SECURE SYNOPSIS: 24 APRIL 2018
- April 28, 2018
- Posted by: InsightsIAS
- Category: SECURE SYNOPSIS
SECURE SYNOPSIS: 24 APRIL 2018
NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same time gives you extra points in the form of background information.
General Studies – 1
Topic: Salient features of Indian Society, Diversity of India. Role of women and women’s organization, population and associated issues, poverty and developmental issues, urbanization, their problems and their remedies. Effects of globalization on Indian society Social empowerment, communalism, regionalism & secularism.
Why this question
India ranks 20th in terms of political participation of women. This is a very poor performance at our level of economic development and even as compared to our south Asian neighbors. The issue has been highlighted by various organizations and was recently highlighted by the economic survey also. It is related to GS-1 syllabus- Salient features of Indian Society, Diversity of India. Role of women and women’s organization, population and associated issues, poverty and developmental issues, urbanization, their problems and their remedies. Effects of globalization on Indian society Social empowerment, communalism, regionalism & secularism.
Key demand of the question
The question wants us to find out and write about the reasons behind low political participation of women in India and why efforts to improve the situation have not been successful and what steps should be taken further.
Analyze- we have to break the given question into key parts/ issues, which need to be answered. Then we have to write about those issues individually, but as per the demand of the question. Then we have to form a balanced and fair personal opinion over the given issue ( as a whole).
Structure of the answer
Introduction- Introduce your answer by defining political participation or you can mention India’s achievements in the field of political participation of females (e.g mention Indira Gandhi, Pratibha Patel etc) and then mention the parameters which indicate poor performance (e.g no. of women MPs and MLAs).
Body- divide the body of the answer into parts;
- Enlist and briefly describe the reasons for low female political participation. E.g financial barriers, social barriers, political barriers, acceptance by society, role models, sexual violence etc.
- briefly discuss in 2-3 lines why there is need for more political participation by Indian females. E.g research shows that women are more effective in delivering of social, educational services; diversity is vital for democracy, women related issues will be better highlighted and resolved etc.
- Enlist and describe briefly, the measures needed to improve the situation. E.g reservation in state legislatures and the Parliament, role of role models, forming women organizations etc.
Conclusion- present a brief conclusion of the above discussion in 1-2 lines.
- India has more female population than that of the United States. Women turnout during India’s 2014 parliamentary general elections was 95.63%, compared to 67.09% turnout for men.
- But India ranks 20th from the bottom in terms of representation of women in Parliament. .The 16th Lok Sabha has only 64 women among its 542 members, a mere 11.8 per cent which is even less than Afghanistan and Pakistan.
Reasons why political participation remains low for women:-
- There has been concern over the role of women as proxies for male family members :-
- Quotas like 33 per cent of seats are reserved for women at local level are neither meritocratic nor useful because women in politics are simply representatives of the men who would have been in politics .
- Training issues:-
- The issue of training has become an increasing concern with preparing women for the role of leadership. It was found in Tamil Nadu that women lack the education and training to understand procedures in panchayats.
- Cultural and social barriers :-
- Familial influence can be a barrier or a support system for female elected officials in terms of connections.
- Domestic responsibilities, prevailing cultural attitudes regarding roles of women in society and lack of support from family were among main reasons that prevented them from entering politics.
- Discrimination continues to be a widespread barrier to women’s political participation:-
- A 2012 study of 3,000 Indian women found the barriers in participation, specifically in running for political office, in the form of illiteracy, work burdens within the household, and discriminatory attitudes towards women as leaders
- Discrimination is further perpetuated by class. Dalit women, of the lowest caste in India, are continually discriminated against in running for public office. Dalit women experience harassment by being denied information, ignored or silenced in meetings, and in some cases petitioned to be removed from their elected position
- Lack of confidence and finance were the other major deterring factors that prevented women from entering politics.
- Significant barrier to women’s capability of participating in politics to be the threat of violence.
- Unlike men, there are fewer opportunities for women to get involved in organizations to gain leadership skills.
- There is little public space for women as men have dominated the political arena for many years in India
- Literacy among Indian women is 53.7%, which is much lower than literacy among men reported at 75.3%. Illiteracy limits the ability of women to understand the political system and issues.
- Problems with exploitation, such as women being left off of voters lists, have been reported as illiteracy limits the ability of women to ensure their political rights are exercised
- Despite the reservation of seats at the local levels, there are no similar quotas in relation to elected seats at the national and state level.
