Police Reforms – SC directives, NPC, other committees reports

Building faith in India’s investigative agencies

Note4Students

From UPSC perspective, the following things are important :

Prelims level: CBI

Mains level: Paper 2- Reforms in investigative bodies

Context

The image of the institution of police is regrettably tarnished by allegations of corruption, police excesses, lack of impartiality and close nexus with the political class.

Police and investigation agencies need social legitimacy

  • The police and investigative agencies may have de-facto legitimacy, but as institutions, they are yet to gain social legitimacy.
  • Police should work impartially and focus on crime prevention. They should also work in cooperation with the public to ensure law and order.
  • The CBI possessed immense trust of the public in its initial phase.
  • But with the passage of time, like every other institution of repute, the CBI has also come under deep public scrutiny.
  • The need of the hour is to reclaim social legitimacy and public trust.

Issues affecting the system and causing delay in trial

  • Lack of infrastructure, lack of sufficient manpower, inhuman conditions, especially at the lowest rung, lack of modern equipment, questionable methods of procuring evidence, officers failing to abide by the rule book and the lack of accountability of erring officers.
  • Then there are certain issues that lead to delays in trials.
  • They are: Lack of public prosecutors and standing counsels, seeking adjournments, arraying hundreds of witnesses and filing voluminous documents in pending trials, undue imprisonment of undertrials, change in priorities with the change in the political executive, cherry-picking of the evidence, and repeated transfers of officers leading to a change in the direction of the investigation.

Way forward

  • Break the nexus with political executive: The first step to reclaim social legitimacy and public trust.is to break the nexus with the political executive.
  • Reform of the police system is long overdue in our country.
  • The Ministry of Home Affairs has itself recognised the glaring need for the same in the “Status Note on Police Reforms in India”. 
  • Comprehensive law: Our investigative agencies still do not have the benefit of being guided by a comprehensive law.
  • Independent and autonomous investigative agency: The need of the hour is the creation of an independent and autonomous investigative agency.
  • Umbrella organisation: There is an immediate requirement for the creation of an independent umbrella institution, so as to bring various agencies like the CBI, SFIO, and ED under one roof.
  • This body is required to be created under a statute, clearly defining its powers, functions and jurisdictions.
  • Such a law will also lead to much-needed legislative oversight.
  • Separation of prosecution and investigation: One additional safeguard that needs to be built into the scheme, is to have separate and autonomous wings for prosecution and investigation, in order to ensure total independence.
  • Annual audit of performance: A provision in the proposed law for an annual audit of the performance of the institution by the appointing committee will be a reasonable check and balance.
  • Strengthening state investigative agencies: There is no reason why state investigative agencies, which handle most of the investigations, cannot enjoy the same level of credibility as that of the national agency.
  • The proposed Central law for the umbrella investigative body can be suitably replicated by the states.
  • Ensure women’s representation: An issue that needs addressing at this stage is the representation of women in the criminal justice system.
  • Often, women feel deterred in reporting certain offences due to a lack of representation.
  • Relations with community: Relations between the community and police also need to be fixed.
  • This is only possible if police training includes sensitisation workshops and interactions to inspire public confidence.

Consider the question “The police and investigative agencies may have de-facto legitimacy, but as institutions, they are yet to gain social legitimacy. In the context of this, examine the challenges faced by the police and the investigative agencies in India and suggest ways to help them gain social legitimacy.”

Conclusion

It is imperative for the police and the public to work together to create a safe society. Ultimately the police must remember that their allegiance must be to the Constitution and the rule of law and not to any person.

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Climate Change Impact on India and World – International Reports, Key Observations, etc.

Crisis and sustainability in the face of climate change

Note4Students

From UPSC perspective, the following things are important :

Prelims level: IPCC

Mains level: Paper 3- Vulnerability to climate change and ways for adaptation

Context

The footprint of the Covid-19 pandemic across the sectors of the economy has instilled a new reckoning for resilience and sustainability on the economic, social and environmental (ESG) front.

IPCC reports suggest adaption for resilience

  • The Intergovernmental Panel on Climate Change (IPCC) published its latest report on climate impacts, vulnerability and adaptation last month.
  • The report suggests that adaptation to climate impacts in the near to medium term can help communities and ecosystems become resilient against the threats from current and future levels of warming.
  •  Ecosystem-based adaptation, for instance, is recommended for taking care of communities and social well-being, while restoring forests, lands and marine ecosystems.
  • The report details the variability in projected climate impacts and the vulnerabilities that can be expected across regions the world over due to differences in the range of warming, geographical location, demographics and the unique biophysical, social and cultural contexts.
  • Cost-effective adaptation: It depends on a host of enablers on which global partnerships need to deliver.
  • Enablers include international cooperation, inclusive technology, financial flows, knowledge sharing and capacity building, with institutions and innovations to support policy development and on-ground implementation.

Gaps in the literature, acknowledge the uncertainties in climate science

  • The IPCC has been consistently drawing attention to the lack of adequate science from and on developing countries.
  • These countries have in turn been asking for the inclusion of what is broadly termed as “grey literature” or non-peer-reviewed literature in the IPCC process.
  • Good science encompasses the formal and the informal, theory and empiricism, the traditional along with the modern.
  • It relies on evolution through acknowledging the gaps and unknowns, the negatives and positives of past knowledge.
  • The understanding of adaptation finance, adaptation costing, and mapping of climate impacts and adaptation needs of communities in geographically remote locations, for instance, could improve with suitable sourcing of information.

Way forward

  • Sustainable development, inclusive of climate resilience, calls for an ensemble approach — one that places contextually appropriate emphasis on tackling climate change impacts and development needs in a world with growing challenges.
  • The pathway to be adopted is one of an integrated risk assessment approach, where solutions are interventions that impact the immediate, near and medium-term outcomes for developing economies.
  • Striking the right balance is at any time a choice driven as much by enablers (capabilities, lifestyles and values, financial flows, technical know-how) as by constraints (warming levels, poverty, inequality, lack of health and education).

Conclusion

The pandemic highlighted the need for balance in nature-people relationships, even as it tested the ability of the developing world.

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Parliament – Sessions, Procedures, Motions, Committees etc

Privacy concerns in the Criminal Procedure (Identification) Bill 2022

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Identification of Prisoners Act 1920

Mains level: Paper 2- Issues with the Criminal Procedure(Identification) Bill

Context

The Union Minister of State for Home Affairs introduced the Criminal Procedure (Identification) Bill 2022.

Purpose of the introduction of the Bill

  • The Bill aims to replace the Identification of Prisoners Act 1920 that has been in need of amendment for several decades.
  • The criticism and the need for amendment was predominantly in respect of the limited definition of ‘measurements’ as under that Act.
  • Back in the 1980s, the Law Commission of India (in its 87th Report) and the Supreme Court of India in a judgment titled State of U.P. vs Ram Babu Misra had nearly simultaneously suggested the need to amend the statute.

What are the issues with the provisions in the Bill?

1] Definition of ‘measurement’ includes analysis of the data

  • The definition of measurements is not restricted to taking measurements, but also their “analysis”.
  • The definition now states “iris and retina scan, physical, biological samples and their analysis, behavio[u]ral attributes including signatures….”
  • It goes beyond the scope of a law that is only designed for taking measurements and could result in indirectly conferring legislative backing for techniques that may involve the collection of data from other sources(For instance, using facial recognition).
  • At present there are extensive facial recognition technology programmes for “smart policing” that are deployed all across the country.
  • Such experimental technologies cause mass surveillance and are prone to bias, impacting the fundamental rights of the most vulnerable in India.

