Note4Students
From UPSC perspective, the following things are important :
Prelims level: CAROTAR
Mains level: Paper 3- Make in India
Context
It will be a good idea to look at the intent, reality, and other ramifications of India’s trade agreements, especially in regard to goods.
Why PTAs matters
- Amongst the existing Preferential Trade Agreements (PTAs), the most commonly used by exporters and importers, are the agreements with the ASEAN region, South Korea, Japan, and South Asian countries.
- It is noteworthy that India has significant trade deficits with three of the aforementioned regions.
- Another factor to note is that three of these regions have significant manufacturing capacity and investment in their own territories.
- Thus, India’s ongoing initiatives in trade agreements must consider whether such deals strengthen imports into India or incentivize investment.
- This is all the more important as the Centre has laid out schemes like Phased Manufacturing Programs (PMPs) and Production Linked Incentives (PLIs) to encourage investment in Make in India.
How existing trade agreements affect Phased Manufacturing Programs(PMP)
- How does it work? Under the PMP, calibrated reductions in customs duty rates on inputs and intermediate goods have been provided along with higher duty rates on finished products.
- However, considering that many of the finished products are covered by zero duty rates under existing trade agreements with some regions or countries, manufacturers with existing facilities in such countries may not have a compelling reason to move manufacturing to India.
- Similar benefits exist under other agreements and may inhibit the uptake of the PMPs by multinational manufacturing entities.
Production Linked Incentives and trade agreements
- Under PLIs, based on a threshold level of capital investment and incremental production, subsidies are to be given to approved applicants.
- Such schemes cover 15 product categories as of now.
- In some cases, the attraction of incentives could score over the benefits of importing goods under low or nil rates of duty under PTAs.
Suggestions:
- The PLIs could become even more attractive if it is combined with certain pre-existing special governmental schemes that reduce costs and conserve cash flow.
- While the application window for most of the PLI schemes has closed, a few may be extended and depending on the success of current schemes, more could follow.
- Improving trade governance: PTAs are governed by written agreements between nation states or groups of nation states and domestic laws of the signatories.
- Contrary to a violation of a multilateral or plurilateral agreement entered into under the aegis of the WTO, enforcement mechanisms external to the parties, do not exist for PTAs.
- The committed benefits could be allowed or disallowed by customs rules (for example the CAROTAR in India) and customs officials, conditional upon certifications and validations.
- Mechanisms exist in the FTAs themselves to solve such matters, but in a situation where entities of different sizes and economic power attempt to resolve such issues, the resolutions may not be acceptable to all parties.
- Better governance mechanisms are needed.
Conclusion
It is expected that a holistic view, keeping in mind the government’s schemes on investment and trade governance, would inform future negotiations as well as a review of existing trade agreements of India.
Source:
https://www.financialexpress.com/opinion/make-trade-deals-for-make-in-india/2457320/
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Back2Basics: CAROTAR 2020
- CAROTAR 2020 (“Rules”) aims to add to the existing operational certification procedures which are prescribed under different trade agreements such as Free Trade Agreements (FTAs), Preferential Trade Agreement, Comprehensive Economic Cooperation Agreement and Comprehensive Economic Partnership Agreement.
- The Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR, 2020), was notified on 21st August 2020 by the Central Board of Indirect Taxes and Customs.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- ICJ decision on Ukraine crisis and its significance
Context
The International Court of Justice (ICJ) has ordered Russia to immediately suspend its military operations in Ukraine. In short, to end the war instantly.
Breach of the Genocide Convention
- Ukraine moved the ICJ against Russia accusing it of falsely claiming that Ukrainians are committing genocide in their territory and using this untruthful premise to start an illegal war.
- This, Ukraine believes, breaches its rights under the Genocide Convention — a treaty that is binding to both Russia and Ukraine.
- This decision was rendered by the ICJ in response to Ukraine’s application for indication of provisional measures under Article 41 of the ICJ Statute.
- Provisional measures under the ICJ Statute are the international equivalent of an interim injunction that can be provided by the court to preserve the rights of the parties pending a final decision on the merits of the case.
Three reasons cited by the ICJ
1] ICJ’s jurisdiction in the case
- Since 2014, Russia has been repeatedly accusing Ukraine of committing genocide in the Donetsk and Luhansk regions.
- Just before the military invasion, Russian President Vladimir Putin mentioned ending the genocide in Ukraine as the reason to use force.
- Ukraine vehemently rejects this charge.
- Prima facie, this shows the existence of a “dispute” under Article IX of the Genocide Convention — the compromissory clause that bestows jurisdiction on the ICJ.
- Self-defence under Article 51 of the UN Charter: Russia contended that its formal basis for use of force against Ukraine was its right to self-defence under Article 51 of the UN Charter (a patently illegal argument, but this issue is not before the ICJ).
- The court held that it had prima facie jurisdiction in the case because the subject matter fell under the Genocide Convention.
2] Preservation of rights claimed by the parties
- Ukraine argues that it has a right under the Genocide Convention not to be falsely accused of genocide and rely on this wrong pretext to use force against its territorial integrity.
- The ICJ held that the objective of indicating provisional measures is the preservation of the rights claimed by the parties, pending the decision on merits.
- Since the current proceedings were only for provisional measures, the ICJ did not decide definitively whether Ukraine has such a right under the Genocide Convention.
- Nonetheless, the ICJ found Ukraine’s right plausible, which is adequate for the current purposes.
- While the court did not decide on whether Russia has breached the Genocide Convention, as this is a question of merits, it did express doubt over whether a country can unilaterally use force against another country for punishing or preventing an alleged act of genocide.
3] Risk of irreparable harm to Ukraine’s rights
- The ICJ held that if it does not indicate provisional measures, that is, order cessation of military action, there is a real and imminent risk of irreparable harm to Ukraine’s rights.
- This is because of the magnitude of destruction that the ongoing war has caused.
Significance of the order
- ICJ’s decision is binding on Russia and constitutes part of its international legal obligations.
- However, the remedy for not complying with ICJ rulings lies with the UN Security Council, which has Russia as a permanent member.
- But just because authoritarian populist leaders like Vladimir Putin don’t care for international law does not diminish its significance.
Conclusion
The weight of global opinion against Russia on its egregious abuse of international law is mounting with each passing day. Russia can keep ignoring this only at grave peril to itself.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Semiconductor, Rare earth elements
Mains level: Economic impact of Russian invasion
The global supply of semiconductors is now being threatened once again by the Ukraine crisis on account of supply of two key raw materials — neon and palladium — that are at a risk of being constrained.
What are Semiconductors?
- A semiconductor sits between a conductor and an insulator and is commonly used in the development of electronic chips, computing components, and devices.
- It’s generally created using silicon, germanium, and other pure elements.
- Semiconductors are created by adding impurities to the element.
Why are neon and palladium important for chipmaking?
(a) Neon
- Neon gas is used in the photolithography process that is the most common method for fabricating integrated circuits.
- Specifically, the neon gas is used in the laser machines that carve the integrated circuits.
- But for use of neon gas in the semiconductor industry, the gas has to reach 99.99% purity levels — which makes it a rarity.
