Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Bank governance
What the guidelines say
- The Reserve Bank of India recently issued certain instructions on the governance for banks.
- As per the instructions from the central bank, the post of Managing Director (MD) and Chief Economic Officer (CEO) MD or Whole Time Director (WTD) cannot be held by the same incumbent for more than 15 years.
- The individual will be eligible for re-appointment as MD&CEO or WTD in the same bank after a minimum gap of three years, subject to meeting other conditions.
- The upper age limit for MD & CEO and WTDs in private banks would continue to be 70 years.
- MD&CEO or WTD who is also a promoter/ major shareholder, cannot hold these posts for more than 12 years except in extraordinary circumstances.
- Banks are permitted to comply with these instructions latest by October 01, 2021.
Applicability
- These guidelines are applicable for banks, including private banks, Small Finance Banks (SFBs), Wholly Owned Subsidiaries of Foreign Banks.
- However, it added that this circular is not applicable to foreign banks operating as branches in India.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Issues with vaccination strategy
The article highlights the issues with the new vaccine strategy adopted by the government.
Revamped vaccine strategy
- With the second Covid-19 wave reaching catastrophic proportions, the Government of India has acted by unveiling a completely revamped vaccine strategy.
- Two key elements are the hallmark of this new strategy, which will be implemented from May 1.
- First, the vaccination drive has now been extended to the entire adult population, namely, to those above 18 years.
- Second, vaccine manufacturers have been given the freedom to sell 50% of their vaccine production to State governments and private hospitals.
- A third element of the vaccine strategy, which was not announced formally, is a grant of ₹45 billion to the two vaccine manufacturers, the Serum Institute of India (SII) and Bharat Biotech, to boost their capacities.
Issues with the new vaccine strategy
1) Control over the market for vaccine
- The central government has given up its control over the market for vaccines, a key feature of the vaccine roll-out plans thus far.
- This issue assumes further significance since the Government of India is well aware about the significance of vaccinating every citizen in the country; “none of us will be safe until everyone is safe”.
- It is, therefore, vitally important that public health authorities in the country take an objective view of the realities of the country before adopting strategies for vaccine availability.
2) Vaccine export
- The phased roll-out of the government’s ambitious vaccination drive, beginning with health-care and frontline workers in January was in sync with the availability of vaccines in the country.
- But, given that India too saw a degree of “vaccine-scepticism”, the Government of India found itself in a situation where it could promise exports of vaccines to 95 countries, mostly in Africa and Asia.
- As of April 26, these countries have received more than 66.4 million doses of vaccines from India.
- Until now, nearly 142 million vaccine doses have been administered in the country, the third highest in the world.
- However, in terms of population share, less than 2% has received both vaccine doses, while less than 9% has received one dose.
- But there is one worrying facet, which is that a demand-supply mismatch has begun to appear as the coverage of the vaccine-eligible population expanded.
- The largest supplier, SII, gave two explanations for its inability to meet its commitments.
- The first was that the United States Government had restricted exports of vaccine culture and other essential materials.
- Second, the company complained that it lacked the financial capacity to expand its production, requesting a grant of ₹30 billion from the government.
3) Onus on the States
- Central government have allowed vaccine producers to sell 50% of their production directly to State governments and private hospitals.
- The central government would continue to support vaccination for people above 45 years, and health-care workers and frontline workers.
- The new strategy shifts the onus onto the State governments, which have to take decisions regarding free vaccination for people above 18 years.
- The government has not fixed the vaccine prices and has allowed the producers to pre-declare the prices they would charge from the State governments and private hospitals, a sharp departure from the extant strategy.
- New policy fragments the market into three layers namely, central government procurement, State government procurement and the private hospitals.
- This layering of the market would allow the producers to charge high prices from the State governments and private hospitals.
- The new strategy would shift the burden of vaccination of the young population, namely, those between 18-44 years, entirely on the State governments.
- This implies that the vaccination of a significant section of the population depends on the financial health of each State government, resulting in inequitable access to vaccines across States.
4) Public money given for expanding production capacity
- In view of the advance of ₹45 billion made by the Government of India to the two vaccine producers in India for expanding their production capacities decision to deregulate the vaccine market raises serious questions.
- This question is more pertinent in India, where access to affordable vaccines is critical for ensuring “vaccination for all”.
Way forward
- Rather than allowing duopoly in the vaccine market, the government should have ensured a competitive market for vaccines.
- One positive step that the government has taken in this direction is to increase production of Bharat Biotech’s vaccine through the involvement of three public sector undertakings, including Haffkine Institute.
- There is a need for more open licensing of this vaccine to scale up production.
Conclusion
There can be no alternative to vaccination for all if we want to overcome the Covid and to ensure that government needs to rethink its new strategy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: BEPS
Mains level: Paper 3- Global minimum tax
The article highlights the issue of race among countries to offer low corporate taxes to attract global financial capital and its implications.
