Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 3- How will India economy be impacted by the Covid-19?
Context
India is currently in the grip of dual shocks: Covid-19 and a financial one.
The supply and demand shock
- Containing outbreak at economic cost: Even as infection rates have tapered in China, they are rising elsewhere. Countries that have succeeded in containing it have done so at an economic cost, by quarantining people, implementing lockdowns and social distancing.
- This has resulted in a plateauing of new infection cases in China and South Korea, but they are still rising exponentially across Europe and the US.
- Supply shock: This is both a supply as well as demand shock. On the former, the impact is via disruptions in China-centred supply chains.
- Demand shock: But there is also a hit to final demand as infections spread across the rest of the world, hurting travel, tourism, hotels and local retail activity.
- Tightened financial condition: The correction in equity markets and wider credit spreads have tightened financial conditions, and both consumer and business confidence has faltered.
- Rising infections in Europe a big concern: Rising infections in Europe and the US are a big concern as both are large services-driven economies. Any pullback in their consumption demand will likely result in a demand shock for the rest of the world.
Global spillover of Covid-19
- Hitting economies in waves: One uncertainty pertains to how long this shock will last. There are no definite answers as of now. Covid-19 shocks are hitting economies in waves and countries are imposing lockdowns, one by one.
- Hence, instead of a synchronized global slump over one or two months, the economic impact is getting spread out.
- For example, supply chain disruptions and lockdowns in China are gradually easing, and we estimate that factories should be operating at full capacity by mid-April.
- Hit to travel and tourism to last till June: The hit to travel and tourism will last at least until June because even if the number of new infection cases eases, travellers will remain cautious initially.
- Demand in the US and Europe to remain low until April: Curtailment in discretionary demand due to social distancing in the US and Europe only started in March and will likely continue until April, if not longer.
- Global spillover to continue till May: The global spillovers of Covid-19 will likely be spread out over February and May, implying a weak first half of 2020.
- Whether the shocks last longer will depend on whether countries successfully contain infections.
- It also depends on the ability of countries to prevent spillover effects onto corporate balance sheets (more defaults) and the labour market (job losses).
- Global GDP to remain low in the first half: Global gross domestic product (GDP) growth in the first half of 2020 is likely to be weaker than during the global financial crisis of 2008-09, due to a sharp first-quarter decline in China, and weaker final demand in developed economies in the second.
What will be the impact on India?
- The economic hit to India will be felt through multiple channels.
- First, India is not a part of China-centric global value chains, but China accounts for a significant share of India’s imports (14%) and its production halt will hit India’s imports of
- primary and intermediate goods,
- disrupting domestic production,
- particularly in industries such as pharmaceuticals, auto, electronics, solar power and agriculture.
- Second, there will be a slowdown in international and domestic travel and tourism. India earns over 1% of GDP as foreign exchange earnings from tourism annually.
- Third, social distancing measures, along with the public fear factor will hit domestic retail activity as people avoid public places.
- Fourth, India will face the indirect effects of weaker global demand, tighter financial conditions and low confidence.
- Oil windfall offset: Even though lower oil prices are a boon, in the current environment any benefit from lower oil prices will be offset by other negatives.
- Domestic financial sector risk: Another big challenge for India relates to domestic financial sector risks.
- The spillover effect of Yes bank: Weak growth and financial stability concerns have been brewing for over a year now and the spillover effects of Yes Bank’s takeover are still reverberating through the system.
- The fallout of the shadow banking slowdown via potential stress for real estate developers and small and medium-sized enterprises is a risk.
- If the asset quality of both shadow banks and the banking sector deteriorate in the next few quarters, as is likely, then domestic credit conditions may stay tight, as the perceived risk premium could rise further.
- GDP growth rate: In this backdrop, the real activity could suffer. The GDP growth is expected to average around 4% year-on-year in the first half of 2020, with risks skewed to the downside.
- GDP growth in 2020-21 is unlikely to be more than 2019-20’s 5%.
Way forward
- An optimal policy response to Covid-19: The optimal policy response to is globally-coordinated public health safety and virus containment. India has taken some worthy decisions on this.