- Another obstacle faced by women is the lack of access to information and communication technologies (ICT) which also been used to attack women
Why political participation of women is necessary:-
- According to Harvard research women have tended to invest significantly more than their male counterparts on the provision of public goods like health, education, and roads.
- Recognising the significance of roles of women in decision making process in the society is critical to strengthen women’s agencies for building a progressive society with equality of opportunities among all citizens
- Women are also likely to bring welfare issues such as violence against women, childcare, and maternal health to consideration
- There is already enough evidence in the world to show the positive impact of women’s leadership. Women have successfully built and run countries and cities, economies and formidable institutions
- Studies have revealed that increased women’s participation has resulted in a bigger economic benefit, increased cooperation across party lines and more sustainable conflict resolution.
Measures needed are:-
- Empowerment of Indian women can occur through bridging gaps in education, renegotiating gender roles, the gender division of labour and addressing biased attitudes
- Introduction of quotas:-
- Women Reservation Bill needs to be passed and is certainly a positive step in the right direction.
- ICT can be used to raise awareness of women’s political activism and to organize campaigns for advocacy
- Conducting training such as developing media skills, designing campaigns and building knowledge of key national and local policy issues along with long term mentoring has assisted in building women’s confidence to take on leadership roles beginning at grassroots levels.
- Providing skill building and leadership training for women civil society members, women’s organizations, and female journalists
- Promote community and sport programs that foster leadership skills for girls and women and promote gender equality.
- Support women’s leadership in the workplace through greater inclusion in executive positions and on corporate boards.
- Support women’s coalitions to work more effectively within and with political parties and representative bodies.
- Encourage political parties to
- Remove all barriers that discriminate against the participation of women
- Develop their capacity to analyse issues from a gender perspective and develop gender-sensitive election manifestos
- Promoting coalition building and networking among women representatives and decision-makers to strengthen women’s influence up and down the decision-making chain.
- Supporting gender sensitive parliaments through induction training for MPs on gender issues, mainstreaming gender impact reviews into parliamentary committee work, gender analysis of proposed laws, the introduction of tools for gender-sensitive budgets, support for cross-party women’s caucuses, and women’s mentoring programmes.
- Incorporate men, especially fathers and sons, in training focused on supporting and promoting girls and women as leaders and decision makers.
Topic: Topic – Population and associated issues
Why this question
Reaping the demographic dividend remains one of the foremost objective of Indian state. The change in population structure will raise several issues particularly those related to employment, social security etc. Hence this issue needs to be discussed in detail.
Key demand of the question
The question expects us to answer the following points
- What kind of an impact falling mortality and fertility rate will have on working age population
- What are the direct and indirect challenges as a result of change in working age population
- Measures to deal with the issue
Discuss – Bring out the several challenges of the changing age profile of working population. Also mention if there are any advantages. Thereafter, provide a way forward
Structure of the answer
Introduction – Highlight the importance of demographic dividend and the need to seize the same
- Highlight the impact of falling fertility and mortality rate on the age profile of working population
- Bring out the change in age profile
- Bring out other important changes having an effect on working age population
- Highlight challenges
- Elder people would increase in the workforce – bring out issues like skill acquisition and upgradation; technical know how etc
- Like increased proportion of female in LFPR due to reduced burden of chidcare
- Highlight advantages (potential or accrued)
- Thereafter provide a way forward on how to deal with this issue before it becomes a problem of epic proportion
Conclusion – Highlight that it present India with a golden opportunity and India should seize the day
- Demographic Dividend refers to the rise in the rate of economic growth due to a rising share of working age people in a population.
- India’s demographic dividend- i.e. its working-age (15-59 years) population, as of now, largely consists of youth (15-34 years), and as a result its economy has the potential to grow more quickly than that of many other countries including neighbouring China.
- According to economists, the working population in India is set to rise considerably over the next decade or more. By 2020, the average Indian will be only 29 years of age, compared with 37 in China.
Impact of reduced fertility and mortality rate on working age population:-
- The decrease in fertility and the associated decrease in the dependency ratio, in turn lead to an increase in the share of the population concentrated in the working ages and hence in the ratio of the working age to the non-working age population.
