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SECURE SYNOPSIS: 18 March 2021


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: Role of women and women’s organization, population and associated issues, poverty and developmental issues, urbanization, their problems and their remedies.

1. COVID-19 pandemic has accelerated class inequalities and poverty in India. Discuss. (250 words)

Reference:  feature.undp.org

Why the question:

The coronavirus pandemic is unprecedented in our lifetimes. In just a few months it has spread to almost every continent, infecting millions and killing hundreds of thousands. Thus the question.

Key Demand of the question:

Discuss in detail the effect of covid-19 pandemic in accelerating class inequalities and poverty.

Directive:

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction:

Start with brief background of the pandemic situation.

Body:

Such answers are best explained with facts and data to support the answer stand such as – New UNDP estimates for global human development – as a combined measure of the world’s education, health and living standards – is on course to decline this year for the first time since the concept was developed in 1990. The decline is expected across the majority of countries – rich and poor – in every region.

Explain the present status of inequalities and widespread poverty in India.

Discuss the impact of the pandemic on class inequalities and poverty.

Present the efforts of the government to prevent such an effect in the country.

Conclusion:

Suggest solutions to address the issue and conclude with way forward.

Introduction:

In 2019, the UNDP reported that India had succeeded in lifting 271 million people out of poverty between 2006 and 2016. However, in the same year, India’s Ministry of Statistics and Programme Implementation, which conducts the National Sample Survey, indicated that for the first time since this type of measurement was available, the percentage of Indians living below the poverty line had begun to rise again, because of the immiseration of the countryside (where about two-thirds of the population still lives). The Covid-19 crisis has amplified this process dramatically.

Body:

The coronavirus (COVID-19) is a crisis like no other the world has faced in recent decades in terms of its potential economic and social impacts. The world bank estimates that the pandemic could push about 49 million people into extreme poverty in 2020. It also reports that for the first time since 1998, global poverty rates are forecast to rise. According to the United Nations estimates, by the end of the year, 8% of the world’s population, a half-billion people, may be pushed into destitution largely because of the pandemic.

 

present status of inequalities and widespread poverty in India:

  • In its latest report, Oxfam has flagged a worrying post-pandemic trend, highlighting the further widening gap between the rich and the poor in the global world, especially India. “The wealth of Indian billionaires increased by 35 per cent during the lockdown and by 90 per cent since 2009 to $422.9 billion ranking India sixth in the world after US, China, Germany, Russia and France,” stated the report titled ‘The Inequality Virus’.
  • Multiple estimates by multilateral institutions show the COVID-19 pandemic will hit India the hardest by sending 40 million people into “extreme poverty”, worsen hunger and income inequality, and yet the government seems oblivious with no data, no estimation or policy response
  • The United Nations Development Programme (UNDP) estimates that 260 million people will be back in poverty by 2020 – almost as many as the 271 million who left between 2006 and 2016.
  • In the second week of April 2020, UN’s International Labour Organization (ILO) claimed that about 400 million workers from India’s informal sector are likely to be pushed deeper into poverty due to Covid-19.

 

Previous efforts across to globe to fight poverty:

  • In 1990, 36% of the world’s population, or 1.9 billion people, lived on less than $1.90 a day. By 2016, that number had dropped to 734 million people, or 10% of the world’s population, largely because of progress in South Asia and China.
  • Some of the biggest gains were made in India, where 210 million people were lifted out of poverty from 2006 to 2016, according to the U.N.
  • Since 2000, Bangladesh brought 33 million people — 20% of its population — out of poverty while funding programs that provided education to girls, increased life expectancy and improved literacy.
  • Famines that once plagued South Asia are now vanishingly rare, and the population is less susceptible to disease and starvation.

Impacts across globe:

  • It is feared that this progress may be reversed, experts worry, and funding for anti-poverty programs may be cut as governments struggle with stagnant growth rates or economic contractions as the world heads for a recession.
  • While everyone will suffer, the developing world will be hardest hit.
  • The World Bank estimates that sub-Saharan Africa will see its first recession in 25 years, with nearly half of all jobs lost across the continent. South Asia will most likely experience its worst economic performance in 40 years.
  • Most at risk are people working in the informal sector, which employs 2 billion people who have no access to benefits like unemployment assistance or health care.
  • In Bangladesh, 1 million garment workers — 7% of the country’s workforce, many of them informally employed — lost their jobs because of the lockdown.
  • Countries like India, Bangladesh, which spent heavily on programs to improve education and provide health care, may no longer be able to fund them.
  • There will be groups of people who climbed up the ladder and will now fall back into vicious cycle of poverty.
  • In India, millions of migrant labourers were left unemployed and homeless overnight after the government there announced a lockdown. In parts of Africa, millions may go hungry after losing their jobs and as lockdowns snarl food aid distribution networks.
  • In Mexico and the Philippines, remittances that families relied on have dried up as primary breadwinners lose their jobs and can no longer send money home.
  • A resolution that committed the U.N. to eliminating poverty and hunger and providing access to education for all by 2030 may now be a pipe dream.