- Since Covid-19 will adversely impact service sectors like retail, hospitality, travel and civil aviation, the government’s fiscal policy response should be aimed well through measures such as tax relief and interest-free loans, particularly for small and medium enterprises.
- Liquidity easing and policy accommodation: On monetary policy, a combination of liquidity easing and policy accommodation would be needed beyond the moves already made.
- Macro-prudential steps such as lowering the counter-cyclical capital buffer for banks could be announced.
- Fixing the financial sector, though, would need a broader response, including a recognition of the full scale of the problem and then adequately recapitalising banks and shadow banks.
- Else, credit risk premia may stay elevated and credit growth may not pick up.
Conclusion
In all, the economic impact on India due to shocks emanating from Covid-19 could get compounded due to weak domestic balance sheets. The coming quarters call for close vigilance of credit risks and the prioritizing of financial stability.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Need to entrust the Human Right Commissions with more powers.
Context
The Madras High Court is to decide on whether the recommendations made by such panels are binding upon the state.
A fourth branch institution
- Enactment of the Act and its purpose: In 1993, the Indian Parliament enacted the Protection of Human Rights Act.
- Purpose: The purpose of the Act was to establish an institutional framework that could effectively protect, promote and fulfil the fundamental rights guaranteed by the Indian Constitution.
- To this end, the Act created a National Human Rights Commission, and also, Human Rights Commissions at the levels of the various States.
- What is fourth branch institution: The National and State Human Rights Commissions are examples of what we now call “fourth branch institutions.”
- According to the classical account, democracy is sustained through a distribution of power between three “branches” — the legislature, the executive, and the judiciary, with each branch acting as a check and a balance upon the others.
- The necessity of independent bodies: The complexity of governance and administration in the modern world has necessitated the existence of a set of independent bodies, which are charged with performing vital functions of oversight.
- Some of these bodies are constitutional bodies — established by the Constitution itself. These include, for instance, the Election Commission and the Office of the Comptroller and Auditor General.
- Others have been established under law: for example, the Information Commission under the Right to Information Act, and Human Rights Commissions under the Protection of Human Rights Act.
- HRC under scrutiny and criticism: In the two-and-a-half decades of their existence, however, the functioning of the Human Rights Commissions have come under scrutiny and criticism.
- There have been the usual critiques of the politicization of autonomous bodies, and selectiveness.
- Toothless: Even more than that, however, it has been alleged that for all intents and purposes, the Human Rights Commissions are toothless: at the highest, they play an advisory role, with the government left free to disobey or even disregard their findings.
Limitations of NHRC
- NHRC’s recommendations are not binding
- NHRC cannot penalize authorities who do not implement its orders
- JK is out of its jurisdiction
- NHRC jurisdiction does not cover human right violations by private parties
- 3/5 are judges, leading to more judicial touch to its functioning
- 2/5 are also not Human rights experts. Political appointments.
- Time limit is set to 1 year i.e. NHRC cannot entertain ca case older than 1 year
- Limited jurisdiction over violation by armed forces
- The act does not extend to J&K
- Vacancies are not filled on time. Most human rights commissions are functioning with less than the prescribed Members
- Fund crunch
- Overload and backlog. Too many complaints. Hence, in recent days, NHRC is finding it difficult to address the increasing number of complaints
- Bureaucratic style of functioning
What the case before Madras High Court will decide?
- Whether recommendations are mandatory or not: A Full Bench of the High Court will be deciding upon whether “recommendations” made by the Human Rights Commissions are binding upon their respective State (or Central) governments, or whether the government is entitled to reject or take no action upon them.
- What are the power of HRC under the act? Under the Protection of Human Rights Act, the Human Rights Commissions are empowered to inquire into the violations of human rights committed by state authorities, either upon petitions presented to them, or upon their own initiative.
- Powers of civil courts: While conducting these inquiries, the Commissions are granted identical powers to that of civil courts, such as the examining witnesses, ordering for documents, receiving evidence, and so on.
