Among members: on G-20 Osaka summit (The Hindu)

Mains Paper 2: International Relations
Prelims level : G-20 Osaka summit
Mains level : Key highlights of the events at G 20 Summit

Context

• The countries that make up the G-20 (19 nations and the European Union) account for 85% of the world’s nominal GDP, and each has pressing issues it wishes to discuss with other members on bilateral, plurilateral and multilateral levels.

Key highlights of the events at G 20 Summit

• Prime Minister Narendra Modi used the occasion of the G-20 summit at Osaka for as many as 20 such meetings, including nine bilaterals, eight pull-aside engagements, and of the Russia-India-China, Japan-U.S.-India and Brazil-Russia-India-China-South Africa groupings.

• The most anticipated were President Donald Trump’s meetings with his Chinese counterpart Xi Jinping and Mr. Modi, given the escalation in trade tensions.

• Both ended on a cordial note, but with no breakthrough or “big deals”.

• The Indian and U.S. Commerce Ministers will sit down again, as they have on at least three occasions in the past year, to try to resolve the impasse over trade issues, and the U.S. and China have called a halt to raising tariffs until they resolve issues.

• Both come as a relief to India, given the impact of those tensions on the national and global economies.

Raising issues and solution

• Mr. Modi raised several Indian concerns at the G-20 deliberations, including the need for cooperation on dealing with serious economic offenders and fugitives, as well as climate change funding.

• This found its way into the final declaration.

• India sent a tough message by refusing to attend the digital economy summit pushed by Japanese Prime Minister Shinzo Abe, as his plan for “data free flow with trust”, included in the G-20 declaration, runs counter to the Reserve Bank of India’s proposed data localisation guidelines.

• The U.S. wrote in a counter to the paragraph praising the Paris accord, while trade protectionism was not mentioned in the document.

• On issues such as ocean pollution management, gender equality and concerted efforts to fight corruption, the G-20 found consensus more easily.

Way Forward

• With Saudi Arabia hosting the next G-20 in 2020, followed by Italy in 2021, all eyes will soon turn to the agenda India plans to highlight when it holds the G-20 summit in 2022.

• Many global challenges, such as climate change and its impact, the balance between the needs for speed and national security with 5G networks being introduced, as well as technology-driven terrorism, will become even more critical for the grouping, and the government must articulate its line.

• India should lead the exercise in making the G-20 more effective in dealing with some of the inequities in its system.

• The G-20 is an important platform to discuss pressing issues, and it must not be detracted from its original purpose of promoting sustainable growth and financial stability by grandstanding by one or two members.

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Start with preventive care (The Hindu)

Mains Paper 2: Health
Prelims level : Non-communicable diseases
Mains level : Tackling Non-communicable diseases

Context

• The medical profession is a calling. It requires sacrifice and grit to become a healer, a clinician, and from then on, it is a responsibility and commitment to a lifetime of service and learning.

• Beyond the initial years of studying medicine, doctors have to work very hard every single day to upgrade their knowledge and skills.

Professional challenges

• What makes the process more challenging is the dynamic nature of the world we live in today.

• Knowledge and the nature of knowledge are evolving, driven by technological developments. Healthcare challenges have also constantly evolved.

• Doctors have reduced many feared ailments to stories of the past.

• But ailments have also remodelled and resurfaced and are posing different tests to doctors today.

Developments in healthcare

• Health is on the national agenda for the first time after Independence. Ayushman Bharat is a game-changer.

• It will cover the cost of medical care for almost 40% of India’s population, while the 1,50,000 Health and Wellness Centres being developed will strengthen the national focus on preventive healthcare.

• There is a willingness amongst our administrators to hear the perspectives of the sector.

• Innovative plans are on the anvil to boost medical education and hospital infrastructure.

• Skilling for healthcare is gaining momentum, and will undoubtedly be a key engine for job creation.

• Millions of medical value travellers from over a hundred countries are choosing India for medical and surgical treatment.

• Huge investments are being made to build hospitals, contemporary medical centres and remote healthcare models.

The big challenge today

• Non-communicable diseases (NCDs) are a big challenge today and need serious tackling. The World Health Organization has been ringing the warning bells for the last few years on the challenges that NCDs pose.

• NCDs have been rapidly growing. Cancer, stroke, obesity and diabetes are some of the ailments growing at an alarming pace.

• They affect people across ages and threaten the younger population a lot more than the older population. But there are only finite manpower and resources to manage the problem.

• The limited pool of medical professionals, technicians and nurses, equipment and hospital beds will make it very difficult to tackle the onslaught of patients and diseases in the coming decade.

• The entire medical fraternity must come together to tackle this threat with a disruptive and innovative approach of creating a continuum of care.

• This will enable healthcare to start from preventive care instead of limiting medical excellence to curative care.

• Doctors must encourage an attitude of care continuum among patients.

Conclusion

• On the occasion of National Doctors Day, doctors need to pledge again the medical oath.

• They have to be the harbingers of change in the attitudes and approaches towards healthcare. They need to become role models for their patients to lead healthier lives.

• They must educate patients about NCDs, and promote preventive care.

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A thumbs down to unilateralism (The Hindu)

Mains Paper 2: International
Prelims level : United States Trade Representative
Mains level : U.S strategy on India’s WTO-consistent policies

Context

• Economic relations between India and the United States are on a knife-edge after the U.S. took a series of unilateral actions against India’s exports, that began in 2018, followed by India’s recently announced retaliatory move of increasing tariffs on 28 products imported from its largest trade partner.

• As a result of these developments, India has become the Trump administration’s most significant target after China.

Background

• The Office of the United States Trade Representative (USTR) and the United States International Trade Commission (USITC) — have “investigated” India’s trade policies, the conclusions of which have been used by the administration to demand changes in policies that would benefit American businesses.

• Early resolution of this discord seems difficult as the U.S. has decided to undermine the WTO’s dispute settlement mechanism and walk down the path of unilateralism instead.

• Under these circumstances, the Government of India would have focus on two fronts: to remain engaged with its largest trade partner and to also engage actively with the global community to make the U.S. understand the imperatives of a rules-based trading system.

What are the Propriety rights and procedures

• It is important to mention here that all of India’s trade-related policies (which include intellectual property rights that were investigated and questioned in the two USITC reports were done under the cover of the U.S.’s domestic laws.

• This is tantamount to unilateralism, the response to which should be an unequivocal “no” in this age of multilateralism.

• Propriety and global trade rules demanded that the concerns of American businesses about India’s policies had to be addressed within the WTO through consultations among the members.

Flawed step

• The fact that the U.S. is not approaching the WTO to challenge India’s trade and investment policies that American businesses find detrimental to their interests implies the following:

• India’s largest trade partner is acting in defiance of agreed rules to target India’s WTO-consistent policies.

• Take, for instance, India’s high tariffs which have left Mr. Trump greatly perturbed.

• These tariffs were agreed to in the Uruguay Round negotiations in consultation with all members of the organisation.

• Moreover, in the period since, India has lowered tariffs on many agricultural and industrial products.

• Contrast this with the U.S.’s position wherein it continues to defend its high levels of agricultural subsidies which are used for lowering commodity prices to levels at which no other country can have access to its domestic market.

• Thus, the U.S. does not need tariffs to protect its agriculture; it uses subsidies, instead.

• The WTO also informs us that the U.S. also uses very high tariffs on tobacco (350%), peanut (164%) and some dairy products (118%).

Conclusion

• The India-U.S. discord over trade stems from a deep-seated desire of U.S. businesses to have a bigger footprint in the Indian economy, and to achieve this goal, the administration is stepping beyond legitimate means.

• This discord defies Mr. Pompeo’s simplistic formulation that “great friends are bound to have disagreements”.

• In fact, the basis of the discord lies in the way the U.S. has been targeting India’s policies, disregarding the rule of law.

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It’s time to act, not do more research (The Hindu)

Mains Paper 2: Health and Education
Prelims level : Education Quality Upgradation and Inclusion Programme
Mains level : The goals of EQUIP and the NEP

Context

• In its first 100 days, Prime Minister Narendra Modi’s second government has begun yet another rethink of higher education policies through the draft NEP (National Education Policy) and EQUIP (Education Quality Upgradation and Inclusion Programme).

• This is the latest, and seemingly among the most elaborate, in an endless series of official reports and programmes aimed at improving higher education in independent India.

Background

• The Radhakrishnan Commission of 1949, the National Education Policies of 1968 and 1986, the Yashpal Committee of 2009, the National Knowledge Commission in 2007, and the draft NEP of 2019 have all basically said the same thing.

