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A blueprint for national security for Modi 2.0 govt (Live Mint)

Mains Paper 3 : Defense and security
Prelims level : Modi 2.0
Mains level : Modi 2.0 on India’s security policies

Context

• The 2019 election was unique. It was fought on the plank of national security and India’s response to Pakistan’s unabated proxy war over the past 30 years.
• This, surprisingly, made caste arithmetic irrelevant.
• The tipping point had come with the brutal killing of 40 Central Reserve Police Force troopers at Pulwama.
• For the first time, India called Pakistan’s nuclear bluff and reacted across the border with a massive air strike at the Balakot terror camp.
• This was the first time in the last 50 years that Indian war planes had crossed into Pakistan.
• The response of the people was one of euphoric catharsis and got the National Democratic Alliance (NDA) a landslide victory in the elections.

What we expect from the new administration?

• This new administration will now have to deliver and strengthen national security in a highly visible and significant manner.
• The world is increasingly becoming more complex, with the Trump administration flexing muscles against Russia, Iran, and China. Iran is vital to our energy security and as a gateway to landlocked

Afghanistan and Central Asia.

• American sanctions against Russia directly impinge on our military hardware purchases such as the vital S-400 deal. How the China-US trade war will pan out affects us directly.
• Also, the US withdrawal from Afghanistan could have a serious impact on our security.
• There must be no scope for any illusion that it can carry on with terror strikes.
• These will invariably invite strong cross-border military retaliation and the onus of escalation will be squarely on Pakistan.
• We need to create the military power and capacity to deter and dissuade the China-Pakistan combine from any adventurism.
• The civilian government and bureaucracy must get single point advice from a military expert. Police, intelligence and the foreign service do not have the expertise or experience to provide such professional military inputs in times of a crisis requiring kinetic responses.
• After Balakot these could occur with much greater frequency.
• Also, we must, on topmost priority, plug the dangerous gaps in our air power.
• We must rapidly induct 150 new Medium Multi-Role Combat Aircraft (MMRCAs) and arrest the dangerous downslide in our squadron strength.
• We must open a second production line in the private sector to enhance the rate of induction of LCAs (Light Combat Aircraft).
• Civil-military integration of the armed forces and ministry of defence needs to go beyond tokenism. Military officials must be inducted now at the joint secretary level.

Controlling internal disturbance

• The police and home ministry have been claiming great success in containing the Maoists and reducing their influence.
• The unfortunate fact, however, is that each year in April-May they launch an annual tactical counter-offensive and inflict heavy losses on the police and CPOs and loot weapons.
• Their strike power is intact and we have not been able to penetrate the dense jungles of Dantewada to destroy the armed Maoist groups in that sanctuary.
• The number of armed Maoist battalions has gone up from 3 to 21 in this forest redoubt. This is dangerous and we cannot lull ourselves into complacency.
• We need concerted offensive military operations in the jungle redoubts to impose actual attrition on armed Maoist groups.
• The Indian state cannot give primacy to universal human rights principles at the cost of its own national security and survival.
• We may have to use the army special forces and attack helicopters for concerted offensive ops against armed Maoist gangs in deep jungle sanctuaries.

Conclusion

• The NDA has received an unprecedented mandate.
• This has aroused huge expectations and the new government will simply have to deliver.
• It came back on the agenda of primacy to national security.
• It will have to deliver on those promises in a visible and time-bound manner.

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Forgotten lessons (Indian Express)

Mains Paper 2 : International Relation
Prelims level : Not Much
Mains level : Sri Lanka political crisis

Context

• The resignation of nine Muslim ministers and two governors in Sri Lanka is telling of how much and how swiftly the country has changed in the six weeks since the Easter bombings that killed more than 250 people.
• The attacks were carried out by a group of radicalised Muslims, later claimed by ISIS as its own.
• Security forces mopped up remnants of the group within days, arresting scores of people with active help from the wider Muslim community, which had long red-flagged the existence of these rotten apples to the authorities but to little effect.
• But even as this process continues and investigators are probing the networks of the perpetrators, there are other forces at work digging the crack between the majority Sinhala Buddhist community and the minority Muslims, widening and deepening it by the day.

Political tussle between Prime Minister and President

• It is unfortunate that the leadership of the country divided between a prime minister and president who see each other as rivals in the presidential elections later this year, and both threatened by a former president has done nothing to calm matters.
• In fact, they have done the opposite, by allowing majoritarian minded Buddhist monks to seize the agenda and dictate terms.
• Accused by Sinhala Buddhist extremists of “appeasement” of the Muslim community for votes, the present dispensation appears completely to have surrendered to these forces.
• The first sign was the imposition of a ban on face veils worn by women, then the laissez faire attitude as rioters targeted Muslims.
• Clearly the top leadership of the country believes that any attempt to stop these majoritarian forces will go against them at the elections.
• The resignations came after a hunger strike by a monk demanding that the two governors step down because of their alleged links to those who carried out the Easter attacks.
• The ministers resigned in solidarity, demanding that the allegations be established by due process instead of by word of mouth.
• Among those who visited the fasting monk was another man in saffron robes, who was in jail for instigating anti-Muslim violence in the past, until he was freed recently following a questionable presidential pardon.

Conclusion

• Sri Lanka has been here before.
• It was the Tamils then, and it took a long and brutal war to learn that majoritarianism is not a workable political model in plural societies, even in those that do not call themselves secular.
• It is unfortunate that those lessons have been forgotten so quickly.

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Fine-tuning the education policy (The Hindu)

Mains Paper 2 : Governance
Prelims level : Education Policy
Mains level : Challenges behind in implementation of the National Education Policy 2019

Context

• After about four years in the making, the draft National Education Policy, 2019 is out in the public domain, with comments sought from all stakeholders till June 30.
• The idea that lifelong education is based on four pillars learning to know, learning to do, learning to live together and learning to be has inspired the committee to cover every aspect of the education sector: school, higher, vocational and adult education.
• It also includes the whole gamut of professional education engineering, medicine, agriculture, law, etc.
• It explains the scientific rationale behind the policy’s prescriptions and suggests how the proposals can be translated into practice at the State and Central levels.

Unique features of the policy

• The draft policy seeks to revamp all aspects of the sector and does not shy away from suggesting brave new ideas.
• In school education, one such idea is to cover children of 3-18 years [instead of the present 6-14 years under the Right to Education (RTE) Act], three years under early childhood care and education (ECCE) and four years under secondary education.
• Based on evidence from neuroscience that over 85% of a child’s cumulative brain development occurs prior to the age of six and that ‘school preparedness’ at Anganwadis is light on educational aspects, ECCE would facilitate play and discovery-based learning for children of that age group.

Universal foundational literacy and numeracy

• Another innovative idea is to achieve ‘universal foundational literacy and numeracy’ through initiatives like the National Tutors Programme and the Remedial Instructional Aides Programme.
• Introduction of school complexes, a system of modular Board Examinations to allow flexibility, setting up Special Education Zones in disadvantaged regions, recognising teachers at the heart of the system, moving teacher education into the university system, and stressing the importance of learning new languages are among the key recommendations.

Way ahead

• The aim is to double the Gross Enrolment Ratio from 25% to 50% by 2035 and make universities the hubs of research (with Tier I universities/institutions devoted primarily to research and some teaching, Tier 2 universities devoted to teaching and some research, and Tier 3 institutions comprising mainly colleges that are to be converted gradually into degree-giving autonomous institutions).
• The policy recognises the crucial importance of liberal arts (it recommends setting up five Indian Institutes of Liberal Arts offering four-year courses) and the study of modern and classical languages (it recommends setting up National Institutions for Pali, Prakrit and Persian).
• It proposes separate institutions for regulation, funding, standard setting and accreditation, a National Research Foundation, and a Rashtriya Shiksha Aayog/ National Education Commission.
• Interestingly, vocational education, meant for 50% of the students, is sought to be integrated with school and higher education.

Challenges in implementation

• These are progressive ideas, but there are roadblocks in their implementation. These mostly relate to funding requirements and governance architecture.
• First, what is recommended is a doubling of public funding to 6% of the GDP and increasing overall public expenditure on education to 20% from the current 10%.
• This is desirable but does not appear to be feasible in the near future given that most of the additional funding has to come from the States.
• Though innovative financing schemes have been proposed, involving the private sector, how those schemes will shape up remains to be seen.
• Second, while establishing new institutions for Pali, Prakrit and Persian appears to be a novel idea, shouldn’t the Central Institute of Indian Languages in Mysuru be strengthened and perhaps even upgraded to a university with an extended mandate to take care of these languages?
• Third, expanding coverage under the RTE Act to include pre-school children is extremely important, but should perhaps be introduced gradually, keeping in mind the quality of infrastructure and teacher vacancies. Amendment of the Act can perhaps wait for a while.
• Fourth, the idea of setting up the Rashtriya Shiksha Aayog under the Prime Minister and having it serviced by the MHRD is crucial in order to integrate the approaches and programmes of multiple departments.
• However, it is fraught with many administrative problems and possible turf battles. Bringing medical or agricultural or legal education under one umbrella is likely to be met with stiff opposition.
• Fifth, the idea of regulation being brought under the National Higher Education Regulatory Authority, standard setting under the General Education Council and funding under the Higher Education Grants Council may require a revisit so that there is synchronisation with the current Bill for the Higher Education Commission of India.
• Besides, the draft policy is silent on the Institutions of Eminence and agencies like the Higher Education Funding Agency.
• Last, language issues have to be handled sensitively in view of their emotional overtones, as witnessed recently. Protests are often made without understanding the spirit of the text.