- More than half of semiconductor-grade neon comes from Ukrainian companies Incas and Cryoin.
(b) Palladium
- It is used for multiple purposes in semiconductor and electronic manufacturing.
- It is used to coat electrodes that help control flow of electricity.
- It is also used in plating of microprocessors and printed circuit boards — which is an essential process of chip making.
- Russia accounts for nearly half the global supplies of palladium and the multiple trade sanctions on Moscow threaten to constrain the availability of the element.
Why was there a shortage in semiconductors?
- The trigger point was the beginning of the Covid-19 pandemic and the subsequent lockdowns across the world that forced chip-making facilities to shut in countries like Japan, South Korea, China and the US.
- A key feature in a chip shortage is that it almost always causes cascading effects, given that the first one creates pent-up demand that becomes the cause for the follow-up famine.
How is the Russia-Ukraine crisis protracting this shortage?
- Palladium and neon are two resources that are key to the production of semiconductor chips.
- Russia supplies over 40 per cent of world’s palladium and Ukraine produces 70 per cent of neon.
How long will the semiconductor shortage last?
- The answer to that question is a function of two variables:
- Existing stockpiles of these raw materials with chip manufacturers
- Time for which the crisis in Ukraine prevails
- If a deal is not brokered in the coming months, expect the chip shortage to get worse and for industries highly dependent on them to be similarly affected.
- This means significant risks are ahead for many automakers, electronic device manufacturers, phone makers, and many other sectors that are increasingly reliant on chips for their products to work.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Election of the President
Mains level: Read the attached story
The presidential polls are expected to be held in July to decide on the successor of President Ram Nath Kovind, who will complete his term on July 24, 2022.
The President of India
- The President of India is recognised as the first citizen of the country and the head of the state.
- The elected President of India is a part of the Union Executive along with several other members of the parliament including the Prime Minister, Attorney-General of India and the Vice – president.
Electing the President
- The provisions of the election of the President are laid down in Article 54 of the Constitution of India.
- The Presidential and Vice-Presidential Election Act 1952 led to the establishment of this Constitutional provision.
Qualifications to become the President of India
The qualification of be the President of India are given below:
- He/ She must be an Indian citizen
- A person must have completed the age of 35.
- A person must be qualified for election as a member of the House of the People.
- Must not hold a government (central or state) office of profit
- A person is eligible for election as President if he/she is holding the office of President or Vice-President.
Actual course of election
- The President of India is elected indirectly by an Electoral College following the system of proportional representation utilizing a single transferable vote system and secret ballots.
- MPs and MLAs vote based on parity and uniformity values.
Electoral College composition-
(1) Legislative Assemblies of the States:
- According to the provision of Article 333, every state’s Legislative Assembly must consist of not less than 60 members but not more than 500 members.
(2) Council of States:
- 12 members are nominated by the President of India based on skills or knowledge in literature, arts, science, and social service to act as the members of the Council of States.
- In total, 238 represent act as representatives from both the States and Union Territories.
(2) House of the People:
- The composition of the House of People consists of 530 members (no exceeding) from the state territorial constituencies.
- They are elected through direct election.
- The President further elects 20 more members (no exceeding) from the Union Territories.
Uniformity in the scale of representation of states
To maintain the proportionality between the values of the votes, the following formula is used:
Value of vote of an MLA= total no. of the population of the particular state/ number of elected MLAs of that state divided by 1000.
Single vote system
- During the presidential election, one voter can cast only one vote.
- While the MLAs vote may vary state to state, the MPs vote always remain constant.
MPs and MLAs vote balance
- The number of the total value of the MPs votes must equal the total value of the MLAs to maintain the State and the Union balance.
Quotas:
- The candidate reaching the winning quota or exceeding it is the winner.
- The formula sued is ‘Winning quota total number of poll/ no.of seats + 1’.
Voters’ preference:
- During the presidential election, the voter casts his vote in favor of his first preferred candidate.
- However, in case the first preference candidate does not touch the winning quota, the vote automatically goes to the second preference.
- The first preferred candidate with the lowest vote is eliminated and the votes in his/her favor are transferred to the remaining candidates.
Why need Proportional representation?
- The President of India is elected through proportional representation using the means of the single transferable vote (Article 55(3)).
- It allows the independent candidates and minority parties to have the chance of representation.
- It allows the practice of coalition with many voters under one government.
- This system ensures that candidates who are elected don’t represent the majority of the electorate’s opinion.
Why is President indirectly elected?
If Presidents were to be elected directly, it would become very complicated.
- It would, in fact, be a disaster because the public doesn’t have the absolute clarity of how the president-ship runs or if the candidate fits the profile of a president.
- Another reason why the direct election system isn’t favorable is that the candidate running for the president’s profile will have to campaign around the country with the aid of a political party.
- And, this will result in a massive political instability.
- Moreover, it would be difficult and impossible for the government to hand out election machinery (given the vast population of India).
- This will cost the government financially, and may end up affecting the economy as well.
- The indirect election system is a respectable system for the First Man of India (rightly deserving).
- The system/method of indirect electing of the president also allows the states to maintain neutrality and minimize hostility.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Land Monetisation Corporation (NLMC)
Mains level: Asset Monetization
The Union Cabinet has approved the creation of the National Land Monetisation Corporation (NLMC), the Special Purpose Vehicle (SPV) announced in the Union Budget 2021-22 to carry out monetisation of government and surplus land holdings of public sector undertakings (PSU).
What is the NLMC?
- The NLMC will be a firm, fully owned by the government, to carry out the monetisation of government and public sector assets in the form of surplus, unused or underused land assets.
- It will fall under the administrative jurisdiction of the Ministry of Finance and will be set up with an initial authorised share capital of ₹5,000 crore and a paid-up capital of ₹150 crore.
- Apart from monetising underutilised or unused land parcels of Central Public Sector Enterprises (CPSEs), the Corporation will also facilitate the monetisation of assets belonging to PSUs that have ceased operations or are in line for a strategic disinvestment.
- The surplus land and building assets of such enterprises are expected to be transferred to the NLMC, which will then hold, manage and monetise them.
What will it do?
- The setting of the NLMC will speed up the closure process of the CPSEs and smoothen the strategic disinvestment process.
- It will also enable productive utilisation of these under-utilised assets by setting in motion private sector investments.
- It will boost new economic activities such as industrialisation, boosting the local economy by generating employment and generating financial resources for potential economic and social infrastructure.
- Besides managing and monetising, the NLMC will act as an advisory body and support other government entities and CPSEs in identifying their surplus non-core assets.
- It will help monetising them in an efficient and professional manner, maximising the scope of value realisation.
What does monetization mean?
- When the government monetises its assets, it essentially means that it is transferring the revenue rights of the asset (could be idle land, infrastructure, PSU) to a private player for a specified period of time.
- In such a transaction, the government gets in return an upfront payment from the private entity, regular share of the revenue generated from the asset, a promise of steady investment into the asset, and the title rights to the monetised asset.
- There are multiple ways to monetise government assets; in the case of land monetisation of certain spaces like offices, it can be done through a Real Estate Investment Trust (REIT).
