trainee5's blog

Putting the SAGAR vision to the test (The Hindu)

Mains Paper 2:International 
Prelims level: Indian Ocean Commission
Mains level: How India can contribute to the Indian Ocean Commission

Context:

• In March 2015, Prime Minister Narendra Modi visited three small but significant Indian Ocean island states — Seychelles, Mauritius, and Sri Lanka. 
• During this tour, he unveiled India’s strategic vision for the Indian Ocean: Security and Growth for All in the Region (SAGAR). 

About SAGAR: 

• SAGAR seeks to differentiate India’s leadership from the modus operandi of other regionally active major powers and to reassure littoral states as India’s maritime influence grows. 
• As External Affairs Minister S. Jaishankar signalled at the fourth Indian Ocean Conference in September last year, India’s SAGAR vision is intended to be “consultative, democratic and equitable”. 
• India’s recent admission as observer to the Indian Ocean Commission (IOC) will put this vision to the test.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

IOC, a trusted regional actor

• Following a request from New Delhi, the IOC granted observer status to India on March 6 at the Commission’s 34th Council of Ministers. 
• Founded in 1982, the IOC is an intergovernmental organisation comprising five small-island states in the Western Indian Ocean: the Comoros, Madagascar, Mauritius, Réunion (a French department), and Seychelles. 
• Though Réunion brings a major power, France, into this small-state equation, decisions in the IOC are consensus-based, and while France’s foreign policy interests are represented, the specifics of Réunion’s regional decision-making emerge from its local governance structures. 
• Over the years, the IOC has emerged as an active and trusted regional actor, working in and for the Western Indian Ocean and implementing a range of projects.

Leadership role played by IOC:

• More recently, the IOC has demonstrated leadership in the maritime security domain. Since maritime security is a prominent feature of India’s relations with Indian Ocean littoral states, India’s interest in the IOC should be understood in this context. 
• However, India has preferred to engage bilaterally with smaller states in the region. What India will not find in the IOC is a cluster of small states seeking a ‘big brother’ partnership. 
• The IOC has its own regional agenda, and has made impressive headway in the design and implementation of a regional maritime security architecture in the Western Indian Ocean.

MASE Programme:

• In 2012, the IOC was one of the four regional organisations to launch the MASE Programme — the European Union-funded programme to promote Maritime Security in Eastern and Southern Africa and Indian Ocean. 
• Under MASE, the IOC has established a mechanism for surveillance and control of the Western Indian Ocean with two regional centres. 
• The Regional Maritime Information Fusion Center (RMIFC), based in Madagascar, is designed to deepen maritime domain awareness by monitoring maritime activities and promoting information sharing and exchange. 
• The Regional Coordination Operations Centre (RCOC), based in Seychelles, will eventually facilitate joint or jointly coordinated interventions at sea based on information gathered through the RMIFC. 
• These centres are a response to the limitations that the states in the region face in policing and patrolling their often enormous Exclusive Economic Zones (EEZs). 
• They deliver an urgently needed deterrent against unabating maritime crime at sea, only partly addressed by the high-level counter-piracy presence of naval forces from the EU, the Combined Maritime Forces, and Independent Forces. 
• Seven states in the region have signed agreements to participate in this multilateral maritime security architecture, and once ratified, will provide its legal foundation. Many major powers have expressed interest in accessing the RMIFC.

Learn from IOC:

• The IOC’s achievements offer an opportunity for India to learn, and also to support. 
• The IOC style of ‘bottom-up regionalism’ has produced a sub-regional view and definition of maritime security problems and local ownership of pathways towards workable solutions. 
• A 2019 policy brief published by the IOC (with inputs from this author), ‘Strengthening Maritime Security in the Western Indian Ocean’, sets out how the counter-piracy response off the coast of Somalia delivered unprecedented regional and international cooperation in the domain of maritime security. 
• However, it resulted in multiple players, the duplication of actions, and regional dependence on international navies. 
• The IOC has been seeking more sustainable ways of addressing maritime security threats in the region, with the RMIFC and RCOC as part of this response. 
• Its regional maritime security architecture is viewed locally as the most effective and sustainable framework to improve maritime control and surveillance and allow littoral States to shape their own destiny. 
• Moreover, with proper regional coordination, local successes at curbing maritime threats will have broader security dividends for the Indian Ocean space.

How can India contribute?

• The IOC’s maritime security activities have a strong foundation, but they require support and buy-in from additional regional actors. 
• India has already signalled a strong interest in the work of the IOC through its request to be admitted as an observer. 
• The view from Ebène, where the IOC is headquartered, and from where its maritime security strategy is directed, is that major powers are warmly invited to support its initiatives. 
• Nearly all littoral states in the Western Indian Ocean need assistance in developing their maritime domain awareness and in building capacity to patrol their EEZs. 
• All would benefit from national information fusion centres that can link to those of the wider region. 
• With its observer status, India will be called upon to extend its expertise to the region, put its satellite imagery to the service of the RMIFC, and establish links with its own Information Fusion Centre.

Way forward: 

• As a major stakeholder in the Indian Ocean with maritime security high on the agenda, India will continue to pursue its interests and tackle maritime security challenges at the macro level in the region. 
• However, as an observer of the IOC, a specific, parallel opportunity to embrace bottom-up regionalism presents itself. 
• There are those in the Western Indian Ocean who are closely watching how India’s “consultative, democratic and equitable” leadership will take shape.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

The fragile ceasefire in Syria’s Idlib war(The Hindu)

Mains Paper 2:International 
Prelims level: Syria’s Idlib war
Mains level: Effect of policies and politics of developed anddeveloping countries

Context:

• United Nations Secretary-General António Guterres has called for warring parties the world over to cease fire in order to support the bigger battle against COVID-19. 
• One such conflict is in Syria’s Idlib province involving President Bashar al-Assad’s military forces with support from Russia, and where Turkey’s armed intervention and backing of anti-Assad militants, including Islamist terrorists, had been halted even before Mr. Guterres’s appeal by a fragile agreement on March 5 between Russia and Turkey which no observer believes can endure long. 
• In this imbroglio, described by many as the world’s greatest humanitarian tragedy, it is necessary to disentangle the priorities of the several contestants.

Background: 

• To first summarise the ground situation, Idlib bordering Turkey is the last stronghold of jihadists funded by Qatar and Saudi Arabia, Hayat Tahrir al-Sham (HTS), a terrorist unit designated by the United Nations, and assorted Syrian anti-government elements evacuated from areas liberated by Damascus. 
• The region was spared a Syrian offensive in 2018 on Turkey’s plea that it could not suffer any further influx of refugees besides hosting some three-and-a-half million already. 
• There are about 200,000 displaced persons on the Syria-Turkey border and 85,000 in refugee camps, in addition to nearly 400,000 people displaced by the Turkish offensive against Syrian Kurds.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Demilitarised zone:

• A Turkey-Russia agreement of 2018 established a demilitarised zone (DMZ) with terrorists, including the HTS, leaving this zone, while so-called moderate rebels had to withdraw heavy weaponry. 
• A chain of Turkish observation posts was established, and militants rejecting the plan were to be legitimately targeted by Mr. Assad’s military. But Syria and Turkey accused each other of violations, with Russia increasingly agitated due to drone attacks against its airbase in Latakia from Idlib-based jihadists. 
• With the rebels making territorial gains, Syria resumed its offensive in April 2019, retaking territory and targeting Saraqib that strides the M5 highway connecting Aleppo with Damascus.

Clashes between Turkey and Syria:

• The Syrian advances brought Turkey and Syria into direct clashes, with accusations by Damascus and Moscow that the Turks were supplying jihadists with weapons and shielding them by intermingling Turkish forces among them. 
• The Turks denied this, objecting to their observation posts being encircled or bypassed by the Syrian army. 
• Over 5,000 Turkish forces, with artillery and combat drones, have intervened and suffered 50 or more casualties, whereas Mr. Assad’s losses in men and material have been much higher, despite being assisted by Russia controlling the airspace and denying the Turks the use of aircraft other than drones. 
• Moscow has also used direct air power in support of Syria, though this is denied. 
• The conflict seriously strained Turkey’s relations with Russia to their lowest level since the 2015 crisis and the downing of a Russian warplane by Turkey.

Tangled up in politics :

• The latest Russo-Turkish agreement reaffirms their ‘dedication to combat and eliminate all terrorist groups in Syria’. 
• Given the fact that the majority of the anti-Assad forces are HTS cadres that have been weaponised by Ankara, implementation appears highly improbable. 
• The agreement provides for safe passage along the M4 and M5 highways linking Aleppo with Latakia and Damascus. 
• The Syrian Army had gained control of M5 and was about to take M4 when the Moscow agreement was concluded. Both highways are important for Syria for commercial and strategic reasons. 
• The new DMZ will bestride the M4 highway with a 12-kilometre strip jointly patrolled by Turkey and Russia.