Conclusion

• The details about financing and institutional structures should be fleshed out at the earliest, perhaps by an inter-departmental committee under the Cabinet Secretary.
• It is time for all conscientious persons to study the report and suggest the best path forward.
• If the political leadership backs it, implementation of the policy will transform our nation.
• The draft policy seeks to revamp all aspects of the sector and does not shy away from suggesting brave new ideas.

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The immediate neighbourhood (The Hindu)

Mains Paper 2 : International Relations
Prelims level : BIMSTEC
Mains level : India and its neighbourhood relations

Context

• The government has shown its commitment to its strategy of “Neighbourhood First” by inviting the leaders of neighbouring countries for the second time to Prime Minister Narendra Modi’s swearing-in ceremony on May 30.
• The focus will continue this week when he makes his first visit in this tenure to the Maldives and Sri Lanka, something that has become tradition for all Indian Prime Ministers.
• The obvious difference between Mr. Modi’s invitations to his taking office the first and second time is that in 2014 they went to the leaders of the eight-member South Asian Association for Regional Cooperation (SAARC), while in 2019 they went to leaders of the seven-member Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).
• BIMSTEC includes five SAARC members (Bangladesh, Bhutan, India, Nepal, Sri Lanka), and Myanmar and Thailand, while leaving SAARC members Afghanistan, Pakistan and the Maldives out, due to the geographical location of the Bay of Bengal.

Subsuming the other

• To extrapolate from this that BIMSTEC has replaced SAARC, or that the Modi government is in effect building the foundations of BIMSTEC over the grave of SAARC is both illogical and contrary to the founding principles of these organisations.
• SAARC, as an organisation, reflects the South Asian identity of the countries, historically and contemporarily.
• This is a naturally made geographical identity. Equally, there is a cultural, linguistic, religious and culinary affinity that defines South Asia.
• Therefore, just as rivers, climatic conditions flow naturally from one South Asian country to the other, so do the films, poetry, humour, entertainment and food.
• Since 1985 when the SAARC charter was signed, the organisation has developed common cause in several fields: agriculture, education, health, climate change, science and technology, transport and environment.
• Each area has seen modest but sustainable growth in cooperation.
• SAARC’s biggest failure, however, comes from the political sphere, where mainly due to India-Pakistan tensions, heads of state have met only 18 times in 34 years; it has been five years since the last summit in Kathmandu.

About BIMSTEC

• BIMSTEC, on the other hand, is not moored in the identity of the nations that are members.
• It is essentially a grouping of countries situated around the Bay of Bengal, and began in 1997 (Bhutan and Nepal joined in 2004), a decade after SAARC.
• The organisation did not even have a secretariat until 2014.
• While it has made some progress in technical areas, leaders of BIMSTEC nations have held summits just four times in 22 years.
• With India’s growing frustration over cross-border terrorism emanating from Pakistan, it hopes to build more on BIMSTEC’s potential.
• But the organisation is unlikely to supplant SAARC for a specific reason.

India’s SAARC aversion

• This principled stand by India, however, doesn’t extend to other organisations such as the Shanghai Cooperation Organisation (SCO), into which India and Pakistan were inducted in 2017.
• Unlike SAARC, which has never presumed to resolve bilateral issues of its members, the SCO is a security-based regional organisation that is keen to work on conflict resolution in the region; it even organises military exercises between members.
• It is difficult to reconcile the staunch opposition to attending a SAARC summit where India is at least the largest country, with the acquiescence to the SCO, where Russia and China take the lead.
• Both Moscow and Beijing have made no secret of their desire to facilitate talks between India and Pakistan, and it remains to be seen how successful they will be when Mr. Modi and Pakistan Prime Minister Imran Khan attend the SCO summit in Bishkek (June 13-14).
• The SCO summit is hosted by rotation, and is likely to be in either India or Pakistan next year, which would mean that Mr. Modi would either be required host Mr. Khan, or the other way around, something the government has refused to do at SAARC.

SAARC defunct Motor Vehicles Agreement (MVA)

• However, such agreements have not made progress in other groupings either: the Bangladesh-Bhutan-India-Nepal (BBIN) grouping has failed to implement the MVA due to opposition from Bhutan, and India has held up for years cross-border power-exchanges that would allow Bhutan and Nepal to freely sell electricity to third countries such as Bangladesh.
• India has rightfully held Pakistan responsible for holding up the South Asia Free Trade Area agreement and refusing to reciprocate ‘Most Favoured Nation’ (MFN) status to India.
• After the Pulwama attack this February, India also withdrew MFN status to Pakistan, but New Delhi must admit that in other regional groupings such as the ASEAN-led Regional Comprehensive Economic Partnership (RCEP), it too is accused of stonewalling free trade regimes. In BIMSTEC, one can imagine similar logjams.
• However, over time, India began to see the benefits of leading SAARC, where neighbours became force multipliers for India’s power projections.
• Some such as Bangladesh and Sri Lanka even outstripped India on growth and human development indicators, leading to more opportunities for engagement with them.

Conclusion

• In a region increasingly targeted by Chinese investment and loans, SAARC could be a common platform to demand more sustainable alternatives for development, or to oppose trade tariffs together, or to demand better terms for South Asian labour around the world.
• This potential has not yet been explored, nor will it be till SAARC is allowed to progress naturally and the people of South Asia, who make up a quarter of the world’s population, are enabled to fulfil their destiny together.

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Why interest sops for exports can’t work (The Hindu)

Mains Paper 3 : Economy
Prelims level : Interest Equalisation Scheme
Mains level : Reason behind adopting IES by the government

Context

• The government changed the Interest Equalisation Scheme (IES) which is available to some exporters.
• The broad objective of the IES is to provide exporters with a cheap source of rupee credit both for pre-shipment and post-shipment activities.
• In India, nominal and real rates of interest are relatively on the higher side compared to some of the other countries. This makes cost of capital expensive and it may affect competitiveness of exporters.

Reason behind adopting IES by the government

• The government uses the IES as an export incentive, whereby eligible exporters get interest subvention on their export credit.
• It is expected that cheaper working capital will enable these exporters to become more competitive.
• The original IES, which was launched in 2015, provided incentive to all manufacturer-exporters who were MSMEs and all manufacturer-exporters under 416 specific tariff lines at 4-digit HS code.
• These 416 products were largely labour intensive manufactured goods and chosen with a broader goal to promote export-led job growth in manufacturing.

Past experiments

• The IES-2015 did not become very popular among exporters in India.
• While launching the scheme, the government estimated the financial implication of the scheme to be ₹2,500-2,700 crore per year.
• However, from a Rajya Sabha question dated July 18, 2018, it appears that only ₹4,829 crore was spent in the first three-and-a-half years of its implementation (2015-16 to July 2018).
• This implies only about 55 per cent utilisation of the scheme by the exporters.
• As highlighted in a paper by the RBI, these twin shocks may have disrupted the MSME supply chain and had a negative impact on exports from MSMEs.
• Apart from these, lack of awareness among exporters and banks about this facility may have resulted in low utilisation.
• Also, high interest rate in India could have discouraged the exporters.
• It is possible that, even with an interest subvention of 3 per cent, the rate of interest plus the assortment of processing fees charged by banks for export credit may still have been high, discouraging Indian exporters from borrowing from the domestic banking sector.

Major changes

• To make the scheme more popular, the government introduced some major changes in the IES.
• In November 2018, a change in policy increased interest subvention from 3 per cent to 5 per cent for exporters from the MSME sector.
• However, non-MSME large exporters, who export the 416 eligible products, will continue to receive interest subvention at 3 per cent. Subsequently, in January 2019, another change in policy was introduced.
• This amendment now allows merchant exporters of these 416 products to take advantage of the interest equalisation scheme at 3 per cent.
• It is notable that previously only producer-exporters were eligible for the IES.
• It is argued by the government that MSMEs export a significant amount of products through merchant exporters; they play an important role in finding overseas markets and getting export orders.
• Extending these benefits to the merchant exporters should facilitate higher exports from the MSME sector.

WTO Subsidies and Countervailing Measures agreement

• According to the WTO Subsidies and Countervailing Measures (SCM) agreement, any measure by a national government, which is either a financial contribution or revenue foregone and is contingent upon export performance, is considered an export subsidy.
• Export subsidies are prohibited by the WTO and if a country is found to be providing them, it must remove them at the earliest.
• The IES is contingent upon exports and hence would be treated as prohibited subsidy in the WTO. The WTO has a rapid (three-month) dispute settlement mechanism for complaints regarding prohibited subsidies.
• This problem was not there in 2015 when the IES was introduced.
• Till 2017, India was under a special status for poor countries in the WTO which allowed exemption from the prohibition on export subsidies.
• However, India graduated from that exemption in 2017.
• Therefore, according to the WTO rules, IES will be treated as a prohibited subsidy. In the present global trade scenario where countries are combative and protectionist, it is expected that they will challenge these measures and Indian exporters are unlikely to get away with these.
• Therefore, export contingent incentive measures may not be a prudent policy.

Extend the reach

• A possible solution can be to make interest subvention available to the entire MSME sector.
• The government can make it contingent on non-trade measures like production, value addition and job creation.
• There are two advantages of this.
• First, this way the interest subvention scheme will not be an export-contingent subsidy; hence it will not be treated as a prohibited subsidy in the WTO.
• And, second, this will extend lower cost of capital for the firms in the MSME sector who are producing for the domestic market.
• Given the sluggish global demand and tensions related to potential trade-wars, facilitating the entire MSME sector may make more sense than focussing only on exporters from the MSME sector.
• Non-MSME labour-intensive firms may also be given some incentives for job creation.