- Dependency ratio:-
- The proportion of workers rises sharply, even as the proportion of dependants falls. In many countries, the ratio of workers to dependents goes up, giving a huge boost to per capita income.
- India will see a significant rise in working age adults India’s dependency ratio that is the number of dependents to working people is low at 0.6, compared with the developed countries. That ratio is going to decline further with fertility rates continuing to fall.
- For the next few decades India will have a youthful, dynamic and productive workforce than the rest of the world.
- Declining fertility and age structure:-
- Declining fertility rates have changed the age structure of India’s population, resulting in a bulge in the working age-group. This “demographic dividend” has improved the dependency ratio leading to the hypothesis that the bulge in working population will lead to acceleration in growth.
- A demographic trend where the proportion of persons aged 15-24 in the population increases significantly compared to other age groups which paired with limited employment opportunities may contribute to increased poverty, hunger, malnutrition, poorer health, lower educational outcomes, child labour, unsupervised and abandoned children, and rising rates of domestic violence.
- Having a greater proportion of people in the working age group can mean faster per capita economic growth, but only if their full potential is realized. State of employment in the country shows that India is still far from deriving any real advantage from its demographic dividend.
- This is perhaps due to the poor employability of the workforce, which is severely affected by a deficit in educational attainment and health
- Some dilemmas:-
- There are already difficulties in determining if women engaged in housework, particularly in rural India, are doing so under duress, being unable to find a job.
- Another dilemma lies in deciding if youth, nominally enrolled in educational institutions but still looking for a job, are part of the labour force.
- Problems also arise in deciding if workers who work in casual jobs for short durations are to be considered among the working or the unemployed.
- Lack of skill:-
- The growth in the working-age ratio is likely to be concentrated in some of India’s poorest states and that the demographic dividend will be fully realized only if India is able to create gainful employment opportunities for this working-age population.
- Since most of the new jobs that will be created in the future will be highly skilled and lack of skill in Indian workforce is another serious challenge.
- Low human capital base due to
- Education constraints:-
- There are serious problems with Indian higher education. These include a shortage of high quality faculty, poor incentive structures, lack of good regulation
- India is home to the world’s largest concentration of illiterate people in the world
- At the primary level, there are also serious problems with health and nutrition that impact the effectiveness of education and the capacity for learning.
- In future large proportion of older working aged people who face longer periods of retirement, accumulate assets to support themselves.
- Education constraints:-
- Higher savings:-
- The younger population will have both more savings and higher spending due to the raising higher disposable income.
- Higher savings along with better and more investment opportunities nowadays leads to higher household savings which increases the overall capital formation in the economy. This provides for future industrial investments and propels the economy into higher growth path in the long run.
- Higher income increases the effective demand in the market there by increasing the overall consumption and the market growth of business in the current period of time
- Outsourcing of jobs:-
- With the declining working age population in the other countries particularly developed countries, more jobs emanating from the developed countries will be outsourced and India can gain from it due to demographic dividend.
- An increase in the share of a country’s working-age (15–64 years) can generate faster economic growth. The working-age population is generally more productive and saves more increasing domestic resources for
- Increased fiscal space created by the demographic dividend to divert resources from spending on children to investing in physical and human infrastructure
- Rise in women’s workforce that naturally accompanies a decline in fertility, and which can be a new source of growth
- Additional boost to savings that occurs as the incentive to save for longer periods of retirement increases with greater longevity
- Massive shift towards a middle-class society that is already in the making
Way forward :-
- Health and education parameters need to be improved substantially to make the Indian workforce efficient and skilled.
- Enhance, support and coordinate private sector initiatives for skill development through appropriate Public-Private Partnership (PPP) models; strive for significant operational and financial involvement from the private sector
- Focus on underprivileged sections of society and backward regions of the country thereby enabling a move out of poverty; similarly, focus significantly on the unorganized or informal sector workforce.
- Measures should have pan Indian presence and not just concentrated in metropolitan cities as most of the workforce is likely to come from the rural hinterland.
- Investing in people through healthcare, quality education, jobs and skills helps build human capital,which is key to supporting economic growth, ending extreme poverty, and creating more inclusive societies
- New technology could be exploited to accelerate the pace of building human capital, including massive open online courses and virtual classrooms
- Policymakers should have a greater incentive to redouble their efforts to promote human capital so that it can contribute to economic growth and job creation
General Studies – 2
Topic – Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.
