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[Mission 2023] Insights SECURE SYNOPSIS: 30 July 2022

 

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.

 

Answer the following questions in 150 words:


General Studies – 1


 

1. Digital governance and initiatives are the future but it should not compromise the dignity and rights of the poor and needy. Examine.

Reference: The Hindu

Introduction

The right to live with dignity is a constitutional imperative. However, it rarely manifests in discussions surrounding digital initiatives in governance. Centralised data dashboards — valuable as they are — have become the go-to mode for assessing policies, relegating principles such as human dignity and hardships in accessing rights to its blind spots. Often when technological glitches prevent one from accessing rights, there is a tendency to make the rights-holder feel responsible for it.

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Digital governance compromising rights of poor and needy

  • Increasing penetration of digital technology by bridging the existing digital divides is associated with greater social progress of a country. But certain times people without knowledge or access to internet will be left behind in the wheel of progress.
  • Social capital: Once an individual is connected, Internet connectivity and ICTs can enhance his or her future social and cultural capital.
  • Economic disparity is created between those who can afford the technology and those who don’t.
  • A direct correlation between a company’s access to technological advancements and its overall success in bolstering the economy.
  • Countries with less digital gap are benefitted more than the ones with more digital gap.
  • Education:
    • The digital divide also impacts children’s ability to learn and grow in low-income school districts.
    • Without Internet access, students are unable to cultivate necessary tech skills in order to understand today’s dynamic economy
  • Lack of information:
    • Almost all India’s socio-economic problems had links to the “digital divide”, which had come to stay during the era of digital revolution and then again during the era of internet revolution in India.
    • Rural India suffered from information poverty. Information is controlled by a few at the top of the pyramid who restrict its percolation down to those at the bottom.
  • Political empowerment and mobilization in the age of social media is difficult when there is digital divide.

 

Conclusion

With digital revolution there must be digital inclusion and transformation must be accompanied by empowerment of masses. Else the spoils will go to the victors and the poor will remain the vanquished in this new era of digital governance. Sabka Saath is more important for sabka vikas.


General Studies – 2


 

2. Civil society organizations perform important role to help Governments understand and respond to problems and needs on the ground. Critically examine in the context of Indian civil society.

Reference: The HinduInsights on India

 

Introduction

Civil Society Organizations can be defined to include all non-market and non-state organizations outside of the family in which people organize themselves to pursue shared interests in the public domain”.

Examples include community-based organizations and village associations, environmental groups, women’s rights groups, farmers’ associations, faith-based organizations, labour unions, co-operatives, professional associations, chambers of commerce, independent research institutes and the not-for-profit media.

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Need for an active civil society:

  • Citizens have the right to scrutinise the work of their representatives.
  • To publicise acts such as infringement of civil liberties and failure of governments to provide a reasonable standard of life for the citizens.
  • Article 19 of the constitution provides for the democratic right to protest as part of the freedom of expression.
  • The right to participate in an activity should not be restricted to politics and elections alone.
  • Without this right, democracy becomes an illusion.
  • So civil society cannot be conceptualised independent of the state.

Civil society’s functional contribution to good governance

  • Watchdog: against violation of human rights and governing deficiencies.
  • Advocate: of the weaker sections’ point of view.
  • Agitator: on behalf of aggrieved citizens.
  • Educator: of citizens on their rights, entitlements and responsibilities and the government about the pulse of the people.
  • Service provider: to areas and people not reached by official efforts or as government’s agent.
  • Mobilizer: of public opinion for or against a programme or policy.
  • The ways include: Right to Information Act, Consumer Protection Act, Citizens Charters, Whistle-blower protection, e-governance, Democratic Decentralisation, Public Interest Litigation, etc

Role of Civil Society:

  • In a large developing country like India, there are numerous gaps left by the government in the development process. These are the gaps that civil societies try to fill in modern India.
  • Supplementing the government effort to provide health care to citizens, and by raising awareness in society about issues like child and maternal malnutrition
  • A number of NGO’s like Childline India Foundation, World Vision, Arambh India have played important role in raising awareness on child sexual abuse.
  • In the last 20 years, a very large number of NGOs in India have been active in the area of environmental protection.
  • The NGOs have often been helped by the judiciary whenever the government of the day has proved unresponsive.
  • The engagement of civil society and the media in educating citizens about the evils of corruption, raising their awareness levels and securing their participation by giving them a ‘voice’.
  • Civil society can influence policy and project formulation through membership of committees and submission of memoranda.

Limitations of Civil Society

  • Misappropriation of funds: Many NGOs don’t have sophisticated finance and legal teams, nor do they have the funds to conduct audits.
  • The issue of foreign funding: According to government data a total of 3,068 non-governmental organizations (NGOs) received foreign funding above Rs. 22,000 Cr in 2014-15. It is often said that foreign-funded NGOs tries to propagate the foreign propaganda to stall developmental projects. Example: Kudankulam Protest.
  • Non-accountable, non-transparent undemocratic functioning: CBI records filed in the Supreme Court show that only 10% of the total registered NGOs under the Societies Registration Act file annual financial statements.
  • Money Laundering: Corrupt or unscrupulous NGOs that receive foreign funds may serve as conduits for money laundering.
  • Accreditation remains a big challenge as it is very difficult to distinguish whether an organization wants to work for the cause or has been set up only for the purpose of receiving government grants.
  • Over dependence on funds from the government dilutes the willingness of NGOs to speak out against the government.
  • NGOs are often seen as encroaching on centuries-old tradition and culture of the people, and lead to mass protest at times. Ban of Jallikattu, after the PIL by PETA is one such example

