DAILY MAINS NEWSLETTER FOR UPSC | 18 MAR 2021 | RaghukulCS

Daily Mains Newsletter For UPSC
| RaghukulCS

18 MAR 2021

Index

Mains Value Addition

Mains Analysis

Topic No

Topic Name

Source

1

Pulling India’s democracy back from the brink

 The Hindu

2

Aligning a missile deal with destination Manila

The Hindu

3

The bad news from state budgets

Indian Express

4

How e-commerce marketplaces can drive MSME makeover

Indian Express

Mains Value Addition

Serious issue if 3 cr. ration cards were cancelled, says SC

Syllabus – 

GS2- Important aspects of governance, transparency and accountability

Analysis: –

  • The Supreme Court recently said it was a “very serious” matter if the Centre had really cancelled around three crore ration cards, even those of tribal people and the poor, solely because they could not be biometrically linked with Aadhaar.
  • A Bench, led by Chief Justice of India Sharad A. Bobde, asked the Centre to respond to the allegation made in a petition by Koili Devi, represented by senior advocate Colin Gonsalves, that such cancellations had led to starvation deaths across the country.
  • Right to food, which the ration card symbolised, cannot be curbed or cancelled because of lack of Aadhaar.
  • Koili Devi’s 11-year-old daughter, Santhoshi Kumari, was allegedly a victim of hunger death in Jharkhand in 2017.
  • She said the family’s ration card was cancelled due to non-linkage with Aadhaar.

Enact law to make Facebook, Google pay for news, says MP

Syllabus – 

GS2- Important aspects of governance, transparency and accountability

Analysis: –

  • India should take a cue from Australia and enact a law to make tech giants such as Facebook and Google pay local publishers of news content, an MP demanded in the Rajya Sabha recently.
  • The print and news broadcast media, whose content is freely available on platforms run by the tech giants, were passing through their worst phase in recent history as advertisements have shifted to tech platforms.
  • The traditional news media make heavy investments employing anchors, journalists and reporters who gather information, verify it and deliver credible news.

‘Quad summit strengthens U.S. hand ahead of talks with China’

Syllabus –

 GS2- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Analysis: –

  • The U.S. has sought to build strength before engaging China later this week and the Quad summit is an example of this.
  • Secretary of State Antony Blinken and National Security Adviser Jake Sullivan are scheduled to meet China’s Director of the Office of the Central Commission for Foreign Affairs Yang Jiechi and State Councilor Wang Yi soon.
  • Both U.S. officials have been extensively engaged with allies, primarily in Europe and the Indo-Pacific, since the administration kicked off on January 20.
  • The U.S. has said it will discuss a long list of concerns with China — these include human rights abuses, Chinese aggression in the neighbourhood, an erosion of democratic norms in Hong Kong and some of Beijing’s economic practices and policies.

New DFI must curb reliance on foreign funds, says K.V. Kamath

Syllabus –

 GS3- Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment

Analysis: –

  • Making a case for an upgrade in India’s sovereign rating, former New Development Bank president K.V. Kamath recently said the new development finance institution (DFI) cleared by the Union Cabinet must be careful about preventing ‘excessive reliance’ on foreign funds.
  • “The institution will have to carefully assess if you are going to use external borrowing for rupee needs, what the total cost is and if it’s still attractive to a borrower.”
  • He stressed even global development banks’ soft loans were ‘not really soft’ and ‘excessive reliance on international funds’ would not be prudent.

Mains Analysis

Pulling India’s democracy back from the brink

Why in News: –

The Centre will launch Bharat ka Amrut Mahotsav, the countdown to India’s 75th year of independence, next month, amid the pandemic and mass vaccination.

Syllabus:

GS-2:Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential; citizens charters, transparency & accountability and institutional and other measures.

  • The Modi government has decided to celebrate 75 years of Indian independence 75 weeks before August 15 2022.
  • The citizens that live under their democratic influence come in a dizzying array of types, challenging simplistic efforts of classification.
  • In spite of all this variation, what remains constant is this: throughout history, governments wield considerably more power over the governed than the other way around.