Why this question
Recently a lot of cases of sexual crimes against children have come to the forefront. The decision of the government to bring out an ordinance to award death penalty for rape of children below 12 years has ignited a debate over the effectiveness of the step. In this backdrop, critical analysis of POCSO Act and its implementation becomes important.
Key demand of the question
The question demands us to examine POCSO Act and its implementation, highlight the shortcomings in both, the positives (if any) in both, and provide a balanced opinion on the reason why such crimes persist. Post that, it is also important to mention a way forward to overcome the lacunae highlighted in the answer.
Critically examine – The focus here should be on going in detail – highlighting the positives and the shortcomings – of the act and its implementation to understand why such crimes persist. Based on the arguments provided, we need to provide our stand on the issue being discussed.
Structure of the answer
Introduction – Bring out the necessity of debating this issue in context of frequent sexual crimes against children. Also highlight that an ordinance has been passed which has ignited public debate.
- Mention details of law – POCSO Act being talked about in the question
- Do a critical examination of POCSO Act highlighting its good points and the bad
- Discuss about the issues in implementation
- Provide your stand on whether the law needs to be reframed or implementation of law needs to be improved. You can also highlight the things that need to change in both for the situation to improve
Conclusion – Mention a way forward and the need for urgently tackling this crime.
- Sexual abuse is traumatising for anyone who goes through it, but for a child, the scars can run much deeper as they are inflicted at a younger age, in the formative years.
- India ranks among the top five countries with the highest rate of child sexual abuse. A 2013 report ‘India’s Hell Holes: Child Sexual Assault in Juvenile Justice Homes’ by the Asian Centre for Human Rights explained the epidemic proportions of this problem, with over 48,000 child rape cases recorded between 2001 to 2011. There was a 336% increase in child rape cases during this time period.
Why rape crime is still rampant?
- According to NCRB data for 2015, in 94.8% cases of rape registered under POCSO, the perpetrator was known to the victim. Even so, cases where people related to the children are involved, a completely different kind of handholding and support is required.
- The reluctance on the part of the victim not to confide to anyone is a major reason for the perpetrator roaming free to do it again with another child.
- Children who bravely complain of sexual abuse are often dismissed or ignored by the police, medical staff and other authorities
- The root of the problem lies in an unsupportive societal attitude towards rape victims, a deficient police and judicial system that result in lower conviction rate (26 per cent of all registered cases as per National Crime Records Bureau).
- The stigma associated with sex education leads to parents not educating children about sexual advances or threats, which could protect them from abuse.
- Technology misuse:-
- Children are at a higher risk due to misuse of technology, and the lack of proper mechanisms to control travelling child sex offenders
- Technology led to increase the network of offenders simply because it is easier to access and exchange child sexual abuse material (CSAM) online
POSCO act :-
- The POCSO Act was enacted in 2012 to protect children from sexual assault, harassment and pornography.
- The Act also mandated setting up of special courts, where such cases can be tried expeditiously.
- Every stage of the judicial process was intended to be child friendly something that hasn’t exactly happened.
- Recently death penalty for child sexual abuse under 12 years is cleared by cabinet
- Ensures protection of the child:-
- Law says expressly that courts must have a child-friendly atmosphere and the victim is not to be exposed to the accused at any time, including during the recording of evidence, though the accused can hear the child’s statement.
- Courts are using video-conferencing facilities, single-visibility mirrors or curtains while the victim is deposing.
- POCSO provides for relief and rehabilitation as soon as the complaint is made to the Special Juvenile Police Unit or the local police, who are required to make immediate arrangements for care and protection. The intent to commit an offence, as defined under POCSO, is also punishable, besides abetment of sexual abuse against a child.
- Special emphasis has been placed on ensuring the speedy disposal of trials in special children’s courts as well as following of special procedures to keep the accused away from the child at the time of testifying.
- It included almost all types of physical abuse.
Issues involved in implementation:-
- For monitoring and implementation of the provisions of POCSO, the Act enjoins that the National Commission and State Commissions for Protection of Child Rights. Such Commissions are either only partially-functional or effectively non-functional.
- Appointing support persons:-
- There is a provision of appointing support persons to help the victims. This appointment has to be done by the Child Welfare Committee. This is not implemented effectively.
