Note4Students
From UPSC perspective, the following things are important :
Prelims level: GDP and inflation
Mains level: Paper 3- India's growth rate
Context
The Provisional Estimates of Annual National Income in 2021-22 just released show that GDP grew 8.7% in real terms and 19.5% in nominal terms (including inflation). It makes India the fastest growing major economy in the world.
What data implies
- Just 1.51% larger: Provisional Estimates of Annual National Income in 2021-22 also indicate that, the real economy is 1.51% larger than it was in 2019-20, just before the novel coronavirus pandemic hit the world.
- In nominal terms it is higher by 17.9%.
- Inflation: These numbers imply that the rate of inflation was 10.8% in 2021-22 and 16.4% between the two years, 2019-20 and 2021-22.
- Almost no growth: This picture implies almost no growth and high inflation since the pre-pandemic year.
- So, the tag of the fastest growing economy means little.
- Quarterly growth rate: The quarter to quarter growth currently may give some indication of the present rate of growth.
- In 2020-21, the quarterly rate of growth increased through the year.
- In 2021-22, the rate of growth has been slowing down.
- Of course in 2020-21, the COVID-19 lockdown had a severe impact in Q1 (-23.8%); after that the rate of growth picked up.
- In 2021-22, the rate of growth in Q1 had to sharply rise (20.3%).
- Ignoring the outliers in Q1, growth rates in 2021-22 have sequentially petered out in subsequent quarters: 8.4%, 5.4% and 4.1%.
- Going forward, while the lockdown in China is over, the war-related impact is likely to persist since there is no end in sight.
- Thus, price rise and impact on production are likely to persist.
Issues with the data
- The issue is about correctness of data.
- The annual estimates given now are provisional since complete data are not available for 2021-22.
- There is a greater problem with quarterly estimates since very limited data are available for estimating it.
- No data for Q1 of 2020-21: The first issue is that during 2020-21, due to the pandemic, full data could not be collected for Q1.
- No data for agriculture: Further, for agriculture, quarterly data assumes that the targets are achieved.
- Agriculture is a part of the unorganised sector.
- Very little data are available for it but for agriculture — neither for the quarter nor for the year.
- It is simply assumed that the limited data available for the organised sector can be used to act as a proxy.
- The non-agriculture unorganised sector is represented by the organised sector.
- Changes in non-agriculture unorganised: The method using the organised sector to proxy the unorganised non-agriculture sector may have been acceptable before demonetisation (2016) but is not correct since then.
- The reason is that the unorganised non-agriculture sector suffered far more than the organised sector and more so during the waves of the pandemic.
- Shift in demand to the organised sector: Large parts of the unorganised non-agriculture sector have experienced a shift in demand to the organised sector since they produce similar things.
- This introduces large errors in GDP estimates since official agencies do not estimate this shift.
- All that is known is that the Micro, Small and Medium Enterprises (MSME) sector has faced closures and failures.
- If GDP data are incorrect, data on its components — private consumption and investment — must also be incorrect.
- Further, the ratios themselves would have been impacted by the shock of the lockdown and the decline of the unorganised sectors.
- Private consumption data is suspect since according to the data given by the Reserve Bank of India which largely captures the organised sector, consumer confidence throughout 2021-22 was way below its pre-pandemic level of 104 achieved in January 2020.
- In brief, neither the total nor the ratios are correct.
Possible corrections
- In the best possible scenario, assume that the organised sector (55% of GDP) and agriculture (14% of GDP) are growing at the official rate of growth of 8.2% and 3%, respectively.
- Then, they would contribute 4.93% to GDP growth.
- The non-agriculture unorganised component is declining for two reasons: first, the closure of units and the second the shift in demand to the organised sector.
- Even if 5% of the units have closed down this year and 5% of the demand has shifted to the organised sector, the unorganised sector would have declined by about 10%; the contribution of this component to GDP growth would be -3.1%.
Conclusion
Clearly, recovery is incomplete and India is not the fastest growing big economy of the world.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: IPEF countries
Mains level: Paper 2- IPEF opportunities and challenges
Context
The official launch of the Biden Administration’s Indo-Pacific Economic Framework (IPEF), the US’s de facto foreign economic policy for Asia, has been lauded and welcomed.
About IPEF
- Seen as a means to counter China in the region, it is a U.S.-led framework for participating countries to solidify their relationships and engage in crucial economic and trade matters in the region.
- The member nations include Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam.
- It includes seven out of 10 members of the Association of South East Asian Nations (ASEAN), all four Quad countries, and New Zealand.
- Together, these countries account for 40 per cent of the global GDP.
- Not a free trade agreement: The Indo-Pacific Economic Framework is not a free trade agreement.
- No market access or tariff reductions have been outlined, although experts say it can pave the way for future trade deals.
- The IPEF is also seen as a means by which the US is trying to regain credibility in the region after former President Donald Trump pulled out of the Trans Pacific Partnership TPP.
- IPEF countries value its purpose and potential, particularly given some doubts over whether the US administration could sustain its focus in Asia as war broke out in Europe.
- The IPEF empowers the Biden administration to shape rules across several critical pillars that will condition America’s economic engagement in the Indo-Pacific amid competing economic paradigms, notably the Chinese through the BRI and Europe through digital policies and standards.
- Countering China: Besides Ukraine, the IPEF’s importance also owes to China’s patent economic footprint across Asia that could be checked by an alternative economic paradigm that emphasises openness, flexibility, and integration.
Significance of IPEF
- Boost supply chain resilience: Globally, the IPEF signifies the first multilateral attempt to boost supply chain resilience to ease global inflationary pressures and mitigate effects of future disruptions, particularly key raw materials, critical minerals, and semiconductors.
- Four key pillars: It’s a framework or a starting point to regulate trade and commerce across four key pillars: Digital economy, supply chains, clean energy, and governance.
- Negotiating high standard rules: The IPEF also represents an effort to negotiate “high-standard” rules between like-minded countries to govern the digital economy, particularly data flows, climate mitigation, global tax, anti-money laundering and anti-bribery provisions.
Challenges
- Impact on domestic companies: IPEF commitments and standards that other signatories like India have to accede to, will likely facilitate US MNCs’ access to Asian economies at the expense of domestic preferences.
- Impact on policy preference of countries: The IPEF’s pillars — climate, digital, supply chains, and governance reforms — could clash with and supersede these countries’ policy preferences on such issues.
- For instance, the US’ preference to allow free and open data flows under the digital economy pillar will constrict India’s ability to regulate data for domestic purposes.
Way forward for India
- The IPEF remains attractive for India given its flexibility and open nature, allowing Delhi to demonstrate its political commitment to the United States to jointly shape the rules governing the Indo-Pacific’s economic future even as competitors lurk.
- Tough policy choices, like the one on data and taxation, must be made by Indian officials while negotiating the terms of the IPEF accession.
Conclusion
What’s clear is that the IPEF represents both a mirage and aspiration. Collectively, it represents a leap into an unknown that has to be negotiated amongst partners that share interests and some values.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Lessons from Indus Water Treaty
Context
The 118th meeting of the Permanent Indus Commission (PIC) comprising the Indus Commissioners of India and Pakistan held on May 30-31, 2022 in New Delhi.
Indus Waters Treaty, 1960: A background
- After years of arduous negotiations, the Indus Waters Treaty was signed in Karachi on September 19, 1960, by then Indian Prime Minister Jawaharlal Nehru and then Pakistani President Ayub Khan, negotiated by the World Bank.
- According to this agreement, control over the water flowing in three “eastern” rivers of India — the Beas, the Ravi and the Sutlej was given to India
- The control over the water flowing in three “western” rivers of India — the Indus, the Chenab and the Jhelum was given to Pakistan
- The treaty allowed India to use western rivers water for limited irrigation use and unrestricted use for power generation, domestic, industrial and non-consumptive uses such as navigation, floating of property, fish culture, etc. while laying down precise regulations for India to build projects
- India has also been given the right to generate hydroelectricity through the run of the river (RoR) projects on the Western Rivers which, subject to specific criteria for design and operation is unrestricted.
- The Permanent Indus Commission, which has a commissioner from each country, oversees the cooperative mechanism and ensures that the two countries meet annually (alternately in India and Pakistan).
- This year, the commission met twice, in March in Islamabad, Pakistan, and then in New Delhi, in May.
- It is a rare feat that despite the many lows in India-Pakistan relations, talks under the treaty have been held on a regular basis.