2] Power of the police and prison officials widened

  • The existing law permits data capture by police and prison officers either from persons convicted or persons arrested for commission of offences punishable with a minimum of one year’s imprisonment.
  • Parallel powers are granted to judges, who can order any person to give measurements where it is in aid of investigation.
  • While the judicial power is left undisturbed, it is the powers of the police and prison officials that are being widened.
  • The law removes the existing — albeit minimal — limitation on persons whose measurements could be taken.
  • It is poised to be expanded to all persons who are placed under arrest in a case.
  • Here, the proposed Bill also contains muddied language stating that a person, “may not be obliged to allow taking of his biological samples”.

3] Storage and retention of data for a long period

  • The National Crime Records Bureau (NCRB) shall for a period of 75 years from the date of collection maintain a digital record, “in the interest of prevention, detection, investigation and prosecution of any offense”.
  • The provision permits the NCRB to, “share and disseminate such records with any law enforcement agency, in such manner as may be prescribed”.
  • The NCRB already operates a centralised database, namely the Crime and Criminal Tracking Network & Systems (CCTNS), without any clear legislative framework.
  • The existence of such legislative power with a technical framework may permit multiple mirror copies and parallel databases of the “measurements” being stored with law enforcement, beyond a State Police department which will be prosecuting the crime and the NCRB which will store all records centrally.
  • For instance, in response to a Standing Committee of Parliament on police modernisation, Rajasthan has stated that it maintains a ‘RajCop Application’ that integrates with “analytics capabilities in real-time with multiple data sources (inter-department and intra-department)”.
  • Similarly, Punjab has said that the “PAIS (Punjab Artificial Intelligence System) App uses machine learning, deep learning, visual search, and face recognition for the identification of criminals to assist police personnel.
  • Hence, multiple copies of “measurements” will be used by State government policing departments for various purposes and with experimental technologies.
  • This also takes away the benefit of deletion which occurs on acquittal and will suffer from weak enforcement due to the absence of a data protection law.
  •  The end result is a sprawling database in which innocent persons are treated as persons of interest for most of their natural lives.

Conclusion

To protect individual autonomy and fulfil our constitutional promises, the Supreme Court of India pronounced the Justice K.S. Puttaswamy judgment, reaffirming its status as a fundamental right. The responsibility to protect it falls to each organ of the government, including the legislature and the union executive.

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Parliament – Sessions, Procedures, Motions, Committees etc

Anti defection: Related issues

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Tenth Schedule

Mains level: Paper 2- Exemptions to anti-defection laws

Context

In its verdict in the Goa MLAs case, Bombay High Court has misread the 10th schedule of the Constitution, which was meant to prevent horse trading among legislators.

Understanding the Paragraph (4) of Tenth Schedule

  • Paragraph (4) is an exception to the Tenth Schedule’s main provisions.
  • It operates only when the defectors’ original political party has merged with the party to which they have defected and two-thirds of the members of the legislature belonging to that party have agreed to the merger.
  • Under this provision, the merger of the original political party has to take place first, followed by two-thirds of the MLAs agreeing to that merger.
  • The basic premise of the February 25 judgment is that sub-paragraph (2) is distinct from the parent paragraph, and a factual merger of the original political party is not necessary.
  • This does not square with the content, context and thrust of paragraph (4), which contemplates the factual merger of the original political party — in this case, the INC.
  • The court’s view — the merger of the 10 MLAs of the Congress Legislative Party with the BJP should be regarded as the Congress itself merging with the BJP — goes against the letter and spirit of the Tenth Schedule, paragraph (4) in particular.

Process for the merger: 2 conditions need to be satisfied

  • 1] Merger alone is not enough: The opening words of sub-paragraph (2) — “for the purposes of sub-paragraph (1) of this paragraph” — clearly mean that to exempt a member from disqualification on account of defection, and for considering this member’s claim that he has become a member of the party with which the merger has taken place, a merger of two political parties alone is not enough.
  • 2] Not less than 2/3 members should also agree: Not less than two-thirds of the members should also agree to such a merger.
  • The lawmakers made it tough for potential defectors to defect.
  •  The words “such merger” make it clear beyond any shadow of doubt that the merger of the original political party has to take place before two-thirds of the members agree to such a merger.
  • The members of the legislature cannot agree among themselves to merge as the court has said, but they can agree to a merger after it takes place.

Conclusion

The anti-defection law was designed to eliminate political defection. However, the judgment of the Bombay HC seems to assume that paragraph (4) of the 10th schedule is meant to facilitate defection. This judgment is likely to open the flood gates to defection. The Supreme Court must intervene quickly.

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Electoral Reforms In India

Opinion polls

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Read the attached story

Mains level: Exit and Opinion Polls in India

Every election season, we find television channels flooded with opinion polls and subsequently exit polls after the casting of votes.

What are Opinion Polls?

  • Opinion polls are similar to surveys or an inquiry designed to gauge public opinion about a specific issue or a series of issues in a scientific and unbiased manner.
  • This term has got wide recognition for assessing outcomes of elections in India.
  • In most democracies, opinion and exit polls are common during elections.
  • In India, the ECI allows the dissemination of the exit poll results half an hour after the end of polling on the last poll day.

How are they conducted?

  • Interviewers/reporters ask questions of people chosen at random from the population being measured.
  • Responses are given, and interpretations are made based on the results.
  • It is important in a random sample that everyone in the population being studied has an equal chance of participating.
  • Otherwise, the results could be biased and, therefore, not representative of the population.

Need of such polls

  • Popular opinion: Polls are simply a measurement tool that tells us how a population thinks and feels about any given topic.
  • Specific viewpoint: Polls tell us what proportion of a population has a specific viewpoint.
  • Opportunity to express: Opinion polling gives people who do not usually have access to the media an opportunity to be heard.

Issues with such polls (in context to elections)

  • Authenticity: Critics have often questioned their authenticity.
  • Manipulation of voters: This largely manipulates the voting behavior.
  • Sensationalization by media: The media, on the other hand, invariably opposes the idea of a ban as seat forecasts attract primetime viewership.
  • Ridiculing the public mandate: The exit polls largely disrespect public opinions inciting confusion regarding the election mandate.

Why does it persist in India?

Ans. Exercise of Free Speech

  • The opposition to the ban in India is mainly on the ground that freedom of speech and expression is granted by the Constitution (Article 19).
  • What is conveniently forgotten is that this freedom is not absolute and allows for “reasonable restrictions” in the same article.

Limited restrictions that we have in India

  • RP Act: The Indian Penal Code and Representation of the People Act, 1951 do contain certain restrictions against disinformation.
  • Restrictions on A19: While the Constitution allows for reasonable restrictions on freedom of expression, its mandate to the ECI for free and fair elections is absolute.
  • Supreme Court interpretations: The Supreme Court (SC), in a series of judgments, has emphasized this requirement.
  • Basic structure doctrine: It considers free and fair elections is the basic structure of the Constitution (PUCL vs Union of India, 2003; NOTA judgment, 2013).

Examples of restrictions

  • Restrictions are imposed in many countries, extending from two to 21 days prior to the poll — Canada, France, Italy, Poland, Turkey, Argentina, Brazil, Colombia, to name a few examples.
  • In India, all political parties too have opposed these polls, demanding a ban — except when they are shown as winning.