Way forward

• The policymakers must redesign the IES to make it more effective under the present global trade regime.
• A more horizontal and cross cutting interest subvention scheme may take care of the relatively high rate of interest prevailing in the Indian economy now and help in employment generation.

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For skilling India (Indian Express)

Mains Paper 3 : Economy
Prelims level : Pradhan Mantri Kaushal Vikas Yojana
Mains level : Improving employment through skilling

Context

• Over the last 10 years, the Indian government has undertaken significant efforts in improving both the scale and quality of skilling, like setting up the National Skills Development Corporation (NSDC) in 2009.
• It launching the Skill India mission in 2015, and the flagship skilling initiative, the Pradhan Mantri Kaushal Vikas Yojana (PMVKY) in 2016.
• This, in turn, is expected to drive economic gains and social mobility for individuals as well as trigger a productivity dividend for enterprises.

Major challenges

• Despite the progress made so far, today, learners face a multitude of challenges on their skilling journey.
• Two ecosystem barriers contribute directly to this: Informational asymmetries and limited quality assurance.
• As far as the first barrier is concerned, there is a fundamental lack of awareness around why skills matter at the individual level.
• There is also a paucity of timely and reliable data on the supply of and demand for jobs, which makes it difficult for those seeking employment to identify what opportunities they should pursue.
• There also exists limited access to impartial and credible sources of information on high-quality service providers and high-potential opportunities, which means that jobseekers and learners end up relying on personal networks or proximate training providers. As a result, they end up training in skills that are not responsive to the local and changing market needs.

Quality skilling

• Regarding quality assurance, currently, there are three primary overseeing bodies that manage the quality assurance process.
• The National Council for Vocational Training (NCVT) manages long-term skilling programmes while the National Skills Development Agency (NSDA) and the NSDC regulate short-term programmes.
• There is also an imbalance at various levels of the process that need correction, for example, incentives for different service providers are misaligned leading to situations where outcome-based disbursement models favour assessment agencies over training providers.

Potential of the skills ecosystem

• To unlock the potential of the skills ecosystem, these frictions must be smoothened through technology-led change, as well as through market-enabling governance.
• Until now, technology has played an enabling role in making existing systems and processes become smoother and more efficient (for example, digitisation of course curriculums).
• Moving to a technology-led transformation will help reach scale, promote inter-operability and create digital public goods for all to use, that is, the internet equivalent for skills.
• Automated and scalable forms of interactions can help improve trust and credibility in the ecosystem and enable better decision-making by learners, service providers and employers.
• Two leading initiatives in this direction are
• (i) creating and adopting digital certificates that allow consent-based sharing of information in a machine-readable format, to ensure better security and authenticity and
• ii) open APIs that can enable stakeholders in the ecosystem to tap into large, centralised sets of information (e.g. public registries of trainers, students etc.) and build market solutions (e.g. ratings for training centres).

Consolidated and market-enabling governance

• Consolidated and market-enabling governance can also help create the right incentives for service providers to cater to the needs of learners and employers effectively.
• A seminal step in this direction has been the creation of an overarching skilling regulator, the National Council for Vocational Education and Training (NCVET) by merging NCVT, NSDA and regulatory functions of NSDC.
• Over the next year, it is expected that NCVET will develop minimalistic and user-friendly guidelines to recognise and regulate two of the most important stakeholders in the skilling ecosystem the awarding bodies, who accredit training institutions, and, the assessment agencies, who assess learner performance.
• In turn, it will be incumbent upon the awarding bodies to monitor and regulate the functioning of affiliated training providers.
• NCVET will be a forward-looking regulator and will support disruptive innovation in the ecosystem like models that reduce the gap in market-based data between learners and service providers.
• NCVET will be a presence-less and paper-less regulator: It will take decisions that are rooted in evidence and real-time data driven, and, adopt a spirit of disclosure and transparency in its interactions.
• Most significantly, NCVET will adopt a learner-centric lens to its decision making.

Conclusion

• To push the skilling agenda forward, it is important for the government to adopt the role of an ecosystem facilitator.
• This can foster informed decision-making by learners and employers, increase employer trust, and, enable upward and horizontal mobility of skilled workers.
• Technology and governance must work closely together to drive this transformative change.

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Telling Numbers: On new gender equality index, India is 95th in 129 countries (Indian Express)

Mains Paper 1 : Society
Prelims level : SDG Gender Index
Mains level : Important indexes indication global gender equality

Context

• A new index to measure global gender equality, launched on Monday, ranks India at 95th among 129 countries.
• The SDG Gender Index comes close on the heels of the gender gap index of the World Economic Forum where India was ranked 108th.

How the ranking works

• The SDG Gender Index has been developed by Equal Measures 2030, a joint effort of regional and global organisations including African Women’s Development and Communication Network, Asian-Pacific Resource and Research Centre for Women, Bill and Melinda Gates Foundation, and International Women’s Health Coalition.
• It accounts for 14 out of 17 SDGs (sustainable development goals) that cover aspects such as poverty, health, education, literacy, political representation and equality at the workplace.
• A score of 100 reflects the achievement of gender equality in relation to the targets set for each indicator. It means, for example, that 100% of girls complete secondary education, or that there is around 50-50 parity for women and men in Parliament.
• A score of 50 signifies that a country is about halfway to meeting a goal.

Global Scenario

• The ranking found that the world is far from achieving gender equality with 1.4 billion girls and women living in countries that get a “very poor” grade.
• The global average score of the 129 countries which represent 95% of the world’s girls and women — is 65.7 out of 100 (“poor” in the index).
• Altogether, 2.8 billion girls and women live in countries that get either a “very poor” (59 and below) or “poor” score (60-69) on gender equality.
• Just 8% of the world’s population of girls and women live in countries that received a “good” gender equality score (80-89) and no country achieved an “excellent” overall score of 90 or above.

Key findings for India

• India’s highest goal scores are on health (79.9), hunger & nutrition (76.2), and energy (71.8). Its lowest goal scores are on partnerships (18.3, in the bottom 10 countries worldwide), industry, infrastructure and innovation (38.1), and climate (43.4).
• On indicators that define such goals, India scored 95.3 on the percentage of female students enrolled in primary education who are overage.
• Some of India’s lowest scores on indicators include the proportion of seats held by women in national parliaments (score 23.6; women made up 11.8% of Parliament in 2018). On seats held by women in the Supreme Court (4%), India has a score of 18.2.

Conclusion

• On gender-based violence, indicators include proportion of women aged 20-24 years who were married or in a union before age 18 (27.3%), women who agreed that a husband/partner is justified in beating his wife/partner under certain circumstances (47.0%), and women aged 15+ who reported that they “feel safe walking alone at night in the city or area where she lives” (69.1%).

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Why interest sops for exports can’t work (The Hindu)

Mains Paper 3 : Economy
Prelims level : Interest Equalisation Scheme
Mains level : Significance of Interest Equalisation Scheme

Context

• The government changed the Interest Equalisation Scheme (IES) which is available to some exporters.
• The broad objective of the IES is to provide exporters with a cheap source of rupee credit both for pre-shipment and post-shipment activities.
• In India, nominal and real rates of interest are relatively on the higher side compared to some of the other countries.
• This makes cost of capital expensive and it may affect competitiveness of exporters.

Interest Equalisation Scheme

• The government uses the IES as an export incentive, whereby eligible exporters get interest subvention on their export credit.
• It is expected that cheaper working capital will enable these exporters to become more competitive.
• The original IES, which was launched in 2015, provided incentive to all manufacturer-exporters who were MSMEs and all manufacturer-exporters under 416 specific tariff lines at 4-digit HS code.
• These 416 products were largely labour intensive manufactured goods and chosen with a broader goal to promote export-led job growth in manufacturing.
• However, the IES-2015 did not become very popular among exporters in India.
• While launching the scheme, the government estimated the financial implication of the scheme to be ₹2,500-2,700 crore per year.
• However, from a Rajya Sabha question dated July 18, 2018, it appears that only ₹4,829 crore was spent in the first three-and-a-half years of its implementation (2015-16 to July 2018).
• This implies only about 55 per cent utilisation of the scheme by the exporters.

Why the IES was underutilized?

• Generally, low export growth and slowdown in global demand may have led to low demand for export credit during this period. Also, the implementation of the IES, to a large extent, coincided with the imposition of demonetisation and GST.
• As highlighted in a paper by the RBI, these twin shocks may have disrupted the MSME supply chain and had a negative impact on exports from MSMEs.
• Apart from these, lack of awareness among exporters and banks about this facility may have resulted in low utilisation.
• Also, high interest rate in India could have discouraged the exporters.
• It is possible that, even with an interest subvention of 3 per cent, the rate of interest plus the assortment of processing fees charged by banks for export credit may still have been high, discouraging Indian exporters from borrowing from the domestic banking sector.