Some disagreements
- Throughout its existence, there have been many occasions during which differences between the two countries were discernible.
- Both countries held different positions when Pakistan raised objections regarding the technical design features of the Kishanganga and Ratle hydroelectric power plants.
- Differences were also discernible when Pakistan approached the World Bank to facilitate the setting up of a court of arbitration to address the concerns related to these two projects referred to in Article IX Clause 5 of the treaty, and when India requested the appointment of a Neutral Expert referent to Clause 2.1 of Article IX .
- Eventually, on March 31, 2022, the World Bank, decided to resume two separate processes by appointing a neutral expert and a chairman for the court of arbitration.
- The appointment of a neutral expert will find precedence to address the differences since under Article IX Clause 6 of the treaty provisions, Arbitration ‘shall not apply to any difference while it is being dealt with by a Neutral Expert’.
- Pakistan, invoking Article VII Clause 2 on future cooperation, raised objections on the construction and technical designs of the Pakal Dul and Lower Kalnai hydropower plants.
- Similarly, India has raised concerns on issues such as Pakistan’s blockade of the Fazilka drain.
Lessons from the treaty
- Engagement between conflicting nations: The treaty is an illustration of a long-standing engagement between the conflicting nations that has stood the vagaries of time.
- Water management cooperation: The treaty is considered one of the oldest and the most effective examples of water management cooperation in the region and the world.
- Avoiding conflict: With the exception of differences on a few pending issues, both countries have avoided any actions resulting in the aggravation of the conflict or acted in a manner causing conflict to resurface.
Potential for cooperation
- Joint research: Recognising common interests and mutual benefits, India and Pakistan can undertake joint research on the rivers to study the impact of climate change for ‘future cooperation’ (underlined in Article VII).
- Potential for cooperation and development: The Indus Waters Treaty also offers great potential for cooperation and development in the subcontinent which can go a long way in ensuring peace and stability.
Conclusion
Given that both India and Pakistan have been committed to manage the rivers in a responsible manner, the Treaty can be a reference point to resolve other water-related issues in the region through regular dialogue and interaction.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Jal Jeevan Mission
Mains level: Paper 2- Achievements of JJM and SBM
Context
The performance of the Jal Jeevan and Swachh Bharat Missions highlights the importance of convergence as an operating principle of the government.
Jal Jeevan Mission: Progress made so far
- Jal Jeevan Mission (JJM) is a flagship programme of the Government of India, launched by Hon’ble Prime Minister on 15th August 2019.
- Jal Jeevan Mission, is envisioned to provide safe and adequate drinking water through individual household tap connections by 2024 to all households in rural India.
- Community approach: The Jal Jeevan Mission is based on a community approach to water and will include extensive Information, Education and communication as a key component of the mission.
- Over 9.6 crore rural households get tap water supply; notably, more than 6.36 crore households have been provided tap water connections since the programme was announced in August 2019.
Achievements of Swachh Bharat Mission
- Universal sanitation coverage: To accelerate the efforts to achieve universal sanitation coverage and to put the focus on sanitation, the Prime Minister of India had launched the Swachh Bharat Mission on 2nd October 2014.
- Under the mission, all villages, Gram Panchayats, Districts, States and Union Territories in India declared themselves “open-defecation free” (ODF) by 2 October 2019, the 150th birth anniversary of Mahatma Gandhi.
- To ensure that the open defecation free behaviours are sustained, no one is left behind, and that solid and liquid waste management facilities are accessible, the Mission is moving towards the next Phase II of SBMG i.e ODF-Plus.
- Swachh Bharat Mission Phase-2: The government has launched Swachh Bharat Mission Phase 2 with a focus on plastic waste management, biodegradable solid waste management, grey water management and faecal sludge management.
- Under Swachh Bharat Mission Phase-2, arrangements for solid and liquid waste management have been made in 41,450 villages; nearly 4 lakh villages have minimal stagnant water.
- ODF Plus: Nearly 22,000 villages have been named “model village” under the ODF Plus scheme, and another 51,000 villages are on their way to achieving this tag.
- Sludge treatment and plastic waste management: Before the government embarked on Swachh Bharat Mission, nearly 1,20,000 tonnes of faecal sludge was left untreated as two-thirds of all toilets were not connected to the main sewer lines
- The scale of India’s plastic waste pollution is staggering.
- Both these problems find themselves on the agenda of Swachh Bharat Mission’s Phase 2.
- In a short time, 3.5 lakh villages have become plastic dump free and nearly 4.23 lakh villages have minimal litter.
- Nearly 178 faecal sludge treatment plants and nearly 90,000 km of drains have been constructed.
How convergence between SBM and JJM enabled each other
- Principle of convergence: The late Arun Jaitley introduced convergence as one of the primary operating principles of the government in his first budget speech.
- One enabling the other: The best exhibition of this can be found in the ways in which the Jal Jeevan Mission and Swachh Bharat Mission work in tandem, one enabling the other.
- More than 10 crore toilets were built under SBM but this accomplishment could have been difficult had the government not had the foresight to build the toilets on a twin-pit design that has in-situ treatment of faecal sludge.
- Now, providing tap water connections through the Jal Jeevan Mission is among the government’s top priorities.
- Managing grey water discharge: The Jal Jeevan Mission faces a challenge similar to that faced by the Swachh Bharat Mission — managing grey water discharge.
- Holistic sanitation: When household tap connections were provided, the Jal Jeevan Mission converged with the Swachh Bharat Mission to achieve holistic sanitation in which the treatment of grey water became a vital component.
- Focus on women: The Jal Jeevan mission intends to relieve women of the drudgery of travelling long distances to fetch water.
- The Swachh Bharat Mission too is centred around the dignity of women.
- A joint study by the Bill and Melinda Gates Foundation and UNICEF revealed that an overwhelming number (80 per cent) of the respondents stated that safety and security were the main drivers of their decision to construct toilets.
- The Jal Jeevan Mission is catalysing change at the grass roots level by reserving 50 per cent seats for women in village and water sanitation committees.
- In every village, at least five women have been entrusted with water quality surveillance and many of them have been trained as plumbers, mechanics and pump operators.
Impact on growth and economy
- In 2006, a joint study by WSP, Asian Development Bank and UKAID revealed that inadequate sanitation cost India Rs 2.4 trillion — 6 per cent of India’s GDP at that time.
- The Swachh Bharat Mission, apart from preventing GDP loss, provides annual benefits worth Rs 53,000 per household.
Conclusion
The success of Jal Jeevan Mission and Swachh Bharat Mission is a good example of convergence, one of the primary operating principles of the government.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Core inflation
Mains level: Paper 3- Inflation challenge
Context
A rate hike in the monetary policy committee’s June meeting was a foregone conclusion after the spike in inflation and an off-cycle surprise interest rate hike on May 4.
Reasons fast forwarding of interest rate hike
- 1] Broad based inflation: A confluence of factors has pushed inflation higher and made it persistent and broad-based.
- 2] Policy rates are still negative: Even with this hike, the repo rate, the signalling tool for bank interest rates, is still below pre-pandemic levels.
- The real policy rate (repo rate less expected inflation) remains negative and has some distance to cover before it reaches positive territory — where the RBI would like to see it.
- 3] Lag in effect: Monetary policy impacts growth, and thereafter, inflation with a lag.
- To control inflation, the RBI needed to act faster by front loading rate hikes.
- 4] Elevated inflation expectations: The risk of inflation expectations getting unmoored had risen.
- Household and business inflation expectations remain elevated, as indicated by the RBI’s inflation expectations survey of households.
- 5] Interest rate hike in the US: The aggressive stance of the US Federal Reserve and ensuing tightening financial conditions.
- India is better placed today than in 2013 to face the Fed’s actions with a stronger forex shield.
How US Fed’s actions affect India?
- India is not insulated.
- Capital outflow: The headwinds now are stronger than in 2013 and we have seen net capital outflows since October 2021.
- S&P Global expects the US federal funds rate to be hiked to 3-3.25 per cent in 2023, higher than the pre-pandemic level, and highest since early 2008.
- Despite a strong forex hoard, the RBI has had to deploy monetary policy to mute the impact of the Fed’s actions.
Inflation and its impact
- Upward pressure on food inflation: The pressure on food inflation has increased owing to the impact of the freak heatwave on wheat, tomatoes and mangoes, which is driving prices higher.
