SECURE SYNOPSIS: 26 JULY 2018
SECURE SYNOPSIS: 26 JULY 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– urbanization, their problems and their remedies.
1) Disorganised urbanization in one of the biggest reasons for problems associated with urbanization. Examine the issue and discuss the steps taken by government to address the challenges arising out of urbanization?(250 words)
Why this question
There are several challenges arising out of urbanization with basic necessities like water etc coming at a premium. The problems associated with urbanization and associated solutions are very important discussions to be mulled over from mains point of view.
Key demand of the question
The question expects us to examine whether one of the main reasons why challenges due to urbanization are arising, is due to the disorganised nature of urbanization. We need to discuss the challenges as well and examine the steps taken by government in this regard.
Examine – When you are asked to examine, you have to probe deeper into the topic, get into details, and find out the causes or implications if any .
Structure of the answer
Introduction – Explain the status of urbanization in India
- Discuss some of the key challenges arising out of urbanization – water shortage, environmental pollution, lack of infrastructure etc
- Examine the causes behind it, with special emphasis on whether they arise out of disorganised nature of urbanization in India. Explain how towns and cities are classified, the governance structure etc
- Discuss some of the steps taken by government in this regard and the pros and cons of such steps
Conclusion – explain that urbanization is a big challenge for Indian state with linkages to economy, society etc and needs to be addressed. give a way forward.
- Over 34% of India’s current population lives in urban areas, rising by 3% since 2011. By some estimates, India’s urban population could increase to 814 million by 2050.
Disorganised urbanization :-
- Cities look and feel downtrodden, riven with poverty and poor infrastructure, with little semblance of urban planning.
- With an increase in urban population will come rising demands for basic services such as clean water, public transportation, sewage treatment and housing.
- Groundwater exploitation:-
- Ground water exploitation for commercial and domestic use in most cities is leading to reduction in ground water level.
- Distribution and water loss issues:
- Distribution challenges, such as water loss due to theft, pilferage, leaky pipes and faulty meter readings, result in unequal and unregulated distribution of water.
- About 40% to 50% of water is reportedly lost in distribution system
- Water supply issues in urban areas :-
- Only 62 per cent of urban households have access to treated tap water and only a little over 50 per cent are directly connected to a piped network.
- The average connected household receives water for approximately two hours per day.
- Drainage issues:-
- According to the National Sample Survey, only 47% of urban households have individual water connections
- As per the 2011 census, only 32.7% of urban Indian households are connected to a piped sewerage system.
Steps taken by government to address the challenges arising out of urbanization :-
- Jawaharlal Nehru National Urban Renewal Mission (JnNURM), launched in 2005, was one of the first urban development schemes implemented by the central government. Under JnNURM, the central government specified certain mandatory and optional reforms for cities, and provided assistance to the state governments and cities that were linked to the implementation of these reforms.
- The new urban schemes move beyond the mandate that was set by JnNURM. While AMRUT captures most of the objectives under JnNURM, the other schemes seek to address issues around sanitation (through Swachh Bharat), affordable housing (through PMAY-U), and technology innovation (through Smart Cities).
- Value Capture Financing (VCF):
- The VCF policy framework was introduced by the Ministry of Urban Development in February 2017. VCF is a principle that states that people benefiting from public investments in infrastructure should pay for it.
- Municipal bonds:
- Municipal bonds are bonds issued by urban local bodies (municipal corporations or entities owned by municipal bodies) to raise money for financing specific projects such as infrastructure projects.
Issues with these:-
- Smart cities:-
- On the Smart City front, while over 90 ‘Smart Cities’ have identified 2,864 projects, India lags on implementation, with about 148 projects completed and over 70% still at various stages of preparation.
- Finally, there is still an outstanding shortage of over 10 million affordable houses (despite the government taking encouraging steps to incentivise their construction.
- The annually recurring instances of floods in Mumbai, dengue in Delhi and lakes on fire in Bengaluru paint a grim picture.
- One primary problem is that of the definition of what’s urban:-
- Urban development comes under State governments, with the Governor notifying an area as urban based on parameters such as population, density, revenue generated for the local administration and percentage employed in non-agricultural activities.
- This notification leads to the creation of an urban local government or municipality, classifying the area as a “statutory town”. With such a vague definition, discretionary decisions yield a wide variance in what is considered a town.
- Central government considers a settlement as urban if it has a urban local government, a minimum population of 5,000; over 75% of its (male) population working in non-agricultural activities; and a population density of at least 400 per sq. km. However, many States consider such “census towns” as rural, and establish governance through a rural local government or panchayat.
- Another issue is the low level of urban infrastructure investment and capacity building:-
- India spends about $17 per capita annually on urban infrastructure projects, against a global benchmark of $100 and China’s $116.
- The Jawaharlal Nehru National Urban Renewal Mission and other urbanization schemes like Rurban implementation has been mostly inadequate, with exploration of financing options limited as well.
- For example, Jaipur and Bengaluru collect only 5-20% of their potential property tax. With this meagre amount how can urban local bodies be sustainable
- Meanwhile, urban institutions also suffer from a shortage of skilled people.