Measures needed: Policies needed to mitigate poverty and distributional impacts will have to respond to each country’s context and circumstances. Having said that, the numbers above suggest that across affected countries:

  • Multilateral global institutions must support the developing nations:
    • Oxfam is calling on world leaders to agree on an Emergency Rescue Package of 2.5 trillion USD paid for through the immediate cancellation or postponement of 1 trillion in debt repayments, a 1 trillion increase in IMF Special Drawing Rights (international financial reserves), and an additional 500 billion in aid.
  • An effective response in support of poor and vulnerable households will require significant additional fiscal resources.
    • Providing all the existing and new extreme poor with a cash transfer of $1/day (about half the value of the international extreme poverty line) for a month would amount to $20 billion —or $665 million per day over 30 days.
    • Given that impacts are likely to be felt by many non-poor households as well and that many households are likely to need support for much longer than a month, the sum needed for effective protection could be far higher.
  • Any support package will need to quickly reach both the existing and new poor.
    • While existing safety net programs can be mobilized to get cash into the pockets of some of the existing poor relatively quickly, this is not the case for the new poor.
    • In fact, the new poor are likely to look different from the existing poor, particularly in their location (mostly urban) and employment (mostly informal services, construction, and manufacturing).
  • Decision-makers need timely and policy-relevant information on impacts and the effectiveness of policy responses.
    • This can be done using existing, publicly available data to monitor the unfolding economic and social impacts of the crisis, including prices, service delivery, and economic activity, as well as social sentiment and behaviours.
    • In addition, governments can use mobile technology to safely gather information from a representative sample of households or individuals.
    • Phone surveys can collect information on health and employment status, food security, coping strategies, access to basic services and safety nets and other outcomes closely related to the risk of falling (further) into poverty.

Conclusion:

This pandemic is as much a social and economic crisis as it is a humanitarian one. Considering the uncertain path that lies ahead, helping the country’s poor become self-sufficient and better prepared can prove to be the best weapon against the deadly virus, and such a DBT can go a long way in that.

 


General Studies – 2


 

Topic: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

2. Faith for Rights (F4R) movement of the United Nations (UN) provides a way to create a balance between religious traditions and rights, do you agree that India should embrace it too. Comment. (250 words)

Reference:  Indian Express

Why the question:

The article explains that India must support Faith for Rights, a UN-led movement which campaigns against incitement to national, racial or religious hatred, and exposes legislative patterns, judicial practices and government policies that undercut peaceful coexistence of different faiths.

Key Demand of the question:

Discuss in what way Faith for Rights (F4R) movement of the United Nations (UN) provides a way to create a balance between religious traditions and rights.

Directive:

Comment– here we have to express our knowledge and understanding of the issue and form an overall opinion thereupon.

Structure of the answer:

Introduction:

Start with what is Faith for Rights (F4R) movement of the United Nations (UN).

Body:

The answer body must have the following aspects covered:

Explain the attempts to create a balance between various traditions and human rights.

Talk about the campaign – It campaigns against incitement to national, racial or religious hatred and exposes legislative patterns, judicial practices and government policies that undercut the peaceful coexistence of different faiths.

Discuss the recommendations of F4R: for creating a balance between religious traditions and rights. (Based on Article 20 of the International Covenant on Political and Civil Rights)

Conclusion:

Conclude by drawing inspirations from the F4R movement for India.

Introduction:

The “Faith for Rights” framework provides space for a cross-disciplinary reflection and action on the deep, and mutually enriching, connections between religions and human rights. The objective is to foster the development of peaceful societies, which uphold human dignity and equality for all and where diversity is not just tolerated but fully respected and celebrated.

Body:

Brief background:

  • The Beirut Declaration considers that all believers – whether theistic, non-theistic, atheistic or other – should join hands and hearts in articulating ways in which “Faith” can stand up for “Rights” more effectively so that both enhance each other.
  • Individual and communal expression of religions or beliefs thrive and flourish in environments where human rights are protected.
  • Similarly, human rights can benefit from deeply rooted ethical and spiritual foundations provided by religions or beliefs.