- This is on top of rising input costs for agricultural production, the global surge in food prices and the expected sharper than usual rise in minimum support price.
- Fuel inflation will remain high, duty cuts notwithstanding, as global crude prices remain volatile at elevated levels.
- Core inflation, the barometer of demand, is a complex story.
- Goods (despite only partial pass-through of input costs) are witnessing higher inflation than services.
- That’s because services faced tighter restrictions during the Covid-19 waves, restricting their consumption and the pricing power of providers as well.
- Service categories that are mostly regulated, such as public transport, railways, water and education, have over 50 per cent weight in core services.
- However, prices of discretionary services such as airlines, cinema, lodging and other entertainment are rising.
- Transportation-related services have seen the sharpest rise in the past six months due to fuel price increases.
- Impact on the poor: For those at the bottom of the pyramid, high inflation hits harder because energy and food are a big chunk of their consumption basket.
Growth prospects
- S&P Global has recently cut the growth outlook for major economies for 2022 — that of the US to 2.4 per cent from 3.2 per cent, for Eurozone to 2.7 per cent from 3.3 per cent earlier, and for China to 4.2 per cent from 4.9 per cent.
- This will hurt exports which are very sensitive to global demand.
Monetary policy actions
- Not all aspects of supply-driven inflation can be addressed via monetary policy.
- So the authorities are complementing monetary policy actions by using the limited fiscal space to cut duties and extend subsidies to the vulnerable.
Conclusion
Monetary tightening impacts growth with a lag of at least 3-4 quarters and the fact that real interest rates are negative and borrowing rates still below pre-pandemic levels, implies monetary policy is unlikely to be growth-restrictive for this year.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Health Mission
Mains level: Paper 2- Reforms in healthcare
Context
The lesson emerging from the pandemic experience is that if India does not want a repeat of the immeasurable suffering and the social and economic loss, we need to make public health a central focus.
Need for institutional reforms in the health sector
- The importance of public health has been known for decades with every expert committee underscoring it.
- Ideas ranged from instituting a central public health management cadre like the IAS to adopting an institutionalised approach to diverse public health concerns — from healthy cities, enforcing road safety to immunising newborns, treating infectious diseases and promoting wellness.
- Covid has shifted the policy dialogue from health budgets and medical colleges towards much-needed institutional reform.
About National Health Mission (NHM)
- The National Health Mission (NHM) seeks to provide universal access to equitable, affordable and quality health care which is accountable, at the same time responsive, to the needs of the people, reduction of child and maternal deaths as well as population stabilization, gender and demographic balance.
- The Framework for Implementation of NUHM has been approved by the Cabinet on May 1, 2013.
- NHM encompasses two Sub-Missions, National Rural Health Mission (NRHM) and National Urban Health Mission (NUHM).
- The National Rural Health Mission (NRHM) was launched in 2005 with a view to bringing about dramatic improvement in the health system and the health status of the people, especially those who live in the rural areas of the country.
Learning from the failure of National Health Mission (NHM)
- The National Health Mission (NHM) has been in existence for about 15 years now and the health budget has trebled— though not as a proportion of the GDP.
- Despite this less than 10 per cent of the health facilities below the district level can attain the grossly minimal Indian public health standards.
- Clearly, the three-tier model of subcentres with paramedics, primary health centres with MBBS doctors and community health centres (CHC) with four to six specialists has failed.
- Lack of accountability framework: The model’s weakness is the absence of an accountability framework.
- The facilities are designed to be passive — treating those seeking care.
Suggestions
- 1] FHT: Instead of passive design of NHM, we need Family Health Teams (FHT) like in Brazil, accountable for the health and wellbeing of a dedicated population, say 2,000 families.
- The FHTs must consist of a doctor with a diploma in family medicine and a dozen trained personnel to reflect the skill base required for the 12 guaranteed services under the Ayushman Bharat scheme.
- A baseline survey of these families will provide information about those needing attention.
- Family as a unit: The team ensures a continuum of care by taking the family as a unit and ensuring its well-being over a period.
- Nudging these families to adopt lifestyle changes, following up on referrals for medical interventions and post-operative care through home visits for nursing and physiotherapy services would be their mandate.
- 2] Health cadre: The implication of and central to the success of such a reset lies in creating appropriate cadres.
- 3] Clarity to nomenclatures: There is also a need to declutter policy dialogue and provide clarity to the nomenclatures.
- Currently, public health, family medicine and public health management are used interchangeably.
- While the family doctor cures one who is sick, the public health expert prevents one from falling sick.
- The public health management specialist holds specialisation in health economics, procurement systems, inventory control, electronic data analysis and monitoring, motivational skills and team-building capabilities, public communication and time management, besides, coordinating with the various stakeholders in the field.
- 4] Move beyond doctor-led systems: India needs to move beyond the doctor-led system and paramedicalise several functions.
- Instead of wasting gynaecologists in CHCs midwives (nurses with a BSc degree and two years of training in midwifery) can provide equally good services except surgical, and can be positioned in all CHCs and PHCs.
- This will help reduce C Sections, maternal and infant mortality and out of pocket expenses.
- 5] Counsellors and physiotherapists at PHC: Lay counsellors for mental health, physiotherapists and public health nurses are critically required for addressing the multiple needs of primary health care at the family and community levels.
- 6] Review of existing system: Bringing such a transformative health system will require a comprehensive review of the existing training institutions, standardising curricula and the qualifying criteria.
- Increase spending on training: Spending on pre-service and in-service training needs to increase from the current level of about 1 per cent.
- 7] Redefining of functions: A comprehensive redefinition of functions of all personnel is required to weed out redundancies and redeploy the rewired ones.
Conclusion
Resetting the system to current day realities requires strong political leadership to go beyond the inertia of the techno-administrative status quoist structures. We can.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Forward-looking strategy on Pakistan
Context
India’s approach in dealing with Pakistan today is very different from the framework that emerged at the dawn of the 1990s.
Terms of engagement with Pakistan
- From the 1990s, for nearly three decades, it was Pakistan that had the political initiative.
- The turmoil in Kashmir, the international focus on nuclear proliferation, and the relentless external pressure for a sustained dialogue with Pakistan put Delhi in a difficult situation.
- If Pakistan was on the political offensive, a series of weak coalition governments in Delhi were forced onto the back foot.
- At the heart of Pakistan’s ambition was to change the status quo in Jammu and Kashmir.
- Islamabad also played up to the concerns in Western chancelleries that the conflict in Kashmir might escalate to the nuclear level.
- The new international consensus that Kashmir is the “world’s most dangerous nuclear flashpoint” aligned well with Pakistan’s strategy.
- Delhi had no option but to respond, but any move to counter Pakistan would make the situation worse.
- Under Prime Minister Narendra Modi, India has begun to reset the terms of the engagement agenda.
- Change in regional and international context: Meanwhile, the regional and international context has also altered in many ways since the early 1990s essentially in India’s favour.
Reset in engagement
- India’s transformed relations with the US, the resolution of Delhi’s dispute with the global nuclear order, and getting the West to discard its temptation to mediate on Kashmir enormously improved India’s diplomatic position.
- But the most consequential change has been in the economic domain.
- The persistent neglect of economic challenges left Pakistan in an increasingly weaker position in relation to India.
- If India has inched its way into the top six global economies, Pakistan today is broke.
- Modi had the opportunity to build on these shifting fortunes of Delhi and Islamabad and develop a three-pronged strategy of his own.
- 1] India bet that the heavens won’t fall if Delhi stops talking to Islamabad or negotiating with Pakistan-backed militant groups in Kashmir.
- 2] Delhi has been unafraid of staring at nuclear escalation in responding to Pakistan’s cross-border terrorism.
- 3] By changing the constitutional status of Kashmir in 2019, India has reduced the scope of India’s future negotiations with Pakistan on Kashmir.
Way forward
- Pakistan’s hand today is much weaker than in the 1990s and Delhi’s room for manoeuvring has grown, notwithstanding the challenges it confronts on the China border.
- That opens some room for new Indian initiatives toward Pakistan.
- Getting Pakistan’s army and its political class to be more practical in engaging India is certainly a tall order; but Delhi can afford to make a move.
Conclusion
While there can be much disagreement on Pakistan’s capacity to respond, Delhi’s new initiatives can reinforce the positive evolution of Indian foreign policy, and expand the space for Indian diplomacy in the region and beyond.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GST council
Mains level: Paper 2- GST council's role in federal structure of India
Context
The Supreme Court of India recently ruled that “The recommendations of the GST Council are not binding on either the Union or the States…”.