Reforms needed are:-
- Revisit the classification method to cover all eligible settlements to function as urban area having urban planning and governance for their jurisdiction
- Take up infrastructure development along with capacity building of urban local bodies:-
- Municipal capacities to mobilise own sources need to be strengthened with a robust financial management, asset mobilisation and tax administration along with project preparation and borrowing abilities to seek investible funds
- Include green-house gases emission particulate matter 2.5 in the city planning in the light of their footprint in the municipal functions. It requires special efforts to organise waste management covering reduce, reuse and recycle principles
- Spatial dispersal of economic activities towards low urbanised States in the central and eastern India (infrastructure, skill education and finance for manufacturing)
- Development of compact cities particularly in the new town developments to have optimum economy in the cost on agglomeration, citizen and economy
- Link urbanisation with the inter-State potential on productivity, investment and employment creation including intensive efforts to attract FDI (Foreign Direct Investment).
- It would be better to have policies and programmes in place to facilitate the integration of migrants into the local urban fabric, and building city plans with a regular migration forecast assumed. Lowering the cost of migration, along with eliminating discrimination against migrants, while protecting their rights will help raise development across the board.
- The solution to the affordable housing crisis would be focused efforts on land and housing policy reforms, delegation of power to urban local bodies, fostering innovative housing finance, and the reduction in project costs and schedule overruns.
- An National urban policy should offer a clear directive to urban policymakers at all levels of government to bring in a more cohesive approach to urban planning and urban infrastructure investments. This policy should help India achieve the following
- Identify urban development priorities so that they fit in with national- and state-level goals.
- Provide guidance on reforming urban planning, urban legislation, and urban governance systems.
- Provide a cohesive understanding and coordination between national, state, and local urban policymakers.
- Provide guidance to generate a local urban policy and project action in terms of making private and public investments in urban infrastructure
Topic– Part of static series under the heading – “Nature of Indian Federalism”
Key demand of the question
The question expects us compare and contrast cooperative and competitive federalism, discuss their comparative advantages and disadvantages and conclude on the nature of federalism best suited to serve India’s needs.
Analyze – When asked to analyze, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary.
Structure of the answer
Introduction – Discuss the emphasis placed on cooperative and competitive federalism in recent times for securing developmental objectives.
- Explain the two terms and how they differ
- Discuss how the spirit of competitive federalism is seen in the various inter state ranking metric derived such as for ease of business, environmental pollution etc
- Discuss how the spirit of cooperation is being enhanced by sharing experiential learnings etc
- Discuss the pros and cons of one over the other – competitive federalism requires States to reform their programmes and provide goods and services that they can self-fund, disciplines the states, accelerates growth. Discuss the advantages that cooperative federalism offers.
Conclusion – Mention in the end that a balance of the two is required.
Competitive federalism :-
- Competitive federalism is a concept where centre competes with states and vice-versa, and states compete with each other in their joint efforts to develop India and over a broad range issues to provide citizens various services in a hassle-free manner.
- How is it suitable to India:-
- The policy of one-size-fit-all is replaced with different policies of various states based on the own priorities with in the state. Each state will design their own policies for development of the state with self-fund. The concept also promotes discipline among the states.
- Competitive federalism is a federalism when units of federation pursue a healthy competition for economic interests. It is the vertical relationship between centre and state which competes with each other which leads to the overall growth of the states.
- Competitive federalism is already at work in economic policies since liberalisation. States vie with one another to hold investors’ meet; Chief Ministers go abroad to promote trade relations; State governments enter into agreements with foreign countries for social-economic projects.
- Regional meetings are also held to promote common economic interests. In these endeavours, some are going fast and some lag behind – a situation that ranking may help to change.
- The union government has replaced the sixty-four year old Planning Commission by establishing NITI Aayog.
- The NITI Aayog is formed to empower and strength the state governments. The one way flow of policy is replaced with participation of the states in policy formulation.
- The state governments will not have to look towards centre for policy guidance and fiscal resources because now the share of fiscal resources for each state will be transferred to be spent by the state governments autonomously based on their own priorities and the priorities will also be decided by the state on their own.
- The NITI Aayog will also provide for the appointment of Regional Councils with specific mandates for specific time periods. These councils could help to create cooperation among two or more states facing a common set of problems or amicably settle disputes. These councils could catalyse joint projects involving travel, transportation and tourism across member states.
- In February 2015, the union government in pursuit of competitive federalism has tabled in parliament the recommendation of the Fourteenth Finance Commission of India.
- The centre has increased the share of states in central tax revenue from the earlier 32% to 42%. The government also declared that the states will have freedom to plan their expenditure based on their own priorities and the states are free to change centrally sponsored schemes. This is a long-time demand from the states.
- But along with autonomy states should observe fiscal prudence and discipline. Competitive federalism follows the concept bottom-up approach as it will bring the change from the states.
- The concept of competitive federalism is driving the Indian states to rush in for reforms to make processes easy for doing business in their state and expediting the pending project clearances. States are also encouraged to streamline the procedures to attract more investment and establishment of single window registration for obtaining licences.
Cooperative federalism :-
- Cooperative federalism is the concept which reflects the relationship between centre and state where they both come together and resolve the common problems with each other’s’ cooperation. With the collaborative efforts and cooperation, different level of governments in a amicable manner, contributes towards the growth of the country.
- It shows the horizontal relationship between union and states and shows neither is above the other. To ensure this relationship between centre and state, Indian constitution has incorporated certain instruments like inter-state council, Zonal council, 7th schedule etc.