Way Forward:

  • A National Accreditation Council consisting of academicians, activist, retired bureaucrats should be made to ensure compliance by NGOs.
  • There should be better coordination between Ministries of Home Affairs and Finance in terms of monitoring and regulating illicit and unaccounted funds.
  • A regulatory mechanism to keep a watch on the financial activities of NGOs and voluntary organizations is the need of the hour.
  • Citizens today are keen to play an active role in processes that shape their lives and it is important that their participation in democracy go beyond the ritual of voting and should include promotion of social justice, gender equity, inclusion etc.
  • The government should frame guidelines for their accreditation, the manner in which these organizations should maintain their accounts and the procedure for recovery in case they fail to submit their balance sheets.
  • Avoid tussle between Home Ministry and Finance Ministry by bringing the regulation of NGOs under one head.
  • General Financial Rules, 2005 have mandated a regulatory mechanism for the NGOs and a comprehensive law in line with these rules should be framed in no time.

Conclusion

NGOs, Pressure groups and CSOs form the backbone of democracy. Democracy does not just revolve around elections but how rights of the citizens are protected and are allowed to hold power holders accountable. The state must respect the articulation of the politics of voice and not just the politics of the vote. The promises of democracy can only be realised through collective action in civil society. A democratic state needs a democratic civil society and a democratic civil society also needs a democratic state. They mutually reinforce each other.

 

3. The India–United States (US) defence and technology cooperation is pivotal in maintaining international security and order and could yet be the defining one for this century. Analyse.

Reference: Indian Express

Introduction

In recent times, India and USA have strengthened their defence partnership accounting to nearly $15 billion since 2014. The signing of BECA agreement during the 2+2 dialogue shows the strategic convergence of India and USA’s world view. This is especially true with a rising China that threatens to revise the world order.

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The India–United States (US) defence and technology cooperation so far

  • DTTI: India and the United States have launched a Defence Technology and Trade Initiative (DTTI) aimed at simplifying technology transfer policies and exploring possibilities of co-development and co-production to invest the defence relationship with strategic value.
    • It aims to move past the buyer-seller relationship, that currently dominates Indo-Russia defence deals.
  • Defence partnership: USA’s Defence secretary said that it will operationalise India’s ‘Major Defence Partner’ status and continue to build upon existing strong defence cooperation to ensure the US and Indian militaries can collaborate to address shared interests.
    • This allows US to sell high technology aircrafts and drones like the Guardian Sea Drones.
  • Foundational Agreements: All four foundational agreements have been signed which includes, Basic Exchange and Cooperation Agreement (BECA), Communications Compatibility and Security Agreement COMCASA, The General Security of Military Information Agreement (GSOMIA), Logistics Exchange Memorandum of Agreement (LEMOA).
    • Further, the signing of BECA and the four agreements will fast-forward the integration of the Indo-Pacific strategies of their two countries.
  • With logistic memorandum agreement that allows refuelling of each other’s vessels, India and USA will be able to keep a close watch on the movements of Chinese warships in the Indian Ocean. It can counter the String of Pearls strategy of China.
  • Moreover, its signing comes at a time when India is locked in one of its most hostile standoffs with China along their disputed border in the Himalayan region and also increased Chinese hegemony in the disputed south China sea.
  • 2+2 Dialogue: The foreign and defence ministers of India-USA meet every year for 2+2 dialogue where major security aspects are discussed.
    • This is all the more important when China’s aggression has increased and Russia has become anti-west and aligning with China.
    • India’s 2+2 with USA as well as Japan and Australia, is in sync with increasing formalization of QUAD, which can be seen in the recent joining of Australia in the Malabar naval exercises.
  • Defence deals: Advanced technology aircraft such as Chinook, Apache and Hercules have been obtained from USA. There is no such matching technology with any other nation.

Importance of cooperation

  • A strong India benefits the United States. As Secretary of Defense Lloyd Austin noted at the recent 2+2 talks, a strong India-U.S. partnership is a critical building block in a more resilient, regional security architecture.
  • Global challenges have multiplied, and the order that has kept the peace since the Cold War’s end is under strain.
  • With the rise of China, a new Cold War has begun, this time in the Indo-Pacific, where India is a key player.
  • With its global presence and multiple theaters opening up, U.S. power is reaching its limits and becoming increasingly stretched.
  • A strong India that not only balances China but also plays a larger security role in the region will relieve some pressure on the United States.
  • Assisting India in developing a robust military-industrial complex will most likely shift India’s inclination toward the U.S. for critical weapons imports, as it has with Russia thus far.
  • As cost constraints tighten, U.S. defense companies will benefit from partnering with India in their supply chain, taking advantage of lower costs.
  • Perhaps in the future, India could be a part of a new multinational weapons project led by the U.S., bringing some of the capabilities it develops as well as financial contributions from its expanding economy.
  • Pursuing only a buyer-seller relationship as an alternative to Russia will only shift India’s dependency, which will not be of interest to New Delhi.

Conclusion:

India and the United States need a landmark defense deal to strengthen their defense ties, similar to the 2005 nuclear agreement, which marked a turning point in their overall bilateral relationship. Such a deal will demonstrate to India that the U.S is capable of being a strong ally as Russia has been. The defence partnership between India and USA must aim to ensure rules-based world order and to ensure security and peace against hegemonic tendencies.

 


General Studies – 3


 

4. What is blue economy? How can it be equitably and sustainably harnessed as a lever for economic growth? Present India’s strengths and weaknesses in this regard.

