Note4Students
From UPSC perspective, the following things are important :
Prelims level: Marginal propensity to consume
Mains level: Paper 3- Growth prospects for Indian economy
Context
The adverse effect of the third wave of COVID-19, which is mainly affecting the last quarter of 2021-22, may call for a further downward adjustment in the growth rate to about 9%.
Growth in FY 2021-22
- As per the NSO’s advance estimates, at the end of 2021-22, the magnitude of GDP in real terms is estimated at INR₹147.5-lakh crore that is only a shade higher than INR₹145.7-lakh crore in 2019-20.
- Thus, due to the three waves of COVID-19 that India has experienced, two years of real growth in economic activities have been wiped out.
- As per the advance estimates, the gross fixed capital formation (GFCF) relative to GDP at current prices stands at 29.6% in 2021-22.
- Capacity utilisation in India continues to have considerable slack.
- Private final consumption expenditure (PFCE) also shows a low growth of 6.9% in 2021-22.
- Any pick-up in demand would continue to be constrained by low-income growth in sectors characterised by a high marginal propensity to consume (MPC) such as the trade, transport, et al. sector and the Micro, Small and Medium Enterprise (MSME) sector more broadly.
- It may thus be prudent to expect a real GDP growth in the range of 6%-7%.
- Growth in 2022-23 would also continue to be constrained by supply-side bottlenecks and high prices of global crude and primary products.
- Growth in 2022-23 would depend on the basic determinants such as the saving and investment rates in the economy.
Suggestions
- Extend GST compensation period: The GST compensation provision would also come to an end in June 2022.
- This would cause a major revenue shock at least for some States such as Tamil Nadu, Kerala and Andhra Pradesh.
- While this matter may be considered by the GST Council, the compensation arrangement should be extended by two years in some modified form.
- With respect to non-tax receipts, the scope of the National Monetization Pipeline (NMP) may be extended to cover monetisation of government-owned land assets.
- Disinvestment initiatives may have to be accelerated.
- Expenditure prioritisation in 2022-23 should focus on reviving both consumption and investment demand.
- Urban counterpart to MGNREGA: Since consumption demand remains weak, some fiscal support in the form of an urban counterpart to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) may be considered.
Focusing on fiscal consolidation
- It would be appropriate now to consider a graduated return to fiscal consolidation while using fiscal policy to lay the base for faster growth in the years to come.
- The Fifteenth Finance Commission had suggested a fiscal consolidation path where the Centre’s fiscal deficit was benchmarked at 5.5% of GDP for 2022-23.
- In their pessimistic scenario, it was kept at 6% of GDP.
- It may be prudent to limit the reduction in fiscal deficit-GDP ratio to about 1% point of GDP in 2022-23.
- This would imply a fiscal deficit in the range of 5.5%-6% of GDP.
- From here on, a stepwise reduction of 0.5% points per year would enable a level of about 4% of GDP by 2025-26.
- By this time, as suggested by the Fifteenth Finance Commission, a high-powered inter-governmental group should be constituted to re-examine the sustainability parameters of debt and fiscal deficit of the central and state governments.
Conclusion
Expenditure prioritisation in 2022-23 should focus on reviving both consumption and investment demand while aiming for the gradual return to the fiscal consolidation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CAPF
Mains level: Paper 3- Issues with multiple agencies guarding borders
Context
Recent developments warrant a comprehensive review of border management to ensure the all-weather security of our borders.
What makes India’s border management difficult?
- India shares land borders with Pakistan, China, Nepal, Bhutan, Bangladesh and Myanmar, which stretch approximately 15,106 km.
- In addition, we have an approximately 3,323 km-long LoC with Pakistan, which further extends to the rechristened 110 km stretch of “Actual Ground Position Line” (AGPL) dividing the Siachen glacier region.
- Further east, we have the 3,488 km LAC with China.
- We share maritime boundaries with Sri Lanka, Maldives, Bangladesh, Pakistan, Myanmar and Indonesia; we have a 7,683 km coastline and an approximately 2 million sq km exclusive economic zone (EEZ).
- This makes India’s task more complex than most other countries.
Multiple agencies securing borders
- Complexity is accentuated by the fact that along with the army, we have multiple other security agencies — the Central Armed Police Force (CAPF) and the Paramilitary Forces (PMF) — sharing the responsibility.
- While the army is deployed along the LoC and AGPL, the Border Security Force (BSF) looks after the international border with Pakistan and Bangladesh.
- Guarding the LAC has been assigned to the Indo-Tibetan Border Police (ITBP) and Assam Rifles.
- The Sashastra Seema Bal (SSB) is responsible for guarding the borders with Nepal and Bhutan.
- The Assam Rifles looks after our border with Myanmar.
- In a nutshell, in addition to the army, we have four agencies guarding borders with six neighbours.
- Conversely, maritime borders are guarded by a single agency — the Coast Guard.
Need for review of the border management
- There is a lack of a coherent policy on training, planning and the conduct of guarding operations among various outfits.
- Overall coordination is also affected.
- Our adversary on the western border has often escalated violations by resorting to the prolonged use of military resources.
- Chinese provocations along the LAC are military operations.
- Clearly, the peace-time scenario is now by and large militarised.
Way forward
- Single security agency: In this scenario, India needs a single security agency adequately equipped, suitably armed and trained in advanced military drills and sub-unit tactics to guard our borders.
- Manpower from Army: Further, to augment the battle efficiency, a fixed percentage of manpower, including the officer cadre, should be drawn on deputation from the army.
- Paramilitary force under Ministry of Defence: To ensure the desired training and operational standards, this single security agency should be designated as a paramilitary force under the Ministry of Defence and operate under the army.
- Mergers: The ITBP and the SSB should be fully merged into the new outfit; the BSF and CRPF still have important internal security duties and can be partially merged.
- The reorganised Assam Rifles too should retain its role of conducting counter-insurgency operations and act as a reserve for the army for conventional operations.
- Most countries have raised specialised and dedicated armed bodies for border security.
- Iran has the Border Guard Command, Italy has the Border Police Service, Russia has created a Border Guard Service, whereas in the US, it is under Homeland Security.
- Most of these countries, based on threat perception and for better combat cohesion, have placed these organisations under the command of the armed forces.
Conclusion
India should adopt a single agency with adequate resources and training to deal with the evolving challenges.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Federal system
Mains level: Paper 2- Federal character of India polity
Context
Conscious recognition of the federal character of our polity is essential to protect our national character.
Federal spirit and ideas in Indian Constitution
- Conscious of the differential needs of the populations of different states, the drafters of the Constitution made provisions for an equitable share of powers and responsibilities among different levels of governments.
- The lists in the 7th Schedule of the Constitution — Union, state and concurrent — are an example of this division, wherein each level of government has its own sphere, enabling context-sensitive decision-making.
- Local self-government: Later, institutions for local self government were added through the 73rd and 74th amendments, which strengthened grass roots democracy.
- Division of responsibility: Article 246 and Article 243 G provide for this division of responsibilities.
- Finance Commission: Article 280 provided for the constitution of Finance Commission to define the financial relationship and terms between the Union and states.
- Inter-State Council: Article 263 provided for the establishment of an Inter-State Council for smooth transition of business between the Union and states and resolution of disputes.
- The inter-state tribunals, the National Development Council and other informal bodies have served as vehicles of consultations between the Union, states and UTs.
- Rajya Sabha: Apart from these institutions and the Rajya Sabha, the Constitution makers also left much scope for consultative and deliberative bodies so as to strengthen the spirit of cooperation and federalism.
Steps against the spirit of federalism
- The Planning Commission has been scrapped.
- The Inter-State Council has met only once in the last seven years while the National Development Council has not met at all.
- The tenure of the 15th Finance Commission was mired in controversy and many states expressed apprehensions about devolution.
- The GST has already taken away much of the autonomy available to states and has made the country’s indirect tax regime unitary in nature.