What factors contributed to low corporate tax
- When the Soviet Bloc collapsed in 1990, nations in east Europe were badly hit and needed capital infusion to overcome their economic woes.
- To attract global capital, they cut their tax rates sharply. This resulted in a ‘race to the bottom’.
- Global financial capital which is highly mobile has effectively used tax havens and shell companies to shift profits and capital across the globe.
- This mobility has enabled it to extract concessions from countries by making them compete with each other to match the concessions given by another — that is the ‘race to the bottom’.
- Nations in Europe were forced to cut their tax rates one after the other to not only attract capital but also to prevent capital from leaving their shores.
- Also, any country facing economic adversity can cut its tax rates to attract capital and force others to follow suit.
- India has also cut its tax rates since the 1990s.
- Most recently in 2019 the corporation tax rate was cut drastically to match those prevailing in Southeast Asia.
Implications of lower corporate tax rate
1) Shortage of resources
- The race to the bottom had global implications.
- Nations became short of resources and cut back expenditures on public services and encouraged privatisation.
- The developing countries followed suit even though private markets do not cater to the poor.
- Thus, disparities increased within nations.
2) Base Erosion and Profit Shifting
- The world experienced Base Erosion Profit Shifting (BEPS).
- Namely, companies shifted their profits to low tax jurisdictions, especially, the tax havens.
- For instance, many of the most profitable companies like Google and Facebook are accused of shifting their profits to Ireland and other tax havens and paying little tax.
- EU has levied fines on Google and Apple for such practices.
- Since all the OECD countries have suffered due to cuts in tax rates and BEPS, initiatives have been taken to check these practices.
- But they will not succeed unless there is agreement among all the countries.
3) Regressive tax structure
- Another implication of the reductions in direct tax rates has been that governments have increasingly depended on the regressive indirect taxes for revenue generation.
- Value-Added Tax and Goods and Services Tax have been increasingly used to get more revenues.
- This impacts the less well-off proportionately more and is inflationary.
- Direct taxes tend to lower the post-tax income inequality.
- The rising inequalities result in shortage of demand in the economy and to its slowing down which then requires more investment and that calls for more concessions to capital.
Call for Global minimum tax rate
- It is against this backdrop that United States Secretary of the Treasury Janet L. Yellen’s has proposed a global minimum tax rate.
- But, without global coordination, corporation tax rates cannot be raised.
- The U.S. is crucial to this coordination.
- There will also have to be cooperation among countries to tackle the lure of the tax havens by enacting suitable global policies.
Consider the question “What factors contributed to the race to bottom on the corporate taxes among the countries? What are its implications? Will the global minimum tax rate be able to deal with it?”
Conclusion
The impact of all this will be far-reaching impacting inequalities, provision of public services and reduction of flight of capital from developing countries such as India and that will impact poverty.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- India as third highest military spender
What the SIPRI database says
- India was the third largest military spender in the world in 2020, behind only the US and China.
- The US accounted for 39 per cent of the money spent on military globally, China accounted for 13 per cent, and India accounted for 3.7 per cent of the globe’s share.
- The US spent a total of $778 billion in 2020, China spent $252 billion and India’s military expenditure was $72.9 billion.
- The United States’ military spending was 3.7 per cent of its GDP while the corresponding numbers for China and India were 1.7 per cent and 2.9 per cent respectively.
- The other top spenders included Russia with $61.7 billion, the UK at $59.2 billion, Saudi Arabia at $57.5 billion, followed by Germany and France at just under $53 billion each.
Increase in spending in the year of pandemic
- SIPRI said that the total “global military expenditure rose to $1981 billion last year, an increase of 2.6 per cent in real terms from 2019.
- 2.6 per cent increase in world military spending came in a year” when the global GDP shrank by 4.4 per cent largely due to the economic impacts of the Covid-19 pandemic.
- Military spending as a share of GDP—the military burden—reached a global average of 2.4 per cent in 2020, which is the biggest year-on-year rise in the military burden since the global financial and economic crisis in 2009.
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From UPSC perspective, the following things are important :
Prelims level: Herd immunity
Mains level: Paper 2- Herd immunity and issues related to it
What is herd immunity
- The herd immunity concept is based on lowering the number of susceptible individuals.
- If sufficient individuals in the population are immune either through vaccination or a prior exposure, then the number of susceptible individuals drops.
- For example, if the immune population is 70%, then the susceptible population is 30%.
Does herd immunity really protect from subsequent waves?
- The number of daily cases depends on three factors: The number of infectious people in the population, the number of susceptible individuals, and the rate of transmission of the virus.
- The rate of transmission is dependent on the nature of the virus and the extent of contact between individuals.
- So, if the rate of transmission increases due to change in social behaviour and increased contact then even with a large percentage of the immune population, a significant number of daily cases can result.
- The “herd immunity” number is not a static number but it changes depending on the rate of transmission of the virus and the extent of virus present.