Reference: Down to EarthInsights on India 

 

Introduction

“Blue Economy” refers to strategic and sustainable use of Marine Resources for the development of Economy and the well-being of human. Gunter Pauli’s book, “The Blue Economy: 10 years, 100 innovations, 100 million jobs” (2010) brought the Blue Economy concept into prominence. It offers “Green Approach” to meet the aspirations of mankind. India is endowed with a vast coastline of approximately 7500 Km and hence better placed to harness the “potential of oceans” – with an Exclusive Economic Zone (EEZ) of 2.02 mn. sq.km. It is an upcoming sunrise sector.

Union Minister of State (Independent Charge) Science & Technology, Jitendra Singh has said that the Union Ministry of Earth Sciences (MoES) is finalising a National Policy on the blue economy for the country.

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Potential of Blue economy in India:

  • Economy:
  • Blue economy, through sustainable use of oceans, has great potential for boosting the economic growth by providing opportunities for income generation and jobs etc.
  • It can support food security, and diversification to address new resources for energy, new drugs valuable chemicals, protein food, deep sea minerals, security etc.
  • At least 3-5% of global GDP is derived from oceans
  • Socio-Economic Development:
  • Blue economy presents India with an unprecedented opportunity to meet its national socio-economic objectives as well as strengthen connectivity with neighbours.
  • Blue Economy can help in focusing on livelihood generation, achieving energy security, building ecological resilience, and improving health and living standards of coastal communities.
  • Blue economy would reinforce and strengthen the efforts of the Indian government as it strives to achieve the SDGs of hunger and poverty eradication along with sustainable use of marine resources by 2030.
  • Environmental Benefits:
  • Mangroves and other vegetated ocean habitats sequester 25 percent of the extra CO2 from fossil fuels, i.e., Blue Carbon.
  • Protection of coastal communities from disasters like floods and storms.
  • A Sustainable Blue Economy can help to achieve commitments under UN’s Sustainable Development Goals 2030, Paris climate agreement 2015 and the UN Ocean Conference 2017
  • Renewable Energy:
  • Sustainable marine energy can play a vital role in social and economic development.
  • As energy sources on the surface are limited, in the near future the dependency on marine resources will increase, which will require more human resource to be deployed in the field of environment engineering and marine resource protection
  • Mineral Wealth:
  • According to ISA there are vast reserves of Poly-metallic Nodules, sulphides, cobalt rich ferro-mangenese crust( rich in cobalt, bismuth, iron, lead, platinum).
  • ISA has notified two major areas “clariton-clipperton fracture zone” and Central Indian Ocean Basin.
  • India has already signed a contract and entered in the league with Japan, USA, China
  • Fisheries:
  • Sustainable fisheries can generate more revenue, more fish and help restore fish stocks.
  • Maritime Transport:
  • Over 80% of international goods traded are transported by sea.
  • Marine services sector could serve as the backbone of its blue economy and help India become 10 trillion dollar economy by 2022.
  • Indian Ocean is a major conduit of trade with as much as 80% of global oil trade happening through it.
  • Tourism:
  • Ocean and coastal tourism can bring jobs and economic growth.
  • Climate Change and Bio-diversity:
  • Oceans are an important carbon sink (blue carbon) and help mitigate climate change.
  • Oceans protect biodiversity, keep the planet cool, and absorb about 30% of global CO2 emissions.
  • Oceans cover three-quarters of the Earth’s surface, contain 97% of the Earth’s water, and represent 99% of the living area on the planet.
  • Waste Management:
  • Better waste management on land can help oceans recover.

Challenges associated:

  • Threat of sea borne terror:
    • Piracy and armed robbery, maritime terrorism, illicit trade in crude oil, arms, drug and human trafficking and smuggling of contraband etc.
  • Natural Disasters:
    • Every year tsunamis, cyclones, hurricanes typhoons etc leave thousands of people stranded and property worth millions destroyed.
  • Man-Made disasters:
    • Oil spills, climate change continue to risk the stability of the maritime domain.
  • Impact of climate change:
    • Threats of both slow-onset events like sea-level rise and more intense and frequent weather events like cyclones.
    • Long-term climate change impacts on ocean systems like changes in sea temperature, acidity, and major oceanic currents.
  • Marine pollution:
    • In form of excess nutrients from untreated sewerage, agricultural runoff, and marine debris such as plastics.
    • Deep sea mining can cause long term irreversible ecological damage to marine ecosystem.
  • Geopolitical issues:
    • Geopolitical tussle between in various regions like South China Sea, Indian Ocean Region etc. and undermining International Laws like UNCLOS limits the countries from achieving the full potential of Blue Economy.
  • Overexploitation of marine resources:
    • Illegal, unreported, and unregulated extraction of marine resources.
    • FAO estimates that approximately 57 percent of fish stocks are fully exploited and another 30 percent are over-exploited, depleted, or recovering.
  • Unsustainable development near marine areas:
    • Physical alterations and destruction of marine and coastal habitats & landscapes largely due to coastal development, deforestation, & mining

Way Forward:

  • India should look to adopt the sustainable approach of balancing economic benefits with sustainability for meeting the broader goals of growth, employment generation, equity and protection of environment.
  • We need to come up with technology to explore the minerals deep down at seabed.
  • India must focus on marine ICTs, and transport (shipping) and communication services, and the creation of a knowledge hub for marine research and development.
  • An effective response mechanism to address humanitarian crises and natural disasters should be made for the evolving Indian Ocean security strategy.
  • India should not look at its oceans as just water bodies, but as global stage for continued economic, social, and cultural dialogue.
  • Ever increasing marine pollution must be abated and India’s vow to curb plastic pollution must be pursued relentlessly.
  • Tackling the Global warming and submergence of low lying islands as part of Paris Climate deal agreement and initiatives like FIPIC.

