Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Impact of the next U.S. President's policies on India's two major concerns
The article analyses two major concerns of India which would be influenced by the policies adopted by the next U.S. President.
Concern for India
- What policy President-elect Joe Biden will adopt in its foreign policy will has bearing on India.
- There are two foreign policy issues which are of great concern and interest — China and Iran in that order.
- For the world, the equation between the United States and China may be the relationship of the greatest consequence.
- For India, the most consequential relationship is not with the U.S. — as is sometimes claimed — but one with China.
- What happens in greater West Asia will always remain of concern, but those interests will not be affected one way or the other by who is the President of the U.S.
Quad dynamics and China
- In the Trump years, India signed all the ‘foundational’ agreements with America.
- India also bought billions of dollars worth of military hardware from them.
- India resisted converting the Quad into a primarily military or strategic grouping, and is in fact aimed solely at containing China.
- The Quad is an anti-China coalition.
- How far it can be successful in containing the Dragon remains to be seen.
- India’s External Affairs Minister has stated, India will not join any military alliance.
- However, given the fact that all the other three, and perhaps five or six in future, are already in strategic alliance with one another and with the U.S., it is highly likely that India too will be forced to agree to some form of military alliance at a future date.
- But no external power would want to get involved on our side in case of major hostilities with China.
- On the other hand, if there is a major skirmish or worse in the South China Sea, the other members of the Quad will expect us to join them in fighting China, in an area far removed from our shores.
Approach towards China
- If Mr. Biden adopts a more conciliatory approach towards China, India may find ourselves in a difficult situation.
- We do not want China to be permanently hostile to us; it will absorb huge resources, human and material.
- The strong rhetoric employed in relation to China will need to be tempered.
- Public opinion which has been worked up against China may make it difficult to do so immediately but the government is efficient in managing and moulding public opinion.
Approach toward Iran
- It may be difficult for Mr. Biden to quickly reverse Mr. Trump’s adventurist policy towards Iran.
- It may not be possible for him given the domestic compulsions, to readopt JCPOA in its original form.
- But he will surely, if slowly, engage Tehran in talks and negotiations through Oman or some other intermediary, to reduce tensions in the region.
- India may be able to buy Iranian oil, and sell our pharma and other goods to that country.
- The government may also feel less constrained in investing openly in oil and other infra projects in Iran, including the rail project in which Indian Railways Construction Ltd has been interested.
Conclusion
While India can’t expect the reversal of all Trump era policies, there will be certain changes in the stance adopted by the new U.S. President and India should be prepared to deal with it.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Funds allocated for containing air pollution and issue of its inadequacy
The article deals with the issue of allocation of funds to tackle air pollution and issues with it.
Allocation in the budget
- A ₹4,400 crore package was announced in last budget for 2020-21 to tackle air pollution in 102 of India’s most polluted cities.
- The funds would be used to reduce particulate matter by 20%-30% from 2017 levels by 2024 under the National Clean Air Programme (NCAP).
Issues with estimating the scale of the problem
- It is unclear if this amount is adequate because the scale of the problem is unknown.
- Delhi government spent money on the measurement of pollution for in Delhi that far exceeds s allocations that find mention in the Centre and State government’s budgeting books.
- The funds allocated don’t account for the trained manpower and the support system necessary to effectively maintain the systems and these costs are likely to be significant.
- Historically, cites have used manual machines to measure specified pollutants and their use has been inadequate.
- An analysis by research agencies Carbon Copy and Respirer Living Sciences recently found that only 59 out of 122 cities had PM 2.5 data available.
- Only three States, had all their installed monitors providing readings from 2016 to 2018.
- Prior to 2016, making comparisons of reduction strictly incomparable.
- Now manual machines are being replaced by automatic ones and India is still largely reliant on imported machines.
- In the case of the National Capital Region, at least ₹600 crore was spent by the Ministry of Agriculture over two years to provide subsidised equipment to farmers in Punjab and Haryana and dissuade them from burning paddy straw.
- Yet this year, there have been more farm fires than the previous year and their contribution to Delhi’s winter air woes remain unchanged.
- This indicates that money alone doesn’t work.
Conclusion
A clear day continues to remain largely at the mercy of favourable meteorology. While funds are critical, proper enforcement, adequate staff and stemming the sources of pollution on the ground are vital to the NCAP meeting its target.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Lessons from Bangladesh and Vietnam for Indian economy
The article examines the emergence of Bangladesh and Vietnam as the major export hubs in the world and explains the lessons India could draw from it.
Context
- Bangladesh has become the second-largest apparel exporter after China.
- Vietnam’s exports have grown by about 240% in the past eight years.
Analysing Vietnam’s success
- An open trade policy, a less inexpensive workforce, and generous incentives to foreign firms contributed to Vietnam’s success.