Why does the ECI feel that opinion polls interfere with free and fair elections?

  • Prevalence of paid news in India: Having seen “paid news” in action, it apprehends that some opinion polls may be sponsored, motivated and biased.
  • Opacity: Almost all polls are non-transparent, providing little information on the methodology.
  • Propaganda: Subtle propaganda on casteist, religious and ethnic basis as well as by the use of sophisticated means like the alleged poll surveys create public distrust in poll process.
  • Disinformation: With such infirmities, many “polls” amount to misinformation that can result in “undue influence”, which is an “electoral offense” under IPC Section 171 (C). It is a “corrupt practice” under section 123 (2) of the RP Act.
  • Betting: The polling agencies manipulate the margin of error, victory margin for candidates, seat projections for a party or hide negative findings.

Call for a ban in India

  • The demand for a ban on opinion polls is not new.
  • At all-party meets called by the Election Commission in 1997 and 2004, there was unanimous demand for a ban.
  • The difference of opinion was only on whether the ban should apply from the announcement of the poll schedule or the date of notification.

Moves by ECI

  • In 1998, the ECI issued guidelines that were challenged in the SC.
  • A five-judge Constitution Bench asked the ECI how it would enforce these decisions in the absence of a law.
  • Realizing its weakness, the ECI withdrew the guidelines.
  • Unfortunately, this left the constitutionality of the issue

Way forward

  • Independent regulator: Ideally a body like the British Polling Council would be a viable option. India could set up its own professional, self-regulated body on the same lines say Indian Polling Council.
  • Mandatory disclosure: All polling agencies must disclose for scrutiny the sponsor, besides sample size, methodology, time frame, quality of training of research staff, etc.

 

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Foreign Policy Watch: India – EU

India-Britain free trade agreement

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- India-UK FTA

Context

In May last year, Prime Ministers Narendra Modi and Boris Johnson announced their shared vision for a transformative decade for the India-United Kingdom partnership. These words have now been made real.

Transforming India-UK partnership

  • Doubling bilateral trade: The two leaders had declared their ambition to more than double bilateral trade by 2030, which totalled over £23 billion in 2019.
  • Reduce barriers to trade: They directed their governments to take rapid steps to reduce barriers to trade.
  • FTA: The groundwork necessary to begin work on a Free Trade Agreement (FTA) had to be prepared by the end of 2021.
  • Both governments have already taken action; for example, unlocking the export of British apples to India and enabling a greater number of Indian fisheries to export shrimp to the U.K.
  • The big next step was the launch of FTA negotiations last month.

Trade relations at present

  • Bilateral trade: The bilateral trade between the two countries stood at 15.5 billion USD in 2019-20. India has engaged with the UK in sectors like pharma, textiles, leather, industrial machinery, furniture, and toys.
    • Britain is among the top investors in India and India is the second-biggest investor and a major job creator in Britain. Recently, the Serum Institute of India has announced setting up its research facilities in the UK.
  • Indian Diaspora: Around 1.5 million people of Indian origin live in Britain. This includes 15 Members of Parliament, three members in Cabinet, and two in high office as Finance and Home Ministers.
  • India is already a big investor in the U.K. — especially in dynamic sectors such as fintech, electric vehicles, and batteries.
  • India has an extraordinary opportunity to transform its economy and society in the next 30 years, as it hits its demographic sweet spot, at the heart of the Indo-Pacific region where half the world’s people live and 50% of global economic growth is produced.

Benefits of FTA

  • A U.K.-India trade agreement will stimulate growth and employment in both countries. 
  • Lower barriers coupled with greater regulatory certainty would incentivize new small and medium-sized enterprises to export their goods and services.
  • An agreement also means Indian and British consumers see improvements in the variety and affordability of products.
  • Strategic reasons: The British Government’s Integrated Review of our overseas policy, describes the world we are in; messier, with the more geostrategic competition.
  • It is one in which two dynamic democracies such as India and the U.K. need to work closely together to promote open economies.

Consider the question “Colonial prism has long distorted the perception of India-UK relation. However, both the countries stand to gain by finding a fresh basis for sustaining bilateral relations. Comment.”  

Conclusion

An FTA would mark a new way of working between the U.K. and India. It gives a new framework within which the two countries can grow and flourish together, putting the colonial economic relationship where it belongs — in the history books.

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Government Budgets

Fiscal management during a pandemic

Note4Students

From UPSC perspective, the following things are important :

Prelims level: FRBM Act

Mains level: Paper 3- Fiscal consolidation

Context

The fiscal deficit for the year 2022-23 is higher than what was recommended by the Fifteenth Finance Commission. However, if we consider the direction of consolidation, it is towards a reduction in the fiscal deficit.

The budget focuses on capital investment

  • This year’s Union budget projects an increase in capex by Rs 3.14 lakh crore, as compared to the budgeted numbers of the previous fiscal.
  • Given the economy’s savings-investment profile and macroeconomic uncertainties due to the pandemic, private and household investments are likely to be reactive to the general economic environment.
  • Achieving sustainable recovery: For the government, making capital investment in such uncertain times assumes a much higher priority and is equally indispensable for achieving a strong and sustainable recovery from the pandemic.
  • Increasing share of government: As per National Accounts data, gross fixed capital formation by the general government (Centre and states) has shown an increase as a percentage of GDP from 3.48 in 2011-12 to 3.82 in 2019-20, while other sectors, particularly households, the share fell from 15.75 per cent to 11.39 per cent during the same period.
  • The fiscal stance taken in the post-pandemic budgets for higher capital spending, including the budget of 2022-23, is likely to further enhance the general government share in overall capital formation. 
  • Important role of the States: it is also important to recognise that two-thirds of the general government’s capital expenditure is undertaken by states and in this context, the announcement of the Rs 1 lakh crore interest-free loans to the states to increase public investment has been a significant step.
  •  Since states taken together have a higher share in the country’s public capital spending, effective absorption of this additional borrowing facility will be critical for higher public investment.

Three broad trends on Fiscal Consolidation

  • 1] Increase in taxes: The increase in taxes by Rs 5.71 lakh crore between 2020-21 (the first year of the pandemic) and 2022-23 shows that the fiscal challenges have eased, but remain present as we navigate economic recovery in uncertain times.
  • 2] Reduction in revenue deficit: Between 2020-21 and 2022-23 (BE), the reduction in revenue deficit has been substantial — from 7.3 per cent to 3.8 per cent of GDP.
  • 3] Revenue deficit dominates fiscal deficit: Compositionally, revenue deficit continues to be more than 55 per cent of the fiscal deficit and the management of such a deficit has few important considerations for revenue expenditure, that is, interest payments and allocation under various centrally sponsored and central sector schemes.
  • Role of CSS in revenue deficit: Aggregate allocation under centrally sponsored and central sector schemes (CSS) as per the 2022-23 (BE) is Rs 3.83 lakh crore and the interest payment cost of the Union government is Rs 9.56 lakh crore.
  • Beyond scheme-wise allocations, it is also important to consider CSS allocation as an issue of macro-fiscal management issue at the Union and state level, especially when it is contributing to the high revenue deficit of the central government and binding state resources for matching contribution, thereby increasing states’ deficit.