- These proceedings are deemed to be judicial proceedings, and they require that any person, who may be prejudicially affected by their outcome, has a right to be heard.
- Issue over the meaning of recommend: The controversy before the Madras High Court stems from the issue of what is to be done after the Human Rights Commission completes its enquiry, and reaches a conclusion that human rights have been violated.
- Section 18 of the Protection of Human Rights Act empowers the Human Rights Commission to “recommend” to the concerned government to grant compensation to the victim, to initiate prosecution against the erring state authorities, to grant interim relief, and to take various other steps.
- The key question revolves around the meaning of the word “recommend.”
- Opposite conclusion by different benches: The Full Bench of the Madras High Court is hearing the case because different, smaller benches, have come to opposite conclusions about how to understand the word “recommend” in the context of the Protection of Human Rights Act.
- According to one set of judgments, this word needs to be taken in its ordinary sense. To “recommend” means to “put forward” or to “suggest” something or someone as being suitable for some purpose.
- Ordinarily, a mere “suggestion” is not binding. Furthermore, Section 18 of the Human Rights Act also obligates the concerned government to “forward its comments on the report, including the action taken or proposed to be taken thereon, to the Commission”, within a period of one month.
- The argument, therefore, is that this is the only obligation upon the government.
- If indeed the Act intended to make the recommendations of the Commission binding upon the government, it would have said so: it would not simply have required the government to communicate what action it intended to take to the Commission (presumably, a category that includes “no action” as well).
Why ordinary meaning of recommend needs to be rejected?
- Argument against the ordinary meaning of “recommend”
- Ordinary meaning and meaning within the legal framework: The first is that there is often a gap between the ordinary meanings of words and the meanings that they have within legal frameworks.
- Legal meaning: Legal meaning is a function of context, and often, the purpose of the statute within which a word occurs has a strong influence on how it is to be understood.
- For example, the Supreme Court has held, in the past, that the overriding imperative of maintaining judicial independence mandates that “consultation” with the Chief Justice for judicial appointments (as set out under the Constitution) be read as “concurrence” of the Chief Justice (this is the basis for the collegium system).
- Recently, while interpreting the Land Acquisition Act, the apex court held that the word “and” in a provision had to be construed as “or”.
- Of course, there needs to be a good reason for interpretations of this kind.
- Constitutional commitment: This brings us to the purpose of the Human Rights Act, and the importance of fourth branch institutions.
- Ensure adequate realisation of constitutional commitment: As indicated above, the Human Rights Act exists to ensure the protection and promotion of human rights.
- To fulfil this purpose, the Act creates an institutional infrastructure, via the Human Rights Commissions.
- The Human Rights Commissions, thus, are bodies that stand between the individual and the state, and whose task is to ensure the adequate realisation of constitutional commitment to protecting human rights.
- Leaving decision with the state would defeat the purpose of the act: It stands to reason that if the state was left free to obey or disobey the findings of the Commission, this constitutional role would be effectively pointless, as whatever the Human Rights Commission did, the final judgment call on whether or not to comply with its commitments under the Constitution would be left to the state authorities.
- This, it is clear, would defeat the entire purpose of the Act.
- Past precedents: Indeed, in the past, courts have invoked constitutional purpose to determine the powers of various fourth branch institutions in cases of ambiguity.
- For example, the Supreme Court laid down detailed guidelines to ensure the independence of the Central Bureau of Investigation; various judgments have endorsed and strengthened the powers of the Election Commission to compulsorily obtain relevant details of candidates, despite having no express power to do so.
- It is therefore clear that in determining the powers of autonomous bodies such as the Human Rights Commission, the role those fourth branch institutions are expected to play in the constitutional scheme is significant.
- Powers of civil courts: And lastly, as pointed out above, the Human Rights Commission has the powers of a civil court, and proceedings before it are deemed to be judicial proceedings. This provides strong reasons for its findings to be treated — at the very least — as quasi-judicial, and binding upon the state (unless challenged).
- Indeed, very recently, the Supreme Court held as much in the context of “opinions” rendered by the Foreigners Tribunals, using very similar logic to say that these “opinions” were binding.