• While it is always valuable for various government committees to point to the importance of higher education for economy and society.

• It is not necessary to convene many experts through initiatives such as EQUIP to tell the government and the academic community what they already know.

• Perhaps the time, energy and resources that EQUIP will require can be better spent implementing the obvious.

• Everyone agrees that higher education needs significant improvement, especially as India seeks to join the ranks of the world’s premier economies.

Inadequate allocation of funds

• However, central to both quality improvement and increased access is money.

• Higher education in India has been chronically underfunded it spends less than most other BRICS countries on higher education.

• The last Budget allocated only ₹37,461 crore for the higher education sector. Other related ministries and departments such as Space, Scientific and Industrial Research, Skill Development and Entrepreneurship, Science and Technology, Health Research and Agricultural Research have been allocated only modest support. Inadequate funding is evident at all levels.

• All State governments, which provide the bulk of higher education money, also fail to adequately support students and institutions.

The goals of EQUIP and the NEP

• A key goal of EQUIP and the NEP is that India must expand the percentage of young people enrolled in post-secondary education significantly.

• It is interesting to note that while the draft NEP aims at increasing the gross enrolment ratio to at least 50% by 2035, EQUIP targets doubling the gross enrolment ratio to 52% by 2024.

• At present, India’s gross enrolment ratio is 25.8%, significantly behind China’s 51% or much of Europe and North America, where 80% or more young people enrol in higher education.

• India’s challenge is even greater because half of the population is under 25 years of age.

• The challenge is not only to enrol students, but to ensure that they can graduate. Non-completion is a serious problem in the sector.

• The challenge is not only to enrol students and improve graduation rates but also to ensure that they are provided with a reasonable standard of quality.

• It is universally recognised that much of Indian higher education is of relatively poor quality. Employers often complain that they cannot hire graduates without additional training.

• The fact that many engineering colleges even today have to offer “finishing programmes” to their graduates underlines the pathetic state of quality imparted by these institutions.

Differentiated academic system requirement

• India needs a differentiated academic system — institutions with different missions to serve a range of individual and societal needs. Some “world class” research-intensive universities are needed.

• Colleges and universities that focus on quality teaching and serve large numbers of students are crucial.

• Distance education enters the mix as well.

• The draft NEP’s recommendations for a differentiated system of research universities, teaching universities, and colleges are in tune with this.

• However, the ways suggested to achieve these objectives are impractical.

Role of private education sector

• The private sector is a key part of the equation.

• India has the largest number of students in private higher education in the world. But much of private higher education is of poor quality and commercially oriented.

• Robust quality assurance is needed for all of post-secondary education, but especially for private institutions.

• The structure and governance of the higher education system needs major reform.

• There is too much bureaucracy at all levels, and in some places, political and other pressures are immense.

• Professors have little authority and the hand of government and managements is too heavy. At the same time, accountability for performance is generally lacking.

Key recommendations that India needs:

• Dramatically increased funding from diverse sources, and the NEP’s recommendation for a new National Research Foundation is a welcome step in this direction;

• The significantly increased access to post-secondary education, but with careful attention to both quality and affordability, and with better rates of degree completion;

• The longitudinal studies on student outcomes;

• To develop “world class” research-intensive universities, so that it can compete for the best brains, produce top research, and be fully engaged in the global knowledge economy;

• To ensure that the private higher education sector works for the public good;

• To develop a differentiated and integrated higher education system, with institutions serving manifold societal and academic needs;

• To reforms in the governance of college and universities to permit autonomy and innovation at the institutional level; and

• To better coordination between the University Grants Commission and ministries and departments involved in higher education, skill development, and research.

Conclusion

• The latest draft NEP and EQUIP have reiterated the importance of some of these points. There is really no need to spend money and attention on a new review.

• The needs are clear and have been articulated by earlier commissions and committees. The solutions are largely obvious as well.

• What is needed is not more research, but rather long-neglected action.

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Below the line (The Hindu)

Mains Paper 2: National
Prelims level : Air India Specific Alternative Mechanism
Mains level : Indian credit rating system

Context

• Minister of State (Independent Charge) of Civil Aviation, said that the government remains committed to the disinvestment of Air India.

• In this regard, the Air India Specific Alternative Mechanism (AISAM) has decided as follows: In view of volatile crude prices and adverse fluctuations in exchange rates, the present environment is not conducive to stimulate interest amongst investors for strategic disinvestment of Air India in immediate near future.

• The issue would be revisited once global economic indicators including oil prices and forex conditions stabilise.

Too much information

• Squabbles between senior and junior bureaucrats on how much information should ideally be revealed to public can often get unnerving.

• After the medical entrance examination NEET results were announced, a junior official was not sure whether to reveal just the NEET percentiles or also reveal students’ marks.

• The senior official was against revealing marks as that could attract eye balls on students with extremely low marks qualifying.

• But the junior official was concerned about what should be done if someone filed a Right to Information (RTI) report demanding to know marks scored by students.

• To this the senior official immediately concurred that the information then could be revealed to only the person who had filed the RTI but not to the general public.

Rating conundrum

• It is rued a top NBFC honcho, who was recently at the receiving end of a rating agency’s overnight downgrade action.

• Now, in this country even SEBI orders can be appealed before SAT, which in 80 per cent of the cases overturned the market regulator’s orders.

• However, when it comes to credit rating where is the independent third party review for a rating agency’s action.

• It is time regulators and policy makers apply their minds on this issue.

Way forward

• The new industrial policy that had been readied by the Department of Policy for Industry and Internal Trade (DPIIT) and was awaiting Cabinet approval just before the general elections may not be ready any time soon despite the BJP getting re-elected.

• According to some officials, the new Commerce and Industry Minister Piyush Goyal was not too enthused by a recent presentation on the policy by the DPIIT.

• The Minister apparently said that he was not ready to sign on the policy in its present form and there was a need for big changes in it.

• With the Modi government winning a fresh mandate for another five years, time certainly is not an issue!

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Stray cattle issue, a reality check (Indian Express)

Mains Paper 2: Polity
Prelims level : Cattle Issue
Mains level : Addressing cattle issue

Context

• India is home to the largest livestock population in the world.
• The country is also the biggest producer of milk in the world, apart from being the third largest bovine meat exporter to almost 70 countries.
• There are links between the two sectors.
• The spent buffaloes are utilised by the bovine meat sector.
• That is why it’s extremely rare to see a stray buffalo in most parts of the country.
• The farmer can sell his unproductive buffalo in the open market and get almost 40 per cent of his original investment as the termination value — this he can utilise to purchase buffaloes.

Background

• In the last few years, there has been much talk about stray cattle causing distress to farmers, especially in UP and the NCR.
• This narrative ascribes the problem to the ban on cow slaughter. However, the ban on cattle slaughter has been in place for decades Maharashtra allowed bulls to be slaughtered but this practice was stopped in 2014.
• It seems that a large number of people are ill informed their views in favour of the farmer or against the current dispensation lacks an appreciation of the issues at hand.

What nobody is asking is why there was no such issue before 2015?

• Most people assume that illegal slaughtering of cows was rampant before 2015 and these cattle were being exported. Nothing could be further from the truth.
• What is being exported is buffalo meat. To link legitimate trade to cow slaughter would be grossly incorrect and damaging to a trade which is the backbone of the dairy and leather industry.

What has caused the stray cattle problem, then?

• For decades, the entire population of spent animals would move to Bangladesh and Myanmar via the country’s Northeast. According to unofficial records, almost 25-28 lakh cattle used to cross the border every year — the trade is estimated to be above Rs 20,000 crore.
• Since 2014, the Ministry of Home Affairs has conducted operations to put an end to this illegal trade — rightly so, keeping the religious sentiments of people in mind.
• But no one thought about or advised on how the consequences of this enforcement would be dealt with in a country that is perennially short of fodder.
• About 10 per cent of the country’s livestock becomes unproductive every year.
• Given that the country’s cattle population is over 250 million, finding out the number of these spent animals is no rocket science.
• There are more than a crore stray cattle while there is shelter and food for not even 10 per cent of these animals and no resources for this purpose.
• In the Delhi-NCR region, more than 200 cows and bulls die every year due to lack of such resources.

Conclusion

• It is important that we get the correct perspective on the problem of stray cattle rather than blame a community or a trade.
• We should analyse the result of stopping the movement of cattle into the Northeast and Bangladesh. There are a number of reports on this aspect of the cattle trade in the public domain.
• It will also be pertinent for the policymakers to review the livestock policies of the country and ask why farmers are moving to buffaloes in place of cows.
• What must be kept in mind is that a farmer’s decision-making is guided by economic factors.

