FDI in Indian economy

The Bilateral Investment Treaties (BITs) to review

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Model BIT

Mains level: Paper 3- Reviev of BITs

Context

The report of the Standing Committee on External Affairs on ‘India and bilateral investment treaties (BITs)’ was presented to Parliament last month.

Factor’s that necessitated the review of India’s BITs

  • Investor’s started suing India frequently: Since 2011, when India lost its first investment treaty claim in White Industries v. India, foreign investors have sued India around 20 times for alleged BIT breaches.
  • This made India the 10th most frequent respondent-state globally in terms of investor-state dispute settlement (ISDS) claims from 1987 to 2019 (UNCTAD).
  • Adoption of new Model BIT: India adopted a new Model BIT in 2016, which marked a significant departure from its previous treaty practice.
  • Negotiating new BITs: India is in the process of negotiating new investment deals (separately or as part of free trade agreements) with important countries such as Australia and the U.K.

Recommendations of the Committee

  • 1] Speed of the existing negotiations: India has signed very few investment treaties after the adoption of the Model BIT.
  • It recommends that India expedite the existing negotiations and conclude the agreements at the earliest because a delay might adversely impact foreign investment.
  •  2] Sign more BIT’s in core sector: The committee recommends that India should sign more BITs in core or priority sectors to attract FDI.
  • Generally, BITs are not signed for specific sectors.
  •  It will require an overhauling of India’s extant treaty practice that focuses on safeguarding certain kinds of regulatory measures from ISDS claims rather than limiting BITs to specific sectors.
  • 3] Fine-tune Model BIT: Model BIT gives precedence to the state’s regulatory interests over the rights of foreign investors.
  • The Model BIT should be recalibrated keeping two factors in mind:
  • a) tightening the language of the existing provisions to circumscribe the discretion of ISDS arbitral tribunals.
  • b) striking a balance between the goals of investment protection and the state’s right to adopt bonafide regulatory measures for public welfare.
  • 4] Improve the capacity of government officials: The committee recommends bolstering the capacity of government officials in the area of investment treaty arbitration.
  •  While the government has taken some steps in this direction through a few training workshops, more needs to be done.
  • What is needed is an institutionalised mechanism for capacity-building through the involvement of public and private universities.
  • The government should also consider establishing chairs in universities to foster research and teaching activities in international investment law.

Need to improve poor governance

  • A very large proportion of ISDS claims against India is due to poor governance.
  • This includes changing laws retroactively which led to Vodafone and Cairn suing India.
  • Annulling agreement in the wake of imagined scam which resulted in taking away S-band satellite spectrum from Devas.
  • The judiciary’s fragility in getting its act together (sitting on the White Industries case for enforcement of its commercial award for years).

Suggestions

  • The Committee could have emphasised on greater regulatory coherence, policy stability, and robust governance structures to avoid ISDS claims.
  • The government should promptly assemble an expert team to review the Model BIT.

Consider the question “India is one of the most frequent respondent-state globally in terms of investor-state dispute settlement (ISDS) claims. In context of this, examine the reasons for such frequent disputes and suggest the way forward.” 

Conclusion

The committee’s report on India’s BITs have novel suggestions, but it is lacking in several aspects.

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Back2Basics: ISDS mechanism

  • Investor-state dispute settlement (ISDS) is a mechanism in a free trade agreement (FTA) or investment treaty that provides foreign investors, with the right to access an international tribunal to resolve investment disputes.
  •  ISDS promotes investor confidence and can protect against sovereign or political risk.
  • If a country does not uphold its investment obligations, an investor can have their claim determined by an independent arbitral tribunal, usually comprising three arbitrators.

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Foreign Policy Watch- India-Central Asia

New prominence of the Central Asian region

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Centrality of Central Asian region for India

Context

When Prime Minister Narendra Modi hosts the five Central Asia leaders at the Republic Day Parade on January 26, it will send a strong signal — of the new prominence of the Central Asian region in India’s security calculations.

Why India needs effective continental policy

  • Factors intensifying geopolitical competition: China’s assertive rise, withdrawal of forces of the United States/North Atlantic Treaty Organization (NATO) from Afghanistan, the rise of Islamic fundamentalist forces, the changing dynamics of the historic stabilising role of Russia (most recently in Kazakhstan) and related multilateral mechanisms — the Shanghai Cooperation Organization (SCO), the Collective Security Treaty Organisation, and the Eurasian Economic Union — have all set the stage for a sharpening of the geopolitical competition on the Eurasian landmass.
  • Progress in ties: India’s continental strategy, in which the Central Asian region is an indispensable link, has progressed intermittently over the past two decades — promoting connectivity, incipient defence and security cooperation, enhancing India’s soft power and boosting trade and investment.
  • It is laudable, but as is now apparent, it is insufficient to address the broader geopolitical challenges engulfing the region.
  • To meet this challenge, evolving an effective continental strategy for India will be a complex and long-term exercise.

Leveraging maritime power

  • India’s maritime vision and ambitions have grown dramatically during the past decade, symbolised by its National Maritime Strategy, the Security and Growth for All in the Region (SAGAR) and major initiatives relating to the Indo-Pacific and the Quad, in which maritime security figures prominently.
  •  It was also a response to the dramatic rise of China as a military power.
  • Importance: Maritime security is important to keeping sea lanes open for trade, commerce and freedom of navigation, resisting Chinese territorial aggrandisement in the South China Sea and elsewhere, and helping littoral states resist Chinese bullying tactics in interstate relations.
  • However, maritime security and associated dimensions of naval power are not sufficient instruments of statecraft as India seeks diplomatic and security constructs to strengthen deterrence against Chinese unilateral actions and the emergence of a unipolar Asia.
  • Bulwarks against Chinese maritime expansionist gains are relatively easier to build and its gains easier to reverse than the long-term strategic gains that China hopes to secure on continental Eurasia.
  • Centrality of Central Asia: Like Association of Southeast Asian Nations (ASEAN) centrality is key to the Indo-Pacific, centrality of the Central Asian states should be key for Eurasia.

Challenges for India

1] Connectivity challenge

  • Connectivity means nothing when access is denied through persistent neighbouring state hostility contrary to the canons of international law.
  • India has been subject for over five decades to a land embargo by Pakistan that has few parallels in relations between two states that are technically not at war.
  • Lack of alternative route: Difficulties have arisen in operationalising an alternative route — the International North-South Transport Corridor on account of the U.S.’s hostile attitude towards Iran.
  • With the recent Afghan developments, India’s physical connectivity challenges with Eurasia have only become harder.
  • The marginalisation of India on the Eurasian continent in terms of connectivity must be reversed.

2] India must be aware of the limitations of the US

  • The ongoing U.S.-Russia confrontation relating to Ukraine, Russian opposition to future NATO expansion and the broader questions of European security including on the issue of new deployment of intermediate-range missiles, following the demise of the Intermediate-Range Nuclear Forces (INF) treaty will have profound consequences for Eurasian security.
  • The U.S. would be severely stretched if it wanted to simultaneously increase its force levels in Europe and the Indo-Pacific.
  • A major conflict — if it erupts in Central Europe, pitting Russia, Ukraine and some European states — will stall any hopes of a substantial U.S. military pivot to the Indo-Pacific. 
  • India should be cognisant of the limitations of geography, obvious gaps between strategic ambition and capacity but also the inherently different standpoints of how major maritime powers view critical questions of continental security.
  • India is unique as no other peer country has the same severity of challenges on both the continental and maritime dimensions.

Way forward for India

  • India would need to acquire strategic vision and deploy the necessary resources to pursue our continental interests without ignoring our interests in the maritime domain.
  • This will require a more assertive push for our continental rights — namely that of transit and access, working with our partners in Central Asia, with Iran and Russia, and a more proactive engagement with economic and security agendas ranging from the SCO, Eurasian Economic Union (EAEU) and the Collective Security Treaty Organization (CSTO).
  • Striking the right balance between continental and maritime security would be the best guarantor of our long-term security interests.

Conclusion

India will need to define its own parameters of continental and maritime security consistent with its own interests. In doing so, at a time of major geopolitical change, maintaining our capacity for independent thought and action will help our diplomacy and statecraft navigate the difficult landscape and the choppy waters that lie ahead.