About Faith for Rights (F4R) movement

  • The F4R framework has finally been affirmed by the United Nations system. The Office of the High Commissioner for Human Rights (OCHR) promoted the Rabat plan of action in 2012.
  • The plan was a result of a series of expert workshops on the prohibition of incitement to national, racial or religious hatred, underlying “legislative patterns, judicial practices and policies”.
  • The UN Human Rights Council is shortly going to discuss further the prohibition of the advocacy of national, racial or religious hatred that constitutes incitement to “discrimination, hostility or violence”.
  • The F4R movement underscores the high threshold of Article 20 of the International Covenant on Political and Civil Rights, and urges that restrictions on rights be clearly and narrowly defined, prosecution be a responsible response to a “pressing social need”, and recourse to the least intrusive measure — free speech may not be restricted “in a wide or untargeted way”.
  • Proportionality requires that the “benefit to the protected interest outweighs the harm to freedom of expression”.
  • And a six-part threshold test is proposed for expressions considered as criminal offences — context, speaker, intent, content and form, extent, and imminence.

India’s stance:

  • India must support Faith for Rights, which campaigns against incitement to national, racial or religious hatred, and exposes legislative patterns, judicial practices and government policies that undercut peaceful coexistence of different faiths.
  • This is very important in a nation where communal riots (Delhi Riots in February 2020), are still a frequent phenomenon. History is marred by communal violence and the outbreak keeps happening.
  • Certainly, India has a high place at the UN table. Wise leadership and judicious human rights diplomacy are forever expected of India, which has a proud global record of promoting spiritual politics in many capacities.
  • As a member of the UN Human Rights Council, non-permanent member of the Security Council, India awaits the final decision of the apex court (due shortly) on constitutional secularism. However, without a shadow of doubt, India supports and upholds secularism.
  • Hence India must unequivocally support the movement under the leadership of UN.

Conclusion:

Rather than focusing on theological and doctrinal divides, the Beirut Declaration favours the identification of common ground among all religions and beliefs to uphold the dignity and equal worth of all human beings. It reaches out to persons in all regions of the world, with a view to enhancing cohesive, peaceful and respectful societies on the basis of a common action-oriented platform which is open to all. This thought process is necessary for India as well as the world for sustainable peace between communities.

 

Topic: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

3. Only a robust public health system, and not healthcare alone, can lead to disease prevention and control, do you agree? Evaluate. (250 words)

Reference:  The Hindu

Why the question:

The efforts of healthcare personnel, from ASHA workers to highly specialized intensive care physicians, have saved countless lives and made India proud. The editorial throws light upon how the pandemic has demonstrated the importance of healthcare and public health in times of a health crisis.

Key Demand of the question:

Discuss the importance of robust healthcare system along with healthcare.

Directive:

Evaluate – When you are asked to evaluate, you have to pass a sound judgement about the truth of the given statement in the question or the topic based on evidences.  You have to appraise the worth of the statement in question. There is scope for forming a personal opinion here.

Structure of the answer:

Introduction:

Briefly highlight the current situation and explain in what way it has forced us to think of a robust healthcare system.

Body:

Explain that while the health-care capability in India ranks among the world’s best, it is not the case when it comes to public health. There is a need to distinguish between the two.

Healthcare refers to the transaction between one caregiver and one sick person at a time. For public health, the client is the community at large and the goal is disease prevention and control. Disease control is the deliberate, intervention-based and quantified reduction of disease burden. It has to be data-driven.

Talk about the issues associated in detail.

Highlight the issues with India’s Public Health Management.

Conclusion:

Suggest solutions to address the issue and conclude that Investment in public health will result in health, wealth and prosperity.

Introduction:

India’s expenditure on the health sector has risen meagerly from 1.2 per cent of the GDP in 2013-14 to 1.4 per cent in 2017-18. The National Health Policy 2017 had aimed for this to be 2.5% of GDP.

According to the latest National Health Accounts (NHA) estimates released on Wednesday, patients bear a big chunk of health expenses, as high as 61 per cent of the total health expenditure, by themselves.