Conclusion
The crucial role played by a Human Rights Commission — and the requirement of state accountability in a democracy committed to a ‘culture of justification’ — strongly indicates that the Commission’s recommendations should be binding upon the state. Which way the Madras High Court holds will have a crucial impact upon the future of human rights protection in India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 3- Using technology to deal with epidemics.
Context
Coronavirus crisis is an opportunity for India to build on domestic technological capabilities in artificial intelligence, big data analytics, life sciences and health technology in the private sector.
How a small tech company flagged Covid-19 outbreak?
- What does it do? A small tech company in Canada — BlueDot — was among first outside China to spot a new epidemic spreading out from Wuhan last December.
- BlueDot, founded in Canada by a medical scientist of South Asian origin, Kamran Khan, tracks the origin and transmission of infectious diseases around the world.
- How could they detect the outbreak in China? BlueDot did this by sifting through massive volumes of news reports and blogs by individuals, including health professionals flowing out of China.
- Data analytics and medical expertise combined: BlueDot combines “public health and medical expertise with advanced data analytics to build solutions that track, contextualise, and anticipate infectious disease risks”.
- Use of AI: BlueDot is one of the many technology firms leveraging artificial intelligence for business and policy purposes.
- Many governments are reaching out to tech companies to cope with the corona crisis.
- The state government of California has just hired BlueDot to help it deal with the challenge.
The growing role of technology in dealing with coronavirus
- Across the world, policymakers see a growing role for technology in identification, tracking, and treating the coronavirus.
- Alibaba and Tencent’s help in China: In China, the Communist Party roped in big tech companies like Alibaba and Tencent in the battle against the virus.
- Silicon valley’s help in the US: In the US, President Donald Trump has set aside his well-known distaste for Democrat-leaning Silicon Valley to tackle what he now calls a war-like emergency.
- India will need all the science and technology it can get hold of in overcoming the crisis that is bound to escalate by the day.
- An opportunity to do good: For the small tech startups in related areas, this is a moment to shine. For the large tech companies, this is a huge opportunity to deploy their immense capabilities to resolve the specific problems posed by the spread of the coronavirus.
- In rising to the occasion, they could fend off a lot of the recent negative criticism of their business practices and demonstrate that their commitment to “doing good” is not just empty rhetoric.
- A good business proposition: “Doing good” is also a sensible business proposition at this time.
- As governments desperately seek solutions to the crisis, the tech startups and established companies leverage the moment to scale up many technologies, develop new uses and markets.
How countries used technology to deal with the outbreak
- How China used technology? In China, as the government moved decisively after the delayed initial response, it turned to-
- the well-established mass surveillance system based on facial recognition technologies,
- sensing technologies to identify those with fever in public places and
- data from mobile phone companies to trace the people who might be infected, and limit the spread of the disease.
- China also developed a Health Code that uses data analytics to-
- identify and assess the risk of every individual in a targeted zone based on travel history and time spent in infected places.
- The individuals are assigned a colour code (red, yellow, or green) which they can access via popular apps to know if they ought to be quarantined or allowed in public.
- How Korea used technology? Many Asian democracies like South Korea have also turned to AI tools to contain the spread of the disease.
- How the US used technology? As it copes with the rapid spread of the coronavirus, the US had no option but to use surveillance to contain it.
- Partners in dealing with outbreak: Unsurprisingly, the big tech companies in the US, based on collecting and monetising massive amounts of data from individuals, have inevitably become partners for Washington.
- But the relationship between the government, corporations and individual citizens in the US is governed by a welter of laws.
- There is mounting pressure now to tweak these laws to manage the corona crisis.
- The US is also liberalising the regulations on the access to, and use of, patients’ health records.
Growing collaboration between science and the state
- The race between China and the US: Overarching these arguments is a race between the US and China to find new vaccines for the coronavirus.
- And, more broadly, for the mastery of new scientific capabilities — from artificial intelligence to health technologies.
- The competition, in turn, is promoting a more intensive alliance between science and the state in both nations.