About GST Council
- The GST Council is a federal body that aims to bring together states and the Centre on a common platform for the nationwide rollout of the indirect tax reform.
- Article 279 (1) of the amended Indian Constitution states that the GST Council has to be constituted by the President within 60 days of the commencement of the Article 279A.
- According to the article, the GST Council will be a joint forum for the Centre and the States. It consists of the following members:
- 1] The Union Finance Minister will be the Chairperson.
- 2] As a member, the Union Minister of State will be in charge of Revenue of Finance.
- 3] The Minister in charge of finance or taxation or any other Minister nominated by each State government, as members.
- The Council has to function as a platform to bring the Union and State governments together.
- As a mark of cooperative federalism, the Council shall, unanimously or through a majority of 75% of weighted votes, decide on all matters pertaining to GST and recommend such decisions to the Union and State governments.
- Article 279A (4) specifies that the Council will make recommendations to the Union and the States on the important issues related to GST, such as the goods and services will be subject or exempted from the Goods and Services Tax.
- Article 246A confers simultaneous or concurrent powers on Parliament and the state legislatures to make laws relating to GST.
- This article is in sharp contrast to the constitutional scheme that prevailed till 2017.
Background of the case
- In Union of India Anr. vs Mohit Minerals Pvt. Ltd., the Supreme Court of India on May 19, 2022 ruled on a petition relating to the levy of Integrated Goods and Services Tax (IGST) on ocean freight paid by the foreign seller to a foreign shipping company.
- Mohit Minerals had filed a writ petition before the Gujarat High Court challenging notifications levying IGST on the ground that customs duty is levied on the component of ocean freight and the levy of IGST on the freight element in the course of transportation would amount to double taxation.
- GST is paid by the supplier, but if the shipping line is located in a non-taxable territory, then GST is payable by the importer, the recipient of service.
- Ocean freight is a method of transport by which goods and cargo is transported by ships through shipping lines.
Important aspects of the judgement
- Power to legislate simultaneously: Article 246A gives powers to the Union and State governments simultaneously to legislate on the GST.
- In other words, the two tiers of the Indian Union can simultaneously legislate on matters of the GST (except the IGST, which is in the legislative domain of the Union government).
- In this case, the Government of India had argued that “Neither can Article 279A override Article 246A nor can Article 246A be made subject to Article 279A.”
- However, cooperative federalism is to operate through the GST Council to bring in harmony and alignment in matters pertaining to the GST from both governments.
- Given this background, the Union government had almost delegated the powers to create laws under the GST Act Section 5(1) to the GST Council.
- Persuasive value only: The Supreme Court of India adjudicated that the GST Council’s recommendations are non-qualified and the simultaneous legislating powers of the Union and State governments give only persuasive value to the Council’s recommendations.
- The power of the recommendations rests on the practice of cooperative federalism and collaborative decision-making in the Council.
Issues with voting rights in GST council
- Inbalance in voting rights: The Union government holds one-third weight for its votes and all States have two-thirds of the weight for their votes.
- This gives automatic veto power to the Union government because a resolution can be passed with at least three-fourths of the weighted votes.
- This imbalance in the voting rights between the Union and State governments, makes democratic decision-making difficult.
- Equal weight to all states creates political problems: Though all the States are not equal in terms of tax capacity, everyone has equal weight for their votes.
- This creates another political problem as the smaller States with lesser economic stakes can be easily influenced by interest groups.
- Debate on political lines: The debates in the GST Council will be on political lines rather than on the economics of taxation.
- When the States governed by Opposition parties are vocal on counter-points, the States governed by the same party at the Union government are mute spectators.
Way forward
- Work in a harmonised manner: The Supreme Court has recorded, “Since the Constitution does not envisage a repugnance provision to resolve inconsistencies between the Central and State laws on GST, the GST Council must ideally function, as provided by Article 279A(6) in a harmonised manner to reach a workable fiscal model through cooperation and collaboration.”
- Cooperative federalism: The nuanced understanding of cooperative federalism shows that there is no space for one-upmanship in either of the two tiers of the Indian federal government and particularly for the Union government under a quasi-federal Constitution.
Conclusion
Given the lopsided power structure favouring the Union government in the GST Council, it is against the spirit of democracy and federalism that the finances of governments can be left to such bodies.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Creation of All India Services
Mains level: Paper 2- Civil Service reforms
Context
Recently, two IAS officers were the subject of widespread public derision for misuse of power. A week later, the media and the public feted those who had successfully cracked the UPSC examination in order to become bureaucrats of the future.
About Indian Administrative Service
- Civil Services refer to the career civil servants who are the permanent executive branch of the Republic of India.
- The modern Indian Administrative Service was created under Article 312(2) in part XIV of the Constitution of India, and the All-India Services Act, 1951.
- It is the backbone of the administrative machinery of the country.
- As India is a parliamentary democracy, the ultimate responsibility for running the administration rests with the people’s elected representatives.
- The elected executive decides the policy and it is civil servants, who serve at the pleasure of the President of India, implement it.
- Article 311 of the Constitution protects Civil Servants from politically motivated vindictive action.
What makes civil services favourable in India
- Most countries in the world have a cadre of professional civil servants but nowhere are new entrants to the system of government celebrated like in India.
- Colonial legacy: The fact is that, 75 years after independence and 30 years after liberalisation, there is still an overhang of the all-powerful, all-pervasive state.
- There are good reasons for a favourable view of the civil services.
- Merit based selection: For one, candidates are selected on merit based on an open examination and interview.
- Job security: Then there is the job security that comes with gaining entry.
- Unless a civil servant does an extraordinary wrong, she has a job for life, and steady, time-bound promotions which ensure that everyone retires at the top irrespective of performance.
Issues with public perception
- However, in the perceived strengths of the civil services lie its weaknesses.
- Single exam: The single UPSC examination is treated as gospel.
- But merit and competence cannot be judged by a single exam.
- Permanence is a problem: The permanence of the job is a problem too.
- Punishment for over-reach or misuse of power is a transfer, either from a weightier ministry to a lighter one or from high-profile capitals to geographically remote ones.
- A system of limited accountability: The result is that all civil servants, never mind their ability or competence, operate in a system of limited accountability with few incentives to perform and plenty of opportunities to use and abuse their powers.
Way forward
- Placing civil servant at par with other professions: The civil services system needs to be brought down from its pedestal and placed at par with every other profession like elsewhere in the world.
- This will not happen via political diktat. It requires the weight of public opinion.
- Broaden the selection criteria: The system must be manned by capable, competent individuals. This cannot be decided on the basis of one exam.
- Remove the job permanency: The underperforming officers need to be separated which cannot happen when the job is for life.
- It may sound radical for India’s civil services but that is the way the rest of India and the world function, including the UK from where we inherited the structure.
Conclusion
If we can make these changes in the civil services, India will get the government it needs for the 21st century.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper- India-Pakistan relation
Context
An official delegation from Pakistan was in New Delhi recently to hold talks with its Indian counterparts under the aegis of the Indus Water Treaty.
Positive developments in the relations
- Starting from February, India has been sending through Pakistan consignments of wheat, via the World Food Programme, to the Taliban-run Afghanistan.
- Evidently, channels of communication between the two governments are working and open hostility has subsided, if not vanished completely.
- China factor: The change has been driven by realist considerations that surfaced during the Ladakh border crisis on the Line of Actual Control with China in the summer of 2020.
- The recent change of government in Pakistan, including Imran Khan’s removal, is seen as a positive in New Delhi.
- The official Indian establishment has had close ties with both the Pakistan Muslim League-Nawaz and the Pakistan Peoples Party that are now part of the government.
Countering the collusive military threat from China and Pakistan
- The border crisis in Ladakh raised the spectre of a collusive military threat between China and Pakistan.
- Such a challenge cannot be effectively dealt with by the military alone and would need all the instruments of the state — diplomatic, economic, informational, and military — to act in concert.
- To prevent such a situation, India’s National Security Adviser Ajit Doval opened backchannel talks with Pakistan.
Way ahead
- There are some low-hanging fruits which can be plucked the moment a political go-ahead is given.
- These include a deal on the Sir Creek dispute, an agreement for revival of bilateral trade, return of High Commissioners to the missions in Delhi and Islamabad, and build-up of diplomatic missions to their full strength.