Implications from Moscow agreement:

• The Moscow agreement is destined to fail because the priorities of the countries concerned cannot be reconciled. Mr. Assad, recognised by the United Nations but not by the West, and openly supported by few of the nations that recognise him, now controls some 70% of his country and wishes to secure the remainder, but his forces remain dependent on Russia in the air and Iran and Hezbollah on the ground. 
• He is in haste because his troops are exhausted by nine years of continuous fighting and he cannot count on Russian, Iranian and Hezbollah support much longer. 
• Iran is in domestic turmoil apart from suffering U.S. sanctions and COVID-19, while the Hezbollah is deeply involved in Lebanon’s complex domestic politics. 

Role of Turkey:

• Turkey under President Erdoğan, nominally a member of the western alliance against Russia, wishes to play a lead role in the Arab world, and has deliberately extended its reach in Syria and Libya to have a say in the futures of those nations. 
• Upset with NATO for lack of support both during the failed coup of 2016 and his campaign against Syrian Kurds whom he regards as anti-Turkish terrorists, Mr. Erdoğan has leveraged the refugee problem to extract €4.5 billion from the European Union and uses the refugees continuously as a bargaining counter. He also needs manageable ties with both Russia and the U.S. to play each off against the other. 
• The confrontation with Moscow four years ago led to severe economic difficulties for Turkey after Russian curbs on trade and tourism, which Mr. Erdoğan would not wish to have repeated. 
• Both countries also have a vested interest in the TurkStream pipeline conveying Russian gas to southern Europe. 
• Criticism of Mr. Erdoğan has lately emerged domestically but his position is solid provided he retains his army’s support by avoiding more casualties in Idlib. 

Russia’s call:

• Russia is now the country of first resort in Syria and its influence in the entire West Asian region has expanded remarkably in recent years. 
• In principle it backs Mr. Assad exercising sway over the whole of Syria and has saved him from being toppled, but it now wishes to bring the Syrian conflict to an end with a negotiated settlement, avoid losses and more expenditure, while consolidating its naval and air bases in that country.

Gaining by US and Europe: 

• The Americans are content to be bystanders in the belief that they will be the gainers whatever the Idlib outcome. 
• The Europeans have neither the will nor the means to affect developments, and the United Nations is continuing the thus-far futile enterprise of persuading the Syrian multi-party talks in Geneva to arrive at a new constitution to be followed by free elections.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Futures shock: On oil price fall below $0(The Hindu)

Mains Paper 3:Economy 
Prelims level: West Texas Intermediate
Mains level: Economic impact due to decline the crude oil prices in US 

Context:

• Five decades after the oil shock of 1973, when an Arab embargo on the supply of oil to some western powers including the United States sent the price of crude skyrocketing fourfold to $12 a barrel.
• The global economy faces a fresh shock from a free-fall in oil prices. 
• On Monday, May futures for the West Texas Intermediate (WTI) U.S. crude plunged below zero to touch a historic low of -$40.32 a barrel. 

Negative price: 

• A negative price implies that a seller would have to pay the buyer to hold the oil to be supplied. 
• While the unprecedented plunge in the particular futures contract could be partly explained away as a technical anomaly given that the May contract was set to expire on Tuesday, beyond which buyers would need to be ready to take physical delivery, the reality is that oil prices are desperately in search of a bottom. 
• A perfect storm of a supply glut exacerbated in March by a price war that saw key producers Saudi Arabia and Russia ramp up output even as demand continued to contract on account of the COVID-19 outbreak sent prices into a steeper slide. 
• Brent crude futures have tumbled more than 67% in 2020 to about $21 a barrel as of Tuesday afternoon in London trading, while the WTI futures have plunged about 110% to -$5.78. 

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

About West Texas Intermediate:

• West Texas Intermediate (WTI) crude oil is a specific grade of crude oil and one of the main three benchmarks in oil pricing, along with Brent and Dubai Crude. 
• WTI is known as a light sweet oil because it contains 0.24% sulfur, making it "sweet," and has a low density, making it "light." 
• It is the underlying commodity of the New York Mercantile Exchange's (NYMEX) oil futures contract and is considered a high-quality oil that is easily refined.

Curtail output: 

• With storage for crude — on land or offshore in supertankers — nearing capacity or becoming prohibitively expensive, oil producers are going to have little option but to curtail output. 
• Saudi Arabia is reported to be considering output cuts even before a 9.7 million barrels per day deal it had struck with Russia to cut production takes effect from May. 
• Still, merely closing the tap a notch or two is not going to redress the oversupply in the market at a time when the ‘Great Lockdown’ has destroyed demand on an unprecedented scale. 

Strategic reserve: 

• India has prudently been using the sharp fall in both crude prices and domestic demand to accelerate the build-up of its strategic reserve. 
• While the sliding oil prices would help significantly pare India’s energy import bill, a protracted demand drought would end up hurting the government’s tax revenues severely, especially at a time when it badly needs every additional rupee it can garner. 
• Also, rock-bottom oil prices risk damaging the economies of producer countries including those in West Asia, hurting inward remittances. 
• After the lockdown, the Centre ought to consider using this opportunity to cut retail fuel prices sharply by foregoing some excise revenue for a while in order to tease back momentum into the wider economy.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Non-essentials can wait: On e-commerce flip-flop (The Hindu)

Mains Paper 2:Governance 
Prelims level: e-commerce
Mains level: Reasons behind allowing the non-essentialsthrough e-commerce

Context:

• The Centre’s last-minute reversal of its decision to allow e-commerce companies to resume deliveries of ‘non-essential items’, as part of an easing of the lockdown curbs.
• On Sunday, the Home Ministry directed States to ensure that the movement of vehicles used by e-commerce operators for transporting non-essentials be ‘excluded’ from the list of additional activities that would be allowed from April 20 to mitigate public hardship. 

Arguments behind allowing the non-essentials:

• The Ministry gave no reason for its U-turn.
• It would appear wiser counsel prevailed after some Opposition parties and the retail trade had raised the issue of a lack of level-playing field for brick and mortar retailers. 
• The online purchase of a product and its doorstep delivery by an e-commerce firm minimises human interaction to a negligible level unlike a purchase in a store, the fact that the lockdown is aimed at restricting movement to the barest minimum in order to break the chain of transmission necessitates limiting exemptions. 

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Key implications: 

• It given the immense economic costs associated with the shutdown especially to individual livelihoods.
• It would seem a reasonable argument that as many sectors and jobs that can be allowed to reopen with stringent safeguards mandated ought to be permitted to do so in a phased manner.
• Among the sectors that can resume are agricultural and horticultural activities, banking, cargo transportation, construction, and manufacturing of specified goods including packaging material.

Problem for self-employed tradesmen: 

• While self-employed tradesmen such as electricians, plumbers and carpenters have been allowed to resume work, they would be unable to ply their trades if their customers are unable to furnish the relevant material at the work site because the shops and e-commerce firms selling these ‘non-essential’ goods are yet to resume operations. 
• Lost here though is the very definition of what ought to be deemed essential. 
• Is a packet of ‘essential’ cheese slices more vital than a ‘non-essential’ laptop for a person working from home or attending online classes? 

Conclusion: 

• Also, as the lockdown extends to over a month, what might have been non-essential initially might turn essential later. 
• Still, protecting lives must ultimately be prioritised over allowing commercial activity even when the line between ‘essential’ and ‘non-essential’ purchases remains a blur.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Preparing for a new political field in Jammu and Kashmir (The Hindu)

Mains Paper 2:Polity 
Prelims level:TRIVIA- Gupkar Declaration
Mains level: Role of state political parties in a democracy 

Context:

• With National Conference leaders Farooq Abdullah and Omar Abdullah being released after over seven months of detention, there is an air of inevitabilityto the leader of the Peoples Democratic Party (PDP), Mehbooba Mufti, being released as well.
• There were expectations that Mr. Omar Abdullah and Ms. Mufti would be released in tandem, but nearly a month after Mr. Omar Abdullah’s release, it is strange that her detention should continue. 
• Ms. Mufti has merely been moved out of a sub-jail into her official residence, where she remains in detention.