Major changes

• To make the scheme more popular, the government introduced some major changes in the IES.
• In November 2018, a change in policy increased interest subvention from 3 per cent to 5 per cent for exporters from the MSME sector.
• However, non-MSME large exporters, who export the 416 eligible products, will continue to receive interest subvention at 3 per cent. Subsequently, in January 2019, another change in policy was introduced.
• This amendment now allows merchant exporters of these 416 products to take advantage of the interest equalisation scheme at 3 per cent.
• It is notable that previously only producer-exporters were eligible for the IES.
• It is argued by the government that MSMEs export a significant amount of products through merchant exporters; they play an important role in finding overseas markets and getting export orders.
• Extending these benefits to the merchant exporters should facilitate higher exports from the MSME sector.
• This problem was not there in 2015 when the IES was introduced.
• Till 2017, India was under a special status for poor countries in the WTO which allowed exemption from the prohibition on export subsidies.
• However, India graduated from that exemption in 2017.
• Therefore, according to the WTO rules, IES will be treated as a prohibited subsidy.
• In the present global trade scenario where countries are combative and protectionist.
• It is expected that they will challenge these measures and Indian exporters are unlikely to get away with these.
• Therefore, export contingent incentive measures may not be a prudent policy.

Extend the reach

• A possible solution can be to make interest subvention available to the entire MSME sector.
• The government can make it contingent on non-trade measures like production, value addition and job creation.
• There are two advantages of this.
• First, this way the interest subvention scheme will not be an export-contingent subsidy; hence it will not be treated as a prohibited subsidy in the WTO.
• And, second, this will extend lower cost of capital for the firms in the MSME sector who are producing for the domestic market.

Conclusion

• The policymakers must redesign the IES to make it more effective under the present global trade regime.
• A more horizontal and cross cutting interest subvention scheme may take care of the relatively high rate of interest prevailing in the Indian economy now and help in employment generation.

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The changing idea of a university (The Hindu)

Mains Paper 2 : Governance
Prelims level : National Education Policy
Mains level : Significance and importance of the National Education Policy

Context

• The first proposal of this government to be made public was the 100-day action plan for education.
• It includes framing a new National Education Policy, replacing the University Grants Commission (UGC) with another body, and adding 10 more Institutions of Eminence.

The purpose of education

• While the media has extensively covered the attacks on institutions such as Jawaharlal Nehru University and Hyderabad Central University, and the violence unleashed by the Akhil Bharatiya Vidyarthi Parishad.
• The student arm of the Rashtriya Swayamsevak Sangh, in some places, what is more long lasting is the way the BJP has instrumentalised education by binding it to the objective of creating skills and employment and making education useful for the market.
• By doing this, it has hollowed out the whole purpose of education, which is to preserve and disseminate knowledge and generate new knowledge.
• This is the first time in the history of independent India that common people have started looking at universities as spaces where their hard-earned money is being misspent. The business of knowledge creation itself is being perceived as extravagant and unnecessary.
• So, if you look for the word ‘knowledge’ in the policy documents of the government, you are bound to be disappointed.

Developing critical thought

• The very idea of pursuing truth and developing critical thought, which were seen as the role of universities, has gone into disuse.
• Universities were spaces where all kinds of ideas, however dominant, were constantly examined.
• The only aim of education is to be to mainly inculcate nationalism, as prescribed by the government, among students as well as teachers.
• The government even circulated a list of research areas and topics to be kept in mind while preparing and approving research proposals.
• This essentially means that there is no space for free inquiry in the field of higher education any more.
• If we look at the research proposals approved by the Indian Council of Social Science Research, the Indian Council of Historical Research and even scientific bodies, we realise the thinning of this area.
• Even the All India Institute of Medical Sciences recently held a seminar on ‘astrology and the medical sciences’.
• This means that the very idea of science is under severe stress. Also, the stories of the pressure that independent research institutions are facing in the name of appraisal and scrutiny have not come out in the open for obvious reasons.

Withdrawal of state support

• Apart from all this, public universities are being systematically weakened by the steady withdrawal of state support to them.
• This is ironically at a time when the number of first-generation learners in the university space has reached a satisfactory level.
• Universities needed more support to improve access to higher education. Unfortunately, they are now facing a fund crunch.
• This leaves these students at a great disadvantage.
• The government is firming an unequal hierarchy in the field by promoting the idea of Institutions of Eminence and keeping autonomy reserved for a privileged set of institutions.
• Most public universities with a long tradition are kept out of it, thus demoralising their teachers and students.
• Autonomy to such institutions has also been linked to withdrawal of state support.
• Weakening the regulatory framework mechanism
• The regulatory mechanism for the field of higher education had started to weaken during the UPA regime itself.
• Directives from the government became frequent and regulatory agencies were used to route them to universities.
• Directives from bodies like the UGC kept disrupting the functioning of universities.
• From reservation in faculty appointments to norms for doctoral research and framing of undergraduate and postgraduate courses and syllabi.

Way forward

• It has been a story of overreach and encroachment of the university space by the UGC.
• Universities have also failed to assert their autonomy and have allowed the UGC to enter areas it is not supposed to.
• Along with this we have seen a campaign to purge campuses of dangerous ‘anti-national’ elements.
• Meetings and seminars have been held exhorting students to identify such elements.
• Independent scholars are now being shunned by universities and the nationalism check is applied almost everywhere.
• Publishing is part of the academic ecosystem.
• Major publishing houses have started getting manuscripts legally vetted to avoid litigation and attack by ‘nationalist’ elements.
• We can expect publishing to take a right turn under the new regime.

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Crisis defused: on Hindi imposition (The Hindu)

Mains Paper 2 : Governance
Prelims level : Third Language
Mains level : Issue of three language formula

Context

• The Centre has moved quickly to defuse a potentially volatile controversy over the charge of Hindi imposition.

Background

• The reference in the newly unveiled draft National Education Policy to mandatory teaching of Hindi in all States was withdrawn following an outcry from political leaders in Tamil Nadu, a State that is quite sensitive to any hint of ‘Hindi imposition’ by the Centre.
• The modified draft under the heading ‘Flexibility in the choice of languages’, has omitted references to the language that students may choose.

The issue of three language formula

• However, the broader recommendation regarding the implementation of a three-language formula remains, something Tamil Nadu, which will not budge from its two-language formula, is averse to.
• The gist of the original sentence in the draft NEP was that students could change one of the three languages of study in Grade 6, provided that in Hindi-speaking States they continued to study Hindi, English and one other Indian language of their choice, and those in non-Hindi-speaking States would study their regional language, besides Hindi and English.
• The revised draft merely says students may change one or more of their three languages in Grade 6 or 7, “so long as they still demonstrate proficiency in three languages (one language at the literature level) in their modular Board examinations some time during secondary school”.
• It may not amount to a complete reversal , but is still important in terms of conciliatory messaging.

What are the broader Issues?

• Ever since the Constitution adopted Hindi as the official language, with English also as an official language for 15 years initially, there has been considerable tension between those who favour the indefinite usage of English and those who want to phase it out and give Hindi primacy.
• In Tamil Nadu, it is seen as a creeping imposition of Hindi in subtle and not-so-subtle forms.
• The tension has been managed based on the statesmanship behind Jawaharlal Nehru’s assurance in 1959 that English would be an associate language as long as there are States that desire it.
• One would have thought that with the ascent of coalition politics the instinct to stoke differences based on language would die out. Unfortunately, it keeps coming up, especially in the form of imposing the three-language formula on States.

Conclusion

• Language is primarily a utilitarian tool.
• While acquisition of additional tools can indeed be beneficial, compulsory learning should be limited to one’s mother tongue and English as the language that provides access to global knowledge and as a link language within India.
• It is time attempts to force Indians proficient in their mother tongue and English to acquire proficiency in a third are given up.

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Current Affairs for IAS Exams - 04 June 2019

::NATIONAL::

Bombay high court upholds death penalty against repeated offenders of child rape

• The Bombay High Court on Monday upheld the constitutional validity of a section of the Indian Penal Code (IPC) under which life imprisonment or death penalty can be awarded to repeat offenders in rape cases.

• The provision was introduced by the Criminal Law (Amendment) Act, 2013, on February 3, 2013, on the basis of recommendations of the Justice J.S. Verma Committee, which was formed to consider changes in law to deal more sternly with offenders in sexual offence cases following the outrage over the brutal gangrape of a 23-year-old paramedical student in Delhi in 2012.

• In its 117-page judgment, the court held, “There is no vagueness and confusion inasmuch as there exists a procedure which is just, reasonable and fair to deal with the implementation of Section 376E.” The court said it did not find any merit in the challenge to the constitutional validity of Section 376E, and dismissed the petitions.

• With the dismissal of the petitions, another Bench of the High Court will now take up for final hearing appeals filed by the convicts challenging their conviction and death penalty imposed by the sessions court and also a petition filed by the State government for confirmation of their sentence.

Government to consider new bill to ban triple talaq

• Government will again bring a bill in Parliament to ban the practice of instant triple talaq.

• Law and Justice Minister Ravi Shankar Prasad said this while taking charge of his ministry in New Delhi on Monday. He said, the issue of triple talaq is part of the party's manifesto.

• The contentious Bill had lapsed as it could not be passed by Parliament and was pending in the RajyaSabha. Bills that are introduced in the RajyaSabha and are pending there do not lapse with the dissolution of the LokSabha. But Bills passed by the LokSabha and pending in the RajyaSabha lapse.

• The Muslim Women (Protection of Rights on Marriage) Bill makes all declarations of instant triple talaq void and illegal. It seeks to make the practice a punishable offence with imprisonment of three years.

• Talking about the priorities of his Ministry, Mr Prasad said, with synergy of technology and legal procedure, legal access will be made more effective.

::ECONOMY::

RBI to reduce exposure of public sector banks

• The Reserve Bank of India has decided to reduce banks’ exposure to a group of connected parties to 25% of its capital base, while the exposure to a single party has been capped at 20%. However, bank boards can allow an additional 5% exposure in ‘exceptional cases.’