What are REITs?
Ans: REITs a company that owns and operates a land asset and sometimes, funds income-producing real estate. Assets of the government can also be monetised through the Public Private Partnerships (PPP) model.
Why need monetization?
- There are different reasons why the government monetises its assets.
- One of them is to create new sources of revenue.
- The economy has already been hit due to the coronavirus pandemic and revenues are essential to fulfil the Modi government’s target of achieving a $5 trillion economy.
- Monetisation is also done to unlock the potential of unused or underused assets by involving institutional investors or private players.
- Thirdly, it is also done to generate resources or capital for future asset creation, such as using the money generated from monetisation to create new infrastructure projects.
How will the NLMC function?
- The firm will hire professionals from the private sector with a merit based approach, similar to other specialised government companies like the National investment and infrastructure Fund (NIIF) and Invest India.
- This is because asset monetisation of real estate requires expertise in valuation of property, market research, investment banking, land management, legal diligence and other related skill sets.
- The NLMC will undertake monetisation as an agency function and is expected to act as a directory of best practices in land monetisation.
How much land is currently available for monetisation?
- According to the Economic Survey 2021-2022, as of now, CPSEs have put nearly 3,400 acres of land on the table for potential monetisation.
- They have referred this land to the Department of Investment and Public Asset Management (DIPAM).
- As per the survey, monetisation of non-core assets of PSUs such as MTNL, BSNL, BPCL, B&R, BEML, HMT Ltd, Instrumentation Ltd etc are at different stages.
What are the possible challenges for NLMC?
(a) Volatile market situation
- The performance and productivity of the NLMC will also depend on the government’s performance on its disinvestment targets.
- In FY 2021-22, the government has hardly been able to raise expected amounts through various forms of disinvestment.
- For example, the Life Insurance Corporation IPO, which was supposed to raise ₹60,000 crore is now shrouded in uncertainty owing to the Russia-Ukraine crisis making stock markets volatile.
- If the IPO does not hit the markets by the end of March, the government would be missing its disinvestment targets by a wide margin.
(b) Issues with transfer of rights
- The process of asset monetisation does not end when the government transfers revenue rights to private players.
- Identifying profitable revenue streams for the monetised land assets, ensuring adequate investment by the private player and setting up a dispute-resolution mechanism are also important tasks.
(c) Unattractiveness of PPP Model
- Posing as another potential challenge would be the use of Public Private Partnerships (PPPs) as a monetisation model.
- For instance, the results of the Centre’s PPP initiative launched in 2020 for the Railways were not encouraging.
- It had invited private parties to run 150 trains of the Indian Railways but when bids were thrown open, nine clusters of trains saw no bidders.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Taxing of Crypto assets
Mains level: Cryptocurrencies regulation in India
The government has clarified that investors won’t be allowed to offset losses in one crypto asset against gains in another, and that crypto mining infrastructure costs will not be included in the cost of acquisition to be claimed as a deduction.
How are crypto investments taxed?
- The Union Budget 2022-23 in February proposed that gains from virtual digital assets or crypto assets would be taxed at 30% irrespective of the individual’s income tax slab.
- In addition, a 1% tax deducted at source or TDS was introduced on the transfer of such assets.
- The government did not say if crypto assets are to be treated as currency, commodity, or security, and a clarification is expected in due course via separate legislation.
- Gifting of crypto assets to non-relatives is also taxed in the hands of the recipient if the value exceeds ₹50,000 in a year.
How does crypto tax differ from others?
- If listed shares are sold within 12 months of purchase, short-term capital gains (STCG) tax is applied on the gains, while beyond one year, long-term capital gains (LTCG) tax is levied.
- STCG is levied at 15.6%, including cess, while LTCG for gains over ₹1 lakh is 10.4%, including cess.
- There is no provision of long-term or short-term crypto assets, while gains are taxed at a flat rate of 30%.
- Investors in equities can offset the loss in one stock against another, while they can carry forward both short-term and long-term loss for eight assessment years.
- This has not been allowed in crypto.
How will crypto tax impact investors?
- In a fiscal year, if an investor had made gains in bitcoin and losses in ether, he or she will have to pay tax at 30% on gains in bitcoin.
- Further, the absence of loss set-off provision would cause a double whammy —paying taxes on gains and no offset of losses.
- Tax experts believe that in certain cases, the effective rate of taxation can even cross 100% on crypto investments.
How will miners be affected?
- The government has clarified that mining infrastructure will also not be eligible to be deducted as the cost of acquisition.
- So far, it was understood by some that crypto generated during the ‘mining’ process is taxable only on the profits, after accounting for mining expenses such as electricity.
- But with the latest explanation, a 30% tax plus cess and surcharges will be levied on such transactions.
- Experts believe that crypto mining operations would become non-profitable under the current announcement.
Will crypto tax trigger an investor exodus?
- The crypto industry has been unequivocal in criticizing the tax proposals.
- Thanks to the tearing rally in crypto assets over the past two years, it is estimated by some that more than 20 million Indian investors have poured more than ₹1 trillion into cryptos.
- However, the industry leaders fear that the lack of provision to offset losses will drive away users from KYC-compliant exchanges and platforms to the underground peer-to-peer grey market, which would defeat the purpose of regulation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Maitri scholarships and fellowships
Mains level: Paper 2- India-Australia relations
Context
On March 21, Prime Ministers of India and Australia held their Virtual Summit and took stock of the pace of implementing the Australia-India Comprehensive Strategic Partnership.
India-Australia relations
- Since we elevated our relationship in 2020, we have advanced practical actions on cyber and critical technologies, maritime affairs, defence ties, economic and business links and Quadrilateral cooperation.
- The two Prime Ministers announced a range of tangible and practical initiatives spanning the breadth of our shared economic, strategic, and regional interests.
Areas of cooperation
- Energy partnership: Both countries are working on a new and renewable energy partnership, to support the development of technologies such as green hydrogen and ultra-low cost solar.
- We are also supporting research and investment to unlock Australian critical minerals for Indian advanced manufacturing.
- We will boost collaboration on innovation, science and entrepreneurship, to scale up ideas that address global challenges.
- Space sector: We are also increasing investments into our countries’ rapidly growing space sectors.
- We are establishing the Australia-India Centre of Excellence for Critical and Emerging Technology Policy — and a Consulate-General — in Bengaluru.
- Australians value highly the Indian diaspora and student contributions to its community — whether economic, social, or cultural.
- Australia and India are also working to ensure a peaceful and stable region.
- Both countries are committed to a free and open Indo-Pacific.
- In our defence relationship, there is an enhancement in information sharing and operational cooperation.
- Such arrangements also help continue delivering quality humanitarian support to the region, seen recently when India helped Australia’s Pacific family, Tonga and Kiribati.
Conclusion
These investments in strategic, economic, and community ties show what we can achieve when two multicultural democracies join in a spirit of trust and understanding.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Export to GDP ratio of India
Mains level: Paper 3- Issues in buying cheaper oil from Russia
Context
With oil above $100, the government now has to spend twice as much to import oil as it did earlier. Russia has offered to sell oil at lower prices to India. It is a hard temptation for India to resist. But one that comes with profound and long-lasting consequences.