- Demilitarisation of the Siachen glacier is still seen to be off the table as the Indian proposal is believed to be unacceptable to the Pakistan Army.
- A window of opportunity would possibly open in Pakistan after the next elections, which are scheduled next year but could be held earlier.
Conclusion
India must shift course from the belligerence it has displayed and profited from earlier in favour of proper diplomatic and political engagement with Pakistan.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India's approach in dealing with the Taliban
Context
It is good that India has extended humanitarian assistance to Afghanistan at this time through international agencies and not let its unhappiness with the Taliban’s policies come in the way.
India’s recent engagement with Afghanistan
- Recently, the Ministry of External Affairs announced that a team led by J P Singh, Joint Secretary (PAI) “is currently on a visit to Kabul to oversee the delivery operations of our humanitarian assistance to Afghanistan”.
- The MEA clearly implied that this engagement should be seen only in the limited context of assistance to the Afghan people
- The continuance of humanitarian assistance can be only one, though an important, segment of interaction; other aspects, especially security issues and later, connectivity and investments, as Afghanistan stabilises, have to be part of the dialogue with the Taliban.
Why Afghanistan matters to India’s security
- Afghanistan impacts India’s security.
- It has, in the past, provided space to al Qaeda with which the Taliban had a special relationship.
- Afghanistan has an ISIS presence too.
- Of special concern to India are the Taliban’s ties with the Lashkar-e-Taiba and Jaish-e-Mohammed.
- A recent United Nations report has emphasised that the Taliban’s connections with these groups have not been severed.
So, what should be India’s approach toward the Taliban?
- It is argued that both “principle and pragmatism” demand that India should not do business with the Taliban.
- However, Pakistan has continued to sponsor terror and yet India has continued to engage it and has maintained a diplomatic presence in Islamabad.
- India cannot argue that the diplomatic door must be kept open for Pakistan because it’s a neighbour while it can be shut on the Taliban because Afghanistan directly impacts Indian security.
- Engagement with Taliban: An engagement with the Taliban would at least give an opportunity to convey Indian concerns directly and encourage those elements within the group who wish to open up its diplomatic choices.
- Exploit contradiction: Far from being a monolith, the Taliban has significant tribal and regional contradictions.
- Therefore, India should not leave the Afghan arena entirely to Pakistan and China because of the social manifestation of Taliban theology.
- The Taliban is here to stay and for India, there is no alternative but to deal with it even while repeating, if it wishes, the mantra of inclusive government.
- India should also maintain contacts with the leaders of the ousted Republic, especially as the Taliban itself wants them to return to the country.
Conclusion
All in all, the sooner India establishes a permanent presence in Kabul the better for the pursuit of national interests in the external sphere. This is not an exercise in evangelism but the cold and undeterred pursuit of interests.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: ASHA program
Mains level: Paper 2- Strengthening ASHA
Context
India’s one million Accredited Social Health Activists (ASHA) volunteers have received World Health Organization’s Global Health Leaders Awards 2022.
Background of the ASHA program
- In 1975, a WHO monograph titled ‘Health by the people’ and then in 1978, an international conference on primary health care in Alma Ata (in the then USSR and now in Kazakhstan), gave emphasis for countries recruiting community health workers to strengthen primary health-care services that were participatory and people centric.
- Soon after, many countries launched community health worker programmes under different names.
- India launched the ASHA programme in 2005-06 as part of the National Rural Health Mission.
- The biggest inspiration for designing the ASHA programme came from the Mitanin (meaning ‘a female friend’ in Chhattisgarhi) initiative of Chhattisgarh, which had started in May 2002.
- The core of the ASHA programme has been an intention to build the capacity of community members in taking care of their own health and being partners in health services.
- Each of these women-only volunteers work with a population of nearly 1,000 people in rural and 2,000 people in urban areas, with flexibility for local adjustments.
A well thought through and deliberated program
- The ASHA programme was well thought through and deliberated with public health specialists and community-based organisations from the beginning.
- 1] Key village stakeholders selected: The ASHA selection involved key village stakeholders to ensure community ownership for the initiatives and forge a partnership.
- 2] Ensure familiarity: ASHAs coming from the same village where they worked had an aim to ensure familiarity, better community connect and acceptance.
- 3] Community’s representative: The idea of having activists in their name was to reflect that they were/are the community’s representative in the health system, and not the lowest-rung government functionary in the community.
- 4] Avoiding the slow process of government recruitment: Calling them volunteers was partly to avoid a painfully slow process for government recruitment and to allow an opportunity to implement performance-based incentives in the hope that this approach would bring about some accountability.
Contribution of ASHA
- It is important to note that even before the COVID-19 pandemic, ASHAs have made extraordinary contributions towards enabling increased access to primary health-care services; i.e. maternal and child health including immunisation and treatment for hypertension, diabetes and tuberculosis, etc., for both rural and urban populations, with special focus on difficult-to-reach habitations.
- Over the years, ASHAs have played an outstanding role in making India polio free, increasing routine immunisation coverage; reducing maternal mortality; improving new-born survival and in greater access to treatment for common illnesses.
Challenges
- Linkages with AWW and ANM: When newly-appointed ASHAs struggled to find their way and coordinate things within villages and with the health system, their linkage with two existing health and nutrition system functionaries — Anganwadi workers (AWW) and Auxiliary Nurse Midwife (ANM) as well as with panchayat representatives and influential community members at the village level — was facilitated.
- This resulted in an all-women partnership, or A-A-A: ASHA, AWW and ANM, of three frontline functionaries at the village level, that worked together to facilitate health and nutrition service delivery to the community.
- No fixed salary to ASHAs: Among the A-A-A, ASHAs are the only ones who do not have a fixed salary; they do not have opportunity for career progression.
- These issues have resulted in dissatisfaction, regular agitations and protests by ASHAs in many States of India.
Way forward
- The global recognition for ASHAs should be used as an opportunity to review the programme afresh, from a solution perspective.
- 1] Higher remuneration: Indian States need to develop mechanisms for higher remuneration for ASHAs.
- 2] Avenues for career progression: It is time that in-built institutional mechanisms are created for capacity-building and avenues for career progression for ASHAs to move to other cadres such as ANM, public health nurse and community health officers are opened.
- 3] Extend the benefits of social sector services: Extending the benefits of social sector services including health insurance (for ASHAs and their families) should be considered.
- 4] Independent and external review: While the ASHA programme has benefitted from many internal and regular reviews by the Government, an independent and external review of the programme needs to be given urgent and priority consideration.
- 5] Regularisation of temporary posts: There are arguments for the regularisation of many temporary posts in the National Health Mission and making ASHAs permanent government employees.
Conclusion
The WHO award for ASHA volunteers is a proud moment and also a recognition of every health functionary working for the poor and the underserved in India. It is a reminder and an opportunity to further strengthen the ASHA programme for a stronger and community-oriented primary health-care system.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Malnutrition challenge
Context
The country’s response to its burden of malnutrition and growing anaemia has to be practical and innovative.
What is malnutrition?
- Malnutrition refers to deficiencies, excesses or imbalances in a person’s intake of energy and/or nutrients.
- The term malnutrition covers 2 broad groups of conditions.
- One is ‘undernutrition’—which includes stunting (low height for age), wasting (low weight for height), underweight (low weight for age) and micronutrient deficiencies or insufficiencies (a lack of important vitamins and minerals).
- The other is overweight, obesity and diet-related non-communicable diseases (such as heart disease, stroke, diabetes, and cancer).
What are the root causes of malnutrition in India?
The following three deficits are the root cause of malnutrition in India.
1) Dietary deficit
- There is a large dietary deficit among at least 40 per cent of our population of all age groups, shown in— the National Nutrition Monitoring Bureau’s Third Repeat Survey (2012), NFHS 4, 2015-16, the NNMB Technical Report Number 27, 2017.
- Our current interventions are not being able to bridge this protein-calorie-micronutrient deficit.
- The NHHS-4 and NFHS-5 surveys reveal an acute dietary deficit among infants below two years, and considerable stunting and wasting of infants below six months.
- Unless this maternal/infant dietary deficit is addressed, we will not see rapid improvement in our nutritional indicators.
2) Information deficit at household level
- We do not have a national IEC (information, education and communication) programme that reaches targeted households to bring about the required behavioural change regarding some basic but critical facts.