Body

Lacunae in the health sector

  • There is a massive shortage of medical staff, infrastructure and last mile connectivity in rural areas. E.g.: Doctor: Population 1:1800 and 78% doctors cater to urban India (population of 30%).
  • Massive shortages in the supply of services (human resources, hospitals and diagnostic centres in the private/public sector) which are made worse by grossly inequitable availability between and within States.
    • For example, even a well-placed State such as Tamil Nadu has an over 30% shortage of medical and non-medical professionals in government facilities.
  • Health budget: The health budget has neither increased nor is there any policy to strengthen the public/private sector in deficit areas. While the Ayushmaan Bharat provides portability, one must not forget that it will take time for hospitals to be established in deficit areas.
    • This in turn could cause patients to gravitate toward the southern States that have a comparatively better health infrastructure than the rest of India.
  • Infrastructure constraints: There are doubts on the capacity of India’s infrastructure to take on the additional load of patients during pandemics like Covid-19 as seen recently.
    • There is a growing medical tourism (foreign tourists/patients) as a policy being promoted by the government, and also domestic patients, both insured and uninsured.
  • Absence of primary care: In the northern States there are hardly any sub-centres and primary health centres are practically non-existent. First mile connectivity to a primary healthcare centre is broken. For eg, in Uttar Pradesh there is one PHC for every 28 villages.
  •  Out of pocket expenditure high: Even the poor are forced to opt for private healthcare, and, hence, pay from their own pockets. As a result, an estimated 63 million people fall into poverty due to health expenditure, annually.
    • Inequities in the health sector exist due to many factors like geography, socio-economic status and income groups among others. Compared with countries like Sri Lanka, Thailand and China, which started at almost similar levels, India lags behind peers on healthcare outcomes.
  • Rural medical practitioners (RMPs), who provide 80% of outpatient care, have no formal qualifications for it. People fall prey for quacks, often leading to grave disabilities and loss of life.
  • Numerous Schemes: The Government has launched many policies and health programmes but success has been partial at best. The National Health Policy(NHP) 2002 proposed to increase Government spending on health by two to three per cent of the gross domestic product (GDP) by 2010 which has not happened yet. Now, the NHP 2017, has proposed to take it to 2.5 per cent of the GDP by 2025.
  • Healthcare without holistic approach: There are a lot of determinants for better health like improved drinking water supply and sanitation; better nutritional outcomes, health and education for women and girls; improved air quality and safer roads which are outside the purview of the Health Ministry.
  • While private sector healthcare providers play an important role in the overall delivery of health services, any engagement of Government hospitals with private sector is seen with suspicion.
  • A number of health institutions, established since independence, seem to have outlived their utility, for instance institutions solely focus on family welfare.
  • Finally, universal health coverage (UHC) is a widely accepted and agreed health goal at the global level and has been included in the broader Sustainable Development Goals (SDGs) agenda as well.

Steps needed

  • The current approach requires re-emphasizing the missing priority on PHCs and CHCs for developing comprehensive primary care. Achieving comprehensive primary care requires a paradigm shift from disease-control vertical programmes to community-led, people-oriented primary care.
  • Sharper focus in the resource-starved states should be on improving efficiency in spending without compromising equity, and this can be attained by designing programmes that would cover a large number of people and a wide range of diseases.
    • For example, POSHAN Abhiyan to be strictly rolled out in BIMARU states.
  • Since the states have higher responsibility than the Centre in matters related to health, the blueprints of primary care can further be redefined in view of the local needs. This should be the policy agenda for the low-performing and resource-constrained states.
  • It is relevant to develop low-cost primary care service delivery models involving nurses and allied health professionals which can lower the burden on the public health system marked by the stress of a low doctor-strength.
  • India needs to design health services to meet local needs with the opposite referral mechanism to secondary- and tertiary-care, and this can produce better health outcomes with a considerable cost-advantage.
    •  In this context, the role of public health professionals, those who can help design outreach and preventive programmes and implement the continuing health programme effectively, assumes paramount importance. Eg: Telemedicine
  • India lacks the required number of public health professionals. The shortage is severe in many parts of the country, especially poorer states like Odisha, Jharkhand, Chhattisgarh and Rajasthan.
    • The focus should be to train a pool of social workers, psychiatrists, counsellors with public health orientation who could then transform the primary healthcare delivery system in the country.
    • Ayush doctors can prescribe Allopathy medicines after a bridge course.
  • Along with Ayushmaan Bharat (PMJAY), focus must be laid on strengthening the primary health centres with basic diagnostics and services, with district hospitals equipped with multi-specialty capabilities and services to people. Especially for the poor who cannot afford quality health care in private hospitals.
  • Access to medicines through Jan Aushadhi Kendra Scheme. It is mandated to offer 2000 medicines and 300 surgicals in all districts by 2024.

Conclusion:

The neo-liberal solution of lopsided and unregulated growth of private healthcare is not a panacea for India’s massive health needs. It calls for a people-centred, decentralized public health system that socializes the cost of healthcare. Especially in times of Pandemics like Covid-19, the significance and loopholes of Indian public health sector are led bare. It gives an opportunity to reform and rehaul the healthcare sector to be better equipped for future emergencies.

 

Topic: India and its neighborhood- relations.

4. critically analyse the underlying threats in China’s newly approved Brahmaputra mega-project. (250 words)

Reference:  Times of India

Why the question:

The article talks about China’s Escalating Water War.

Key Demand of the question:

One must critically analyse the underlying threats in China’s newly approved Brahmaputra mega-project.

Directive:

Critically analyze – When asked to analyse, 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. When ‘critically’ is suffixed or prefixed to a directive, one needs to look at the good and bad of the topic and give a fair judgment.

Structure of the answer:

Introduction:

China’s multi-pronged unconventional war against India has ranged from cyberattacks on critical infrastructure and furtive territorial encroachments to strategic information warfare and an ongoing village building drive to populate uninhabited but disputed borderlands. Water wars are a key component of such warfare because they allow China to leverage its upstream Tibet-centred power over the most essential natural resource.