- Article 370 was removed without consulting the state legislature.
- Parliament legislated on “agriculture”, entry no. 14 in the state list, to enact the three contentious farm laws, overstepping its jurisdiction and imposing a law on the states.
- The New Education Policy has been flagged as encroaching on the federal nature of the polity.
- The BSF’s jurisdiction was extended in Assam, West Bengal and Punjab without any consultation with the concerned states.
- The constitutional office of governor has come under scrutiny several times for encroaching on the powers of state executive and legislature.
Conclusion
It should be underlined that Article 1 of our Constitution declares that “India that is Bharat is a union of states”, and that devolution of powers is necessary in such a setting.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: All India Services
Mains level: Paper 2- Amendments to IAS Cadre rules
Context
The Central Government has proposed four amendments to Rule 6(1) of the IAS (Cadre) Rules, 1954 dealing with deputation, and has sought the views of State governments before January 25, 2022.
Historical background of All India Services
- It was Sardar Patel who had championed the creation of the Indian Administrative Service (IAS) and the Indian Police Service (IPS) as “All India Services” (AIS) whose members would be recruited and appointed by the Centre and allotted to various States, and who could serve both under the State and the Centre.
- Speaking to the Constituent Assembly on October 10, 1949, Patel said, “The Union will go, you will not have a united India if you have not a good All India Service which has the independence to speak out its mind, which has a sense of security….”.
Central deputation of All India Service officers
- Consultative process: AIS officers are made available for central deputation through a consultative process involving the Centre, the States and the officers concerned.
- The Centre would choose officers only from among those “on offer” from the States.
- Concurrence of the State government: The existing Rule 6(1) states that a cadre officer may be deputed to the Central Government (or to another State or a PSU) only with the concurrence of the State Government concerned.
- However, it has a proviso which states that in case of any disagreement, the matter shall be decided by the Central Government.
- Unfortunately, both the Centre and the States have at times flouted these healthy conventions for political considerations.
The politicisation of the deputation process
- In May 2021, the Centre unilaterally issued orders for the central deputation of the Chief Secretary of West Bengal just before his last day in service.
- Some States used to vindictively withhold the names of some of the officers who had opted for central deputation or delay their relief after they were picked up by the Centre.
- The proposed amendment to rule: The Central Government has proposed four amendments to Rule 6(1) of the IAS (Cadre) Rules, 1954 dealing with deputation.
Two of the four proposed amendments are disconcerting
- 1] Providing a fixed number of IAS officers for central deputation: One is a new proviso making it mandatory for the State government to provide a certain fixed number of IAS officers for central deputation every year.
- The proposed amendment more or less compels a State government to offer IAS officers for central deputation even when these officers themselves may not wish to go on central deputation.
- Reasons for shortage of IAS officers: Poor working conditions in junior-level posts, an opaque and arbitrary system of empanelment for senior-level posts, and lack of security of tenure at all levels are the real reasons for the shortage of IAS officers, which the Centre should address.
- 2] Requiring states to release the officer: The other is a proviso that requires the State government to release such officers whose services may be sought by the Central Government in specific situations.
- Based on experiences of the recent past, State governments have a justified apprehension that this proviso may be misused for political considerations.
Issues with the proposed amendments
- The contemplated changes have grave implications for the independence, security and morale of IAS officers.
- Infringement of rights of States: States are right in perceiving the proposed amendments as a serious infringement of their rights to deploy IAS officers as they deem best, especially when the cutting edge of policy implementation is mostly at the State level.
- States may prefer officers of the State Civil Services to handle as many posts as possible.
- . In course of time, the IAS will lose its sheen, and the best and the brightest candidates will no longer opt for the IAS.
- Against cooperative federalism: In S.R. Bommai vs Union of India (1994), the Supreme Court held that “States have an independent constitutional existence and they have as important a role to play in the political, social, educational and cultural life of the people as the Union. They are neither satellites nor agents of the Centre”.
Consider the questions “What are the proposed amendments to IAS Rule 1954? What are the concerns with the proposed changes?”
Conclusion
In a federal setup, it is inevitable that differences and disputes would arise between the Centre and the States. But all such quarrels should be resolved in the spirit of cooperative federalism and keeping the larger national interest in mind.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NATO
Mains level: Paper 2- Disruption in Central Asia and role of Russia
Context
Vladimir Putin, who annexed Crimea in 2014 has now mobilised some 100,000 troops on the Ukraine border.
How insecurity and history plays role in Russia’s actions
- Russia, the world’s largest country by land mass, lacks natural borders except the Arctic Ocean in the north and the Pacific in the far east.
- Its vast land borders stretch from northern Europe to Central and north east Asia.
- The country’s heartland that runs from St. Petersburg through Moscow to the Volga region lies on plains and is vulnerable to attacks.
- In the last two centuries, Russia saw two devastating invasions from the west — the 1812 attack by Napoleonic France and the 1941 attack by Nazi Germany.
- After the Second World War, Russia re-established its control over the rim land in Eastern Europe and Central Asia, which it hoped would protect its heartland.
- But the disintegration of the Soviet Union threw its security calculations into disarray, deepening its historical insecurity.
NATO’s expansion after disintegration of the Soviet Union
- When the Soviet Union collapsed, Russia lost over three million square kilometres of sovereign territory.
- In the last months of the Soviet Union, the West promised that the North Atlantic Treaty Organization (NATO) would not “expand an inch to the east”.
- The United States and the United Kingdom repeated the pledge after the collapse of the Soviet Union.
- But despite the promises, NATO continued expansion.
- In March 1999, in the first enlargement since the end of the Cold War, the Czech Republic, Hungary and Poland (all were members of the Soviet-led Warsaw Pact) joined NATO.
- Five years later, seven more countries — including the three Baltic countries of Estonia, Latvia and Lithuania, all of which share borders with Russia — were taken into the alliance.
- Russia felt threatened but was not able to respond.
- But in 2008, when the U.S. promised membership to Georgia and Ukraine in the Bucharest summit, Russia, which was coming out of the post-Soviet retreat, responded forcefully.
How Russia see NATO expansion as threat to its dominance on Black Sea
- Turkey, Bulgaria and Romania, all Black Sea basin countries, are NATO members.
- Ukraine and Georgia are the other countries that share the Black Sea coast, besides Russia.
- Russia was already feeling squeezed on the Black Sea front, its gateway to the Mediterranean Sea.
- If Ukraine and Georgia also join NATO, Russia fears that its dominance over the Black Sea would come to an end.
- So, in 2008, Mr. Putin sent troops to Georgia over the separatist conflict in South Ossetia and Abkhazia.
- In 2014, when the Kremlin-friendly regime of Ukraine was toppled by pro-western protesters, he moved to annex the Crimean peninsula, expanding Russia’s Black Sea coast, thereby protecting its fleet based in Sevastopol in Crimea.
Restoring the rim land
- In recent years, Mr. Putin has tried to turn every crisis in the former Soviet region into a geopolitical opportunity.
- South Ossetia and Abkhazia, the self-proclaimed republics that broke away from Georgia, are controlled by Russia-backed forces.
- In 2020, when protests erupted in Belarus after a controversial presidential election, Mr. Putin sent assistance to the country to restore order.
- In the same year, Russia sent thousands of “peacekeepers” to end the war between Armenia and Azerbaijan.
- Earlier this year, Belarus leader Alexander Lukashenko, with Mr. Putin’s backing, manufactured a migrant crisis on the Polish border of the European Union.
- This month, when violent unrest broke out in Kazakhstan, the largest and wealthiest country in Central Asia, its leader turned to Russia for help.
How do geopolitical circumstances favour Russia?
- The U.S.’s ignominious withdrawal from Afghanistan has left the Central Asian republics deeper in the Russian embrace.
- Europe is very much dependent on Russian gas, which limits its response.
- For years, the West, the winner of the Cold War, discounted Mr. Putin.