Estimating exposures in metro cities
- Serosurveys indicated that Covid had touched 56% of population in Delhi by January; 75% in some slums Mumbai in November, and about 30% in Bengaluru in November.
- The population touched by Covid can also be estimated by the Infection Fatality Rate (IFR).
- This is the total number of deaths divided by the total people infected. In India, the estimate is 0.08%.
- So this number can be used to back-calculate the number of infections based on the number of deaths in the different cities.
- The table given below shows the number of people exposed to Covid in some metros until January 31 using the method above.
What are the reasons behind the recent surge
- The reasons behind the recent surge are not fully understood.
- The one factor that is not in doubt, however, is that interaction and contact with the population has increased since February.
- Such increased contact increased the virus in circulation and led to increased cases in the susceptible population.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Factors to consider in finding solution to conflicts in Afghanistan and Myanmar
The article highlights the inherent difficulty in finding a solution to the two conflicts raging on in India’s neigbourhood.
Tale of two conflicts in neighbourhood
- Efforts to end two major conflicts in India’s neighbourhood have become intense.
- To the west, a peace summit on Afghanistan, seeking to end decades of conflict there, was also scheduled to take place in Istanbul over the weekend.
- To the east, the Association of Southeast Asian Nations (ASEAN) has produced a diplomatic opening with Myanmar’s military leadership.
- Afghan conflict go back to the late 1970s; since then we have seen different phases of the conflict.
- Although the crisis in Myanmar appears recent, the tension between civil-military relations is not new.
- Back in 1988, the army annulled the huge mandate won by Aung San Suu Kyi and unleashed massive repression.
3 Common Themes in the effort at peace and reconciliation
1) Ending violence
- The first is about ending violence.
- In Afghanistan it has been near impossible to get a resurgent Taliban to agree to stop its attacks on government forces or the civilian population.
- The ASEAN initiative in Myanmar calls for an immediate cessation of violence and utmost restraint from all sides.
- The opposition demanding restoration of democracy might find this rather ironic, since it is the army that is employing violence and has shown scant restraint.
2) Dialogue among all parties
- The second theme in the ASEAN initiative — “constructive dialogue among all parties” to “seek a peaceful solution” — is also common to all peace processes.
- The Taliban found all kinds of excuses to delay a dialogue with the Kabul government that it always saw as illegitimate. So far, it has avoided one.
- In Myanmar, the army might be ready to engage the opposition in a prolonged dialogue and defuse international pressure; but it will be hard for the victims of the coup to accept a dialogue on the army’s terms.
3) Third-party mediator
- The Afghan conflict has long been internationalised.
- All major powers, including regional actors and neighbours, have acquired stakes in the way the Afghan conflict is resolved.
- This unfortunately makes the construction of an internal settlement that much harder.
- In Myanmar, the ASEAN has set the ball rolling by agreeing that a special envoy will be traveling to the region and will engage with all parties to the conflict.
Cost-benefit in diplomacy
- The US is hoping that the Taliban will moderate some of its hardline positions given its need for significant international economic assistance for reconstruction, political legitimacy.
- In Myanmar, too, the international community will hope the military would want to avoid the risks of political isolation and economic punishment.
- But how the Taliban and the Myanmar army calculate these costs and benefits could be very different.
- Both have long experience of surviving external pressure and enduring sanctions.
Conclusion
Few civil wars have seen the kind of massive external effort to change the internal dynamics as in Afghanistan; but to no avail. In Myanmar, it is not clear how far the international community might go. The prospects for positive change in Afghanistan and Myanmar, then, do not look too bright in the near term.
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From UPSC perspective, the following things are important :
Prelims level: Disaster Management Act 2005
Mains level: Paper 2- Governance issues during pandemic
Order under Disaster Management Act 2015
- Invoking the Disaster Management Act, the Centre ordered States that all liquid oxygen shall be made available to the government and will be used for medical purposes only.
- The order said that under section 10(2)(I) and section 65 of the DM Act, States had to ensure that “liquid oxygen is not allowed for any non medical purpose”
- The order was passed after the review of oxygen supply situation in the country.
Dealing with the shortage
- On April 22, Centre issued order under the DM Act, making the district magistrates and senior superintendent of police personally liable to allow unhindered inter-State movement of vehicles carrying medical oxygen.
- Despite MHA’s orders and letters, States continued to flag shortage of oxygen supply.
- Medical oxygen to States are being provided as per daily quota decided by an empowered group of officers in central ministries.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: What constitute M3
Mains level: Paper 3- Increase in currency with public
Increase in currency with the public
- During the fortnight ended April 9, currency with the public jumped by Rs 30,191 crore to hit a new high of Rs 27,87,941 crore.
- In the six-week period between February 27 and April 9, currency with the public rose by Rs 52,928 crore, show RBI data.
- Experts said the increase in currency with the public is on account of the fear of imposition of lockdowns by state or central governments.
How currency with public is arrived at
- According to the RBI, currency with the public is arrived at after deducting the cash with banks from the total currency in circulation.