Issues in buying oil from Russia
1] Impact on India’s export due to threat of the secondary sanction by the US
- The demise of the Soviet Union made it easier for India to abandon the Soviet-influenced ideology of a planned economy and veer towards the American version of a market economy.
- Now, in the reverse ideological direction, Russia’s offer of cheaper oil has hidden and direct costs that India will have to deliberate upon.
- Whenever global crude oil prices have risen above $100 in the past, India was able to cushion that shock primarily through growth in exports.
- When oil prices were similarly high, exports rose to nearly 25 per cent of nominal GDP, which helped India withstand the shock.
- However, exports now have fallen dramatically to 18 per cent of GDP, which must be revived.
- The US is India’s biggest export market.
- The US has already cautioned India about abetting Russia by buying Russian oil.
- It remains to be seen if the US will impose secondary sanctions against India for buying discounted Russian oil, but that threat looms large.
2] Cascading de-dollarisation
- With US sanctions against Russia, it will insist on payment in rubles.
- If India is forced to accept trading in rubles with Russia, then it is very likely that China, which is India’s second-largest trading partner, may also insist on payments in Chinese yuan.
- Saudi Arabia may also insist on trading in a currency other than the US dollar.
- This cascading “de-dollarisation” phenomenon will further irk and antagonise the US, since it weakens the dollar’s status as the world’s reserve currency.
- If India is forced to purchase Russian oil in rubles and potentially trade in yuan with China and others, it can catapult India into the centre of a geo-economic war that it can ill afford.
Opportunity for India
- The Russia-Ukraine conflict can be an opportunity for India to step up and capture global market share in goods and services.
- There is already talk of India capitalising on wheat exports, albeit a tiny share of India’s overall exports, as a fallout of global sanctions against Russian wheat.
Conclusion
Exports remain India’s biggest hope for a long-term sustainable economic recovery with ample job creation. India cannot risk being isolated in future global trade for near-term discounted oil deals with Russia.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GSOMIA
Mains level: Paper 2- Role of the US in South Asia
Context
On the external front, Russia’s Ukraine war and the Sino-Russian alliance are setting the stage for a reordering of South Asia’s great power relations.
Opportunity for the US in South Asia
- If it looks beyond the region’s immediate response to the war in Ukraine, Washington can seize the current opportunity to elevate the US’s salience for the Subcontinent in partnership with India.
- The Indo-Pacific strategy offers new pathways for the US to limit the traditional economic and military weight of China and Russia in the Subcontinent.
Three regional trends in South Asia
1] Decline of Pakistan’s influence
- In the wake of the missile accident, Islamabad moved to seek international intervention, including from the UN Secretary-General.
- But there were few takers for this old South Asian formula, except in Beijing.
- Underlining the peremptory dismissal of Islamabad’s concerns is a deeper trend — the relative decline of Pakistan’s international standing.
- Since his election, US President Joe Biden has refused to call Imran Khan, who runs a “major non-NATO ally”; high-level visitors from Washington now skip Pakistan during South Asia visits.
- Chinese and Russian official visitors are among the few to combine trips to Delhi and Islamabad.
- Islamabad’s decline after the US withdrawal from Afghanistan is likely to accelerate amidst Pakistan’s deepening domestic political chaos.
- With an economy that is smaller than that of Bangladesh and limited prospects for rapid growth in the coming years, Pakistan will find it hard to match its traditional claim for “strategic parity” with India.
2] Declining interest in China’s Belt and Road Initiative in South Asia
- Just a couple of years ago, China’s commercial march into South Asia seemed unstoppable. Not any longer.
- Troubles in Pakistan and Sri Lanka: Pakistan and Sri Lanka, which embraced the BRI with great gusto, are South Asia’s two worst-performing economies.
- The deepening economic crises are compelling the elites of Pakistan and Sri Lanka to focus on non-Chinese financial sources to stabilise their economies.
- Sri Lanka, which ostentatiously refused to accept $480 million developmental assistance from the US in 2020, is now desperately looking for hard currency support for its sinking economic fortunes.
- In Nepal, the dominant communists had made political opposition to US infrastructure assistance of $500 million as a life and death issue for a decade.
- At the end of last month, Nepal’s parliament ratified the US loan that will facilitate Nepal’s infrastructure development and its economic integration with the Subcontinent.
3] The growing possibilities for US security cooperation with the Subcontinent
- During the Cold War, the US military engagement was limited to Pakistan.
- In the 21st century, there has been a steady expansion of US defence cooperation with India.
- The current focus on the Indo-Pacific is getting Washington to modernise the defence partnerships with the smaller countries of the region.
- The Trump Administration discarded the traditional obsession with Pakistan and began to recognise the strategic significance of the smaller South Asian states for its Indo-Pacific strategy.
- The visit of US Undersecretary of State to Bangladesh over the weekend saw progress towards signing the so-called GSOMIA (General Security of Military Information Agreement) that codifies the commitment to protect classified military information.
Conclusion
Reversing that must necessarily involve deeper security cooperation with the region and developing alternatives to military dependence on Beijing and Moscow. This is best done in partnership with Delhi.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: One rank one pension Scheme
Mains level: OROP Policy
The Supreme Court has upheld the Centre’s one rank, one pension (OROP) scheme for the armed forces.
What is the news?
- The Supreme Court has ruled that there was “no constitutional infirmity” in the way the government had introduced ‘one rank, one pension’ (OROP) among ex-service personnel.
- The scheme, notified by the Defence Ministry on November 7, 2015, was challenged by Indian Ex-Service Movement, an association of retired defence personnel.
What is OROP Scheme?
- OROP means that any two military personnel retiring at the same rank, with the same years of service, must get an equal pension.
- While this might appear almost obvious, there are several reasons why two military personnel who may have retired at the same rank with the same years of service, may get different pensions.
Need for the scheme
Military personnel across the three services fall under two categories, the officers and the other ranks.
- Early age of retirement: The other ranks, which are soldiers, usually retire at age 35.
- No benefits from pay commissions: Unlike government employees who retire close to 60, soldiers can thus miss out on the benefits from subsequent pay commissions.
- Salary based pension: And since pensions are based on the last drawn salary, pensions too are impacted adversely.
- Ranks based discrimination: The age when officers in the military retire depends upon their ranks. The lower the rank, the earlier they superannuate.
- Liability against the sacrifice: It was argued that early retirement should not become an adverse element for what a soldier earns as pension, compared with those who retire later.
Earlier pension mechanism
- From 1950 to 1973, there was a concept known as the Standard Rate of Pension, which was similar to OROP.
- In 1974, when the 3rd Pay Commission came into force, certain changes were effected in terms of weightage, additional years of notion service, etc., with regard to pensions.
- In 1986, the 4th Pay Commission’s report brought further changes.
- What ultimately happened was that the benefits of the successive pay commissions were not passed to servicemen who had retired earlier.
- Pensions differed for those who had retired at the same rank, with the same years of service, but years apart.
Demand for OROP
- Ex-servicemen demanded OROP to correct the discrepancy.