Obstacles in the process of competitive federalism:-
- As a concept, it is more suitable to the countries like US, where it is in-built in their constitution.
- Only few states actively participate:-
- While the competition between states, reflected in the World Bank’s Ease of Doing Business index, has generated a lot of enthusiasm, this must be a continuing exercise. There are only few well-off states like Maharashtra, Gujarat, and Tamil Nadu which are competing. The present inter-state competition in attracting investment is too early to determine whether it will really encourage competitive patterns of investment on a continuous basis.
- Regional differences:-
- There are varied economic patterns in different states. There are deficit states or the backward regions or the states under debt. Those states should not be treated on par with the well-off states.
- The states like West Bengal, Bihar, Orissa, and Assam have protested against the uniform approach in funding because of their special situations in which the central government has to provide special funds to these states. Without special funding these states cannot imagine their participation in competitive federalism.
- Though the states are provided with financial independence, it is a fallacy to assume that all the states would perform uniformly in the process of development because while some states have favourable factors like skilled labour, capital and infrastructure, innovative service industries other states lagging behind. For that states with unfavourable climate still need the help from Centre.
- The proposed GST law may help some of the less productive States to raise the revenue as the tax will be a destination-based levy. But the opposition of few well-off states with respect to revenue loss in implementation of GST system points that there is lack of will in participating in the process of competitive federalism.
However in India these problems need to be rectified to make cooperative and competitive federalism successful:-
- The Inter-State Council as mentioned in Article 263 is supposed to be a body for intergovernmental consultation and co-operation. But it has not been given the powers to inquire and advise on disputes between States. It can only discuss subjects of common interest and make recommendations. It meets rarely and has not been able to work to its full potential.
- The most important thing is International treaties which are greatly overlooked the involvement of the states. It should be strengthened as while negotiating the international treaties involvement of states should be there with greater extent as its implementing will surely going to impact on the states.
- Article 262 that provides for the resolution of inter-state water disputes which also failed to contain many disputes which reached it despite repeated hearings and decisions. Failure of this can be because of both structural and procedural inadequacies.
- Structural inadequacies like Non-binding nature of advices of River boards, Lack of enforceability of tribunal decisions, Ad hoc instead of permanent Tribunals has given scope for politicisation and ultimately leads to judicial overview in the matter.
- Procedural inadequacies like absence of SOPs (Standard Operating Procedures) , no provision for penalty for deliberate delay by parties, non-cooperation by states, leaves enough scope for ambiguities and discretions leading to inordinate delays.
- Governor Issue is also the concern which weaken the centre-state relationship. This has been the evident since long that as the political party gets changed in the centre the governors appointed by the earlier party were asked to resign. Governor’s appointment should not be politically motivated.
- The 7th Schedule needs to be reformed to ensure greater empowerment of States in accordance with increased financial transfers characteristic of cooperative federalism.
- Equal representation of states in Rajya Sabha is another blow to the cooperative federalism. There should be equal representation as there is in United States of America.
- State bills which are reserved for President assent should be disposed of as early as possible. This creates impediment in the growth of the country and ultimately it hits the cooperation between centre and state.
- Presently, the union government is taking unilateral decisions on issues like international treaties, WTO obligations, environmental issues, and decisions on FDI liberalisation in various sectors of economy etc. To protect the interest of affected states, an institutional mechanism must be evolved where important decisions are appropriately discussed with states.
- Cooperative federalism and competitive federalism are not mutually exclusive instead they both are two sides of the same coin. None of them can have more weightage than other as it will lead to an over centralization or decentralization state. Both should be equally present for the development of a nation as a whole.
- The competition alone cannot give the best results it is competition with cooperation that will drive the real change.
- To bring competition, the centre should cooperate with the states by providing necessary autonomy in their policy making and allocating them the required funds to spend based on their own priorities. The cooperation forms the ground base on which competition can begin. There has to be a balance between cooperative and competitive federalism.
General Studies – 2
Topic– Statutory, regulatory and various quasi-judicial bodies.
Why this question
The National Company Law Tribunal (NCLT) is an important quasi-judicial body, that adjudicates issues relating to the Companies in India. It is important to know its role and functioning.
Key demand of the question.
The question wants us to write in detail about how the NCLAT functions; and what functions it performs vis a vis resolution of corporate disputes in India.
Discuss- This s an all-encompassing directive which mandates us to write in detail about the key demand of the question. We also have to discuss about the related and important aspects of the question in order to bring out a complete picture of the issue in hand.
Structure of the answer
Write a few introductory lines about the nature, history and the purpose of NCLT. e.g it is a quasi-judicial body; constituted under companies act, 2013; on the recommendation of committee; replaced Company law board, BIFR etc.
- Discuss the functioning of NCLT. E.g NCLT works on the lines of a normal Civil Court and is obliged to act fairly and without any bias; determine the facts of each case and decide with matters in accordance with principles of natural justice and in the continuance of such decisions, offer conclusions from decisions in the form of orders; It helps in resolving a situation, rectifying a wrong done by any corporate or levying penalties and costs and might alter the rights, obligations, duties or privileges of the concerned parties. The Tribunal isn’t required to adhere to the severe rules with respect to appreciation of any evidence or procedural law.