- Collaboration could accelerate the technological capabilities: The collaboration between science and the state during past crises led to a dramatic acceleration of technological capabilities.
- World War precedents: During the Second World War, science and the state got together to move nuclear physics from the lab to the battlefield.
- Cold War precedent: The Cold War between America and Russia promoted the development of space technology, microelectronics, communications and computing.
- Role of private entities: What marks out the current technological race between the US and China is the role of private and non-governmental entities.
- That might well be the missing link in India’s effort to beat the coronavirus.
Conclusion
- Opportunity for India: The current crisis, however, is also an opportunity for India to build on the existing domestic technological capabilities in the areas of artificial intelligence, big data analytics, life sciences, health technology in the private sector.
- India needs stronger private sector in science: In India, the state has dominated the development of science and its organisation. That was of great value in the early decades after Independence.
- Today, what Delhi needs is a stronger private sector in science and greater synergy with it in dealing with challenges like the corona crisis.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Various instruments of OMOs, OMOs
Mains level: Read the attached story
The Reserve Bank of India (RBI) has decided to infuse ₹10,000 crore liquidity in the banking system by buying government securities through open market operations (OMO).
What are Open Market Operations (OMOs)?
- OMOs are conducted by the RBI by way of sale and purchase of G-Secs to and from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis.
- When the RBI feels that there is excess liquidity in the market, it resorts to sale of securities thereby sucking out the rupee liquidity.
- Similarly, when the liquidity conditions are tight, RBI may buy securities from the market, thereby releasing liquidity into the market.
How and in what form can government securities be held?
- The public debt office (PDO) of RBI, acts as the registry and central depository for G-Secs.
- They may be held by investors either as physical stock or in dematerialized (demat/electronic) form.
- It is mandatory for all the RBI regulated entities to hold and transact in G-Secs only in dematerialized subsidiary general ledger or SGL form.
Types:
i) Physical form
- G-Secs may be held in the form of stock certificates. A stock certificate is registered in the books of PDO.
- Ownership in stock certificates cannot be transferred by way of endorsement and delivery.
- They are transferred by executing a transfer form as the ownership and transfer details are recorded in the books of PDO.
- The transfer of a stock certificate is final and valid only when the same is registered in the books of PDO.
ii) Demat form:
- Holding G-Secs in the electronic or scripless form is the safest and the most convenient alternative as it eliminates the problems relating to their custody, viz., loss of security.
- Besides, transfers and servicing of securities in electronic form is hassle free.
How are the G-Secs issued?
- G-Secs are issued through auctions conducted by the RBI.
- Auctions are conducted on the electronic platform called the E-Kuber, the Core Banking Solution (CBS) platform of RBI.
- The RBI, in consultation with the Government of India, issues an indicative half-yearly auction calendar which contains information about the amount of borrowing, the range of the tenor of securities and the period during which auctions will be held.
- The RBI conducts auctions usually every Wednesday to issue T-bills (Treasury Bills) of 91-day, 182-day and 364-day tenors.
- Settlement for the T-bills auctioned is made on T+1 day i.e. on a working day following the trading day. Like T-bills, CMBs are also issued at a discount and redeemed at face value on maturity.
- The tenor, notified amount and date of issue of the CMBs depend upon the temporary cash requirement of the Government. The tenors of CMBs are generally less than 91 days.
What is meant by repurchase (buyback) of G-Secs?
- Repurchase (buyback) of G-Secs is a process whereby the central government and state governments buy back their existing securities, by redeeming them prematurely, from the holders.
- The objectives of buyback can be the reduction of cost (by buying back high coupon securities), reduction in the number of outstanding securities and improving liquidity in the G-Secs market (by buying back illiquid securities) and infusion of liquidity in the system.
- The repurchase is also undertaken for effective cash management by utilising the surplus cash balances.
- The state governments can also buy back their high coupon (high-cost debt) bearing securities to reduce their interest outflows in the times when interest rates show a falling trend.