- Currency in circulation, which includes notes in circulation, rupee coins, and small coins, refers to cash or currency within a country that is physically used to conduct transactions between consumers and businesses.
- It effectively means the currency that individuals across the country hold with themselves.
M3 has gone up
- Money supply in the economy – or M3 – has gone up over the last couple of months.
- M3, which includes currency with public, current deposits, savings deposits, and fixed deposits, has increased by 11.3 per cent, or Rs 19.17 lakh crore, to a new high of Rs 189.07 lakh crore as on April 9, 2021.
B2BASICS
Measures of Money supply
- Reserve Money (M0): It is also known as High-Powered Money, monetary base, base money etc.
M0 = Currency in Circulation + Bankers’ Deposits with RBI + Other deposits with RBI
It is the monetary base of economy.
- Narrow Money (M1):
M1 = Currency with public + Demand deposits with the Banking system (current account, saving account) + Other deposits with RBI
- M2 = M1 + Savings deposits of post office savings banks
- Broad Money (M3)
M3 = M1 + Time deposits with the banking system
- M4 = M3 + All deposits with post office savings banks
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From UPSC perspective, the following things are important :
Prelims level: Convention on the Elimination of All Forms of Racial Discrimination (ICERD)
Mains level: Paper 2- Issues with the deportation of Rohingya
The article highlights the issues with the order passed by the Supreme Court allowing the deportation of Rohingya refugees.
Context
- Recently, in its order in Mohammad Salimullah v. Union of India, the Supreme Court rejected an application to stay the deportation of Rohingya refugees to Myanmar.
Principle of non-refoulement
- The Supreme Court noted the petitioners’ reliance on a judgment of the International Court of Justice (ICJ) dated January 23, 2020, which recorded the genocidal conditions that resulted in 7.75 lakh Rohingyas being forced to take refuge in Bangladesh and India.
- The Supreme Court relied on the word of the government that the principle of non-refoulement, or forcible repatriation to a place where the refugee’s life is in danger, applies only to signatories to the UN’s Refugee Convention of 1951 or its 1967 Protocol.
- It must be stated that a UN Special Rapporteur was not heard, as the Court felt that serious objections had been raised to her intervention.
- The Supreme Court accepted that the right not to be deported flows not from the right to life and liberty under Article 21, which applies to all human beings, but from the right to reside and settle in India under Article 19(1)(g), which applies to citizens alone.
Why the judgement needs reconsideration
1) India has recognised genocide as an international crime
- India is a signatory to the Convention for the Prevention and Punishment of the Crime of Genocide (the Genocide Convention, 1948),
- Acceding to the Convention in 1959, India has recognised genocide as an international crime, and that the principles of the Convention are “therefore already part of common law of India”.
- India has also ratified the International Convention on the Elimination of All Forms of Racial Discrimination (ICERD), the International Covenant on Civil and Political Rights (ICCPR) have a bearing on non-refoulement.
- Article 6(1) of the ICCPR, which mirrors Article 21 of our Constitution.
- A number of other UN conventions particularly those dealing with the rights of women (CEDAW) and children (CRC) also have a non-refoulment element in it and both of which have been declared by the Supreme Court to be part of our domestic legal framework.
2) Prevention of genocide
- The leitmotif of the Genocide Convention is prevention.
- Prevention is also central to Article I, under which the contracting parties confirm that genocide is a crime under international law, “which they undertake to prevent and to punish”.
3) Preemptory norm
- It is increasingly accepted in public international law, that non-refoulement and other protections emanating from the Genocide Convention, are peremptory norms that apply to state parties as well as non-parties.
- That non-refoulement is jus cogens, a norm from which there can be no derogation whatsoever. I
- At least three high courts (Gujarat in 1998, Delhi in 2015, and Calcutta in 2019) have held that non-refoulement is part of the right to life and liberty protected by Article 21 of our Constitution.
What should the Supreme Court do
- There are two possible solutions.
- The first is that in its interim order, the Court specifies that the Rohingya refugees may not be deported unless “the procedure prescribed for such deportation is followed”.
- It is a long-held principle of Indian jurisprudence that the word “procedure” means “due process”, or a procedure that is just, fair, and reasonable.
- The Supreme Court can, thus, suo motu clarify that due process requires that they not be deported as long as there exists a reasonable threat of persecution in Myanmar.
- Alternately, since the order in question is an interim order, the Supreme Court could swiftly hear the main petition on its merits, and clarify the law on non-refoulement and Article 21.
Conclusion
The order on the deportation of Rohingya refugees needs reconsideration by the Supreme Court considering the India’s treaty obligations on the genocide.
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From UPSC perspective, the following things are important :
Prelims level: Anatolia region
Mains level: Paper 2- Relations between Turkey and the US
What is genocide
- According to Article II of the UN Convention on Genocide of December 1948, genocide has been described as carrying out acts intended “to destroy, in whole or in part, a national, ethnic, racial or religious group”.