- Over the decades, several committees looked into it.
- The Brig K P Singh Deo committee in 1983 recommended a system similar to Standard Rate of Pension, as did Parliament’s standing committees on defence.
- The Narendra Modi government notified the current OROP scheme in November 2015, and it was made applicable from July 1, 2014.
Issues with OROP
- During the OROP protests of 2013-15, it was argued repeatedly that meeting the demand would be financially unsustainable.
- Because soldiers retire early and remain eligible for pension for much longer than other employees, the Defence Ministry’s pension budget is very large, impacting capital expenditure.
- The total defence pensioners are 32.9 lakh, but that includes 6.14 lakh defence civilian pensioners.
- The actual expenditure of the Defence Ministry on pensions was Rs 1.18 lakh crore in 2019-2020.
- The Defence Ministry’s pension-to-budget ratio is the highest among all ministries, and pensions are more than one-fifth of the total defence budget.
- When the late Manohar Parrikar was Defence Minister, it was estimated that a one-time payout of Rs 83,000 crore would be needed to clear all past issues.
Challenge to OROP
- The petitioners contended that the principle of OROP had been replaced by ‘one rank multiple pensions’ for persons with the same length of service.
- They submitted that the government had altered the initial definition of OROP and, instead of an automatic revision of the rates of pension.
- Under this, any future raising of pension rates would be passed on to past pensioners — the revision would now take place at periodic intervals.
- According to the petitioners, this was arbitrary and unconstitutional under Articles 14 and 21.
What has the SC ruled now?
- The court did not agree with the argument that the government’s 2015 policy communication contradicted the original decision to implement OROP.
- It said that “while a decision to implement OROP was taken in principle, the modalities for implementation were yet to be chalked out.
- The court also said that while the Koshyari Committee report furnishes the historical background of the demand, and its own view on it, it cannot be construed as embodying a statement of governmental policy.
- It held that the OROP policy “may only be challenged on the ground that it is manifestly arbitrary or capricious”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Economic crisis in Sri Lanka
Sri Lanka’s economic crisis is aggravating rapidly, putting citizens through enormous hardship.
Reasons for the Crisis
The first wave of the pandemic in 2020 offered early and sure signs of distress.
- In-migration: Thousands of Sri Lankan labourers in West Asian countries were left stranded and returned jobless.
- Shut-down: Garment factories and tea estates could not function, as infections raged in clusters. Tourism sector to saw a big dip.
- Domestic job losses: Thousands of youth lost their jobs in cities as establishments abruptly sacked them or shut down.
- Forex decline: It meant that all key foreign exchange earning sectors, such as exports and remittances, along with tourism, were brutally hit.
Policy failures of Lankan govt
- No strategy: The lack of a comprehensive strategy to respond to the crisis then was coupled with certain policy decisions last year.
- Ill-advised policies: It included the government’s abrupt switch to organic farming —widely deemed “ill-advised”, further aggravated the problem.
- Food hoarding: The government declared emergency regulations for the distribution of essential food items. It put wide import restrictions to save dollars which in turn led to consequent market irregularities and reported hoarding.
- Continuous borrowing: Fears of a sovereign default rose by the end of 2021, with the country’s foreign reserves plummeting to $1.6 billion, and deadlines for repaying external loans looming.
What is happening on the ground?
- At the macro-economic level, all indicators are worrisome.
- The Sri Lankan rupee, which authorities floated this month, has fallen to nearly 265 against the U.S. dollar. Consumer Price inflation is at 16.8% and foreign reserves stood at $2.31 billion at the end of February.
- Sri Lanka must repay foreign debt totalling nearly $7 billion this year and continue importing essentials from its dwindling dollar account.
- Sri Lanka will incur an import bill of $22 billion this year, resulting in a trade deficit of $10 billion.
Implications on Public
- For citizens, this means long waits in queues for fuel, a shortage of cooking gas, contending with prolonged power cuts in many localities and struggles to find medicines for patients.
- In families of working people, the crisis is translating to cutting down on milk for children, eating fewer meals, or going to bed hungry.
How is India helping?
- Acting in the Neighbourhood’s first policy, India stands with Sri Lanka.
- $1 billion credit line signed for supply of essential commodities. Key element of the package of support extended by India.
- Beginning January 2022, India has extended assistance totalling $ 2.4 billion — including an $400 million RBI currency swap and a $500 million loan deferment.
Chinese lure of aid
- China is considering Sri Lanka’s recent request for further $2.5 billion assistance, in addition to the $2.8 billion Beijing has extended since the outbreak of the pandemic.
How is India’s assistance being viewed in Sri Lanka?
- Sacking key infra projects: The leadership has thanked India for the timely assistance, but there is growing scepticism in Sri Lankan media and some sections, over Indian assistance “being tied” to New Delhi inking key infrastructure projects.
- Deep incursion: They mainly include the strategic Trincomalee Oil Tank Farm project; the National Thermal Power Corporation’s recent agreement with Ceylon Electricity Board to set up a solar power plant in Sampur, with investment from India’s Adani Group.
- Diplomatic blackmail: SL media accuses New Delhi was resorting to “diplomatic blackmail”. The political opposition has accused the Adani Group of entering Sri Lanka through the “back door”, avoiding competitive bids and due process.
Options available for SL
- Sri Lanka is hoping for a Rapid Finance Instrument (RFI) facility as well as a larger Extended Fund Facility (EFF) from the IMF to deal with its foreign currency shortages.
- IMF had assured to help the country with an amount of $300 million to $600 million.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: World Happiness Report
Mains level: Not Much
India ranks 136th in the World Happiness Report 2022, while Finland becomes the happiest country for the fifth consecutive year.
One can definitely question the credibility of such reports whenever India is being grouped with some African countries that too below Pakistan.
World Happiness Report
- The WHR is an annual publication of the UN Sustainable Development Solutions Network.
- It measures three main well-being indicators: life evaluations, positive emotions, and negative emotions (described in the report as positive and negative affect).
- Since 2011, the World Happiness Report (WHR) is released every year around the time of International Day of Happiness on March 20.
- It was adopted by the UN General Assembly based on a resolution tabled by Bhutan.
How is the WHI derived?
- The ranking is done on a three-year average based on surveys of ‘Life Evaluation’ conducted by Gallup World Poll which surveys around 1000 people from each country to evaluate their current life on a scale of 0-10.
- On this scale, 10 marks the best possible and 0 as the worst possible life.
- Further, six key variables GDP per capita, social support, healthy life expectancy, freedom, generosity, and corruption contribute to explaining life evaluations.
Top performers this year
- The top five countries in the list are from Europe.
- While the United States held the 16th spot in the happiest countries list.
- Following Finland, Denmark bagged the second rank, while Iceland and Switzerland stood at third and fourth rank.
- The Netherlands was at the fifth rank in the list.
- Meanwhile, Luxembourg, Norway, Israel, and New Zealand were the remaining countries in the top 10.
Dismal performers
- Afghanistan held the last position of 146th in the list, with Lebanon (145th), Zimbabwe (144th), Rwanda (143rd), and Botswana (142nd) following.