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Foreign Policy Watch: India-China

The Chinese challenge

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- China challenge

Context

Nearly 20 months after the border crisis began in Ladakh, China has pressed on with aggressive diplomatic and military gestures against India.

Recent anti- India moves by China

  • Beijing recently renamed 15 places in Arunachal Pradesh, following the six it had done in 2017.
  • China justifies the renaming as being done on the basis of its historical, cultural and administrative jurisdiction over the area — these old names existed since ancient times which had been changed by India with its “illegal occupation”.
  • On January 1, 2022, Beijing’s new land border law came into force, which provides the People’s Liberation Army (PLA) with full responsibility to take steps against “invasion, encroachment, infiltration, provocation” and safeguard Chinese territory.

India’s response

  • Delhi has run out of proactive options against Beijing that will force the Chinese leadership to change course on its India policy.
  • The two countries have an increasingly lopsided trade relationship driven by Indian dependency on Chinese manufacturing, a situation further worsened by the Government’s mishandling of the novel coronavirus pandemic.
  • To restore the status quo ante on the LAC as of April 2020, India undertook internal balancing of its military from the Pakistan border to the China border and external rebalancing through a closer partnership with the United States in the Indo-Pacific.
  • Because of the China factor, the U.S. is currently looking away even as India mistreats its minorities and its democracy stands diminished.
  •  India’s difficult diplomatic and military engagement with China is going to leave it more dependent on U.S. support, rendering India more vulnerable to American pressure on ‘shared values’.
  • With a rising China as its neighbour and a more self-centred U.S. – which is uncomfortable with India’s reliable partner, Russia — as its friend, Delhi continues to face difficult choices.

Conclusion

Put under the harsh glare, India has been found wanting in its ability to deal with future challenges. The immediate challenge, however, remains China. It cannot be wished away and must be tackled.

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Alternative Dispute Resolution Mechanism – NCA, Lok Adalats, etc.

The Mediation Bill, 2021

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Section 498A

Mains level: Paper 2-Mediation Bill 2021

Context

The Mediation Bill, 2021 was introduced in Parliament in December 2021. It seeks to ‘promote mediation (including online), and provide for enforcement of settlement agreements resulting from mediation’.

Need to popularise mediation

  • The Chief Justice of India (CJI), N.V. Ramana, had said that mediation should be made mandatory as a first step in dispute resolution and that a law should be framed in this regard.
  • He emphasised the point that a movement needs to be launched to popularise mediation as it was a cheaper and faster dispute resolution mechanism.
  • He said that courts should be the last resort for dispute resolution; therefore, one should explore the options of alternate dispute resolution.
  • The Tamil Nadu Mediation and Conciliation Centre, an initiative of the Madras High Court and India’s first court-annexed facility with a mediation centre in every district, has significantly reduced the pendency of referred cases.

Which laws in India allow mediation?

  • Mediation finds legitimacy in some specific laws such as:
  • The Code of Civil Procedure, 1908, the Arbitration and Conciliation Act, 1996,
  • The Companies Act, 2013,
  • The Commercial Courts Act, 2015,
  • The Consumer Protection Act, 2019,
  • However, there is no standalone legislation as yet.

How the provisions of Mediation Bill 2021 will help in improving the law and order situation

  • The bill seeks to promote mediation (including online), and provide for enforcement of settlement agreements resulting from mediation’.
  • In case of civil or commercial disputes, a person must try to settle the dispute by mediation before approaching a court or tribunal.
  • Improving the law and order situation: There are certain provisions in the Bill which may help in improving the law and order situation in a locality and/or encourage compounding of criminal offences.
  • First, Section 7 of the Bill says that courts will be competent to refer any dispute to mediation relating to compoundable offences or matrimonial offences connected with or arising out of civil proceedings between the parties.
  • Second, Section 44 of the Bill provides for ‘any dispute likely to affect peace, harmony and tranquillity amongst the residents or families of any area or locality, to be settled through community mediation.
  •  Third, the provisions of the Act shall not have the overriding effect, inter alia, on the Maintenance and Welfare of Parents and Senior Citizen Act, 2007 and the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
  • Promote friendliness: Section 320 in the Code Of Criminal Procedure (CrPC) provides for the compounding of certain criminal offences which shall have the effect of acquittal of the accused.
  • Here, the policy of the law is to promote friendliness between the parties so that peace between them is restored.
  • Relieving the pressure on the police: Many criminal offences are a result of the fact that civil or commercial disputes could not be resolved amicably and in time.
  • The police at times take minor cases lightly or reduce the seriousness of crime by converting a cognisable offence into a non-cognisable one.
  • Therefore, the proposed law of mediation, that has the mechanism of not only preventing the breakdown of law and order through community intervention but also the competence to smoothen the route to compounding of certain criminal offences, may ultimately relieve some of the pressure on the police also.

Some laws are left out of the scope of Mediation Bill 2021

  • Law to prevent sexual harassment of women at workplace: The law to prevent the sexual harassment of women at the workplace has probably been kept out of its scope so that an internal or local complaint committee is able to take up conciliation and close the case locally without involving a third party and detailed procedure.
  • Law on welfare of parents and senior citizens: The law on the maintenance and the welfare of parents and senior citizens has also been kept out of its scope as offences under it are cognisable offences.

Way forward

  • The Supreme Court’s view: The Supreme Court of India has held that if there is a composition of an offence during investigation, the parties can either approach the court or the police.
  • Increasing the compoundable offences: The number of offences that can be compounded may also be increased — particularly property offences.
  • Keeping in view the recommendations of the Law Commission in its 243rd report, Section 498A of the Indian Penal Code, relating to cruelty by the husband or his relatives, can also be made compoundable.
  • It may have far-reaching consequences in resolving matrimonial disputes.

Consider the question “What are the provisions of the Mediation Bill 2021 that could help relieve some of the pressure on law enforcement agencies?”

Conclusion

Though the proposed law primarily intends to resolve civil and commercial disputes through mediation, it has ample scope to relieve some of the pressure on law enforcement agencies.

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Back2Basics: What is a Compoundable and Non Compoundable offence in India

  • Compoundable offences are those offences where, the complainant (one who has filed the case, i.e. the victim), enter into a compromise, and agrees to have the charges dropped against the accused.
  • However, such a compromise should be a “Bonafide,” and not for any consideration to which the complainant is not entitled to.
  • Compoundable offences are less serious criminal offences and are of two different types mentioned in tables in Section 320 of the Criminal Procedure Code, as follows:
  • Court permission is not required: These are the offences, compounding of which do not require prior permission of the court.
  •  Court permission is required: These are the offences, compounding of which require prior permission of the court.

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President’s Rule

Confrontation between the Governors and the State governments

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Discretionary power of Governor

Mains level: Paper 2- Governor-Government conflict

Context

Recent media reports about the confrontation between the Governors and the State governments, in Maharashtra and Kerala, have turned the spotlight on the rather delicate relationship between the constitutional head of the State and the elected government.

Recent incidents of confrontation

  •  In Maharashtra, the Governor refused to accept the date of election of the Speaker recommended by the State government.
  • The Constitution has not assigned any role to the Governor in the election of the Speaker under Article 178, which is exclusively the job of the House.
  • The Governor’s refusal to accept the date of election of the Speaker goes against the principles of constitutional government. 
  • In Kerala, the State Governor having reappointed the Vice Chancellor of Kannur University in accordance with the law, made an allegation that he was under pressure from the Government to reappoint the Vice Chancellor.
  • In fact, he or she can accept suggestions from any person including the Leader of the Opposition in the Assembly.
  • However, the Governor as Chancellor is not required to act on the advice of the Council of Ministers in the matter of appointment of Vice Chancellor and others in the university.
  • He can act absolutely independently.
  • Non-acceptance of the advice of the Council of Ministers too has been witnessed in Rajasthan as well as Maharashtra again.
  • The Kerala High Court has clarified this legal point in Gopalakrishnan vs Chancellor, University of Kerala.

What explains the confrontational relationship between Governor and State Government?