New contours:

• Notably, since they’ve been set free, neither of the Abdullahs has rocked Delhi’s political boat leading to speculation whether there had been some understanding reached prior to their release or whether they are keeping their powder dry following the Gupkar Declaration of August 4, 2019.
• During that meeting, politicians from across the spectrum, minus those from the Bharatiya Janata Party (BJP), pledged to unite to safeguard the special status and autonomy of Jammu and Kashmir. Perhaps there is fear that Ms. Mufti could queer the pitch when she is unencumberedof her strictures and inconveniently starts harking back to August 5, 2019; after all, she has support among the Jamaat-e-Islami in south Kashmir.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

TRIVIA- Gupkar Declaration:

• It is for the first time in the history of Kashmir that all main pro-India political parties had a premonition that India might commit aggression against the people of Jammu, Kashmir and Ladakh. 
• They decided to meet at the Gupkar Residence of Dr. farooq Abdullah, President Jammu Kashmir National Conference (JKNC) on 4 August 2019 to “deliberate upon the prevailing political situation, triggered by massive deployment of security forces, advisories issued, abandonment of Amarnath Yatra midway and forced removal of tourists from the Valley.” 
• The meeting was attended by 18 leaders from 7 political parties, namely NC, PDP, JKPC, Congress, CPIM, PUF and ANC. The two members of Parliament elected from NC also attended the meeting. After deliberations the parties adopted a “Gupkar Declaration”, which carried the following three demands:
• “That all the parties would be united in their resolve to protect and defend identity, autonomy and special status of the JK State against all attacks and onslaughts whatsoever
• The modification, abrogation of articles 35A, 370, trifurcation of the State or unconstitutional delimitation would be an aggression against the people of Jammu, Kashmir and Ladakh.
• That the parties participating in the meeting resolved to seek audience with the President and Prime Minister of India and the leaders of other political parties to apprise them of the current situation and make an appeal to them to safeguard the legitimate interests of the people of State with regard to constitutional guarantees given to the State under the constitution of our country.

Undesirable domino effect:

• Competitive jostlingfor political space could have an undesirable domino effectas New Delhi struggles to create a new political playing field, the contours of which are becoming clearer now. 
• For one, it would make the going much tougher for New Delhi’s favourite, Apni Party, led by Altaf Bukhari and comprising a motleygroup of politicians who have defected, resigned or were fired from different political parties.
• Left alone in the political field, the Apni Party will gain disdainand derision rather than political heft. This must have been a big factor in the rethink on continuing to keep the Abdullahs in detention. The question remains: what will be New Delhi’s road map for Jammu and Kashmir?

A cauldron of resentments:

• Eight months of sustained lockdown has indubitablyleft many sections of Kashmiri society crushed economically and otherwise. There is perhaps a cauldron of resentments there, more susceptible than ever before. 
• Before the novel coronavirus came along, Kashmir’s apple orchards did some business. But all other avenues of income, such as the handicrafts industry, small enterprises, the papier-mâché industry, the carpet industry and tourism, could not have thrived.
• There was a strangleholdon social media. Broadband as well as mobile Internet services in the region were banned for months. 
• Broadband and 2G Internet were restored in January, but they severely constrainall sorts of community, communication and business activities that normal societies thrive on.

Increased armed activity:

• It’s spring in Kashmir, and the security forces confront a situation of increased armed activity. After claiming responsibility for the Kabul Gurdwara attack on March 25 that killed over 25 people, the Islamic State of Iraq and the Levant-Khorasan Province said that the attack was “revenge for Kashmir.”
• This mutual reinforcementcould turn into a wellspring for the radicalisedKashmiri as well as for Pakistan which is set to get a better gripon Kabul via the Taliban. 
• India temporarily closed two consulates in Afghanistan (Herat and Jalalabad) in the first week of April anticipating growing security threats, among other things. At least two of the five militants who killed para commandos in early April in Kupwara, close to the Line of Control, were local youth from south Kashmir.

Change in dynamic:

• The COVID-19 crisis has certainly changed the dynamic of the discourse somewhat. It has given time for the government to prepare the playing field better. Delimitation will be the key. 
• There will be more electoral loading in Jammu, which will take away some of the emphasis from the constituencies in Kashmir, which have espoused separatist sentiments.
• Yet, delimitationbased on the infirmities of the 2011 Census would make less sense than one based on 2021, which has been deferred indefinitely. Elections could happen once the seats have increased from 83 to 90, which gives plenty of time to get the panchayat elections right. 
• The last panchayat elections were a disaster because the mainstream political parties boycotted it. Nearly 12,000 posts were left vacant. This time the government will be keen to ensure more healthy participation.

Way ahead:

• The rough road ahead looks something like this: if the COVID-19 crisis abates, the Amarnath Yatra will be held from mid-June to end-July, and if the security situation permits, the panchayat elections will be held. Later, the Census will be conducted and delimitation will occur. 
• Following all this, the Assembly elections will take place. All this could take more than a year and a half. Somewhere in the middle of all this danglesthe carrot of promised statehood.
• Though individual members are popular enough to stand on their own feet in their constituencies, the Apni Party cannot provide an overarchingpolitical framework for Jammu and Kashmir. J
• ammu BJP and Jammu and Kashmir People’s Conference chairman Sajjad Lone might add some numbers. The rest the BJP may manage, as it did in Goa, Karnataka and Madhya Pradesh.

Conclusion:

• It is unclear if the National Conference and the PDP, and others of the Gupkar grouping, if they contest, can come together to deny New Delhi political space. 
• But right now the Kashmiri is a mere bystanderas the framework of a new political order is sought to be worked and put in place by New Delhi.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Beijing’s response to Covid underlines that the world needs more democracy, not less (The Hindu)

Mains Paper 2:International  
Prelims level:One party system vs Democratic system 
Mains level: Effect of policies and politics of developed anddeveloping countries on India's interests

Context:

• There is a desperate effort on the part of China to erase its culpability in unleashing COVID-19 across the world through the lack of transparency inherent in its one-party authoritarian system. 
• It has sought to overcome the damaging global public opinion which it has suffered by a subsequent sustained propaganda campaign. 

Two aspects of Chinese propaganda:

• Highlighting the success China claims to have achieved in arresting the pandemic within the country through drastic measures on a massive scale, thereby demonstrating the superiority of its authoritarian system as contrasted with the delayed and often less-than-effective measures taken in democratic European countries and the US in particular. 
• The other seeks blanket publicity of its provision of much-needed medical equipment and medical teams to assist affected countries. 
• The main target is Europe, though assistance to other countries is also given prominence. 
• Chinese diplomats are using Twitter, Facebook and other social media platforms to create an image of a benign China providing public goods to a grateful community of beleaguered nations.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Here is what China would like us to believe: 

• The COVID-19 virus did erupt in Wuhan, but it may not have originated in China. 
• There may have been a delay in acknowledging the seriousness of the crisis, but this was due to missteps by the local leadership in Wuhan city and Hubei province.
• Once the gravity of the situation was recognised, Chinese leaders promptly informed the WHO and shared the DNA sequence of the virus with it and other countries. 
• The unprecedented measures adopted by Chinese authorities, which also imposed great suffering on the Chinese people, bought valuable time for the rest of the world to get prepared to deal with the pandemic.
• Having achieved notable success in arresting the spread of the virus, valuable assistance is now being provided to affected countries in the spirit of solidarity. 
• China’s economy is beginning to recover and this will contribute to the recovery of the global economy.

Has China demonstrated the superiority of China’s one-party system as compared to democracies? 

• There is no escaping the fact that COVID-19 may not have become a pandemic if China were a democracy with a free flow of information through an independent media and accountable political leadership. 
• This is like original sin, which cannot be whitewashed. 
• There are democracies which have done as well if not better than China without resorting to its sledgehammer tactics. 
• Notably, there is Taiwan, which is constantly bullied by China. 
• There is South Korea, which has even held parliamentary elections after having brought the pandemic under control. 
• Even in India, the government is providing daily updates on the spread of the virus. The media is able to report on the shortcomings in government policies, which are then addressed, though not always efficiently. 
• The bottom line is that as a result of being a democracy, we have a better chance of knowing the true dimensions of the crisis, of being able to obtain constant feedback on people’s reactions and access the best advice from multiple sources.
• Rather than express envy of Chinese authoritarianism, Indians should be thankful that we are a democracy. We need more democracy, not less, to overcome the COVID-19 challenge.

What about the Chinese economy? 

• There is no doubt that economic activity in China is beginning to revive after a steep drop of 6.8 per cent (year on year) in GDP during the first quarter of 2020. 
• Chinese economy is now functioning at about 80 per cent of the level last year, which is impressive. China’s economy is not as export-dependent as it has been in the past. 
• Exports were 19.5 per cent of GDP in 2018 against 32.6 per cent in 2008. But the external economic environment is critical for China’s globalised economy. 
• It is a significant node in the most important regional and global supply chains. This will be impacted by countries re-shoring production or opting for shorter and closer-to-home supply chains, having suffered from disruptions during the pandemic. 
• Japan will spend $2.2 billion to assist Japanese companies to shift units from China back to Japan or relocate to South East Asia. 
• In 2012, when China-Japan tensions were at a peak, there was a similar move and India was seen as an alternative. But that opportunity was lost. Perhaps India has a second chance.