- Vietnam’s open trade policy through Free Trade Agreements (FTAs) means trading partners do not charge import duties on products made in Vietnam.
- Vietnam’s domestic market is open to the partners’ products.
- Vietnam has agreed to change its domestic laws to make the country attractive to investors.
- Over a decade or so, large brands such as Samsung, Canon, Foxconn, H&M, Nike, Adidas, and IKEA have flocked to Vietnam to manufacture their products.
What explains Bangladesh’s success?
- In Bangladesh, large export of apparels to the EU and the U.S. make the most of the country’s export story.
- The EU allows the import of apparel and other products from least developed countries (LDCs) like Bangladesh duty-free.
- India, as a good neighbour, accepts all Bangladesh products duty-free (except alcohol and tobacco).
- Bangladesh may not have this facility in four to seven years as its per capita income rises and it loses the LDC status.
- Bangladesh is working smartly to diversify its export basket.
Lessons for India
- The key learning from Bangladesh is the need to support large firms for a quick turnover.
- Yet, most of Vietnam’s exports happen in five sectors, in contrast, India’s exports are more diversified.
- The Economic Complexity Index (ECI), which ranks a country based on how diversified and complex its manufacturing export basket is, illustrates this point.
- The ECI rank for China is 32, India 43, Vietnam 79, and Bangladesh 127.
- India, unlike Vietnam, has a developed domestic and capital market.
- To further promote manufacturing and investment, India could set up sectoral industrial zones with pre-approved factory spaces.
- There should be no need to search for land or obtain many approvals.
India should pursue organic growth
- Most of Vietnam’s electronics exports are just the final assembly of goods produced elsewhere.
- In such cases, national exports look large, but the net dollar gain is small. China also faces this issue.
- Country’s Export to GDP ratio (EGR) indicates its export capacity.
- Vietnam’s EGR is 107%, such high dependence on exports brings dollars but also makes a country vulnerable to global economic uncertainty.
- The U.S.’s EGR is 11.7%, Japan’s is 18.5%, India’s is 18.7%. Even for China, with all its trade problems, the EGR is 18.4%.
- Most such countries, including India, follow an open trade policy, sign balanced FTAs, restrict unfair imports, and have a healthy mix of domestic champions and MNCs.
- While export remains a priority, it is not pursued at the expense of other sectors of the economy.
- The focus is on organic economic growth through innovation and competitiveness.
Consider the question “While export is essential for the growth of the country, over-dependence on it and its promotion at the expense of the other sectors could do more harm to the economy than good. Comment.”
Conclusion
With reforms promoting innovation and lowering the cost of doing business, India is poised to attract the best investments and integrate further with the global economy without increasing its dependence on export.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Finance Commission
Mains level: Mandate of the Finance Commission
The 15th Finance Commission, chaired by NK Singh, on Monday submitted its final report for 2021-22 to 2025-26 to the President.
Try this PYQ:
With reference to the Finance Commission of India, which of the following statements is correct?
(a) It encourages the inflow of foreign capital for infrastructure development
(b) It facilitates the proper distribution of finances among the Public Sector Undertakings
(c) It ensures transparency in financial administration
(d) None of the statements (a), (b) and (c) given above is correct in this context
Key recommendations that would feature in its final report:
- A separate defence and national security: The viability of creating a separate defence and national security fund as suggested by the Centre.
- States would keenly await these recommendations as it may translate into a lower share of funds for them.
- GST compensation dues to States: The panel is also expected to factor in unpaid GST compensation dues to States for this year, while working out State’s revenue flow calculations for the years beyond 2022.
Formula that decides a State’s share:
| Weight in 15th FC |
Parameters |
Weight in 14th FC |
| 15 (2011 Census) |
Population |
27.5 (17.5 – 1972, 10 – 2011 Census) |
| 15 |
Area |
15 |
| 10 |
Forest and Ecology |
7.5 |
| 45 |
Income Distance |
50 |
| 12.5 |
Demographic Performance |
– |
| 2.5 |
Tax Effort |
|
What is the Finance Commission?
- The Finance Commission (FC) was established by the President of India in 1951 under Article 280 of the Indian Constitution.
- It was formed to define the financial relations between the central government of India and the individual state governments.
- The Finance Commission (Miscellaneous Provisions) Act, 1951 additionally defines the terms of qualification, appointment and disqualification, the term, eligibility and powers of the Finance Commission.
- As per the Constitution, the FC is appointed every five years and consists of a chairman and four other members.
- Since the institution of the First FC, stark changes in the macroeconomic situation of the Indian economy have led to major changes in the FC’s recommendations over the years.
Constitutional Provisions
Several provisions to bridge the fiscal gap between the Centre and the States were already enshrined in the Constitution of India, including Article 268, which facilitates levy of duties by the Centre but equips the States to collect and retain the same.