Body:

The answer body must discuss the underlying threats in detail – Underlying Threats; Weaponised water as a tool of asymmetric warfare, Water as a tool of coercive diplomacy: Breaching bilateral accords, China punitively cut off the flow of hydrological data to India, which undermined downstream flood early warning systems, resulting in preventable deaths in Assam. Misinformation/Ignorance in India: View that the Brahmaputra collects larger share of its water in India, which is only true for four monsoon months. Threats to unique hydrology and biodiversity, Ticking water bomb on downstream communities, Religious concerns etc.

 Conclusion:

Suggest what needs to be done and conclude.

Introduction:

China’s parliament recently adopted the 14th five-year plan, the mega blueprint containing billions of dollars’ worth of projects, including the controversial hydropower project on the Brahmaputra river in Tibet close to the Arunachal Pradesh border over which India has raised concerns.

Body:

China’s newly approved Brahmaputra mega-project, which will dwarf its Three Gorges Dam by generating almost three times more electricity. The project is to harness the force of a nearly 3,000 metre drop in the Brahmaputra’s height when the river, just before entering India, takes a U-turn around the Himalayas to form the world’s longest and steepest canyon. The 60 million kWh hydropower exploitation could provide 300 billion kWh of clean, renewable and zero-carbon electricity annually. The project will play a significant role in realising China’s goal of reaching a carbon emissions peak before 2030 and carbon neutrality till 2060.

Figure: Probable location of the lower Yarlung Dam based on an existing map by Hydrochina; Discharge data for Nuxia and for ‘point leaving China’.

Geological importance of Brahmaputra:

  • The Brahmaputra, the world’s highest altitude river, gathers extremely rich silt in its almost 2,200km Himalayan run.
  • The silt rich water from Tibet, not monsoon water collection, is central to the river’s unique hydrology and biodiversity support.
  • The canyon mega-project, like the Three Gorges Dam, will trap downstream flow of nutrient-rich silt.
  • It’ll also disrupt the Brahmaputra’s annual flooding cycle, which helps to re-fertilise farmland naturally by spreading silt, besides opening giant fish nurseries.
  • That, in turn, is likely to cause subsidence and salinity in the Brahmaputra-Ganges-Meghna delta.

Threats posed to India:

  • The Brahmaputra mega-dam, ominously, will be built in a seismically active area, thus implying a ticking “water bomb” for downstream communities.
  • India has been expressing concerns on Brahmaputrasince 2015 when China operationalised its project at Zangmu.
  • A dam at the Great Bend,if approved, would raise fresh concerns considering its location downstream and just across the border from Arunachal Pradesh.
  • For India, quantity of water is not an issuebecause these are run of the river dams and will not impact the Brahmaputra flow. More importantly, Brahmaputra is not entirely dependent on upstream flows and an estimated 35% of its basin is in India.
  • However, India is concerned about the Chinese activities affecting the quality of water, ecological balance and the flood management.
  • Unidentified Chinese upstream activities in the past have triggered flash floods in Arunachal Pradesh and Himachal Pradesh and, more recently, turned the water in the once-pristine Siang – Brahmaputra’s main artery – dirty and grey as it entered India.
  • About a dozen small or medium sized Chinese dams are already operational on the Brahmaputra’s upper reaches. But with its dam building now moving to the river’s India-bordering canyon region, China will be able to manipulate transboundary flows and leverage its claim to the adjacent Arunachal.
  • India and Chinado not have a water sharing agreement. Both nations share hydrological data so it becomes important to share genuine data and have continuous dialogue on issues like warning of droughts, floods and high water discharges.
  • The expanding water war is clearly part of China’s integrated, multidimensional strategy against India, which seeks to employ all available means short of open war. Its unconventional war is profoundly impacting every core Indian interest.

Way Forward:

  • Declassification of data and making it available for everyone along with the full disclosure of all project details will be the first step towards confidence-building in a largely charged and vitiated climate of foreign relation between the two Himalayan neighbours.
  • India is required to go beyond the exchange of hydrological data and ask China for information on the topographic condition of the whole basin.
  • Any forward movement on ensuring hydro-security in the Brahmaputra basin would require a long-term understanding between the two countries.
  • It is necessary for India to engage China in a sustained dialogue and secure a water-sharing treaty that serves the interests of both the countries.
  • India should continue to voice its legitimate concerns through the already established channel — the Expert-level Mechanism (ELM) on transborder rivers.

Conclusion:

The 14th five-year plan included building the dam on the lower reaches of the Brahmaputra river over which India and Bangladesh, the riparian states, have raised concerns. China has downplayed such anxieties saying it would keep their interests in mind. By setting out to dam the Brahmaputra there, China is seeking to effectively weaponise water against India.