Conclusion: 

• China will suffer from accelerated “decoupling” from the US economy with COVID-19 sharpening the already fraught bilateral relations. 
• China was already decoupled from the US by denying entry to US tech giants, Google, Facebook, Microsoft and Amazon, even while its own tech multinationals like Huawei and Alibaba have built markets in the West. This cannot be sustained. 
• The winners in the more digital world which will emerge post-COVID-19 will be the American tech giants, even though the US is politically dysfunctional. Democracies sometimes win even if their politics is frustrating.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Tightened FDI rules (Financial Express)

Mains Paper 3:Economy 
Prelims level:People’s Bank of China
Mains level: Challenges for Indian economy from Chinese investment route

Context:

• People’s Bank of China (PBC) buying a 1% stake in HDFC Bank, it is just as well that the government announced a policy “for curbing opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic”. 

Leveraging China or not: 

• A 1% stake in HDFC Bank via the FPI route wouldn’t give PBC any leverage, but FPI rules allow for this to rise to 10%. 
• Combined with the possibility of other Chinese entities buying, this could give the Chinese government some serious leverage. 
• Indeed, with even more Indian assets likely to be auctioned off after the pandemic, the Centre would be wary of Chinese entities—especially given their government/military link—picking up too many assets for a song. 
• A recent Brookings India report notes how Chinese firms are investing in all manner of areas from mobile phones and construction equipment to real estate and automobiles, and increasingly, in startups. Over 800 Chinese firms operate in India right now.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Chinese investment route in India:

• It is difficult to get a fix on Chinese investment in India, since a lot could be coming via Singapore, or through funds where a certain beneficial interest could be Chinese; Sebi is supposed to be probing this. 
• India’s official data show that just 1.5-2% of FDI has come in from China and Hong Kong—$800 mn of the total $45 bn of fresh equity flows in FY19, and $6.5 bn of the $456 bn that has come in since April 2000. 
• A recent paper by Gateway House estimates China has invested $4 bn in Indian tech startups, resulting in18 of India’s top 30 unicorns having Chinese funding. 
• In addition, Chinese smartphone manufacturers already have a two-thirds share of India’s mobile phone market. 
• In 2018, Gateway House says, around half of the total app downloads on—iOS and Google—in India were apps with Chinese investments, such as SHAREit, TikTok, and UC Browser.
• The Brookings paper, quoting the Chinese commerce ministry, puts the number at $6.4 bn in 2014-2017 (this includes Fosun’s $1.1 bn to buy Gland Pharma), and says this is an underestimate. 
• The big investments that come to mind are Alibaba’s $860 mn in Paytm, and $500 mn in Snapdeal, along with SoftBank and Foxconn; Tencent’s $400 mn in Ola, $700 mn in Flipkart, $175 mn in Hike Messenger, and $145 mn in Practo.
• Chinese apps ask for 45% more permissions—access to contacts, cameras, microphones, etc—than those requested by the top 50 global apps, this is hardly relevant since none of these firms are based out of India. 
• The real issue is whether Chinese investors are insisting the firms share the data gathered with them; perhaps, that is something the authorities need to examine.

Steps need to be taken: 

• If India is to be more vigilant with Chinese investors, it must carve out no-go areas; without such rules, it will be impossible to ever clear Chinese investments in the startup world, which requires quick decisions on funding. 
• Future Chinese investment, for instance, can be kept out of the fintech space because it interacts with India’s banking system, out of biotech, defence (including drones), telecom (networks, not equipment), and such select areas, but may be allowed in the taxi business, in retail, food delivery, entertainment, etc.
• Since China is one of the few countries that have the money to invest right now, if India’s startups aren’t to be starved of funds.
• The government will have to ensure Indian investors get a level playing field versus global ones in terms of tax treatment, and other such facilities.
• Indeed, till the operating environment in India gets less hostile, more startups will be incorporated in countries like Singapore; then, India can’t even hope to keep a check on Chinese investing in these firms.
• At a macro level, if India wants to keep Chinese investment at non-threatening levels, it needs sweeping reforms. 
• Apart from the obvious reforms to make India more competitive, and fixing the government’s anti-industry bias, policymaking has to become a lot more coherent. 
• For instance, hope to attract Indian fintech players while, at the same time, abolishing MDR commissions these companies live off. 
• If price controls continue to hobble domestic pharmaceutical firms, they will have nowhere to turn to but to low-cost Chinese API, and if you keep squeezing telecom players, or don’t allow electricity boards and power producers to get paid adequately, they, too, will turn to low-cost Chinese suppliers. 

Conclusion:

• The only way to keep Chinese firms from developing a chokehold here is to allow local firms, as well as those from the US, Europe, and Japan to do well; India’s current policies, it so happens, are tailor-made for mainly Chinese firms to do well.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Putting world together again (Financial Express)

Mains Paper 2:International 
Prelims level:Pandemic conference
Mains level: Highlights the conditions of post-pandemic strategic environment

Context:

• The current focus in the fight against the COVID-19pandemic rightly remains on the medical management, economic fallout and impact on social harmony due to the mass displacement of migrant labour — all aspects of human security. 

Background: 

• It’s the post-pandemic strategic environment that will dictate how soon the world recovers from this unexpected shock. 
• It must start with the international geopolitical angle, with many assumptions. With some clarity in this domain, we can prepare ourselves better for the recovery phase of a near post-war situation. 
• In his essay titled “The World after Coronavirus”, Israeli historian and celebrated author Yuval Noah Harari writes: “The decisions people and governments take in the next few weeks will probably shape the world for years to come. They will shape not just our healthcare systems but also our economy, politics and culture. Yes, the storm will pass, humankind will survive, most of us will still be alive — but we will inhabit a different world.” 
• Shortly, even as the world continues to reel under the pandemic threat, there will be more endeavours on enhancing human security through better strategic management of the world. 
• So, what will all that be about?
• In 1921-22, the great powers came together for the Washington Naval Conference. It was a time when the world was also trying to deal with the global effects of a pandemic and an age of great power competition after the Great War. 
• A moratorium on aspects such as enhanced naval deployment and restrictions on the size of battleships followed but nothing more. The strategic effects of the Treaty of Versailles escaped attention. 
• A century later, the level of trust between great powers is even less. Individual nations or blocs of nations are bound to see opportunities for strategic gain. 

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Will a potential 2020 “pandemic conference” succeed in getting big powers to jettison their geopolitical ambitions?

• The US-China rivalry will remain the core issue, with several other regions and nations jostling to clamber on to the one who can bring them short to medium-term advantages. 
• Contingent upon how badly the US is finally affected, its current confused leadership is unlikely to inspire and its efforts at internal stabilisation may compromise US power. 
• A major turn in political fortunes in the US and its bumbling on pandemic management could throw open opportunities for others to exploit. 
• The US will perceive itself as far more insecure than it was even after 9/11.
• There is likely to be a huge effort to slander China — accusing it of being the originator of the scourge — and isolate it economically and politically. 
• The allegations on the use of biological warfare are the ones which will cause turbulence in relationships. 
• Ironically, China is also in a unique position to help the world bounce back. Against the backdrop of these accusations regarding culpability, we need to be ready for changes in the norms of international cooperation and behaviour.
• A cold war of sorts could well be on the cards for some time, hampering a full recovery.
• It will be brutal in the cyber world — fake news on social media will prevent international cooperation in crucial fields such as scientific research, patents and perhaps even slow down the ability to prevent the next pandemic. 
• China is reported to be having leadership issues, but a steadfastness of purpose has always been China’s strength. 
• Its ambitions for 2035 and 2050, so succinctly expressed by the 19th Congress of the Chinese Communist Party, could well be advanced sensing a moment of opportunity.
• US’s economic capability after the pandemic, the ability to find a consensus to put on hold defence spending for the sake of human security will be the key. 
• But the trust deficit between nations will probably hamper this to a great extent. 
• The key anchor of globalisation — the US-China trade relationship — will change even more. 
• China cannot be replaced by the US as a major industrial producer (even for the US market). 
• Other countries or blocs — ASEAN, Bangladesh and India — will all chip in but that will still not be enough. Nor can any country buy as much grain from the US as China does. 
• So, an economic relationship will continue but will be politically fractured as both parties search for alternatives, which don’t exist on a scale that both of them need.