- Having failed to defeat the Taliban in Afghanistan, NATO is unlikely to pick a war with Russia over Ukraine.
Conclusion
By destabilising Georgia and Ukraine and re-establishing Russia’s hold in Belarus, Caucasus and Central Asia, Moscow has effectively stalled NATO’s further expansion into its backyard.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: PLI scheme
Mains level: Paper 3- Lessons from the success of mobile manufacturing
Context
The mobile phones and room air conditioners (RAC) sectors in recent times have shown us the formulae for expansion of the manufacturing sector and growing exports.
How did India expand its mobile manufacturing base?
- We were one of the largest consumers of mobile phones in 2014.
- In 2014-15, our mobile phone imports exceeded $8 billion.
- Our electronics imports were threatening to exceed our oil imports.
- Steps taken by govt: The government took many steps like 100 per cent automatic FDI,
- levy of import duties to protect local manufacturers,
- the Phased Manufacturing Plan (PMP),
- manufacturing clusters (EMC 2.0) and
- the Production Linked Incentive (PLI) scheme.
- They have attracted investments, created lakhs of jobs, and have moved us from being a net importer to a net exporter.
- Our mobile phone manufacturing value has jumped more than eight times from Rs 0.27 trillion in 2013-14 to Rs 2.2 trillion in 2020-21.
- We have surpassed the US and South Korea to become the second-largest manufacturer globally.
Steps need to be taken
- Our mobile phone exports are primarily limited to feature phones and low-value smartphones.
- India must aim for a significant increase in exports from the current $4 billion.
- China exports $200 billion, and Vietnam exports $60 billion worth of mobile phones.
- The PLI scheme aims to achieve the same by allocating incentives of Rs 410 billion for the mobile phone category over the next five years.
- Low value addition: Our value addition in mobile phone manufacturing is currently limited to 15-20 per cent versus more than 40 per cent in China.
- The scheme for promoting the manufacturing of electronic components and semiconductors (SPECS) is a step in the right direction.
- We must focus on setting up a fabrication plant to manufacture semiconductor chips to facilitate complete vertical integration.
The Room AC sector story
- We imported RACs worth Rs 41 billion in 2017-18.
- The government initiated multiple measures such as the PMP scheme, banning the import of refrigerant-filled ACs, increasing the import duty on RACs and critical components, and the PLI scheme.
- From 2017-18, RAC imports have declined by 56 per cent to Rs 18 billion in 2020-21.
- Our import of RACs has shifted from China to an FTA country like Thailand, where import duty isn’t applicable.
- A judicious mix of protection (levy of import duty/banning of finished goods) and incentives (PMP, PLI scheme, 100 per cent FDI) has developed local manufacturing, created jobs, and turned a trade surplus.
Way forward
- We missed the manufacturing/export bus in the 1980s.
- We did excel in services like software to become back office to the world. With China+1 becoming a geopolitical imperative, it is an opportune time for us to expand the manufacturing sector and improve our export market share.
- To achieve our true potential we need close coordination and seamless working between central, state, and local governments, the rule of law, improvements in infrastructure, especially logistics and flexible labour laws.
Conclusion
Many of our peers are ahead of us in ease of doing business, but none of them has a large domestic market like us. The automobile and generic pharma sector in the past and the mobile phone/RAC sectors recently have shown that we know the formulae.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: 73rd and 74th Constitutional amendment
Mains level: Paper 2- Strengthening local governments
Context
The “State Finances, Study of Budgets of 2021-22” report, correctly identify the role of the city governments in meeting the challenges the pandemic has thrown up, the report also points to the draining of resources.
What the RBI report says about the role of local governments
- The report highlights the frontline role played by the third-tier governments by implementing containment strategies, healthcare.
- Due to this, their finances have come under severe strain, forcing them to cut down expenditures and mobilise funding from various sources.
- Need for functional autonomy: The RBI further commented that the functional autonomy of civic bodies must increase and their governance structure strengthened.
- Empowering financially: This could happen by ‘empowering them financially through higher resource availability.
- The RBI did echo the recommendations of the 15th Finance Commission report on local bodies that emphasised city governance structures and financial empowerment.
- Limited coverage of property tax: The RBI report also highlights the limited coverage of property tax and its failure in shoring up municipal corporation revenues.
- Organisation for Economic Co-operation and Development (OECD) data show that India has the lowest property tax collection rate in the world — i.e., property tax to GDP ratio.
Issues faced by city governments
- During the pandemic, while leaders from the Prime Minister to Chief Ministers to District Magistrate were seen taking a call on disaster mitigation strategies, city mayors were found missing.
- The old approach of treating cities as adjuncts of State governments continues to dominate the policy paradigm.
- The general approach towards urban empowerment has remained piecemeal in India.
- The first intervention to understand ‘the urban’ (though there are references in the Five Year plans) and plan with a pan-Indian vision took place in the 1980s when the National Commission On Urbanisation was formed with Charles Correa as its chairperson.
- Another important intervention was in the first half of the 1990s with the Constitution 73rd and 74th Amendments.
- The latter refers to urban reforms — empowering urban local bodies to perform 18 functions listed in the 12th Schedule.
- However, there is no mention of financial empowerment.
- The only exception to the rule has been the people’s plan model of Kerala where 40% of the State’s plan budget was for local bodies (directly) with a transfer of important subjects such as planning, etc.
How to achieve functional autonomy for city government
- This should happen with three F’s: the transfer of ‘functions, finances and functionaries’ to city governments.
- There are nearly 5,000 statutory towns and an equal number of census towns in India.
- Nearly 35% of the population lives in urban centres.
- And, nearly two-thirds of the country’s GDP stems from cities and almost 90% of government revenue flows from urban centres.
- Before value-added tax and other centralised taxation systems, one of the major earnings of cities used to be from octroi.
- But this source of revenue collection was taken away by the State and the central governments.
- Instead, finance commissions recommended grants to urban local bodies based on a formula of demographic profile.
- In such a situation, it is difficult for the towns to sustain their ability to perform their bare minimum functions, especially with the latest Pay Commission recommendations.
- This has resulted in burdening people more with taxes and further privatisation/outsourcing of the services of the municipalities.
- The often-cited example is how cities in the Scandinavian countries manage their functions well — from city planning to mobility to waste management.
- But the truth is that a chunk of the income tax from citizens is given to city governments.
- A committee formed by the Ministry of Housing and Urban Development to review the 74th constitutional amendment recommended that 10% of income tax collected from the cities was to be given back to them as a direct revenue grant from the central government.
Way forward
- 1] Cities must be treated as important centres of governance, where democratic decentralisation can bring in amazing results.
- There will be transparency and adequate participation of the people.
- 2] Cities should not be considered as entrepreneurship spaces where the sole driving force is to make them competitive to attract investments.
- 3] The resources required for quantitative and qualitative data must be immediately provided to the cities to ensure a disaster risk reduction plan keeping vulnerable communities in mind.
- 4] A piecemeal approach such as the concept of ‘smart cities’ must be shunned altogether.
- This approach further widens the gap between different sets of people.
- 5] Leadership in the cities must be elected for a term of five years.
- Likewise, the third F, i.e., functionaries, must be transferred to the cities with a permanent cadre.
Consider the question “The functional autonomy of civic bodies must be increased and their governance structure strengthened. This could happen by ‘empowering them financially through higher resource availability’. Comment.”
Conclusion
Thus, in this exercise by the RBI, the good part is that there has least been a mention of cities, with local bodies as important centres of governance.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- How can budget address the issues of informal sector
Context
We need to insure the most vulnerable against shocks such as Covid, but even more, we need to create good job opportunities for the unskilled. What can the budget do?
Impact on informal economy
- The last two quarters have seen a substantive recovery in the Indian economy.
- Corporate profitability of our largest firms has hit a new record this year.