- Bangladesh has improved its ranking by seven notches on the WHI from 101 last year to 94 in 2022 out of 146 countries included in the report.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Exercise LAMITIYE
Mains level: Not Much
The 9th Joint Military Exercise LAMITIYE-2022 between the Indian Army and Seychelles Defence Forces (SDF) is being conducted at Seychelles Defence Academy (SDA), Seychelles.
Exercise LAMITIYE
- Lamitiye, which in Creole means friendship, is a biennial training event being conducted in Seychelles since 2001.
- This year, it will feature a range of complex military drills, demonstrations and discussions, officials said.
- The objective of the joint training exercise is to build and promote bilateral military relations in addition to exchanging skills, experiences and good practices between both the armies.
- Both sides will jointly train, plan and execute a series of well-developed tactical drills for neutralization of likely threats that may be encountered in a semi-urban environment.
- The exercise will also witness showcasing of new-generation equipment and technology for conducting joint operations.
Significance of the exercise
- LAMITIYE is crucial and significant in terms of security challenges faced by both nations in the backdrop of the current global situation and growing security concerns in the Indian Ocean region.
Tap to read more about:
Various Defence Exercises in News
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Fourth industrial revolution
Mains level: Paper 3- Textile industry in South Asia and challenges ahead
Context
South Asia became a major player in the global textiles and clothing market with the onset of the third wave of global production.
Textile industry in Bangladesh
- Bangladesh overtook India in exports in the past decade as Indian labour costs resulted in products becoming 20% more expensive.
- Bangladesh joined the league in the 1980s, owing to the outbreak of the civil war in Sri Lanka.
- Lower production costs and free trade agreements with western buyers are what favour Bangladesh, which falls third in the line as a global exporter.
- Bangladesh has been ahead of time in adopting technology.
- Bangladesh also concentrates on cotton products, specialising in the low-value and mid-market price segment.
Where does India stand?
- The progress of India and Pakistan in readymade garments is recent when compared to their established presence in textiles.
- India holds a 4% share of the U.S.$840 billion global textile and apparel market, and is in fifth position.
- India has been successful in developing backward links, with the aid of the Technical Upgradation Fund Scheme (TUFS), in the cotton and technical textiles industry.
- However, India is yet to move into man-made fibres as factories still operate in a seasonal fashion.
Challenges ahead
1] Fourth Industrial revolution and robotic automation
- The Fourth Industrial Revolution (4IR) has been shifting focus from production machinery to integrating technology in the entire production life cycle.
- The production cycle incorporates all digital information and automation including robotics, artificial intelligence (AI), virtual reality, 3D printing, etc.
- Robotic automation exemplifies production efficiency, especially in areas such as cutting and colour accuracy.
- The Asian Development Bank anticipates the challenges of job losses and disruption, inequality and political instability, concentration of market power by global giants and more vulnerability to cyberattacks.
- With a 7% unemployment rate, India faces the challenge of job creation in the wake of increased automation.
- The World Bank expects this trend to accelerate in the post-COVID-19 market.
- The 4IR may result in unemployment or poor employment generation, primarily affecting a low skill workforce.
2] Sustainability challenge
- Sustainability is also an important consideration for foreign buyers.
- Bangladesh’s readymade garments initiated ‘green manufacturing’ practices to help conserve energy, water, and resources.
- Textile and apparel effluents account for 17%-20% of all water pollution.
- The Indian government is committed to promoting sustainability through project sustainable resolution.
3] Labour issues
- Access to affordable labour continues to be an advantage for south Asia.
- In addition, a country such as India with a very high number of scientists and engineers could lead, as is evident in the areas of drones, AI and blockchain.
- India’s potential lies in its resources, infrastructure, technology, demographic dividend and policy framework.
- The creation of a Centre for the Fourth Industrial Revolution is indicative of India’s intent.
Way forward
- Digitalisation and automation in areas such as design, prototyping, and production are key in order to stay abreast, and in controlling production quality and timely delivery.
- Sustainable practices such as regenerative organic farming (that focuses on soil health, animal welfare, and social fairness), sustainable manufacturing energy (renewable sources of energy are used) and circularity are being adopted.
- Tax exemptions or reductions in imported technology, accessibility to financial incentives, maintaining political stability and establishing good trade relations are some of the fundamental forms of support the industry needs from governments.
- The U.S. trade war on China owing to human rights violations along with its economic bottlenecks, opens doors for India and Pakistan as they have strong production bases.
- Similar to China, India has a big supply — from raw material to garments.
- Bangladesh has also risen as a top exporter in a cost competitive global market.
- India’s proposed investments of US$1.4 billion and the establishment of all-in-one textile parks are expected to increase employment and ease of trade.
- India extended tax rebates in apparel export till 2024, with the twin goals of competitiveness and policy stability.
- Labour law reforms, additional incentives, income tax relaxations, duty reductions for man-made fibre, etc. are other notable moves.
- Newer approaches in the areas of compliance, transparency, occupational safety, sustainable production, etc. are inevitable changes in store for South Asia to sustain and grow business.
- Finally, there is a need for governments’ proactive support in infrastructure, capital, liquidity and incentivisation.
Conclusion
Ensuring government support for financial incentives, upgrading technologies and reskilling labour are key challenges.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Vision for Defence Technology and Industrial Base
Context
Given its successive abstentions during votes on Ukraine in the UN Security Council and elsewhere, New Delhi has attracted criticism and even reproach from many quarters. While India’s abstentions may be hard to justify on moral grounds, they are certainly rooted in “realpolitik”.
Reasons for India’s stance
- There is irrefutable logic in the argument that safeguarding the source of 60-70 per cent of its military hardware constitutes a prime national interest for India.
- Any interruption in the supply of Russian arms or spares could have a devastating impact on our defence posture vis-à-vis the China-Pak axis.
- Even after diversification of sources, India remains trapped in the Russian bear’s jaws, jeopardising the credibility of its “strategic autonomy”.
Implications of India’s position
- The stance adopted by India has placed it amongst a minority of nations, alongside China and Pakistan.
- Seen widely as pro-Russian, this posture is likely to affect India’s international standing and bears reflection.
Suggestion
- The answers to India’s agonising dilemma lie in two drastic imperatives, which must receive the closest attention of decision-makers. They are:
- The “de-Russification of the armed forces” and the genuine “indigenisation of India’s defence technological and industrial base (DTIB)”.
- Russia’s military-industrial complex, in oligarch hands, has been struggling against inefficiency, poor quality control and deficient customer support.
- It is time to initiate a process of progressive “de-Russification” of Indian armed forces; not to switch sources, but of becoming self-reliant.
- It may be uplifting to see battle-tanks, warships and jet-fighters held up as examples of self-reliance, but what is never mentioned is that vital sub-systems like engines, guns, missiles, radars, fire-control computers, gear-boxes and transmission are either imported or assembled under foreign licences.
- Atmanirbhart requires selective identification of vital military technologies in which we are deficient and demands the initiation of well-funded, time-bound, mission-mode projects to develop (or acquire) the “know-how” as well as “know-why” of these technologies.