China:

• China’s recovery is likely to be the fastest. Its ambitious Belt and Road Initiative (BRI) may now go uncontested by the US-led efforts to create alternatives. 
• The Chinese ability to influence politics among smaller nations in Asia and Africa could bring it strategic advantages, but it is unlikely to be enough to replace America unless the recession-hit US remains defensively oriented.
• Knowing the US propensity to bounce back, China’s efforts will have to remain energetic and that is where the potential for conflict is likely to rise.
• It is not as if the US would abandon its interests for an era of only-inward economic healing. Its eye on the future will remain firmly in place.

Some traditional hot spots could yield temporary space:

• Iran has been hit badly and with the US unrelenting on sanctions, its economy could collapse with frightening results as far the Middle East is concerned.
• A big nation in instability mode with internal turbulence and leadership challenges could spread greater threats of an undefined kind. 
• The US may abandon Afghanistan with less commitment towards keeping its economy sustainable — a sure recipe for internal instability, which could see the Islamic State emerge a major player. 
• Everything in the Middle East points towards Russian advantage and domination.

Is this an opportunity for India? 

• Economically hit but probably one of the few nations without a recession, India’s strong central leadership could be a big advantage. 
• Prime Minister Narendra Modi would need to use all his influence to cobble together international cooperation to pull the world from the abyss it could sink into. 
• His credibility is already higher than most international leaders and could spell a leadership role for India not in conflict with China but in cooperation with it. 
• It is India’s established multilateral foreign policy that could eventually come to the assistance of the world.

Conclusion:

• The UN has lost credibility with the World Health Organisation taking the worst hit any UN agency has suffered in years. 
• However, its future is contingent upon how it manages the geopolitical fallout of the pandemic. The sooner it can get the world leaders on board, the better.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Telephone survey shows highunderstanding of social distancing, support for lockdown(Indian Express)

Mains Paper 1:Society 
Prelims level:Social Distancing 
Mains level: Effects of lockdown and its future outlook 

Context:

• With the nation in the midst of an extended lockdown to prevent the spread of COVID-19, the question of what to do next looms large. We are operating in a brave new world where modern governance has met an old-fashioned enemy. 

Historical background: 

• The Spanish flu epidemic of 1918 is believed to have killed more than 15 million Indians and COVID-19 is seen to be almost as virulent. 
• At the same time, there are more weapons in our arsenal to deal with this enemy today than a century ago.
• Worldwide, social distancing is seen as a way to reduce the spread of the disease until health systems are able to cope with it and a vaccine is developed. 
• The challenge we face is between public health needs and the requirement to keep the wheels of the economy rolling. 

How has the lockdown affected the society? 

• While there is no crystal ball to predict the future, a recently completed Delhi National Capital Region Coronavirus Telephone Survey (DCVTS) by the National Council of Applied Economic Research (NCAER) offers interesting insights into the present. 
• The NCAER National Data Innovation Centre has carried out the Delhi Metropolitan Area Study (DMAS) since February 2019. 
• It has surveyed over 5,000 urban and rural households in Delhi as well as in the surrounding districts of Uttar Pradesh, Haryana and Rajasthan via in-person interviews. 
• Between April 3 and April 6, 2020, about 1,750 households from this larger study were surveyed in a telephone interview about their understanding of symptoms and transmission of the novel coronavirus as well as their experience of the lockdown.
• The massive communications effort undertaken by the government ensured that every single person interviewed had heard of coronavirus and 95 per cent believed it to be very dangerous. 
• When asked to identify symptoms of the infection, they could easily distinguish between coronavirus as a respiratory disease as opposed to a gastrointestinal disease. 
• The next stage of communications messaging, however, will need to focus on helping people identify when to seek help. 

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Should we continue it for a few more weeks? 

• Respondents reported that the lockdown resulted in substantial reduction in income in the preceding two weeks. 
• About 55 per cent respondents said that their incomes had reduced “very much” while 30 per cent said it had reduced “somewhat”. 
• Most of the income drop occurred in households that drew income from casual labour or petty business. 
• Regular salaried workers were somewhat isolated, as were farmers. Among households where the primary source of income was casual labour, 75 per cent suffered large income loss compared to 47 per cent for regular salaried workers. 
• The drop in income affected households in the bottom 20 per cent of the wealth distribution more than those in the top 20 per cent — 62 per cent in the bottom quintile reported a large decline in income compared to 42 per cent at the top. 
• This lends strength to the urgency for ensuring income support to households below the poverty line.

Using the tool of social distancing: 

• Social distancing, one of the primary weapons in our arsenal, is understood by most households and people are making an effort to follow it. 
• About 85 per cent of the respondents noted some form of social distancing as a way of preventing infection. 
• When asked about how many people they had come in contact with outside the house over the preceding 24 hours, over 50 per cent responded that they had not come in contact with anyone. 
• Most of the others noted only one or two contacts outside the house. However, a minority of individuals had a large number of contacts. 
• Many were in occupations like shopkeeping that did not allow them to distance themselves. 
• We will need to develop strategies, such as use of masks, that allows these individuals to continue to offer essential services while reducing spread of the disease.

Way forward:

• An emergency, like the threat of coronavirus, brings out the best and the worst of ourselves. 
• It has brought forth a civic response unlike any we have seen in the past outside of war times. Regardless of their personal situation, individuals stand ready to fight the virus. 
• In spite of some missteps, it has also brought out the strength of the Indian bureaucracy in identifying the challenge and in mobilising strategies like social distancing before the virus had a chance to spread to rural India. 
• At the same time, it has also amplified preexisting vulnerabilities where some segments of the society face greater challenges due to loss in incomes or are at a higher risk due to preexisting conditions such as diabetes or heart condition. 

Conclusion:

• The coronavirus threat also highlights the vulnerability of the Indian health system, forcing us to make difficult choices in who to test, whom to treat and when to treat as we try to deal with shortages in testing supplies and treatment facilities.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Why COVID-19 is a data problem as well as a public health issue (Indian Express)

Mains Paper 2:Health 
Prelims level:R-naught
Mains level: Highlights the implication of CFR and R-naught data uses

Context:

• Unless you are an infectious disease specialist or an epidemiologist, there’s a good chance that you had little to no interest in terms like R-naught, case fatality rate (CFR) and community transmission before January 2020.
• R-naught:
• R-naught is the rate of transmission of infection. 
• An R-naught of three would mean that one sick person gives the infection to three healthy people on average. 

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Advantages: 

• Most of us are much more aware now of how pathogens spread and why we must each play our part in containing them. We are also much better primed now to follow difficult public health measures like physical distancing (previously called social distancing). 
• Additionally the guidelines, infrastructure and knowledge we build now should give us greater confidence in our ability to handle any future outbreaks.

Disadvantages: 

• This could be fixating on some public health tools at the expense of other information that could be crucial to manage this crisis precipitated by the SARS-CoV-2 coronavirus, which has made more than 21 lakh people sick and claimed nearly 1.5 lakh lives in the 16 weeks since it was first reported in Wuhan, China.

CFR and R-naught data uses: 

• CFR and R-naught, while extremely useful in general, are less so during an evolving health crisis.
• Johns Hopkins University and Medicine data show that the CFR of COVID-19 varies from 0.2% in Singapore to 15.3% in Algeria – the same data set puts this rate at 3.3% for India. So while this data does tell us that different countries are faring differently with this virus, it does not tell us what to expect when the virus enters a new region of the world.
• Similarly, the R-naught for the new coronavirus varies across the globe, depending on factors like population density and level of preparedness.That said, any changes in R-naught at a district, state or country level could be significant – an upward trend would indicate a potential rise in infections, and necessitate more steps to build preparedness. 
• On the other hand, a downward trend could be seen as reassuring: once the R-naught drops below 1, that’s when we can say that the outbreak is at an end.

Still more useful figures to collect and look at during this pandemic could be:

• The number and distribution of doctors and healthcare facilities in each community: We have mentioned in an earlier article that if we are able to map the healthcare personnel and infrastructure of this country accurately, then we can build better preparedness to deal with the COVID-19 infection in every community and every home of India. 
• Size of elderly population in the country: India’s 104 million people over the age of 60 (according to Census 2011) should be another important figure for us during this outbreak. These are the people most likely to get severe symptoms of COVID-19 if they get the infection. Protecting them through strict home quarantine (with lots of social engagement and care from a safe distance) should be a top priority, to reduce the burden on critical care infrastructure as well as the COVID-19 death toll. 
• Doubling rate: This is the number of days over which confirmed cases of coronavirus infection double. As of 17 April, this rate stood at 6.2 days in India compared with three days before the lockdown. It would be important to manage this rate once we come out of lockdown also. 
• The number of people who need to become immune to the disease: Indian epidemiologist Dr Jayaprakash Muliyil has pointed out that once the lockdown is lifted, we should expect a rise in the number of COVID-19 cases. Now this number will naturally start to plateau at some point.
• The key challenges, in the meantime, would be to protect the most vulnerable: older people and those with chronic illnesses like diabetes, heart disease and lung disease who could get very sick if they get COVID-19.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Conclusion: 

• Indeed the greatest test for India will come when the lockdown is lifted. 
• Separating the important data from everything else may help us to take the necessary preventive actions going forward.