- Discuss the role of NCLT. e.g NCLT has been empowered in taking several steps, from cancelling the registration of a company to dissolving any company in cases of non-adherence to procedures or fraudulent registration; empowered to hear grievances of rejection of companies in transferring shares and securities; provide necessary solutions for companies facing issues related to winding up, mismanagement, and insolvency of businesses. Being the only tribunals for arbitrating company disputes, it eliminates the overlap of or occurrence of conflicting rulings and minimize the delays in the resolution of disputes etc
Conclusion- mention the NCLAT and the role of courts in resolving corporate disputes and form a fair and a balanced conclusion on the issue.
- Ministry of Corporate Affairs (MCA) amended the Companies Act of 2013, introducing the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) by replacing the Company Law Board (CLB)
- The NCLT will be a single judicial forum to judge all disputes concerning the affairs of Indian companies.
- It is a quasi-judicial authority incorporated for dealing with corporate disputes that are of civil nature arising under the Companies Act.
- Issues relating to the investigation of a company’s accounts, freezing of assets, class action suits, and conversion of a public company to a private one will be decided by the NCLT.
- Aim is to gradually allow other issues including reduction of share capital, merger, de-mergers, and settlement to be transferred to the NCLT.
- NCLT works on the lines of a normal Court of law in the country and is obliged to fairly and without any biases determine the facts of each case and decide with matters in accordance with principles of natural justice and in the continuance of such decisions, offer conclusions from decisions in the form of orders.
- The orders so formed by NCLT could assist in resolving a situation, rectifying a wrong done by any corporate or levying penalties and costs and might alter the rights, obligations, duties or privileges of the concerned parties. The Tribunal isn’t required to adhere to the severe rules with respect to appreciation of any evidence or procedural law.
- It has the power of High Court in the matters of mergers, demergers, amalgamations, winding up, etc.
- Registration of companies:-
- NCLT has been empowered in taking several steps, from cancelling the registration of a company to dissolving any company.
- The Tribunal could even render the liability or charge of members to unlimited.
- With this approach, NCLT can de-register any company in specific situations when the registration certificate has been obtained by wrongful manner or illegal means under section 7(7) of the Companies Act, 2013.
- Transfer of shares:-
- NCLT is also empowered to hear grievances of rejection of companies in transferring shares and securities and under section 58- 59 of the Act which were at the outset were under the purview of the Company Law Board.
- Freezing assets of a company
- The NCLT isn’t just empowered to freezing the assets of a company for using them at a later stage when such company comes under investigation or scrutiny, such investigation could also be ordered on the request of others in specific conditions.
- Power to investigate and wind up companies:-
- An investigation which is ordered by the NCLT could be conducted within India or anywhere in the world. The provisions are drafted for offering and seeking help from the courts and investigation agencies and of foreign countries.
- Power to order repayment of deposits accepted by Non-Banking Financial Companies as provided in section 45QA of the Reserve Bank of India Act, 1934.
- Power to Review its own orders.
How does NCLT resolve corporate disputes:-
- It should enable faster implementation of the bankruptcy code
- Also reduce the burden of hundreds of cases pending in the
- Once stipulations under the Companies Act and Bankruptcy Code are effective, the tribunals will provide necessary solutions for companies facing issues related to winding up, mismanagement, and insolvency of businesses.
- Being the only tribunals for arbitrating company disputes, it will eliminate the overlap of or occurrence of conflicting rulings and will minimize the delays in the resolution of disputes, which is a big relief for litigants.
- The following roadblocks will be cleared:-
- Resolution of disputes relating of companies affairs has been one the major roadblock in improving ease of doing business in India.
- Thousands of cases remain long pending in the courts despite having legal timeline of resolution.
- Such scenario hinder the new investments not only from outside even domestic companies are preferring to shift their Headquarters outside the countries and choosing more business amicable locations like Singapore to operate.
- Delay in dispute resolution not only stagnate the new investments it also lead to devaluation of assent and increases inefficiencies of businesses and market.
- Multiplicity of bodies will no longer exist:-
- Till 2016 several bodies like the Company Law Board, Board of Industrial and Financial Reconstruction, the Appellate Authority for Industrial and Financial Reconstruction and High Courts were responsible for the judging the disputes concerning companies affairs, this multiplicity of adjudicating and governing bodies was also delaying the dispute resolution process.
- Efficient resolution:-
- The formation of the NCLT and the NCLAT is also a significant step towards attaining fast and efficient resolution of disputes relating to affairs of the Indian corporates.
- No more overlapping:-
- Being the sole forum dealing with company related disputes, these tribunals would also eliminate any scope for overlapping or conflicting rulings and minimise delays in resolution of disputes, thus, proving to be a boon for litigants.
- Removes ambiguity:-
- Instead of getting different decisions on the same matter by different High Courts, consolidation of jurisdiction will help the Tribunal Members and Judges in delivering uniform decisions and thereby removing any ambiguity and friction.
- To ensure fair play and avoidance of judicial error, the procedural laws provide for appeals, revisions and reviews, and allow parties to file innumerable applications and raise vexatious objections as a result verdict get delayed.