  • Historical background: It has something to do with the whole idea of the office of the Governor and its past history.
  • In the colonial era, the Governor was the absolute ruler of the province.
  • While making the Constitution,  there were divergent views on the powers to be given to the Governor in the Constituent Assembly.
  • There were members in the Assembly who wanted the Governor to be as powerful as the colonial-era Governors.
  • Discretionary powers: Though B.R. Ambedkar was clear that the Governor should only be a constitutional head and the executive power should vest entirely in the elected government.
  • He promoted the idea of vesting certain discretionary powers in the Governor.
  • Why discretionary powers? In this respect he was guided by the thinking that the State governments are in subordination to the Union government and, therefore, the Governor should be given discretionary powers to ensure that they act so.
  • So, ultimately, the Governor is given certain discretionary powers prescribed by or under the Constitution unlike the President of India who has not been given any such powers.
  • Vagueness about actual powers: Further, Article 163 became a ‘blind reproduction of Section 50 of the Government of India Act 1935’ (H.V. Kamath).
  • This exact reproduction of the provision in the Act of 1935 has, to a great extent, introduced a vagueness about the actual powers of the Governor vis-à-vis the elected government.
  • This vagueness was corrected only with the Supreme Court of India stating the law in unambiguous terms in Shamsher Singh (1974).
  • From Shamsher Singh to Nabam Rebia (2016) the Supreme Court declared that the Governor can, in the exercise of executive power of the state, act only on the aid and advice of the Council of Ministers “…save in a few well-known exceptional situations”.

Consider the question “The relationship between the Governor and Chief Minister has, even at the best of times, not been absolutely simple and tension free. What are the factors responsible for confrontation? Suggest the way forward.”

Conclusion

The Governor is a high constitutional authority. He needs to function within the four walls of the Constitution and be a friend, philosopher and guide to his government.

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Foreign Policy Watch: India-China

China’s new land boundary law fits in with its expansionism

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Chumbi Valley

Mains level: Paper 2- What China's new boundary law mean for India?

Context

The latest in the series of aggressive Chinese actions is the use of lawfare through the passing of the “Land Boundary Law” on October 21 which became effective this week.

Background of the Chinese approach

  • The last residue of the Qing dynasty was wiped out in the 1911 revolution when China was established as a republic.
  • The republic was again overthrown in 1949 by the Chinese Communist Party.
  • Three successive Chinese governments in China refused to delineate or demarcate the boundary with either Tibet or India.
  • British archival records, many declassified points to attempts made by Imperial Britain to formally formulate a boundary with China.
  • Yet, all three regimes were united in their refusal to accept a formal limiting of China’s territorial expanse and kept their response ambiguous.
  • Even during the Simla Convention of 1913-14, when the Republic was ascendant in China, there was a vehement refusal to recognise any demarcation of boundaries between Tibet and China.

Strong-arm tactics against India

  • Having operated from a maximalist position to settle its borders with 12 of its 14 neighbours so far, China has attempted to use the same strong-arm tactics with both India and Bhutan.
  • It has offered to forgo its claims in the larger parts of North Bhutan in lieu of gaining a relatively smaller area in West Bhutan.
  • Threat to Siliguri corridor: This seeming magnanimity is calculated to expand into the Chumbi Valley in the South, threatening the narrow and strategic Siliguri corridor in India.
  • In its latest move, China has made a new claim on Sakteng sanctuary in Bhutan which may form a launchpad for future operations against Tawang in Arunachal Pradesh.
  • China has also strengthened its collusion with Pakistan.
  • There is a deliberate attempt by China to physically link with Pakistan in the Northern Areas by removing the Indian wedge of DBO, the doorway to the Karakoram Pass.
  • A Training Mobilisation Order (TMO) issued by Xi Jinping in January 2020 called for “confrontational training” for its troops and officers to assess their preparedness, especially in light of the new reforms undertaken by the PLA.
  • These factors seem to be the tactical beginnings of China’s grand strategy which also saw China flexing in the South China Sea and Taiwan, almost simultaneously.

China making use of lawfare and implications for India

  • The latest in the series of aggressive Chinese actions is the use of lawfare through the passing of the “Land Boundary Law”.
  • Formalises and legalises land Chinese grab: The law formalises and legalises China’s geographic creep towards Tawang, Arunachal Pradesh and parts of eastern Ladakh and creates conditions for using newly-constructed border villages close to the LAC for claiming sovereignty over disputed areas.
  • The import of the law is most critical for India but will affect China’s disputes with other countries too.
  • What China has done, therefore, is convert a territory dispute over borders into a sovereignty dispute which precludes any give or take of territory.
  • China will attempt to settle its Han population in the Tibetan regions, reversing established demographic patterns and at the same time.
  •  Future negotiations over territory, if they occur, will then refer to the Border Defence Cooperation Agreements of 2005 and 2012 which call for border settlements to be done keeping in mind the local population in the border regions.

Way forward

  • A deliberate thought process needs to be evolved to offset our disadvantages as purely military actions may not solve the situation in the long term.

Conclusion

What emerges clearly is that by adopting the Land Boundary Law, in conjunction with its physical actions on the LAC, China has consolidated its position in eastern Ladakh and kept possibilities open in Arunachal Pradesh.

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Climate Change Negotiations – UNFCCC, COP, Other Conventions and Protocols

For carbon sequestration, India must revisit its policy framework

Note4Students

From UPSC perspective, the following things are important :

Prelims level: REDD+

Mains level: Paper 3- Ensuring participation of people to achieve desired target of carbon sequestration

Context

India’s pledge to set a net-zero target by 2070, at the COP26 summit, Glasgow, has again highlighted the importance of forests to help mitigate the challenges of climate change.

Need for sustainable management of forests

  • The United Nations Framework Convention on Climate Change (UNFCC) framework (2013) of REDD+ for Reducing Emissions from Deforestation and Forest Degradation has highlighted the importance of forest along with the ‘sustainable management of forests for the conservation and enhancement of forest carbon stocks’.
  • Land-based sinks: In a study by Griscom (2017), land-based sinks (natural climate solutions which also include forests) can provide up to 37% of emission reduction and help in keeping the global temperature below 2° C.
  • Natural regeneration model: Recent research has favoured a natural regeneration model of restoration over the existing much-hyped mode of tree planting as such forests are said to secure nearly 32% carbon storage, as per one report of the Intergovernmental Panel on Climate Change.

Degradation and deforestation in India

  •  As per the State of Forests Report (1989), the country had 2,57,409 sq.km (7.83% of its geographical area) under the open forest category, having a density of 10% to less than 40%.
  • However, in 30 years (2019) this has been increased to 3,04,499 sq. km (9.26%).
  • This means every year on average, nearly 1.57 lakh hectare of forests was degraded. 
  • Anthropogenic pressure: This degradation highlights the presence of anthropogenic pressures including encroachment, grazing, fire, which our forests are subjected to.

Need for the participation of people to achieve target of carbon sequestration

  • The degradation warrants the participation of people as an essential and effective route to achieve the desired target of carbon sequestration through the restoration of forests.
  • As envisaged in National Forest Policy, 1988, India made its attempt, in 1990, to engage local communities in a partnership mode while protecting and managing forests and restoring wastelands with the concept of care and share. 
  • Later, the concept of forest development agencies was introduced to consolidate the efforts in an autonomous model.
  • Creation of joint forest management committees: The efforts to make this participatory approach operative resulted in the formation of nearly 1.18 lakh joint forest management committees managing over 25 million hectares of forest area.
  • Most of these became active and operative while implementing various projects financed by external agencies such as the World Bank, the Overseas Economic Cooperation Fund (OECF) Japan, the Department for International Development (DFID) United Kingdom and the European Union (EU).
  • A similar system of joint management in the case of national parks, sanctuaries and tiger reserves which existed in the name of eco-development committees initially proved effective.
  • However, the completion of the project period and lack of subsequent funding affected their functionality and also the protection of forests due to a lack of support from participating local communities including associated non-governmental organisations.
  • Customary participation: Except for the National Mission for Green India, in all other centrally sponsored programmes such as Project Tiger, fire management, Integrated Development of Wildlife Habitats (IDWH) including the Compensatory Afforestation Management and Planning Authority (CAMPA), the lack of priority and policy support to ensure the participation of local communities via the institutions of joint forest management committees slowly made their participation customary.
  • This caused a gradual decline in their effectiveness.
  • Role change: The role of local institutions of gram panchayat or joint forest management committees is now restricted to be a consultative institution instead of being partners in planning and implementation.
  • Implications of role change: This indifference and alienation from the participatory planning and implementation of various schemes

Way forward

  • Revisit legal and policy mechanism: To achieve net-zero targets there is a need to revisit our existing legal and policy mechanisms.
  • Incentivise local communities: We also need to incentivise the local communities appropriately and ensure fund flow for restoration interventions.
  • There is a need for duly providing for the adequate participation of local people in planning and implementation through local institutions.
  • Replicate Telangana model: Political priority and appropriate policy interventions as done recently in Telangana by amending the panchayat and municipal acts and creating a provision for Telangana Haritha Nidhi need replication in other States.
  • Financial and institutional support mechanisms: These should be supported by enabling financial and institutional support mechanisms and negotiations with stakeholders
  • Though India did not become a signatory of the Glasgow Leaders’ Declaration on Forests and Land Use, the considerations of land tenure and the forest rights of participatory communities with accelerated finances will help aid steps in the race toward net zero.