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

India’s ATM ecosystem needs urgent repair, especially now (The Hindu)

Mains Paper 3:Economy 
Prelims level:ATM
Mains level: Improving ATM ecosystem 

Context:

• In order to provide relief to those hit hard by the nationwide lockdown, the Pradhan Mantri Garib Kalyan Yojana is relying heavily on direct cash transfers into bank accounts of the poor. 
• The Centre has claimed that over 32 crore beneficiaries — women Jan Dhan account holders, farmers, construction workers and seniors — have already received ₹29,350 crore in bank credits, which they are now free to withdraw. 

Poor performance by ATMs: 

• Given inadequate ATM penetration and their poor maintenance in India’s hinterland, reports are emerging of poor folk trudging for miles only to find the local ATM not operating at all or short of cash to disburse. 
• ATM users in far-flung areas complain of cash shortages, service providers cite difficulties in effecting repairs and refilling cash at ATMs amid the lockdown. 
• The truth though is that India’s ATM network outside the cities has been in decline since the 2016 demonetisation, with both banks and third-party players clearly disinterested in setting affairs right. 

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Addressing regulatory problems:

• There’s the long-simmering issue of low interchange fees that ATM providers are allowed to levy to permit other banks’ customers to access their machines. 
• ATM operators have for long argued that the RBI-mandated fee of ₹15 is too low for viable operations, particularly in rural areas where footfalls are sporadic. But the RBI and some factions of the banking industry have been strangely reluctant to accede to this hike. 
• Last June, the regulator lobbed this issue to a committee, but the report is yet to be made public or acted upon. While white-labelled ATMs offer a good solution, entrants to this arena have been hobbled by the RBI’s convoluted rules mandating year-wise and city-wise quotas for the rollout. 
• The RBI and the Ministry of Home Affairs have also dashed off a series of circulars asking ATM operators to effect software and security upgrades to make their ATMs safer. 
• Such investments are much-needed, but operators complain that they further stretch ATM break-evens. 
• ATM operations have also been hobbled by a shake-out in cash management firms after the RBI specified that they needed to maintain a minimum net worth of ₹100 crore, a fleet size of 300 vehicles, two armed guards and other bells and whistles, in a sudden change of ground-rules last year.

Conclusion: 

• Overall, the complete lack of co-ordination between participants in the ATM ecosystem — regulator included — is hurting the hapless small savers the most. 
• Without access to the cash that is being promised, many of the NDA regime’s much-touted social welfare schemes — from PM Kisan to the Garib Kalyan Yojana — risk remaining only on paper.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

The dilemma of power demand (Financial Express)

Mains Paper 3:Economy 
Prelims level:Electricity distribution companies
Mains level: Factors related to aggregate demand projection in power sectors

Context:

• The reduction in power demand during the Covid-19 lockdown explains that the demand of power depends largely on the level of socioeconomic activities. 
• Meeting the full demand would be a function of available generation, access to load centre and also the health of electricity distribution companies (discoms). 

Background:

• India had a total generating capacity of about 368 gigawatts (GW) as on January 2020, whereas the maximum peak demand reached so far was around 183GW. 
• The renewable energy capacity has also doubled over the last five yearsto become almost 23% of the installed capacity of utilities.
• Even though electricity generated from renewable energy sources is still only 9%, due to the low capacity utilisation factor (CUF) of about 14-15%.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Power purchase agreements:

• The current extent of flexibilisation in conventional thermal plants cannot efficiently make up for variability induced by must-run renewable energy plants. 
• As a result, discoms have done more power purchase agreements (PPAs) than required, and now end up paying excess fixed charges. The problem has further been compounded by the current downside in consumption and peak load due to the lockdown. 
• The comparison of peaks of certain dates shows that the peak load was growing compared to the previous year demand, but started to reduce from the day of the Janta Curfew.

Factors related to aggregate demand projection:

• The system of aggregate demand projection has not been robust in the country. 
• The aggregate power demand is directly connected with the growth rate of the gross domestic product (GDP). 
• The GDP growth rate of 8-10% was used in demand projection of the 18th Electric Power Survey (EPS; 2012-17) and, consequently, actual demand remained much below the projected one. 
• Income elasticity of electricity demand is found higher in the relatively less-developed eastern region, leading to higher growth in electricity demand with increasing income. 
• Relatively slower growth in electricity demand has been observed in developed states, i.e. industrialised states, although in absolute value they are quite high.
• The impact of Covid-19 on power demand would be better understood once the lockdown is lifted. 
• If industrial activities in developed states suffer from reverse migration of workforce, and the public consumption does not pick up in developing states due to deprivation of domestic remittance, then it may affect demand adversely. 
• It would, therefore, be desirable to hasten industrial production in developed states and ensure adequate income to strengthen consumption in developing states.
• Demand estimates of 19th EPS (2017-22) also face great challenges and may go haywire in the wake of global slowdown and Covid-19. 
• Energy-efficiency schemes such as solarisation of agri-pumps, Perform, Achieve and Trade (PAT) for designated industries, LED bulb campaign, and the Standards and Labelling programme (Star rating) are likely to reduce electricity demand on the grid.

Giving tax concession: 

• Tax concession for establishing MSMEs in identified pockets can enhance demand as well as remove regional inequality and create local employment. 
• The Covid-19 crisis should be leveraged as an opportunity for introducing tariff reforms. 
• Rationalisation of industrial and commercial tariff; reducing cross-subsidy regime in coal, railways and power sector; introduction of demand-linked tariff slabs; preferential tariff to energy-intensive industries; introduction of time and type of use tariff; and incentivising electric vehicles through lower tariffs can boost power demand and resolve the dilemma.

Way forward:

• Post-2014, India added more than 100GW capacity in three years. 
• With surplus installed capacity, India needs to accelerate electric cooking, electric mobility and electrification of railways. 
• We must search new opportunities of cost-effective storage technology, diversified usages and overseas trade of electricity to utilise full capacity.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Covid-19 crisis: Farming needs urgent action (Financial Express)

Mains Paper 3:Economy 
Prelims level:PM-Kisan
Mains level: Cash transfer and other agricultural support to the farmers

Context:

• The Covid-19 crisis is likely to pose a serious challenge to agriculture and rural economy. 

Measuring the impact:

• The impact could be different at different levels and across time horizons. 
• Immediate supply-chain disruptions could translate into demand contraction later in the rural economy, which could have an adverse impact on economic growth.
• In the short run (before the lockdown ends), the problems are twofold. 
• Farmers are unable to harvest and market Rabi crops (wheat, gram, mustard), and also fruits and vegetables.
• This is because of non-availability of labour and machinery for harvesting, lack of transport facilities and closure of markets/mandis. 
• They are unable to use cold storages for crops like potato because of closure of cold storages and short supply of ammonia needed for cold storages. 
• It can lead to crops wasting away on the field, local distress sales and lower prices for farmers.

Lack of agricultural labours:

• This segment is unable to earn a living because of movement restrictions and lack of adequate income and safety nets. 
• But the problems will not disappear after the lockdown. Immediately upon its lifting, large-scale arrivals are very likely in the markets.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Impact on farmers income:

• Farmers’ incomes in the Rabi season are likely to be much lower owing to likely crop losses and the likely depression of prices due to sudden rush in agricultural markets. 
• Farm labourers are certain to face lower earnings because of movement restrictions and low agricultural activity. 
• These, combined with lowered demand for animal products such as chicken, on account of Covid-19 fears, the incomes of rural population are likely to be hit very hard. 
• Also, a slowdown in the construction sector, which absorbs majority of agricultural labour in lean seasons, will aggravate this crisis.

Policy initiatives:

• Urgent policy initiatives are needed. Postponement of procurement to the third week of April and staggering of procurement within states/districts to avoid overcrowding of FCI centres are needed. 
• Farmers may be incentivised to delay bringing produce to the markets. To this end, higher MSP may be provided for delayed sales to FCI. 
• Haryana has made a proposal—farmers would get remuneration of Rs 1,925 per quintal of wheat between April 20 and June 5; Rs 1,975 between May 6 and May 31; and Rs 2,050 in June.