- Lack of communication:-
- Communication at every stage with the victim is crucial, and this is given least importance. Infrastructure and a child-friendly environment will be of no use if there is lack of sensitivity in communication.
- Recording child’s statement:-
- The law also says the child’s statement should be recorded at a place where he/she usually resides or at the place of his/her choice, and as far as practicable by a woman police officer not below the rank of sub-inspector. This provision is often not followed
- Victim turns hostile
- It is a problem in most cases. Most victims while recording their statement under CrPC Section 164, give one version but during their testimony before court, they change their statement.
- A report by the National Law School Bangalore, which analysed 667 judgments between 2013 and 2015, shed light on this phenomenon. It stated that alleged victims turned hostile in 67.5% cases, and testified against the accused in only 26.7% cases.
- Once a POCSO case is filed, the long winded proceedings give the accused ample time to try and pressure the victims or their families to backtrack on their complaints.
- The situation is even more complicated when the accused is a family member .In such cases, the conviction rate drops even further.
- Majority of these victims are from the lower economic strata, so they are more vulnerable to pressure.
- Low conviction rate:-
- While the number of cases reported under Protection of Children from Sexual Offenses (POCSO) Act has increased since the law came into effect in 2012, the conviction rate remains abysmally low.
- Other intersectionalities of caste and class, socio-economic conditions, physical and/or mental disability which make some child sexual abuse victims more vulnerable
- Death penalty alone does not do justice as :-
- Death penalty has never been a deterrent against any sort of crime. There is little empirical evidence to show that those about to commit a capital offence would stop themselves merely out of the fear of being hanged.
- Even S. Verma committee decided against recommending the death penalty for rape
- Lack of infrastructure:-
- Under the Act, courts hearing POCSO cases are supposed to have certain infrastructure. But there are several instances where the available amenities were inadequate
Measures needed are :-
- Victims turning hostile :-
- The need to be separated from the family in cases where the alleged perpetrator is a family member.
- There needs to be clear coordination between victims and prosecutors.
- The process can be shortened so that prosecutors do not get enough time to take the victim on their side.
- More facilities and resources are needed for the prosecution department and also there ought to be special courts to exclusively look after POCSO cases, many courts hear other cases as well.
- Police investigation needs to be efficient.
- Delay in getting forensic reports must be avoided as these reports become even more important when cases involve mentally disabled children. The pendency rate has reduced to 50 per cent.
- Moreover, the latest method for DNA testing must be used in deciding cases.
- There is huge pendency of the cases in the POCSO court and it is nearly impossible for the judge to dispose them quickly .For this, the rationalisation of work should be considered by the High Court, which should set a benchmark that judges deal with only this number of cases.
- There should be a committee to look for the most vulnerable places from where most cases are coming.
- Accordingly, there should be awareness, education, and policing.
- Experts recommended that the state should institute specialists and interpreters who can help communicate with these children and do the required handholding.
- Software professionals can develop apps for tracking the traffickers and child sexual abuse offenders. Business houses should prioritise protection of children as part of the corporate social responsibility.
TOPIC: India and its neighborhood- relations
4)Discuss the role India can play in the commonwealth of nations and also, discuss why an egalitarian and an inclusive migration policy is vital for increasing the relevance of the organization.(250 words)
Why this question
Recently India participated, after a decade, with huge enthusiasm at home and abroad, attended the CHOGM summit wherein various issues were discussed. India has responded positively to the UK’s attempt to revitalize it, post Brexit scenario. However, commonwealth of nations, as an organization, has been an under-achiever with little relevance vis a vis other forums. And one of the most important issues undermining the efforts to improve the relevance of the organization is the issue of migration. The question is related to GS 2 syllabus- India and its neighborhood- relations. Bilateral, regional and global groupings and agreement involving India and/or affecting India’s interests Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.
Key demand of the question
The question wants us to bring forward the role that India can play while being one of the largest economies of the commonwealth. We also have to discuss why migration remains the issue of contention among the members and how it hampers the effectiveness of the the commonwealth of nations.
Discuss- we have to dig deep into the issue and write in detail about;
- What role can be played by India by being a member of Commonwealth- we have to write about what India’s interests will be served by better working of the commonwealth.
- How the current migration policy is not inclusive and egalitarian and how this affects the relevance and importance of commonwealth.
Structure of the answer
Introduction- write a few lines about the composition, history, working mechanism (consensus) of the commonwealth.