Consider the question “India is witnessing enormous degradation of forests and deforestation. This warrants the participation of people as an essential and effective route to achieve the desired target of carbon sequestration. In context of this, elaborate the importance of people participation and suggest the way forward.”

Conclusion

This inclusive approach with political prioritisation will not only help reduce emissions but also help to conserve and increase ‘our forest cover’ to ‘a third of our total area’. It will also protect our once rich and precious biological diversity.

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Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

Extinguishing the tobacco industry’s main narrative

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Price and tax measures to reduce demand of tobacco

Context

There is no doubt that tobacco use is highly detrimental to public health. We have to find the ways and the means to reduce the demand for tobacco among existing as well as aspiring users.

Impact of tobacco

  • Tobacco is a product that kills more than 13 lakh Indians every year.
  • Annual burden: The annual economic burden from tobacco use is estimated to be ₹177,340 crore which is more than 1% of India’s GDP.
  • About 27 crore people above the age of 15 years and 8.5% of school-going children in the age group 13-15 years use tobacco in some form in India.

Are price and tax measures effective against tobacco use?

  • When tobacco products become more expensive, people either quit using them or use them less, and it incentivises many to not initiate the habit.
  • Because it hurts both revenue and profits, the tobacco industry, globally, is always devising tactics and narratives that will pre-empt any kind of tax increases on tobacco products.
  • The narrative of “increasing illicit trade” is something the tobacco industry has historically used to pre-empt potential tax increases on tobacco products in most countries around the world.
  • The story is no different in India.
  • In a recent report by the Tobacco Institute of India, it was said that the illicit cigarette volume in India has grown by 44% from 2011 to 2019 while adding that high and increasing tax rates provide a profitable opportunity for tax evasion and encourage growth in illegal trade.
  • A study published in 2018 which used a survey of empty cigarette packs collected from retail outlets across different cities in India estimated that illicit cigarettes constitute 2.7% of the market.
  • The second study published in 2020 used tax-gap analysis to estimate that the percentage of illicit cigarettes was 5.1% in 2009-10 and 6.6% in 2016-17.

Are taxes and prices key determinants of illicit trade?

  • It is to be noted that taxes and prices are not the key determinants of illicit trade.
  • There is sufficient evidence in the literature on illicit trade in cigarettes that shows tax increases only have a minimal impact, if at all, on illicit trade.
  • There are several countries where tobacco taxes are quite high and yet have low levels of illicit trade, while there are also countries with high levels of illicit trade despite having relatively low tax rates.
  • Several factors such as the quality of tax administration, the strength of the regulatory framework, government commitment to control illicit trade, the strength of governance, social acceptance, and the presence of informal distribution networks are known to play a larger role in determining the scale and the extent of an illicit market.

Way forward

  • WHO protocol: Eliminating all forms of illicit trade in tobacco products through a package of measures is one of the major objectives of the Protocol to Eliminate Illicit Trade in Tobacco Products under the World Health Organization’s Framework Convention on Tobacco Control.
  • The Protocol provides the tools and the measures to eliminate or minimise illicit trade which includes strong governance, establishing an international track and trace system, and securing supply chains.
  • India has already ratified the World Health Organization Protocol and it should now show leadership in implementing these measures to effectively address even the relatively lower levels of illicit trade.

Conclusion

There is no scientific or public health rationale not to increase tax on tobacco products for unfounded fear of increasing illicit trade.

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Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

Worrying trends in nutrition indicators in NFHS-5 data

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Dealing with the nutrition gap

Context

The NFHS-5 factsheets for India and all states and Union territories are now out. At first glance, it appears to be a mixed bag — much to cheer about, but concern areas remain.

Positives from the NFHS-5 survey

  • Change in demographic trends: For the first time since the NFHS 1992-93 survey, the sex ratio is slightly higher among the adult population.
  • Improvement in sex ratio at birth: For the first time in 15 years that the sex ratio at birth has reached 929 (it was 919 for 1,000 males in 2015-16).
  • The total fertility rate has also dropped from 2.2 per cent to a replacement rate of 2 per cent, albeit with not much change in the huge fertility divide between the high and low fertility states.
  • Improvement in literacy level of women: There has been an appreciable improvement in general literacy levels and in the percentage of women and men who have completed 10 years or more of schooling, which has reached 41 per cent and 50.2 per cent respectively.
  • Improvements in health indicators: The health sector deserves credit for achieving a significant improvement in the percentage of institutional births, antenatal care, and children’s immunisation rates.
  • There has also been a consistent drop in neonatal, infant and child mortality rates — a decrease of around 1 per cent per year for neonatal and infant mortality and a 1.6 per cent decrease per year for under five mortality rate.

Nutrition: Area of concern

  • Increase in anaemic people: India has become a country with more anaemic people since NFHS-4 (2015-16), with anaemia rates rising significantly across age groups, ranging from children below six years, adolescent girls and boys, pregnant women, and women between 15 to 49 years.
  • Why anaemia is a concern? Adverse effects of anaemia affect all age groups — lower physical and cognitive growth and alertness among children and adolescents, and lesser capacity to learn and play, directly impacting their future potential as productive citizens.
  •  Further, anaemia among adolescent girls (59.1 per cent) advances to maternal anaemia and is a major cause of maternal and infant mortality and general morbidity and ill health in a community.
  • The detailed report will explain why a dedicated programme like Anaemia Mukt Bharat which focused on IFA consumption failed to gain impetus.
  • Slow pace of improvement in nutritional indicators: Between NFHS 4 and NFHS 5, the percentage of children below five years who are moderately underweight has reduced from 35.8 per cent to 32.1 per cent.
  • Moderately stunted children have fallen from 38.4 per cent to 35.5 per cent, moderately wasted from 21 per cent to 19.3 per cent and severely wasted have increased slightly from 7.5 per cent to 7.7 per cent.
  • Inadequate diet: The root cause for this is that the percentage of children below two years receiving an adequate diet is a mere 11.3 per cent, increasing marginally from 9.6 per cent in NFHS-4.

Way forward

  • India’s nutrition programmes must undergo a periodic review.
  • The Integrated Child Development Services (ICDS), which is perceived as the guardian of the nation’s nutritional well-being must reassess itself and address critical intervention gaps, both conceptually and programmatically, and produce rapid outcomes.

Conclusion

The nutritional deficit which ought to be considered an indicator of great concern is generally ignored by policymakers and experts. Unless this is addressed, rapid improvement in nutritional indicators cannot happen.

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Cyber Security – CERTs, Policy, etc

How to control cyber crime against women

Note4Students

From UPSC perspective, the following things are important :

Prelims level: CERT-IN

Mains level: Paper 2- Cybercrimes against women

Context

The open-source app, Bulli Bai, hosted on the web platform GitHub for “auctioning Muslim women” has laid bare the harassment women face online.