Require immediate direct payments:

• The government has announced frontloading of Rs 2,000 under PM-Kisan. 
• This amount may be increased to Rs 6,000. Similarly, a payment of Rs 2,000 may be made immediately to all active MGNREGA job card holders. 
• As per revised MGNREGA wage rate, this payment constitutes wages for only 10 days to job card holders. 
• There are 8.69 crore beneficiaries of PM-Kisan and 7.6 crore active MGNREGA job card holders.
• Payments to farmers and farm labourers will entail an expenditure of Rs 67,340 crore, which constitutes 2.1% of estimated sectoral GDP and 0.4% of total GDP. 
• If the payment to farmers is not hiked to Rs 6,000 and only Rs 2,000 is made, then the expenditure will be much lower at Rs 32,580 crore (just 1% of the estimated sectoral GDP and 0.2% of total GDP).

Way forward:

• The crisis also provides an opportunity to usher in policy reforms. 
• Moving away from price and input subsidy-based approach to direct income-based approach is the first one. 
• When the policy objective is to ensure minimum income for farmers and rural workers, direct income transfer may be a better policy instrument than indirect instruments such as output price support or input subsidies. 
• A well-functioning eNAM could have helped not only in better price discovery for farmers, but also in maintaining physical distance amongst the actors, which is crucial in the current context.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Use tax salve to lessen COVID-19 pain (Indian Express)

Mains Paper 3:Economy 
Prelims level:Vivad se Vishwas Scheme
Mains level: Impact of cash-flow and liquidity problems for taxpayers in an economy 

Context:

• The government has announced several measures to provide relief to taxpayers and alleviate cash-flow problems faced by them as a result of the disruptions caused by COVID-19. 
• Highlights about the ordinance: 
• An ordinance promulgated on March 31, has extended time limits specified in the law for various compliances, for making payments under the ‘Vivad se Vishwas Scheme, 2020’ and making tax-saving investments, etc, falling within the period March 20 to June 29 to June 30. 
• Reduced rates of interest have been provided in respect of tax payments falling due between March 20 and June 30, if the payments are made by June 30. 
• Separately, a special dispensation for expedited issue of certificates for lower or nil deduction of tax at source has been introduced. 

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Impact of extending the lockdown period: 

• However, with the period of lockdown now having been extended to May 3, the cash-flow and liquidity problems for taxpayers are bound to increase.
• The Central Board of Direct Taxes (CBDT) would do well to examine the need for additional measures. 
• Drawing upon the compilation of country responses to COVID-19 published recently by the OECD—Forum on Tax Administration as well as requests being voiced by different stakeholders, the following further steps could be considered.

Deferral of tax payments:

• The reduction in interest rates on deferred tax payments brought in through the ordinance may not provide adequate relief to a large number of taxpayers who are facing, or will be facing, acute cash flow problems due to the lockdown. 
• Several countries have allowed taxpayers who can demonstrate cash flow problems due to COVID-19 to seek deferment of advance income taxes payable by them for periods up to a year and, in some cases, without payment of any interest.
• CBDT could consider authorising Commissioners of Income Tax to grant further reduction or even complete waiver of interest chargeable for delays in payments of,
• (i) advance tax due on June 15 and September 15, and 
• (ii) self-assessment tax in respect of income of FY20, and due to be deposited by September 30.

Suspension of tax-debt recovery measures:

• No relaxation has been specified by the ordinance in respect of payment of outstanding tax demands by taxpayers. 
• Several countries around the world have applied a pause on coercive or active enforcement measures for collection of tax. 

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Faster refunds:

• Government has already directed immediate issue of all pending tax refunds of amounts up to Rs 5 lakh. 
• The primary and urgent requirement at present is to provide direly needed cash flow and liquidity to small and medium businesses, and to individuals and senior citizens who are dependent on fixed income sources such as interest and rent. 
• It is also to be noted that these pending refunds represent the taxpayers’ own money paid in the form of excess taxes. CBDT should, therefore, consider substantially enhancing the monetary limit of Rs 5 lakh for expedited processing of refunds in all cases.

Tax residence:

• Apprehensions have been expressed by tax professionals that there could be several cases where individuals or managers and employees of non-resident enterprises are stranded, or otherwise find it safer to stay on in India, and the extended periods of stay may give rise to issues of tax residence or of place of effective management.
• Impacting the taxability in India of the income of such persons or of the enterprises they work for.
• However, these considerations are essentially based on tax treaties:
• In order to provide tax certainty even under the domestic law, CBDT may consider issuing a circular to assure taxpayers that, 
• (i) the place of effective management of a foreign company shall not be taken to be in India merely because certain persons responsible for taking key management and commercial decisions are stranded and unable to leave India for any period of time owing to the impact of COVID-19; and 
• (ii) any period of time reckoned for the purpose of deciding whether a non-resident individual (including a non-resident Indian) has acquired the status of a resident, or resident, but-not-ordinarily-resident in India, shall not include the period for which the taxpayer establishes that he was forced to remain in India due to COVID-19 considerations.

Conclusion: 

• The above measures can be carried out through administrative instructions and circulars issued by the CBDT and do not need any amendments to the Income-Tax Act.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Basic income: Towards a path of resilience (Indian Express)

Mains Paper 3:Economy 
Prelims level: Great Depression 
Mains level: Significance of the transformative economic policy

Context:

• India has been given time to prepare, or in the jargon of the moment, to get ahead of the curve before the death toll mounts, and the economic slump heaps further misery on people.

Key reasons: 

• The main reason is that the economic crisis has been waiting for some time to happen. The pandemic is like a trigger. 
• The global economic system has evolved into global rentier capitalism, not anything close to free-market capitalism. 
• With rentier capitalism, more and more of the income and wealth flow to the owners of assets-physical, financial and so-called intellectual property.
• The share of income going to people who work and labour has been falling across the world.

Crises difference between 1920 and 2020:

• A hundred years ago, the US economy was able to bounce back because the private debt was less than 50% of national income, corporate debt was insignificant, and the size of the financial sector was not large relative to the real economy.
• Just before the pandemic struck this year, private debt was over 150% of the US national income, and corporate debt was 73% of GDP. 
• In Britain, Japan and many other countries, private and corporate debt were also at record levels.
• This means that the major economies entered the pandemic in an extremely fragile state. The negative multiplier effects of a small downturn will be huge, and this is not going to be small. 

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Requirement of transformative economic policy:

• It requires brave and transformative economic policy. 
• While central banks and the international financial agencies will resort to fancy monetary instruments and will do their utmost to prop up corporations and financial markets, it is what happens to ordinary people that will matter most.
• We should presume that the Indian government is not complacent or timid. But, a key principle must be kept in mind. 
• Whatever the delaying effect of lock-downs, deaths due to the pandemic and to the ensuing economic downturn will be much higher if ordinary people are not given the resources to be resilient. 
• Indeed, the slogan should be: Rescue, Resilience, and Revival.

Way ahead:

• Several interesting schemes are trying to mobilise private money as donations to such initiatives as the PMNRF and PM CARES. 
• Those are likely to be politicised, and even if they were genuinely philanthropic, there would be widespread suspicion that they have ulterior motives. 
• Better for the affluent to allocate money to help legitimise a basic income system by making a start in randomly chosen districts, setting an example that the state and central governments could follow with conviction.

Conclusion:

• There is the technology to be able to identify everybody and deliver basic incomes (it could even induce much more documentation). 
• Above all, there are potentially millions of lives to be saved.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Collateral damage: Coronavirus poses major challenge for scientific community (Indian Express)

Mains Paper 2:Health 
Prelims level: Personal protective equipment
Mains level: Health sector issues and challenges 

Context:

• As medical containment strategies, and even viral behaviour go, the novel coronavirus has proven to be quite a challenge for the scientific community. 
• A recent Lancet study noted that 15% of the 247 hospitalised COVID-19 patients in Wuhan, and as many as 50% of those who died, acquired bacterial infections.

Outcome of the study:

• This, combined with the fact that the virus primarily manifests as a pulmonary disease with pneumonia-like symptoms.
• It has meant that medical practitioners are becoming increasingly—and dangerously—dependent on antibiotics to manage COVID-19 symptoms, even though these do not directly affect the SARS-CoV-2 virus responsible for the disease. 
• Now, there are growing concerns that unrestrained usage of antibiotics might fuel the development of drug-resistant bacteria.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Measures taken so far: 

• Already, hospitals, especially intensive care units, are hotbeds of antimicrobial resistance. 
• Now, with the shortage of ventilators and personal protective equipment (PPE) necessitating their sharing and/or reusage, the risk of contracting an infection from a drug-resistant microbe has significantly increased.
• This is an even greater concern for India, which, according to a Johns Hopkins-CDDEP study published last year, had the highest instance of antibiotic resistance among the 41 countries studied. 
• Another study lead by CDDEP found resistance to the class of antibiotics used against bacterium K penumoniae, a leading cause of pneumonia and lung infection, to be 56% among Indians. 
• It is no one’s case that antibiotics not be used to manage the fallout of a raging pandemic. 