- So have GST collections, another indicator of the formal economy, with an average monthly collection of Rs 1.2 trillion in the second and third quarters.
- The glass though is half full, the informal economy was particularly badly hit by Covid and its associated lockdowns.
- Small enterprises, retail, hospitality, and construction were all hammered.
- These were our main source of recent employment growth.
- Agricultural employment has risen in the last year-and-a-half, while manufacturing and services employment has fallen — this is the opposite of development.
- Informal service sector jobs may not seem like great jobs to us, but they are greatly prized relative to eking out a marginal existence in agriculture.
- We need to insure the most vulnerable against such shocks, but even more, we need to create good job opportunities for the unskilled, equip people at all levels to participate more fully in the modern economy, and systemically promote wider policies of inclusion.
What can the budget do?
- Create good jobs for unskilled: The way it can do so directly is through accelerating spending on infrastructure.
- The National Infrastructure Pipeline has identified a good set of projects.
- The government should be complimented for its intention and ambition; what we need now is implementation.
- Labour-intensive manufacturing: Most countries developed by putting millions to work in labour-intensive manufacturing.
- We do not have the huge firms in export-oriented labour-intensive sectors that employ millions in China, Vietnam, and Bangladesh.
- Bangladesh has thrived by putting millions to work in manufacturing.
- A booming garment sector employs 4.4 million.
- As 80 per cent of those employed in garment factories are women, Bangladesh has twice the female labour force participation ratio of India.
- Implement labour laws: In June and September 2020, the government passed four labour laws.
- These laws have since been left dormant.
- The budget should announce a time frame for implementation, notification by the Union government and then by the states.
- Investment in education and skilling: India has among the least skilled workforces in the world.
- Under 5 per cent of our workforce is formally skilled, compared to 96 per cent in South Korea, 75 per cent in Germany and 52 per cent in the US.
- That is why the work of the National Skills Development Corporation is so important.
- Can the budget specify it as an independent entity controlled and run by the private sector that is then held accountable for delivering on our skilling targets.
- Education is even more important, especially primary education.
- Pratham’s education reports make for sobering reading.
- The New Education Policy has a proposal that every second standard child should be able to read and do arithmetic at the second standard level as a foundation for further education.
- This welcome initiative must receive greater dedication and focus from both government and industry.
- School education is a state subject, so the Union budget can at best incentivise states to do the right things, say by linking the flow of additional funds to those that demonstrate improved second standard learning outcomes.
- As a part of CSR, many companies work actively with schools.
- Education is already the largest single area for CSR spending, accounting for one-third of the Rs 9,000 crore spent by the top 100 companies.
Conclusion
Other policies for economic inclusion must go beyond social inclusion. These include measures like reducing tariffs to benefit millions of consumers instead of thousands of firms. Industrial policies that help all firms such as the ease of doing business, instead of incentivising a selected few.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: ICJ
Mains level: Paper 2- Genocide prevention issue
Context
Incendiary speeches at a religious assembly include calls for the genocide of Muslims in India and can be seen as part of an ongoing pattern of targeting minorities.
Background of the convention against genocide
- India’s role: India has signed and ratified the Convention on the Prevention and Punishment of the Crime of Genocide of 1948.
- In 1946, Cuba, India and Panama co-sponsored General Assembly Resolution 96(I), which affirmed genocide as a ‘crime under international law’.
- As a result of this resolution, a convention on the prohibition of genocide was drafted, which was passed by the General Assembly in 1948 and came into effect in 1951, with more than 150 states party to the convention presently.
- Legal obligation: Legal obligations on states that are party to the convention include:
- the obligation not to commit genocide,
- to prevent genocide, and to punish genocide(Article I),
- to enact legislation to give effect to the provisions of the convention (Article V);
- to provide for effective penalties for those found guilty of criminal conduct (Article V); and
- the obligation to try those charged with genocide in a competent tribunal (Article VI).
No legislation enacted by India
- Since signing the Genocide Convention and ratifying it, to date India has not enacted any legislation in accordance with Article VI of the Genocide Convention.
- At the outset, India is in violation of its international obligation to criminalise genocide within its domestic law per Articles V, VI and VII, and to take all means to ensure the prevention of genocide.
- Indian domestic law shows that there are no comparable provisions for the prosecution of any mass crimes, least of all genocide.
- Indian Penal Code provisions relating to rioting, unlawful assembly and ‘promoting enmity between different groups’ do not embody the basic elements of the crime of genocide, which is against a collectivity or a group, with the specific intent to cause its destruction.
- These also do not pertain to another key aspect of the Genocide Convention – that of prevention, and creating the conditions in which such hate speech and other associated acts are not allowed to flourish.
Significance of the Gambia’s proceedings before the ICJ against Myanmar
- The Gambia has initiated proceedings before the International Court of Justice (ICJ) against Myanmar on the basis of the Convention.
- The ICJ, relying on a previous case of Belgium v. Senegal, stated, “It follows that any State party to the Genocide Convention, and not only a specially affected State, may invoke the responsibility of another State party with a view to ascertaining the alleged failure to comply with its obligations erga omnes partes, and to bring that failure to an end.”
Conclusion
It is more imperative than ever that international legal protections against genocide are incorporated in domestic legislation. Furthermore, the fact that India has international legal obligations under the Genocide Convention which it is not adhering to must be rectified.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Making sense of new security policy of Pakistan
Context
The national security policy statement issued last week by the government of Pakistan acknowledges the need for change.
Why does it matter for India?
- India’s stakes in a stable Pakistan are higher than anyone else in the world.
- Therefore, Delhi must pay close attention to the internal debates within Islamabad on the imperatives of major change in Pakistan’s national direction.
- But as critics in Pakistan insist, the policy offers no clues on how to go about it.
- The classified version probably has a clear strategy on how to accelerate economic growth, build national cohesion, and revitalise its foreign and security policies.
Overview of India’s transformation after 1990s
- The crises that Pakistan confronts today are quite similar to those Delhi faced at the turn of the 1990s.
- Economic challenge: India’s post-Independence old economic model was on the verge of collapse.
- Political instability: The era of massive domestic political mandates was over and weak coalitions government were in place.
- Challenges in International relations: The Soviet Union, India’s best friend in the Cold War, fell off the map and the Russian successor was more interested in integrating with the West.
- India found that its political ties with all other major powers — the US, Europe, China and Japan — were underdeveloped at the end of the Cold War.
- Pakistan, meanwhile, was running proxy wars in India even as it mobilised international pressures against Delhi on Kashmir.
- Within a decade, though, India was on a different trajectory.
- . Its reformed economy was on a high growth path.
- India was hailed as an emerging power that would eventually become the third-largest economy in the world and a military power to reckon with.
- Delhi also cut a deal with Washington to become a part of the global nuclear order on reasonable terms.
- This involved a series of structural economic reforms, the recasting of foreign policy, and developing a new culture of power-sharing within coalitions and between the Centre and the states.
The economic transformation of Bangladesh
- The economic transformation of Bangladesh has been equally impressive.
- Since Sheikh Hasina returned to power in 2009, Bangladesh focused on economic development, stopped support to terrorism, and improved ties with the larger of its two neighbours — India.
- As a result, Bangladesh’s economy in 2021 (GDP at $350 billion) is well ahead of Pakistan ($280 billion).
How Pakistan missed the opportunity
- Pakistan chose a different path.
- Having ousted the Soviet superpower from Afghanistan in the late 1980s, Pakistan was ready to apply the model of cross-border terrorism to shake Kashmir loose from India and turn Afghanistan into a protectorate.
- Supporting jihadi groups was seen as a low-cost strategy to achieve Pakistan’s long-standing strategic objectives in the neighbourhood.
- These grand geopolitical obsessions left little bandwidth for the much-needed economic modernisation of Pakistan.
- Islamabad, which relentlessly pursued parity with Delhi, now finds that the Indian economy at $3.1 trillion is more than 10 times larger than that of Pakistan.