 


General Studies – 3


 

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. Science and Technology- developments and their applications and effects in everyday life.

5. Integrating the best that digital currencies have to offer into the traditional financial paradigm is the need of the hour. Explain. (250 words)

Reference: Live Mint   

Why the question:

The article talks about a call to re-consider India’s aversion to cryptocurrencies and embrace the opportunities.

Key Demand of the question:

Explain the importance of integrating the best that digital currencies have to offer into the traditional financial paradigm.

Directive:

Explain – Clarify the topic by giving a detailed account as to how and why it occurred, or what is the particular context. You must be defining key terms where ever appropriate, and substantiate with relevant associated facts.

Structure of the answer:

Introduction:

Start with what digital currencies are.

Body:

The answer body must have the following aspects covered:

  • Discuss the concerns over Cryptocurrencies.
  • Indian policy response to Cryptocurrencies: Prohibition: In 2018, the Reserve Bank of India prohibited regulated entities from providing services that deals with or settles trades in any virtual currency. Resurrection: In 2020, Supreme Court lifted this restriction.
  • Then highlight the advantages of Cryptocurrencies.

Conclusion:

Conclude with way forward.

Introduction:

Cryptocurrencies are digital currencies in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. It is based on the blockchain technology.

Union minister Anurag Thakur said the government is open to evaluate and explore new technologies, including cryptocurrencies, for improving governance.

Body:

Cryptocurrency in India:

  • Reserve Bank of India (RBI) prohibited banks and entities regulated by it from providing services in relation to virtual currencies (VCs) in 2018.
  • The ban that came into force in April 2018, had crippled the Indian cryptocurrency industry.
  • Supreme court struck down this provision calling it unconstitutional.
  • The central government is likely to consider a new Bill Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which is yet to be finalized.
  • The Bill also seeks to prohibit all private cryptocurrencies in India; however, it allows for certain exceptions to promote the underlying technology of cryptocurrency such as blockchain and its uses.

Concerns over digital currencies:

  • Cryptos are feared not just for their sheer speculative propensities, but also for their capacity to undermine sovereign currencies (the latter is an exaggerated apprehension).
    • This can lead to volatility in the money market and if banks start trading in crypto currencies, the problem of fraud may become more frequent.
  • Virtual currency is being traded anonymously over the Internet and used for a host of antinational and illegal activities, from terror funding to illicit trade of arms and drugs and so on.
    • This threat looms large on India, as there were instances of drug peddling using bitcoins over the dark web in Punjab.
  • The online use of this currency, was without any border restrictions or geographical constraints, resulting in danger to the integrity and sovereignty of the nation.
  • It could dramatically change global monetary policymaking. People will exchange their national currencies for the new digital coin in order to buy and sell the many products that will be priced in it. This will further impact the profit of banks and will put stress on their balance sheet.
  • Governments and policymakers will have reduced ability to control inflation. Usually, when inflation picks up, central banks take steps to control it through various monetary rates. Cryptocurrency will be out of control of the central bank so liquidity control will be an issue.

Digital currency regulation: Need of the hour

  • Smart regulation is preferable, as a ban on something that is based on a technology of distributed ledger cannot be implemented for all practical purposes.
  • Even in China, where cryptocurrencies have been banned and the Internet is controlled, trading in cryptocurrencies has been low but not non-existent, as an India inter-ministerial committee found out.  Eg: Japan regulated use of cryptocurrency.
  • SC Garg committee encouragingly batted for an official digital currency as well as for the promotion of the underlying blockchain technology. Yet went ahead for banning other cryptocurrencies.
  • Regulation must be done at the point of exchange where it is easy to monitor.
  • The Supreme Court held that an outright ban on virtual currencies would be a disproportionate measure by the government since ma­ny less intrusive measures are available.
  • It is worth remembering that virtual currency transactions do not operate in a complete regulatory vacuum.
    • Several existing laws such as the Consumer Protection Act, Information Technology Act, Foreign Exchange Management Act, PMLA, besides tax, deposit-related and criminal laws apply to the virtual currency domain just as they apply to any other economic activity.
  • In fact, action has already been taken in India under many of these laws against errant persons and entities operating in the virtual currency domain.
  • The government must resist the idea of a ban and push for smart regulation.

Conclusion:

Rather than impose bans, it would be more pragmatic to institute awareness campaigns to alert investors to specific risks, and to monitor trades for fraud and scams. Fintech industry needs to jointly work with the RBI and the government on a constructive policy framework for cryptocurrencies in India.

 

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

6. Differentiate Development Finance Institutions (DFIs) from commercial banks.  Discuss the need for India to have DFIs to fund infrastructure. (250 words)

Reference:  Economic TimesIndian Expres

Why the question:

The Union Cabinet on Tuesday gave its nod to a bill for setting up of a Development Finance Institution (DFI) for funding long-term infrastructure financing. Thus the question.