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Air conditioning is the world's next big threat (Live Mint)

Mains Paper 3: Environment
Prelims level : Climate Change
Mains level : Air conditioning effects on global climate

Context

• Carbon dioxide emissions rose another 2% in 2018, the fastest pace in seven years
• By letting people in overheated climates concentrate on their work and get a good night’s sleep, air conditioning has played a big part in driving global prosperity and happiness over the past few decades – and that revolution has still barely begun.
• About half of Chinese households have this modern tool, but of the 1.6 billion people living in India and Indonesia, only 88 million have access to air conditioning at home, Bloomberg New Energy Finance noted in a recent report.
• For many, relief is in sight. Because of the combination of population growth, rising incomes, falling equipment prices and urbanization.
• The number of air-conditioning units installed globally is set to jump from about 1.6 billion today to 5.6 billion by the middle of the century, according to the International Energy Agency.

What will all this extra demand for electricity do to the climate?

• Carbon dioxide emissions rose another 2% in 2018, the fastest pace in seven years. That increase was alarming in its own right, given what we know about the unfolding climate emergency.
• But the proximate cause was especially troubling: Extreme weather led to more demand for air conditioning and heating in 2018, BP Plc explained in its annual review of energy sector.
• It’s not too hard to imagine a vicious cycle in which more hot weather begets ever more demand for air conditioning and thus even more need for power
• That in turn means more emissions and even hotter temperatures.
• That negative feedback loop exists at a local level too. Air-conditioning units funnel heat outside, exacerbating the so-called “urban heat island" effect, which makes cities warmer than the countryside.
• BNEF expects electricity demand from residential and commercial air conditioning to increase by more than 140% by 2050 – an increase that’s comparable to adding the European Union’s entire electricity consumption.
• Air conditioning will represent 12.7% of electricity demand by the middle of the century, compared to almost 9% now, it thinks.
• Buildings have long been a blind spot in climate discussions even though they account for about one-fifth of global energy consumption.
• The inefficiency of air-conditioning systems or badly designed homes and offices simply aren’t as eye-catching as electric cars and making people feel ashamed about flying.
• At least Germany’s “passivhaus" movement, a way of building homes that require very little heating or cooling, voluntary standard for energy efficiency in buildings, shows some people are starting to recognize the danger.

Lessons learned from the world of lighting

• The LED revolution was spurred by innovation but also by better energy efficiency labeling on products and the phasing out of out-of-date technology.
• Something similar needs to happen with air conditioning.
• There was a big step forward in January when the Kigali Amendment to the Montreal Protocol came into force.
• Though not well known, its aim is to phase out the use of potent greenhouse gases called hydrofluorocarbons, which are used widely in air conditioning systems.
• Unless substituted, these alone could cause 0.4C of additional warming by the end of the century.
• In the U.S. 90% of households have air-con, in Germany it's about 3%, which is similar to the U.K.

Conclusion

• Warmer winters may obviate the need for as much heating in temperate countries, but the need for more cooling in densely populated tropical places will probably cause a net increase in energy demand and emissions.

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Even central banks need ‘capital’ infusion (The Hindu)

Mains Paper 3: Economy
Prelims level : Capital Infusion
Mains level :

Context

• The central bank of a country sits at the pinnacle of its financial system and is mandated with ensuring its stability.
• From time to time central banks are directly or indirectly involved in shoring up stressed commercial banks with capital infusion.
• So it may appear odd to suggest that occasionally even the central bank may need some of its own medicine.
• After all central banks make a surplus from their operations, and indeed pay a dividend to their governments.
• The puzzle is resolved, however, when we recognise that capital is not only funds but also ideas.

Time to reflect on role

• In the context, one of the ideas is related to the role of the central bank in the economy. That this issue is being brought up more than half a century after a central bank was instituted in India need not be interpreted assome weakness in the original conception.
• An economic arrangement once made cannot be treated as settled for all time to come.
• This also holds true for central banks, often considered venerable beyond querying.
• It’s time to reflect on the role of the central bank in India as we hear of impending changes in the higher echelons of the Reserve Bank of India (RBI).
• The media coverage has focused on differences among some of its functionaries and the government of India but this is besides the point as there has been complete agreement between them on the role of monetary policy.
• Moreover for about five years now, the government and the RBI have, as though in concert, implemented a deflationary macroeconomic policy via fiscal contraction and monetary tightening, respectively.
• One of Prime Minister Narendra Modi’s finance ministers claimed credit for the government for having ushered in a period of macroeconomic stability. What this achieved for the economy is a different matter.

A rethink in macroeconomic

• The global financial crisis has led to a substantial re-thinking of macroeconomics.
• The main revisions are that monetary policy defined by inflation targeting can no longer be treated as the centrepiece of macroeconomic policy, that fiscal policy should be used to stabilise the economy when needed and that financial regulation is a must.
• The limitation of inflation targeting was understood when the ‘great moderation’, an extended period of low inflation in the west, ended in the financial crisis.
• It is this that has led to the view that light regulation of the financial sector, as advised by the then Governor of the Federal Reserve Alan Greenspan, can be a recipe for disaster.
• It has come to be recognised that assertions of the impotence of fiscal policy may be exaggerated.
• There could be times when the private sector is held back by the state of the economy. In a recession this would delay recovery. Now fiscal expansion would be necessary.
• Apart from theoretical demonstration of the stabilising potential of fiscal policy the belief that the explosion of the U.S. fiscal deficit following the crisis actually saved the day has very likely contributed to the rethinking.
• The general consensus now is that there should be no going back to the pre-crisis practices of narrow inflation targeting, inflexible fiscal policy, and kid gloves for the financial sector.

Lessons to learn

• It is hoped that the Reserve Bank of India and the economic policy-making establishment will take into account the evolving understanding of macroeconomics globally.
• It is unfortunate that policymaking in India has been stuck in the past.
• This would not have mattered if the consequences were benign.
• The government has taken credit for attainment of macroeconomic stability, defined by low inflation, even as unemployment has been rising since 2011.

RBI leadership from paying hawk-eyed attention

• A continuously declining fiscal deficit has not restrained the RBI leadership from paying hawk-eyed attention to it, constantly lecturing the elected government of the perils of even the slightest deviation from the path of fiscal consolidation, when strictly it is not its business to do so.
• Two instances of a failure to do so may be mentioned. Ever since we have had de facto inflation targeting in India, from around 2013, the real policy rate has risen very substantially.
• This has been accompanied by declining borrowing in the formal sector likely affecting investment. Inflation has come down but it was already trending downward, possibly due to the slowing growth.
• Subsequent inflation reduction has been assisted by the declining price of oil.
• The crisis at IL&FS, with a group company defaulting on its payment obligations jeopardising the interests of hundreds of investors, banks and mutual funds is only a specific case in point.

Way forward

• The larger story is of the steady rise in the non-performing assets (NPAs) of banks even as inflation was abating.
• A popular reading is that recently the RBI has had to face some pressure exerted by the government’s nominees.
• This may well have been the case.
• But what we need is not just a central bank that is left to function independently, but also one that is not a slave to some defunct school of thought.
• It has many mandated functions, among them ensuring an adequate supply of clean currency notes in denominations sought after by the ordinary Indian.

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Boost for Marathas: on Bombay HC upholding reservation for Marathas (The Hindu)

Mains Paper 2: Polity
Prelims level : Maratha reservations
Mains level : Highlighting the Bombay High Court verdict in favour of the quota

Context

• The Bombay High Court verdict upholding reservation for Marathas in public employment and education must come as a major relief to the Maharashtra government, which has faced strident agitations from the community in the past for reservation benefits.
• When Maharashtra enacted special legislation to confer reservation benefits in education and public employment on the Maratha community last year, a formidable legal challenge was expected.

Highlighting about the law

• The law created a group called ‘Socially and Educationally Backward Class’ and included Marathas as the sole group under the category, and extended 16% reservation outside the existing quotas for Scheduled Castes and Tribes, and other tribes and backward classes.
• The foremost hurdle was the fact that the additional Maratha component would take the reservation up to 68%, thus going beyond the limit of 50% imposed by the Supreme Court.
• There were doubts whether one particular caste group could constitute a special class.
• The 487-page judgment is a brave effort at answering these difficult questions.
• Significantly, it has ruled that there were “exceptional circumstances and an extraordinary situation” to warrant the crossing of the 50% limit.
• It has upheld the government’s decision to accept the Maharashtra Backward Classes Commission’s report on the backwardness of the Maratha community, faulted it for exceeding the panel’s recommendation for 12-13% reservation and pulled back the figure to the recommended level.