Body- divide the body into 2 parts.
In one part, discuss what role can be played by India by being a member of Commonwealth. e.g countering silk road and maritime belt, improving trade within members, gathering more clout and power to negotiate in other forums, technology transfer, labour migration etc.
In the other part discuss, how the current migration policy is not inclusive and egalitarian (e.g UK’s stance on immigrants and refugees) and how this affects the relevance and importance of commonwealth.
Conclusion- draw a concise, succinct conclusion based on the above discussion and briefly suggest the way forward.
- Commonwealth of Nations is known as the former British Commonwealth. It consists of 53 member countries. The members have a combined population of 2.3 billion people. Hence the potential is huge.
Role.india can play in the commonwealth of nations:-
- India is already the largest member country with 26% of the Commonwealth’s internal trade, to become more active, with a long-term possibility of playing a leading role.
- Without interference from China:-
- India can operate without interference from China .It would help India strengthen its presence in areas where China is increasingly active, for example in Africa where India is building a development role, and in the Indian Ocean and elsewhere such as the Pacific and Caribbean where it could strengthen its relationship with the Commonwealth small island states.
- It can also gain clout against one belt one road initiative of China and other important issues .
- Vulnerable states:-
- Commonwealth had the added attraction that it looked after and advocated the interests of small states, including small islands. This is a category of country in the international system that is of particular interest to India.
- India is the top recipient of foreign direct investment (FDI) from within the Commonwealth group of countries, and the second biggest source of investment after the UK.
- Especially after BREXIT UK needs more investment and India can provide that.
- Especially in the light of raising cyber crimes and data being threatened India can gain technology transfer to deal with such issues and also Make in India.
- India’s growing IT human capital can play a huge role in private sector of UK.
However many have already criticised the relevance of this organisation:-
- The total budget was less than £50 million in 2012. With such small budgets, there is very little the organisation can do for its 53 members with diverse needs.
- Former secretary generals have all spoken of their disappointments about the incompetence of the commonwealth Secretariat.
Problems with current policy :-
- Lack of official recognition of the immigration issue and in particular over UK treatment of the so-called Windrush generation (These are men and women who, often as children, had come to Britain between the late 1940s and early 1970s with their families, as part of post-war efforts to address intense labour shortages)
- They are being treated as undocumented migrants. In some cases they have been denied life-saving National Health Service treatment and even deported.
- Labour mobility, a demand of businesses globally and certainly of India’s IT sector, was nowhere to be seen. Post-Brexit London is likely to welcome trade in goods from the Commonwealth, not services.
- Immigration anomaly has left many people being denied health services, prevented from working, and facing destitution, detention and possible deportation despite having lived in the country for decades. Thousands are encountering serious immigration problems because they have no documents.
- Currently people are advised to provide several documents as evidence for every year they have lived in the UK, which can be very hard to gather
Why an egalitarian and an inclusive migration policy is necessary for increasing the relevance of the organisation:-
- Sending a message of openness would indicate a real willingness to revisit and revitalise the organisation.
- Rising inequity can defeat the mutual goal of sustainable development
- Non-inclusive migration policy can dampen the economic growth and suffocate merit due to lack of opportunity.
- Will lead to shared prosperity and equitable development
- UK inclusive stand can lead to positive impact on change in the stance of protectionist tendencies and immigration .
- The Commonwealth remains a great platform for development aid, democratic values and educational opportunities, but its relevance is unlikely to increase unless it adopts a more egalitarian and inclusive attitude to its next generation of Commonwealth citizens.
General Studies – 3
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Inclusive growth and issues arising from it.
Why this question
Time and again India expresses its displeasure at the refusal of rating agencies to improve India’s score. Also India and other developing countries have raised question mark over the neutrality of the rating of such agencies. Last year’s Economic Survey also highlighted this point. Thus the topic becomes important
Key demand of the question
The question demands us to answer the following
- How rating agencies work and how they impact a country’s macroeconomy
- The advantages (or not) of India using BRICS platform to create a rating agency
Analyze – Here it’s a broader directive than examine. Analyze the idea of BRICS rating agency from several dimension such as economic, geopolitical etc. Thereafter summarize the arguments you made
Structure of the answer
Introduction – Highlight that India has consistently made a demand.