 To ‘create a vision’ for [email protected]:

  • Apart from social and cultural events scientific achievements and technological advancements will be showcased.
  • It will highlight contributions of some freedom fighters and locations that have remained obscure.
  • At inter-ministerial meetings and reviews held this week, all ministries were asked to initiate all round [email protected] celebrations from next month.
  • The Sectoral group of secretaries has been asked to draw up detailed plans for events/activities with defined timelines with a dedicated weekly theme for each of the 75 weeks.
  • Ministries have been tasked with planning a ‘low cost’ but ‘people intensive’ campaign that encourages community participation and is of an ‘all India character’.
  • The campaign is to cover policy initiatives of the government that have impacted the ‘India growth story’- both domestically and internationally

The Institutional checks:

  • The first institutional check on sovereign power is arguably the establishment of the English Parliament in what British historians term the Glorious Revolution.
  • Tired of unending wars that it was asked to fund through people and treasure, emboldened nobility asserted its right to be consulted by the monarch in matters of war and the purse. But for the non-Lords of the British Isles, precious little changed.
  • That was the late 1600s, and while the French and American Revolutions of a century later spawned political theory of the highest order proclaiming the inalienable freedoms of all men created equal, the truth is that the era of colonialism, and
  • The continued exclusion of women, as well as racial and religious minorities, meant that it was not until the mid-1950s that the revolution only dreamt about for millennia before became reality.

 The governed through universal suffrage elections:

  • The leaders were expected to return periodically to face the judgement of the governed through universal suffrage elections, and their power in office was constrained by a constitution whose guardian was an independent judiciary,
  • The leader’s actions were scrutinised and made public by an empowered press charged with a sacred responsibility to speak truth to power on behalf of the powerless.

The Pillars of governance:

  • What the democratic triumphalists failed to anticipate was that elections, while vital to the exercise of democracy, are just one leg of the governance stool.
  • The others, equally necessary for the system to hold steady, are the strength and independence of the other public institutions of the state whose fealty was to the Constitution rather than any elected government;
  • The vibrancy and vitality of the press who served as the people’s representatives, asking questions and uncovering truths that made the powerful squirm and that leveled the playing field for citizens charged with rendering judgment on incumbents at the next election.
  • The electoral autocrat, as academic observers labelled them, understood this architecture all too well, and initiated a sustained, often violent, assault on these very institutions, even arguing brazenly that the counter-majoritarian impulses of constitutionalism were in fact anti-democratic.

Global indices:

  • Freedom House (based in Washington DC) and the Varieties of Democracy project (V-DEM, based in Gothenburg, Sweden) are two of the more well-regarded efforts to conceptualize and measure the state of democracy globally each year.
  • Their methodologies and indicators are transparently public, and the data sets they provide are widely analyzed by researchers worldwide. Like most academic work, their efforts are destined to be ignored by most,
  • The announcement last month that both indices had independently decided to downgrade India’s democratic.
  • India’s External Affairs Minister dismissed these ratings as irrelevant certificates issued by self-appointed arbiters in the West for which India had little use.

What drove the decision to reduce India’s score on these indices?

  • Both Freedom House and V-Dem utilise explicitly multi-dimensional schema that combine many different indicators using, in V-Dem’s case particularly, quite sophisticated statistical techniques.
  • Their methods have been repeatedly peer-reviewed and validated by thousands of studies that establish a very high degree of correlation with other academic efforts to measure democracy.
  • Their key facet is a conception of democracy that is holistic, and that gives considerable weight to the freedom of the press and the independence of the judicial branch.
  • Concerns about the undermining of these institutional checks-and-balances on the power of the Indian state led both institutions to reduce India’s score on their index.

Is India less “free” than it was a decade ago?

  • Its only perception for the country’s ambitions to be a fully paid-up member of the Quad, or of the D-10 , both of which western clubs require a certificate attesting an applicant’s democratic credentials for admission.
  • One need not agree with the scoring to recognize its import.
  • To crib about whether the setting or grading of an examination was fair as if this could alter an adverse university admission decision it caused at a certain point, it is beside the point.

Challenges:

  • India will reverse the damage through, the government must resist peevish responses. An international audience increasingly savvy to misinformation in social media.
  • India’s democratic credentials are intrinsic to its identity and its greatest source of legitimacy internationally.
  • The suggestion that these credentials have been tarnished merits a serious, thoughtful, and respectful response, rather than a clever quip that plays to one’s preferred gallery but does nothing to assuage one’s critics.
  • The courts and press must own up to their part in this debacle. Institutional independence is a hard-won resource to be husbanded and invested wisely by their custodians.
  • Doing so strengthens them and the government with whom they serve the people.
  • Third, strong democracy requires a strong Opposition; as much as it does an incumbent secure enough to face criticism without getting defensive.
  • Without an Opposition to provide voters a viable alternative, the most powerful check on power devised by human society elections loses its power, and with it, so does democracy.