Objectives of the law

• The failure to treat this group as backward for decades has pushed its members deeper into social and educational backwardness.
• It says, an extraordinary situation has been created wherein the State had to treat them as a separate category.
• It is doubtful whether a politically influential and dominant community can be treated as a special category in itself, even if it is educationally backward and under-represented in the services owing to lack of reservation benefits.
• The uplift of the Marathas can be achieved by including it in the OBC list.
• If there were concerns about too large a population sharing too small a quota, the existing OBC reservation could have been expanded, instead of Marathas being given separate reservation.

Conclusion

• Further, Marathas have been classified as the only member of the newly created ‘SEBC’.
• The court seems to have ignored the fact that being socially and educationally backward is the constitutional reason for OBC reservation.
• It is befuddling how ‘SEBC’ can be a separate category outside the OBCs.
• Further, whether adequate grounds have been established to make an exception to the 50% limit will likely be examined by the Supreme Court closely.
• Mere expansion of the reservation pool is unlikely to be a constitutionally permissible reason for it.

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Bringing fiscal policy back into the spotlight (The Hindu)

Mains Paper 3: Economy
Prelims level : Fiscal Policy
Mains level : Keynesian style pump priming

Context

• Unemployment is at an all-time high. Growth is falling. Our GDP grew from $1.32 trillion in 2009 to $2.74 trillion in 2019 in nominal terms, a compounded average growth of 7.5 per cent, it has now fallen to 5.8 per cent in Q4 of FY19 .
• If we aim at becoming a $5-trillion economy in five years, our GDP will have to grow at 12.5 per cent. We have had our successes.
• ‘One Nation One Tax’ was successfully implemented. Fiscal deficit has been contained from 3.9 per cent in 2016 to 3.4 per cent. The Insolvency and Bankruptcy Code has been brought on the statute.

The inflation trend

• Monetary policy has been unconventional across the globe and the distinction between monetary and fiscal policy has become blurred.
• Esoteric and unconventional monetary policy tools, in the words of Nouriel Roubini, are now the norm.
• Terms like ZIRP (Zero Interest Rate Policy), QE (Quantitative Easing), CE (credit easing) or UFXINT (Unsterilised Effects Intervention) are now used in most advanced economies and some emerging markets as well.
• Inflation has now eased to a 22-month low.

Pump priming

• The present economic situation calls for bold measures and an emphatic shift from monetary policy to fiscal policy.
• It does not matter if fiscal deficit target is not adhered to for a year or two. Growth has to be fostered. There should be a temporary injection of purchasing power into the economy.
• A temporary rise in government spending, financed by borrowing rather than taxes, can raise incomes through its multiplier effects which will allow investment to recover.
• Once the cumulative recovery process gets going, it will be possible to eventually receive sufficient extra revenue to restore government debt to its original level.
• This is the Keyensian theory of pump priming.

Revenue raising measures

• Farmers have to be paid ₹6,000 per year, and Ayushman Bharat requires funds.
• The Bharat Mala project like the Golden Quadrilateral, the Railway expansion, the Ganga Canal Cleaning Project, the linking of Godavari and Pennar should be taken up in right earnest to add to employment opportunities on a large scale.
• Additional resources must be mopped up. The new Finance Minister has started off in right earnest.
• There has been a sudden crackdown on tax evasion and money laundering indulged in by tax evaders not matching their income tax and GST returns. Notices have been issued for unearthing the mismatch.
• Inefficient and corrupt tax officials have been given the marching orders.
• Prosecution provisions have been tightened up ruling out compounding in cases of serious tax frauds.
• The present Finance Minister has been able to persuade the G20 countries to accept suggestions for tackling the problem of MNCs indulging in base erosion and profit shifting.
• Much more remains to be done. GST reforms must include reducing the slabs and pruning the rates.
• Dividend taxation calls for a fresh look. Is it fair to treat a commoner earning dividend of ₹1,000 on par with a billionaire earning in crores?
• Every time taxation of the affluent is talked of, the government comes with an increase in surcharge. A bold measure must be taken to introduce a 40 per cent slab for crorepatis.
• The promises made in the Interim Budget should be fulfilled.
• The SIT constituted on the directions of the Supreme Court suggested that a tax be levied on betting.
• It quoted FICCI and KPMG report to show that a sum of ₹3 lakh crore can be brought to tax, and at the rate of 20 per cent the Exchequer can earn revenue between ₹12,000-₹19,000 crore.

Conclusion

• Our Prime Minister swears by the maxim Sabka Saath, Sabka Vikas.
• The Budget is being presented in the 150th birth anniversary year of the Mahatma.
• Nirmala Sitharaman can be expected to launch surgical strikes on poverty both rural, and urban.

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Negotiating the forks in the road of diplomacy (The Hindu)

Mains Paper 2: International Relations
Prelims level : G-20 summit
Mains level : Bilateral agreements and grouping

Context

• Seldom in the recent past has the impact of one month meant more in Indian foreign policy than the present one.
• And rarely have meetings on the sidelines around one summit carried as much import on India’s future policies as the G-20 summit in Osaka (June 28-29), where Prime Minister Narendra Modi will hold bilateral meetings with at least eight world leaders (most notably U.S. President Donald Trump and Russian President Vladimir Putin), and participate in two parallel trilaterals, the Russia-India-China (RIC) and Japan-U.S.-India (JAI).
• Two weeks ago, in June, he also held a bilateral meeting with Chinese President Xi Jinping on the sidelines of the Shanghai Cooperation Organisation (SCO) summit in Bishkek.

Trade concerns

• India had rejoiced when the U.S. first declared a trade war on China, given India’s long-standing concerns about China’s unfair trade practices.
• Mr. Trump trained his guns on India next, the joy evaporated, and choices for the Modi government changed.
• At Osaka, Mr. Modi will meet Mr. Trump in an effort to give trade issues another try, but he also plans to attend the RIC trilateral as well as a meeting with leaders of BRICS (Brazil-Russia-India-China-South Africa), both of which will focus on countering the U.S.’s “unilateralism” on trade.
• New Delhi must make another choice, on whether to sign up for the Regional Comprehensive Economic Partnership (RCEP), a trade grouping that has taken centrestage after the U.S. walked out of the Trans-Pacific Partnership.
• If trade issues with the U.S., India’s largest trading partner, remain intractable, it is not hard to see that the RCEP bloc, with China in it, will become more prominent in India’s trade book.

Energy and communications

• The choice on energy, and in particular on Iran, comes next. When the Trump administration pulled out of the Joint Comprehensive Plan of Action (JCPOA) nuclear agreement in May 2018, but granted India and a few other countries a waiver to continue oil imports (as well as one for Chabahar trade), the government had assumed it could muddle through the Iran-U.S. confrontation.
• It has lost on both principle and profit. After accepting U.S. sanctions on oil imports, India’s intake of cheaper, better Iranian crude will dip from about 23.5 million tonnes in 2018-19 to zero in 2019-20.
• The waiver for Chabahar turned out to be a red herring as banks, shipping and insurance companies have declined to support India-Afghan trade through the Iranian port for fear of sanctions affecting their other businesses.
• What follows now will be more difficult for New Delhi, as the U.S. has sanctioned the top rungs of Iran’s government and the Islamic Revolutionary Guard Corps.
• Having meekly submitted to U.S. sanctions, will India now also abjure contact with the Iranian leadership or reject the U.S.’s demand?
• India’s investments and its dreams of larger connectivity via Chabahar and the Russian-led International North-South Transport Corridor go, in the event of a full-scale confrontation between the U.S. and Iran.

Establishment 5G network

• New Delhi will be forced to make in the next few months is on telecommunications and building its 5G network, for which trials are due to begin in September.
• The U.S. has made it clear that it expects the Modi government to exclude the Chinese telecom company, Huawei, over security concerns, and threatens to withhold intelligence and security cooperation if India allows this company to control its 5G networks.
• China has made it equally clear that India must make an “unbiased” choice and will oppose any move to cut Huawei out of the trials.
• On the Russian S-400 missile system deal too, its a black-or-white decision for the government to make as the U.S. makes it clear that going ahead with the deal won’t just invoke sanctions but will close the door to American high-tech and advanced aircraft deals.