Cybercrimes against women

  • As per the Telecom Regulatory Authority of India (TRAI) there were around 825 million internet users in India at the end of March 2021.
  • The minuscule amount of rogue elements among these internet users have the lethal capability to create havoc in the nation, its polity, economy and the personal and professional lives of citizens.
  • Reluctance to file case: Many times, police officers are approached by anxious parents, days before marriage, seeking help about fake profiles or morphed photographs of their daughters on the internet.
  • A formal police case is thus never lodged.
  • The stark reality is that cyber blackmailing, stalking and bullying is a humongous issue, causing a lot of stress to women and their families.
  •  NCRB statistics show that total cyber crimes in India during 2020 were 50,035, and those specifically against women were only 10,405.

Steps need to be taken

  • Promt reporting and registration: To find out the true magnitude of cyber crime, prompt reporting and registration are the only options.
  • International cooperation through treaties: There are many international gangs which successfully avoid detection as “servers” used by them are located outside India.
  • International cooperation through formal treaties and informal channels has to be pursued.
  • CERT-IN has been doing commendable work in this regard.
  • Registering a criminal case is the first crucial step as it sets the law into motion, leading to tracing, arresting and prosecuting the rogues even if they are located outside the country.
  • Increase awareness:  There is need to increase awareness about cyber safety and security so that youth, especially young girls and women, take proper precautions while surfing the virtual world.
  • Better policing: As for the police, we do need better infrastructure, more special cyber cells and police stations, regular training, and collaboration with cyber experts on a continuous basis.
  • Strengthening the capability of forensic laboratories can lead to timely collection of evidence of cyber bullying, threatening, morphing and profiling.
  • Many state labs do not have sufficient numbers of cyber experts to seize, preserve and store images of digital evidence essential for securing conviction in courts.
  • The central government has given funds to states and Union territories under the Cyber Crime Prevention Against Women and Children (CCPWC) scheme to start “cyber forensic-cum-training laboratories”.
  • Fast trial: Fast trial of cyber crimes would indeed help. As per the NCRB, during 2020, court trials were completed in only nine cases of cyber blackmailing and threatening with a 66.7 per cent conviction rate — 393 such cases are pending in courts.
  • Systematic training of prosecutors and judicial officers in dealing with cyber crimes would definitely speed up trials.

Conclusion

Prompt reporting of cyber crime by citizens, technically proficient investigation by police adequately supported by forensics, and time-bound completion of court trials are essential for catching cyber offenders who are terrorising people, especially women, in the virtual as well as the real world.

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What America’s Indo-Pacific policy mean

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Blue Dot network

Mains level: Paper 2- Indo-Pacific region

Context

The visit by United States Secretary of State  Antony J. Blinken to Southeast Asia in December 2021 underscores the importance that is being accorded to this region by the Joe Biden administration.

Take aways from the visit

[1] Projecting the US as reliable partner

  • The idea was to present the U.S. as a reliable partner in meeting the challenges that the Indo-Pacific region is facing.
  • For instance, completely aware that the Southeast Asian nations are averse to choosing sides in this U.S.-China competition, Mr. Blinken made it a point to mention that “individual countries will be able to choose their own path and their own partners.

[2] Tackling China challenge

  • Both China and the U.S. are trying to lure the Association of Southeast Asian Nation (ASEAN) countries to their side — China with its grand economic infrastructure investment deals and the U.S. through recent high profile official visits as well as through the Build Back Better World initiative and Blue Dot Network.
  • In Southeast Asia, the U.S.-China competition is most visible in two areas; one is the South China Sea and the second is the investment in fulfilling the infrastructure development needs of Southeast Asian countries.
  • The U.S. has continued its Freedom of Navigation operations in the disputed waters of the South China Sea.
  • In his remarks in Indonesia, Mr. Blinken stressed America’s determination “to ensure freedom of navigation in the South China Sea, where Beijing’s aggressive actions there threaten the movement of more than $3 trillion worth of commerce every year”.

[3] Closing the gap on infrastructure

  • Southeast Asia has been one of the top recipients of Chinese investments under its Belt and Road Initiative (BRI).
  • How these investments have driven countries such as Cambodia and Laos to do China’s bidding in the ASEAN even at the cost of compromising ASEAN’s unity is a known fact.
  • Mr. Blinken reiterated that the U.S. remains committed to help close the gap on infrastructure.
  • The infrastructure coordination group launched by the Quad members is seeking to catalyse even more investment and is looking to partner with Southeast Asia on infrastructure and many other shared priorities.
  • Washington is promising to do more under the Build Back Better World initiative and the Blue Dot Network.

Way forward

  • The ASEAN countries, even after the release of the ASEAN Outlook on the Indo-Pacific, do not have a uniform approach when it comes to dealing with the U.S. and China.
  • These differing approaches are also challenging the much vaunted ASEAN centrality in the Indo-Pacific.
  • Though external players will have a limited role in ensuring that the unity within ASEAN is restored, providing proper alternative models of investments for development in sectors such as infrastructure, digital economy, supply chain, and health for the Southeast Asian nations will be critical.

Conclusion

The economic framework, investment plans and promises outlined need to be made operational quickly if Washington is to show that it is indeed serious about sustained commitment toward the Indo-Pacific.

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NGOs vs. GoI: The Conflicts and Scrutinies

Challenges facing the Civil Society Organisations

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Regulatory challenges faced by civil society organisations

Context

Recently, the Missionaries of Charity established by Nobel Laureate Mother Teresa was in the news for the cancellation of its permission under the FCRA.

Detailed scrutiny delaying permission for grant

  • The levels of due diligence and the information sought on the one hand and the annual declarations to be given by the board members of civil society organisations on the other have increased significantly.
  • The mandatory opening of bank accounts for foreign contributions has been centralised in one branch of the State Bank of India.
  • The linking of Permanent Account Number (PAN), Aadhaar number and mapping it with the bank account/s of the individual board members are happening.
  • The registrations under Foreign Contribution (Regulation) Act (FCRA) have been long necessitated in order to undertake due diligence of the causes for which the organisation is working for and also to have a handle on the traceability of funds.
  • The dashboard shows a little under 17,000 active organisations — which have either got permission or will know their fate by March 2022, while around 33,000 organisations have either lost their permission or it has expired.

Various restrictions

  • Restriction on sub-grant: In the past, the amendments in the FCRA that restricted the ability to sub-grant, killed many of the niche organisations working in very remote areas which had no direct access to international funding but were doing it through larger non-governmental organisations.
  • Restriction on administrative expenses: The other amendment restricting the proportion of expenses on administration almost choked organisations that worked for the rights of the disposed.
  • The increasing level of surveillance type of data sought has resulted in many organisations losing people on their governance structure and resulting in problems in funding.

Why do we need Civil Society Organisations?

  • We need them because they usually work on what can be called an unreasonable agenda.
  • This unreasonableness falls in three large verticals.
  • [1] Ensuring efficiency and accountability from state: The first is that they ask for greater efficiency, delivery and accountability from the state.
  • Whether is it about rehabilitation and compensation in the case of land acquisition or setting up a great accountability framework as was done through the movement led by the Mazdoor Kisan Shakti Sangathan for the Right to Information.
  • [2] Correcting extractive nature of market: The second vertical is in correcting the extractive nature of markets.
  • The groups asking for environmental accountability are looking at inter-generational justice on a matter that is not very precisely measurable but is palpable.
  • [3] Picking up niche causes: The third is basically picking up causes that are so niche that it is beyond the capability of the state to come up with such initiatives.
  • For example, a drama school set up in a village called Heggodu, Karnataka, or an idea of distributing clothing for work as done by Goonj.
  • These initiatives cannot be put into specific business plans, spreadsheets or government schemes.
  • They, therefore, need a grant-based, cause-based revenue stream model.

Should these organisations accept foreign funding?

  • Causes have no boundaries: “Causes” have no boundaries and funding for such socially desirable belief systems could come from beyond borders.
  • Some causes carried out by organisations such as Doctors Without Borders, or Reporters Without Borders are by definition international in nature.
  • Similar is the case with the Jaipur foot provided by the Bhagwan Mahaveer Viklang Sahayata Samiti.
  • The humanitarian work by the Missionaries of Charity is beyond the capability of a state.
  • Such causes do not have a rational basis to be explained in terms of a financial model; how do you put a price tag to press freedom?
  • The niche funding will happen from agencies that may be beyond the borders.
  • The duality of welcoming foreign investments (which takes away capital gains and dividends) while actively discouraging foreign aid to charities is staring us in the face.