Why Armenians were targeted
- In a way, the Armenians were victims of the great power contests of the late 19th and early 20th centuries.
- The resentment started building up after the Russo-Turkish war of 1877-78 in which the Turks lost territories.
- In the Treaty of Berlin, big powers dictated terms to the Ottomans, including putting pressure on Sultan Abdülhamid II to initiate reforms “in the provinces inhabited by Armenians, and to guarantee their security against the Circassians and Kurds.”
- The Sultan saw this as a sign of strengthening ties between the Armenians and other rival countries, especially Russia.
- Post the treaty, there were a series of attacks on Armenians by Turkish and Kurdish militias.
- In 1908, the Young Turks wrested control from the Sultan and promised to restore imperial glory.
- Under the Turks, the empire became more and “Turkik” and persecution against the ethnic minorities picked up.
- In October 1914, Turkey joined the First World War on the side of Germany.
- In the Caucasus, they fought the Russians, their primary geopolitical rival.
- But the Ottomans suffered a catastrophic defeat in the Battle of Sarikamish by the Russians in January 1915.
- The Turks blamed the defeat on Armenian “treachery”.
How the killings took place
- As the War was still waging, the Ottomans feared that Armenians in eastern Anatolia would join the Russians if they advanced into Ottoman territories.
- First, Armenians in the Ottoman Army were executed.
- On April 24, the Ottoman government arrested about 250 Armenian intellectuals and community leaders. Most of them were later executed.
- The Ottoman government passed legislation to deport anyone who is a security risk.
- Then they moved Armenians, including children, en masse to the Syrian Desert. That was a march of death.
- Before the First World War broke out in 1914, there were 2 million Armenians in the Ottoman Empire.
- According to a study by the University of Minnesota’s Center for Holocaust and Genocide Studies, in 1922, four years after the War, the Armenian population in the region was about 387,800.
- This has led historians to believe that up to 1.5 million Armenians were killed during the course of the War.
What is Turkey’s response
- Turkey has acknowledged that atrocities were committed against Armenians, but denies it was a genocide which comes with legal implications.
- Turkey also challenges the estimates that 1.5 million were killed.
- The Turkish Foreign Ministry has issued a strong statement to Mr. Biden’s announcement saying it doesn’t not have “a scholarly and legal basis, nor is it supported by any evidence”.
- Turkey has called on the U.S. President to correct the mistake of recognition as genocide.
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From UPSC perspective, the following things are important :
Prelims level: About SWAMITVA Scheme
Mains level: Paper 3- SWAMITVA Scheme
e-Property cards under SWAMITVA scheme
- The Prime Minister launched the distribution of e-property cards under the SWAMITVA scheme on National Panchayati Raj Day (24 April).
- 4.09 lakh property owners were given their e-property cards on this occasion, which also marked the rolling out of the SVAMITVA scheme for implementation across the country.
- Under the scheme, the entire village properties are surveyed by drone and property card are distributed to the owners.
- The Scheme has infused a new confidence in the villages as property documents remove uncertainty and reduce the chances of property disputes while protecting the poor from exploitation and corruption.
- This eases credit possibility also.
About SWAMITVA Scheme
- SVAMITVA (Survey of Villages and Mapping with Improvised Technology in Village Areas) was launched by Prime Minister on 24th April 2020.
- It is a Central Sector Scheme to promote a socio-economically empowered and self-reliant rural India.
- The Scheme has the potential to transform rural India using modern technical tools of mapping and surveying.
- It paves the way for using the property as a financial asset by villagers for availing loans and other financial benefits.
- The Scheme will cover around 6.62 Lakh villages of the entire country during 2021-2025.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Role of civil servants in implementing the development agenda
The article highlights the role bureaucracy can play in the development of the country and suggests the ways to deal with the challenges faced by the bureaucracy.
Background of the PSU’s
- In the 1950s and ’60s, the private sector had neither the capability to raise capital to take the country on the path of industrialisation.
- The state had to take on the role of industrialising the country by establishing PSUs.
- The civil services became the natural choice for establishing and managing these units.
- They delivered substantially, if not fully.
- Even after privatisation, the bureaucracy would be required for the transition of PSUs from the public to the private sector.
Need for structural transformation agenda
- The goal of making India a $5-trillion economy needs a coherent structural transformation agenda and extraordinary implementation capacity.
1) Dealing with crony capitalisms
- Since Independence, the political survival of Indian regimes has required pleasing a powerful land-owning class and a highly concentrated set of industrial capitalists.
- The elites of business houses and land owners share no all-encompassing development agenda.
- Can the present regime find a way out of this conundrum?
2) Implementing the development agenda
- While the agenda is an outcome of political choices, the thinking goes that market mechanisms should be used as far as possible to make economic choices.
- This argument is at the heart of the privatisation of state assets.
- However, markets operate well only when they are supported by other kinds of social networks, which include non-contractual elements like trust.