Maritime

• The U.S. and China are pitted against each other in the South China Sea, which is now spilling over into South Asia through the Indo-Pacific.
• While India has focussed on China’s encroachment in subcontinental waters, it is clear that the U.S. too is seeking a role here.
• The signing of an updated Status of Forces Agreement (SOFA) which was put off, along with a cancellation of U.S. Secretary of State Mike Pompeo’s visit to Colombo at the last minute this week, will be one of many such military and security upgradation plans for the U.S. in the region.

Transformed alignments

• The tussle between the U.S. and Russia-China is not new and India has negotiated these in the past few decades with considerable success.
• However, there are several reasons why this does not hold in the present, and why New Delhi will need more than nimble footwork to navigate the choices that their contestations present.
• To begin with, the Russia-China bond today is firmer than it has been at any point since the 1950s, cemented by the Xi-Putin friendship.
• The Trump administration has crystallised that bond by marking out “revisionist” Russia and China as the U.S.’s “central challenge” in its National Defense Strategy published in 2018.
• As a result, both sides are imposing an “either/or” choice on countries that are not already strategically or economically riveted to one side or the other.
• In a world where the rhetoric is increasingly about interoperability and there is a ‘buffet’ of options, a la carte choices that New Delhi had hoped it could make may no longer be on the menu.
• India’s pivot within this period, away from “non-alignment” to “multi-alignment” or “issue-based alignment”, therefore, is unsustainable.
• India needs a substantive, more clearly defined account of its own objectives to steer its strategic course in these stormy times.
• It is necessary to stay rooted in India’s own geographical moorings within Asia and within South Asia in particular.
• An India that carries its neighbourhood is a formidable force at any international forum, compared to one mired in sub-regional conflicts. Second, India needs its own list of “asks” from its relationships with big powers.
• The recent success with listing Masood Azhar as a globally designated terrorist is an example of how focussed persistence and quiet diplomacy pays off.

Way forward

• However, India needs to move beyond asking for punitive measures against Pakistan or its constant demand for more visas for Indians to live and work abroad and think in terms of long-term strategic needs instead.
• India needs to re-embrace non-alignment as it was envisioned, not as the Non-Aligned Movement grouping, which is now in disarray.
• In order to do this, it is necessary to reject the “tactical transactionalism” that has currency today for a more idealistic view of the world that India wishes to shape in the future.
• It would be a mistake, as Australian Prime Minister Scott Morrison said recently, if we become “nothing more than the sum of our deals”.
• It would be a greater misfortune, however, to be trapped in the ‘zero sum’ of our deals.

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Taking firm steps to emancipation (The Hindu)

Mains Paper : Polity
Prelims level : Sachar Commission report
Mains level : Highlighting the Sachar Commission report on welfare among muslim community

Context

• The results of the elections to the 17th Lok Sabha and the scale of the mandate for the Bharatiya Janata Party have made many Muslims in India despondent. But perhaps it is a blessing in disguise.
• Since Independence, Muslims have been treated as a vote bank by the Indian National Congress and other so-called secular parties.
• The community has only been used by the political class with very little having been done for them.

Highlights of the Rajinder Sachar Commission report

• Justice Rajinder Sachar Commission has reported, most Muslims in India are still relatively poor and backward.
• They have been in the grip of reactionary maulanas and crafty politicians with their own vested interests in mind and who have propagated the idea that no government at the Centre and in many States could be formed without their help.
• This illusion has now been shattered by the result of the 2019 general election. The recent interview by Karan Thapar with former Union Minister Arif Mohammed Khan illustrates this.
• The number of seats won by Muslims in this election could now force the community to ponder over their welfare, how to remedy the situation and improve their lives.
• The main cause of their sorry plight is their backwardness, which in turn is due to the reactionary and feudal mindsets of some leaders who claim to represent them both from the clergy and the political class.

Path to progress

• In order to change this, the community will have to take three radical steps.
• The first is demanding a uniform civil code for all Indian religious communities. This, by implication, means an abolition of the outdated feudal Sharia law.
• The law is a reflection of social conditions at a particular historical stage of a society’s development. So as society changes, the law too must change.

How can a medieval law be applicable in the 21st century?

• The abolition of Sharia will not mean the abolition of Islam.
• Almost the entire old non-statutory Hindu law was abolished by the Hindu Marriage Act, 1955 and the Hindu Succession Act, 1956 — but Hinduism has not been abolished by that.

Banning the Burqa

• The second is a demand to abolish the burqa as it constricts the freedom of women.
• However, many have said it should be the women’s choice whether to wear a burqa or not.
• But, surely, no such choice should be given as it constitutes a ‘negative’ freedom. There should be no freedom to continue backward feudal practices and they should be suppressed if the country (including Muslims) is to progress, as was done in Turkey by the leader, Mustafa Kemal Atatürk.
• A heavy fine should be imposed on women wearing the burqa, as has been done in parts of Europe.
  Abolish AIMPLB
• The third is a demand to abolish the All India Muslim Personal Law Board (AIMPLB), a non-statutory body set up in 1973 in the time of Indira Gandhi, whose eye was on the Muslim vote bank.
• The AIMPLB comprises reactionary clerics and other people most of whom have reactionary mindsets whose aim is to protect and continue the outdated feudal reactionary Sharia law, which in fact harms Muslims.
• The AIMPLB strongly opposed the progressive and humanitarian Shah Bano judgment (1985), which granted maintenance to divorced Muslim women, and which led to the Rajiv Gandhi government getting the judgment legislatively annulled.
• Recently, the AIMPLB took another reactionary step by advocating the setting up of Sharia courts in every district.

A note for youth

• Atrocities on Muslims such as lynching or hate speeches, or framing of false charges should be condemned.
• But there can be no support for backward practices, whether among Muslims or Hindus (such as the caste system or looking down on Dalits).

Way forward

• It is time now for Muslims, particularly the youth, to rise and demand putting an end to feudal reactionary practices which are the biggest cause of backwardness in the community. This is the only means to their salvation.
• As Maulana Azad said to Muslims in 1947 at the Jama Masjid: “Nobody can drown you unless you drown yourself. Nobody can defeat you unless you defeat yourself. The moment you realise this, you develop the confidence that this country is ours, along with others.”

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RCEP next steps: on India's free trade agreement (The Hindu)

Mains Paper 2: International Relations
Prelims level : RCEP
Mains level : Highlights of the ASEAN summit

Context

• Leaders of the 10-member Association of South East Asian Nations have resoundingly committed to conclude negotiations for the Regional Comprehensive Economic Partnership free trade agreement by the end of 2019.
• Some like the Malaysian Prime Minister went a step further, suggesting that countries not ready to join the RCEP, notably India but also Australia and New Zealand, could join at a later date, allowing a truncated 13-member RCEP to go ahead.

Highlights of the ASEAN summit

• It is clear that ASEAN, which first promoted the RCEP idea in 2012, is putting pressure on all stakeholders to complete the last-mile negotiations.
• The ASEAN summit, which ended in Bangkok on Sunday, agreed to send a three-member delegation to New Delhi to take forward the talks. RCEP includes ASEAN’s FTA partners India, China, Japan, South Korea, Australia and New Zealand and the FTA would encompass 40% of all global trade among economies that make up a third of global GDP. India has been keen to join.
• But six years into negotiations, its concerns remain: opening its markets for cheaper goods from countries like China and South Korea; and ensuring that RCEP countries open their markets for Indian manpower (services).

India’s trade deficit with RCEP countries

• India has a trade deficit with as many as 11 of the RCEP countries, and it is the only one among them that isn’t negotiating a bilateral or multilateral free trade agreement with China at present.
• Negotiators have agreed to New Delhi’s demand for differential tariffs for its trade with China vis-à-vis the others, India has also made tagging the “Country of Origin” on all products a sticking point in RCEP negotiations.
• Despite its misgivings, however, the government has reiterated that it is committed to making RCEP work, and any attempt to cut India out of the agreement was “extremely premature”.
• In the next few months, India will be expected to keep up intense negotiations, and most important, give a clear indication both internally and to the world that it is joining RCEP.

Way forward

• The Commerce Ministry has begun consultations with stakeholders from industries that are most worried about RCEP, including steel and aluminium, copper, textile and pharmaceuticals, and has engaged think tanks and management institutes to develop a consensus in favour of signing the regional agreement.
• Giving up the chance to join RCEP would mean India would not just miss out on regional trade, but also lose the ability to frame the rules as well as investment standards for the grouping.
• Above all, at a time of global uncertainties and challenges to multilateralism and the international economic order, a negative message on RCEP would undermine India’s plans for economic growth.