Key Demand of the question:

Differentiate Development Finance Institutions (DFIs) from commercial banks.  Discuss the need for India to have DFIs to fund infrastructure.

Directive:

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction:

Start with what Development Finance Institutions (DFIs) is.

Body:

The development finance institutions or development finance companies are organizations owned by the government or charitable institutions to provide funds for low-capital projects or where their borrowers are unable to get it from commercial lenders.

Explain the objectives of Development Finance Institutions.

Discuss the need for India to have DFIs to fund infrastructure.

Conclusion:

Conclude with importance.

Introduction:

A World Bank survey defines a development bank as ‘a bank or financial institution with at least 30 per cent State-owned equity that has been given an explicit legal mandate to reach socioeconomic goals in a region, sector or particular market segment’. It uses the terms Development Bank and Development Financial Institution interchangeably.

The development finance institutions(DFIs) or development finance companies are organizations owned by the government or charitable institution to provide funds for low-capital projects or where their borrowers are unable to get it from commercial lenders.

Body:

Difference between DFI and commercial banks:

ParametersCommercial BanksDevelopment Finance Institutions
MeaningCommercial Banks are the banks that provide basic banking and financial services to individuals and corporates.Development Banks are the banks which are set up to provide finance for infrastructural and economic development.
NatureReactiveProactive
Set upSet up under the Companies Act, as Banking Companies.Set up under specialized act.
Source of fundsRaise funds from accepting public deposits.Borrowing, grants and selling of securities.
Loans providedShort and Medium-term loansMedium and Long term loans
OrientationProfit orientedDevelopment oriented
PurposeTo make a profit by lending money at a high rate of interest.To achieve social profit, by providing funds for developmental projects.
Services offeredLegal, Business advice and Credit Investigation service are provided for a definite fee.Counselling and Advisory service are provided for the development and promotion of the enterprise.
ClientsIndividuals, and Business EntitiesGovernment

 

Need of DFI to channel funds for infrastructure projects in India:

  • The role of DFIs—as development finance institutions making impact investments for sustainable development, generating profits—allow them to be a catalytic intermediary between private capital and the markets in the developing world.
  • These institutions are meant to provide long term finance to agriculture, industries, trade, transport, and basic infrastructure.
  • A DFI provides financing for development activities at less than strictly commercial terms. It delivers this through technical assistance grants, structured loans, different types of guarantees and credit enhancement and sometimes even equity.
  • DFIs can have a specific sectoral or broad focus. The specific sector ones typically cover infrastructure, core industries, small and medium enterprises, agriculture, and exports. Broadly focused ones tend to cover some or all of these sectors.
  • Meeting the SDGs by 2030 is not impossible but it will require over US$11.5 trillion in investments, according to United Nations estimates.16Donors and aid agencies have been playing an indispensable role in helping low- and middle-income countries achieve these goals.
  • DFIs were transformational for many countries in their digital revolution and they can continue to play an important role as developing countries undergo the fourth industrial revolution.
  • DFIs can help finance the expansion of new technologies in the emerging markets that will bring us closer to achieving the sustainable development goals.
  • By making targeted investments to fund innovative ventures, they can leverage many additional billions of dollars and turn the hopes and aspirations of the developing world into real opportunities.
  • DFIs can once again take center stage and use their resources to mitigate the risks posed by new technologies while creating an enabling environment that will foster innovations that can spur long-term economic development

DFIs in India:

Agriculture

  • NABARD: National Bank for agriculture and rural development was established in July 1982. It is the apex institution in the area of agriculture and rural sectors.

Industry

  • IFCI: Industrial Finance Corporation of India was established in 1948. 1st DFI in India.
  • ICICI: Industrial Credit and Investment Corporation of India Limited established in 1955 by an initiative of the World Bank. In 2002, ICICI limited was merged into ICICI Bank Limited making it the first universal bank of the country.
  • IDBI: Industrial Development Bank of India was set up in 1964 under RBI and was granted autonomy in 1976. It is responsible for ensuring adequate flow of credit to various sectors. It was converted into a Universal Bank in 2003
  • IRCI: Industrial Reconstruction Corporation of India was set up in 1971. It was set up to revive weak units and provide financial & technical assistance.
  • SIDBI: Small Industries development bank of India was established in 1989.

Foreign Trade

  • EXIM Bank: Export-Import Bank was established in January 1982 and is the apex institution in the area of foreign trade investment. Provides technical assistance and loan to exporters

Housing:

  • NHB: National Housing Bank was established in 1988. It is the apex institution in Housing Finance

Conclusion:

Development finance institutions (DFIs) have emerged as one of the fastest growing agencies pursuing innovative financial solutions to support development efforts worldwide. A new-age DFI would have to come to terms with governance issues if it is not to eventually become a fiscal burden. One way would be to subject it to the discipline of the stock market.