- States can also retire their high-cost debt pre-maturely in order to fulfil some of the conditions put by international lenders like Asian Development Bank, World Bank etc. to grant them low-cost loans.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Windrush Generation
Mains level: Windrush Scandal
The British government has apologised for its treatment of Britons of Caribbean origin, which were wrongly detained or deported for being illegal immigrants, after the publication of a devastating official report.
What is the scandal?
- The Windrush scandal is a 2018 British political scandal concerning people who were wrongly detained, denied legal rights, threatened with deportation, and, in at least 83 cases wrongly deported from the UK.
- Many of those affected had been born British subjects and had arrived in the UK before 1973, particularly from Caribbean countries as members of the “Windrush generation”.
- As well as those who were wrongly deported, an unknown number were wrongly detained, lost their jobs or homes, or were denied benefits or medical care to which they were entitled.
- A number of long-term UK residents were wrongly refused re-entry to the UK, and a larger number were threatened with immediate deportation by the Home Office.
- The scandal also prompted a wider debate about British immigration policy and Home Office practice.
Windrush Generation
- The Windrush generation is named after one of the many vessels that ferried some half a million people from the Caribbean islands to the U.K. in the late 1940s.
- The “Empire Windrush” ship had brought one of the first groups of West Indian migrants to the UK in 1948.
- The generation refers to migrants from the Caribbean Commonwealth who had come to the U.K. at a time when they had the right to remain indefinitely in Britain but had had their rights questioned under a toughened immigration regime.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Lipids, Non-polar compounds
Mains level: Not Much
A researcher from IIT Bombay is using biologically active lipid molecules as chemical biology tools to elucidate their biological disease-causing function.
About the research
- The research is focused to explore how lipids play critical roles in infectious diseases by intervening in cellular signaling, membrane trafficking, and protein function all of which are intimately involved in host-pathogen interplay.
- The research works with lipids from Mycobacteria tuberculosis (Mtb), which synthesizes atypical lipids predisposed on its surface to interact with the human host membrane.
- Using Mtb lipids as tools, the research elucidates a direct correlation between human host lipid membrane modification and modulation of associated signaling pathways by these exogenous Mtb lipids.
What are Lipids?
- A lipid is a biomolecule that is soluble in nonpolar solvents.
- Non-polar solvents are typically hydrocarbons used to dissolve other naturally occurring hydrocarbon lipid molecules that do not (or do not easily) dissolve in water, including fatty acids, waxes, sterols, fat-soluble vitamins (such as vitamins A, D, E, and K), monoglycerides, diglycerides, triglycerides, and phospholipids.
- The functions of lipids include storing energy, signaling, and acting as structural components of cell membranes.
- Lipids have applications in the cosmetic and food industries as well as in nanotechnology.
Role of Lipids
- Lipids are important components of living cells and are responsible for maintaining the integrity of our cell membrane, which allows nutrients and drugs to pass through the cell.
- These are commonly breached during infection and in diseases.
- Lipids play a major role in altering cell membrane properties modulating lipid and protein diffusion and membrane organization.
- Thus, changes in membrane properties control the proper functioning of cells and are harnessed by pathogens for their survival and infection.
- Lipids critically dictate the molecular interactions of drugs with membranes influencing drug diffusion, partitioning, and accumulation, thereby underpinning lipid-composition specificity.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: IUSSTF
Mains level: India-US collaboration in STEM
Indian students will undertake a research internship at Viterbi School of Engineering, University of Southern California, LA, USA under the IUSSTF Program.
What is IUSSTF?
- IUSSTF is an acronym for the Indo-U.S. Science and Technology Forum.
- It is established under an agreement between the Governments of India and the USA in March 2000.
- It is an autonomous bilateral organization jointly funded by both the Governments that promote Sci-Tech, Engineering and Innovation through substantive interaction among government, academia and industry.
- The Department of Science & Technology, Governments of India and the U.S. Department of States are respective nodal departments.
About Viterbi Program
- The Viterbi Program of IUSSTF was developed between IUSSTF and the Viterbi School of Engineering, University of Southern California (USC).
- This program is a part of the Government’s endeavour to encourage research and development amongst the bright young Indian minds to create long-term, sustainable, and vibrant linkages between India and the US.
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