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Scoring on health: on Health Index 2019 (The Hindu)

Mains Paper 2: Health
Prelims level : Health Index 2019
Mains level : Indications of the Health Index 2019

Context

• The Health Index 2019 released by NITI Aayog makes the important point that some States and Union Territories are doing better on health and well-being even with a lower economic output, while others are not improving upon high standards.
• In the assessment during 2017-18, a few large States present a dismal picture, reflecting the low priority their governments have accorded to health and human development since the Aayog produced its first ranking for 2015-16.

The disparities are stark

• Populous and politically important Uttar Pradesh brings up the rear on the overall Health Index with a low score of 28.61, while the national leader, Kerala, has scored 74.01.
• Andhra Pradesh and Maharashtra join Kerala as the other top performers, with the additional distinction of making incremental progress from the base year.
• The NITI Aayog Index is a composite based on 23 indicators, covering such aspects as neonatal and infant mortality rates, fertility rate, low birth weight, immunisation coverage and progress in treating tuberculosis and HIV.
• States are also assessed on improvements to administrative capability and public health infrastructure.
• For a leading State like Tamil Nadu, the order of merit in the report should serve as a sobering reminder to stop resting on its oars.
• It has slipped from third to ninth rank on parameters such as low birth weight, functioning public health centres and community health centre grading.

The Health Index concept

• The Health Index concept to spur States into action, public health must become part of mainstream politics.
• While the Centre has devoted greater attention to tertiary care and reduction of out-of-pocket expenses through financial risk protection initiatives such as Ayushman Bharat, several States remain laggards when it comes to creating a primary health care system with well-equipped PHCs as the unit.
• This was first recommended in 1946 by the Bhore Committee.
• The neglect of such a reliable primary care approach even after so many decades affects States such as Bihar, where much work needs to be done to reduce infant and neonatal mortality and low birth weight, and create specialist departments at district hospitals.
• Special attention is needed to shore up standards of primary care in Odisha, Madhya Pradesh, Uttarakhand, Rajasthan, Assam and Jharkhand, which are at the bottom of the scale, as per the NITI Aayog assessment.

Conclusion

• The Health Index does not capture other related dimensions, such as non-communicable diseases, infectious diseases and mental health.
• It also does not get uniformly reliable data, especially from the growing private sector.
• What is clear is that State governments now have greater resources at their command under the new scheme of financial devolution, and, in partnership with the Centre, they must use the funds to transform primary health care.

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The savings dilemma (Indian Express)

Mains Paper 3: Economy
Prelims level : Not much
Mains level : Issues relating growth and development, employment

Context

• Empirical evidence shows that developing economies have a positive long-term correlation between savings and growth.
• In a fast-growing economy like India, investments generally outpace domestic savings, and the gap gets funded by foreign savings.
• This shows up as current account deficit. Maintaining adequate domestic savings, therefore, is essential to sound macroeconomic management more so in today’s challenging global environment.

Indians have been saving less

• Worse, our rate of savings has fallen sharply.
• The overall savings rate (households, public sector and private sector), or the proportion of gross domestic savings in the GDP, plunged to 30.5 per cent in fiscal 2018 from a peak of 36.8 per cent in fiscal 2008, rising marginally in the interim.
• It has been downhill since fiscal 2012.
• The external shock of the global financial crisis led to a sharp slowdown in public savings in fiscal 2009, with the government resorting to fiscal stimulus.
• The savings rate recovered marginally in the next three years, only to lose momentum thereafter. This could compound India’s problem of slowing growth.

The granular trends in the household savings

• The largest savers in the economy, household savings, (the government and the corporate sector being the other two categories) fell from 23.1 per cent as a per cent of the GDP in fiscal 2010 to 17.2 per cent in fiscal 2018.
• As a result, its share in gross savings fell from 68.2 per cent to 56.3 per cent. Household savings in physical form (largely in real estate and also referred to as physical savings), declined from 15.9 per cent to 10.3 per cent. Financial savings declined too, from 7.4 per cent to 6.6 per cent.
• That’s a major source of concern because households have been traditionally net suppliers of funds to the private corporate sector as well as the public sector.
• This means that excess of household sector savings over their investments is used to fund the saving-investment gap of the other two sectors.
• A continuation of this trend will shrink the pool of savings available to facilitate private investments.

What explains the decline in household savings?

• A part of the answer lies in the consumption trend. National accounts data shows that over the past few years, private consumption as a percentage of the GDP has risen — in a reversal of the trend seen till the early 2000s.
• Given favourable demographics, households are becoming consumption-centric, and their financial liabilities have been rising, as evidenced in retail credit, which, at 17 per cent annually, is the fastest-growing loans segment in the past five years.
• This fall in household savings rate is also corroborated by a sharp fall in household saving elasticity (the proportional change in savings to a change in income) since the beginning of this decade.
• In India, about 70 per cent of the working age population falls in the 20-40 years category.

Government savings

• On the other hand, savings of government corporations (departmental and non-departmental enterprises) are largely offset by government dis-saving (as it runs a revenue deficit), which keeps the overall public savings rate low.

Private sector savings

• But the private corporate sector savings bucked this trend, surging to 11.6 per cent of the GDP in fiscal 2018 from 7.4 per cent about a decade ago.
• Part of this is the result of a change in the base year to 2011-12, which led to physical assets of quasi-corporations being excluded from households and included in private corporations.
• So while private corporate savings surged, household savings declined commensurately.
• Yet, the rise in private corporate savings is in line with evolving global trends in savings after the global financial crisis.

Way forward

• In India too, rising corporate savings could be channeled for financing private corporate investment when the opportunity arises.
• Beyond these domestic sources, an increase in private sector investment will need to be financed by foreign savings, which carries its own set of risks beyond a point.
• It is noteworthy that the expansion of the Indian economy before the global financial crisis coincided with a significant lift in both savings and investments.
• With the election-related uncertainty behind us, a softer monetary policy stance, and the government’s resolve to push growth up, investments are likely to increase in the future.
• Clearly, it’s time to reignite the virtuous cycle of high savings, investment, and growth so that the country returns to the high-growth trajectory of the past.
• Pushing up household financial savings would require greater efforts towards financial inclusion, and possibly, incentives for saving.
• These must be complemented by productivity-enhancing reforms that encourage private sector investments.

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Agriculture needs 1991-like reforms push (Indian Express)

Mains Paper 3: Economy
Prelims level : PM Kisan Samman
Mains level : Four pronged plan on agriculture reform

Context

• The new Finance Minister, Nirmala Sitharaman, will not be short on advice on what should be done for agriculture as part of Budget-making for July 5.
• The challenge will be to integrate these ideas into a viable action plan for India’s 14 crore farmers.
• Agriculture is a State subject but it eagerly awaits its 1991 moment of comprehensive reforms which should involve the Centre, the States, banks and the RBI.
• While many changes were brought about to deal with corporate sector woes in the last seven or eight years, agriculture has not received as much attention from the regulator.
• Those at the helm of RBI in recent times have not seen life in India’s villages at close quarters.
• This should form the foundation of the “New Deal” for agriculture that should suffuse the Budget, and it should have a four-pillar structure.
• The first pillar will be in the form of “first aid” to the embattled sector, taking forward the income support scheme announced as part of PM Kisan Samman.

Four-pronged plan

Income support

• A survey published by NABARD last year assessed the monthly income of an agricultural household at ₹8,931, using the same methodology of the NSSO.
• A household has not less than five members in a farmer’s family.
• It is a necessary (but not sufficient) first step that some form of income support is given to farmers in addition to the other subsidies.
• The amount of ₹87,000 crore that is estimated as the requirement for the PM Kisan Samman scheme should not be grudged.
• In a sense, it is a price that we have to pay for keeping inflation so low during Modi 1.0. The firm cap on inflation that Prime Minister Modi was able to achieve has not received the favourable attention that it deserves.
• Part of this was owing to the subdued prices of food items in the CPI basket.
• Food, with a weightage of about 46 per cent in the CPI, contributed greatly to inflation being benign in the last five years.
• According to an OECD study, the level of support to producers (farmers) in India has been negative for all the years from 2000.
• This means that the annual monetary value of net transfers from consumers and taxpayers to agricultural producers has been negative.

Centre and the States on a common platform

• The second pillar of this reform package should be to get the Centre and the States together on a common platform.
• Here, a GST-like council of agriculture ministers of the States and the Centre should be constituted and important changes like the adoption of the model APLM Act, abolition of the Essential Commodities Act of 1955 vintage (which was meant for times of shortages and not surpluses) and faster digitisation of land records should be implemented.