Way forward:

• However, efforts must be focused on decreasing the risk of in situ contraction of infections in hospitals. 
• And, to that end, ensuring sufficient supply of PPE and crucial medical equipment must be a top priority.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Virus outbreak can potentially spur next quantum leap for computing (Mint)

Mains Paper 3:Science and Tech 
Prelims level: Quantum Computing 
Mains level: Uses of quantum computing in health sector 

Context:

• Shortly after China welcomed the new year, the whole world was pressurized into quickly discovering a vaccine and a cure for covid-19. 
• IBM’s Summitwas busy running numerous simulations and computations to help scientists find promising molecules to fight the pandemic.
• The latest update says the Summit has been able to identify 77 candidate molecules that researchers can use in trials, and this was achieved in just two days, while, traditionally, it has taken months to make such progress.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

But is this progress fast enough? 

• Given that we are all living in a connected world, the global carnage wreaked by the virus before we have a viable cure will be in trillions of dollars and thousands of jobs; in this case, we truly don’t have a second to waste.
• Today, faster molecular discoveries are limited by the computing capacity, as much as the need for scientists to write codes for harnessing the computing power. 
• It is no secret that classical computing power is plateauing and, till we have scalable artificial intelligence (AI) and machine learning (ML), scientists will have to write code for not only different scenarios, but also for different computing platforms.
• What we need today is more computing power and, given that we have already neared the peak of classical computing, the solution probably is quantum computing.
• Not just vaccines, quantum computing can accelerate many innovations, such as hyper-individualized medicines, 3-D printed organs, search engines for the physical world and, maybe, even the iron-man suit. 
• All innovations currently constrained by the size of transistors used in classical computing chips can be unleashed through quantum computing.

What next? 

• Quantum computing uses the ability of sub-atomic particles to exist in multiple states simultaneously, until it is observed. 
• Unlike classical computers that can store information in just two values, that is 1 or 0, quantum computing uses qubits that can exist in any superposition of these values, enabling quantum computers to solve in seconds problems which a classical computer would take thousands of years to crack. 
• The application of this technology is enormous, and just to cite a few, it can help with the discovery of new molecules, optimize financial portfolios for different risk scenarios, crack RSA encryption keys, detect stealth aircraft, search massive databases in a split second and truly enable AI.

Steps taken by the Government: 

• In the Union budget this year, the Indian government announced investments of ₹8,000 crore for developing quantum technologies and applications.
• Globally, too, countries and organizations are rushing to develop this technology and have already invested enormous capital towards its research. These are encouraging signs.
• Unless we overcome classical computing limits, we will hurtle towards the modern catastrophe of frequent pandemics, uncontrollable climate change, scarcity of water, disappearing coastlines due to melting icebergs, plastic-poisoned water tables, and lifestyle diseases.

Conclusion:

• Historically, unprecedented crises have always created more innovations than routine challenges or systematic investments. Coincidentally, current times pose similar opportunities in disguise.
• While the last decade has given us 10x increase in quantum computing, the next quantum leap is expected from a vicious cycle of climate- or health-related catastrophes—covid-19 could be one.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

The UN cannot lead us out of this crisis (The Hindu)

Mains Paper 2:International 
Prelims level: UN organisations 
Mains level: Role of UN multilateral bodies to combat the crisis 

Context:

• As economic historian Adam Tooze said, “an entire model of global economic development has been brought skidding to a halt” by the Covid-19 crisis, exposing the malignant methods which have worked to channel wealth to those at the top while draining the public purse and stretching public services — upon which the health and resilience of most of us depend — to a breaking point.
• Finding our way out
• In rapid succession, novice UK Chancellor Rishi Sunak discovered his inner Keynes; US Treasury Secretary Steve Mnuchin became an (unwitting) advocate of universal basic income; and German Chancellor Angela Merkel abandoned her religious devotion to strict debt and fiscal rules. 
• Whether this will be enough to prevent another Great Depression remains to be seen. 
• As Tooze warns, with the main centres of economic and political power disoriented, it is unclear “who will lead the way out of the crisis”.
• Ideally, the job should fall on those institutions tasked with international cooperation and coordination. The signs so far are mixed. 

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Varying influence:

• The World Health Organization — very much in the eye of the Covid-19 storm — has had a difficult few weeks. 
• It was the first UN agency with universal membership, mandated to control the spread of contagious diseases, backstop public health programmes, formualte standards on nutrition and hygiene and establish a centre for comparative health data. 
• But as historian Mark Mazower has argued, from its earliest days, the WHO was under pressure from the US government to adopt a technical assistance approach to disease eradication, in line with advanced pharmaceutical interests, rather than an global advocate of public health policy.

Role of World Trade Organization:

• The World Trade Organization is the most recent arrival to the multilateral family based in Geneva. 
• Emerging from the GATT as the custodian of the Uruguay Round’s expanded trade agenda and a standard bearer for open and efficient global markets, it is uniquely blessed with a dispute mechanism that can discipline reprobate governments that break its rules. 
• This has made it the institution of choice for advanced countries determined to promote the kind of corporate-friendly rules that align with their own economic interests. 
• That two-stage dispute mechanism almost died in December, as the US spread its unilateralism virus.
• Nothing to contribute
• A different message might be expected from Azevado’s counterpart at the UNCTAD, an organisation established over 50 years ago by developing countries to support their efforts to redress the biases and asymmetries in the trading system. 
• In truth, the UNCTAD has been drifting in a neoliberal direction since its nineth conference in South Africa in 1996, albeit with moments of resistance by previous Secretary-Generals from Brazil and Thailand. 

Way forward:

• Geneva is, no doubt, a pleasant enough place from which to indulge in the niceties of international diplomacy. 
• But its multilateral credentials have been withering on the vine of comfortable complacency for years, too distant from the harsh realities of neoliberal capitalism in the developing world.
• Too dependent on the big financial players in Washington for policy guidance and too close to the big European donors for the money that keeps the Geneva international machine ticking over.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Ahead of the Covid curve (Indian Express)

Mains Paper 2:Health 
Prelims level: COVID curve
Mains level: Kerala model of health infrastructure system 

Context:

• The COVID curve in Kerala is nearly 50 per cent while the all-India average is around 11. 
• While the mortality rate among the infected is 0.5 per cent in Kerala, the all-India average is 3.4 per cent. 
• The transmission rate of a primary carrier is 2.6 while in Kerala it is only 0.4.

Preparing for the next challenge: 

• Kerala is preparing for the next challenge, the outcome of which will determine the result of the war against COVID. 
• Lifting of the lockdown is going to result in an influx of returning migrants from foreign countries and other states. 

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Preparedness:

• That is the key word to the success of Kerala and the key lesson to be learned from it. 
• The single most important factor that enabled us to be prepared for the COVID is the strength of our public health system. 
• All over the globe, we are witnessing serious market failures in the health sector in the context of the pandemic crisis. 
• Policymakers are learning the hard way of the importance of a public health network.
• The morale of health personnel has been exceptionally high. 
• Special training, protective gear, scientific duty rotation and, most importantly, societal empathy and solidarity, have all contributed. 

Route map for COVID positive cases:

• A route map of each COVID positive case is prepared and given publicity, alerting everybody who might have been in contact. 
• The protocol of cycles of intense test, trace, isolate and treatment has been the norm. 
• Kerala has the highest test rate in the country. Break the Chain Campaign to promote social distancing has been successful. This is indeed a very important lesson. 
• Lockdown by itself is not going to contain the COVID spread. It would continue to multiply within households and dormitories. 
• Testing has been woefully insufficient in the national response so far.

Economic revival challenges: 

• The lockdown destroys livelihoods and it is the duty of the state to ensure subsistence through income transfers and free rations. 
• The transfer of Rs 500 to Jan Dhan accounts and additional 5 kg grain rations have been woefully inadequate. 
• The payment to construction workers, which is a major component of the Centre`s package, is from the state-level construction workers’ welfare funds.
• Lack of adequate financial resources has been the biggest impediment faced by the government. 
• The state’s own revenues have dried up. The GST compensation is in four month arrears. Credit is freezing for the SLR bonds. 

Way forward: 

• There are no sufficient resources for relief let alone for the stimulus after the exit from the lockdown. 
• The Central government has to step in and ensure adequate fiscal space to the states.

CLICK HERE FOR FULL EDITORIAL (Only for Course Members)

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials