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  • Foreign Policy Watch: India-China

    Leveraging its market to force China to settle border issue

    op-ed snap | International Relations | Mains Paper 2: India & Its Neighborhood – Relations

    The article charts out the plan to leverage the potential and the present size of the India markets to settle the boundary dispute with China.

    Boycott of Chinese goods: view and counterview

    • After Galwan incident, there have been calls for the boycott of Chinese goods.
    • Counter views have been expressed that the Indian economy is so dependent on China that the costs would be disproportionately higher for India.
    • Our dependence can be reduced substantially if there is a national will and resolve to do so.

    Need for mutually acceptable boundary agreement

    • China may not be willing to go back substantially from the areas they have occupied.
    • Agreeing on maintaining peace and tranquillity or clarification of the LAC has left space for the Chinese to create border incidents which have now led to casualties.
    • So India needs to get China to seriously negotiate a mutually acceptable boundary agreement.

    India could use its market as leverage

    • Size of Indian market: The size of the Indian market and its potential in the coming years provides India considerable leverage.
    • But to use this leverage, Indians, individual consumers as well as firms, have to accept that there would be a period of adjustment in which they would have to pay higher prices.
    • The Chinese have a competitive advantage and are integral to global supply chains.
    • But whatever they sell is, and can be, made elsewhere in the world.
    • Indian can produce everything imported by China: Most of what we import from China was, is and can be made in India itself.
    • With volumes and economies of scale, the cost of production in India would decline as it did in China.

    Steps need to be taken to use market as leverage

    • Focus on those imports from China which have been increasing: The initial focus should be on items which are still being made in India and where imports from China have been increasing.
    • Depriciate Rupees: If the RBI let the currency depreciate in real terms it would be equivalent to an increase in import duties of about 10 per cent.
    • China-specific safeguard duties and use of non-tariff trade barriers should be used in segments like electrical appliances to let Indian producers expand production and increase market share.
    • Government Finances for expansion: The government should also facilitate the flow of finances for expansion and provide technical support for testing, improving quality and lowering costs of production.
    • Look for other players: In critical areas such as Active Pharmaceutical Ingredients, we need a vigorous approach to procure from elsewhere and have early production in India.
    • The government could provide support for environmental compliance to bring down costs of production.This would create demand for domestic goods and services.
    • There are strategic sectors where we should reduce vulnerability: Like scrutiny of -Chinese FDI, Chinese 5G participation etc.
    • Assured government procurement: In critical areas like solar panel and grid storage batteries private investment for manufacturing in India would be triggered by assured government procurement.

    Consider the question “Size and potential of India market could be leverage by India to settle the issues it has with its neighbour. What India needs to achieve this is a strategy and its implementation. Comment.”

    Conclusion

    A sustained and graded economic response to the recent Chinese conduct on the border is needed. We should signal India’s firm resolve and willingness to bear the cost. China could choose to settle the border amicably and have full access to our market. We could then work together to make this the Asian century.

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  • Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

    States can have sub-groups among SCs/STs: Supreme Court

    SC Judgements | Polity | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections

    A five-judge Bench of the Supreme Court has held that States can sub-classify Scheduled Castes and Scheduled Tribes in the Central List to provide preferential treatment to the “weakest out of the weak”.

    Try this question for mains;

    Q.Reservation is no more seen by the Supreme Court as an exception to the equality rule; rather, it is a facet of equality. Discuss this in light of the quest for sub-categorisation of Scheduled Castes/Tribes.

    What is the sub-categorisation of SCs?

    • States have argued that among the SCs, there are some that remain grossly under-represented despite reservation in comparison to other SCs.
    • This inequality within the SCs is underlined in several reports, and special quotas have been framed to address it.
    • For example, in AP, Punjab, Tamil Nadu and Bihar, special quotas were introduced for the most vulnerable Dalits.
    • In 2007, Bihar set up the Mahadalit Commission to identify the castes within SCs that were left behind.

    About the Judgement

    • The judgment is based on a reference to the Constitution Bench the question of law involving Section 4(5) of the Punjab Scheduled Caste and Backward Classes (Reservation in Services) Act, 2006.
    • The legal provision allows 50% of the reserved Scheduled Castes seats in the State to be allotted to Balmikis and Mazhabi Sikhs.

    There lies struggle within castes: SC

    • There is a “caste struggle” within the reserved class as a benefit of reservation is being usurped by a few, the court pointed out.
    • The million-dollar question is how to trickle down the benefit to the bottom rung.
    • It is clear that caste, occupation, and poverty are interwoven.
    • The State cannot be deprived of the power to take care of the qualitative and quantitative difference between different classes… to take ameliorative measures, said the judgment.

    Overruling the old judgment

    • With this, the Bench took a contrary view to a 2004 judgment delivered by another Coordinate Bench of five judges in the E.V. Chinnaiah case.
    • The judgment had held that allowing States to unilaterally “make a class within a class of members of the Scheduled Castes” would amount to tinkering with the Presidential list.
    • The judgment is significant as it fully endorses the push to extend the creamy layer concept to the Scheduled Castes and Scheduled Tribes.
    • Citizens cannot be treated to be socially and educationally backwards till perpetuity; those who have come up must be excluded like the creamy layer, the judgment said.

    What is the Presidential list?

    • The Constitution, while providing for special treatment of SCs and STs to achieve equality, does not specify the castes and tribes that are to be called SCs and STs.
    • This power is left to the central executive — the President. As per Article 341, those castes notified by the President are called SCs and STs.
    • A caste notified as SC in one state may not be an SC in another state. These vary from state to state to prevent disputes as to whether a particular caste is accorded reservation or not.
    • According to the annual report of the Ministry of Social Justice and Empowerment, there were 1,263 SCs in the country in 2018-19.
    • No community has been specified as SC in Arunachal Pradesh and Nagaland, and Andaman & Nicobar Islands and Lakshadweep.
    • The Constitution treats all Schedule Castes as a single homogeneous group.