Conclusion
Having failed for 75 years after independence to attain a degree of self-reliance in military hardware that would have undergirded our “strategic autonomy,” it is time for India to zero in on the reasons why we have failed, where peer-nations like China, South Korea, Israel, Taiwan and even Singapore have succeeded spectacularly.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: The Commonwealth of Independent States (CIS)
Mains level: Paper 2- Need for focus on China
Context
The Russian offensive on Ukraine on the night of February 23-34 shocked the world. The trigger for the conflict has been the rise of anti-Russia/Putin and pro-Europe lobby in Ukraine, led by President Volodymyr Zelenskyy and with the tacit support of the US and the West.
Background of the conflict
- The situation became deeply polarised after battle lines were drawn in 2015, with Ukraine’s breakaway Donbas region seeking a merger with Russia, after Crimea’s unification with the latter.
- Russia has, over the years, quite correctly questioned the relevance of NATO — a grouping of the Cold War era — and its expansion eastwards.
- For instance, NATO included the Commonwealth of Independent States (CIS) countries of Georgia and Ukraine, earlier part of the Soviet Union, in its “Partnership for Peace” programme, despite Russian objections.
Implications of war for geopolitics and role of China
- Geopolitics will never be the same, especially with Germany and Japan announcing militarisation initiatives, polarisation in Europe and the strengthening of the anti-US nexus of China- Russia-Turkey-Iran.
- Focus moves away from China: A matter of concern is that once again, the attention of the US and the West has been diverted from China, the main adversary, to a war that should not have taken place.
- Possibility of annexation of Taiwan: In the current conflict, the ineptitude of the US/NATO to support Ukraine with “boots on the ground” is bound to embolden China in its nefarious design to annex Taiwan.
- This could also lead to increased hostility by China in the resolution of land disputes with the neighbouring countries, as well as in the South and East China seas.
Consider the question “With the Russian invasion of Ukraine, the geopolitics will never be the same again.”Comment.
Conclusion
For India, the greatest lesson is that it will have to meet the Chinese challenge on its own. There is no likelihood of the US or any other nation getting involved in India’s fight with China. Let us focus on atmanirbharta in all its dimensions.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Reasonable Accommodation
Mains level: Not Much
The Karnataka High Court decision effectively upheld the denial of entry to students wearing the hijab. The court rejected an argument in support of permitting Muslim girls wearing head-scarves that was based on the principle of ‘reasonable accommodation’.
What is Reasonable Accommodation?
- ‘Reasonable accommodation’ is a principle that promotes equality, enables the grant of positive rights and prevents discrimination based on disability, health condition or personal belief.
- Its use is primarily in the disability rights sector.
- The provision plays a major role in addressing these barriers and thus contributes to greater workplace equality, diversity and inclusion.
Article 2 of the UN Convention on the Rights of People with Disabilities (UNCRPD) defines:
- Reasonable accommodation is “necessary and appropriate modification and adjustments not imposing a disproportionate or undue burden, where needed in a particular case, to ensure to persons with disabilities the enjoyment or exercise on an equal basis with others of all human rights and fundamental freedoms”.
International Labour Organization (ILO), in its recommendation on HIV/AIDS and the world of work, defines:
- It is “any modification or adjustment to a job or to the workplace that is reasonably practicable and enables a person living with HIV or AIDS to have access to, or participate or advance in, employment”.
How does the principle work?
- The general principle is that reasonable accommodation should be provided, unless some undue hardship is caused by such accommodation.
- A modified working environment, shortened or staggered working hours, additional support from supervisory staff and reduced work commitments are ways in which accommodation can be made.
- Suitable changes in recruitment processes — allowing scribes during written tests or sign language interpreters during interviews — will also be a form of accommodation.
What is the legal position on this in India?
- In India, the Rights of People with Disabilities Act, 2016, defines ‘reasonable accommodation’ as “necessary and appropriate modification and adjustments, without imposing a disproportionate or undue burden in a particular case, to ensure to PwD the enjoyment or exercise of rights equally with others”.
- The definition of ‘discrimination’ in Section 2(h) includes ‘denial of reasonable accommodation’.
- In Section 3, which deals with equality and non-discrimination, sub-section (5) says: “The appropriate Government shall take necessary steps to ensure reasonable accommodation for persons with disabilities.”
Judicial interpretation of Reasonable Accommodation
- In Jeeja Ghosh and Another v. Union of India and Others (2016), the Supreme Court, awarded a compensation of ₹10 lakh to a passenger with cerebral palsy who was evicted from a flight after boarding.
- It said: “Equality not only implies preventing discrimination …, but goes beyond in remedying discrimination against groups suffering systematic discrimination in society.
- In concrete terms, it means embracing the notion of positive rights, affirmative action and reasonable accommodation.
- The Supreme Court elaborated on the concept in Vikash Kumar v. UPSC (2021).
- This was a case in which the court allowed the use of a scribe in the Union Public Service Commission examination for a candidate with dysgraphia, or writer’s cramp.
- It said failure to provide reasonable accommodation amounts to discrimination.
Context to the recent K’taka verdict
- In the recent Karnataka verdict on wearing the hijab, the High Court did not accept the argument for allowing minor variations to the uniform to accommodate personal religious belief.
- The HC meant that the court did not favour making any change or adjustment to the rule that could have enabled the students to maintain their belief or practice even while adhering to the uniform rule.
- The appeal against the verdict in the Supreme Court provides an opportunity to see if the concept can be used in the realm of belief and conscience too.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NPPA
Mains level: Drugs price regulation
Consumers may have to pay more for medicines and medical devices if the National Pharmaceutical Pricing Authority (NPPA) allows a price hike of over 10% in the drugs and devices listed under the National List of Essential Medicines (NLEM), this coming month.
Who regulates Drugs prices?
- The NPPA was set up in 1997 to fix/revise prices of controlled bulk drugs and formulations and to enforce price and availability of the medicines in the country, under the Drugs (Prices Control) Order, 1995-2013.
- Its mandate is:
- To implement and enforce the provisions of the DPCO in accordance with the powers delegated to it
- To deal with all legal matters arising out of the decisions of the NPPA
- To monitor the availability of drugs, identify shortages and to take remedial steps
- The NPPA is also mandated to collect/maintain data on production, exports and imports, market share of individual companies, profitability of companies etc., for bulk drugs and formulations and undertake and/ or sponsor relevant studies in respect of pricing of drugs/ pharmaceuticals.
How does the pricing mechanism work?
- Prices of Scheduled Drugs are allowed an increase each year by the drug regulator in line with the Wholesale Price Index (WPI) and the annual change is controlled and rarely crosses 5%.
- But the pharmaceutical players pointed out that over the past few years, input costs have flared up.
- The hike has been a long-standing demand by the pharma industry lobby.
- All medicines under the NLEM are under price regulation.
Do you know?
As per the Drugs (Prices) Control Order 2013, scheduled drugs, about 15% of the pharma market, are allowed an increase by the government as per the WPI while the rest 85% are allowed an automatic increase of 10% every year.
How are the prices determined?