 

5. In order to reap the maximum benefits, it becomes pertinent to increase private participation and nudge India towards a scientific pursuit of space exploration driven by economic aims. Discuss.

Reference: The Hindu

Introduction

India is lagging in harnessing the power of private innovation in the space domain. This not only limits the exploitation of space for economic development, but has serious national security implications.

Principal Scientific Adviser Ajay Kumar Sood stated earlier this month that the government would soon come up with a new space policy that could initiate the rise of India’s own “SpaceX-like ventures”.

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Potential of private sector in the space sector

  • Today, the space industry is undergoing a paradigm shift, moving from Space 3.0 to Space 4.0, driven by changes in motivations, actors, roles, and technologies.
  • While Space 3.0 has been characterized by large government investments and public-public collaborations, Space 4.0 is a more democratized and accessible field with more public-private and private-private collaborations.
  • It entails the emergence of a plethora of small to medium-sized private companies.
  • As military uses of space and prestige projects like Moon-landing emerged, major private sector entities already in the aviation industry like Boeing and Lockheed won space contracts in the US.
  • Significant expansion of satellite-based telecommunication, navigation, broadcasting and mapping, and lent a significant commercial dimension to the space sector.
  • As the digital revolution in the 21st century transformed the world economy, the commercial space sector has begun to grow in leaps and bounds.
  • The global space business is now estimated to be around $ 400 billion and is expected easily rise to at least trillion dollars by 2040.
  • One example of the rise of private sector companiesin the space sector is SpaceX run by the US entrepreneur Elon Musk. Hired for a resupply mission for the space station, it now launches more rockets every year than NASA.
  • The entry of private sector has begun to drive down the cost-per-launch through innovations such as reusable rockets.
  • India, however, is quite some distance away from adapting to the unfolding changes in the global space business.
  • In its early years, India’s space programme that was constrained by lack of resources found innovative ways of getting ahead in space.
  • Although the ISRO encourages private sector participation in the national space programme, its model is still very 20th century — in terms of governmental domination.

Challenges for private space entities in India:

  • Monopoly: In India ‘Space’ means Indian Space Research Organisation. Globally the technology is highly protected because of its dual use capability. Even if it was not, it would be prohibitively expensive.
  • Funding: A major challenge in setting up a space business in India is funding. Space industry is capital intensive and upstream activities come with a long gestation period.
  • Investor’s Dilemma: The lack of clarity among the investors and lack of the ecosystem required for significant contribution is a challenge for the investors.
  • Lack of Regulation: India is a party to the Outer Space Treaty, where one of the fundamental requirements laid upon states is the supervision of space activities within its borders, the country did not have any formally legislated laws. This is a potential roadblock for commercialization.
  • Growth Challenges: Scaling up, international marketing and funding are challenges.
  • Lack of Support: The Indian ecosystem has neither incubation support nor pointers to seek support of leaders such as ISRO for space start-ups.
  • Political and bureaucratic hurdles limit private space operations in India.
  • Low in-house capacity of ISRO restricts them to very few launches in a year. Privatization can offload 30-40% of the work and help them work more efficiently.

Way forward:

  • India should have national space activities legislation which takes on board all stakeholders.
  • A public-private partnership (PPP) model can be looked into to realise ISRO’s workhorse Polar Satellite Launch Vehicle (PSLV), with a joint venture between ISRO and the private sector.
  • In the UK, space ventures are treated as a complement to big organizations and not a competitor. This should be encouraged in India too.
  • A supportive international partner and likeminded local partners helps to set up a space business.
  • The idea should be to let the private industry build their own facilities after gaining enough expertise.
  • ISRO has built a space technology park spread over 25 acres in Bengaluru where the entire range of facilities have been set up for use by the industry.

Conclusion

The private sector already supplies majority of the sub-systems in satellite manufacturing. This can be further scaled up into other activities with proper regulation and partnership of the ISRO and private sector. The country must deregulate the space sector to encourage private enterprise if we are to compete in the new space economy.

Value addition

Indian Space Association or ISpA is a premier industry association of space and satellite companies. In line with the recent measures taken to expand the role of private players in the space sector, the Indian Space Association aims to serve as a body that brings public and private entities together so that they can work in tandem for the expansion of the Indian space programme. 

 

Answer the following questions in 250 words(15 marks each):


General Studies – 1


 

6. As India becomes increasingly urbanised and families break up into smaller units, the care of elderly people is need to be managed by a set of professionals specialised interested in geriatric services. Discuss.

Reference: Indian Express Insights on India 

Introduction

Currently, India’s population is among the youngest in an ageing world, however, a major proportion of India’s population will be aged by 2050. The population share of the youth is starting to taper off as the share of the elderly is expected to steadily surge during 2021-2036. This calls for more forward-looking policies incorporating population dynamics, education and skills, healthcare, gender sensitivity and most importantly geriatric care.