    Arguments against sub-categorisation

    • The argument is that the test or requirement of social and educational backwardness cannot be applied to SCs and STs.
    • The special treatment is given to the SCs due to untouchability with which they suffer.
    • In a 1976 case, State of Kerala v N M Thomas, the Supreme Court laid down that “Scheduled Castes are not castes, they are class.”
    • The petitioner’s argument against allowing states to change the proportion of reservation is also based on the perception that such decisions will be made to appease one vote-bank or the other.
    • A watertight President’s list was envisaged to protect from such potential arbitrary change.

    Way ahead with the Judgement

    • The judgement reasoned that sub-classifications within the Presidential/Central List do not amount to “tinkering” with it.
    • No caste is excluded from the list. The States only give preference to weakest of the lot in a pragmatic manner based on statistical data.
    • Preferential treatment to ensure even distribution of reservation benefits to the more backward is a facet of the right to equality, judgement observed.

    Also read:

    [Burning Issue] SC judgement on Reservation not being a Fundamental Right

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  • Global Geological And Climatic Events

    What is the Hangenberg Crisis?

    | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    The explosion of a nearby star — occurred at between Devonian and Carboniferous periods — could have caused a mass extinction event that took place 359 million years ago.

    Try this question from CSP 2018:

    Q.The term “sixth mass extinction/sixth extinction” is often mentioned in the news in the context of the discussion of

    (a) Widespread monoculture Practices agriculture and large-scale commercial farming with indiscriminate use of chemicals in many parts of the world that may result in the loss of good native ecosystems.

    (b) Fears of a possible collision of a meteorite with the Earth in the near future in the manner it happened 65million years ago that caused the mass extinction of many species including those of dinosaurs.

    (c) Large scale cultivation of genetically modified crops in many parts of the world and promoting their cultivationin other Parts of the world which may cause the disappearance of good native crop plants and the loss offood biodiversity.

    (d) Mankind’s over-exploitation/misuse of natural resources, fragmentation/loss, natural habitats, destructionof ecosystems, pollution and global climate change.

    Hangenberg crisis

    • The Earth suffered an intense loss of species diversity that lasted for at least 300,000 years.
    • The event is thought to have been caused by long-lasting ozone depletion, which would have allowed much more of the Sun’s ultraviolet (UV) radiation to reach and harm life on Earth.
    • It was called the Hangenberg crisis.

    What did researchers find?

    • Extensive volcanism and global warming can also rupture the ozone layer but shreds of evidence for these are indefinite as far as the time period is concerned.
    • So, they up that one or more supernovae explosions, at a distance of 65 light-years away from the Earth, may have caused a prolonged loss of ozone.
    • Betelgeuse, a supernova, around 600 light-years away and present outside the kill distance of 25 light-years poses a danger today.
    • Events like gamma-ray bursts, solar eruptions and meteorite collisions end up very soon. As such, they cannot pave the way for gradual ozone depletion that took place at the close of the Devonian aeon.
    • A supernova event can be powerful enough to bathe its galaxy in light for days and months alike. It can be spotted across the universe as well.

    Why Supernovae are considered dangerous?

    • Supernovae (SNe) are quick sources of ionizing photons that include fatal X-rays, UV and gamma rays.
    • Over a longer period of time, the bang clashes with the nearby gas, resulting in a shockwave that causes particle acceleration.
    • As such, cosmic rays are generated by SNe. These charged particles with high energies get magnetically confined on the inside of SN remains.
    • The fossil evidence shows a 300,000-year shrink in biodiversity leading the way to Devonian-Carboniferous Boundary (DCB) mass extinction.
    • This puts forward the possibility of multiple catastrophes or multiple supernovae explosions.

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  • Roads, Highways, Cargo, Air-Cargo and Logistics infrastructure – Bharatmala, LEEP, SetuBharatam, etc.

    Atal Tunnel at Rohtang

    Prelims Only | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    The Atal Tunnel at Rohtang, near Manali, is almost complete in all respects and will be inaugurated very soon in September.

    Tap to read more about Himalayas at:

    https://www.civilsdaily.com/the-northern-and-northeastern-mountains-part-1/

    Atal Tunnel

    • The 9-km-long tunnel is constructed under the Pir Panjal range.
    • It has been named after former PM Atal Bihari Vajpayee and will be the world’s longest highway tunnel above the altitude of 10,000 feet (3000 metres).
    • It was scheduled to be completed by May 2020, in a revised estimate, but the Covid-19 pandemic pushed back the completion by a few months due to lockdown conditions.
    • Vehicles can travel at a maximum speed of 80 km per hour. Up to 1,500 trucks and 3,000 cars are expected to use it per day when the situation gets to normal.

    What is its strategic advantage?

    • Cutting through the Pir Panjal range, the tunnel will reduce the distance between Manali and Leh by 46 km.
    • The tunnel will provide almost all-weather connectivity to the troops stationed in Ladakh.

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  • Tribes in News

    PVTGS in Andaman

    Prelims Only | Trivia | Mains Paper 1: Population & Associated Issues

    Five members of the Great Andamanese tribe, a Particularly Vulnerable Tribal Group (PVTGs) have tested positive for COVID-19.

    Try this PYQ:

    Q. Consider the following statements about Particularly Vulnerable Tribal Groups (PVTGs) in India:

    1. PVTGs reside in 18 States and one Union Territory.
    2. A stagnant or declining population is one of the criteria for determining PVTG status.
    3. There are 95 PVTGs officially notified in the country so far.
    4. Irular and Konda Reddi tribes are included in the list of PVTGs.

    Which of the statements given above are correct?(CSP 2019)

    (a) 1, 2 and 3

    (b) 2, 3 and 4

    (c) 1, 2 and 4

    (d) 1, 3 and 4

    PVTGs in Andaman

    • Great Andamanese is one of five PVTGs that reside in Andamans archipelago.
    • The Great Andamanese speak Jeru dialect among themselves and their number stands at 51 as per the last study carried out by Andaman Adim Janjati Vikas Samiti in 2012.
    • The five PVTGS residing in Andamans are Great Andamanese, Jarwas, Onges, Shompens and North Sentinelese.

    What are PVTGs?

    • There are certain tribal communities who have declining or stagnant population, low level of literacy, pre-agricultural level of technology and are economically backward.
    • They generally inhabit remote localities having poor infrastructure and administrative support.
    • These groups are among the most vulnerable section of our society as they are few in numbers, have not attained any significant level of social and economic development.
    • 75 such groups have been identified and categorized as Particularly Vulnerable Tribal Groups (PVTGs).