• Till now, a bank’s exposure to a single borrower and a borrower group was restricted to 15% and 40% of capital funds respectively.

• The central bank, which notified a new framework for large exposures of banks, on Monday decided to exclude entities connected with the sovereign from definition of group of connected counterparties.

• The RBI has introduced economic interdependence criteria in definition of connected counterparties in the new guidelines. “The sum of all the exposure values of a bank to a single counterparty must not be higher than 20% of the bank’s available eligible capital base at all times,” the RBI said.

• “In some cases, a bank may have exposures to a group of counterparties with specific relationships or dependencies such that, were one of the counterparties to fail, all of the counterparties would very likely fail. A group of this sort, referred to in this framework as a group of connected counterparties, must be treated as a single counterparty,” it said.

Draft copyright amendment rules published in gazette

• Department for Promotion of Industry and Internal Trade has sought -suggestions from the people on the proposed draft Copyright Amendment Rules, 2019.

• In a statement, Commerce and Industry Ministry said, the draft rules are available on www.egazette.nic.in for seeking comments and suggestions from all people till 29th of this month.

• The Ministry said, Copyright Amendment Rules have been introduced to ensure smooth and flawless compliance of Copyright Act in the light of technological advancement in digital era and to bring them in parity with other relevant legislations.

• The copyright regime is governed by the Copyright Act, 1957 and the Copyright Rules, 2013. It said, the Copyright rules, 2013 were last amended in 2016 through the Copyright Amendment Rules, 2016.

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::INTERNATIONAL::

UNSecurity Councilto discussSudani crisis

• The UN Security Council will meet today to discuss the crisis in Sudan after security forces violently broke up weeks of protests against military rule.

• In this incident, more than 30 people have been dead and hundreds injured. According to reports, Britain and Germany requested the talks yesterday.

• UN Secretary-General Antonio Guterres criticized Sudan's security personnel for using excessive force.

• In a statement, Mr.Guterres said, he is alarmed by reports that security forces have opened fire inside a hospital in Khartoum and called for an independent investigation into deaths from the violence.

• Mr.Guterres urged Sudanese authorities to facilitate an independent investigation of the deaths and ensure that those responsible are held accountable.

• The US said it was a brutal attack while the UK called it outrageous. After the President Omar al-Bashir was overthrown in a coup in April, the country has been governed by a military council.

• Meanwhile, leaders of the pro-democracy movement, said they were stopping all contact with the Transitional Military Council and called a general strike.

India rejects OIC reference to Kashmir issue

• India on Monday categorically rejected yet another unacceptable reference to matters internal to India at the conclusion of the 14th Islamic Summit of the Organisation of Islamic Cooperation (OIC

• Meeting was held at Makkah, Saudi Arabia on 31st May. In response to media queries, on the reference to the Indian State of Jammu Kashmir in the OIC Final Communique, MEA spokesperson Raveesh Kumar said that the OIC has no locus standi in matters relating to the state of Jammu and Kashmir.

• Mr. Kumar said Jammu & Kashmir is an integral part of India and reiterated that OIC should refrain from making such unwarranted references.

::SCIENCE & TECHNOLOGY::

Army rehabilitation centre brings in ‘Udchalo’ initiative

• In a bid to make wounded soldiers, who are now confined to wheelchairs, self-reliant, an initiative ‘UdChalo’ is all set to take off at the Army’s Paraplegic Rehabilitation Centre (PRC) in Punjab’s Mohali.

• ‘UdChalo’ is a travel portal, that caters for the personal travel of the military and paramilitary forces personnel by aggregating defence fares and getting exclusive discounts. The PRC has joined hands with UdChalo with an aim to empower the disabled military veterans.

• Col. Chadda points out that paraplegic and quadraplegic veterans have found a purpose in life through ‘UdChalo’, when they interact with fellow soldiers and resolve their concerns.

• “It is a life re-lived. The initiative is unique and has given a new lease of life of these soldiers who are now confined to wheelchairs,” he said. PRC provides institutionalised care to soldiers, who are wounded in military or insurgency operations and can’t adequately provide for themselves the constant medical care associated with quadriplegia and paraplegia. Currently, PRC has 31 ex-servicemen from across the country.

::SPORTS::

World archery gives warning to Indian association on separate election issue

• World Archery, the governing body for the sport on Monday warned the Archery Association of India of immediate suspension if it goes ahead with two separate elections on June 9.

• The suspension would mean that the Indian team competing in the World Championships would only be able to compete under a World Archery flag and not the national flag.

• The Indian archery team will kick-off its World Championships campaign on Tuesday, aiming to seal the quota places for Tokyo Olympics.

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The water test (Indian Express)

Mains Paper 2 : Governance
Prelims level : Jal Shakti Ministry
Mains level : Requirement of Jal Shakti Ministry

Context

• During an election rally in Tamil Nadu last month, Prime Minister Narendra Modi had promised that if voted back to office, he would “ensure the creation of a Jal Shakti ministry that will deal with supplying clean drinking water to people and providing top-class irrigation facilities to farmers”.
• He moved to meet this promise during the portfolio allocation of ministers, last week.
  Formation of Jal Shakti Ministry
• A new Jal Shakti Ministry has been formed by reorganising the Ministry of Water Resources, River Development and Ganga Rejuvenation and merging it with the Ministry of Drinking Water and Sanitation.
• The idea behind the creation of the new ministry “to approach the issue of water management holistically and ensure better coordination of efforts” is salutary.
• And, the new Jal Shakti Minister, Gajendra Singh Shekhawat, has begun work by announcing that the government intends to provide piped drinking water to every household.
• This is a long-overdue initiative given that, according to a 2018 NITI Aayog report, “600 million Indians face high to extreme water stress and about two lakh people die every year due to inadequate access to safe water”.

Requirement of of Jal Shakti Ministry

• According to a 2017 assessment by the Ministry of Water Resources, India’s estimated per capita availability of water in 2025 will be 1,340 cubic metres.
• This is likely to fall to 1,140 cubic metres in 2050. The NITI Aayog report underlines one of the reasons for this state of affairs. Seventy per cent of the country’s water aquifers are polluted.
• Much of this owes to the Central Groundwater Board’s (CGWB) aggressive projects to tap groundwater.
• These endeavours, that began in the 1970s, did not pay adequate attention to the constraints placed by the country’s geology: Hard rocks constitute more than 60 per cent of the surface area of underground water sources.
• This means that they have poor permeability, which constrains their re-charge by rainfall.
• The Jal Shakti ministry’s endeavour to provide clean water will require a paradigm shift from the CGWB’s groundwater-centred approach.

Conclusion

• Currently, less than 20 per cent of rural households have access to piped water; hand pumps are their main source of potable water.
• Piped water schemes in rural areas have been dogged by problems of infrastructure maintenance: Power fluctuations often damage motors and pipes are prone to leaks.
• Last year, a CAG report pointed out that “poor execution” has marred the National Rural Drinking Water Programme’s attempt to provide piped drinking water to 35 per cent of the country’s rural households.
• The auditor pointed out that, in most states, the panchayats were not provided with the informational know-how to operate the expensive piped water systems.
• The Jal Shakti ministry’s challenge will be to ensure that such mistakes are not repeated. It will have to join several dots.

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Restoring balance in monetary policy (The Hindu)

Mains Paper 3 : Economy
Prelims level : Global financial crisis
Mains level : Implications of Global financial crisis on Indian Economy

Context

• With real interest rates ruling high, there is scope for a 1.5 percentage point rate cut to revive investment and consumption.
• Since 2011 the RBI has been on a path of structural reform.
• But now that inflation is in the target band and growth is slowing, it is possible to think of countercyclical monetary policy.
• Since credit growth is slowing it is possible to think of countercyclical regulatory policy.
• The RBI was a pioneer the latter before the global financial crisis (GFC) but has now fallen behind.

Aim of targeting inflation

• The aim of an inflation targeting regime is to anchor inflation expectations so that monetary policy can be countercyclical as prices then respond less to commodity price shocks.
• Research shows there is some success in anchoring expectations.
• Headline inflation has been below the RBI target for long, and now there is a sharp fall also in core inflation, which was sticky earlier.
• Headline is rising but is likely to stay below the target of 4 per cent, while core falls towards 4 per cent.
• That core inflation was sticky for long should not be attributed to excess demand raising wages since employment growth was slow.
• The latter itself should have reduced core inflation earlier but did not. It is more likely the fall now is due to reduction in inflation expectations, which fell with a lag.

To abolish monetarist-finance view

• The RBI no longer needs to continue with the monetarist-finance view that has dominated since 2014.
• In this view macroeconomic stimulus cannot affect employment, markets left largely to themselves achieve the best outcome, structural reforms’ only aim is to unfetter markets, while subjecting them to market discipline.
• This stance is at odds with the current dominant global thinking after the GFC, and with the flexible inflation targeting framework RBI is itself following.
• The thinking in Europe was that austerity will increase growth; the US went in for stimulus and has done much better. But we are persisting on the austerity path even as we see growth slowing and financial stress rising. It is time to move to more balance.

After the elections

• Private investment growth has stagnated since 2011.
• There was a brief recovery of animal spirits after the last election, but thanks to the highest real interest rates ever seen in India (as inflation fell with oil prices, but nominal interest rates were not adequately lowered), as well as the asset quality review (AQR), bank lending to firms turned negative and squeezed out the revival. Something similar should not happen this time.
• It can be argued that as election uncertainty dissipates private investment will revive and foreign money will pour in.
• But growth has been softening for many months now in a period of rising real interest and tight liquidity.
• There are external shocks also from the global slowdown and trade wars.