- Describe the working of rating agencies and how they impact the macroeconomy of a country
- Analyze the need for India to set up a BRICS credit rating agency
- Raise capital at lesser rates
- More investment etc
- However debt will increase
- Challenge the domination of west on international financial institutions
- Whether India and china can work together
Conclusion – summarize your arguments and mention what precaution should India take before setting up such an agency.
- Credit rating agencies have played a crucial role in international debt markets for more than 150 years. There are more than 70 agencies around the world. But three dominate, controlling 91% of the global market. They are Standard & Poor’s, Fitch and Moody’s. But they have often attracted controversy.
Impact of rating agencies on economy :-
- The ratings act as a kind of moral suasion that compels developing countries to pursue more prudent and sensible monetary and fiscal policies. Sovereign ratings serve as an incentive for sound monetary and fiscal policies because performance on these policies forms an integral part of the rating methodologies.
- A favourable rating enables governments and companies to raise capital in the international financial market.
- Institutional investors in both the developed and developing world rely heavily on rating agencies in making investment decisions.
- This is because credit ratings are essentially opinions about credit risk. Ratings provide insight into the credit quality of an individual debt issue and the relative likelihood that the issuer may default.
- Credit rating agencies provide an opinion about the credit quality of borrowers such as governments, corporates, financial institutions, and their related debt instruments such as bonds. The opinions by the rating agencies tend to have an important effect on the cost of financing for governments and companies.
- Downgrades from investment grade to non-investment grade can elicit unfavourable, and costly, market reactions.
- For example, South Africa is just a notch above investment grade rating by both Standard & Poor’s and Fitch. Any further downgrade would cause a significant escalation in the cost of raising finances. That’s why countries pay a lot of attention to their credit ratings.
- Such rating agencies can have a global impact, affecting the fiscal fortunes of nations, due to flight of capital, as witnessed during the East Asian crisis of the 1990s. Recent downgrades of U.S. and European sovereign debt have been criticised, with the relegation of Greece, Portugal and Ireland to “junk” status, leading to a sovereign-debt crisis, along with ensuing unemployment and eurozone instability.
Yes, there is a need for moving away from western global rating agencies because:-
- The credibility of credit rating agencies took a knock during the financial crisis. They were criticised for failing to do a diligent job in evaluating the credit worthiness of bonds in the lead up to the crisis. Some had punitive fines imposed on themby US financial regulators.
- Such credit rating agencies have been criticised for failing to predict the 1997 Asian financial crisis and then downgrading such countries several notches during the event
- India’s stand:-
- India has lashed out at global rating agencies saying they are far detached from ground realities .
- In past too, India has questioned the methodology used by global rating agencies saying the nation compares favourably with other emerging countries on metrics such as default risk .The control of intelligence and information is so biased in many ways.
- Concerns over methodologies of the three global agencies (S&P, Fitch, Moody’s) saying that these constrain growth in emerging nations. Ratings of multilateral banks like the BRICS-promoted NDB were affected by the parent countries’ ratings, despite having deep capital buffers.
- Critics claim that the frequent downgrades of developing countries are unjust and serve Western political interests.
- Critics have also attacked the rating agencies’ “issuer-pay model”. Under this system, credit rating agencies are paid by the institutions being rated (debt issuers) and not by the investors who use the information, creating a conflict of interest. Critics also argue that this entrenches geopolitical biases.
- India can use the proposed BRICS credit ratings agency :-
- BRICS agreed to set up an independent rating agency based on market-oriented principles, saying it would further strengthen the global governance architecture.
- New agency would compensate for the perceived bias in the global financial architecture. It would also create competition and offer investors, issuers and other stakeholders a wider choice and a more diverse view on credit worthiness
- Whether the new rating agency satisfies a financial need or is politically motivated, and if it will be competent to provide an independent, objective and credible credit service.
- China has already expressed concerns about the credibility of a new agency.
- Analysts have also strongly criticised the probable adoption of the existing issuer-pay model which would mean the current model is simply replicated.
- Considering that the three major rating agencies control more than 90% of the world’s ratings business, establishing a new one wouldn’t be easy and could take years, or even decades.
- There have been previous attempts to launch new ratings agencies. All failed to take off.
- Adopting a new model might not fly given that the main users of the credit rating information are global pension and mutual funds, which currently use at least one of the big three rating agencies. They are, therefore, unlikely to trust any ratings from the new BRICS agency with a yet-to-be-tested rating model.