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  • The Crisis In The Middle East

    Turkey’s Maritime Disputes

    Prelims Only | Trivia | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Turkish President Erdogan has asserted that his country will take whatever belongs to it in the Mediterranean, as well as Aegean and the Black Sea.

    Try this PYQ:

    Q.Turkey is located between

    (a) The Black Sea and Caspian Sea

    (b) The Black Sea and Mediterranean Sea

    (c) Gulf of Suez and the Mediterranean Sea

    (d) Gulf of Aqaba and the Dead Sea

    Assertion over the Mediterranean

    • Greece and Turkey have been locked in a dispute over control of eastern Mediterranean waters.
    • They are at odds over the rights to potential hydrocarbon resources, based on conflicting claims over the extent of their continental shelves.
    • The Turkish navy will hold the shooting exercises in the eastern Mediterranean off the coast of Iskenderun, northeast of Cyprus.
    • Cyprus was divided in 1974 following a Turkish invasion triggered by a Greek-inspired coup.
    • Turkey recognizes the Turkish-populated north of Cyprus as a separate state, which is not recognised by other countries.

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  • Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

    Making agricultural reforms successful

    | Economics | Mains Paper 3: Transport & Marketing Of Agricultural Produce

    The article analyses the issues with the reforms in the agricultural marketing policies.

    Recent reforms in agricultural marketing

    • The 3 recent reforms in agricultural marketing bring major changes in policy.
    • The removal of restrictions under the Essential Commodities Act (ECA) should help attract private investment in agriculture.
    • The two new ordinances are expected to enable inter-State trade and promote contract farming, thereby providing a large number of options to farmers.

    Concerns that need to be addressed

    1) Policy credibility problem

    • The first problem is ‘time-inconsistency’ problem or the policy credibility problem.
    • This situation arises when a decision maker’s preferences change over time in such a way that the preferences are inconsistent at different points in time.
    • Because the policy signals are not very clear in the last few years as relates to agricultural marketing, as we will see below.
    • This clarity of clear signal is reflected in rollout of multiple schemes: e-NAM, PM-AASHA, PM-KISAN.
    • In 2016, the electronic national agricultural market (e-NAM) was launched with a lot of fanfare.
    • States needed to amend their respective Agricultural Produce Market Committee (APMC) Acts.
    • Several States could not or did not carry out these amendments and the e-NAM proved to be far less effective than desired.
    • As a result, the government reverted back to public price support by launching an ambitious programme, PM-AASHA, in September 2018.
    • The programme was confined to pulses and oilseeds to limit the fiscal costs.
    • However, the initial budgetary outlay did not match the level of ambition of the programme.
    • In addition to the PM-AASHA programme, two Model Acts were formulated by the Central government in 2017 and 2018 to promote agricultural marketing and contract farming in States.
    • States were required to legislate these Model Acts.
    • However, progress has been tardy and many States have not adopted the Model Acts.
    • This uninspiring performance of PM-AASHA necessitated a more radical and direct approach.
    • Thus evolved the PM-KISAN, a direct cash transfer programme, in the interim Budget of 2019-2020 (February 2019).
    • This programme involved a fixed payment of ₹6,000 per annum to each farm household with a budgetary outlay of ₹75,000 crore.
    • The frequent flip-flops in farm policy — from a market-based e-NAM to a public funded PM-AASHA and now back to market-based measures — may not inspire much confidence in the minds of private investors about the continuance of the present policies.

    2) Centre-State and State-State relations

    • Recent Ordinances were passed by the Central Government using the constitutional provisions but the implementation of the same vests with the States.
    • Also, inter-State trade involves movement of goods across the State boundaries.
    • Thus, coordination between the Central and the State governments, and also among various States becomes crucial.
    • Also, the States must have faced several problems in legislating and implementing the earlier Model Acts.
    • Thus, the Centre must engage with the States about these constraints in order to iron out the potential problems in the implementation of the ordinances.

    3) Multiple market failures and the resultant inter-linkage of rural markets

    • Absence or failure of credit and insurance markets may lead a farmer to depend upon the local input dealer.
    • This, in turn, may tie him to these intermediaries and constrain his choice of output markets.
    • Similarly, the widespread restrictions on land leasing in many States lead to an inefficient scale of production.
    • Thus, reforms in the output market alone are not sufficient.
    • Reforms in output must be supplemented and complemented with the liberalisation of the lease market and better access to credit and insurance markets.

    Consider the question “What are the reform measures taken by the government to deal with the issues in the agricultural marketing by farmers? What are the concerns with such measures?”

    Conclusion

    In conclusion, consistency in policy, collaborative approach and complementary reforms are necessary for the success of the recent agricultural market reforms.

    Back2Basics: Agricultural reform

    Read in detail about the 3 reforms form here-

    Agri reforms and way forward

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  • Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

    National Recruitment Agency: Taking jobs closer to people

    op-ed snap | Governance | Mains Paper 2: Health & Education

    Recruitment reform in the form of National Recruitment Agency will resolve many issues faced by the youth appearing for the multiple government exam.

    Context

    • On average, 2.5-3 crore candidates appear for about 1.25 lakh vacancies in the central government every year.
    • But from next year, the NRA will conduct the CET and based on the score, one can apply for a vacancy with the respective agency.

    NRA: Composition and functioning

    • The NRA will have representatives from the Ministry of Railways, Ministry of Finance/Department of Financial Services, Staff Selection Commission (SSC), Railway Recruitment Boards (RRBs) and Institute of Banking Personnel Selection (IBPS).
    • A multi-agency body, the NRA will conduct a Common Eligibility Test (CET) to screen/shortlist candidates for the Group B and C (non-technical) posts.
    • The NRA shall conduct a separate CET each for the three levels of graduate, higher secondary (12th pass) and the matriculate (10th pass) candidates for those non-technical posts to which recruitment is presently carried out by the SSC, RRBs and IBPS.