- The ceiling price of a scheduled drug is determined by first working out the simple average of price to retailer in respect of all branded and generic versions of that particular drug formulation.
- It should have a market share of more than or equal to 1%, and then adding a notional retailer margin of 16% to it.
- The ceiling price fixed/revised by the NPPA is notified in the Gazette of India (Extraordinary) from time to time.
When are the prices revised?
- Prices are revised when there is a rise in the price of bulk drugs, raw materials, cost of transport, freight rates, utilities like fuel, power, diesel, and changes in taxes and duties.
- The cost rises for imported medicines with escalation in insurance and freight prices, and depreciation of the rupee.
- The annual hike in the prices of drugs listed in the NLEM is based on the WPI.
- The NLEM lists drugs used to treat fever, infection, heart disease, hypertension, anaemia etc and includes commonly used medicines like paracetamol, azithromycin etc.
Why are inputs costs high?
- One of the challenges is that 60%-70% of the country’s medicine needs are dependent on China.
- WPI is dependent on price rise in a basket of a range of goods that are not directly linked with the items that go into the cost of medicines.
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From UPSC perspective, the following things are important :
Prelims level: Asiatic Cheetah
Mains level: Wildlife re-introduction and issues
The cheetah, which became extinct in India after Independence, is all set to return with the Union Government launching an action plan in Kuno National Park in Madhya Pradesh.
According to the plan, about 50 of these big cats will be introduced in the next five years, from the Africa savannas, home to cheetahs, an endangered species.
Distribution of cheetahs in India
- Historically, Asiatic cheetahs had a very wide distribution in India.
- There are authentic reports of their occurrence from as far north as Punjab to Tirunelveli district in southern Tamil Nadu, from Gujarat and Rajasthan in the west to Bengal in the east.
- Most of the records are from a belt extending from Gujarat passing through Maharashtra, Madhya Pradesh, Uttar Pradesh, Chhattisgarh, Jharkhand and Odisha.
- There is also a cluster of reports from southern Maharashtra extending to parts of Karnataka, Telangana, Kerala and Tamil Nadu.
- The distribution range of the cheetah was wide and spread all over the subcontinent. They occurred in substantial numbers.
- The cheetah’s habitat was also diverse, favouring the more open habitats: scrub forests, dry grasslands, savannahs and other arid and semi-arid open habitats.
What caused the extinction of cheetahs in India?
- The major reasons for the extinction of the Asiatic cheetah in India:
- Reduced fecundity and high infant mortality in the wild
- Inability to breed in captivity
- Sport hunting and
- Bounty killings
- It is reported that the Mughal Emperor Akbar had kept 1,000 cheetahs in his menagerie and collected as many as 9,000 cats during his half century reign from 1556 to 1605.
- The cheetah numbers were fast depleting by the end of the 18th century even though their prey base and habitat survived till much later.
- It is recorded that the last cheetahs were shot in India in 1947, but there are credible reports of sightings of the cat till about 1967.
Conservation objectives for their re-introduction
- Based on the available evidence it is difficult to conclude that the decision to introduce the African cheetah in India is based on science.
- Science is being used as a legitimising tool for what seems to be a politically influenced conservation goal.
- This also in turn sidelines conservation priorities, an order of the Supreme Court, socio-economic constraints and academic rigour.
- The issue calls for an open and informed debate.
What is the officially stated goal?
- To establish viable cheetah meta-population in India that allows the cheetah to perform its functional role as a top predator
- To provide space for the expansion of the cheetah within its historical range thereby contributing to its global conservation efforts
Issues in re-introduction
- Experts find it difficult whether the African cheetahs would find the sanctuary a favorable climate as far as the abundance of prey is concerned.
- The habitat of cheetahs needed to support a genetically viable population.
Back2Basics: Asiatic Cheetah
- Cheetah, the world’s fastest land animal was declared extinct in India in 1952.
- The Asiatic cheetah is classified as a “critically endangered” species by the IUCN Red List, and is believed to survive only in Iran.
- It was expected to be re-introduced into the country after the Supreme Court lifted curbs for its re-introduction.
- From 400 in the 1990s, their numbers are estimated to have reached to 50-70 today, because of poaching, hunting of their main prey (gazelles) and encroachment on their habitat.
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From UPSC perspective, the following things are important :
Prelims level: Assam Accord
Mains level: Not Much
Last week, the Assam government informed the Assembly that nearly 1.44 lakh illegal foreigners had been identified in the state this year based on the 1985 Assam Accord, and around 30,000 of them had been deported to their country of origin.
Who is a foreigner under the Assam Accord?
- The Assam Accord was signed in 1985 by the Centre and the Assam government with the All Assam Student Union (AASU) and the All Assam Gana Sangram Parishad.
- This movement had spearheaded the 1979-85 Assam Movement against migration from Bangladesh.
- It was against all migrants from Bangladesh, irrespective of religion.
- The Accord set March 24, 1971 as a cut-off. (The Assam Movement had demanded 1951 as the cut-off.)
- Anyone who had come to Assam before midnight on that date would be an Indian citizen, while those who had come after would be dealt with as foreigners.
- The same cut-off was used in updating the National Register of Citizens (NRC).
What are the expressions for which the definitions have not been determined? Why are they important?
- The definitions of phrases mentioned in the Accord such as ‘Axomiya janagan’ (Assamese people), ‘khilonjia’ (indigenous) and ‘adi basinda’ (original inhabitants) were yet to be determined.
- The context is Clause 6 of the Assam Accord, which promises “constitutional, legislative and administrative safeguards to protect, preserve and promote the cultural, social, linguistic identity and heritage of the Assamese people”.
- However, it doesn’t provide clear cut definitions to identify who would be the “Assamese people”.
- Clause 6 is important because many felt the 1971 cut-off was inadequate.
Issues with the cut-off date
- The cut-off for the rest of India is 1948, many noted that the Assam Accord would grant citizenship to a section of migrants who would be counted as foreigners elsewhere in the country.
- Clause 6 was, therefore, seen as a protective provision which would guarantee certain benefits to the Assamese people, while excluding some sections among those granted citizenship on the basis of the 1971 cut-off.
Why is the ‘Assamese’ definition difficult?
- Because Assam’s demography has been shaped by decades of migration.
- Many of the migrants had settled here during the colonial era.
- While they might not be native speakers of an indigenous language, such as Assamese or Bodo or Karbi, the question was whether the definition of “Assamese” could exclude someone, for example, whose family might have lived in Assam for 100 years.
Have any definitions been proposed?
- A key committee came in 2019, when Assam was rocked by protests against the Citizenship Amendment Act (CAA) which proposes to grant citizenship to various categories of foreigners including Hindus from Bangladesh.
- The government set up the committee as a means to quell the protests.
This committee recommended following persons as Assamese:
- All citizens who are part of the Assamese community
- Any person of indigenous tribal community of Assam
- Any other indigenous community of Assam
- Any other citizens of India residing in the territory or Assam on or before January 1, 1951 and
- Descendants of these categories
- In essence, this definition includes not only the indigenous people but also all other Indian citizens, irrespective of mother tongue, as long as their ancestors were staying in Assam before 1951.
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