Article 280 of the Indian Constitution defines the scope of the commission:
- The President will constitute a finance commission within two years from the commencement of the Constitution and thereafter at the end of every fifth year or earlier, as the deemed necessary by him/her, which shall include a chairman and four other members.
- Parliament may by law determine the requisite qualifications for appointment as members of the commission and the procedure of selection.
- The commission is constituted to make recommendations to the president about the distribution of the net proceeds of taxes between the Union and States and also the allocation of the same among the States themselves. It is also under the ambit of the finance commission to define the financial relations between the Union and the States. They also deal with the devolution of unplanned revenue resources.
Why need the Finance Commission?
- As a federal nation, India suffers from both vertical and horizontal fiscal imbalances.
- Vertical imbalances between the central and state governments result from states incurring expenditures disproportionate to their sources of revenue, in the process of fulfilling their responsibilities.
- However, states are better able to gauge the needs and concerns of their inhabitants and therefore more efficient at addressing them.
- Horizontal imbalances among state governments result from differing historical backgrounds or resource endowments and can widen over time.
- The first FC was established in 1951 by Dr B.R. Ambedkar, the then-incumbent law minister, to address these imbalances.
Important functions
- Distribution of net proceeds of taxes between Center and the States, to be divided as per their respective contributions to the taxes.
- Determine factors governing Grants-in-Aid to the states and the magnitude of the same.
- To make recommendations to the president as to the measures needed to augment the Fund of a State to supplement the resources of the panchayats and municipalities in the state on the basis of the recommendations made by the finance commission of the state.
- Any other matter related to it by the president in the interest of sound finance.
Members of the Finance Commission
- The Finance Commission (Miscellaneous Provisions) Act, 1951 was passed to give a structured format to the finance commission and to bring it to par with world standards.
- It laid down rules for the qualification and disqualification of members of the commission, and for their appointment, term, eligibility and powers.
- The Chairman of a finance commission is selected from people with experience of public affairs. The other four members are selected from people who:
- Are, or have been, or are qualified, as judges of a high court,
- Have knowledge of government finances or accounts, or
- Have had experience in administration and financial expertise; or
- Have special knowledge of economics
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not Much
Mains level: Impact of US regime change on India
Donald Trump’s rise to the White House as well as his exit has led to a wide reactionary response in India.
Also read:
[Burning Issue] India US relations in the backdrop of recent hiccups
(1) Economic Impact
Trade
- There are several ways in which the US economy, its health and the policy choices of its government affect India.
- For one, the US is one of those rare big countries with which India enjoys a trade surplus. In other words, we export more goods to the US than what we import from it.
- The trade surplus has widened from $5.2 billion in 2001-02 to $17.3 billion in 2019-20.
- Under a Biden administration, India’s trade with the US could recover from the dip since 2017-18.
FDI and FPI
- The US is the fifth-biggest source for Foreign Direct Investment (FDI) into India. Of the total $476 billion FDI that has come in since April 2000, the US accounted for $30.4 billion — roughly 6.5 per cent — directly.
- Only Mauritius, Singapore, Netherlands, and Japan have invested more FDI since 2000.
- Apart from FDI the US also accounts for one-third of all Foreign Portfolio Investments (that is, investment in financial assets) into India.
Ending protectionism
- A Biden presidency may also see a renewed push towards a rules-based trading system across the world.
- Instead of outright ad-hocism as was the case under Trump — as well as a move away from the protectionist approach that has been getting strong across the world.
(2) Visa
- For instance, how a US President looks at the H1-B visa issue, affects the prospects of Indian youth far more than the youth of any other country.
- Under Trump, who severely curtailed the visa regime, thanks to his policy of “America First”, India had suffered the most.
- That could change under Biden, who is unlikely to view immigrants and workers from India with Trump-like suspicion.
(3) Technology
- Other points of contention between India and the US are the tricky issue of data localisation or capping prices of medicines and medical devices.
- These have a better chance of getting towards a resolution as we move away from the radical approach of President Trump to the pragmatism of a Biden presidency.
(4) Diplomacy
- Further, under the Trump administration, the US sanctions on Iran severely limited India’s sourcing of cheap crude oil.
- For an economy such as India, which needs a regular supply of cheap oil to grow fast, a normalization of US-Iran relationship (and lifting of sanctions) would be more than useful.
- On China, too, while the US apprehensions are unlikely to be fewer. It is more likely that a Biden administration will help India against China, instead of clubbing the two together.
(5) Climate Action
- Biden has promised to rejoin the Paris Climate Accord, and this may help countries such as India in dealing with the massive challenges — both technical and financial — on this front.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GRACE FO mission
Mains level: Impact of climate changes on Cryosphere
The GRACE-FO mission has mapped deviation in Earth’s surface mass and spatial variations in the rate of sea-level rise between 1993 and 2018 using altimetric and gravimetric analysis.