Conclusion

The government needs to ensure that the regulations do not create hurdles for the civil society organisations in their functioning and receiving fundings.

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Climate Change Negotiations – UNFCCC, COP, Other Conventions and Protocols

A partnership to carry India into net-zero future

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Commitment to net-zero emission targets

Mains level: Paper 3- Transition towards clean energy

Context

At a time when our planet faces an existential crisis, there is little doubt that we need innovative, scientific and urgent steps to secure humanity’s future.

India’s climate commitment

  • We need to act decisively to reach global net-zero, restricting future cumulative emissions to the remaining carbon budget — as COP26 noted — if the rise in temperature is to remain within the limits of the Paris Agreement.
  • At COP26, India announced its climate commitments — the “Panchamrit”, including a commitment to reach net-zero by 2070.
  • India’s announcement of its net-zero goal is a major step considering that our country is not the cause of global warming.
  • Its historical cumulative emissions are a mere 4.37 per cent of the world’s total. 

India’s steps to achieve the targets

[1] India’s renewable energy targets and achievements

  • India’s renewable energy targets have steadily become more ambitious, from the 175 GW by 2022 declared at Paris, to 450 GW by 2030 at the UN Climate Summit, and now 500 GW by 2030, announced at COP26.
  • India has also announced the target of 50 per cent installed power generation capacity from non-fossil energy sources by 2030, raising the existing target of 40 per cent, which has already been almost achieved.
  • Renewable technologies: India will not lag in terms of new cutting-edge renewable technologies and has already announced a Hydrogen Energy Mission for grey and green hydrogen.
  • In energy efficiency, the market-based scheme of Perform, Achieve and Trade (PAT) has avoided 92 million tonnes of CO2 equivalent emissions during its first and second cycles.

[2] India’s E-mobility transtion

  • FAME: India is accelerating its e-mobility transition with the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles Scheme to support the electric vehicle market development and enable its manufacturing ecosystem to achieve self-sustenance.
  • Incentives for customers and companies: The government has also announced a slew of incentives for customers and companies to promote e-vehicles.
  • Adoption of BS-VI: India leapfrogged from Bharat Stage-IV (BS-IV) to Bharat Stage-VI (BS-VI) emission norms by April 1, 2020.
  • Scrapping policy: A voluntary vehicle scrapping policy to phase out old and unfit vehicles now complements these schemes.
  • Electrification of railway routes: Indian Railways is charging ahead, targeting the full electrification of all broad-gauge routes by 2023.

[3] Ujjwala Yojana and UJALA

  • The Pradhan Mantri Ujjwala Yojana has benefitted 88 million households with LPG connections.
  • More than 367 million LED bulbs have been distributed under the UJALA scheme, leading to energy savings of more than 47 billion units of electricity per year and a reduction of 38.6 million tonnes of CO2 per year.
  • With these and many other initiatives, India has already achieved a reduction of 24 per cent in the emission intensity of its GDP between 2005 and 2016, and is on track to meet its target of 33 to 35 per cent by 2030.

Role of private sector

  • Since industries also contribute to GHG emissions, any climate action will need to reduce or offset emissions that emerge from industrial and commercial activity.
  • The public and private sectors in India are already playing a key role in meeting the climate challenge, helped by growing customer and investor awareness, as well as increasing regulatory and disclosure requirements.
  • Enterprises are well-positioned to not just adapt to but also gain from the low-carbon transition.
  • The low-carbon transition challenge is bigger for companies that are largely coal-powered and contribute more than half of our country’s emissions.
  • The business fraternity must make the best possible use of this opportunity to invest in climate technologies and expand the use of renewable energy sources.
  • The Indian cement industry has taken pioneering measures and achieved one of the biggest sectoral low carbon milestones worldwide.

Way forward

  • India’s journey on the low-carbon pathway towards net-zero requires the active participation of all stakeholders.
  • Sustainable lifestyles and climate justice are at the core of this journey.

Conclusion

With cooperation from the private sector, India will be able to responsibly use its fair share of the global carbon space and contribute to reaching the global net-zero goal to build a more environmentally sustainable planet.

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Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

A reality check on great CAPEX expectations

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Capex boom in India

Context

Economists are predicting a potential virtuous capital investments (capex) cycle to kick in globally as we emerge from the pandemic.

Why do analysts think that capital investment cycle is about to start?

  • Less leveraged: Corporates are less leveraged today compared to 2008.
  • Indian corporates repaid debts of more than Rs 1.5 trillion.
  • Fiscal and monetary support: Companies are also more confident of durable fiscal and monetary support.
  • Increased savings: Households have large excess savings built during Covid — $1.7 trillion in the US and roughly $300 billion in India as per a UBS report.
  • Cash: Lastly, corporates are sitting on a large cash pile – S&P 500 firms’ cash has soared from $1 trillion pre-pandemic to $1.5 trillion now.

Why capex wave is difficult in India?

  • Fall in capital formation: India’s fixed capital formation rate has steadily fallen from 36 per cent of GDP in 2008 to 26 per cent in 2020.
  • For a set of 718 listed companies for which data is consistently available from 2005, the capex growth rate has decreased from 7 per cent in 2008 to around 2 per cent in 2020.
  • Low return on invested capital: The return on invested capital in FY21 is still low at 2-3 per cent compared with 16-18 per cent returns in 2005-08.
  • Structural issues: Land acquisition is still tough, changes to labour laws have been slow, and reform uncertainty has resurfaced with the rollback of the agriculture reform laws.
  • Discouraging current data: As per CMIE data, the quarter ending in June 2021 saw Rs 2.72 lakh crore worth of new projects announced. This fell to Rs 2.22 lakh crore for the September 2021 quarter.
  • This is much below the average of Rs 4 lakh crore a quarter of new project announcements during 2018 and 2019.
  • Further, new projects are concentrated in fewer industries (power, and technology) with the top three accounting for 44 per cent of the total of new projects announced.
  • Low capacity utilisation: At the same time, capacity utilisation for corporate India is at an all-time low.
  • From a peak of 83 per cent in 2010, when capex was running hot, utilisation levels declined to 70 per cent just before the pandemic, and further to 60 per cent in June 2021 as per the RBI’s latest OBICUS data.
  • Capex is funded either from fresh debt or equity issues or from accumulated cash. Large firms are repaying debt.

Conclusion

It is too early in the cycle to predict anything with confidence, but we need more evidence to predict a capex cycle.

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Selective alignment to universal engagement of Indian diplomacy

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- India's engagement with the world

Context

In 2021, Indian diplomacy was characterised by a readiness to deal with friends and foes alike.

Challenges faced by India diplomacy in 2021

  • The US leadership change: Coping with the change from President Donald Trump to President Joe Biden and the consequent changes in U.S. policy were big enough to keep the world leaders on tenterhooks.
  • Pandemic:  With the increased onslaught of the pandemic, India suddenly became the epicentre of the tragedy.
  • The exposure of the inefficiency of India’s health system and put the country in the defensive and weakened its credibility as it tried to contribute to the resolution of global issues.
  • Aggression by China: For India, the biggest preoccupation of 2021 was the effort to get China to disengage in areas in Ladakh.
  • Dialogue, military preparedness and economic pressure met with limited success.
  • Afghanistan crisis: Afghanistan turned out to be a bigger crisis than expected, with the Taliban’s walkover in Kabul.
  • Bringing some civility to the Taliban in Kabul became a high priority in the face of a Pakistan-China-Taliban axis with some support from Russia and Iran.
  • Issue of permanent membership of the UN Security Council: Unprecedented in the history of the UN, an event at the Security Council was chaired by the Prime Minister.
  • Significant inputs were provided during discussions on issues like maritime security, peacekeeping and anti-terrorism for active consideration in the future.
  • Although it is illusory to believe that the way has been cleared for India’s permanent membership of the Security Council, India’s diplomatic capabilities and its commitment to the UN have demonstrated yet again.

What marks the change in the style of Indian diplomacy?