    How it will benefit youth

    • It will eliminate multiple tests and save time as well as resources.
    • It will give a big boost to transparency.
    • The multiple recruitment examinations are a burden on the candidates, as also on the respective recruitment agencies, involving avoidable/repetitive expenditure, law and order/security-related issues and venue-related problems.
    • The NRA is a combination of convenience and cost-effectiveness for candidates.
    • Examination centres in every district would greatly enhance access to the candidates located in far-flung areas, with a special focus on creating examination infrastructure in the 117 Aspirational Districts.
    • This will prove a great boon to crores of aspirants residing in hilly, rural and remote areas and most importantly, for female candidates.
    • Taking job opportunities closer to the people is a radical step that would greatly enhance ease of living for the youth.

    Consider the question “Recruitment reform in the form of National Recruitment Agency is a radical step that would greatly enhance ease of living for the youth.”

    Conclusion

    Taking job opportunities closer to the people is a radical step that would greatly enhance ease of living for the youth.

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  • ISRO Missions and Discoveries

    Space industry and challenges

    op-ed snap | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    The article analyses opportunities and challenges the outer space technology offers to us.

    Emerging trends in space industry

    • The price for reaching low Earth orbit has declined by a factor of 20 in a decade.
    • It enhances human space travel possibilities by leveraging new commercial capabilities.
    • According to a Bank of America Report, the $350 billion space market today will touch $2.7 trillion by 2050.
    • Starlink, the constellation being constructed by SpaceX to provide global Internet access, plans more than 10,000 mass-produced small satellites in low Earth orbit. 
    •  In a decade, 80,000 such satellites could be in space compared to less than 3,000 at present.
    • Companies such as Planet, Spire Global and Iceye are using orbital vantage points to collect and analyse data to deliver fresh insights in weather forecasting, global logistics, crop harvesting and disaster response.
    • Space could prove attractive for high-tech manufacturing too.
    • In short, an exciting new platform is opening up for entrepreneurs.

    3 Challenges

    1) Governance of outer space

    • Framework for governance of outer space as it becomes democratised, commercialised and crowded is becoming obsolescent.
    • The Outer Space Treaty of 1967 enshrines the idea that space should be “the province of all mankind” and “not subject to national appropriation by claims of sovereignty”.
    • The Rescue Agreement, Space Liability Convention, and the Space Registration Convention expanded provisions of the Outer Space Treaty.
    • The Moon Treaty of 1979 was not ratified by major space-faring nations.
    • Space law does not have a dispute settlement mechanism, is silent on collisions and debris, and offers insufficient guidance on interference with others’ space assets.
    • These gaps heighten the potential for conflict in an era of congested orbits and breakneck technological change.

    2) Acknowledging role of non-state entities

    • The legal framework related to outre space is state-centric, placing responsibility on states alone.
    • However, non-state entities are now in the fray for commercial space exploration and utilisation.
    • Some states are providing frameworks for resource recovery through private enterprises.
    • Some scholars and governments view this as against the principle of national non-appropriation, violating the spirit if not the letter of the existing space law.
    • The lack of alignment of domestic and international normative frameworks risks a damaging free-for-all competition for celestial resources involving actors outside the space framework.

    3) The arms race in outer space

    • The space arms race is difficult to curb, especially since almost all space technologies have military applications.
    • For example, satellite constellations are commercial but governments could acquire their data to monitor military movements.
    • Investment in technologies that can disrupt or destroy space-based capabilities is under way.
    • Despite concerns about military activity in outer space for long, not much progress has been made in addressing them.
    • The UN General Assembly passes a resolution on Prevention of an Arms Race in Outer Space since 1982.
    • The current geopolitical situation does not hold hope for addressing concerns of a space arms race.

    Need for space legislation in India

    • India has invested enormous resources in its space programme through the Indian Space Research Organisation.
    • More importantly, our space assets are crucial for India’s development.
    • The proposed involvement of private players and the creation of an autonomous body IN-SPACe for permitting and regulating activities of the private sector are welcome efforts.
    • However, the space environment that India faces requires us to go beyond meeting technical milestones.
    • We need a space legislation enabling coherence across technical, legal, commercial, diplomatic and defence goals.

    Consider the question “Outer space technology is expanding its horizon day by day. However, there are certain challenges the expansion of the space technology faces. What are these challenges and suggest ways to deal with such challenges.”

    Conclusion

    Our space vision also needs to address global governance, regulatory and arms control issues. As space opens up our space vision needs broadening too.

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  • Women empowerment issues – Jobs,Reservation and education

    How marriage age and women’s health are linked?

    DOMR | Governance | Mains Paper 1: Role Of Women & Women Organization

    PM had announced a panel to fight malnutrition in young women and ensure they get married at the right age. Take a look at how the two are linked:

    How prevalent is underage marriage?

    • Data show that the majority of women in India marry after the age of 21.
    • Chart 1 shows the mean age of women at marriage is 22.1 years, and more than 21 in all states. This does not mean that child marriages have disappeared.
    • The latest National Family Health Survey (NFHS-4) found that about 26.8% of women aged 20-24 (Chart 2) were married before adulthood (age 18).

    Try this question for mains:

    Q. Discuss how marriage age and women’s health are linked with each other?

    How does the age of marriage correlate with health?

    • Preventing early marriage can reduce the maternal mortality ratio and infant mortality ratio.
    • At present, the maternal mortality ratio — the number of maternal deaths for every 100,000 children born — is 145.
    • India’s IMR shows that 30 of every 1,000 children born in a year die before the age of one.
    • Young mothers are more susceptible to anaemia. More than half the women of reproductive age (15-49 years) in India are anaemic.

    What delayed marriage can alter?

    • Poverty, limited access to education and economic prospects, and security concerns are the known reasons for early marriage.
    • If the main causes of early marriage are not addressed, a law will not be enough to delay marriage among girls.

    What do the data show?

    • Women in the poorest 20% of the population married much younger than their peers from the wealthiest 20% (Chart 5).
    • The average age at marriage of women with no schooling was 17.6, considerably lower than that for women educated beyond class 12 (Chart 6).
    • Almost 40% of girls aged 15-18 do not attend school, as per a report of the National Commission for Protection of Child Rights.
    • Nearly 65% of these girls are engaged in non-remunerative work.
    • That is why many believe that merely tweaking the official age of marriage may discriminate against the poorer, less-educated and marginalised women.