Factors that explain change in Pakistan’s policy
- Diminishing role in geopolitics: In the past, Pakistan had much success in pursuing a foreign policy that not only balanced India with the support of the West, but also carved out a large role for itself in the Middle East and more broadly the Muslim world.
- Today, barring the United Kingdom, Pakistan’s equities in the West have steadily diminished.
- Weakened ties in the Middle East: Meanwhile, it has weakened its traditionally strong ties in the Middle East with Saudi Arabia and the United Arab Emirates.
- Weakened ties with the US: Although its all-weather ties with China have gone from strength to strength, the unfolding conflict between Washington and Beijing has put Pakistan in an uncomfortable strategic situation.
- Pakistan’s support for violent religious extremism has also begun to backfire.
- A permissive environment for terrorism has now attracted severe financial penalties from the international system.
India’s changed approach towards Pakistan
- Delhi, which was prepared to make concessions on Kashmir in the 1990s and 2000s, has taken Kashmir off the table and is ready to use military force in response to major terror attacks.
- Delhi’s attitude towards Islamabad now oscillates between insouciance and aggression.
- Unlike in the past, the West is no longer pressuring India to accommodate Pakistan on Kashmir.
- The US is eager for India’s support in balancing China in the Indo-Pacific.
Conclusion
All these shifts together have compelled Pakistan to rethink its policies. There is no guarantee that the change will be definitive and for the good. But if it is, Delhi should be prepared to respond positively.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CAATSA
Mains level: Paper 2- Challenges facing India in 2022
Context
Risks in 2022 could be both domestic and geopolitical, with many precepts that the world has been accustomed to being at risk. Democracy itself could face serious headwinds this year.
Challenges to democracy
- The world has recently seen the rise of authoritarian rulers in many countries.
- What is worrisome is that democratic tenets which have been under attack in recent years appear set to face more onslaughts this year.
- The United States, which was widely viewed as a major bulwark for democracy, appears to have developed certain pathological infirmities.
Geopolitical challenges and risks
[1] Disruption by China
- The role of China is possibly the most disrupting one, given the challenge it poses to the existing international order.
- Militarily, China is openly challenging U.S. supremacy in many areas, including ‘state-of-the-art weaponry’ such as hyper-sonic technology.
- China is now threatening Taiwan, which could well become one of the flashpoints of conflict in 2022.
- The dip in China’s economic profile in the past year and more could also lead to new tensions in the Asia-Pacific region in 2022.
[2] Russia-Ukraine conflict
- The other major risk of a war in 2022, stems from the ongoing conflict between Russia and Ukraine — the latter being backed by the U.S. and North Atlantic Treaty Organization (NATO) forces.
- During the past three decades, NATO has expanded its reach almost a 1,000 miles to the east in violation of an earlier tacit understanding.
- Russia appears determined that Ukraine should be the ‘last frontier’ and, if need be, ensure this through military force.
- The situation has grave possibilities and could result in a series of cyclical outcomes with considerable damage potential.
[3] Instability in the vast region
- Unrest in Kazakhstan: The current unrest in Kazakhstan, which till recently was one of the more stable Central Asian nations, is perhaps symptomatic of what is in store.
- Recent events in Kazakhstan demonstrates a sharper cleavage between the U.S.-led West and its principal opponents, Russia and China.
- This is not a good sign for the world already wracked by a series of coups or internecine strife as in Ethiopia, Libya and certain regions of West Asia and North Africa.
[4] Return of Taliban and security implications for India
- Shift in balance of power: Of particular significance to India is that the Taliban’s return to power in Afghanistan has led to a material shift in the balance of power in India’s periphery.
- Developments in Afghanistan have fuelled the ambitions of quite a few ‘anti-state militant groups’ across the region.
- Even in Pakistan, the Tehrik-e-Taliban Pakistan (TTP) has become energised and is enlarging its sphere of action to other parts of Asia, notably Kazakhstan.
- This will have an unsettling effect across large parts of Asia.
- New evidence suggests that on India’s eastern flank, viz. Indonesia, a resurgence of radical Islamist activities is taking place.
- The Jemaah Islamiyah has reportedly become more active in Indonesia.
[5] India’s border issue with China
- The most serious issue that India confronts today is how to deal with a China that has become more confrontational.
- India’s membership of the Quad still rankles as far as China’s psyche is concerned, and during 2022, may well result in China embarking on new adventurist actions at many more points on the Sino-Indian border compelling India to react.
- Additionally, India will need to determine how best to respond to China’s provocations.
- Strengthen military posture: India would need to strengthen its military posture, both as a means to deter China and also to convince India’s neighbours that it can stand up to China.
Challenges ahead for India
- Challenge in Central Asia: Diplomatically, in 2022, India may find itself vulnerable in dealing with the turmoils which have occurred in two areas of strategic interest to it, viz. Central Asia and West Asia.
- Challenge in West Asia: In West Asia, the challenge for India is how to manage its membership of the Second Quad (India, Israel, the United Arab Emirates and the U.S.) with the conflicting interests of different players in the region.
- Limits to balancing: There is a limit to the kind of balancing act that India can perform, whether it be with regard to buying S-400 missile systems from Russia, risking potential sanctions from Washington under Countering America’s Adversaries Through Sanctions Act (CAATSA) or manoeuvering between the Arab States, Israel, Iran and the U.S. in West Asia.
Conclusion
Facing a host of unprecedented challenges, India’s leaders and diplomats must not only take stock of the dangers that exist but also be ready on how to manage the risks that are well evident.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India-Japan relations
Context
The year 2022 marks the 70th anniversary of the establishment of diplomatic relations between Japan and India.
Historical background of India-Japan relationship
- We have a long history of people-to-people exchanges that can be traced back to the sixth century.
- Buddhism was brought to Japan and, in 752.
- During Meiji Restoration in the late 19th Century — Japan needed natural resources to modernise its industry.
- Many Japanese travelled to India to purchase cotton, iron ore, etc.
- Formal relations between Japan and India began in 1952.
- After the Second World War, instead of signing the multilateral San Francisco Peace Treaty, India opted for concluding a bilateral peace treaty with Japan, considering that honour and equality should be ensured for Japan to rejoin the international community.
- But even before the establishment of diplomatic relations, the goodwill between the people of the two countries was deeply rooted through business, academic and cultural exchanges.
- After 70 years of multi-layered exchanges, the relationship between our two countries grew into a “Special Strategic and Global Partnership”.
Future possibilities
[1] As democratic countries, contribute to global peace and prosperity
- As democratic countries in Asia, India and Japan can cooperate to contribute to global peace and prosperity.
- We share political, economic and strategic interests based on the firm foundations of common values and traditions.
- We are continuing our efforts to build a rules-based free and open international order.
[2] Cooperation in security
- There are a plethora of fields that we can cooperate in security issues including cyber security, outer space and economic security.
[3] Augmenting economic relations
- For long, Japan has been the largest ODA (Official Development Assistance) donor to India.
- One of the most recent and ongoing examples of our collaboration is the Mumbai-Ahmedabad High-Speed Rail project.
- Japan is also one of the largest investors in India.
- Both countries have also promoted economic cooperation in other countries to enhance social infrastructure and connectivity.
- Our economic partnership can further strengthen the economy of the Indo-Pacific, as well as the world economy.
[4] Cultural exchange
- Cultural exchanges including literature, movies, music, sports and academics are essential for our relations, enabling a better understanding.
Consider the question “The year 2022 marks the 70th anniversary of the establishment of diplomatic relations between Japan and India. The future offers enormous possibilities for the partnership. In context of this, examine the future possibilities the two countries can explore.”
Conclusion
India-Japan ties will continue to flourish. Our long history substantiates that.
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Meiji Restoration in Japan
- In Japanese history, the political revolution in 1868 that brought about the final demise of the Tokugawa shogunate (military government)—thus ending the Edo (Tokugawa) period (1603–1867)—and, at least nominally, returned control of the country to direct imperial rule under Mutsuhito (the emperor Meiji).