- Investors will be sceptical about the new BRICS rating agency’s ability to compensate for losses in the event that it issues false ratings, as the big three did in the US.
- The biggest task for a new BRICS credit rating agency is to convince investors, particularly those from the US and Europe, that the ratings assigned are politically impartial. One way of doing this would be to adopt the “investor-pays model” where investors subscribe to ratings released by the agencies, and the subscription revenues become its source of income. This would ensure transparency and credibility while avoiding conflicts of interests.
General Studies – 4
Topic : Information sharing and transparency in government, Right to Information, Codes of Ethics, Codes of Conduct, Citizen’s Charters, Work culture, Quality of service delivery, Utilization of public funds, challenges of corruption. Case Studies on above issues.
Why this question
Code of conduct remains an important tool for enforcing ethical behavior on part of the members/ employees of an organization/ government. However, the same has not been successful in meeting its purpose and violations of ethical behavior are common despite the code of conduct rules. The issue is related to GS-4 syllabus- Information sharing and transparency in government, Right to Information, Codes of Ethics, Codes of Conduct, Citizen’s Charters, Work culture, Quality of service delivery, Utilization of public funds, challenges of corruption. Case Studies on above issues.
Key demand of the question
The question wants to know our viewpoint on the the statement,” whether the code of conduct rules restrict the ethics to mere legalism” and if yes then to what extent; and what purposes the code of conduct serves.
Comment- we have to form a personal opinion on the issue and also discuss, what is the importance of code of conduct rules in enforcing ethical behavior.
Structure of the answer
Introduction- define code of conduct rules and briefly discuss their prevalence and also mention All India service, Central civil service conduct rules.
Body- divide the body of the answer into two main parts;
- In one part, discuss the meaning of the phrase and then whether code of conduct rules reduce the ethics to mere legalism and how. (E.g low compliance, abuse of the provisions, low knowledge among employees and not much sincere efforts to provide the same on part of the organization/ government, conflict with personal values and global values, lax enforcement).
- In the other part, discuss the importance of the code of conduct rules. e.g they act as guiding light for the organization’s vision and employee/ members’ behavior, provide a framework for passing judgements/ rewards/ punishments, helps address various workplace issues like gender relations, employee-management relationships, conflict of interest issues, financial practices, etc
Conclusion- draw out a balanced conclusion out of the above discussion and briefly suggest in 1-2 lines, how to increase compliance of code of conduct rules (e.g awareness and education, top down approach of instilling compliance etc.).
Codes of conduct represents the set of enforceable rules that should be followed by a person in an organisation. Codes, along with other measures, have helped some companies dig themselves out of scandals, and have helped many companies build a healthier work climate and reputation.
Code of conduct is not enforced effectively as it is considered as mere formality. Unless enforced proper punishment cannot be meted out. Also morals are internal so just by enforcing a law people do not change their work ethics . The arrest of an Indian Police Service (IPS) officer on probation, for cheating during the civil services examination shows that imposition of code of conduct
Code of conduct consists of provisions general to all employees so some acts which are not mentioned might be considered ethical despite their unethical nature.It becomes a legal impediment in governance due to its rigidity which can affect the public servant leading to policy paralysis.
A well-written code of conduct clarifies an organization’s mission, values and principles, linking them with standards of professional conduct. The code articulates the values the organization wishes to foster in leaders and employees and, in doing so, defines desired behavior. As a result, written codes of conduct or ethics can become benchmarks against which individual and organizational performance can be measured.
Additionally, a code is a central guide and reference for employees to support day-to-day decision making. A code encourages discussions of ethics and compliance, empowering employees to handle ethical dilemmas they encounter in everyday
A code serves as a public statement of what the company stands for and its commitment to high standards and right conduct.Code of Conduct outlines specific behaviours that are required or prohibited as a condition of ongoing employment. It might forbid sexual harassment, racial intimidation or viewing inappropriate or unauthorized content on company computers.
Strict code of conduct in financial sector would ensure ethics in the employees and would have avoided and punished instances like recent Nirav Modi scam where ethics of the bank employees was under question.
Preventing corruption and improving the public service management are the main goals of the promotion of ethical standards for the civil servants. Therefore there is need to imbibe ethical nature in children from school level itself .Along with that there is a need for top down compliance in the organisations for effective enforcement of code of conduct.