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  • BRICS Summits

    BRICS Innovation Base for 5G and AI Technology

    IOCR | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    China has made a proposal to create what it has termed a BRICS innovation base to take forward 5G and Artificial Intelligence (AI) cooperation.

    Try this question from CSP 2019:

    Q.With reference to communication technologies, what is/are the difference/differences between LTE (Long-Term Evolution) and VoLTE (Voice over Long-Term Evolution)?

    1. LTE ‘is commonly marketed as 3G and VoLTE is commonly marketed as advanced 3G.
    2. LTE is data-only technology and VoLTE is voice-only technology.

    Select the correct answer using the code given below.

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

    BRICS Innovation Base

    • China is considering the establishment of a BRICS innovation base in China, in order to strengthen practical cooperation with the BRICS.
    • It has urged fellow nations, including India, to boost cooperation in areas including 5G and AI in partnership with Huawei.
    • The move could pose an awkward question for India, which is the only country in the grouping that is leaning towards excluding Chinese participation in the roll-out of India’s 5G networks.

    Huawei in BRICS

    • In South Africa, Huawei is providing services to three of its telecom operators in the roll-out of their 5G networks.
    • Brazil has allowed participation in trials but yet to take a final call.
    • India is unlikely to allow Chinese participation in 5G, particularly in the wake of recent moves to tighten investment from China and national security concerns.

    Back2Basics: BRICS

    • BRICS is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China and South Africa.
    • The BRICS Leaders Summit is convened annually. It does not exist in form of organization, but it is an annual summit between the supreme leaders of five nations.
    • On November 30, 2001, Jim O’Neill, a British economist who was then chairman of Goldman Sachs Asset Management, coined the term ‘BRIC’ to describe the four emerging economies of Brazil, Russia, India, and China.
    • The grouping was formalized during the first meeting of BRIC Foreign Ministers on the margins of the UNGA in New York in September 2006.
    • The first BRIC Summit took place in 2009 in the Russian Federation and focused on issues such as reform of the global financial architecture.
    • South Africa was invited to join BRIC in December 2010, after which the group adopted the acronym BRICS.

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  • Air Pollution

    [pib] Nationally Determined Contributions (NDC) Transport Initiative for Asia (TIA)

    IOCRPIB | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    NITI Aayog will virtually launch the India Component of the Nationally Determined Contributions (NDC)–Transport Initiative for Asia (TIA).

    Try this PYQ:

    Q.The term Intended Nationally Determined Contribution is sometimes seen in the news in the context of:

    (a) Pledge made by the European countries to rehabilitate refuges from the war-affected Middle East.

    (b) Plan of nation outlined by the countries of the world to combat climate changes.

    (c) Capital contributed by the member countries in the establishment of Asian Infrastructure Investment Bank.

    (d) Plain of action outlined by the countries of the regarding SDGs.

    What is NDC-TIA?

    • It is a joint programme, supported by the International Climate Initiative (IKI) of the German Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU).
    • On behalf of the GoI, NITI Aayog will be the implementing partner.
    • It aims to promote a comprehensive approach to decarbonize transport in India, Vietnam, and China.
    • It is implemented by a consortium of seven other organisations.

    Working

    • The programme has a duration of 4 years.
    • The India Component will focus on establishing a multi-stakeholder dialogue platform for decarbonizing transport in India, strengthening GHG and transport modelling capacities.
    • It would help in financing climate actions in transport, offering policy recommendations on electric vehicle (EV) demand and supply policies.

    Why need TIA?

    • India has a massive and diverse transport sector that caters to the needs of billion people.
    • It has the world’s second-largest road network, which contributes to maximum GHG emissions through all means of transportation.
    • With increasing urbanisation, the fleet size i.e. the number of sales of vehicles is increasing rapidly.
    • It is projected that the total number of vehicles will be doubled by 2030.

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  • Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

    [pib] Export Preparedness Index (EPI) 2020

    PIB | Economics | Mains Paper 3: Indian Economy

    NITI Aayog in partnership with the Institute of Competitiveness has released the Export Preparedness Index (EPI) 2020.

    Try this PYQ:

    Q.Which one of the following is not a sub-index of the World Bank’s ‘Ease of Doing Business Index? (CSP 2019)

    (a) Maintenance of law and order

    (b) Paying taxes

    (c) Registering property

    (d) Dealing with construction permits

    EPI 2020

    • EPI intends to identify challenges and opportunities; enhance the effectiveness of government policies; and encourage a facilitative regulatory framework.
    • The structure of the EPI includes 4 pillars –Policy; Business Ecosystem; Export Ecosystem; Export Performance.
    • It has 11 sub-pillars –Export Promotion Policy; Institutional Framework; Business Environment; Infrastructure; Transport Connectivity; Access to Finance; Export Infrastructure; Trade Support; R&D Infrastructure; Export Diversification; and Growth Orientation.

    Highlights of the EPI

    • This edition of the EPI has shown that most Indian states performed well on average across the sub-pillars of Exports Diversification, Transport Connectivity, and Infrastructure.
    • Overall, most of the Coastal States are the best performers. Gujarat, Maharashtra and Tamil Nadu occupy the top three ranks.
    • Six of eight coastal states feature in the top ten rankings, indicating the presence of strong enabling and facilitating factors to promote exports.
    • In the landlocked states, Rajasthan has performed the best, followed by Telangana and Haryana.
    • Among the Himalayan states, Uttarakhand is the highest, followed by Tripura and Himachal Pradesh.
    • Across the UTs, Delhi has performed the best, followed by Goa and Chandigarh.

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  • Coronavirus – Economic Issues

    Eat Out to Help Out Scheme

    Prelims Only | Economics | Mains Paper 3: Indian Economy

    Since the lockdown began in India, different bodies representing the country’s hospitality sector have repeatedly asked the government for financial assistance to help tide over the crisis. UK’s popular Eat Out to Help Out (EOHO) Scheme can be an example of the kind of intervention in India.

    Note: The ‘Eat Out to Help Out’ Scheme recently seen in news is related to Hospitality. One may get confused over Poverty and Hunger.

    What is the EOHO Scheme?