 

Topic: Science and Technology- developments and their applications and effects in everyday life. Achievements of Indians in science & technology; indigenization of technology and developing new technology.

7. Explain the need for a value-based global AI governance framework to realize the true potential of the technology. (250 words)

Reference:  The Hindu

Why the question:

The article highlights the need for a value-based global AI governance framework to realise the true potential of the technology.

Key Demand of the question:

Explain the need for a value-based global AI governance framework to realize the true potential of the technology.

Directive:

Explain – Clarify the topic by giving a detailed account as to how and why it occurred, or what is the particular context. You must be defining key terms where ever appropriate, and substantiate with relevant associated facts.

Structure of the answer:

Introduction:

Start with brief introduction on significance of AI in general.

Body:

The answer body must have the following aspects covered:

Discuss the merits of AI; Unprecedented growth: From beating human champions at Jeopardy in 2011 to vanquishing the world’s number one player of Go, to decoding proteins. The unlimited scope: AI can leapfrog us toward eradicating hunger, poverty and disease, opening up new and hitherto unimaginable pathways for climate change mitigation etc. Direct benefits: AI has helped increase crop yields, raised business productivity, improved access to credit and made cancer detection faster and more precise. Towards SDGs: A study published in Nature reviewing the impact of AI on Sustainable Development Goals (SDGs) finds that AI may act as an enabler on 134 or 79% of all SDG targets. Economic potential: Can contribute >$15 trillion to world economy by 2030, adding 14% to global GDP.

Then bring out the concerns associated with AI.

Conclusion:

Conclude with solutions.

Introduction:

We often see technology as a helping hand or better yet, a path to a better world. But before any of that, we have to lay down the ethics with in it so we can have a moral underground on where to start.

Techno ethics views technology and ethics as socially embedded enterprises and focuses on discovering the ethical use of technology, protecting against the misuse of technology, and devising common principles to guide new advances in technological development and application to benefit society.

Body:

Background: Rapid development of AI:

  • In just the last decade, AI has evolved with unprecedented velocity — from beating human champions at Jeopardy (a game) in 2011, to vanquishing the world’s number one player of Go, to decoding proteins.
  • Already, AI has helped increase crop yields, raised business productivity, improved access to credit and made cancer detection faster and more precise.
  • It could contribute more than $15 trillion to the world economy by 2030, adding 14% to global GDP. Google has identified over 2,600 use cases of “AI for good” worldwide.
  • As AI is evolving, it is raising some new ethical and legal questions. AI works by analysing data that is fed into it and draws conclusions based on what it has learned or been trained to do.
  • Though it has many benefits, it may pose a threat to humans, data privacy, and the potential outcomes of the decisions. To curb the chances of such outcomes, organisations and policymakers are crafting recommendations about ensuring the responsible and ethical use of AI.

Need for value-based global AI governance framework:

  • First, algorithms, whether static or of the machine-learning sort, are not value-free. The data underlying them and the formulae that make them function, think, and transform over time embody the biases of history and that of their designers.
  • This means that algorithms should be subordinated to the same kind of universal ethics regime that governs human and state behaviour: something similar to the Universal Declaration of Human Rights.
  •  Artificial intelligence will make human lives more efficient.
    • But here we must not mistake efficiency for morality – just because something is more efficient does not mean that it is morally better.
    • For example, people can make more efficient weapons – more efficient at killing people and destroying things – but that does not mean they are good or will be used for good. Weapons always reflect a form of damage to the common good.
    • As the realms of unexplored areas of AI progresses, existing regulation will become obsolete.
  • The challenge today is that several AI applications have been used by consumers or organisations only for them to later realise that the project was not ethically fit. An example is the development of a fully autonomous AI-controlled weapon system which is drawing criticism from various nations across the globe and the UN itself.
  • Another challenge arises from a data protection perspective because AI models are fed with data sets for their training and learning. This data is often obtained from usage history and data tracking that may compromise an individual’s identity
  • Another example, for instance are self-driving cars. It executes as per the algorithm it has been fed. Now, in a hypothetical situation the car has to decide whether to swerve left or right. But in either case there is collateral damage, say of a school bus with students or a pedestrian.
    • Can this decision be taken in a rational manner? It is not possible to choose whom to save or put a price on whose life as being more precious.

Conclusion:

Any new technology that changes our businesses or society for the better often has a potential dark side that is viewed with suspicion and mistrust. The disruptive potential of AI poses looming risks around ethics, transparency, and security, hence the need for greater governance. AI will be used safely only once governance and policies have been framed, mandating its use.


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