Policy response

• Many indicators suggest the fall in consumption growth, and therefore in investment may persist in the absence of a policy response.
• In mid-May the one-year GOI Treasury bill rate was 6.5 per cent. With the inflation forecast at 4 per cent or below, one year ahead real interest rate is above 2.5 — the highest in the world.
• Since the neutral real rate is about 1 per cent there is space to cut policy rates by 1.5 percentage points.

Counter-cyclical stabilisation is the dharma of inflation targeting

• Even if the MPC resorts only to a 0.25 percentage point cut now, waiting for the Budget and the monsoon to play out, there are ways the RBI can improve transmission.
• It can communicate a softening stance and act on liquidity to reduce market rates, reducing rising spreads for borrowers.
• Long and variable lags are used to justify setting policy rates based on inflation forecasts but it is necessary to distinguish between the extent of backward (BL) and forward looking (FL) behaviour.
• If FL dominates, a sharp response to expected inflation reduces the cost of disinflation.
• But with a large share of BL behaviour, instability can occur the response should be small but quick, while communication on future moves guides those who look forward.
• Uncertainty and waiting for new data also justifies such a response.
• To the extent expectations are anchored, response to signs of slowdown has to be faster while transient price shocks are looked through.
• Even if the MPC does not shift to accommodation, other communication can convey softening.
• Allowing real rates to reach 3-4 per cent in 2014-15 was an over-reaction that caused a lot of instability and damage in the economy.

Liquidity factor

• The composition of liquidity also matters.
• Although the RBI is now keeping short-term liquidity in surplus, banks scarred by a long battle with NPAs are just parking it back with the RBI, instead of increasing lending.
• M3 and credit growth rate are low. If the share of durable liquidity is increased it will encourage banks to lend and also reduce market rates.
• It is necessary to take prompt action against the ongoing stress in NBFCs since it is causing escalating spillovers.
• The RBI did not want to open a special liquidity window because of credit risk — the view was that exit of weaker NBFCs would create better incentives.
• The RBI did make it easier for banks to refinance NBFCs, but they are not doing so, since they are also afraid of credit risk arising from systemic effects. Bank lending has improved as that from NBFCs reduced, but not enough. Even the better NBFCs, in the current environment, are hoarding liquidity and lending less.
• Since measures taken so far have turned out to be inadequate, more needs to be done.
• Apart from an overall rise in liquidity, a temporary window for NBFCs that makes liquidity available at high rates and good collateral would not be used much, but may build confidence and increase lending.

Way forward

• In the long term reforms must make regulations uniform so that different financial entities grow complementing each other, rather than arbitraging regulations.
• But an asset-liability mismatch should not be allowed to drive potentially solvent but illiquid institutions into bankruptcy.
• An NBFC AQR now would be procyclical the bank AQR killed lending to industry for many years.
• The government may complement these reforms with a fuller recap of banks, which is possible now with bankruptcy and some governance reforms in place, even as the returning government is likely to renew its commitment to fiscal consolidation, sustaining the space for monetary stimuli.

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Depths of field, defined and blurred (The Hindu)

Mains Paper 2 : Polity
Prelims level : 2019 lok sabha election
Mains level : Political anarchy behind the 2019 lok sabha election

Context

• When the forensics of the 2019 Lok Sabha election are done in the future, strange things may emerge from the examination.
• While some answers might be surprising, the questions themselves might be quite different from those many are asking today.
• Given a chunk of hindsight time and a thicker sandwich of context around this moment, some of our current assumptions and head-scratchings might look extremely droll to people conducting the review.
• On a more serious note, the exhumation of the bones of Election 2019 might well be conducted after far more seismic historic events have occurred:
• A trade war between China and the U.S. that debilitated the world economy for years to come; or an armed conflict between the U.S./Israel and Iran with major knock-on effects that turn India into just another nation-state billiard ball, cannoning out of control.

Impending catastrophes

• Leave aside an economic meltdown or missile-apocalypse, there could also be an understanding that no Indian political party was equipped to handle the ecological-disaster meteor hurtling towards the country, that none of them even saw it coming, and it was Modi 2.0 which was in charge when it struck.
• Today, we are already in the midst of a catastrophic air-pollution crisis and heading swiftly towards a major water-crisis;
• We could well be looking at a food crisis of almost 1943 proportions, where our harvests are adequate but our skewed distribution systems lead to quasi-famine situations.
• If ignored or mis-handled and this regime has a terrific record of doing both this could leave future historians looking at a huge renting of the fabric of the nation, a huge transformation, but not of the sort the Sangh Parivar imagines in its fevered dreams.

What could a granular political archaeology yield in the future?

• 2019 might be seen as the first serious beginning of a north-south division of the country, the moment where the south begins to understand that they want no part of the Hindutva agenda.
• That it is of no advantage for advanced, educated people of different religions who are confident in their own secularism.
• The Hindu majority of whom are confident in their own kinds of Hindu practice, to be sucked down by the horribly feudal, backward notions of nation and society being offered by the zealots in control of the central north.
• These recently executed elections might throw up yet another irony of abusive labelling: posterity might see the Sangh Parivar and its vassal parties and media as the real Tukde-Tukde gang, the ones who turned the Union of India into a brittle biscuit.

The health of the nation

• There would also have to be an examination of the changing character and role of the Indian Deep State at this moment.
• If we define the phrase ‘Deep State’ to mean a covert nexus between industrial corporations and the security services, with their self-defined mission being to keep the country at a working status quo tilted conservatively.
• Then what was this Deep State’s reaction to the second victory of the Narendra Modi-Amit Shah combination?
• To what extent did they participate?
• Was there any concern that the country would be radicalised beyond their control?
• Was there any recognition that the attempted suppression and de-legitimisation of nearly 200 million Indians might have cataclysmic effects that were not in the Deep State’s own long-term interests?

Key questions arising

• Our future historians have as an instrument one of those animated infographic maps of South Asia, with the countries differentiated by patterns indicating different elements that make up the ‘health’ of each nation: clear separation between state and religion, between state and military; operational democracy at all levels of society, democracy that is constant and not just noduled around elections.
• The rule of law and order; effective public health systems; unassailable human rights; freedom of expression and a free media under a diverse ownership; a properly competitive business environment with checks and balances; a cross-institutional understanding of environmental problems and robust programmes to deal with those challenges; and, most importantly, reliable indicators for food security and poverty levels.
• In such a map, will 2019 be the point when the patterns of our favourite failed state, Pakistan, and India begin to merge with increasing speed?
• Will people say that this was the tipping point where the Pakistanisation of India gathered full pace?
• When the moral gangrene infecting the so-called ‘severed limb’ was invited back into the main body?
• As the years slide by on this map, do the colours indicating military conflict and, simultaneously, the shifting of massive refugee populations begin to sweep and bleed into each other?
• Does the Bay of Bengal rise at the same time and start biting into the Sunderbans? Does the desert start to spread across the forehead of the subcontinent?

On a longer graph

• If the terms of reference are somewhat different, could the historians ask very different questions?
• For instance, might they be able to see a continuity of the graph of liberalisation in the 25 or 30 years following 1991 where succeeding governments ignored the immediate needs of the majority of India’s population and paid the price?
• Instead of being the moment of great victory for the Hindutva project, could 2019 be the tipping point where the diverse, slowly simmering protest movements gathered critical mass and within a few years toppled the old order and all the old parties completely?
• Equally, could the period of 1991-2014 be seen as a time of a thinly maintained peace, followed by a period of extreme upheaval for the next 25 years, with 2019 being merely a minor punctuation point, a blip of no great consequence?

Way forward

• In photographic terms, when examining our own time and the current moment, we have no choice but to deal with a very short depth of field, a lot of the past and everything in the future is out of focus, beyond and before the ‘today’ which is most sharply defined.
• Looking back at points of history the depth of field is greater, with a lot more things rendered sharply.
• Perhaps this is a good analogy to remember, both for those bathing themselves in triumphant celebrations today as well as for those who are morose and disheartened and prematurely mourning the death of our precious Republic.

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Make up for lost time (The Hindu)

Mains Paper 3 :Economy
Prelims level : GVA
Mains level : Reasons behind low GDP growth

Context

• Prime Minister Narendra Modi’s election campaign, staying clear of bread-and-butter issues, successfully swayed voter attention away from economic hardships.
• Having won a thumping mandate, his government in its second tenure must now devote itself to a well-thought-out strategy for economic reforms.

The bad news

• The new government’s first day in office, show GDP growth slowed to a five-year low of 6.8% in 2018-19, even as the unemployment rate rose to a 45-year high of 6.1% in 2017-18.
• Agriculture gross value added (GVA) growth is estimated at negative 0.1% and manufacturing GVA growth at 3.1% in the January-March quarter.
• The economy is struggling with an investments and a manufacturing slowdown, rural distress, unremunerative farm incomes, stagnating exports, a banking and financial mess and a jobs crisis.
• Sales figures from fast moving goods makers and continuing production cuts at car manufacturers confirm that consumption spending have slowed.
• The top economic priority for the new Modi government ought to be credible course correction in its attitude to policy its formulation, articulation and the setting of goals.