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Key findings of report

  • Decrease in youth population: Youth in the age group of 15-29 years comprise 27.2 per cent of the population for 2021, which is expected to decrease to 22.7 by 2036.
  • The more populous states of Bihar and Uttar Pradesh, which experienced a rise in the proportion of youth population to total population till 2021, are expected to see a decline from hereon, according to the ‘Youth in India 2022’ report released by the Ministry of Statistics and Programme Implementation.
  • States such as Kerala, Tamil Nadu and Himachal Pradesh are projected to see a higher elderly population than the youth by 2036.
  • Bihar and Uttar Pradesh along with Maharashtra, Madhya Pradesh and Rajasthan, are projected to have over half (52 per cent) of the country’s youth,” the report said.
  • Fluctuation in population growth: The total youth population is projected to reach around 37cr by 2021 and, thereafter, decrease.
  • Increase in elderly population for some states: For Kerala, which saw the youth population peak earlier than other states, the elderly population share in the total population has been projected at 16.5 per cent compared with 22.1 per cent of the youth population in 2021.

Status of elderly in India:

  • The UN World Population Ageing Reportnotes that India’s ageing population (those aged 60 and above) is projected to increase to nearly 20% by 2050 from about 8% now.
  • By 2050,the percentage of elderly people will increase by 326%, with those aged 80 years and above set to increase by 700%, making them the fastest-growing age group in India.
  • A study suggests 8 per cent of the population over 75was afflicted by dementia
    • Alzheimer’s Associationsuggests that the country is already home to 4 million people with this condition.
    • Dementia is a condition associated with ageing and resulting from progressive degeneration of the brain.
  • Lack of family support: Transition to a nuclear family means that an increasing proportion of the elderly will live only with their elderly spouse or alone.

 

Issues associated with elderly population in India

  • Feminisation of ageing: The sex ratio of the elderly has increased from 938 women to 1,000 men in 1971 to 1,033 in 2011 and is projected to increase to 1,060 by 2026.
    • The report also noted that between 2000 and 2050, the population of 80-plus people would have grown 700% “with a predominance of widowed and highly dependent very old women” and so the special needs of such old women would need significant focus of policy and programmes.
  • Financial issues: Retirement and dependence of elderly on their child for basic necessity.
    • Sudden increase in out-of-pocket expenses on treatment.
    • Migration of young working-age persons from rural area have negative impacts on the elderly, living alone or with only the spouse usually poverty and distress.
  • Health: Multiple disabilities among the elders in old age.
    • Health issues like blindness, locomotor disabilities and deafness are most prevalent.
    • Mental illness arising from senility and neurosis.
    • Absence of geriatric care facilities at hospitals in rural area.
  • Social issues: Indian society is undergoing rapid transformation under the impact of industrialization, urbanization, technical & technological change, education and globalization.
    • Consequently, the traditional values and institutions are in the process of erosion and adaptation, resulting in the weakening of intergenerational ties that were the hallmark of the traditional family.
    • Feeling of powerlessness, loneliness, uselessness and isolation in elderly.
    • Generational gap.

Roadmap for elderly care with passage of time

  • Increasing the monthly pension of elderly to minimum of Rs 2,000 per month.
  • Under Pradhan Mantri Awas Yojana, Housing for the aged, particularly the aged poor, must be a priority.
  • Assisted living facilities for indigent elderly, particularly those with age-related issues like dementia, needs policy focus.
  • More tax benefits, or at least removing tax on deposit interest for seniors.
  • Enhancing the geriatric care health infrastructure especially in rural area.
  • Allocation of special budget for elderly population at both levels.
  • Providing entertainment facilities like libraries and clubs at panchayat level.
  • Appreciations for the contributions of elderlies at village level.

Conclusion

Social security is the concurrent responsibility of the central and state governments as, mandated under Indian constitution i.e., Well-being of senior citizens – Article 41 in particular and 46 in general of Indian constitution. In this regard, National Policy on Senior Citizen, 2011 was framed.

For the welfare and care for the older persons, we must focus on the protection of already existing social support systems/traditional social institutions such as family and kinship, neighbourhood bonding, community bonding and community participation must be revived and kins should show sensitivity towards elderly citizens.


General Studies – 2


 

7. A number of constraints and challenges both in federal as well fiscal system are part of the problems that must be solved in order to achieve effective fiscal federalism in the country. Critically analyse.

Reference: The Hindu

Introduction

Fiscal federalism is the financial relations between units of governments in a federal government system. It is part of broader public finance discipline. The term was introduced by the German-born American economist Richard Musgrave in 1959. Fiscal federalism deals with the division of governmental functions and financial relations among levels of government

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Various issues regarding fiscal federalism in India