  • From selective alignment, India moved to universal engagement, even to the extent of convening meetings with antagonists.
  • Engagements with the U.S. went beyond familiarisation with the new government to increased commitment to Quad and acceptance of AUKUS and formation of the ‘western Quad’, with the U.S., Israel and the UAE.
  • Engagement with Russia: Major agreements were signed with Russia, despite the American threat of CAATSA against S-400 missiles and the Russian inclination to align with China in the days to come.
  • The engagement with China at the level of commanders and diplomats was intense, and ministerial interaction continued even when China tore up many fundamental agreements that sustained the dialogue for many years.
  • Patience, diligence and firmness: India attended a Shanghai Cooperation Organisation meeting, where a sub-group led by China took its own decisions on Afghanistan.
  • We also attended a meeting of Russia, China and India.
  • Perhaps because of the unique geopolitical situation, India gave particular importance to its presidency of the UN Security Council in August 2021.
  • Engagement with Myanmar: The Foreign Secretary’s visit to Myanmar to engage the military junta at a time when opposition leaders are in prison may raise eyebrows in many countries, but this is another instance of India’s readiness to engage those in power to explore possibilities of friendship and co-operation.
  •  The intention is to prevent China from having a field day in Myanmar.

Conclusion

Sadly, the extraordinary efforts made by India have not been fruitful in the cases of China and Afghanistan.  But India’s new style of diplomacy will have an impact in shaping the world of the future.

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Renewable Energy – Wind, Tidal, Geothermal, etc.

Preparing for a green energy shift in 2022

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Challenges in transition to clean energy

Context

Political leaders find themselves currently amid a messy reality. The seemingly “irresistible force” for clean energy has met, it would appear, the “immovable object” of an embedded fossil fuel energy system.

Changes in the energy sector in 2021

  • Commitment to Net-zero: One hundred and thirty-three countries pledged to a “net-zero carbon emissions date” and most governments, corporates and civic entities have shown determination to “phase down” and eventually phase out fossil fuels from their energy basket.
  • Price volatility: The petroleum market seesawed and was expectedly volatile.
  • High price: Natural gas prices reached stratospheric levels as demand exceeded supplies and geopolitics compounded the imbalance. 

Five trends that will shape the emergent energy landscape

[1] Transition to clean energy will be long and expensive

  • Redesign and rebuilding: The fossil fuel-based economic system will have to be redesigned and, in parts, rebuilt for clean energy to achieve scale.
  • The process will take decades and require massive capital infusion.
  • No country or multilateral institution can finance this transition individually.
  • The world needs to collaborate: The world will have to collaborate and if it fails to do so, the financing deficit will push back the transition even further.

[2] Fossil fuels will dominate the energy basket during the transition

  • Fossil fuels will dominate the energy basket during this transition phase.
  • Contributing factors: As has been the case so far, its market will be defined by the “fundamentals” of demand, supply and geopolitics and the “non-fundamentals” of exchange rates and speculative trade.
  • The price movements will be sharp, volatile and unexpected.

[3] The resurgence of market influence of OPEC plus after private companies move beyond fossil fuel

  • The “ OPEC plus” will resurge in market influence.
  • The low-cost, high resource petrostates (Saudi Arabia, the Gulf nations, Iraq, Iran, Russia) will, in particular, gain greater control over the petroleum market as private companies move beyond fossils under pressure from shareholders and regulators.

[4] Transition will create new centres of energy power

  • The Democratic Republic of Congo controls, more than 50 per cent of the global supply of cobalt; Australia holds a comparably large share of the lithium market; and China controls the mining, processing and refining of rare earth minerals.
  • It is difficult to tell how and when these countries will exercise their market power but it is clear that the “green transition” will create new centres of energy power.

[5] Nationalism and political opportunism will influence energy policy

  • The US and China are currently embroiled in a “Cold War” over technology, trade, cyber issues and the South China Sea.
  • The US and China appear to be in a similar face-off. But that has not come in the way of their energy relations.
  • A few weeks ago, the two countries decided to coordinate the release of oil stocks from their strategic reserves to cool off the oil market.
  • The underlying reality is that national self-interest and short-term political ambition will be the defining determinant of future energy supply relations cutting across values and rhetoric.

Suggestions for India

  • Nurture relations with traditional suppliers: India must assiduously nurture relations with our traditional suppliers of oil and gas.
  • It must not assume their role in the energy market will diminish.
  • Increase storage capacity of strategic reserves: It should accelerate the build-up of the storage capacity for oil and gas; the latter to hold strategic oil reserves, the former to store gas for inter alia conversion to blue hydrogen.
  • Ecosystem for search and development of minerals required for clean energy: It must create a facilitative ecosystem for the search and development of the minerals and metals required for clean energy.
  • Clean energy supply chain: It should create a “clean energy aatmanirbhar supply chain”.

Conclusion

The green transition must not lead to import dependency on raw minerals and manufactured inputs, especially from China. The current policy to incentivise the manufacture of semiconductors is a step in the right direction.

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Electoral Reforms In India

Why EC can’t delay upcoming polls

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Powers of Election Commission

Context

Ever since the Allahabad High Court urged the Election Commission of India to consider banning all political rallies or postponing the upcoming Assembly elections due to the increasing threat of Omicron, the focus of debate has shifted to the EC.

Why and when does the Election Commission clubs the elections?

  • To avoid the influence of result: As per practice, the EC clubs all elections that are so close to each other to ensure that the results in one state do not influence the voters in the state going to the polls soon after.
  • Earliest date: The earliest due date of a state determines the poll dates for all the clubbed states.
  • No delay allowed: The EC cannot delay an election even by a day, although it can advance it by up to six months.
  • The Assembly elections of five states are due in the early months of 2022, four of these in March itself — Goa (by March 15), Manipur (March 19), Uttarakhand (March 23) and Punjab (March 27).
  • The fifth — UP — is due by May 14.
  • Goa being the earliest, we must have all five elections completed before March 15.

Why EC cannot postpone the elections?

  • Violation of Constitution: Postponing elections is not in the Election Commission’s hands at all and would be a violation of the constitutional mandate that gives every Vidhan Sabha a fixed term.
  • As soon as the term is over, the House stands dissolved automatically.
  • The term of the House cannot be extended except in an emergency declared by Parliament, which the Constitution restricts to only two situations — war and breakdown of law and order.
  • In the seven decades of our electoral history, this has happened only three times — in Assam, Punjab and Jammu and Kashmir — in insurgency situations.

Way forward: Strict enforcement of guidelines

  • Before the Bihar elections of 2020, the EC had issued detailed guidelines based on its observation of other countries that conducted elections that year, like South Korea and Sri Lanka.
  • Reduction of the number of electors: These guidelines included the reduction of the number of electors per polling booth from 1,500 to 1,000, to prevent over-crowding, which required the addition of 33,797 auxiliary polling stations.
  • Covid-sensitive capacity building: The guidelines also included Covid-sensitive capacity-building of election officials.
  • Postal ballot option: The ECI also extended the postal ballot option to senior citizens over the age of 80, Covid-positive patients, persons with disabilities and voters in essential services.
  • Virtual campaigning: Virtual campaigning was also encouraged to stop election rallies contributing to Covid.
  • Besides the standard social distancing and sanitising norms, voters were provided with gloves to touch the EVMs.
  • To avoid crowding at the counting centres, the counting tables were reduced from 14 to seven per assembly constituency.

Consider the question “What are the challenges in postponing the Assembly elections beyond the fixed terms of the Assembly? Suggest the way forward.”

Conclusion

This election is an opportunity for the EC to redeem its image. More importantly, it must guard itself against the trap of postponing the polls under any persuasion.

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Taiwan: An important ally in the battle against authoritarianism

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Summit for Democracy

Mains level: Paper 2- Challenges facing democracy

Context

President Joe Biden-led Summit for Democracy was held on December 9-10. The summit was driven by the idea that in the face of populism, authoritarianism it is critical to keep the “democratic” flock together.

The salience of Summit for Democracy

  • As a goal in itself: The salience of this summit lies in a deeper understanding that democracy is not just a form of government, it is a goal in itself, a value that must be cherished, preserved and celebrated.
  • Democracy as a way of life: Unlike other political systems, democracy is also a way of life — a work in progress that needs sustained attention and careful nurturing to make it more resilient.