- Particularly in industrial transformation, there must be an essential complementarity of state structures and market exchange.
- Only a competent bureaucracy can provide this.
- It is for this reason that Max Weber argued that the operation of large-scale capitalist enterprise depended upon the kind of order that only a modern bureaucratic state can provide.
3) Removing the constraints on the bureaucracy
- The political and permanent executives had to work as a team through mutual respect for each other’s roles as defined in the Constitution.
- Every deviation from these ideals has lowered the capacity of the state to deliver.
- This is the result of electoral politics where the essence of the state action is the exchange relationships between the incumbent governments and its supporters.
- All this is achieved by undermining the impartiality of the bureaucracy in implementing rules and giving opinions frankly.
- The power to transfer is weaponised to bring the bureaucrats to heel and it works because authority sits with the position not the person.
- The pressure on officials to behave contrary to the ostensible purpose of the department undermines to a great extent the ability of the state to promote development.
- If privatisation is to work, then the corruption-transfer mechanism and its effects on the bureaucracy has to go.
4) Corporate coherence
- Corporate coherence is the ability of the bureaucracy internally to resist the invisible hands of personal maximisation by undercutting the formal organisational structure through informal networks.
- If this goes too far, then everything becomes open to sale and the state becomes predatory.
Consider the question “What are the issues facing civil services in India? Suggest the ways to deal with these issues.”
Conclusion
We need to fight the increasing tendency to grab public resources and restore to the bureaucracy its autonomy of action as envisaged in the Constitution by de-weaponising transfers.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Vaccine inequality
Issue of diverting the vaccine stock to India
- Epidemiologists to industry leaders are urging the Biden administration to release the reserve to countries like India and Brazil, given the assertion that the doses won’t be used in the US.
- According to Brown University School of Public Health Ashish Jha, the US is “sitting on 35-40 million doses of AstraZeneca vaccine Americans will never use”.
- In early April, US chief medical adviser Anthony Fauci said the US will likely not need the AstraZeneca shot.
- The AstraZeneca vaccine has not been granted Emergency Use Authorization by the US Federal Drug Administration (FDA).
- With documented cases of blood clots in younger women in Europe correlated with the vaccine, FDA authorisation may be further delayed.
What has the US said in response
- Co-ordinator of the US Covid-19 taskforce that the Quad partnership and team is providing assistance across government to the country.
- He also stated that as their confidence around our supply increases, we will explore the option of exporting the vaccines.
Vaccine inequality
- According to Bloomberg’s Vaccine Tracker, highest-income countries are vaccinating at a pace 25 times faster than the lowest ones.
- The US has 22.9% of the world’s vaccines but only 4.3% of the world’s population.
- China has 21.9% and 18.2% respectively, and India 13.8% and 17.7%, according to the tracker.
- Almost half of all vaccines have gone to 16% of the world’s population.
- The Washington Post reported that the world’s poorest 92 countries may not be able to vaccinate even 60% of their population for another three years.
- India has vaccinated 8% per cent of the population with one dose and 1% with two. Brazil has vaccinated less than 12% with one.
Impact on vaccination in African nations
- India’s stalled vaccine exports have domino effects on the rollouts in African nations and other developing countries, as Serum’s productions were fuelling efforts globally before India’s second wave.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NPCI
Mains level: Paper 3- Cybersecurity norms for payment systems
What prompted RBI to take such step
- Following a series of data breaches faced by operators including Mobikwik and payment aggregator JusPay, the Reserve Bank of India (RBI) will soon issue cybersecurity norms for payment service providers (PSPs).
- On cyber frauds, Reserve Bank of India has issued very recently basic guidelines on cyber hygiene and cybersecurity for banks and certain NBFCs,
- The standards for fintech-driven payment services providers will be similar to these cyber hygiene norms issued recently.
- the critical challenge for regulators would be to speed up the absorption of fintech without undermining the financial system’s integrity or stability.
UPI dominated by limited players
- There are not too many payment systems in India and the number of players is limited.
- Two apps provide about 70% of third-party services in the UPI system.
- The concentration of two or three third-party providers in this retail payments space could give rise to competitive weaknesses.
- Therefore, the National Payments Corporation of India (NPCI) had laid down a framework for a more even distribution of share of third-party app providers in the UPI system.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Role of microfinance in India and challenges sector faces
The article highlights the important role played by the microfinance sector in furthering financial inclusion in India and suggests measures to achieve holistic development of the sector.
Important role played by microfinance
- No other form of financial services has had the kind of far-reaching impact, in terms of fostering financial inclusion, as microcredit has.
- Access to small, collateral-free loans for economically productive purposes has helped transform the lives of millions at the bottom-of-the-pyramid—especially women.
- Over the past decade, India’s microfinance industry has grown at a compound annual growth rate of 26% to reach ₹2.36 trillion.
- It has helped 50 million economically vulnerable Indians, 99% of them women, live a life of dignity and financial independence.