Way Forward: –

  • For almost 75 years, India’s democratic exceptionalism in the developing world has been a source of genuine pride for its citizens, and made it a beacon for others seeking to learn from its enviable record of holding free and fair elections at all levels of society.
  • Only 33% of Indian adults believe elected officials care what ordinary people think. Men are more likely than women to believe that officials don’t care, but almost a third of women (32%) decline to voice an opinion, democracy trust must be improve through collective leadership.

Question: –

India’s democratic credentials are intrinsic to its identity and its greatest source of legitimacy internationally. Discuss how the governments wield considerably more power over the governed than the other way around.

Aligning a missile deal with destination Manila

Why in News: –

India on Tuesday signed a key pact with the Philippines for the sale of “defence material and equipment”, which are likely to include BrahMos cruise missiles.

Syllabus: 

GS-2: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
GS-3:  Security challenges and their management in border areas.
  • India’s emergence as a regional security provider will depend on the way it handles the BrahMos sale to the Philippines.
  • This agreement lays the groundwork for sales of defence systems such as the highly anticipated export of the BrahMos cruise missile, through the government-to-government route.
  • This deal will be of great significance for multiple reasons, and even though the procurement process is progressing steadfastly, there are many challenges that lie ahead.

Features of the system:

  • The BrahMos missiles are medium-range supersonic (faster than the speed of sound) systems that can be launched from submarines, ships, planes or landbased platforms. It is considered to be the fastest supersonic missile in the world.
  • Research and development of the BrahMos cruise missile systems began in the late 1990s. Manufactured by BrahMos Aerospace Limited, a joint venture between the Defence Research and Development Organisation and the joint stock company Military Industrial Consortium NPO Mashinostroyenia.
  • This is the first supersonic cruise missile to enter service. Capable of attaining a speed of Mach 2.8 almost three times the speed of sound, it has a range of at least 290 km a new version can reach up to 400km.
  • India efforts to increase the speed and range of the missile in its next iterations are under way, with a goal of achieving hypersonic speeds (at or above Mach 5) and a maximum range of 1,500 km.
  • An air-launched variant was successfully tested in November 2017 by the Indian Air Force from its Sukhoi-30MKI fighter jet, giving the missile a dominating presence in all three domains.

Export as a goal:

  • These advanced and powerful capabilities of the BrahMos not only augment the strength of the Indian military but make it a highly desirable product for other countries to procure as well.
  • Exporting the system, hence, has been on the agenda for more than a decade.
  • Doing so would boost the credibility of India as a defence exporter, help it meet the target of $5 billion in defence exports by 2025, and elevate its stature as a regional superpower.
  • Countries such as Vietnam, the Philippines, Indonesia, the United Arab Emirates, Argentina, Brazil, and South Africa have so far shown an interest in acquiring the systems.

Geo-political impact:

  • The implications of the Philippines becoming the first country to import the BrahMos would be wide-ranging and consequential in the Indo-Pacific.
  • To begin with, it would caution China, with whom the Philippines has been engaged in a territorial conflict in the South China Sea, and act as a deterrent to Beijing’s aggressive posturing.
  • Indeed, this is why China has been wary of the Association of Southeast Asian Nations (ASEAN) countries acquiring defence systems such as the BrahMos.
  • Further, taking lessons, other nations threatened by Chinese belligerence may come forward to induct the BrahMos into their arsenal, thereby boosting India’s economic, soft, and hard power profile in the region,
  • Also providing the Indo-Pacific with a strong and dependable anchor with which they can protect their sovereignty and territory.

Possible hurdles:

  • The Countering America’s Adversaries Through Sanctions Act (CAATSA), which aims to sanction individuals and entities who engage in a “significant transaction” with a listed entity.
  • So far, Turkey and China have been penalised under CAATSA for purchasing the S-400 Triumf air defense systems from Russia. NPO Mashinostroyenia is one of the listed Russian entities.
  • Since 65% of the components, including the ramjet engine and radar seeker used in the BrahMos, are reportedly provided by NPO Mashinostroyenia, the export of the missile systems may attract sanctions.
  • A regiment of the BrahMos, including a mobile command post, four missile-launcher vehicles, several missile carriers, and 90 missiles, reportedly costs around $275.77 million (?2,000 crore).
  • The cost of the systems has been a major hurdle in moving forward to reach a deal with the Philippines. To remedy this, India has offered a $100 million line of credit,
  • The Philippines is thinking of purchasing just one battery of the BrahMos, consisting of three missile launchers with two to three missile tubes each.