Understanding the direction of fiscal consolidation

  • The fiscal deficit for the year 2022-23 is higher than what was recommended by the Fifteenth Finance Commission.
  • However, if we consider the direction of consolidation, it is towards a reduction in the fiscal deficit.
  • Though in the medium-term, the fiscal story is about supporting recovery, it is also true that there is no “one-size-fits-all” solution to fiscal consolidation and debt sustainability. 

Conclusion

The direction of fiscal consolidation rather than a specific quantified path in an unprecedented time like this is probably the most appropriate consideration.

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Foreign Policy Watch: India-China

Delinking Depsang from the ongoing Ladakh border crisis is worrying

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Aksai Chin

Mains level: Paper 2- Border conflict with China

Context

In a recent television interview, the Indian Army Chief, General M.M. Naravane, argued that “out of the five or six friction points (in Ladakh), five have been solved”.

Friction points in Ladakh

  • ‘Friction point’ are the points of Chinese ingress into hitherto India-controlled territory in Ladakh, where this control is exercised by the Army and the Indo-Tibetan Border Police (ITBP) through regular patrols to the claimed areas.
  • These ‘friction points’ are Depsang, Galwan, Hot Springs, Gogra, North bank of Pangong Tso, Kailash Range and Demchok.
  • By asserting that only one of the friction points is remaining to be resolved —  Hot Springs or PP15, Army Chief implicitly ruled out Depsang as an area to be resolved.
  • This attempt to delink the strategically important area of Depsang from the ongoing Ladakh border crisis is worrying.

Significance of Depsang

  • Depsang is an enclave of flat terrain located in an area the Army classifies as Sub-Sector North (SSN), which provides land access to Central Asia through the Karakoram Pass.
  • The Army has always identified Depsang plains as where it finds itself most vulnerable in Ladakh, devising plans to tackle the major Chinese challenge.
  • SSN’s flat terrain of Depsang, Trig Heights and DBO — which provides direct access to Aksai Chin — is suited for mechanised warfare but is located at the end of only one very long and tenuous communication axis for India.
  • China, in turn, has multiple roads that provide easy access to the area.
  • This leaves SSN highly vulnerable to capture by the PLA, with a few thousands of square kilometres from the Karakoram Pass to Burtse, likely to be lost.
  • Nowhere else in Ladakh is the PLA likely to gain so much territory in a single swoop.
  • SSN lies to the east of Siachen, located between the Saltoro ridge on the Pakistani border and the Saser ridge close to the Chinese border.
  • On paper, it is the only place where a physical military collusion can take place between Pakistan and China — and the challenge of a two-front war can become real in the worst-case scenario.
  • If India loses this area, it will be nearly impossible to launch a military operation to wrest back Gilgit-Baltistan from Pakistan.

Dangers of delinking Depsang

  • Invalidation of Indian claims: The biggest danger of delinking Depsang from the current border crisis in Ladakh, however, is of corroborating the Chinese argument, which invalidates the rightful Indian claim over a large swathe of territory. 
  • In sparsely populated areas like Ladakh, with limited forward deployment of troops, the only assertion of territorial claims is by regular patrolling. 
  • By arguing that the blockade at Y-junction predates the current stand-off — a ‘legacy issue’ that goes back years — the Chinese side can affirm that Indian patrols never had access to this area and thus India has no valid claim on the territory.

Conclusion

As was demonstrated by China in the aftermath of the 1962 War, there should be no holding back in painstakingly asserting one’s claims when it comes to safeguarding the territory.

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Artificial intelligence technologies have a climate cost

Note4Students

From UPSC perspective, the following things are important :

Prelims level: AI

Mains level: Paper 3- Climate cost of AI

Context

While there is an allure to national dreams of economic prosperity and global competitiveness, underwritten by AI, there is an environmental cost.

Issues with AI

  • Unfair race for dominance in AI:  A few developed economies possess certain material advantages right from the start, they also set the rules.
  • They have an advantage in research and development, and possess a skilled workforce as well as wealth to invest in AI.
  • Inequality in terms of governance: We can also look at the state of inequity in AI in terms of governance: How “tech fluent” are policymakers in developing and underdeveloped countries?
  • What barriers do they face in crafting regulations and industrial policy?
  • At the same time, there is an emerging challenge at the nexus of AI and climate change that could deepen this inequity.

Climate impact of AI

  • The climate impact of AI comes in a few forms: The energy use of training and operating large AI models is one.
  •  In 2020, digital technologies accounted for between 1.8 per cent and 6.3 per cent of global emissions.
  •  In November 2021, UNESCO adopted the  In November 2021, UNESCO adopted the Recommendation on the Ethics of Artificial Intelligence, calling on actors to “reduce the environmental impact of AI systems, including but not limited to its carbon footprint.” , calling on actors to “reduce the environmental impact of AI systems, including but not limited to its carbon footprint.”

Inequitable access to resources

  • Both global AI governance and climate change policy (historically) are contentious, being rooted in inequitable access to resources.
  • Developing and underdeveloped countries face a challenge on two fronts:
  • 1] AI’s social and economic benefits are accruing to a few countries.
  • 2] Most of the current efforts and narratives on the relationship between AI and climate impact are being driven by the developed West.

Way forward

  • Assess technology-led priorities: Governments of developing countries, India included, should also assess their technology-led growth priorities in the context of AI’s climate costs.
  •  It is argued that as developing nations are not plagued by legacy infrastructure it would be easier for them to “build up better”.

Consider the question “How Artificial Intelligence technologies could transform the world as we know it? What are the concerns with it?

Conclusion

It may be worth thinking through what “solutions” would truly work for the unique social and economic contexts of the communities in our global village.

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Missed opportunity to opportunity of employment-centred and inclusive growth

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Pradhan Mantri Poshan Shakti Nirman

Mains level: Paper 2- Low allocation for social sector

Context

India continues to rank poorly in various global indices that reflect the quality of life, human capital or human development in the country. In this context, it was expected that the current Budget would see an expansion in government spending on the social sector.

Need for greater spending on social sector

  • In Human Development Index, India ranks 131 out of 189 countries and on the Global Hunger Index, it ranks 101 out of 116 countries.
  • The pandemic over the last two years has had a severe impact on the health, education and food security of the poor and informal sector workers.
  • The country has been experiencing increasing inequality over the last couple of decades.

Marginal increase in allocation for school education

  • In the budget, the government announced that it will expand its ‘one class, oneTVchannel’ scheme instead of announcing enhanced allocations for schools  the government announced that it will expand its ‘one class, oneTVchannel’ scheme instead of announcing enhanced allocations for schools so that they can reopen with vigour.
  •  The budget for school education at ₹63,449 crore is a slight improvement over last year’s ₹54,873 crore (2021-22 budget estimates, BE) and a mere increase of 6% in nominal terms compared to 2020-21 BE of ₹59,845 crore.
  • After rechristening the school mid-day meal scheme as Pradhan Mantri Poshan Shakti Nirman, simply called PM Poshan, the allocation for the scheme has reduced from ₹11,500 crore last year to ₹10,233 crore this year.

Low allocation for health

  • Despite repeated statements about strengthening the public health system, the overall budget for the Department of Health and Family Welfare at ₹83,000 crore has gone up by only 16% over the BE for 2021-22 and by less than ₹1,000 crore compared to the RE for 2021-22, which is ₹82,921 crore.
  • However, by including water and sanitation in the budget for health, there is an increase being shown in health spending as a proportion of GDP.
  • Also, even though the budget for the Jal Jeevan Mission has increased from ₹50,000 crore to ₹60,000 crore, only 44% of the allocated funds to the Department of Water and Sanitation for 2021-22 has been spent as on end December 2021.