Major loopholes

• The announced plans for what looked like a blueprint for structural reforms — spanning an overhaul of labour and land policies and a much-needed manufacturing push, ‘Make In India’, for absorbing the slack from the farms had been abandoned by the end of 2015.
• The initial energy and enthusiasm gave way to misadventures such as demonetisation and the poorly designed rollout of the Goods and Services Tax (GST) regime.
• Despite repeated reminders to the Prime Minister’s Office from Finance Ministry bureaucrats, the decrepit public banking system and the problems of the financial sector received little policy attention.
• Even the insolvency and bankruptcy reform, a sound economic reform, that got rolled out rather gradually and tentatively is already in danger of getting diluted.

Sustainable livelihoods

• Public provision of toilets, cooking gas connections and dwellings or Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) wage jobs and income supplement schemes are temporary sources of relief.
• They are not an economic growth model or strategies for reducing poverty. They can help the poor survive by providing meagre resources for subsistence. Reducing poverty needs economic growth
• to generate sustainable livelihoods for the poor.
• This cannot be remedied by redistributive taxation policies alone.
• Deeply entrenched factors hinder the poor’s access to income-enhancing skills, education, health and job opportunities and obstruct the trickle-down of growth to the poor.

What Modi government’s needs to do?

• The Modi government’s ‘Make In India’ strategy was a step in the right direction, and needs to be revived. Done right, it can absorb the slack from the farms.
• Few organised sector jobs get generated in India because industries prefer capital-intensive production despite the economy’s relative abundance of low-wage labour. With many seekers per job opening, labour has low bargaining power relative to employers.
• If production were less capital-intensive, more organised sector jobs would be created. Plus, labour’s bargaining power would improve.
• Successive governments in recent years have only ended up deepening this structural weakness by yielding to the constant clamour by industry lobbies for lower cost of capital. The first Modi government’s record was no different. The economic strategy embedded in ‘Make In India’ got completely side-tracked as its plan for economic revival was reduced to a clamour for fiscal and monetary stimuli.
• Mere pursuit of fiscal and monetary policy adjustments is not going to unlock India’s economic growth potential, which is impossible without banking, land and labour reforms that no government so far has been able to deliver.

Data collection

• No evolution of the policy paradigm will be possible if the crisis of credibility in the collection, estimation and presentation of official statistics is not addressed appropriately.
• In response to the questions raised over unemployment and GDP statistics, including by well-meaning and eminent economists and statisticians.
• The first Modi government did little else than to suppress inconvenient data or allege political motivations.
• A more mature way of engagement with constructive criticism is called for.

Conclusion

• For the role they play in jobs creation, smaller firms ought to be incentivised with easy credit and taxation norms.
• Instead, the messy GST compliance and refunds framework imposed uneconomic compliance costs on them.
• These were explained away by the Bharatiya Janata Party’s national executive in September 2018 as ‘creative destruction’, a supposedly necessary culling of informal firms so that the formal economy can thrive.
• The only way the GST may lead to more formalisation of the economy is by putting bigger companies at competitive advantage over smaller ones, a policy outcome that no government should want.

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Current Affairs for IAS Exams - 02 June 2019

::NATIONAL::

VP urges nation to move towards progressive thinking

• Vice President M Venkaiah Naidu has underlined the need for writers and litterateurs to promote progressive and positive thinking among the people even while holding a mirror to the happenings in society.

• He was speaking at an event organised to mark the death anniversary of noted social reformer KandukuriVeeresalingam at Visakhapatnam in Andhra Pradesh yesterday.

• Vice President said that Veeresalingam was popularly known as Raja Ram Mohan Roy of Andhra and he was a strong advocate of widow remarriage, opposed the dowry and caste system as also child marriage and batted for empowering women through education.

• Vice President said writers, authors, columnists can change the mindset of the people through their progressive writing and can help remove disparities and evils in society.

• Stressing the need for protecting and preserving native languages, Mr Naidu urged intellectuals, educationists and journalists to strive towards promoting progressive thinking and bringing about an attitudinal change among the people to eliminate social evils.

Ex-EC denies possibility of manipulation EVM-VVPAT system

• Former Chief Election Commissioner S Y Quraishi has said that there is no possibility of manipulating the EVM-VVPAT system. He however said that the Election Commission should explain to the opposition and the people by clearing doubts about it.

• In the recent LokSabha elections, the opposition had alleged that Electronic Voting Machines and VVPAT (Voter Verified Paper Trail Machines) were being manipulated. The EC had refuted the allegations.

• Talking to PTI in Bengaluru today, Quraishi said People's trust has to be maintained and won. He said EVMs cannot be tampered because there are many checks and balances. He said, after the introduction of VVPATs any possibility of any tampering should completely disappear.

• On the opposition demand to go back to the ballot paper voting system, Quraishi said, rather than doing away with the EVMs, one should look at improving these machines.

::ECONOMY::

GST collection crosses 1lakh crore for the third time

• Even after slowdown in industrial activity, the Government managed to collect more than ₹1 lakh crore plus in May. This is third consecutive month of ₹1 lakh crore plus mobilization. However, collection in May was lower than all-time high of April.

• The growth in revenue collection has come at a time when industrial production has slowed down. Growth rate in Core sector (comprising of eight industrial sectors, steel, coal, electricity, cement, Refinery production, crude oil, natural gas and fertiliser) dropped to 2.6 per cent in April.

• These eight sectors together comprise of over 40 per cent in Index of Industrial Production (IIP), which reflects performance of overall industry. April figure for IIP to be released on June 12 while it turned negative in March.

• The revenue in May, 2018 was ₹ 94,016 crore and the revenue during May, 2019 is a growth of 6.67 per cent over the revenue in the same month last year. The revenue in May 2019 is 2.21 per cent higher than the monthly average of GST revenue in FY 2018-19 (₹ 98,114 crore).

• An amount of ₹ 18,934 crore has been released to the states as GST compensation for the months of February-March, 2019.

HRD ministry gives clarification on new draft policy

• The Centre has clarified that it has not taken any decision on the three-language system as suggested in the draft New Education Policy (NEP) prepared by a panel headed by eminent scientist K Kasturirangan.

• In a statement issued yesterday, Human Resource Development Ministry said, this is a draft policy submitted by the committee and is placed for the views of the general public. The HRD ministry said, the final decision will be taken after consulting state governments and getting feedback from the public.

• Union HRD Minister Ramesh PokhriyalNishank also clarified that it is just a recommendation and not a government policy. He said Prime Minister NarendraModi has already said that no particular language will be imposed on any region.

• Mr Nishank said it is just a draft and government will be collecting information from various states and then it will have further discussions.

• Information and Broadcasting Minister PrakashJavadekar also said that Modi government has always promoted all Indian languages and there is no intention of imposing any language on anybody.

• The committee led by former ISRO Chief K Kasturirangan submitted the draft education policy to the HRD Minister on Friday.

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::INTERNATIONAL::

Trump urges for no deal Brexit for Britain

• US President Donald Trump has said that Britain should go for a no-deal Brexit with the EU and refuse to pay the agreed 39 billion pounds (45 billion euros, USD 50 billion) divorce bill.

• In an interview with the Sunday Times on the eve of his visit to London, Mr Trump urged Britain's government to follow his rule book in negotiating deals when it came to Brexit.

• The comments came after US President used another newspaper interview to declare that former foreign minister Boris Johnson would make an excellent prime minister to take over from Theresa May.

• Theresa May is to resign on 7th June after failing to get her EU divorce text through parliament.

• Mr Trump is to embark on a three-day state visit to Britain from tomorrow, during which he will meet Queen Elizabeth II and have talks with Ms May.

Tanzania becomes yet another African nation banning plastic bags

• A plastic bag ban comes into force in Tanzania as Africa leads efforts to stem the tide of plastic pollution. Tanzania is banning the importation, production, sale and use of plastic bags.

• It becomes the 34th African country to implement such restrictions, according to the United Nations Environmental Programme (UNEP).

• Tanzania, known for wildlife tourism, has also issued a notice to travellers that they will have to "surrender" plastic bags in their possession before entering the country.

• Globally, 127 countries have some sort of plastic bag legislation. 91 of these include a ban or restriction on manufacturing, importation and retail distribution, according to the UNEP.

::SCIENCE & TECHNOLOGY::

AYUSH ministry launches app to expand coverage of events

• AYUSH Ministry has launched a mobile application to enable people to locate yoga events and centres providing training and instructors.

• The mobile app was launched ahead of International Yoga Day on June 21. According to a senior official of the AYUSH ministry, yoga locator is a map-based location app which will also enable yoga instructors to register themselves and reach out to a large number of people.

• The official said that yoga locator app will help people to locate yoga centres as well as yoga instructors within the preferred radius of their vicinity.

• It will be a permanent app which will give information to people about yoga activities happening in their vicinity throughout the year.

::SPORTS::

India expresses interest in hosting Asian cup football

• India is one of the three countries which have expressed interest to host the Asian Football Confederation, AFC's Asian Cup football tournament for Women to be held in 2022.

• The AFC said, Chinese Taipei and Uzbekistan are the other countries in contention to host Asia's premier women's competition.

• The three countries will now be invited to nominate their proposed venues for the tournament, with the host expected to be announced by the second quarter of 2020. If India gets the right to host the event, it will be their second time after 1980 in Kozhikode.