- Assuming that these 50 million people who took a loan to start a small business employed at least one other person, it translates into 50 million additional jobs in the country.
- This creates a ‘network effect’ that has a social impact at scale.
Evolution of microfinance industry
- Recommendations of the Malegam Committee, which became regulations, and practices such as relying on credit bureau data to assess a borrower’s creditworthiness have helped the industry immensely.
- The vital role that microfinance plays in the last-mile delivery of financial services was acknowledged.
- Subsequently, eight out of the 10 small finance bank licences granted were also given to microfinance institutions.
- RBI has sought to undertake a comprehensive review of the sector again, after 10 years, to better align the regulatory framework with the sector’s current realities.
Steps for development of sector
- First, Entities should promote financial literacy through group meetings of borrowers.
- Second, organizations should complement their microcredit operations with social development projects and community-connect initiatives.
- Third, prospective borrowers’ indebtedness and ability to repay dues should be assessed properly.
- Fourth, loans must be given only for income-generation purposes.
- Fifth, every microfinance organization should devote time and resources for capacity building at the grassroots.
- Sixth, rather than focusing on taking over the existing debt of a borrower, or lending to her further, institutions should focus on bringing new-to-credit customers into the fold.
Consider the question “How can microcredit stimulate financial inclusion in India? Suggest the measures for the development of microfinance sector in India.”
Conclusion
There is much more that we, as a nation, collectively need to do in order to bring a vast population of unbanked and underbanked Indians into the fold of formal financial services.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: VARUNA-21
Mains level: Paper 2- VARUNA-21
Details of the exercise
- The 19th edition of the Indian and French Navy bilateral exercise ‘VARUNA-2021’ is scheduled to be conducted in the Arabian Sea from 25th to 27th April 2021.
- The exercise will see high tempo-naval operations at sea, including advanced air defence and anti-submarine exercises, intense fixed and rotary wing flying operations, tactical manoeuvres, surface and anti-air weapon firings, underway replenishment and other maritime security operations.
- Units of both navies will endeavour to enhance and hone their war-fighting skills to demonstrate their ability as an integrated force to promote peace, security and stability in the maritime domain.
- On completion of exercise VARUNA-21, to consolidate accrued best practices and enhance interoperability, Indian Navy’s guided-missile frigate INS Tarkash will continue to exercise with the French Navy’s Carrier Strike Group (CSG) from 28th April to 1st May 2021.
- During this period, the ship will take part in advanced surface, anti-submarine and air-defence operations with the French CSG.
Significance of exercise
- VARUNA-21 highlights growing bonhomie and showcases increased levels of synergy, coordination and inter-operability between the two friendly navies.
- These interactions further underscore the shared values as partner navies, in ensuring freedom of seas and commitment to an open, inclusive Indo-Pacific and a rules-based international order.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 50, Article 124
Mains level: Paper 2- Challenges facing judiciary in India
The article highlights the issues facing the judiciary in India and emphasises the need for addressing these issues.
Separating judiciary from the executive
- Today, the judiciary, especially the SC, is called upon to decide a large number of cases in which the government has a direct interest.
- These can be politically sensitive cases too.
- The framers of the Constitution understood the importance of the oath of office of judges of the Supreme Court of India (SC) and carefully designed its language.
- The words, “without fear or favour” to “uphold the constitution and the laws” are extremely significant and stress the need for a fiercely independent court.
- Article 50 of the Constitution provides: “The State shall take steps to separate the judiciary from the executive in the public services of the State.”
Master of roaster issue
- The Chief Justice of India is the first amongst the equals but by the virtue of his office assumes significant powers as the Master of the Roster to constitute benches and allocate matters.
- The SC has re-affirmed this position in a rather disappointing decision in Campaign for Judicial Accountability and Reforms v. Union of India, (2018).
- The result has been catastrophic.
- Many matters were either treated casually or deflected for no reason from serious hearing.
Accountability from legislature and executive
- The SC is expected to seek strict accountability from the legislature and executive and any infraction of the Constitution and laws must be corrected.
- Yet, this is not happening.
- A country of billion-plus needs its highest court to stand for the people, not seemingly for the executive of the day.
Inherent and fundamental challenges
- The judiciary is besieged by inherent and fundamental challenges.
- Millions of pending cases, quality of judges and their decisions, organisational issues and its integrity and impartiality, need urgent attention.
- Yet, in the last two decades precious little has been done.
- Justice is eluding the common man, including the vulnerable sections of society.
Way forward
- The new Chief Justice must seriously introspect and free himself of the bias in constituting benches and allocating cases and take concrete steps to revitalise the administration of justice.
- Only then will the rule of law be restored and the Constitution served.
Consider the question “Examine the inherent and fundamental challenges faced by the judiciary in India. Suggest the measures to deal with these challenges.”