    • The EOHO Scheme is an economic recovery measure by the UK government to support hospitality businesses as they reopen after the lockdown.
    • The scheme was announced as part of the Plans for Jobs summer economic update.
    • Under the EOHO Scheme, the government would subsidise meals (food and non-alcoholic drinks only) at restaurants by 50 per cent.
    • There is no minimum spending and no limit on the number of times customers can avail the offer, since the whole point of the scheme is to encourage a return to dining in restaurants.

    Why was this scheme deemed necessary?

    • All over the world, the food services sector is one of the worst affected by the pandemic.
    • The top two concerns were customers avoiding restaurants for fear of contracting the virus and customers having less disposable income for dining out.
    • Instead of delivering a financial package to operators, it makes eating out more affordable for consumers directly and helps restore demand.
    • Restoring consumer demand is being seen as crucial to the UK’s economic recovery.

    Can India benefit from such a scheme?

    • The main problem confronting the restaurant industry, following Unlock 1.0 in June, has been consumer fear, even as the government has remained silent about specific recovery packages aimed at the hospitality industry.
    • The government needs to work on the demand side.

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  • RBI Notifications

    New umbrella entities (NUEs) for retail payments.

    | Economics | Mains Paper 3: Government Budgeting

    Context

    • Last week the Reserve Bank of India (RBI) released a document setting out the framework it plans to adopt to authorize the establishment of new umbrella entities (NUEs) for retail payments.

    What are NUEs

    • Once established, these newly authorized entities will be able to operate their own clearing and settlement systems.
    • establish new standards and technologies; and develop innovative new payment systems that enhance customer access, convenience and safety.
    • All NUEs will have to be interoperable with the National Payments Corporation of India (NPCI).
    • NPCI would also be allowed to set themselves up as for-profit entities, and they will themselves be able to participate in RBI’s payment and settlement systems.
    • The NPCI is at the epicentre of the digital payments in the country.

    If NPCI is doing its job well, then why NUE?

    • Between the UPI, IMPS, Aadhaar-enabled payments, Bharat BillPay, and all the other payment systems that it manages, 48% of all electronic retail payments in the country pass through the NPCI infrastructure.
    • NPCI is the fulcrum around which everything digital revolves.
    • Perhaps RBI’s concern stems from having the operations of so much of the country’s payment system concentrated in one entity.

    Are the concerns of RBI valid?

    • There is nothing wrong with having all digital transactions flow through a single entity—so long as that entity is neutral.
    • If RBI’s concern is technical, we could build sufficient redundancy into NPCI’s technical architecture to ensure that there is no single point of failure in the system.
    • Creating multiple umbrella entities is not the answer to this problem, as NUEs would be allowed to establish themselves as profit-oriented entities.
    • There is also the question of whether the trade-off is even worth it as replicating the NPCI infrastructure will require heavy investments to make participants in one NUE can seamlessly interact with those in every other.
    • Ensuring interoperability while still maintaining the security of the underlying infrastructure is going to be difficult and expensive.
    • There is the cost of the additional regulatory burden that RBI will have to shoulder, now that the banking-sector regulator will have to manage not just one but multiple umbrella entity.

    Issues with NPCI

    • There would be consequences to letting NPCI only entity in handling the payment system.
    • Any sort of monopoly results in market inefficiencies.
    • Of we have just one umbrella regulator, we will never be sure if transaction costs are as low as they could be, or if the variety of product offerings available to us could be better.
    • Problem is that the NPCI is expected to both manage the digital payments industry as well as come up with the frameworks necessary to foster innovation.
    • When NPCI had just small products in its portfolio it was able to perform both functions efficiently.
    • The effort of just keeping the system working seems to be taking a toll on NPCI’s ability to develop the protocols and standards that are needed to encourage innovation in this boom sector.

    What is the solution to issues faced by NPCI

    • One possible solution might be to create a separate and independent standards-setting body.
    • Such body would come up with the protocols and standards required to foster innovation in the digital payments space.
    • This is how most successful digital infrastructure systems work. Take the World Wide Web, for example.
    •  Any new standard that this body creates will have to first be approved by the NPCI, but then it can be rolled out throughout the digital payments ecosystem.

    Consider the question “Examine the role played by the NPCI in revolutionising the payment system in India.”

    Conclusion

    By establishing a neutral and independent standards-setting body, we can make sure that the system as a whole in our country evolves in the best traditions of digital infrastructure adopted anywhere in the world.

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  • RBI Notifications

    The idea of Central Bank Digital Currency in India

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    The article discusses the idea of digital currency supported by the RBI and its advantages.

    Purpose of NUE

    • RBI recently released the framework for the establishment of a new umbrella entity (NUE) for retail payments.
    • NUE would help reduce payments concentration risk with Unified Payments Interface (UPI) facilitating over 1.5 bn transactions a month.
    • Given the sticky adoption and only a few payments apps dominating the UPI market, RBI intends to create a parallel retail system.

    5 requirements payment systems should fulfil

    • 1) The payments system should reduce the cost and time for government support to reach unbanked and underbanked people.
    • 2) It should ensure ease of access to credit for small and medium businesses.
    • 3) Improve the effectiveness of the implementation of monetary policy.
    • 4) The new payment system should effectively counter risk from unregulated new digital currencies like Bitcoin.
    • 5) It should discourage money laundering and tax evasion.

    CBDC: Solution to the above 5 requirements

    • CBDC is the digital form of fiat money, a digital equivalent of banknotes and coins.
    • A Central Bank Digital Currency (CBDC) could potentially solve the above problems.
    • Retail CBDCs can be issued directly by the central bank to people without going through traditional banks.
    • Individuals would have CBDC accounts directly on the central bank core ledger.
    • CBDC can reduce the cost and time for government support to reach people during desperate times (like pandemic).
    • CBDC can also enable many financial entities to settle directly with RBI.
    • In the current set up only a few large banks can settle directly with RBI.
    • With a digital currency, the settlement can be instantaneous and, as a result, more payments services providers like NBFCs could connect with RBI, thereby, reducing credit and liquidity risk.
    • CBDC lending would build MSMEs history and make further lending easier.
    • For India to be a $5 tn economy, businesses need credit, and that can happen when we have more banks.
    • India had 97 banks in 1947; today we are still at 95!
    • Interest bearing CBDCs can also improve monetary policy effectiveness by enabling real-time pass-through of the policy rate to the lending markets.
    • CBDCs can also allow for direct deposits into accounts of low-income households, senior citizens dependent on pensions and help cushion their purchasing power from the low-level interest rates during the times of economic downturn.
    • CBDC can thwart some competition against privately issued foreign currency-denominated digital currencies.