No indication of plan to extend the PMGKAY

  • 60% of the population are covered by ration cards currently under the National Food Security Act.
  • Those who were eligible benefited from the additional free foodgrains that they have been given under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).
  • However, the food subsidy (BE) for 2022-23 at ₹2.06 lakh crore is only enough to cover the regular NFSA entitlements.
  • The indication is that there is no plan to extend the PMGKAY.
  • The food subsidy RE for 2021-22 is ₹2.86 lakh crore.

Other schemes

  • Budgets for important schemes such as Saksham Anganwadi, maternity entitlements and social security pensions are around the same as the allocations for last year.
  • The allocation for MGNREGA at ₹73,000 crore also does not reflect the increased demand for work or thethe pending wages of ₹21,000 crore.

Continued negligence

  • The resources allocated for crucial government schemes in the fields of health, education, nutrition, and social protection have remained stagnant or show negligent increase.
  • In fact, the budgets for these schemes have been declining in real terms since 2015.
  • The World Social Protection Report 2020-22, brought out by the International Labour Organization, shows that the spending on social protection (excluding health) in India is 1.4% of the GDP, while the average for low-middle income countries is 2.5%.

Conclusion

This continued negligence does not bode well for inclusive development in India.

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Judicial Pendency

The Supreme Court fails to decide key constitutional cases in time-bound manner

Note4Students

From UPSC perspective, the following things are important :

Prelims level: CAA

Mains level: Paper 2- Pendency of important cases

Context

Unless the Court strives in every possible way to assure that the Constitution, the law, applies fairly to all citizens, the Court cannot be said to have fulfilled its custodial responsibility.

Landmark judgments

  • In the last few years, the Indian Supreme Court has delivered some judgments of far-reaching consequence.
  • It declared the right to privacy a fundamental right; decriminalized consensual sexual conduct between adults of the same sex; recognized transgender persons as the third gender; and outlawed triple talaq.
  • These decisions shore up the belief in republican values like liberty and equality reified in our Constitution.

Important cases pending in the Supreme Court

  • Constitutionality of CAA: Many petitions were filed before the Supreme Court challenging the constitutionality of the Citizenship (Amendment) Act, 2019, that provides non-Muslim communities from Bangladesh, Pakistan, and Afghanistan a fast-track route to Indian citizenship.
  • More than two years later, the matter continues to languish in the apex court.
  • Dilution of Article 370: Innumerable petitions have been filed challenging the Presidential Order of August 5, 2019, that effectually diluted Article 370 of the Constitution.
  • To date, the court has done precious little to decide this vexed question of law.
  • Constitutionality of 103rd amendment: Petitions challenging the constitutionality of the Constitution(One Hundred and Third Amendment)Act,2019 that provides reservations in public educational institutions and government jobs for economically weaker sections are also languishing in the Supreme Court.
  • Challenges to the electoral bond scheme: The Supreme Court has failed to accord proper hearing in the last four years to the constitutional challenge to the electoral bonds scheme.

Conclusion

Unless the Court strives in every possible way to assure that the Constitution, the law, applies fairly to all citizens, the Court cannot be said to have fulfilled its custodial responsibility”.

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Nuclear Diplomacy and Disarmament

Why UNSC joint statement on nuclear weapons is important

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- P5 joint statement on nuclear weapons

Context

The leaders of five nuclear-weapons States — the US, Russia, China, the UK, and France, also known as the P5 issued a joint statement on preventing nuclear war and avoiding the ongoing global arms race.

Overview of the P5 statement

  • It is not a binding resolution and reiterates some of the core obligations of the NPT.
  • The P5 statement reaffirms that a “nuclear war cannot be won and must never be fought” because of its “far-reaching consequences”.
  • The statement also expresses a commitment to the group’s Treaty on the Non-Proliferation of Nuclear Weapons (NPT) obligations and “to prevent the unauthorized or unintended use of nuclear weapons”.
  • Declaring that an arms race would benefit none and endanger all, the P5 have undertaken to:
  • (1) work with all states to create a security environment more conducive to progress on disarmament with the ultimate goal of a world without nuclear weapons.
  • (2) continue seeking bilateral and multilateral diplomatic approaches to avoid military confrontations, strengthen stability and predictability, increase mutual understanding and confidence”.
  • (3) pursue “constructive dialogue with mutual respect and acknowledgment of each other’s security interests and concerns”.

Bold action on 6 measures

  • Bold action on six fronts is necessary.
  • 1) Chart a path for nuclear disarmament: That member states should chart a path forward on nuclear disarmament.
  • 2) Transparency and dialogue: They should agree to new measures of “transparency and dialogue”.
  • 3) Address nuclear crises: They should address the “simmering” nuclear crises in the Middle East and Asia.
  • 4) Strengthen global bodies: They should strengthen the existing global bodies that support non-proliferation, including the International Atomic Energy Agency (IAEA).
  • 5) Peaceful use of nuclear technology: They should promote the peaceful use of nuclear technology.
  • 6) Elimination of nuclear weapons: they should remind “the world’s people that eliminating nuclear weapons is the only way to guarantee that they will never be used.

Peace education and the right to peace

  • Peace is necessary for rights, freedom, equality, and justice, and for that reason, we need what Justice Oliver Wendell Holmes Jr. called “education in the obvious”— namely, peace education.
  • This is required at multiple levels, ranging across the planetary, global, supranational, regional, national, and local levels of social cognition and action.
  •  UN Resolution 39/11 (November 12, 1984) proclaims that the peoples of our planet have a sacred right to peace and equally solemnly declares that the “preservation of the right of peoples to peace and the promotion of its implementation constitute a fundamental obligation of each State”.
  • The subsequent UN Resolution 53/243 B, declaring a program of action for a culture of peace (1999) also owes a great deal to Gandhi’s legacy and mission.

Conclusion

The statement is politically significant given the unimaginable danger posed by the 13,000 nuclear weapons currently believed to be held by a handful of countries, and the growing specter of loose nukes, which may be deployed by armed terrorist groups for nefarious purposes.

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How India can adapt to global geoeconomic churn

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Adapting to geopolitical and geoeconomic changes

Context

As India returns to a high growth path after a slowdown in the last decade, its geopolitical salience in the world will continue to rise.

India’s growth story

  •  Today, India’s GDP is $3.1 trillion and could cross, according to some estimates, $8 trillion by the end of this decade.
  •  India’s total trade, which was about $38 billion in 1991-92, is expected to touch $1.3 trillion this year.
  •  This is about 40 percent of India’s GDP and underlines the fact that India is more deeply tied to the world than ever before.
  • The world itself is in a geo-economic churn making the transition to $8 trillion a challenging one.

Geo-economic and geopolitical changes in the global order

Geo-economic changes

  • It was Edward Luttwak, the well-known American strategist, who triggered a global discourse on the idea of geoeconomics in a seminal article in 1990 amidst the end of the Cold War.
  • Using economic dominance for political gain: The rapid economic rise of China in the last three decades and Beijing’s success in leveraging its growing economic clout for political gain is widely seen as a classic example of geoeconomics.
  • Economic interdependence: Luttwak’s warning against illusions of economic interdependence and globalization have been borne out by major changes in US-China relations in recent years.
  • The dramatic expansion of economic interdependence between China and America over the last four decades — what some called “Chimerica” — was the principal evidence for the thesis that geopolitics and ideology no longer mattered.
  • Chimerica was held up as an efficient economic fusion that underscored the virtues of economic globalization.
  • However, economic nationalism has re-emerged in both countries today.
  • The US is also strengthening domestic research and industrial capabilities to compete more effectively with China.
  • China too has adopted the economic strategy of “dual circulation” that focuses on strengthening domestic capabilities and reducing exposure to external factors.