  • Reduced Fiscal capacity of states:
    • The ability of States to finance current expenditures from their own revenues has declined from 69% in 1955-56 to less than 38% in 2019-20.
    • While the expenditure of the States has been shooting up, their revenues did not. They still spend 60% of the expenditure in the country — 85% in education and 82% in health.
    • Since States cannot raise tax revenue because of curtailed indirect tax rights — subsumed in GST, except for petroleum products, electricity and alcohol — the revenue has been stagnant at 6% of GDP in the past decade.
  • Shrunken divisible pool:
    • Even the increased share of devolution, mooted by the Fourteenth Finance Commission, from 32% to 42%, was subverted by raising non-divisive cess and surcharges that go directly into the Union kitty.
    • This non-divisive pool in the Centre’s gross tax revenues shot up to 15.7% in 2020 from 9.43% in 2012, shrinking the divisible pool of resources for transfers to States.
  • GST:
    • States have lost the autonomy to decide the tax rates of subjects that fall within the State List.
    • Previously, state governments used to fix tax rates by taking into account their spending requirements, revenue base, etc.
    • The inability of states to fix tax rates to match their development requirements implies greater dependence on the centre for funds.
  • Cess and surcharges:
    • Another emerging challenge is that cesses and surcharges are becoming a disproportionate proportion of the overall divisible revenue, with non-tax revenues being kept outside the divisible pool.
    • These are worrisome issues, and there should be some mechanism to ensure that the basic spirit of the devolution process should not be undercut by clever financial engineering or by the manipulation of methods that makes them technical and legally tenable, but perhaps not morally so.
  • Increasing dependency on Centre:
    • The dependency of states on the Centre for revenues has increased, with the share of the revenue from own sources declining from 55% in 2014-15 to 50.5% in 2020-21.
    • While part of this is inherent in India’s fiscal structure, wherein states are the big spenders and the Centre controls the purse strings, the situation has been exacerbated by the introduction of the GST.
    • Barring a few exceptions, such as petroleum products, property tax, and alcohol excise, indirect taxes have, to a large degree, been subsumed under the GST regime, eroding the ability of states to raise their own revenues.
  • Shortfall in devolution:
    • Adding to state woes is the significant divergence in past periods between the amount of GST compensation owed and the actual payments made, including for states such as Uttar Pradesh, Bihar and Jharkhand that need greater fiscal support.
    • Even before Covid-19 hit, 11 states estimated a revenue growth rate below the estimated 14% level, implying higher amounts will be owed as GST compensation.
    • With the bulk of the states’ GST coming from goods such as electronics, fashion, and entertainment — all of which have been impacted by the pandemic — these revenues are likely to decline further.

Way-Forward

To sum up, for a large federal country of a mind-boggling diversity, India’s ability to fight Covid-19 pandemic largely rests on how well it manages its Centre-state relation.

  • When compared with other large federal countries such as the US, the country has done very well to minimize the frictions and provide a sense of direction to the states.
  • However, tackling Covid-19 as seen from the experience of other countries would require a differential and agile response across states and the Centre has at best to play the role of a mentor in providing leadership and resource support.
  • The rigid approach as evident in lockdown phase would prove a major hurdle. States must be cleared their dues and be given ample fiscal space to ensure economy is revived.
  • States must be allowed to lead in terms of reviving economy, generating income support, jobs while contain the virus at the same time.
  • The next big change will come when the current Centre-state relationship gets redefined in a way that enables the 28 states to become federal in the true sense – as self-sustaining economic territories in matters of energy, water, food production and waste recycling.
  • Our economic geography of production, transport and communication has to change – it has to become distributive rather than being focused towards the Centre.
  • Centrally distributed funds will need to be directed specifically to build the capacities of each state.
    • The instruments will enable them to embark on a sustainable economic recovery whose base is widely distributed across the various panchayats and districts of each state.
    • Driving distributive recovery will be energy, transport, supply chains, public administration, rule of law, agriculture and rural development.
  • a buoyant tax system can ease the battle for resources in our federal system, and hopefully minimize the mistrust that has grown in recent years between the Centre and states.
  • The 15th Finance Commission has thus recommended a slew of fiscal reforms to increase the tax-to-GDP ratio, especially through an overhaul of the goods and services tax.
  • In short, the real cooperative federalism which the Centre has been espousing for many years is now put on test and the Centre must ensure states are given full cooperation to battle the challenge.

Conclusion

It is important now to rethink the design and structure of a genuine fiscal partnership, which should not merely be a race to garner more resources, but a creative attempt to move towards a vibrant Indian value chain that can catapult India’s growth rate closer to the quest for double-digit growth. Times of economic slowdown must be viewed anecdotally as they are transient in nature and cannot impair India’s vision, both with regard to its potential and its historical compulsions. It is necessary to recast the ideology in a more contemporary context; only then will the practice become more transparent, and India will benefit from congruence between its precepts and practice.

 

8. India’s relationship with ASEAN is a key pillar of our foreign policy and the foundation of our Act East Policy. Analyse the role that north eastern states can play in strengthening ties with ASEAN.

Reference: The Print

Introduction

India’s relationship with ASEAN has emerged as a key cornerstone of our foreign policy. The relationship has evolved from the ‘Look East Policy’ enunciated in early 1990s, to Strategic Partnership in 2012. Since 2014, India is espousing ‘Act East Policy’ that has enhanced the partnership further.

ASEAN-India Strategic Partnership stands on a strong foundation of shared geographical, historical and civilizational ties. ASEAN is central to our Act East Policy and our wider vision of the Indo-Pacific. India and ASEAN will observe 30 years of their Dialogue Partnership in 2022.

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Significance of India- ASEAN strategic partnership and its implications on India

  • Economic Significance
    • 3 Cs–Culture, Connectivity and Commerce–will shape India’s ties with the ASEAN bloc.
    • Connecting India’s North-eastern states with ASEAN.
    • India is part of ASEAN led RCEP which aims to create the world’s largest free trade area with more than a third of the global GDP and commerce.
    • For the first time, bilateral trade between ASEAN and India has crossed US$ 80 billion mark.
    • Singapore has become India’s investment and trading hub in the East.
  • Security Significance
    • ASEAN occupies a central place in the security architecture of the Indo-Pacific region
    • Maritime cooperation in terms of connectivity, safety and security has gained high attention.
    • India and ASEAN can collaborate to combat terror financing, cyber security threats, tax evasions and many more.
    • India needs ASEAN support in achieving a rules-based regional security architecture.
  • Geo-Strategic Significance
    • Partnership with ASEAN nations might help India counter the growing presence of Beijing.
    • ASEAN is seen as the most successful regional organisation next only to the EU
    • To develop connectivity through water, ASEAN and India are working on the Kaladan Multi-Modal Transit Transport Project.
    • ASEAN-India cooperation in maritime domain is one of the key focus areas for growth and development of the Indo-Pacific region.