- In a wider context, however, the Meiji Restoration of 1868 came to be identified with the subsequent era of major political, economic, and social change—the Meiji period (1868–1912)—that brought about the modernization and Westernization of the country.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Geo-tagging
Mains level: Paper 3- Agri-reforms in Punjab
Context
It is no secret that Punjab, once the frontrunner of Indian agriculture, is struggling to retain its dynamism.
Need to diversify
- While Punjab ranked at the top of major Indian states in terms of per capita income during 1967-68 to 2002-03, it has slipped below the 13th position.
- Punjab’s agricultural growth rate, at 5.7 per cent, was more than double the country’s average of 2.3 per cent during 1971-72 to 1985-86.
- This has reversed between 2005 and 2019 with Punjab at 1.9 per cent and India at 3.7 per cent.
- Agriculture least diversified state: With almost 85 per cent of the gross cropped area under wheat and rice, agriculture is least diversified in the state.
- Mandi transactions cost about 8.5 per cent of the MSP, the highest in the country, making Punjab wheat and rice less competitive.
What explains low diversification in agriculture?
- Policies: Guaranteed MSP for wheat and paddy, backed by assured procurement, free power and highly subsidised fertilisers, has disincentivised diversification.
- Political economy: The political economy around wheat and rice is so intense that any effort to address its distortionary impact is met with fierce opposition by vested interest groups.
How to recalibrate Punjab agriculture towards higher, sustainable growth?
- Augment livestock and milk processing: While fruits and vegetables account for 7.4 per cent of the value of the output of agriculture and allied sectors, livestock accounts for 31.5 per cent and fisheries less than 1 per cent.
- The state has the highest per capita availability of milk but it can process less than 20 per cent of it.
- Promoting mega parks for value addition in fruits and vegetables, milk, and other livestock products through medium and small enterprises will strengthen its competitiveness.
- Strengthen market for seed potato: It is also a significant player in seed potato and with the right package of practices, traceability systems, and infrastructure, the market for Punjab seed potato can be strengthened.
- Scaling up alternative marketing channel: Alternative marketing channels for fruits and vegetables such as direct marketing, contract farming, and exports have been in place but these models need to be scaled up with the right ecosystem.
- Shift to demand-driven agriculture: Punjab needs to switch from supply-driven agriculture to demand-driven agriculture.
- The demand for fisheries, poultry, dairy, and fruits and vegetables is increasing way faster than the demand for wheat and rice.
- Rationalise mandi charges: Rationalising mandi charges to not more than 3 per cent will attract private sector investments in building efficient value chains.
- Rationalise subsidies: Time-bound incentives in the form of freight subsidies for exporters of high-value agri-produce, tax exemptions for the processing of perishable commodities for value chain players would be more rational than the overloaded subsidies of urea and free power.
- Use technology and start-up revolution: Punjab should leverage the start-up revolution that is unfolding in India, and use technology to ensure optimal utilisation of resources, expand markets, and augment farmers’ income.
- Geo-tagging of farms can address concerns related to long-term leasing of land that is critical for large-scale investments and enable vibrant agricultural land markets.
- Innovations in supply chain management, be it automated grain silos or state-of-art herd management will not only optimise the use of resources but also bring in traceability of farms and animals, early monitoring and prevention of disease outbreaks, and contain value chain losses.
How to manage financial resources?
- Rationalise urea subsidy: It should rationalise its fertiliser subsidy regime by moving towards cash transfers on a per hectare basis and free up fertiliser prices.
- Include urea in nutrient-based subsidy scheme: If that’s not possible, then urea should be included in the nutrient-based subsidy scheme.
- Bring soluble fertiliser under subsidy: Bring soluble fertilisers under subsidy, which will enhance fertiliser use efficiency through fertigation.
- This will also help reap environmental gains.
- Rationalise food subsidy: Food subsidy can also be rationalised through direct cash transfers replacing PDS, as Punjab is a grain surplus state.
Conclusion
Both environmental and financial sustainability concerns related to business-as-usual farming in Punjab call for a rebooting strategy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Taxing cryptocurrencies
Context
Notwithstanding the eventual introduction of the Cryptocurrency and Regulation of Official Digital Currency Bill in Parliament, cryptocurrencies continue to proliferate.
Provisions in Income Tax Act 1961 to tax cryptocurrencies
- Cryptocurrencies not mentioned in Income Tax Act, 1961: Although the Income Tax Act, 1961 (“IT Act”) does not specifically mention cryptocurrencies, it does cast a wide enough net to bring crypto transactions under its ambit.
- Capital asset: Trading in cryptocurrency may be classified as transfer of a ‘capital asset’, taxable under the head ‘capital gains.
- Business income: If such cryptocurrencies are held as stock-in trade and the taxpayer is trading in them frequently, the same will attract tax under the head ‘business income’.
- Even if one argues that crypto transactions do not fall under the above heads, Section 56 of the IT Act shall come into play, making them taxable under the head ‘Other sources of income’.
Challenges in taxing cryptocurrencies
- The above provisions in themselves are not sufficient in order to put in place a simple yet effective taxation regime for cryptocurrencies.
[1] Varied interpretations:
- First, the absence of explicit tax provisions has led to uncertainty and varied interpretations being adopted in relation to mode of computation, applicable tax head and tax rates, loss and carry forward, etc.
- For instance, the head of income under which trading of self generated cryptocurrency (currencies which are created by mining, acquired by air drop, etc.) is to be taxed is unclear.
- Since there is no consistency in the rates provided by the crypto-exchanges, it is difficult to arrive at a fair market value.
- Similarly, when a person receives cryptocurrency as payment for rendering goods or services, how should one arrive at the value of the said currency and how should such a transaction be taxed?
[2] Identifying tax jurisdiction
- It is often tricky to identify the tax jurisdiction for crypto transactions as taxpayers may have engaged in multiple transfers across various countries and the cryptocurrencies may have been stored in online wallets, on servers outside India.
[3] The anonymity of taxpayer
- The identities of taxpayers who transact with cryptocurrencies remain anonymous.
- Exploiting this, tax evaders have been using crypto transactions to park their black money abroad and fund criminal activities, terrorism, etc.
[4] Lack of third party information on crypto transaction
- The lack of third party information on crypto transactions makes it difficult to scrutinise and identify instances of tax evasion.
- One of the most efficient enforcement tools in the hands of Income Tax Department is CASS or ‘computer aided scrutiny selection’ of assessments, where returns of taxpayers are selected inter alia based on information gathered from third party intermediaries such as banks.
- However, crypto-market intermediaries like the exchanges, wallet providers, network operators, miners, administrators are unregulated and collecting information from them is very difficult.
[5] Physical goods/services may change hand in return for cryptocurrencies
- Even if the crypto-market intermediaries are regulated and follow Know Your Customer (KYC) norms, there remains a scenario, where physical cash or other goods/services may change hands in return for cryptocurrencies.
- Such transactions are hard to trace and only voluntary disclosures from the parties involved or a search/survey operation may reveal the tax evaders.
Steps need to be taken
- Statutory provision: The income-tax laws pertaining to the crypto transactions need to be made clear by incorporating detailed statutory provisions.
- Awareness generation: This should be followed by extensive awareness generation among the taxpayers regarding the same.
- Separate mandatory disclosure: The practice of having separate mandatory disclosure requirements in tax returns (as is the case in the United States) should be placed on the taxpayers as well as all the intermediaries involved, so that crypto transactions do not go unreported.
- Strengthen international legal framework: Additionally, the existing international legal framework for exchange of information should be strengthened to enable collecting and sharing of information on crypto-transactions.
- This will go a long way in linking the digital profiles of cryptocurrency holders with their real identities.
- Training tax officers: the Government must impart training to its officers in blockchain technology.