    Roles and responsibility of RBI with respect to CBDC

    • In terms of managing roles and responsibilities, RBI would only hold the accounts and implement monetary policies as it does now.
    • Fintech companies can become the channel for retail CBDC transmission and manage client relationships.
    • Fintechs can complement the commercial banks and can draw small businesses/poor households into the formal economy.
    • These companies could leverage their data to estimate customers’ creditworthiness and share their findings to banks for more efficient allocation of credit.

    Consider the question “A digital currency backed by the central bank could transform the retail payment landscape in India. Discuss.”

    Conclusion

    India has been at the forefront of the fintech revolution, and other developed countries have been following its path. While the world watches the melee between the Greenback and the Renminbi, it is time India also lays the foundation for a strong currency. CBDC may just be one of the ways to do it.

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

    Boosting manufacturing

    op-ed snap | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth,Indian Economy

    The article analyses the issues of increasing manufacturing in India while dealing with the constraints faced by it. It also suggests the important role States can play.

    Why companies are expected to exit China

    • In the aftermath of the pandemic manufacturing companies are expected to exit China due to three primary reasons.
    • 1) Realisation that relying heavily on China for building capacities and sourcing manufacturing goods is not an ideal business strategy due to supply chain disruptions in the country caused by COVID-19.
    • 2) Fear of Chinese dominance over the supply of essential industrial goods.
    • 3) The growing risk and uncertainty involved in operating from or dealing with China in the light of geopolitical and trade conflicts between China and other countries, particularly the U.S.

    Where India stands in comparison with China

    • China ranks first in contribution to world manufacturing output, while India ranks sixth.
    • Against India’s target of share of manufacturing in Gross Domestic Product (GDP) to 25% by 2022, its share stood at 15% in 2018, only half of China’s figure.
    • Industry value added grew at an average annual rate of 10.68% since China opened up its economy in 1978, India’s grew at 7% after India opened up its economy.
    • Next to the European Union, China was the largest exporter of manufactured goods in 2018, with an 18% world share.
    • India is not part of the top 10 exporters who accounted for 83% of world manufacturing exports in 2018.

    Constraints faced by manufacturing sector in India

    India faces numerous constraints in promoting the manufacturing sector.

    • They chiefly include infrastructure constraints, a disadvantageous tax policy environment, restrictive trade policies, a non-conducive regulatory environment, rigid labour laws.
    • Constraints also include high cost of industrial credit, poor quality of the workforce, Low R&D expenditure, delays and constraints in land acquisition, and the inability to attract large-scale foreign direct investment into the manufacturing sector.

    What role States can play?

    • They  can  contribute land: Federal government system in India demands the participation of States for the lasting solution to the constraints on the sector.
    • An important requirement for the development of the manufacturing sector is the availability of land area.
    • This could be one of the reasons why manufacturing activity is mainly concentrated in Maharashtra, Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh.
    • However, what is of concern is that some States that also have large land area contribute disproportionately little in manufacturing GSDP.
    • These states include Andhra Pradesh, Bihar, Chhattisgarh, Madhya Pradesh, Odisha, Rajasthan, Telangana, and West Bengal.

    Way forward

    • Identify reasons: The reasons for less manufacturing activity in these States have to be carefully examined.
    • State-specific industrialisation strategies: Based on such reasons, State-specific industrialisation strategies need to be devised and implemented in a mission mode with active hand-holding by the Central government.
    • State specific reforms: Policy actions on the part of individual States would improve India’s overall investment climate, thereby boosting investments, jobs, and economic growth.
    • Policy actions of the Centre and the States should  be well coordinated: Strategy Group consisting of representatives from the Central and State governments along with top industry executives to instil teamwork and leverage ideas through sharing the best practices of the Centre and States could be formed.

    Consider the question “What are the constraints faced by the manufacturing sector in India? Suggest the ways to deal with these constraints highlighting the important role States can play in boosting manufacturing.”

    Conclusion

    Both the States and the Central government needs to work in tandem to boost the manufacturing in India and transform the economic landscape of India.

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  • Finance Commission – Issues related to devolution of resources

    India needs a Fiscal Council

    | Polity | Mains Paper 2: Federalism

    The newscard highlights the need of bipartisan, independent Fiscal Council to report and analyse FRBM discrepancies by the Government.

    Try this question for mains:
    Q.Fiscal Council is an important institution needed to complement the rule-based fiscal policy. Discuss.

    What is a Fiscal Council?

    • A Fiscal Council is an independent fiscal institution (IFI) with a mandate to promote stable and sustainable public finances.
    • They aim to provide nonpartisan oversight of fiscal performance and/or advice and guidance — from either a positive or normative perspective — on key aspects of fiscal policy.
    • These institutions assist in calibrating sustainable fiscal policy by making an objective and scientific analysis.

    Voices for a Fiscal Council

    • The 13th Finance Commission recommended that a committee be appointed by the Ministry of Finance which should eventually transform itself into a Fiscal Council.
    • The FC expected it to conduct an annual independent public review of FRBM compliance, including a review of the fiscal impact of policy decisions.
    • The FRBM Review Committee too made a similar recommendation underlining the need for an independent review by the Finance Ministry appointing the Council.

    Why need a fiscal council?

    (1)Burgeoning deficits

    • For the current year, even without any additional fiscal stimulus, the deficit is estimated at about 7% of GDP as against 3.5% estimated in the Budget due to a sharp decline in revenues.
    • The consolidated deficit of the Union and States could be as high as 12% of GDP and the overall debt could go up to 85%.
    • Thus it is necessary that the government must return to a credible fiscal consolidation path once the crisis gets over.