- Appeals against the order of the NCLT will go to NCLAT, exclusively dedicated for this purpose. Further appeal to the Supreme Court will only be on any question of law, thereby reducing the delay in appeals as earlier, the decisions of the Company Law Board were challenged before the High Court and then in the Supreme Court.
- Consolidation of Corporate jurisdiction will lead to convergence rather than divergence and will maintain uniformity in the system.
- While the new tribunals can deal with all company disputes, excluding criminal prosecution as under the Companies Act, their powers are currently limited.
- There was little clarity on the transfer of cases from the CLB to the NCLT.
Topic – India and its neighborhood- relations.
Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Why this question
Africa houses six of the world’s fastest growing economies and is increasingly becoming an important global player. India has historic economic, political and cultural linkages with Africa but the continent remained largely ignored for a long time. There has however been a much required shift in India’s policy towards Africa, as witnessed in recent years. Recently India signed several agreements with Rwanda and PM Modi became the first PM to visit the country.
Key demand of the question.
The question wants us to dig deep into the issue discuss why Africa is important for India. We have to bring out the factors behind the infusion of energy in India-Africa relationship. Then we have to form a personal opinion on the issue.
Critically analyze- Here we have to dig deep into the issue, identify and discuss upon all the relevant aspects and form a personal opinion on the issue, based on our discussion.
Structure of the answer
Introduction – write a few lines about the historic political, economic and cultural linkage between India and Africa. E.g trade relations between the Kingdom of Aksum and Ancient India around the first millennium; non-aligned movement; India-Africa Forum Summit etc.
- Discuss the nature of relationship between India and Africa until recently- e.g passive and a reactive attitude on part of India; no summits; lack of attention and visits to African countries; investments made by private sector etc.
- Discuss how the nature of relationship has changed. E.g mention the recent visits of PM and President to several African countries; plan to construct convention centers across 21 African countries; constructing the Parliament building in Swaziland; Sub-Saharan African countries have also reached out to India to undertake rural electrification – from financing and technology transfer, to detailed project reports and execution; India-Rwanda agreements, India-Seychelles cooperation etc.
- Discuss why the nature of relationship has changed and the importance of cooperation with Africa. E.g Africa houses six of the world’s fastest growing economies; several African countries have been providing incentives to attract foreign investors and partners in growth while the government in New Delhi has been actively lobbying for support for its bid for a seat at the UNSC; China’s hyperactive engagement with Africa; prospects of an African trade agreement etc.
Conclusion- Based on your discussion form a fair and a balanced conclusion on the given issue and suggest a way-forward.
- India-Africa relations are enjoying an unprecedented renaissance, founded on shared economic interests and longstanding historical ties.
- India’s Africa policy over the past few decades has oscillated between passive and reluctantly reactive at best. Strategic apathy toward the continent was obvious on many fronts.
- Most of the countries in Africa did not feature in India’s larger foreign policy matrix, but until recently there wasn’t any significant attention paid to the continent.
- Indian leaders seldom travelled to African nations .
- The narrative of India’s contemporary relationship with Africa is dominated by the historicity of their interactionse..,the century old trade partnerships, socio-cultural linkages built by a thriving diaspora, nationalist movements during the Nehruvian era that supported anti-imperial struggles, and shifting geopolitical tides with the Non-Alignment Movement (NAM).
- Beyond this rhetoric, what kept driving this relationship forward was the acquisition of critical assets by State Owned Enterprises (SOE) looking to diversify the energy basket away from West Asian nations and other commercial ventures by Small and Medium Enterprises (SME) and Multi-National Companies (MNC).
What led to the change in relationship:-
- Most important was the economic growth of the continent that is estimated to be 3.2 per cent in 2018.
- It also houses six of the world’s fastest growing economies
- Several African countries have been providing incentives to attract foreign investors and partners in growth while the government in New Delhi has been actively lobbying for support for its bid for a seat at the UNSC.
- Additionally, the increasing influence of other powers in the continent, especially China’s hyperactive engagement, has nudged India toward a rethink.
How has the relationship changed:-
- Third India-Africa Forum Summit in 2015:-
- The tempo set with the summit has been carried forward and sustained to a large degree.
- Currently, India’s forte in the continent has been developmental initiatives such as Indian Technical and Economic Cooperation (ITEC), Team 9, and Pan Africa e-network among others are aimed at building institutional and human capacity as well as enabling skills and knowledge transfer.
- Conscious attempt at evoking morality to reflect an “alternate model of development” by using terms such as “win-win cooperation” to describe New Delhi’s approach to Africa.
- One of the new trends in this relationship has also been the role played by sub-national organizations and state governments that have been crafting independent relationships with African counterparts.
- For example, Kerala is planning on importing Cashew from African countries for its processing plants that are running low on raw material.
- Similarly, Ethiopia and South Africa are working with Kudumbashree, a self-help group created by the Government of Kerala aimed at eradicating poverty and empowering women, to find ways to localize and adapt the model in their respective countries.
- A unique factor that sets Indian interactions apart is that there is palpable goodwill for people of Indian origin, a sense of familiarity and cultural connection, with Bollywood movies and songs often acting as a bridge.
- Role of Indian businesses:-
- Indian businesses are active across geographic spaces and sectors in Africa. Agri-business, engineering, construction, film distribution, cement, plastics, and ceramics manufacturing, advertising, marketing, pharmaceuticals, and telecommunication are only some of the sectors that have Indian players.