- The United Nations Office on Drugs and Crime’s ‘Cybercrime and Anti-Money Laundering’ Section (UNODC CMLS) has developed a unique cryptocurrency training module, which can aid in equipping tax officers with requisite understanding of the underlying technologies.
Consider the question “What are the provision in Income Tax Act 1961 to tax the cryptocurrencies? What are the challenges in taxing cryptocurrencies? “
Conclusion
It is certain that cryptocurrencies are here to stay. A streamlined tax regime will be essential in the formulation of a clear, constructive and adaptive regulatory environment for cryptocurrencies.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Women in Indian army
Context
Last year, the Supreme Court threw open the hallowed portals of the National Defence Academy for women. Something to truly celebrate on January 15, Army Day, this year.
Background
- The first batch of women officers was inducted into the Indian Army in non-medical roles via the Short Service Commission in 1992.
- Since 2008, women were inducted as permanent commissioned officers in the legal and education corps and as permanent commissioned officers in eight more non-combative corps in 2020.
The low number of women in Army
- As recent as 2020, women officers in the Indian army (excluding the medical corps) numbered just about three per cent.
- Compare this to 16 per cent in the US, 15 per cent in France and 10 per cent in both Russia and the UK.
Significance of allowing women to NDA
- When in February 2020, the Supreme Court decreed that women officers should get command positions on par with male officers, it also effectively dismissed the military’s earlier objection that it would lead to “operational, practical and cultural problems”.
- The SC went on to say that denying women commands based on the above argument was discriminatory and reinforced stereotypes.
- Last year, the Supreme Court threw open the National Defence Academy for women to compete for the seats and subsequent permanent commission in the Indian army in any corps they desire, including the combat ones.
- Addressing the shortage of officers: This may effectively address the long-standing shortage of officers in the Indian army in general. In response to a question in Rajya Sabha a month ago, the Minister of State for Defence said the Army has a shortage of 7,476 officers.
- This torch may also help confront the chauvinism, often misspelt as chivalry, that indisputably exists in the Army.
Conclusion
The move promises to change the composition of this arm of the defence force not just quantitatively, but also qualitatively — both dire requirements of the force at present.
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Back2Basics: Permanent Commission (PC) Vs. Short Service Commission (SSC)
- SSC means an officer’s career will be of a limited period in the Indian Armed Forces whereas a PC means they shall continue to serve in the Indian Armed Forces, till they retire.
- The officers inducted through the SSC usually serve for a period of 14 years.
- At the end of 10 years, the officers have three options.
- A PC entitles an officer to serve in the Navy till he/she retires unlike SSC, which is currently for 10 years and can be extended by four more years, or a total of 14 years.
- They can either select for a PC or opt-out or have the option of a 4-years extension.
- They can resign at any time during this period of 4 years extension.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: MSP
Mains level: Paper 3- Making farming viable through legal MSP
Context
There has been debate on the issue of MSP with some arguing against it while some favouring it.
The issues with MSP
- The broad strands of argument against MSP are:
- MSP hinders the price discovery: Providing MSP does not allow the market to discover the prices; if market cleared prices are less than MSP, then the only buyer would be the government; this would render the government bankrupt.
- FPO as a mechanism to deal with markets: If markets have any distortions, the way to negotiate it is through Farmer Producer Organisations (FPOs) — as demonstrated by Amul.
- Provide income support through DBT: A better way to address the possible income gap is to give an income support-based direct benefit transfer (DBT).
Why MSP is necessary?
1] Barriers in agri-markets
- Through tariffs and other measures, we have built a national barrier on markets, where gates are opened on the basis of strategic intent.
- If we were to open our borders for free movement of grains from elsewhere, we may even argue for unlocking agricultural land for more lucrative purposes without worrying about food self-sufficiency, buffer stocking and domestic food safety.
- We may have to accept a national food safety for at least the essential foodgrains and pulses.
2] Role of MSP as price signalling and why it needs to be given as legal guarantee
- Disproportionate risk: If we were to look at farming, we realise that this exposes itself to disproportionate risks.
- First, there is no stop-loss mechanism after sowing the seed, except for destroying the crop for the season.
- This enterprise not only has the usual business risks but also has the enhanced risk of the force majeure elements that destroy the enterprise — a sudden hail storm, drought, unseasonal showers, a pest attack, a locust attack — there are too many things that the farmer cannot control.
- Therefore, an MSP provides a powerful signal to the farmer to exercise the choice of sowing a particular crop because the farmer can back-calculate the expected margin.
- If MSP is a signal that helps the farmer to choose a crop, then it must remain a choice at the harvest time as well.
- The significance of MSP is only when the markets do not clear the price.
- In such a situation, the farmer gets a return less than the MSP and by this argument we are escorting the farm fraternity towards bankruptcy.
- A legal guarantee is, therefore, needed.
- The argument that the state will have to procure all the floating stock in the market and may become bankrupt is fallacious.
- The intervention of the state in the markets usually covers information asymmetry, arbitrage and cools the markets when they get overheated.
3] Why not opt for income support instead of MSP?
- Income support does not address the issue of viability of the farming operations.
- There is no doubt that we need to make farming viable.
- It is important to address the prices of each crop as a strategic signalling mechanism: For crops that would be encouraged and those that would be discouraged.
4] Issues with drawing parallels with AMUL
- While the Amul model recognised the inherent power of markets, it took about five decades to make the system competitive — the investments were made in breed improvement, free veterinary services, better cattle feed, capital subsidy for processing plants, and return-free capital as investments.
- The nature of subsidies was smart and innovative.
- Dairying was the last bit to be liberalised, and it enjoyed protection even when we opened up in 1991.
Way forward
- Modernise the markets: We need to modernise the markets and storage and processing facilities.
- There is no point in conflating modernisation with liberalisation.
- Investment: If we need to take Indian agriculture on the path of Amul, we need to start making those investments now.
Consider the question “What are the objectives of providing MSP? How legal basis to MSP could help in making agriculture viable in India?”
Conclusion
Let us use the MSP framework smartly on diversified crops, on a decentralised basis while we develop the markets. A legal guarantee will only assure the farmers that they will not be bankrupted.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: AUKUS
Mains level: Paper 2- Indo-Pacific challenge
Context
The geopolitics of the Indo-Pacific, which is changing fast. As it moves into 2022, the region will carry the imprint of the past five years, and will have to chart a course through inter-state tensions and crises, using both diplomacy and military preparedness.
What will shape the geopolitics and geoeconomics of the Indo-Pacific?
- Key players in the region: The region is central to world economy and peace, and nine countries are key players: the US, China, Japan, India, Germany, the UK, Russia, Australia and France.
- The geopolitics and geo-economics of the Indo-Pacific will be largely shaped by the interplay of relations among these nations.
- US-China relations: Of paramount importance is the US-China equation.
- Expect this relationship to be marked by continually adversarial, competitive and cooperative traits.
- Beijing’s south/east China policy, aggressive postures towards Taiwan, human rights violations in Xinjiang, the subjugation of Hong Kong’s citizenry and assertive economic outreach in the Indo-Pacific — these will weigh heavily on US-China relations.
A significant role of groupings and individual nations
- In this standoff, the role of new groupings and individual nations is significant.
- Role of Quad: Foremost are the Quad, a strategic partnership between the US, India, Japan and Australia and the militaristic AUKUS (Australia, UK, US).
- India-Australia ties: Meanwhile, India and Australia are on track to deepen ties, not only bilaterally but also with the other two Quad powers.
- The next Quad summit, probably hosted by Japan, will cement the grouping.
- EU’s role: The EU’s Indo-Pacific strategy, announced last September, aims at increasing its economic and security profile in, and linkages with, the region.
- UK’s role: Only by being more strategic and less mercantilist, more candid and assertive with China, and more cooperative with partners such as India, can the EU — and its former member the UK — hope to become vital players in the Indo-Pacific.