    (2)Transparency issues

    • Besides large deficits and debt, there are questions of comprehensiveness, transparency and accountability in the Budgets.
    • The practice of repeated postponement of targets, timely non-settlement of bill payments and off Budget financing to show lower deficits has been common.
    • The report of the CAG of India in 2018 has highlighted various advances done to keep the liabilities hidden.

    Fiscal Council can be a game changer. How?

    • First, an unbiased report to Parliament helps to raise the level of debate and brings in greater transparency and accountability.
    • Secondly, costing of various policies and programmes can help to promote transparency over the political cycle to discourage populist shifts in fiscal policy and improve accountability.
    • Third, scientific estimates of the cost of programmes and assessment of forecasts could help in raising public awareness about their fiscal implications and make people understand the nature of budgetary constraint.
    • Finally, the Council will work as a conscience keeper in monitoring rule-based policies, and in raising awareness and the level of debate within and outside Parliament.

    Issues meddling between

    • The problem is that a Council created by the Finance Ministry and reporting to it can hardly be expected to be independent.

    Diverse role to play ahead

    • According to the IMF, there were 36 countries with IFIs in 2014 and more have been established since.
    • While most of the IFIs are in advanced countries, emerging economies too have also shown growing interest in them.
    • Although their common agenda has been to function as watchdogs, there is considerable diversity in their structure and functions.
    • Over the years, monitoring compliance with fiscal rules and costing policies and programmes have become major tasks of these councils.

    Way forward

    • When the markets fail, governments have to intervene.
    • Whenever governments seem obstructed, it is here that we need systems and institutions to ensure checks and balances.
    • In that respect, a Fiscal Council is an important institution needed to complement the rule-based fiscal policy.

    Conclusion

    • Of course, it is not a ‘silver bullet’; if there is no political will, the institution would be less effective, and if there is political will, there is no need for such an institution.
    • That is also true of the FRBM Act. While we cannot state that the FRBM Act has been an unqualified success, it has also not been an abject failure either.

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  • Modern Indian History-Events and Personalities

    [pib] Cultural heritage of Hyderabad

    PIB | History and Art & Culture | Mains Paper 1: Arts & Culture

    Ministry of Tourism’s DekhoApnaDesh Webinar Series in its 50th session held a webinar on “Cultural heritage of Hyderabad”.

    Note various cultural sites mentioned in the newscard. The entire DekhoApnaDesh series is a potential hotspot for the coming Prelims.

    The story of Hyderabad City

    • Hyderabad is popularly known as the “City of Pearls” and the “City of Nizams”, and has been the centre of a vibrant historical legacy, ever since its inception by the Qutub Shahi dynasty.
    • The city was later conquered by Mughal Empire and finally falling in the hands of Asaf Jahi dynasty.
    • Muhammad Quli Qutb Shah established Hyderabad in 1591 to extend the capital beyond the fortified Golconda. In 1687, the city was annexed by the Mughals.
    • In 1724, Mughal governor Nizam Asaf Jah I declared his sovereignty and founded the Asaf Jahi dynasty, also known as the Nizams.
    • Hyderabad served as the imperial capital of the Asaf Jahis from 1769 to 1948.
    • As capital of the princely state of Hyderabad, the city housed the British Residency and cantonment until Indian independence in 1947.

    Cultural sites of Hyderabad:

    1) Golconda Fort, Hyderabad: A massive fortress whose ruins stand proudly even today displaying the glory of its rich past and some untold sagas of the city’s history. The place oozing charm is a must visit historical place in Hyderabad. Mohammed Quli understood the need of a new City and made Bhagnagar (after the name of his beloved Bhagmati) with Charminar in its centre.

    2) Chowmahalla Palace: Once the seat of the Asaf Jahi Dynasty, the Chowmahalla Palace was built in Hyderabad and is located near the famous monument, Charminar and Laad Bazar. The palace is designed very intricately and holds that Nawabi Charm in itself. Palace, the seat of power of Nizams, has bagged the UNESCO Asia-Pacific Heritage Merit Award for Culture Heritage Conservation.

    3) Charminar: The monument was erected when Quli Qutab Shah shifted his capital from Golconda to Hyderabad. The monument got its name from its structure as it consists of four minarets.

    4) Mecca Masjid: One of the oldest and the largest mosques of India is the grandest historical places in Hyderabad was completed by Aurangzeb in 1693.The bricks used here are believed to be from Mecca, and hence the name.

    5) Paigah tombs: Located in the suburbs of Pisal Banda in Hyderabad, Paigah Tombs are a group of tombs of the Paigah royal family. Although now in a derelict and dilapidated state, the tombs still boast of striking architecture and marvellously carved marble panels.

    6) Salar Jung Museum: Is an art museum established in the year 1951 and located at Dar-ul-Shifa, on the southern bank of the Musi River in the city of Hyderabad. The Salar Jung family is responsible for its collection of rare art objects from all over the world. The family is one of the most illustrious families in Deccan history, five of them having been prime-ministers in the erstwhile Nizam rule of Hyderabad-Deccan.

    7) Warangal Fort: This fort appears to have existed since at least the 12th century when it was the capital of the Kakatiya dynasty. The fort has four ornamental gates, known as Kakatiya Kala Thoranam, that originally formed the entrances to a now ruined great Shiva temple.

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  • Indian Navy Updates

    Dismantling INS Viraat

    Prelims Only | Security Issues | Mains Paper 3: Various Security Forces, Agencies & Their Mandates

    Decommissioned aircraft carrier INS Viraat is set to be scrapped at a ship breaking yard at Alang in Gujarat soon.

    In rarest case we would see a question based on this in CSP. However, we can expect a question based on INS Viraat in the CAPF exam very well.

    INS Viraat

    • Viraat, a Centaur class aircraft carrier weighing 27,800 tonnes, served in the British Navy as HMS Hermes for 25 years from November 1959 to April 1984.
    • It was commissioned into the Indian Navy in May 1987 after refurbishment and had operated Harrier fighter jets.
    • It was decommissioned from in March 2017, and the Navy had been incurring expenditure since then on its upkeep, such as the provision of electricity and water, and repairs.
    • In 2018, the Maharashtra Cabinet approved a proposal to convert the carrier into a museum and hospitality centre on a PPP basis and had invited bids. But there were no takers.

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