Banking sector approach

• The RBI has an important role to play in this reform architecture. In the last five years at least, there has not been any new RBI policy initiative for this sector.
• It may come as a surprise to many that the limit for collateral-free loans in the agricultural sector is ₹1.6 lakh. MSME borrowers get collateral-free loans of up to ₹10 lakh. For educational loans, this limit is ₹ 7.5 lakh.
• There is definitely a case for immediately hiking this limit to ₹3 lakh for small and marginal farmers.
• It is high time the RBI came out with totally overhauled realistic norms for the agriculture sector, taking note of suggestions from other stakeholders as well. It would be ideal if the RBI were to come with some major steps in tandem with the July 5 Budget.
• One remembers the series of announcements by the RBI which accompanied the radical July 24, 1991, Budget of Manmohan Singh. Will the RBI work in tandem? If not, we would have wasted one more opportunity for a new deal for the farm sector.

Be the banks

• The fourth pillar will, of course, be the banks.
• Commercial banks must expand the attention bandwidth of both top and junior management for rural and inclusive business.
• The credit morality of the small borrower in our country is much better than those who borrow in crores and disappear in droves.

Way forward

• Generally, there has been no case of an “absconding” farmer even if there is default.
• While there is no doubt that the farmer should be “credit-worthy”, it may be time to look inward and see whether changes are required to make banks much more “rural-worthy or farmer-worthy”.

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An indecent settlement (The Hindu)

Mains Paper 2: Health
Prelims level : Paltry settlement
Mains level : Johnson and Johnson case

Context

• Johnson and Johnson has been accused of selling its faulty ASR hip implants to approximately 4,700 Indian patients between 2004 and 2010.
• The company announced a global recall of the ASR hip implants in 2010 after doctors in the U.K. and Australia reported an extremely high failure rate for the implant.
• The metal in the implant was apparently degenerating, causing damage to the bone and tissue, apart from leeching dangerous metals like cobalt and chromium into the blood stream of the patient.
• By 2013, Johnson and Johnson announced a $4 billion settlement to cover the claims raised by 12,000 patients in the U.S.

Steps taken by DCGI

• In India, individual patients filed cases against the company before consumer courts.
• There was no governmental response till 2017 when the Drug Controller General of India (DCGI) set up a committee of experts to probe the matter.
• This committee stated that Johnson and Johnson, as part of its global recall, had published advertisements in two English language newspapers informing patients that it was affecting a recall of the ASR hip implants and would pay for the revision surgery of those patients who required the implant replaced.
• Apparently 1,032 Indian patients contacted the company in response to these advertisements.
• And of these patients, the company paid for revision surgeries of 254 patients, while another 774 patients were kept on monitoring.
• The remaining 3,600 patients are likely not even aware of the issues with their hip implants because J&J did not contact each patient individually.

The challenge before court

• In 2018, an expert committee under Dr. R.K. Arya recommended that Johnson and Johnson be ordered to pay each patient a baseline compensation of ₹20 lakh and additional compensation based on the age of the patient and disability suffered by him.
• When the DCGI ordered J&J to pay compensation as per the formula laid down by the expert committee, its order was challenged before the Delhi High Court on April 8, 2019 by Johnson and Johnson which argued, and rightly so, that only courts of law and not regulators like the DCGI could order payment of compensation.

The Court order

• In May, the company struck an entirely different chord, claiming that it was willing to pay ₹25 lakh to patients who had a revision surgery and approached the government’s committee, provided that the payment was not construed as an acceptance of any liability.
• As per the court’s order, this settlement offer would not affect the patient’s right to claim further compensation subject to the fact that any possible future award of compensation from a court would have to be adjusted with the ₹25 lakh already paid.
• The order records that Johnson and Johnson was in effect extending this offer to merely 67 of the 289 patients who had approached the ‘expert committee’ of the Central government because only these 67 patients had been “verified” and had received revision surgeries.

Problems with the settlement

• The first is that the patients who are the most important stakeholders are not party to this litigation.
• One of the fundamental tenets of law is that no order, not even one that is perceived to be a favourable order, should be passed by a court of law without hearing the parties who are going to be impacted by the order.
• The only way patient interests can be protected is to invite patients to be part of the process. This is not merely an issue of abstract theory but one of practical implications.
• For instance, if there was even one lawyer for the patients present in court, he or she would have informed the court that most patients have not approached the expert committee of the government because it was as clear as day that the committee did not have any legal powers to award damages.
• Instead, most patients moved consumer courts seeking compensation. Thus, dealing with the claims of only the 289 who contacted the committee is pointless.
• The same lawyers would have also informed the court that as per the expert committee report, Johnson and Johnson has knowledge of at least 254 patients who have had revision surgery.

The perfect smokescreen

• The second problem with this payment of ₹25 lakh per patient is that there is no theory of damages supporting the payment of this amount.
• Normally damages are split under different heads such as loss of future earnings and solatium for hardship all of which will be calculated on the basis of the age of the patient.
• A 40-year-old patient who has a much higher earning potential than a 60-year-old patient deserves to be compensated at a higher rate. Johnson and Johnson needs to explain the basis of treating all the patients equally.
• The expert committee had recommended ₹20 lakh as a baseline compensation to which more could be added as per a formula it proposed.
• Going by this formula, the compensation payable to these patients would depend on age and disability and would be far in excess of the ₹25 lakh proposed by Johnson and Johnson.
• The High Court needs to guarantee some transparency in this regard since there are pending cases before the consumer courts which will be dealing with similar questions.
• The third tragedy with this settlement is that it provides the perfect smokescreen to both J&J and the DCGI who have so far had to deal with intense media scrutiny over their failures to take care of patient interests.

Way forward

• By presenting to the media a deal that has the blessings of the Delhi High Court, both Johnson and Johnson and the DCGI will get away with the appearance of having taken care of patients even when it is clear that ₹25 lakh is a pittance of a compensation.
• The image of this settlement which costs Johnson and Johnson a paltry sum of ₹16.75 crore will end the public pressure on the company despite no justice being done to the patients.

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The state of Indian prisons (The Hindu)

Mains Paper 2: Social Justice
Prelims level : NCRB report
Mains level : Highlighting the NCRB report on the status of Indian prisons

Context

• Indian prisons make news when there is a jail break, a prison riot or when the lawyers of high-profile businessmen or economic evaders fight against their extradition to India.
• The release of the data-driven report, the Prison Statistics India 2016, published by the National Crime Records Bureau (NCRB) in April went largely unnoticed.

Highlights of the NCRB report

• This edition of the report is different from its earlier versions on account of its omission of certain key demographic data.
• The report tells us that at the end of 2016, there were 4,33,033 people in prison; of them 68% were undertrials, or people who have yet to be found guilty of the crimes they are accused of.
• India’s under-trial population remains among the highest in the world and more than half of all undertrials were detained for less than six months in 2016.
• This suggests that the high proportion of undertrials in the overall prison population may be the result of unnecessary arrests and ineffective legal aid during remand hearings.

No demographic details

• The most significant shortcoming of the report lies in the NCRB’s failure to include demographic details of religion and the Scheduled Caste and Scheduled Tribe status of prisoners, which are crucial to understanding India’s prison population.
• This information was consistently published for the last 20 years and instrumental in revealing the problematic overrepresentation of Muslims, Dalits and Adivasis among under-trials in prisons.
• The report of 2015, for instance, said that Muslims, Dalits and Adivasis accounted for 55% of the under-trial population even though they made up only 50% of the convict population and 38% of the total Indian population.
• Another disturbing point is the rise in the number of people held under administrative (or ‘prevention’) detention laws in Jammu and Kashmir (a 300% increase), with 431 detainees in 2016, compared to 90 in 2015.
• Administrative, or ‘preventive’, detention is used by authorities in J and K and other States to unfairly detain persons without charge or trial and circumvent regular criminal justice procedures.

Data on prisoner release

• Under Section 436A of the Code of Criminal Procedure, which allows undertrials to be released on a personal bond if they have undergone half of the maximum term of imprisonment they would have faced if convicted.
• In 2016, out of 1,557 undertrials found eligible for release under Section 436A, only 929 were released. Research by Amnesty India has found that prison officials are frequently unaware of this section and unwilling to apply it.
• In 2017, the Law Commission of India had recommended that undertrials who have completed a third of their maximum sentence for offences attracting up to seven years of imprisonment be released on bail.
• Perhaps the NCRB should consider including the number of such undertrials in its upcoming report for informing the policy on the use of undertrial detention.