Try this MCQ:
Q.NASA’s VIPER mission sometimes seen in news is related to the study of-
a)Moon
b)Venus
c)Sun
d)None of these
GRACE-FO Mission
- The Gravity Recovery and Climate Experiment Follow-On (GRACE-FO) mission launched in 2018 is a partnership between NASA and the German Research Centre for Geosciences (GFZ).
- It is a successor to the original GRACE mission, which orbited Earth from 2002-2017.
- It carries on the extremely successful work of its predecessor while testing a new technology designed to dramatically improve the already remarkable precision of its measurement system.
How did NASA measure this?
(1) Altimetric Study
- Altimetry missions are used to know the ocean surface topography — the shape and height of the ocean’s peaks and valleys.
- Radar altimeters continually send out pulses of radio waves (microwaves) that bounce off the surface of the ocean and reflect back toward the satellite.
- The instrument calculates the time it takes for the signal to return, while also tracking the precise location of the satellite in space. From this, scientists can derive the height of the sea surface directly underneath the satellite.
(2) Gravimetric Study
- Gravimetry is a process of using ice’s gravitational pull on a pair of satellites. It helps estimate ice loss and its contribution to sea-level rise.
- The twin satellites in each mission detect subtle shifts in Earth’s gravity field.
- The strength of gravitational forces is determined by mass, so changes in Earth’s gravity field indicate a change or redistribution in mass.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Income Tax Appellate Tribunal
Mains level: Not Much
PM will inaugurate the office cum residential complex of Income Tax Appellate Tribunal (ITAT) at Cuttack in Odisha.
Income Tax Appellate Tribunal
- Income Tax Appellate Tribunal, also known as ITAT, is an important statutory body in the field of direct taxes and its orders are accepted as final, on findings of fact.
- ITAT was the first Tribunal to be created on 25th January, 1941 and is also known as ‘Mother Tribunal’.
- Starting with three benches, at Delhi, Bombay and Calcutta it has now grown to 63 Benches and two circuit benches spread across thirty cities of India.
- With a view to ensuring highest degree of independence of the ITAT, it functions under the Department of Legal Affairs in the Ministry of Law and Justice and is kept away from any kind of control by the Ministry of Finance.
Did you notice this?
ITAT was the very first tribunal constituted in India! And it functions under the Ministry of Law and Justice and not the obvious looking Ministry of Finance.
It’s Functioning
- It is the second appellate authority under the direct taxes and first independent forum in its appellate hierarchy.
- The orders passed by the ITAT can be subjected to appellate challenge, on substantial questions of law, before the respective High Court.
- Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from ₹15 lakh to ₹50 lakh in 2016 Union Budget.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India-Maldives relation
The Soleh government’s ‘India First Policy’ provides respite to India when contrasted with the approach of the predecessors.
India-Maldives relations
- India and the Maldives have had bilateral relations for centuries.
- Maldivian students attend educational institutions in India.
- Patients from the Maldives come here for super speciality healthcare.
- A liberal visa-free regime extended by India has aided the patients.
- The Maldives is now a major tourist destination for some Indians and a job destination for others.
- Given the geographical limitations imposed on the Maldives, India has exempted the nation from export curbs on essential commodities.
Assistance to the Maldives
- In 1988, under Operation Cactus when a coup was attempted against President, India sent paratroopers and Navy vessels and restored the legitimate leadership.
- The 2004 tsunami and the drinking water crisis in Male a decade later were other occasions when India rushed assistance.
- In COVID-19 disruption, India rushed $250 million aid in quick time and also rushed medical supplies to the Maldives, started a new cargo ferry and also opened an air travel bubble, the first such in South Asia.
Strategic comfort to India
- Abdulla Yameen was President when the water crisis occurred.
- Now, the Yameen camp has launched an ‘India Out’ campaign against New Delhi’s massive developmental funding.
- Maldivian protesters recently demanded the Solih administration to ‘stop selling national assets to foreigners’, implying India.
- Mr. Yameen’s tilt towards China and bias against India when in power was evident.
- It is against this background that the Solih administration’s no-nonsense approach towards trilateral equations provide ‘strategic comfort’ to India.
Concerns for India
- India should be concerned about the protests as well as the occasional protest within the ruling Maldivian Democratic Party (MDP) of Mr. Solih.
- There are apparent strains between Mohamed Nasheed, who was the nation’s first President elected under a multiparty democracy and Mr. Yameen.
- This strain could affect the MDP during the run-up to the 2023 presidential polls.
- Also, Mr. Nasheed’s on-again-off-again call for a changeover to a ‘parliamentary form of government’ can polarise the overpoliticised nation even more.
Conclusion
Given this background and India’s increasing geostrategic concerns in the shared seas, taking forward the multifaceted cooperation to the next stage quickly could also be at the focus of relations of the two countries.
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