- Indian investment in Africa is also being ramped up, with over 140 Indian enterprises (from Wipro to Mahindra and Mahindra) investing over $4 billion in South Africa alone. Sub-Saharan African countries have also reached out to India to undertake rural electrification from financing and technology transfer, to detailed project reports and execution.
- Years of diplomatic neglect of the continent is being addressed with the top echelons of Indian leadership regularly visiting the continent.
- Most notably, Indian president’s first overseas visit since taking office was to Djibouti and Ethiopia in October 2017.
- Similarly, when Indian PM stopped by Mozambique during his four-nation tour of Africa making him the first Indian PM in 34 years to visit the country.
- The outcomes of visits included a $100 million line of credit for defense procurement by Mauritius and greater cooperation in the marine resource management and marine connectivity in Madagascar.
- In Equatorial Guinea India announced its decision to open an independent diplomatic mission in the capital of Malabo.
- India will be constructing convention centers across 21 African countries, beginning with Niger in Western Africa.
- Convention centers will also be set up on priority basis in eight other African nations Uganda, Zambia, Malawi, Burkina Faso, Togo, Gabon, and Liberia and on a more phased basis in the remaining 12 countries. This is the first time that India has expanded cooperation with Africa in the realms of this kind of infrastructure.
- India has extended 152 lines of credit to the tune of almost $8 billion to 44 African countries, for developing agriculture, infrastructure, clean energy, and manufacturing.
- Rwanda visit:-
- India will soon open a High Commission in Rwanda which will not only establish communication between the governments of the two countries but also enable facilities for consular, passport and visa.
- India and Uganda signed four MoUs in the areas of defence cooperation, visa exemption for official and diplomatic passport holders, cultural exchange programme and material testing laboratory
- China role:-
- Whereas India’s policy has focused on job creation in the countries it has invested in, China has tended to bring in its own labour causing resentment among the locals.
- The Chinese model has often been criticised for creating huge debts for the nation in which it sets up projects, the Nairobi-Mombasa rail link being one example of this.
- The $ 4 billion project has left Kenya with enormous debts and the Chinese military base in Djibouti has raised fears that Beijing is abandoning its non-interference policy in the region.
Challenges to India :- (Extra points)
- India’s lack of a consistent proactive policy towards Africa led to the Chinese stealing a march over it in terms of investment and trade. China has aggressively pushed its investments up to $ 3.5 trillion in 2015. In contrast, India will cross the $ 500 billion mark in 2020.
- China has offered $100 million in grant aid to establish an African Rapid Response Force to cope with regional crises
- Besides the traditional areas of military security, Beijing has taken big steps towards cooperation with the African governments on internal security, including in the areas of countering terrorism and money laundering
- China promised “comprehensive support” for the modernisation of the armed forces of African nations
- This support includes the supply of new technologies as well as lending personnel and strategic advice
- According to the Stockholm Institute of Peace Research, China’s arms exports to Africa have increased 55 per cent during the period 2013-17 in comparison to the preceding five years
- India does not have much of a defence industrial base to enter the African arms bazaar.
- Beijing collaboration with Africa on AI is mutually beneficial: It will promote social and political stability in Africa while improving the performance of China’s algorithms
- Lack of trust:-
- The most recent and high-profile example of the Gupta brothers charged with allegations of “state capture” stemming from their closeness to ex-president Zuma in South Africa .Also an Indian floriculture company accused of land grabs in Ethiopia or attacks against African students in India has resulted in instances of dissent toward Indians or people of Indian origin.
- There is very little coordination between Indian State and its businesses in Africa and the role of India Inc. is limited while drafting policies.
- India has no coordinated Africa policy nor does there seem to be an avenue where the strengths of both actors can be leveraged.
- New Delhi did the right thing in extending a $ 10 billion line of credit from 2015 to 2020 but it must now push to see that it is used appropriately.
- India must play to its natural strengths and move swiftly into the education and infrastructure fields as well as IT in Africa.
- The various government initiatives aimed at training and equipping Africa’s young demography provides a model that can be replicated by Indian companies whose ease of technology and human capital transfer are already one of its strengths.
- Similarly, in the Gambella region of Ethiopia, for instance, Indian farmers have been able to lease land at extremely low rates, but end up spending substantially on infrastructure development and connectivity.
- This is an opportunity for Indian developmental institutions to step in and provide funding for fledgling agricultural ventures with considerable promise in eastern Africa.
General Studies – 3
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth,
development and employment.
Why this question
Japan has recently unveiled its plans to leverage industry 4.0 to achieve society 5.0. This is an important and an interesting concept in itself. It is pertinent to have knowledge and understanding of the issue.
Key demand of the question.
The question wants us to bring out the meaning and significance of society 5.0 and write in detail about its relevance for India.
Critically comment- here we have to express our knowledge and understanding of the issue and form an opinion thereupon. However our opinion should be backed with substantial and relevant facts/ examples/ arguments etc.
Structure of the answer
Introduction- write a few lines about the japanese plan to exploit the fourth industrial revolution in order to resolve its various technological, social problems and develop a society 5.0, which follows the hunting society (Society 1.0), agricultural society (Society 2.0), industrial society (Society 3.0), and information society (Society 4.0).