- For example, IEC tells about the importance of balanced diets in low-income household budgets, proper maternal, child and adolescent nutrition and healthcare.
3) Inequitable market conditions
- The largest deficit, which is a major cause of dietary deficiency and India’s chronic malnutrition, pertains to inequitable market conditions.
- Such market conditions deny affordable and energy-fortified food to children, adolescents and adults in lower-income families.
- The market has stacks of expensive fortified energy food and beverages for higher income groups, but nothing affordable for low-income groups.
The vicious cycle of malnutrition
- Link with mother: A child’s nutritional status is directly linked to their mother.
- Poor nutrition among pregnant women affects the nutritional status of the child and has a greater chance to affect future generations.
- Impact on studies: Undernourished children are at risk of under-performing in studies and have limited job prospects.
- Impact on development of the country: This vicious cycle restrains the development of the country, whose workforce, affected mentally and physically, has reduced work capacity.
Marginal improvement on Stunting and Wasting
- The National Family Health Survey (NFHS-5) has shown marginal improvement in different nutrition indicators, indicating that the pace of progress is slow.
- This is despite declining rates of poverty, increased self-sufficiency in food production, and the implementation of a range of government programmes.
- Children in several States are more undernourished now than they were five years ago.
- Increased stunting in some states: Stunting is defined as low height-for-age.
- While there was some reduction in stunting rates (35.5% from 38.4% in NFHS-4) 13 States or Union Territories have seen an increase in stunted children since NFHS-4.
- This includes Gujarat, Maharashtra, West Bengal and Kerala.
- Wasting remains stagnant: Wasting is defined as low weight-for-height.
- Malnutrition trends across NFHS surveys show that wasting, the most visible and life-threatening form of malnutrition, has either risen or has remained stagnant over the years.
Prevalence of anaemia in India
- What is it? Anaemia is defined as the condition in which the number of red blood cells or the haemoglobin concentration within them is lower than normal.
- Consequences: Anaemia has major consequences in terms of human health and development.
- It reduces the work capacity of individuals, in turn impacting the economy and overall national growth.
- Developing countries lose up to 4.05% in GDP per annum due to iron deficiency anaemia; India loses up to 1.18% of GDP annually.
- The NFHS-5 survey indicates that more than 57% of women (15-49 years) and over 67% children (six-59 months) suffer from anaemia.
Way forward
1] Increase investment:
- There is a greater need now to increase investment in women and children’s health and nutrition to ensure their sustainable development and improved quality of life.
- Saksham Anganwadi and the Prime Minister’s Overarching Scheme for Holistic Nourishment (POSHAN) 2.0 programme have seen only a marginal increase in budgetary allocation this year (₹20,263 crore from ₹20,105 crore in 2021-22).
- Additionally, 32% of funds released under POSHAN Abhiyaan to States and Union Territories have not been utilised.
2] Adopt outcome oriented approach on the nutrition programme
- India must adopt an outcome-oriented approach on nutrition programmes.
- It is crucial that parliamentarians begin monitoring needs and interventions in their constituencies and raise awareness on the issues, impact, and solutions to address the challenges at the local level.
- Direct engagement: There has to be direct engagement with nutritionally vulnerable groups and ensuring last-mile delivery of key nutrition services and interventions.
- This will ensure greater awareness and proper planning and implementation of programmes.
- This can then be replicated at the district and national levels.
3] Increase awareness and mother’s education
- With basic education and general awareness, every individual is informed, takes initiatives at the personal level and can become an agent of change.
- Various studies highlight a strong link between mothers’ education and improved access and compliance with nutrition interventions among children.
4] Monitoring
- There should be a process to monitor and evaluate programmes and address systemic and on the ground challenges.
- A new or existing committee or the relevant standing committees meet and deliberate over effective policy decisions, monitor the implementation of schemes, and review nutritional status across States.
Conclusion
We must ensure our young population has a competitive advantage; nutrition and health are foundational to that outcome.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Tackling inflation
Context
The economy now seems to be largely out of the shadow of Covid-19, and only a notch better than in 2019-20. But the big question remains: can India rein in the raging inflation that is at 7.8 per cent (CPI for April 2022), with food CPI at 8.4 percent, and WPI at more than 15 per cent?
Need for bold steps on three fronts to tackle inflation
- Unless bold and innovative steps are taken at least on three fronts, GDP growth and inflation both are likely to be in the range of 6.5 to 7.5 per cent in 2022-23.
- 1] Tightening of loose monetary policy: The Reserve Bank of India (RBI) is mandated to keep inflation at 4 per cent, plus-minus 2 per cent.
- The RBI has already started the process of tightening monetary policy by raising the repo rate, albeit a bit late.
- It is expected that by the end of 2022-3, the repo rate will be at least 5.5 per cent, if not more.
- It will still stay below the likely inflation rate and therefore depositors will still lose the real value of their money in banks with negative real interest rates.
- That only reflects an inbuilt bias in the system — in favour of entrepreneurs in the name of growth and against depositors, which ultimately results in increasing inequality in the system.
- 2] Prudent fiscal policy: Fiscal policy has been running loose in the wake of Covid-19 that saw the fiscal deficit of the Union government soar to more than 9 per cent in 2020-21 and 6.7 per cent in 2021-22, but now needs to be tightened.
- Government needs to reduce its fiscal deficit to less than 5 per cent, never mind the FRMB Act’s advice to bring it to 3 per cent of GDP.
- However, it is difficult to achieve when enhanced food and fertiliser subsidies, and cuts in duties of petrol and diesel will cost the government at least Rs 3 trillion more than what was provisioned in the budget.
- 3] Rational trade policy: Export restrictions/bans go beyond agri-commodities, even to iron ore and steel, etc. in the name of taming inflation.
- But abrupt export bans are poor trade policy and reflect only the panic-stricken face of the government.
- A more mature approach to filter exports would be through a gradual process of minimum export prices and transparent export duties for short periods of time, rather than abrupt bans, if at all these are desperately needed to favour consumers.
- Liberal import policy: A prudent solution to moderate inflation at home lies in a liberal import policy, reducing tariffs across board.
Way forward
- If India wants to be atmanirbhar (self-reliant) in critical commodities where import dependence is unduly high, it must focus on two oils — crude oil and edible oils.
- In crude oil, India is almost 80 per cent dependent on imports and in edible oils imports constitute 55 to 60 per cent of our domestic consumption.
- In both cases, agriculture can help.
- Ethanol production: Massive production of ethanol from sugarcane and maize, especially in eastern Uttar Pradesh and north Bihar, where water is abundant and the water table is replenished every second year or so through light floods, is the way to reduce import dependence in crude oil.
- Palm plantation: In the case of edible oils, a large programme of palm plantations in coastal areas and the northeast is the right strategy.
Conclusion
We need to invest in raising productivity, making agri-markets work more efficiently.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 279A
Mains level: Paper 3- Fiscal federalism in GST Council
Context
The recent ruling of the Supreme Court held that the states were free to use means of persuasion ranging from collaboration to contestation.
Simultaneous or concurrent powers under Article 246A
- Article 246A confers simultaneous or concurrent powers on Parliament and the state legislatures to make laws relating to GST.
- This article is in sharp contrast to the constitutional scheme that prevailed till 2017.
- It clearly demarcated taxing powers between the Centre and states with no overlaps.
- After 2017, several central and state levies were subsumed into GST.
- Each state was to have its own GST Act, all of them being almost identical to the Central GST Act.
- Inter-state supplies and imported goods are liable to IGST.
Composition of GST Council
- The GST Council has the Union finance minister as the chairperson and the Union minister of state in charge of revenue or finance as a member.
- Centre has one-third voting power, 31 states (including two Union Territories) share the remaining two-thirds of the vote.
- The GST Council has a total of 33 members.
- Out of a total of 33 votes, 11 belong to the Centre and 22 votes are shared by 31 states/UT, with each state/UT having a 0.709 vote.
- Any decision of the GST Council requires a three-fourth majority or a minimum of 25 votes.
- As the Centre has 11 votes, it requires an additional 14 votes.
- Unlike so many statutes, Article 279A has made no provision to make the decision of the majority binding on the dissenting states.
- Paragraph 2.73 of the Select Committee Report on the 122nd Constitution (Amendment) Bill, 2014, noted that this voting pattern was to maintain a fine balance as, in a federal constitution, the dominance of one over the other was to be disallowed.
Role of GST Council
- Under Article 279A, the GST Council has to make “recommendations” on various topics including the tax rate and exemptions.