How geopolitical and geoeconomic changes are influencing India’s free trade policies

  • At the end of 2019, India has walked out from the Regional Comprehensive Economic Partnership (RCEP) suggesting that the costs of joining a China-centered regional economic order are unacceptable.
  • Deepening engagement with complementary economies: India’s move towards free trade agreements with countries like Australia, Britain, UAE, and Israel.
  • Domestic orientation: Much like the US and China, India is now taking a number of initiatives to promote domestic manufacturing in a range of sectors under the banner of “Atmanirbhar Bharat”.

Way forward for India

  • Until now, India had the luxury of treating its foreign, economic, and strategic policies as separate domains.
  • An integrated approach to policies: Adapting to the current global geo-economic churn demands that Delhi finds better ways to integrate its financial, trade, technological, security, and foreign policies.
  • Above all India needs a strategy that can respond to the imperatives of building domestic capabilities, developing geo-economic partnerships, and constructing geopolitical coalitions with like-minded countries.

Consider the question “How the current geo-political and geo-economic policies are shaping India’s trade policies? Suggest the approach India need to adapt to the structural changes taking place in the global order?” 

Conclusion

India’s selective trade arrangements and the policies to promote domestic manufacturing have drawn much criticism. While those arguments must continue, they must be related more closely to the structural changes in the international economic order.

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Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

How the Budget can push India’s health system transformation

Note4Students

From UPSC perspective, the following things are important :

Prelims level: National Health Authority

Mains level: Paper 2- Health system transformation

Context

After decades of low government expenditure on health, the Covid pandemic created a societal consensus on the need to strengthen our health system.

Steps to strengthen our health system

  • The Fifteenth Finance Commission recommended greater investment in rural and urban primary care, a nationwide disease surveillance system extending from the block-level to national institutes, a larger health workforce and the augmentation of critical care capacity of hospitals.
  • The Union budget of 2021 reflected these priorities in a proposed Pradhan Mantri Aatmanirbhar Swasth Bharat Yojana (PMASBY) to be made operational over six years, with a budget of Rs 64,180 crore.
  • Broader vision of health: The Finance Minister also projected a broader vision of health beyond healthcare by merging allocations to water, sanitation, nutrition and air pollution control with the health budget.
  • Under the Ayushman Bharat umbrella the Digital Health Mission was launched in September 2021.
  • The Health Infrastructure Mission, launched in October 2021, was a renamed and augmented version of the PMASBY.
  • These missions join the two other components of Ayushman Bharat launched in 2018.
  • The Comprehensive Primary Health Care (CPHC) component is nested in the National Health Mission (NHM) while the Pradhan Mantri Jan Arogya Yojana (PMJAY) is steered by the National Health Authority (NHA).

Way forward

  • While much of the following needs to be done by the states, the Centre should incentivise and support such efforts by the states.
  • Link synergically: Primary healthcare services under the CPHC and linkage with water, sanitation, nutrition and pollution control programmes will strengthen the capacity of the health system for health promotion and disease prevention.
  • The budget of 2022 must not only fund these missions adequately but indicate how they will link synergically while functioning under different administrative agencies.
  • Allocate more funds: The NHM received only a 9.6 per cent increase in the 2021 budget.
  • PMJAY did not see an increase in allocation last year, because its utilisation for non-Covid care declined sharply in the previous year.
  •  More importantly, limiting cost coverage to hospitalised care reduces the PMJAY’s capacity to significantly lower out-of-pocket expenditure (OOPE) on health, which is driven mostly by outpatient care and expenditure on medicines.
  • Focus on Digital Heath Mission: The Digital Health Mission can enhance efficiency of the health systems in a variety of ways.
  • These include better data collection and analysis, improved medical and health records, efficient supply chain management, tele-health services, support for health workforce training, implementation of health insurance programmes, real time monitoring and sharper evaluation of health programme performance along with effective multi-sectoral coordination.
  • Improve the skill and number of healthcare workers:  We need to increase the numbers and improve the skills of all categories of healthcare providers.
  • While training specialist doctors could take time, the training of frontline workers like Accredited Social Health Activists (ASHAs) and Auxiliary Nurse Midwives (ANMs) can be done in a shorter time.
  • Upgrade district hospitals: District hospitals need to be upgraded, with greater investment in infrastructure, equipment and staffing.
  • In underserved regions, such district hospitals should be upgraded to become training centres for students of medical, nursing and allied health professional courses.

Conclusion

The expanded ambit of health, as defined in last year’s budget, must continue for aligning other sectors to public health objectives. The Union budget of 2022 can add further momentum to our health system transformation.

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Electoral Reforms In India

Electoral bond scheme

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Electoral bonds

Mains level: Paper 2- Issues with electoral bonds

Context

Ever since its introduction, the electoral bond scheme has envenomed the democratic process, by destroying altogether any notion of transparency in political funding.

Issue of anonymity in electoral bond

  • The electoral bond scheme is designed to allow an individual, or any “artificial juridical person”, including body corporates, to purchase bonds issued by the State Bank of India during notified periods of time.
  • These instruments are issued in the form of promissory notes, and in denominations ranging from ₹1,000 to ₹1 crore.
  • Once purchased, the buyer can donate the bond to any political party of their choice and the party can then encash it on demand.

Supreme Court’s opinion

  • The Supreme Court has allowed the scheme to continue unabated and has denied an interim stay on its operation.
  • In one such provisional order, the Court asserted that the bonds were not, in fact, anonymous.
  • According to the Court, since both the purchase and the encashment of bonds are made through banking channels, all it would take for a person to glean the identity of a donor was for her to look through every corporation’s financial statement — these records, the Court said, ought to be available with the Registrar of Companies.
  • What the order ignored was that there is no attendant obligation on political parties to provide details to the public on each donation received by them through electoral bonds.
  • Companies are also under no obligation to disclose the name of the party to whom they made the donation.

Violation of voter’s right

  •  The Supreme Court has consistently held that voters have a right to freely express themselves during an election and that they are entitled to all pieces of information that give purpose and vigour to this right.
  • Surely, to participate in the electoral process in a meaningful manner and to choose one’s votes carefully, a citizen must know the identity of those backing the candidates.

Electoral bond does not eliminate the role of black money in funding elections

  • As affidavits filed by the Election Commission of India in the Supreme Court have demonstrated, the scheme, if anything, augments the potential role of black money in elections.
  • It does so by, among other things, removing existing barriers against shell entities and dying concerns from donating to political parties.
  • Moreover, even if the bonds were meant to eliminate the presence of unaccounted currency, it is difficult to see what nexus the decision to provide complete anonymity of the donor bears to this objective.
  • It is for this reason that the Reserve Bank of India reportedly advised the Government against the scheme’s introduction.

Conclusion

The worries over the electoral bond scheme, however, go beyond its patent unconstitutionality. This is because in allowing anonymity it befouls the basis of our democracy and prevents our elections from being truly free and fair.