Importance of North-east states

  • The North-East regionis strategically located with access to the traditional domestic market of eastern India, along with proximity to the major states in the east and adjacent countries such as Bangladesh and Myanmar.
  • The north eastern states are sandwiched between neighbouring countries like Bangladesh, Myanmar, China, Bhutan, and Nepal. Hence India’s Northeast holds strategic and political importance.
  • It ensures India’s connectivity with the rest of East Asian countries.
  • With ASEAN engagement becoming a central pillar of India’s foreign policy direction, these states play an important role as the physical bridge between India and Southeast Asia.
  • North-East has immense natural resources, accounting for around 34% of the country’s water resources and almost 40% of India’s hydropower potential.
  • Tribes in North-East have their own culture. Popular festivals include Hornbill Festivalof Nagaland, Pang Lhabsol of Sikkim, etc.

Way Forward

A six-fold strategy for the comprehensive development of the region has been proposed

  • Empowering people by maximizing self-governance and participatory development through grass-root planning to promote inclusive development.
  • Creation of development opportunities for the rural areas through enhancing productivity in agriculture and allied activities such as animal husbandry, horticulture, floriculture, fisheries and generation of livelihood options through rural non- farm employment.
  • To develop sectors in the region having a comparative advantage such as agro-processing, Hydro-power generation.
  • Enhancing the skills and competencies of the people and building the capacities for institutions with the Government and outside.
  • Creating a hospitable investment climate to encourage investment by the private sector particularly for infrastructure.
  • Harnessing the resources of the Government and the private sector to realize the objectives of the Vision.

Conclusion

 

Innovation, Initiatives, Ideas and Implementation–all the four needs to go together. Inclusive growth is possible through improved governance, doing away with the draconian laws and ensuring the local communities are empowered to implement basic services. For this, all the stakeholders need to formulate a comprehensive realistic plan for the overall development of North East.


General Studies – 3


 

9. The special economic zones (SEZ) scheme in India has shown tremendous growth in infrastructure investment, employment and exports since its introduction. SEZs suffer from their fair share of challenges and the SEZ policy needs to be revamped to bring in certain enablers and relaxations leading to large-scale investments and export promotion. Analyse.

Reference: Live Mint Insights on India

 

 

Introduction

An SEZ is a territory within a country that is typically duty-free (Fiscal Concession) and has different business and commercial laws chiefly to encourage investment and create employment. SEZs are created also to better administer these areas, thereby increasing the ease of doing business.

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About Special Economic Zones India

  • Asia’s first Export Processing Zone (EPZ) was established in 1965 at Kandla, Gujarat state.
  • In India, the Special Economic Zones (SEZs) Policy was announced in 2000.
  • SEZs in India functioned from 2000 to 2006 under the provisions of the Foreign Trade Policy and fiscal incentives were made effective through the provisions of relevant statutes.
  • The Special Economic Zones Act was passed in 2005.

Objectives

  • Generation of additional economic activity
  • Promotion of exports of goods and services
  • Promotion of investment from domestic and foreign sources
  • Creation of employment opportunities
  • Development of infrastructure facilities
  • Once an SEZ has been approved by the board of approval and central government has notified the area of the SEZ, units are allowed to be set up in the SEZ.

 

SEZ and their success in export growth

  • Exports: Exports of Rs. 22,840 Crore (2005-06) has increased to Rs. 7,59,524 Crore (2020-21).
  • Investment: Investment of Rs. 4,035.51 Crore (2005-06) has increased to Rs. 6,17,499 Crore (2020-21).
  • Employment: Employment from 1,34,704 persons (2005-06) has increased to 23,58,136 persons (2020-21). About 376 SEZs are notified but currently only 270 SEZs are operational in India.
  • In the April-December 2021 period, exports from SEZs increased by 25% to 93 billion dollars.

Challenges faced with SEZ

  • It appears that SEZs have ceased to be attractive after the tax holiday for units and developers was wound down between 2017 and 2020.
  • The proliferation of Free Trade Agreements between 2005-15 robbed SEZs of their advantages, as importers outside SEZs benefited from zero-rated imports without being subject to Domestic Tariff Area (DTA) related restrictions.
  • Unutilized Land in SEZs: Due to lack of demand for SEZ space and disruptions caused by the pandemic.
  • Existence of Multiple Models: There are multiple models of economic zones such as SEZ, coastal economic zone, Delhi-Mumbai Industrial Corridor, National Investment and Manufacturing Zone, food park and textile park which pose challenges in integrating the various models.
  • Competition from ASEAN Countries: In the past few years, many of the ASEAN countries have tweaked their policies to attract global players to invest into their SEZs and have also worked on a developmental set of their skilling initiatives.
    • Consequently, Indian SEZs have lost some of their competitive advantages globally and hence need to have fresher policies.