- The Union of India argued that the “constitutional architecture” showed that Articles 246A and 279A, when read together, made the GST Council the ultimate policy-making and decision-making body for framing GST laws.
- The GST Council was unique and incomparable to any other constitutional body and its recommendations would override the legislative power of Parliament and state legislatures.
- Neither of them could legislate on GST issues independent of the recommendations of the GST Council.
- The argument went further: On a combined reading of Article 279A, the provisions of the IGST and CGST Acts and the recommendations of the GST Council were transformed into legislation.
- The Supreme Court rightly noted that several sections in the state GST laws, CGST and in IGST, cast a duty even on dissenting states to issue notifications to implement the recommendations of the GST Council.
Observations on federalism
- Delving into legislative history, the court ruled that a draft Article 279B, which provided for a GST Disputes Settlement Authority, was omitted because it would have effectively overridden the sovereignty of Parliament and the state legislatures, and diminished the fiscal autonomy of the states.
- It was desirable, the Court said, to have some level of friction, some amount of state contestation, some deliberation-generating froth in our democratic system.
- Putting to rest any controversy, the court held that the recommendations of the GST Council had only a persuasive value.
- To regard them as binding edicts would disrupt fiscal federalism because both the Union and states were conferred equal power to legislate on GST.
- Rule-making power bound by recommendations of GST Council: The Court held that the state governments and Parliament, while exercising their rule-making powers under the provisions of the State GST Acts, CGST & IGST Acts, are bound by the recommendations of the GST Council.
- States can amend GST laws: But even this did not mean that all recommendations of the GST Council are binding on state legislatures or Parliament to enact primary pieces of legislation on GST.
- In effect, states can amend their GST laws if they so choose.
Way forward
- If the GST Council meets periodically as mandated and there is active participation of the states in making recommendations, no state will oppose a recommendation that has been carefully deliberated and is in the national interest.
Conclusion
Indeed, there is little chance of cracks developing in the GST edifice as long as the spirit of cooperative and collaborative federalism prevails.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Food security
Context
India needs to have a strategy of self-reliance in basic foods, including edible oils.
Contrasting cases of Sri Lanka and Saudi Arabia
- Sri Lanka, a country with 21.5 million population imported dairy products valued at $333.8 million in 2020 and $317.7 million in 2021.
- The island nation’s imports of whole milk powder (WMP) alone were 89,000 tonnes and 72,000 tonnes in these two years.
- The 89,000 tonnes of powder imported in 2020 would have, thus, “produced” almost 2.1 million litres per day (MLPD) equivalent of milk.
- This is as against the 1.3 MLPD that Sri Lanka produces from its own cows and buffaloes.
- It translates into an import dependence of over 60 per cent.
- At the other end, we have Saudi Arabia, home to over 35 million inhabitants (including immigrants) and also the world’s largest vertically integrated dairy company.
- Almarai Company has six dairy farms producing more than 3.5 MLPD of milk.
- The animals are sourced from the US and Europe.
- The entire feed and also forage given to them are procured from abroad.
- Why is Saudi Arabia taking such pains to produce its own milk?
- The answer is food security.
- The Saudis — other Persian Gulf countries have also copied the Almarai model — are prepared to pay any price when it comes to ensuring the availability of basic food like milk.
Lessons for India: Reducing import dependence on edible oil
- India annually imports 13.5-14.5 million tonnes of vegetable oils, again roughly 60 per cent of its total consumption.
- Low international prices meant that the import bill, though high, fell from $9.85 billion in 2012-13 to $9.67 billion in 2019-20.
- However, in the last couple of years, retail prices of most oils more than doubled
- The value of India’s vegetable oil imports surged to a record $19 billion in 2021-22.
Conclusion
As a country with a population many times that of Sri Lanka and Saudi Arabia, India needs to have a strategy of self-reliance in basic foods.
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From UPSC perspective, the following things are important :
Prelims level: Article 142
Mains level: Paper 2- Implications of Perarivalan case for federalism
Context
The recent decision of the Supreme Court of India in the case of A.G. Perarivalan has stirred up a hornet’s nest.
Use of Article 142 to grant pardon
- The Court has treaded the extraordinary constitutional route under Article 142.
- The Bench decided to exercise the power of grant of pardon, remission et al., exclusively conferred on the President of India and State Governors under Articles 72 and 161.
- Against the separation of power: Against the background of separation of powers viz. Parliament/Legislature, Executive and Judiciary, whether the course adopted by the Bench to do expedient justice is constitutional calls for introspection.
Evaluating the constitutionality of decision
- The power under Article 161 is exercisable in relation to matters to which the executive power of the state extends.
- Discretionary power under Article 161: Article 161 consciously provides a ‘discretion’ to the Governor in taking a final call, even if it was not wide enough to overrule the advice, but it certainly provides latitude to send back any resolution for reconsideration, if, in his opinion, the resolution conflicted with constitutional ends.
- In Sriharan’s case (2016 (7) SCC P.1), one of the references placed for consideration was whether the term ‘consultation’ stipulated in Section 435 Cr.P.C. implies ‘concurrence’.
- It was held that the word ‘consultation’ means ‘concurrence’ of the Central government.
- The Constitution Bench highlighted that there are situations where consideration of remission would have trans-border ramifications and wherever a central agency was involved, the opinion of the Central government must prevail.
- Basing its conclusion on the legal position that the subject matter (Section 302 in the Indian Penal Code) murder, falls within Lists II and III (State and Concurrent lists) of the Seventh Schedule to the Constitution, the learned judges concluded that the State was fully empowered to take a call and recommend remission in this case.
- If it is a simple case of being a Section 302 crime, the reason for finding fault with the Governor’s decision to forward the recommendation to the President may be constitutionally correct.
- But the larger controversy as to whether the Governor in his exercise of power under Article 161 is competent at all, to grant pardon or remission in respect of the offences committed by the convicts under the Arms Act, 1959, the Explosive Substances Act, 1908, the Passports Act, 1967, the Foreigners Act, 1946, etc., besides Section 302, is not certain.
- According to the decision, it is a simple murder attracting Section 302 of the IPC and therefore the Governor’s decision to forward the recommendation to the President is against the letter and spirit of Article 161 — meaning it is against the spirit of federalism envisaged in the Constitution.
- Constitutionality use of Article 142: There are momentous issues that are flagged on the exercise of the power of remission under Article 142, by the Supreme Court in the present factual context.
- The first is whether Article 142 could be invoked by the Court in the circumstances of the case when the Constitution conferred express power on the Governor alone, for grant of pardon, remission, etc., under Article 161.
Way forward
- Deeper judicial examination: Whether what the State government could not achieve directly by invoking Sections 432 and 433 of Cr.P.C, without concurrence of Centre could be allowed to take a contrived route vide Article 161 and achieve its objectives is a pertinent issue.
- This aspect requires deeper judicial examination for the sake of constitutional clarity.
- Timeframe for the Governor: The Constitution does not lay down any timeframe for the Governor to act on the advice of the Council of Ministers.
- In any event, even if the delay was constitutionally inexcusable or was vulnerable to challenge, the final arbiter of the Constitution (Article 245) could not have trumped Article 161 with Article 142, which is constitutionally jarring.
Conclusion
To portray the remission as to what it was not in the State is a sad fallout the lawlords on the pulpit may not have bargained for. And on the constitutional plane, this verdict deserves a relook, even a review, as it stands on wobbly foundations built with creaky credence.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Section 124A of IPC
Context
By order dated May 11, 2022, a Bench presided over by the Chief Justice of India, has directed that the petitions challenging the Section 124A be listed for final determination in the third week of July 2022; and that in the meantime suspend the use of Section 124A IPC.
Historical background of Section 124A
- With effect from 1870, (as amended in 1955), Section 124A of the Penal Code read:
“Whoever by words, spoken or written, brings or attempts to bring into hatred or contempt, or excites or attempts to excite disaffection, towards the Government established by law in India shall be punished with imprisonment for life…”.
- “Sedition” is the vaguest of all offences known to the criminal law.
- In colonial times, it was defined expansively in order to uphold the majesty of British power in India.
- Before 1950, there were several Court decisions in operation on Section 124A; amongst them was Bal Gangadhar Tilak’s case (1897).