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Government Budgets

How budget can generate higher growth, jobs

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Credit to GDP ratio

Mains level: Paper 3- How to generate high growth

Context

Although the impact of Omicron is less on the economy, the loss of GDP in the last two years is high. Also note that the pre-Covid year FY20 had a low base with 4 per cent growth of GDP. Therefore, the need to focus on higher growth in the forthcoming budget and in the medium term, that is, beyond India@75, is obvious.

Challenges in creating quantity and quality of jobs in the economy

  • Unemployment rate is high in both rural and urban areas;
  • Decline in work participation rates, particularly for women;
  • Recovery in employment is still below the levels of the pre-Covid period.
  • 85 per cent of the workforce is still in informal sector.
  • Lack of skill: Less than 5 per cent of India’s workforce has formal skill training.
  • Need for structural change: Manufacturing and services need structural change.
  • Focus on MSME sector is needed for higher employment.

Policies needed to achieve higher economic growth and jobs

1] Capital expenditure and infrastructure

  • The government outlined an infrastructure project pipeline worth more than Rs 102 lakh crore and asset monetisation pipeline of Rs 6 lakh crore to be implemented in the medium term.
  • Continuing focus on infrastructure and capex by the government is important as it is a key driver for the “future of India”.

2] Focus on export growth

  • It is well known that rise in exports is one of the main engines of growth and also important for employment creation.
  • Export growth in India has increased and is expected to reach $400 billion by the end of FY22.
  • One worrying aspect of India’s export performance is the failure in expanding the share of labour intensive products in the export basket.
  • Protectionist trade policy: However, one problem in recent years is that India’s trade policy has become more protectionist by increasing import tariffs.
  • Join RCEP: India should also join the Regional Comprehensive Economic Partnership (RCEP) for integrating our industries with the value chains in Asia.

3] Manufacturing and service sector growth

  • The share of manufacturing in GDP and employment has hardly increased over time.
  • Production Linked Incentive (PLI) schemes can improve performance.
  • However, more efforts are required to improve the manufacturing sector.
  •  Similarly, there are a lot of opportunities for India in the service sector.
  • Brand and customer centricity are important here.
  • India can also think of more business in the service sector.
  • Growing startups including unicorns in manufacturing and services is part of this effort.

4] Banking reforms

  • Banking reforms are important as bank credit growth is a key indicator of economic growth.
  • Low credit-to-gdp ration in India: Credit to GDP ratio in India is only around 55 per cent compared to 100 per cent and 150 per cent in many other countries.
  • Credit should flow to all categories of economic agents like firms, households etc.
  •  The bad bank, a key initiative of the last budget, is yet to take shape.
  • The role of fintech companies in the financial sector has increased significantly.
  • They may not be able to replace banks although they are competing on payments.
  • The banks also have to focus now on ESG (environment, social and governance) while giving credit.
  • Big technology and digital push is also needed for banks.

5] Deal with K-shaped recovery

  • The K-shaped recovery of the economy is still continuing.
  • The policies have to focus on giving a push to the MSME sector, increasing investment in agriculture and rural infrastructure, a social sector push including bridging divides in health and education, social protection measures like foodgrain distribution, cash transfers, MGNREGA in rural areas, urban employment guarantee schemes etc.
  • This will also create demand for the economy.

Conclusion

In the near term, fiscal policy has to play an important role in achieving the objectives of growth and jobs by expanding fiscal space while the fiscal deficit can be stabilised in the medium term. Increase in private investment may take some more time.

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Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

India’s economy and the challenge of informality

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Defining formal sector

Mains level: Paper 3- Challenges of formalisation

Context

Despite efforts by the government, formalisation of economy still eludes us.

Prevalence of informality in India

  • Despite witnessing rapid economic growth over the last two decades, 90% of workers in India have remained informally employed, producing about half of GDP. 
  • Combining the International Labour Organization’s widely agreed upon template of definitions with India’s official definition (of formal jobs as those providing at least one social security benefit — such as EPF), the share of formal workers in India stood at 9.7% (47.5 million).
  • The prevalence of informal employment is also widespread in the non-agriculture sector.
  • About half of informal workers are engaged in non-agriculture sectors which spread across urban and rural areas.
  • Industries thriving without paying taxes are only the tip of the informal sector’s iceberg.
  • What remains hidden are the large swathes of low productivity informal establishments working as household and self-employment units which represent “petty production”.
  • To conflate the two distinct segments of the informal sector would be a serious conceptual error.

Fiscal perspective of formalisation

  • Efforts to encourage formalisation: Currency demonetisation, introduction of the Goods and Services Tax (GST), digitalisation of financial transactions and enrolment of informal sector workers on numerous government Internet portals are all meant to encourage the formalisation of the economy.
  • The formal sector is more productive than the informal sector, and formal workers have access to social security benefits.
  • The above-mentioned efforts are based on the “fiscal perspective” of formalisation.
  • This perspective appears to draw from a strand of thought advanced by some international financial institutions such as the International Monetary Fund, which foregrounds the persistence of the informal sector to excessive state regulation of enterprises and labour which drives genuine economic activity outside the regulatory ambit.
  • Hence, it is believed that simplifying registration processes, easing rules for business conduct, and lowering the standards of protection of formal sector workers will bring informal enterprises and their workers into the fold of formality.

Issues with fiscal perspective

  •  Early on, in an attempt to promote employment, India protected small enterprises engaged in labour intensive manufacturing by providing them with fiscal concessions and regulating large-scale industry by licensing.
  • Such measures led to many labour-intensive industries getting diffused into the informal/unorganised sectors.
  • Further, they led to the formation of dense output and labour market inter-linkages between the informal and formal sectors via sub-contracting and outsourcing arrangements (quite like in labour abundant Asian economies).
  • While such policy initiatives may have encouraged employment, bringing the enterprises which benefited from the policy into the tax net has been a challenge.
  • Political and economic reasons operating at the regional/local level in a competitive electoral democracy are responsible for this phenomenon, too.

Role of underdevelopment

  • Global evidence suggests that the view that legal and regulatory hurdles alone are mainly responsible for holding back formalisation does not hold much water.
  • A well-regarded study, ‘Informality and Development’ argues that the persistence of informality is, in fact, a sign of underdevelopment.
  • The finding suggests that informality decreases with economic growth, albeit slowly.
  •  A similar association is also evident across major States in India, based on official PLFS data.
  • Hence, the persistence of a high share of informal employment in total employment seems nothing but a lack of adequate growth or continuation of underdevelopment.

Impact of pandemic

  • Research by the State Bank of India recently reported the economy formalised rapidly during the pandemic year of 2020-21, with the informal sector’s GDP share shrinking to less than 20%, from about 50% a few years ago — close to the figure for developed countries.
  • These findings of a sharp contraction of the informal sector during the pandemic year (2020-21) do not represent a sustained structural transformation.
  • They are a temporary (and unfortunate) outcome of the pandemic and severe lockdowns imposed in 2020 and 2021.

Way forward

  • Policy efforts directed at bringing the informal sector into the fold of formality fail to appreciate that the bulk of the informal units and their workers are essentially petty producers eking their subsistence out of minimal resources.
  •  The economy will get formalised when informal enterprises become more productive through greater capital investment and increased education and skills are imparted to its workers.

Consider the question “What are the reasons for persistent informality in India? Suggest the way to ensure the smooth transition to the formality.”