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Credit ecosystem rejig and policy stimulus needed for infrastructure (Live Mint)

Mains Paper 3 : Economy
Prelims level : Credit ecosystem
Mains level : Infrastructure

Context

• The share of bank credit to infra declined to 11.5% in FY18 after peaking at 15.2% in FY15
• As India’s infrastructure funding gap widens to gargantuan levels, a fiscal push won’t be enough.
• What’s needed is a complete overhaul of the credit ecosystem plumbing so that private money starts flowing in materially.
• National Democratic Alliance government has committed to infusing ₹100 trillion into infrastructure over the next five years.
• But this magnitude of commitment will run into fiscal constraints sooner rather than later.
• And if that weren’t enough, the share of private sector investment in infrastructure has slumped, touching a decadal low of ~25% in fiscal 2018.

Why’s that?

• The share of bank credit to infrastructure has declined steadily to 11.5% in fiscal 2018 after peaking at 15.2% in fiscal 2015. Last fiscal, it showed only a marginal uptick to 12.2%.
• This reflects two things: a continuing stressed assets problem and deceleration in new bankable projects.

What can win back lender confidence and revivify infrastructure investments?

• Revitalize the bond and credit markets: No doubt, bank lending and capital market refinance are ideal to fund an infrastructure project, once stabilized. For this, long-term funds need appropriate investment avenues to match risk appetites. Developing credit enhancement products/other innovative instruments is one way. Pooled finance structure for urban local bodies is a case in point.
• The government could establish a bond guarantee or credit enhancement fund for infrastructure. Such a fund can provide guarantees to credit-enhance bond issuances by infrastructure special purpose vehicles with a minimum BBB (investment grade) credit rating. That would win over capital market investors and pension and insurance funds.
• The use of expected loss (EL) rating scale designed by leading credit rating agencies in India, as opposed to the conventional probability of default (PD) rating scale, must be promoted for infrastructure projects. The EL scale will provide long-term capital market investors such as pension and insurance funds a finer touchstone to invest in operational assets. But for this to happen, regulations must facilitate the use of this scale.

Catalyze patient capital:

• Patient capital from insurance and pension funds is naturally suited to long-term infrastructure projects. However, guidelines governing their investment are not aligned to this need. This needs to be examined closely.
• Asset monetization can help asset owners and/or banks reduce debt burden or churn their asset portfolio and create headroom for further investments.
• The government could put non-core assets of public sector units such as land parcels, real estate, etc., on the block. Toll-operate-transfer projects and infrastructure investment trusts also need to pick up in scale.
• Newer avenues such as loan asset monetization through securitization can also be examined. This will help banks diversify risks, while recycling capital to finance critical infrastructure needs.
  Improve lender confidence in private investments:
• Enhancing project preparation and ensuring the sanctity of executed contracts will be key enablers for banks to warm up to financing infrastructure projects.
• A wider range of public-private partnership models with recalibrated risk-sharing and balanced contracts need to be employed.

Conclusion

• Persistent and collaborative actions on all these fronts can help resolve sectoral issues and create a nurturing credit environment for infrastructure investments to flourish in.

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The return of technocracy (Indian Express)

Mains Paper 2 : Polity
Prelims level : Technocracy
Mains level : Requirement of technocracy in politics

Context

• Prime Minister Narendra Modi has overturned perceptions of being anti-technocracy by inducting former Foreign Secretary S. Jaishankar into his new Cabinet as the Union minister for external affairs.
• This lateral induction of a career diplomat has been widely welcomed.
• For a government that has been trying to get various domain experts into the ranks of the bureaucracy, this signals an emphasis on expertise as a criterion over the usual considerations.

Reasons behind choosing him

• Jaishankar is regarded not only as a foreign policy maven, but also a sharp strategic mind with a clear view of a complex world full of divergent interests.
• As an officer of the Indian Foreign Services, he was among those closely involved in the Indo-U.S. Nuclear Deal of 2008 that New Delhi struck with the U.S. under the Manmohan Singh government.
• Under the Modi government, he reportedly helped find a way out of the 2017 Doklam crisis at our border with China.
• Armed with almost three decades of diplomatic experience, he has been our ambassador to Beijing as well as Washington, and this qualifies him well to help New Delhi pursue India’s interests overseas as a cold war gets underway between China and the U.S.

Conclusion

• The world is currently in geopolitical flux, and we need someone in the foreign ministry who combines political acumen with diplomatic dexterity.
• Modi’s choice of Jaishankar suggests the government is ready to put the country’s best resources at work in a field no country can afford to ignore.
• It also comes as a rebuke to those who feared we’re turning too inward for our own good.

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Agri reforms 2.0 (The Hindu)

Mains Paper 3 : Economy
Prelims level : WTO
Mains level : Agri reforms requirements through e-NAM and other initiatives taken by the government

Context

• The Modi government had made the agri sector its prime focus, rolling out a series of reforms such as e-NAM and the price deficiency payments scheme to deal with farmers’ distress over falling prices.
• The Centre, taking a leaf out of States such as Telangana and Odisha, introduced income support, indicating a paradigmatic shift in the direction of farm support policy.
• With income support being permissible under the WTO, it would now be possible to reduce the scrutiny over ‘producer support subsidies’.

Comparison with previous tenure

• In its next tenure, issues of overproduction may continue to pose challenges to the Centre.
• The farming has become drought-resilient, with food and horticulture output rising since 2015-16, despite a succession of below-normal or deficient monsoons.
• The output of milk, fish and eggs have increased sharply over the last decade.
• However, farmers’ income has not improved in the absence of demand and more so, a supply chain that can ensure viable farm gate prices while reaching the produce in time to the consumer. Hence, agri-marketing reforms need to be foregrounded, going beyond the e-NAM initiative.
• Measures to promote self-sufficiency in crucial crops such as pulses from a nutritional point of view need to be kept up. Pulses are a big plus for soil fertility and for their low water requirements.
• The sharp spurt in horticulture output should be sustained by improvements in marketing channels as well as in crop insurance. It is possible to introduce product differentiation in crop insurance schemes.

Steps need to be taken

• Despite record-high food production, policy mis-management has seen agri imports growing at 9.8 per cent CAGR in the last five years while exports growth has been muted at 1.1 per cent CAGR.
• Institutional reforms such as creation of farmers’ producers organisations can help in breaking credit, logistics and marketing bottlenecks.
• It should also be ensured that all States implement the Model Agricultural Produce and Livestocks Marketing Act, 2017, and encourage investments in agri-processing.
• Doing away with APMC yards, without anything to take their place, is not a good idea as Bihar’s experience has shown.
• Cold storages need more attention than ever before with rising horticulture potential.
• The state of food processing parks needs to be reviewed.
• Subsidies for paddy and cane in rainfed regions, such as free electricity, have led to inappropriate crop choices.
• The Centre must adopt a holistic approach towards water management and agriculture. Haryana’s incentive scheme for shifting away from paddy is worth emulating but there are few signs that the Centre is thinking along these lines.
• The very little can be achieved by just increasing the MSP.

Conclusion

• While the Centre obviously can’t revive food demand or prices globally, it can certainly come up with long-term policies on exports and imports that help producers deal with non-tariff barriers.
• The Centre is on the right track in its farm policies; its policy mix needs to be fine-tuned.

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Fiscal challenges for the new government (The Hindu)

Mains Paper 3 : Economy
Prelims level : Tax collection
Mains level : Major fiscal challenges for new government

Context

• For the new Finance Minister preparing the full Union Budget for 2019-20.
• The challenge of ensuring that poll promises are met without adversely impacting the fiscal math is going to a tough one, given the ongoing problems with tax revenues.
• The Centre had to revise the estimated GST collection for FY19 lower by ₹1 lakh crore as lowering of rates, greater leeway for small businesses and tax evasion, impacted collection.
• But besides indirect tax, the Centre has also struggled to meet its direct tax target for the last fiscal.
• As a result, total tax revenues collected in the first 11 months of the last fiscal year amounted to only 73.7 per cent of the target.

Background

• Despite a sharp cutback in expenditure, lower tax revenues bloated the fiscal deficit to 134 per cent of the estimates up to February 2019.
• Over-estimating revenue collections and brushing aside the ongoing challenges will take the country further away from the path laid down by the FRBM Act.

Boosting direct tax collection system

• The Centre appears to have been too optimistic in revising the direct tax collection for FY19 higher by ₹50,000 crore to ₹12 lakh crore in the interim Budget.
• This might be difficult to achieve given the difficult economic conditions.
• With listed companies in the BSE 500 basket reporting a 7 per cent contraction in profit in the first 9 months of FY19, it is obvious that corporate tax collections will not be too robust.
• Also, growth in direct tax collections has been sharply lower in years when economic growth slowed down.
• The Centre’s efforts to increase the tax base are not having the desired results either.
• While the number of returns filed has increased 80 per cent and the number of tax payers grew 65 per cent between FY14 and FY18, this is not resulting in a dramatic increase in income for the exchequer.

Improve GST collection

• GST collections can be improved with higher scrutiny on information filed, implementation of the new GST returns and stricter enforcement of the e-way bill system.
• Simplification of IT returns, implementation of RERA and limiting cash transactions are also the right way to go, but this is not enough.
• With a large unorganised sector and agricultural income being outside the ambit of tax, it is clear that tax revenue can be improved only if the Centre does some serious thinking on bringing a portion of agricultural income, above a certain threshold, into the tax net.
• Tax reforms must also aim to reduce income inequality in the country, caused by excessive taxation on the salaried class while the non-salaried find it easier to escape the tax net.

Conclusion

• It is clear that the Centre has much more data available now with the linking of most financial transactions to PAN.
• But the revenue department needs more resources to mine this data effectively to identify bigger tax evaders.
• Some tough decisions need to be taken in Modi’s second term to take India’s tax to GDP ratio closer to its peers.

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