- Absence of affection: In Bal Gangadhar Tilak’s case the Privy Council declined to grant leave to appeal, affirming that “disaffection” only meant “absence of affection in any degree towards the British rule or its administration or representatives”, and that exciting of mutiny or rebellion or actual disturbance of any sort was “absolutely immaterial”.
- With the establishment of a Federal Court by the Government of India Act, 1935, in Niharendu Dutt Majumdar And Ors. vs Emperor the Federal Court held that if the language of Section 124A were to be read literally “it would make a surprising number of persons in India guilty of sedition and that no one, however, supposes that it is to be read in this literal sense”
- However, in 1947 it was precisely in this literal sense that the interpretation of Section 124A was reiterated by a Bench of five judges of the Privy Council (AIR 1947 P.C. 82) in which it was declared that: “If the Federal Court had given their attention to Tilak’s case (1897) they should have recognised it as an authority… by which they were bound”.
- With the advent of the Constitution of India on January 26, 1950, this interpretation of Section 124A became “the law in force immediately before the commencement of the Constitution”.
Section 124A after 1950
- Article 372: It stated that all laws in force in the territory of India immediately before the commencement of the Constitution shall continue in force therein until altered or repealed or amended by a competent legislature or other competent authority.
- Protected due to Article 19(2): In 1962, in criminal appeals arising from the states of Bihar and Uttar Pradesh, a Constitution Bench of the Supreme Court held that though Section 124A “clearly violated” the fundamental right to freedom of speech and expression in Article 19(1)(a), it was not unconstitutional only because it was protected from challenge by the words “in the interests of public order” in Article 19(2).
Conclusion
This background has now become pertinent and relevant, because in a fresh batch of writ petitions filed in 2021, the constitutionality of Section 124A (IPC) has been once again challenged in the Supreme Court.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Use of statecraft in finding solutions to security problems
Context
In many countries, both the authorities and security agencies are beginning to acknowledge the importance of resorting to statecraft as a vital adjunct to the role played by the security agencies.
The important role of statecraft in security
- Statecraft involves fine-grained comprehension of inherent problems; also an ability to quickly respond to political challenges.
- It further involves strengthening the ability to exploit opportunities as they arise, and display a degree of political nimbleness rather than leaving everything to the security agencies.
- It entails a shift from reposing all faith in the security establishment to putting equal emphasis on implementation of policies and programmes.
- Two prime examples which provide grist to the above proposition are the prevailing situation in Jammu and Kashmir and the continuing problem involving Maoists.
- The need to use statecraft to deal with quite a few other internal security problems — some of which have lain dormant for years — is also becoming more manifest by the day.
Security issues in various regions
- Jammu and Kashmir: While Jammu and Kashmir has been a troubled region ever since 1947, the situation has metamorphosed over the years.
- No proper solution has emerged to a long-standing problem.
- Irrespective of the reasons for the latest upsurge in violence, what is evident is that Jammu and Kashmir has again become the vortex of violence.
- Evidently, the doctrine of containment pursued by the Jammu and Kashmir police and security agencies is not having the desired effect.
- In Jammu and Kashmir today, as also elsewhere, there is no all-in-one grand strategy to deal with the situation.
- The missing ingredient is statecraft which alone can walk in step with the changing contours of a long-standing problem.
- Punjab: The recent discovery of ‘sleeper cells’ in the Punjab clearly indicates the potential for the revival of a pro-Khalistan movement — which once ravaged large parts of the Punjab.
- While pro-Khalistani sentiment is present in pockets in the United Kingdom and in Europe, it has not been in evidence in India for some time.
- Hence, the recent attack by pro-Khalistan elements on the headquarters of the Punjab Police Intelligence wing in Mohali was a rude shock to the security establishment.
- The incident is a reminder that militancy in the Punjab has not been permanently extinguished, and will need deft statecraft to nip it in the bud.
- North-east: In India’s North-east, more specifically in the States of Assam and Nagaland, there are again incipient signs of trouble which, for the present, may need use of statecraft rather than the security forces.
- In Assam, the United Liberation Front of Asom–Independent (ULFA-I) is trying to revive its activities after a long spell of hibernation.
- Likewise in Nagaland, where the National Socialist Council of Nagalim (I-M) has recently initiated a fresh push for a solution of the ‘Naga political issue’, the situation is pregnant with serious possibilities.
- Both instances merit the use of statecraft so that the situation does not get out of hand.
- South India: In the South, intelligence and police officials appear concerned about a likely revival of Liberation Tigers of Tamil Eelam (LTTE)-sponsored activities in Tamil Nadu.
- This stems from a possible revival of LTTE-sponsored militancy in Sri Lanka following the recent economic crises and uncertainty there.
- This situation again needs deft statecraft to prevent a resurgence of the past.
Conclusion
India faces several challenges today, but the answer to this is neither grand strategy nor grand simplifications nor resort to higher doses of security. A properly structured set of policies, having liberal doses of statecraft in addition to a proper set of security measures, is the best answer to India’s needs, now and in the future.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Implications of Ukraine war for European security
Context
The post-Cold War period of peace in Europe is more an aberration than norm in the continent’s history of conflicts.
Background of the First World War
- The Russian power had collapsed in its far east after the war with Japan in 1904-05.
- Faced with the erosion of Russian influence and the rise of Wilhelmine Germany, which together threatened to alter Europe’s balance of power, France and Britain, competing colonial powers, came together.
- France had already reached an alliance with Russia.
- The three would later form the Triple Entente, triggering a dangerous security competition in Europe with the Triple Alliance (Germany, Austria-Hungary and Italy), which would eventually lead to the First World War in 1914.
- What triggered the great power security competition in the run-up to the First World War was the phenomenal rise of Wilhelmine Germany as a military and industrial power and the regional hegemons’ response to it.
Similarities with the past
- When Otto von Bismarck became the Minister-President of Prussia in September 1862, there was no unified German state.
- Bismarck adopted an aggressive foreign policy, fought and won three wars — with Denmark, Austria and France — destroyed the confederation, established a stronger and larger German Reich that replaced Prussia.
- Bismarck stayed focused on transforming Germany internally in his last two decades.
- It was on the foundation Bismarck built that Wilhelmine Germany turned to weltpolitik in the early 20 century, seeking global domination.
- If Bismarck inherited a weak, loosely connected group of German speaking entities in 1862, Russian President Vladimir Putin got a Russia in 2000 that was a pale shadow of what was the Soviet Union.
- Bismarck spent his years in power expanding the borders of Germany and building a stronger state and economy.
- The post-Cold War Russia initially stayed focused on the restoration of the state and the economy, and then sought to expand its borders and challenge the continent’s balance of power — first the Crimean annexation and now the Ukraine invasion.
- While NATO’s expansion deepened Russia’s security concerns, driving it into aggressive moves, Russia’s aggression has strengthened NATO’s resolve to expand further into Russia’s neighbourhood.
Offensive realism
- Offensive realists argue that “revisionist powers” tend to use force to rewrite the balance of power if they find the circumstances are favourable, while the status quo powers, or the existing regional hegemons, would seek to thwart any new country attaining more power at their expense.
- The result of this type of competition is permanent rivalry and conflict.
- One major difference between the era of Wilhelmine Germany and modern Russia is that there were no well-defined international laws in the 19th and early 20th centuries.
- The international system has evolved ever since.
- But its basic instincts, as realists would argue, have not changed much.
- Mr. Putin’s Russia is not the first country that violated the sovereignty of a weaker power and flouted international laws in the “rules-based” order.
Future of Europe’s security
- Russia apparently had two strategic objectives in Ukraine —
- One, to expand Russian borders and create a buffer.
- And two, to reinforce Russia’s deterrence against NATO.
- While Russia has succeeded, though slowly, in expanding its borders by capturing almost all of Ukraine’s east, the war has backfired on its second objective.
- Russia’s inability to clinch a quick outright victory in Ukraine and the tactical retreats it has already made have invariably dealt a blow to the perception of Russian power that existed before the war.
- This has strengthened NATO, driving even Sweden and Finland into its arms. Besides, the economic sanctions would leave a long-term hole in Russia’s economy.
- But a Russia that is bogged down in Ukraine and encircled by NATO need not enhance Europe’s security.
- As Henry Kissinger said at Davos, Russia had been and would remain an important element in the European state system.
Conclusion
The prospects are bleak. There will not be peace in Europe unless either Russia accepts its diminished role and goes into another spell of strategic retreat or Europe and the West in general accommodate Russia’s security concerns. Both look unrealistic as of today.
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