- ASEAN, located in the middle of the Indo-Pacific waters, faces the heat of China’s aggression and the sharpening great power rivalry.
- It must enhance its realism and shed its tendency of wishing away problems.
Suggestions for India
- 1]Strengthen the Quad – especially by ensuring that the grouping fulfils its commitment to deliver at least one billion vaccine doses to Indo-Pacific nations by December 2022.
- India must protect its established relationship with Russia, and show some resilience in dialogue with Beijing.
- 2] Enhance relations with ASEAN nations: It must enhance cooperation with key Southeast Asian partners —Indonesia, Vietnam, Philippines and Thailand — while humouring ASEAN as a grouping.
- 3] Give attention to African and Indian Ocean island states: The eastern and southern planks of Africa and the Indian Ocean island states need continued high policy attention and financial resources.
- A clear economic and trade agenda to follow the flag in this vital region, is certain to yield long-term dividends.
Consider the question “Indo-Pacific will present India strategic and economic opportunities that India must not miss. However, the region will have to chart a course through inter-state tensions and crises. Comment.”
Conclusion
India has done well by fulfilling its humanitarian duties during the pandemic. Learning how to convert them smartly into economic and strategic opportunities in its periphery is the focused task for the nation in 2022.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Countries involve in South China sea dispute
Mains level: Paper 2- South China sea issue
Context
South-East Asian countries are increasingly wary of their giant neighbour.
Background of dispute
- Disputes in the South China Sea go back decades.
- But it was only ten years ago that China, which makes maritime claims for nearly the whole sea, greatly upped the ante.
- Countries involved: They involve Brunei, China, Malaysia, the Philippines, Taiwan and Vietnam, all with contesting claims.
- China provoked a stand-off that left it in control of an uninhabited atoll, Scarborough Shoal, which under un maritime law clearly belongs to the Philippines.
- Then China launched a massive terraforming exercise, turning reefs and rocks into artificial islands hosting airstrips and bases.
China’s strong-arm tactics
- China’s long-term aim is to project Chinese power deep into the South China Sea and beyond, and to hold the Americans away during any conflict.
- The immediate aim, though, is to dominate politically and economically as much as militarily.
- China has challenged oil-and-gas activity by both Indonesia and Malaysia, and sent drilling rigs to both countries’ eezs and continental shelves.
- It has bullied foreign energy companies into dropping joint development with Vietnam and others.
Implications
- China has paid a diplomatic price.
- Impact on relations with ASEAN: Had Mr Xi engaged in none of the terraforming and bullying, China would be better admired among members of the ten-country Association of South-East Asian Nations (ASEAN).
- Naval presence of the US: The United States and its Western allies have upped their naval presence in the sea, welcomed by most ASEAN members.
Negotiation on Code of conduct on South China Sea
- For years China dragged its feet on agreeing with ASEAN a code of conduct on the South China Sea, a principle agreed on 20 years ago in order to promote co-operation and reduce tensions.
- These days, China likes to play willing.
- China is demanding, in effect, the right of veto over ASEAN members’ naval exercises with foreign powers.
- It also wants to keep out foreigners from joint oil-and-gas development.
- Such demands are unacceptable to members.
Conclusion
Despite China’s efforts to establish its wild claims of sovereignty, China has been facing sustained resistance from the ASEAN countries.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Need for democratic socialism based on cooperative economic enterprises
Context
Inequalities of wealth have increased around the world and India is becoming one of the world’s most unequal countries.
Role of globalisation and privatisation in increasing economic distress
- Economic despair is feeding the rise of authoritarianism, nationalism, and identity politics.
- Role of Globalisation: Opening national borders to free trade became an ideology in economics in the last 30 years.
- Taxes of incomes and wealth at the top were also reduced.
- The ideological justification was that the animal spirits of ‘wealth creators’ must not be dampened.
- With higher taxes until the 1970s, the U.S. and many countries in Europe had built up their public health and education infrastructure and strengthened social security systems.
- The rich are now being taxed much less than they were.
- The pie has grown larger but the richest few have been eating, and hoarding, most of it themselves.
- Role of privatisation: ‘Privatisation’ of everything became another ideological imperative in economics by the turn of the century.
- Selling off public enterprises raises resources for funds-starved governments.
- Another justification is efficiency in delivery of services, setting aside ethical questions of equity.
- When ‘public’ is converted to ‘private’, rich people can buy what they need.
- The gaps between the haves and the have-nots become larger.
How liberal economic policies are creating illiberal societies
- Liberal economists, promoting free markets, free trade, and privatisation, are worried by nationalism and authoritarian governments.
- They rail against “populist” policies of governments that subsidise the poor and adopt industrial strategies for self-reliance and jobs for their citizens.
- Liberals must re-examine their ideas of economics, to understand their own culpability in creating authoritarian and identitarian politics.
The failure of capitalism and communism
- While communism had lifted living standards, and the health and education of masses of poorer people faster than capitalism could, communism’s solution to the “property” question — that there should be no private property — was a failure.
- It deprived people of personal liberties.
- Capitalism’s solution to the property problem — replacing all publicly owned enterprises with privately owned ones (and reducing taxes on wealth and high incomes) has not worked either.
- It has denied many of their basic human needs of health, education and social security, and equal opportunities for their children.
- The private property solution has also harmed the natural environment.
Way forward
- Climate change and political rumblings around the world are both warnings that capitalism needs reform.
- Economic policies must be based on new ideas.
- Thought leaders and policymakers in India must lead the world out of the rut of ideas in which it seems to be trapped.
- Principles of human rights must not be overpowered by property rights.
- A new form of “Gandhian” democratic socialism, powered by cooperative economic enterprises, is required in the 21st century, to create wealth at the bottom, not only at the top, and save humanity and the planet.
Conclusion
A new form of ‘Gandhian’ democratic socialism powered by cooperative economic enterprises is required.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Dealing with hate speech
Context
On January 12, 2022 , the Supreme Court of India agreed to hear petitions asking for legal action to be taken against the organisers of, and speakers at, the “Hardwar Dharma Sansad”.
What constitutes hate speech
- Hate speech is speech that targets people based on their identity, and calls for violence or discrimination against people because of their identity.
- There is an absence of any legal or social consensus around what constitutes “hate speech.”
- As societies around the world have long understood, the harm in hate speech is not restricted to direct and proximate calls to violence.
- Inciting discrimination is part of hate speech: Hate speech works in more insidious ways, creating a climate that strengthens existing prejudices and entrenches already-existing discrimination.
- This is why – with the exception of the United States of America – most societies define hate speech in terms of both inciting violence, but also, inciting discrimination.
Challenges in dealing with hate speech
- Legal challenge: Our laws – as they stand – are unequipped to deal with the challenges of hate speech.
- The laws commonly invoked in such cases are section 295A of the Indian Penal Code (blasphemy) and section 153A of the Indian Penal Code (creating enmity between classes of people).
- Hate speech will not always be self-evident: Hate speech, by its very nature, will not always trumpet itself to be hate speech.
- Rather, it will often assume plausible deniability – as has been seen in the Hardwar case, where statements, worded with the right degree of ambiguity, are now being defended as calls to self-defence rather than calls to violence.
- Any comprehensive understanding of hate speech is a matter of judgment, and must take into account its ambiguous and slippery nature.
- Lack of social consensus against hate speech: No matter how precise and how definite we try to make our concept of hate speech, it will inevitably reflect individual judgment.
- If, therefore, social and legal norms against hate speech are to be implemented without descending into pure subjectivity, what is needed – first – is a social consensus about what kind of speech is beyond the pale.
- In Europe, for example, holocaust denial is an offence – and is enforced with a degree of success – precisely because there is a pre-existing social consensus about the moral abhorrence of the holocaust.
Conclusion
Achieving this social consensus is an immense task, and will require both consistent legal implementation over time, but also daily conversations that we, as a society need to have among ourselves.
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