Taiwan as a desired partner of like-minded democracies

  • Taiwan’s New Southbound Policy (NSP) was launched in 2016 to bring Asia closer to Taiwan and vice-versa.
  • The NSP is aimed to be a pivotal tool to engage like-minded democracies in the region.
  • Role in the post-pandemic world: The post-pandemic world would be more invested in some of these areas — for example, health diplomacy and collaboration in the medical sector, climate change mitigation, and developing sustainable and resilient supply chains.
  • Platform for semiconductor industry: Taiwan is already proving its efficacy as a viable platform for the semiconductor industry.
  • Resilient supply chain mechanism: The US and its friends in the region, particularly India, Japan and Australia, have been proactively exploring possibilities of creating resilient supply chain mechanisms.
  • With its technological knowhow, and shared interests and concerns, Taiwan fits perfectly in this agenda.
  • EU’s renewed interest in Indo-Pacific: Greater interactions between Taiwan and EU on the technology cooperation front, stimulated by the latter’s renewed interest in the Indo-Pacific region, makes Taiwan a desired partner of fellow democracies.
  •  As an industrialised democracy, Taiwan could play an important role, especially since countries are trying to reduce dependence on China and establish supply chain resilience.

Conclusion

It is important for liberal democracies to acknowledge that they are facing similar challenges and view Taiwan as an indispensable partner. Deft diplomacy is in order since transnational challenges demand joint efforts by liberal democracies.

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An opportunity for Digital India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Digital diplomacy

Context

India is pioneering the concept of digital public goods, with it, there is an opportunity for India to embark on digital diplomacy.

Digital public goods in India

  • Built on the foundation of Aadhaar and India Stack, modular applications, big and small, are transforming the way we make payments, withdraw our PF, get our passport and driving licence and check land records, to name just a few activities.
  • There is an opportunity for India to embark on digital diplomacy — to take its made-in-India digital public goods to hundreds of emerging economies across the world.

How Digital Diplomacy can help India?

  • This could be a strategic and effective counter to China’s Belt and Road Initiative.
  • Enhancing the productivity of emerging economies: Emerging economies are characterised by gross inefficiencies in the delivery of government services and a consequent trust deficit.
  • Digital public goods spread speed, transparency, ease and productivity across the individual-government-market ecosystem and enhance inclusivity, equity and development at scale.
  • Acceptance in emerging economies: India’s digital diplomacy will be beneficial to and welcomed by, all emerging economies from Peru to Polynesia, from Uruguay to Uganda, and from Kenya to Kazakhstan.
  • Goodwill: It will enable quick, visible and compounding benefits for India’s partner countries and earn India immense goodwill.

Benefits of Digital diplomacy

  • Reusability: The code is highly reusable
  • Low cost: The cost of setting up an open source-based high school online educational infrastructure, to supplement the physical infrastructure, for an entire country is less than laying two kilometres of high-quality road.
  • No debt trap: The investments required for transporting digital public goods are minuscule in comparison and there is no chance of a debt trap.
  • Short gestation period: Unlike physical infrastructures such as ports and roads, digital public goods have short gestation periods and immediate, and visible impact and benefits.
  • It plugs leaks: Digital infrastructure plugs leaks.
  • It eliminates ghost beneficiaries of government services, removes touts collecting rent, creates an audit trail, makes the individual-government-market interface transparent and provides efficiencies that help recoup the investments quickly.
  • Processes get streamlined and wait times for any service come down dramatically.
  • Increases productivity: Productivity goes up and services can be scaled quickly.
  • Benefits can be rapidly extended to cover a much larger portion of the population.
  • Compounding instead of depreciation: Above all, the digital public goods infrastructure compounds while physical infrastructure depreciates.

Three ways in which digital public goods infrastructure compound

  • Compounding happens for three reasons.
  • [1] Growth of technologyy: Chips keep becoming faster, engines more powerful, and gene-editing technology keeps improving.
  • [2] Network effect: As more and more people use the same technology, the number of “transactions” using that technology increase exponentially — be it Facebook posts or UPI transactions.
  • [3] Rapid creation of new layers of technology: For example, the hypertext protocol created the worldwide web.
  • Then the browser was built on top of it, which made the worldwide web easier to navigate and more popular.
  • Thousands of new layers were added to make it what it is today.
  • Growth of UPI in India: To give an example, consider the surge in UPI-based payments in India.
  • This kind of growth doesn’t happen with a few entitled and privileged people using UPI more and more; it happens with more and more people using UPI more and more.
  • Use of Diksha: The use of Diksha, the school education platform built on the open-source platform Sunbird, has followed the same trajectory — today close to 500 million schoolchildren are using it.

Conclusion

Made in India digital tools can help other emerging economies deal with economic, governance challenges.

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Foreign Policy Watch: India-Sri Lanka

A lack of political will to end the Palk Bay conflict

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Palk Bay conflict

Context

The arrest of 68 Indian fishermen by the Sri Lankan authorities between December 18 and 20 and the impounding of 10 boats for “poaching” in the territorial waters of Sri Lanka has flared up the conflict between the two countries.

About Palk Bay

  • Palk Bay is home to diverse resources including 580 species of fish, extends from Point Calimere of Nagapattinam district to Mandapam-Dhanushkodi of Ramanathapuram district over about 250 km.
  • Source of dispute: It is an important marine zone between south-eastern India and northern Sri Lanka, has been a source of dispute for long.

About the conflict

  • Negotiations: The genesis of the dispute can be traced to the October 1921 negotiations between representatives of the Governments of Madras and Ceylon, on the need for the delimitation of the Palk Strait and the Gulf of Mannar.
  • Delimitation: It was in the mid-1970s that two agreements were signed by India and Sri Lanka, under which the International Maritime Boundary Line (IMBL) came into being.
  • Instead of settling the issues, the pacts gave way to new problems, including the recurring incidents of Tamil Nadu fishermen crossing the IMBL and getting caught by the Sri Lankan authorities.

Cause of the problem

  • Different fishing practices: The asymmetric nature of fishing practices in Tamil Nadu and the Northern Province of Sri Lanka is said to be the cause of the problem.
  • While Tamil Nadu’s fishing community uses mechanised bottom trawlers, its counterpart uses conventional forms of fishing, as trawling is banned in Sri Lanka.
  • Difference in resources: The fishermen of Tamil Nadu continue to cross the IMBL, as the Sri Lankan side of the Bay is considered to have more fishery resources than the Indian side.

Way forward

  • Weak away fishermen from trawling: The deep-sea fishing project,  to wean away the fishermen of Tamil Nadu from bottom trawling, launched in July 2017, has not yielded the desired results.
  • Relaxation of norms of the project is under the consideration of the Union Government, to draw greater response from the fishermen.
  • Motivation for deep-sea fishing: Given the fact that deep sea fishing takes longer duration and has a higher recurring cost per voyage than what the fishing community experiences currently, the need for providing continuous motivation to the fisherfolk assumes critical importance.
  • Other strategies: Various strategies, including the promotion of seaweed cultivation, open sea cage cultivation, seaweed cultivation and processing, and sea/ocean ranching should be adopted.
  • Forming FPOs: There is a view that if the community is encouraged to form fish farmer producer organisations, it may take to sustainable fishing practices.
  • Institution of stakeholders: A section of specialists favours the creation of an international institution of stakeholders for regulating the fishing sector in the Bay.

Consider the question “What leads to the dispute between India and Sri Lanka over the Palk Bay? Suggest the way forward for fishermen in Tamil Nadu.”

Conclusion

For all this to happen, sustained public pressure and political will are a must.

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Back2Basics: What is bottom trawling?

  • A bottom trawl consists of a large tapered net with a wide mouth and a small enclosed end.
  • The mouth of a trawl net has two weighted doors that serve not only to keep the net open, but also to keep the net on the ocean floor.
  • These doors can weigh several tons.
  • In addition to the heavy doors, the bottom of the net is a thick metal cable (footrope) studded with heavy steel balls or rubber bobbins that effectively crush everything in their path.
  • As the net drags along the seafloor, living habitat in its path is crushed, ripped up, or smothered as the seabed is turned over.

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