Measures to revamp SEZ in India

  • The government constituted a committee headed by Mr Baba Kalyani, in 2018 to study the existing SEZs of India and prepare a policy framework to adopt strategic policy measures.
  • Recommendations of the Baba Kalyani committee
  • Rename SEZs in India as 3Es- Employment and Economic Enclave
  • Framework shift from export growth to broad-based employment and economic growth
  • Separate rules and procedures for manufacturing and service SEZs
  • Ease of Doing Business (EoDB) in 3Es such as one integrated online portal for new investments
  • Extension of Sunset Clause and retaining tax or duty benefits
  • Unified regulator for IFSC
  • Dispute resolution through arbitration and commercial courts
  • Budget 2022-23– The Budget says that the SEZ Act will be replaced by a new legislation that will enable large existing and new industrial enclaves to optimally utilize available infrastructure and enhance competitiveness of exports.
    • It will enable the States to become partners in development of enterprise and service hubs.
    • It also says that customs administration in SEZs will be fully IT-driven.
    • An infra cluster approach is proposed rather than one based on export subsidies which will be open to WTO challenge.
    • The new SEZ legislation will have single window clearance and provide high class infrastructure.
    • The new dispensation for SEZ, being considered by the government, could allow domestic units to come up in the unutilised area of SEZs and co-exist with SEZ units with proper monitoring.
    • The suggestion of permitting SEZ units to do job work for DTA units for better capacity utilisation may also now be implemented.

 

Conclusion

Promotion of MSME investments in SEZs by linking with MSME schemes and allowing alternate sectors to invest in sector-specific SEZs is among the recommendations by the Baba Kalyani Committee on SEZs.

It had also batted for additional enablers and procedural relaxations as well as granting SEZs infrastructure status to improve their access to finance and enable long-term borrowings.

 

Value addition

SEZ: Features and Benefits

  • Duty free import and domestic procurement of goods for the development, operation, and maintenance of your company/SEZ unit
  • 100% income tax exemption on export income for first five years, 50% for five years thereafter, and 50% of the export profit reinvested in the business for the next five years
  • Exemption from GST and levies imposed by state government (supplies to SEZs are zero rated under the IGST Act, 2017, meaning they are not taxed)
  • Exemption from Minimum Alternate Tax (MAT)
  • Single window clearances for all state and federal government approvals
  • Exemption in electricity duty and tax on sale of electricity by certain states in India
  • Presence of customs officer in the SEZs to facilitate and expedite the trade processes
  • Offering land to SEZ developers at concessional rates by some states.

 

10. The PPP model can be an effective and sustainable option to strengthen the nation’s infrastructure. Examine the role the PPP model can play in bringing India closer to the goal of five trillion-dollar economy.

Reference: Live Mint

Introduction

According to World Bank, public-private partnership (PPP) is a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance.  Public-private partnerships typically are long-term and involve large corporations on the private side. Some of the commonly adopted forms of PPPs include build-operate-transfer (BOT), build-lease-transfer (BLT), design-build-operate-transfer (DBFO), operate-maintain-transfer (OMT), etc. A key element of these contracts is that the private party takes on a significant portion of the risk.

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Advantages of PPP model

  • Access to private sector finance: India has a very large infrastructure need and an associated funding gap. PPPs can help both to meet the need and to fill the funding gap. PPP projects often involve the private sector arranging and providing finance. This frees the public sector from the need to meet financing requirements from its own revenues (taxes) or through borrowing.
  • Better infrastructure: They provide better infrastructure solutions than an initiative that is wholly public or wholly private. By shifting the responsibility for finance away from the public sector PPPs can enable more investment in infrastructure and increased access to infrastructure services.
  • Increased transparency in the use of funds: A well-designed PPP process can bring procurement out from behind closed doors. The PPP tender and award process based on open competitive bidding following international best practice procedures lead to transparency.
  • Less delays: They result in faster project completion and reduced delays on infrastructure projects by including time-to-completion as a measure of performance and therefore of profit.
  • Risk distribution: Transfer of risks is the most important advantage of PPP projects. In PPP projects, there is a possibility to transfer most or all of the risks to the private entity. The private entities explore opportunities, even though they involve risks.
  • Constant cash flow: The state budget is formed of fixed budgets for each ministry. Major investments are temporary modifications of the budget of a ministry, and this problem can be difficult to deal with within the budgetary process. Avoiding major investments by having a constant cash flow is an important driver when the state looks at the advantages of PPP.

Issues with PPP that need to be resolved

  • Uncertainties: PPPs often cover a long-term period of service provision (eg. 15-30 years). Any agreement covering such a long period into the future is naturally subject to uncertainty. If the requirements of the public sponsor or the conditions facing the private sector change during the lifetime of the PPP, the contract may need to be modified to reflect the changes. This can entail large costs to the public sector.
  • Policy and regulatory gaps: Inadequate regulatory framework and inefficiency in the approval process have been considered as serious disincentives for developers and contractors. For example, more than two years were needed for the Gujarat Pipavav port project to receive the necessary clearances after achieving financial closure. Moreover, most of the large projects involve dealings with various ministries where coordination remains inefficient.
  • Crony capitalism: In many sectors, PPP projects have turned into conduits of crony capitalism. It is worth noting that a large chunk of politically connected firms in India are in the infrastructure sector, which have used political connections to win contracts in the past.
  • Renegotiation: While private firms accept stringent terms of PPP contracts initially, they lose no opportunity for renegotiating contracts, in effect garnering a larger share of public resources than originally planned. Rather than being an exceptional clause, renegotiation has become the norm in PPP projects in India.

Conclusion

The success of Public-Private Partnership to a large extent depends on optimal risk allocation among stakeholders, the environment of trust and robust institutional capacity to timely implementation of PPP projects. To foster the successful implementation of a PPP project, a robust PPP enabling ecosystem and sound regulatory framework is essential.


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