Conclusion
The Chief Justice of India on account of the position he holds as paterfamilias of the judicial fraternity, was suspected by none other than Dr B R Ambedkar. Let us hope the new Chief Justice makes serious efforts to prove otherwise.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: How vaccine works
Mains level: Paper 2- Breakthrough infections
Breakthrough infections
- There have been several cases of Covid-19 vaccinated people, even those who have received both doses, testing positive for the virus.
- Such cases are referred to as “breakthrough” infections, indicating that the virus has been able to break through the defences created by the vaccine.
- Such cases have led to some doubts being expressed about the effectiveness of the vaccine, and contributed to the already prevailing vaccine hesitancy.
- However, vaccines protect not against the infection, but against moderate or severe disease and hospitalisation.
- It typically takes about two weeks for the body to build immunity after being vaccinated.
- So, the chances of a person falling sick during this period are as high — or as low — as the chances for any person who has not been vaccinated.
- Also, those in the priority list of vaccination, such as healthcare workers and frontline workers, have been prone to getting infected due to prolonged occupational exposure to the virus
Full protection not possible
- It is very well understood that no vaccine offers 100% protection from any disease.
- However, according to the Centers for Disease Prevention and Control (CDC) in the United States, vaccinated people are much less likely to get sick, but it is never entirely ruled out.
- Then there is the emergence of new variants of the virus.
- Some variants of the virus are able to evade the human immune response, and therefore have a greater chance to break through the defences created through the vaccine.
Breakthrough cases in India
- Among 10.03 crore people who had taken only the first dose of Covishield vaccina, 17,145 had got infected.
- That translates into a 0.02% prevalence.
- Among the 1.57 crore people who received the second dose as well, 5,014, or about 0.03%, had got infected later.
- About 1.1 crore doses of Covaxin have been administered until now.
- Of the 93.56 lakh who took only the first dose, so far 4,208 have got the infection.
- That is about 0.04% of the total.
- Among the 17.37 lakh who have taken the second shot, only 695 had been infected, again 0.04%.
Challenges
- “Given the scope of the pandemic, there’s a huge amount of virus in the world right now, meaning a huge opportunity for mutations to develop and spread.
- That is going to be a challenge for the developers of vaccines.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Type 1 interferons
Mains level: Paper 2- Emergency use approval of Virafin
About the drug
- It is used in treating people with chronic hepatitis B and C.
- The Drug Controller General of India (DCGI) granted emergency use approval for pharma major Zydus Cadila’s antiviral drug ‘Virafin’, to treat moderate COVID-19 disease in adults.
- When administered early on during COVID, Virafin will help patients recover faster and avoid much of the complications.
- It significantly reduces viral load when given early on and can help in better disease management.
Findings of the clinical trials
- A single dose subcutaneous regimen of the antiviral Virafin [a pegylated interferon alpha-2b (PegIFN)] will make the treatment more convenient for the patients.
- When administered early on during COVID, Virafin will help patients recover faster and avoid much of the complications.
- In the phase-3 trials, the drug was able to achieve “better clinical improvement in the patients suffering from COVID-19”.
- A “higher proportion (91.15%) of patients administered the drug were RT-PCR negative by day seven as it ensures faster viral clearance”.
- The drug reduced the duration for supplemental oxygen to 56 hours from 84 hours in moderate COVID-19 patients.
How the drug works
- Type I interferons are the body’s first line of defence against many viral infections.
- In old people, the ability to produce interferon alpha in response to viral infections gets reduced, which might be the reason for higher mortality.
- The drug when administered early during the disease can replace this deficiency and help in the recovery process.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Consolidated Sinking Fund (CSF)
Mains level: Paper 3- RBI extends WMA scheme
About Ways and Means credit
- Simply put, it is a facility for both the Centre and states to borrow from the RBI.
- WMAs are temporary advances given by the RBI to the government to tide over any mismatch in receipts and payments.
- Section 17(5) of the RBI Act, 1934 authorises the central bank to lend to the Centre and state governments subject to their being repayable “not later than three months from the date of the making of the advance”.
Extension of the scheme
- The RBI decided to continue with the existing interim Ways and Means Advances (WMA) scheme limit of ₹51,560 crore for all States/ UTs shall for six months given the prevalence of COVID-19.
- Based on the recommendations of the Advisory Committee on WMA to State Governments, 2021 — chaired by Sudhir Shrivastava — the RBI had revised the WMA Scheme of States and Union Territories (UTs).
- The WMA limit arrived at by the Committee based on total expenditure of States/ UTs, works out to ₹47,010 crore.
What RBI said about SDR
- The RBI further said Special Drawing Facility (SDF) availed by state governments and UTs will continue to be linked to the quantum of their investments in marketable securities issued by the Government of India.
- The net annual incremental investments in Consolidated Sinking Fund (CSF) and Guarantee Redemption Fund (GRF) will continue to be eligible for availing of SDF, without any upper limit.
- CSF and GRF are reserve funds maintained by some State Governments with the Reserve Bank of India.
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