, with Indonesia’s recent ban on refined palm oil exports adding pressure.
- No wonder then, food inflation is expected to rise.
- Core inflation: Core inflation, a barometer of demand pressures, will continue to climb despite an environment of weak demand due to the persistence of supply shocks.
- For producers, the bump-up in international prices across energy and metal commodities since the war has brought more pain.
- But a weak and uneven demand recovery means producers had limited ability to pass on cost pressures to consumers.
- Such pass-through has been partial, at best.
- For most goods, CPI inflation has been much lower than the corresponding WPI last fiscal.
- The pattern of recovery is also uneven across different segments, with contact-intensive services lagging formal manufacturing.
- But contact-based services will catch up sooner or later, as restrictions become a thing of the past.
- The last time we saw such broad-basing of inflationary pressures was after the Global Financial Crisis.
- The difference this time around is consumer demand, which remains weak and will limit the extent of pass-through.
Conclusion
Forecasting inflation in such uncertain times is fraught with risk. The RBI has predicted ~5.7 per cent consumer inflation this fiscal, while professional forecasters see it at 5.6 per cent. The odds currently favour a higher inflation print, and a rate hike in June.
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