Mental health concerns

• The relevance of prison visits is underlined by the number of “unnatural” deaths in prisons, which doubled between 2015 and 2016, from 115 to 231.
• The rate of suicide among prisoners also increased by 28%, from 77 suicides in 2015 to 102 in 2016.
• For context, the National Human Rights Commission in 2014 had stated that on average, a person is one-and-a-half times more likely to commit suicide in prison than outside, which is an indicator perhaps of the magnitude of mental health concerns within prisons.
• The NCRB has said that about 6,013 individuals with mental illness were in jail in 2016.
• It does not provide information on whether these prisoners were diagnosed with mental illness before entering prison, making it difficult to determine whether prison conditions worsened their plight.
• The report states that there was only one mental health professional for every 21,650 prisoners in 2016, with only six States and one Union Territory having psychologists/psychiatrists.
• Odisha, Uttar Pradesh and Madhya Pradesh, the three States with the most prisoners with mental illness, did not have a single psychologist or psychiatrist.

Conclusion

• All things considered, the report has important information which can be used to facilitate a dialogue on improving prison policies.
• But these conversations will be limited and the public’s right to know about the functioning of the criminal justice system thwarted if critical information is delayed inordinately or withheld without credible reason.
• The NCRB’s apparent reluctance to be prompt and open about its prison statistics does not bode well for the democratic discourse in India.

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The future of parliamentary democracy (The Hindu)

Mains Paper 2: Polity
Prelims level : Parliamentary democracy
Mains level : Describe the role of parliamentary democracy in Indian politics

Context

• Weeks after the nation gave a decisive mandate to Prime Minister Narendra Modi and the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA), political analysts are yet to come up with plausible reasons for what happened.
• No one had forecast this kind of majority, though there are many who now claim they saw it coming.

The magnitude of victory

• First and foremost, in 2019 the NDA eclipsed its performance of 2014.
• It secured 352 seats, while the Congress-led alliance came next with 91 seats.
• The BJP tally of seats was 303 while the Congress secured 52. Regional parties such as the Dravida Munnetra Kazhagam, All India Trinamool Congress, YSR Congress Party, Shiv Sena, Janata Dal (United), Biju Janata Dal and Bahujan Samaj Party each secured 10-23 seats, demonstrating the overwhelming nature of the Modi victory.
• In 224 of the 303 seats it won, the BJP vote share exceeded 50%, compared to 136 in 2014.
• The BJP retained over 81% of the seats it had won previously.

Shifting nature of politics

• Mundane statistics still do not explain the scale of victory.
• Various theories have been floated, viz. that India was entering a new epoch in which Mandir-Mandal politics had no place; caste and subaltern politics had receded into the background; and we are seeing a new India.
• These are mere facile arguments being put forward to explain an unprecedented victory which no one saw coming.
• Certain strategists meanwhile have speculated that the “victory” could be attributed to: the adoption of a new revolutionary approach to ‘data-driven’ communications; the utilisation of ‘influence politics’; and the employment of new ‘social media tactics’, which had the potential to change the behaviour of the electorate.
• This again makes for good copy, but the truth of what led to such a massive victory for the BJP still eludes everyone.

Without issues

• The Opposition concentrated its attack on the weakening economy, but it is conventional wisdom that the true state of the economy or the lack of jobs is often irrelevant to voters when other matters of greater significance intrude.
• The Prime Minister, knowingly or unknowingly, never entered into a debate on the economic aspects, thus denying the Opposition a platform.
• The Opposition also had little occasion to bring up the Mandir issue, since the BJP never projected it as a major election card this time
• Mandal politics has long since lost its edge, as the benefits to be derived from it have since become part and parcel of the political philosophy of every party in the country.
• The Opposition, hence, had little ammunition to deploy against the ruling dispensation.

This again is more illusory than real

• This election was one of a kind, in which issues did not matter.
• This may seem like an ‘anomaly’, but in much the same manner as ‘anomalies’ during revolutions in science led to new paradigms, the Opposition failed to recognise the change that had taken place this time.
• This, together with the unparalleled polarisation and a Hindu consolidation, meant that the Opposition had probably lost the election even before the majority of the electorate had got to the polling booths.

What does the 2019 election victory of Prime Minister Modi presage for parliamentary democracy?

• Parliamentary democracy is the cornerstone of the edifice sanctified by the Constitution. If any part of the edifice, and especially its cornerstone, is affected or diminished, it could spell damage to what we have come to believe since 1950.
• The question is not rhetorical, but requires a well-considered answer.
• When any individual, the Prime Minister included, eclipses his party that is notionally responsible for victory in a parliamentary election, then we are entering uncharted waters, where current rules do not apply.
• Across the world, there is a wave today in favour of tall and powerful leaders from Donald Trump to Vladimir Putin and Xi Jinping but they do not head parliamentary democracies.
• In a parliamentary democracy, the Prime Minister is clearly the first among equals, but is not larger or bigger than the party.

Presidential-style vote

• In 2014, Mr. Modi had crested the wave of disillusionment against the then ruling dispensation, which had been in office for a decade.
• This was not, however, the case in 2019, where incumbency and the inability to deal with a variety of issues had led to a degree of disillusionment with the BJP.
• Yet, Mr. Modi proved invincible, and the party benefited from it.
• Few among the electorate possibly voted for the BJP; they voted for Mr. Modi and what Mr. Modi stood for. The reality is that the electorate voted as if it were a presidential election to elect Mr. Modi.

Conclusion

• If the current trend is maintained, it could well mean the end of parliamentary democracy.
• Now that the elections are over, it might be worthwhile to look dispassionately at the growing trend of favouring ‘maximum leaders’ to the detriment of the parties they lead, and to the policies and practices the latter espouse.
• This does carry risks for the future of parliamentary democracy.

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A city gone dry: on Chennai water crisis (The Hindu)

Mains Paper 3: Environment
Prelims level : Chennai water crisis
Mains level : Highlighting the assessment on Chennai water crisis

Context

• Chennai’s aspirations to grow into a global economic hub appear considerably weakened as it struggles to find water.
• The shadow of drought from 2018 has stretched into the torrid summer this year, evaporating not just the city’s reservoirs, but the prosperity of its residents who are forced to hunt for tankers, pay bribes and spend hours even at night waiting for trucks to dispense some water.

Situation in Tamil Nadu

• Tamil Nadu’s capital, which in a normal year gets anything between 1,300 mm and 1,400 mm of rainfall, has been laid low by the indifference of successive governments.
• That residents are now given minimum piped water and meagre tanker supplies totalling a third of the installed capacity of 1,494 million litres a day, that too mainly from desalination plants, faraway lakes and farm wells, is proof of the neglect of water governance.
• Yet, even searching questions posed by the Madras High Court to the AIADMK government have elicited only vague assurances on meeting basic requirements and restoring 210 waterbodies to augment future storage, rather than a firm timeline.
• Chief Minister Edappadi K. Palaniswami was wrong to dismiss reports on water scarcity as “an exaggeration”, and he must end this business-as-usual approach.

Highlighting the assessment

• A time-bound plan is needed to augment the resources in the Greater Chennai region encompassing the neighbouring districts of Thiruvallur and Kancheepuram.
• This plan should be tasked to a Special Officer, to be framed by officials in consultation with credentialed experts in research and academia, and public comments invited before it is finalised.
• Given the large base of tanks and reservoirs in Greater Chennai over 4,000 waterbodies of significance prudent rainfall management can help it through withering summers and weak monsoons.
• A white paper with a full assessment of these wetlands and their storage potential should be a priority for the State’s Sustainable Water Security Mission. Deepening storage in the four major reservoirs must get priority.
• Such a project must quantify the increase in storage and set an early deadline of a year.
• These measures can harvest the bulk of the rain in a good year, and prove superior to the fire-fighting approach of installing expensive desalination plants and bringing small quantities by rail from another district.
• Tamil Nadu made rainwater harvesting mandatory quite early, but failed to follow it up with an institutional mechanism to help citizens implement it.

Way forward

• The government should give monetary incentives to NGOs, as NITI Aayog proposed in its Water Index report, to encourage them to install systems and show quantifiable recharge outcomes.
• On the consumer side, devices and practices to reduce wastage should be promoted, especially on commercial premises.
• Droughts are bottlenecks for profit, and several actors have developed a vested interest in transferring water to the city at high cost. Long-term solutions can end this cycle.

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