Conclusion

Policy efforts to formalise the economy will have limited results as the bulk of informal units are petty producers.

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Civil Services Reforms

Finding a way to share IAS officers

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Amendment to IAS cadre rules

Context

There are recent reports in the media about serious concerns of several state governments on Government of India’s proposed move to amend the IAS service rules to meet the shortage of officers at various levels at the Centre.

How does central deputation work?

  • Voluntary: Under the current dispensation, officers opt for central deputation from the states voluntarily.
  • The Centre then makes a selection from among these officers for posts which are vacant or are likely to be vacant in the near future.
  • While doing so, it considers the suitability of the officer based on his/her past experience.
  • Once the selection is finalised, orders are issued, requesting the state government to relieve the officer concerned.
  • Quota for each state: Each state has a certain quota beyond which its officers are not accepted by the Centre.

Shortage of officers on central deputation

  • In the last decade, there has been a gradual decline in the number of officers who opt for central deputation.
  • Generally, of the total cadre strength of the states, about 25-30 per cent used to be on central deputation.
  • Currently, less than 10 per cent are working in various central ministries.
  • According to certain reports, in states like UP, Bihar, Odisha and Tamil Nadu and Kerala, the number is between 8 per cent and 15 per cent.
  • One of the reasons for this non-availability of officers for central deputation is the inadequate recruitment more than a decade and half ago.
  • But an important reason is also the comparatively better service conditions in the states.

So, what do the proposed rules seek to achieve?

  • While fixing the cadre strength of states, about 40 per cent posts of senior duty are earmarked for central deputation.
  • Shortage to be shared equitably: Considering that recruitments in the past were not adequate, the proposed change in rules provides for shortage to be shared equitably between the Centre and states.
  • Time limit to relieve officers: Also, since vacancies need to be filled in time, there is a suggestion of a time limit in which states must respond and relieve the officer selected.

Way forward

  • Respect the views of State: It has to be clearly understood that when states give the list of officers they wish to offer for central deputation, it will be the decision of the states alone.
  • The Centre, if it wishes to have an officer work for it, can suggest so to the state. 
  •  If the state does not wish to suggest his name for deputation, the Centre should respect their views, even though they have the power under cadre rules to do so.
  • Improving working conditions for officers: The Centre has to realise that improving working conditions for officers at the deputy secretary and director levels is critical to the success of cadre management.
  • Many of the officers at this level have concerns regarding education of their children, transport and the higher cost of living in Delhi.
  • A deputation allowance for the period of deputation in Delhi could be an option.
  • Non-adversarial manner: The states also have to look at this issue in a non-adversarial manner, where needs of both the Centre and the state have to be matched and met.
  • The Centre should dispel fears of states about misuse of central power.

Conclusion

Proposed amendment to service rules is needed to meet shortage of personnel, but Centre must dispel states’ fears about overreach.

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Food Processing Industry: Issues and Developments

Unlock India’s food processing potential

Note4Students

From UPSC perspective, the following things are important :

Prelims level: PLIS

Mains level: Paper 3- Food processing industry in India

Context

One of the largest producers of fruits and vegetables in the world to boost processed food in large quantities, India has formulated a unique Production-Linked Incentive Scheme (PLIS) which aims to incentivise incremental sales.

Progress made so far

  • A sum of ₹10,900 crore has been earmarked for the scheme.
  • Beneficiaries have been obliged to commit a minimum investment while applying for the scheme.
  • Under Category 1, firms are incentivised for incremental sales and branding/marketing initiatives taken abroad.
  • Assuming the committed investment as a fixed ratio of their sales and undertaking execution of at least 75% of the projects, the sector is likely to witness at least ₹6,500 crore worth of investment over the next two years.
  • New alternatives are being explored which have immense potential in replacing the staples of rice and wheat in the form of Nutri-cereals, plant-based proteins, fermented foods, health bars and even fresh fortified foods for pets.
  • By welcoming the new brands in the category, PLIS aims to create an enabling ecosystem for innovation in both food products and processes.

Way forward

1] Improve infrastructure

  • A study in the United States concluded that a 1% increase in public infrastructure increased the food manufacturing output by 0.06% in the longer run (https://bit.ly/3rOeE0l).
  • This correlation holds good for India too as a higher investment is being concentrated in States such as Andhra Pradesh, Gujarat, Maharashtra, Tamil Nadu and Uttar Pradesh.
  • These States as reported by the Good Governance Index 2020-21, ranked among the highest in the ‘Public Infrastructure and Utilities’ parameter with ‘Connectivity to Rural Habitations’ showing the highest improvement.

2] Improve profitability in export

  • For the exports market, it is now established that sales promotion is positively related to increased sales volume, but inversely related to profitability.
  • To bridge this gap, of the 13 key sectors announced under the PLIS, the ‘Food Processing PLIS’ earmarks a dedicated Category 3 for supporting branding and marketing activities in foreign markets. 
  •  This ensures that India’s share of value-added products in the exports basket is improved, and it may leverage on its unique geographical proximity to the untapped markets of Europe, the Middle East/West Asia, Africa, Oceania and Japan.

3] Access to credit

  •  The access of micro, small, and medium enterprises (MSMEs) to finance is a perennial problem in the country, predominating due to a lack of proper credit history mechanism for MSMEs.
  • Smart financing alternatives such as peer-to-peer (P2P) lending hold potential for micro-food processors.
  • Access to working capital has in theory been addressed by the Trade Receivables Discounting System (TReDS), a platform for facilitating the financing/discounting of trade receivables of MSMEs through multiple financiers.

Conclusion

With growing populations, changing food habits and unrestricted use of natural resources, nations must come together and lay out a road map for a common efficient food value chain.

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Renewable Energy – Wind, Tidal, Geothermal, etc.

The consequences of an ill-considered green strategy

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Issues with rapid transition to green energy

Context

Europe’s push for renewable energy at the cost of conventional fuel may end up causing a global food crisis.

Consequences of fuel shortage in Western Europe

  • Since August 2021, Western Europe has faced a problem with renewable energy – the wind doesn’t always blow when needed and the sun doesn’t always shine.
  • Commodity markets across the world operate on a balance of demand and supply — even seemingly “small” changes in either side of a few percentage points can push the prices up or down sharply.
  • High energy bills: Higher gas prices have pushed up energy bills for households and are expected to impact household spending and consumption as well.
  • High urea prices: Natural gas is used to produce urea – if gas prices go up, fertiliser also becomes expensive.
  •  Some poor and middle-income countries are already starting to face problems of fertiliser availability — there are reports from several Indian states as well. 
  • High food prices: The impact of expensive fertiliser will be felt some months down the line as expensive fertiliser and reduced harvests push up food prices.
  • India is relatively less affected as the share of natural gas in the country’s energy mix is low but will still face problems due to high food prices.
  • In 2007-08, when oil prices were high, there was a push to use “biofuels” led by the US and Europe.
  •  The effects of the 2008 food price crisis were felt around the world, especially by the poor.

Lessons for India

  • Cheap and reliable energy sources should not be abandoned until the alternatives have been stringently stress tested.
  • India will be especially hard hit if oil prices spike as it imports close to 1.4 billion barrels of oil annually.

Consider the question “What are the inherent dangers in rapid transition to the green energy? Suggest the way forward for India.”

Conclusion

A blind push to shut down traditional sources of energy and move to less reliable “clean” energy can have second and third order effects.

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