- Briefly discuss the meaning of society 5.0. E.g It is envisaged as a human-centered society that balances economic advancement with the resolution of social problems by a system that highly integrates cyberspace and physical space; new technologies such as IoT, robotics, AI, and big data, all of which can affect the course of a society, are continuing to progress and Society 5.0 can be a reality as a new society that incorporates these new technologies in all industries and social activities and achieves both economic development and solutions to social problems in parallel etc.
- Discuss the relevance of society 5.0 for India. E.g India needs to put serious efforts towards reduction of greenhouse gas (GHG) emissions, increased production and reduced loss of foodstuffs, mitigation of costs associated with the aging society, support of sustainable industrialization, redistribution of wealth, and correction of regional inequality. But achieving both economic development and solutions to social problems at the same time has proven to be difficult in the present social system and industry 4.0 and associated technologies can be deployed to solve many of those problems etc.
Conclusion– Mention the need for gradual adoption and learn from best practices across the countries along with the need to provide social security cover to the threatened jobbers etc.
- Society 5.0 was proposed in the 5th Science and Technology Basic Plan as a future society that Japan should aspire to. It follows the hunting society (Society 1.0), agricultural society (Society 2.0), industrial society (Society 3.0), and information society (Society 4.0).
- Japan aims to become the first country in the world to achieve a human-centered society (Society 5.0) in which anyone can enjoy a high quality of life full of vigor
- It is a human-centered society that balances economic advancement with the resolution of social problems by a system that highly integrates cyberspace and physical space.
- Social reform (innovation) in Society 5.0 will achieve a forward-looking society that breaks down the existing sense of stagnation, a society whose members have mutual respect for each other, transcending the generations, and a society in which each and every person can lead an active and enjoyable life.
Goes beyond digitization of economy:-
- Society 5.0 achieves a high degree of convergence between cyberspace (virtual space) and physical space (real space). In the past information society (Society 4.0), people would access a cloud service (databases) in cyberspace via the Internet and search for, retrieve, and analyze information or data
- In Society 5.0, a huge amount of information from sensors in physical space is accumulated in cyberspace. In cyberspace, this big data is analyzed by artificial intelligence (AI), and the analysis results are fed back to humans in physical space in various forms.
- In Society 5.0, however, people, things, and systems are all connected in cyberspace and optimal results obtained by AI exceeding the capabilities of humans are fed back to physical space. This process brings new value to industry and society in ways not previously possible.
- Society 5.0, new value created through innovation will eliminate regional, age, gender, and language gaps and enable the provision of products and services finely tailored to diverse individual needs and latent needs. In this way, it will be possible to achieve a society that can both promote economic development and find solutions to social problems.
- Variety of measures have become necessary such as the reduction of greenhouse gas (GHG) emissions, increased production and reduced loss of foodstuffs, mitigation of costs associated with the aging society, support of sustainable industrialization, redistribution of wealth, and correction of regional inequality, but achieving both economic development and solutions to social problems at the same time has proven to be difficult in the present social system.
- In the face of such major changes in the world, new technologies such as IoT, robotics, AI, and big data, all of which can affect the course of a society, are continuing to progress. Japan seeks to make Society 5.0 a reality as a new society that incorporates these new technologies in all industries and social activities and achieves both economic development and solutions to social problems in parallel. India can emulate this too.
- Society 5.0 achieves advanced convergence between cyberspace and physical space, enabling AI-based on big data and robots to perform or support as an agent the work and adjustments that humans have done up to now.
- This frees humans from everyday cumbersome work and tasks that they are not particularly good at, and through the creation of new value, it enables the provision of only those products and services that are needed to the people that need them at the time they are needed, thereby optimizing the entire social and organizational system.
- This is a society centered on each and every person and not a future controlled and monitored by AI and robots.
Topic– Indian Economy – Issues
Why this question
NPA has been a huge challenge for banks and RBI has come up with several measures to deal with this challenge. IBC has been quite successful in handling cases of bad debts, thus, understanding why Sashakt scheme had been introduced and its comparison with IBC is important.
Key demand of the question
The question expects us to explain the features of Sashakt Scheme, explain why it has been introduced, its comparison with IBC, the comparative advantages offered, the shortcomings etc
Discuss – The overall explanation of the scheme, comparison, discussion about advantages and disadvantages of the scheme, way forward all has to form part of the discussion.
Structure of the answer
Introduction – Highlight the status quo of bad loans, and mention that RBI has been taking several measures in this regard such as IBC. Sashakt is in the same line of measures, but not by RBI.
- Explain Sashakt Scheme
- Compare and contrast it with IBC Scheme
- Explain why Sashakt when IBC is already there
- Discuss the advantages, disadvantages, challenges, way forward
Conclusion – Mention that the impact of the problem of NPA has started reflecting in our economy and manadates quick action and thus the need for multiple steps.
- With the banking sector’s bad loans problem spiralling to epic proportions, public and private sector bank officials yesterday hashed out a new framework to deal with the crisis.
- Committee of representatives from several banks announced an alternative mechanism for resolving bad loans, called Project Sashakt.
- Both Insolvency and Banduptcy (IBC) and Sashakt are created to deal with the mounting Non Performing Assets problem.
- It aims at resolving the problem of non-performing assets through a market-led approach.
- Under the scheme, bankers are not seeking any dispensation or forbearance from the Reserve Bank of India.
- The plan includes three crucial aspects:-
- 1) Signing of intercreditor agreements.
- 2) Setting up of an asset management company, which then raises an alternative investment fund.
- 3) Getting asset reconstruction companies and stressed asset funds to bid for these assets and put a restructuring plan in place.
- Resolution of loans up to 50 crore by lenders within a period of 90 days. For loans under Rs 50 crore, a resolution plan will be arrived at within 90 days of detection of stress by individual banks.
- Resolution of loans between 50 crore and 500 crore within 180 days, with the lead lender taking charge
- For assets up to 500 crore, an independent asset management company (AMC) would be created that will be funded by alternative investment funds (AIF)
- Multiple AMCs are likely to be created.
- AMC to be formed with equity infusion from banks, foreign funds, infrastructure investment funds.
- Alternative investment funds will be created by institutional investors.
- Banks may also invest in AIFs to tap into upside on the asset later.
- AMCs will appoint industry experts and turn around specialists to help resolve the stressed asset.
- AMCs will repay security receipts in full within 60 days
- ARCs will also be allowed to bid for assets through a transparent auction process.
- ARCs could also tie up with AMCs to operate and turn around the asset.
- Banks may also push for creation of a platform for trading assets.
Advantages of Sashakt :-
- New ‘Sashakt’ scheme to tackle non-performing loans (NPL) through a market-led approach could stabilise balance sheets in the medium term.
- It will aid assets with a turnaround potential and is also beneficial for segments like small and medium enterprises, which contribute immensely to employment generation and economic growth.
- The framework will not be useful just for public-sector banks but also for their private-sector counterparts.
- Experts criticize that Sashakt plan is nothing new from what is already happening now. Even now, banks deal with smaller loans that have turned bad while very high-value loans are pushed to the NCLT. In this context, Sashakt looks like a case of old wine in a new bottle.
- The Asset Management Company (AMC) Sashakt is proposing is might not work because it is difficult for such a structure to either raise sufficient finances or manage stressed resources.
- As banks had found out under the old SDR scheme, it was relatively easy to take over a defaulting borrower but much more difficult to run it on a day to day basis or nurse it back to health.
- The AMC route, which is ostensibly to sort out the problem being faced by small and medium sized companies that have defaulted, only gives additional time before pushing for their bankruptcy. In essence, it increases the time limit of resolution further.
- Not much interest is shown by private investors to participate in stressed assets whether they will invest in Alternate Investment Fund (AIF’s) is a doubt.
Comparison with IBC :-
- Quicker resolution:-
- Sashakt scheme has provision for time bound resolution of loans along with the amount specified whereas, IBC requires 180 days to draft the insolvency resolution plan.
- IBC cases relating to corporates went directly to the NCLT whereas in Sashakt project only cases above 500 crore resolution cases to the NCLT
- Sashakt plan envisages to create Asset Management Companies (AMC’s) with wider participation from Banks that will provide equity investments to the new AMC’s. IBC has provision to liquidate the creditors of the company rejects the plan of resolution.
- Lenders get the option of price discovery through a market driven process where other AMCs or AIFs can bid for the assets. This is unlike the IBC.
General Studies – 4
Topic–Part of the series of Ethics case studies.
7) Richa wants to become an intern in ABC institute of learning. She posted negative remarks on Facebook about an internship for which she had applied. The negative comments were focused on the policy for professional dress as an intern. After the director saw the comment, the student was not selected for the internship.
Why this question
This is one of the most important problems faced by government as well as private sector employees. It is important to analyze and discuss upon the situation in order to broaden our ethical understanding.
Structure of the answer
Hint for answer–
- It appears to be both an ethical and legal issue. From a legal perspective, one would need to consider if the information was legally obtained and was it a lawful use of the information on part of the director; the ethical issue is that whether the negative comment was the reason why the individual was not selected to that internship; A lack of respect for the value of integrity and professional behaviors seems evident in this situation etc.
- If the information was publically available, the intern applicant would have very little legal protection here. The rights to free speech are not as broad and generally would not apply in this case; Postings on Facebook may have long term negative implications since once the post is made, the originator no longer has control over who views it or how it is used etc.
Take the help of these hints to from a complete answer for both the questions.
Social media is booming with networking opportunities and the chance to share your accomplishments but it could also lead to the end of your career if used incorrectly.
The stakeholders involved in this case study are Richa, director etc.
The ethical issues involved in this scenario are :-
Freedom of expression of Richa on social media however has some restrictions because if Richa made sweeping statements defaming the other organization it can be a legal issue but if she just stated the fact then it might not be an ethical issue.
The way the organization got to read her post vs Right to privacy of RIcha.
Whether Internship was rejected to Richa because of her facebook posts or she was genuinely not qualified enough for the position is an ethical issue.
Also without being part of the institution itself Richa has made statements which can adversely impact the institution so this might have been seen as an act of disloyalty by the organization.
Implications of the act done by Richa are:-
The ABC institute of learning can be seen in a bad light and that would harm its reputation as social media outreach is huge. The institute might even go for legal discourse.
Richa might not only be rejected by this organization but she might face the same issue with future employers as well.
The facebook post might lead to the institute ensuring proper clarification leading to healthier debate.