Way Forward: –

  • The missile system can be used for coastal defence and ground attack, is expected to boost the Philippine’s military firepower in the face of threats to its maritime territory, mainly due to the aggressiveness of China, a geopolitics impotence for India.
  • With India determined to develop itself as a hub of defence manufacturing, how it handles the sale of the BrahMos would be an important factor in its potential emergence as a net provider of regional security in the Indo-Pacific.
  • The Government of India has prioritised making the country ‘Atmanirbhar’ in the defence manufacturing sector and establishing itself as a major defence exporter.
  • The Philippines, on the other hand, has decided to buy the BrahMos out of geopolitical and strategic necessities. Nonetheless, two major roadblocks still remain in the Manila deal.

Question: –

Critically examine the statement. “India’s emergence as a regional security provider will depend on the way it handles the BrahMos sale to the Philippines.”

The bad news from state budgets

Why in News: –

Over the past few weeks, several state governments have presented their budgets for the financial year 2021-22. These budgets shed light not only on how state finances have fared during the current year (2020-21) but equally critically, detail the expenditure stance of these governments during these tumultuous years (2020-22).

Syllabus: –

GS 3: Government Budgeting.

  • Considering that the states, put together, account for a larger share of general government spending than the Centre, their spending stance is pivotal to the hopes of a government spending-led economic recovery.
  • The broad state-level budget trends highlighted here are based on 11 states that account for a little over 60 per cent of India’s GDP.
  • While more concrete trends will emerge once all states present their budgets, this does provide a sense of what transpired in the year almost gone by, and what to expect in the coming financial year.

Five broad trends emerge:

  1. First, the collapse in states’ revenues and transfers from the Centre, coupled with a “reluctance” among some states to borrow more to spend, has meant that at the aggregate level spending by these states in 2020-21 will end up being lower than what they had budgeted for before the onset of the pandemic.
  2. Second, this year, states which typically run revenue surpluses will run revenue deficits. This was expected. The collapse in revenues meant that states that usually borrow to finance capital expenditure have had to borrow to finance their recurring expenditure as well.
  • As a consequence, capital spending by states, which was budgeted to be around 50 per cent more than that of the Centre in 2020-21, has been cut sharply.
  1. Third, oddly enough, some of these states did have the leeway to ramp up spending by borrowing more.
    • The Centre had raised the ceiling on their market borrowings from 3 to 5 per cent of GSDP.Of this 2-percentage point increase in the borrowing limit, part was unconditional while the remaining was subject to fulfilling Centre-mandated reforms. Several states did qualify to undertake the conditional borrowings.
  • As per ICRA’s estimate, 17 states qualified based on the One Nation One Ration Card reforms, 15 qualified based on the ease of doing business reforms, seven partially completed power sector reforms, while six had completed the urban local body reforms.
  • But, it is only the low-income states of Bihar, Rajasthan and Madhya Pradesh with already stretched finances — their budgeted fiscal deficit for 2020-21 was pegged at 3 per cent or above before the pandemic — that seem to have availed the additional borrowing space and were thus able to either maintain or exceed their budgeted expenditure levels.
  1. In comparison, the high-income states of Gujarat, Maharashtra and Karnataka, all of whom had greater fiscal headroom going to the crisis, and were better placed to borrow more and spend, have not done so.
  2. Fourth, as is the case with the Centre, states have, remarkably, budgeted for aggressive fiscal consolidation next year. The average fiscal deficit across these states is expected o fall by more than 1 percentage point of GSDP, more than twice the decline recommended by the 15th finance commission.
  3. Fifth, this aggressive consolidation next year is expected to be achieved not by expenditure compression, as is the case with the Centre, but by significant revenue enhancement. However, some revenue assumptions are quite ambitious, to say the least — some states have pegged their GST and VAT collections to grow far in excess of 30 per cent in 2021-22.
  4. In the past too, there has been a considerable gap between the “aspirational” budget estimates and actuality.

Way Forward:

  • Subdued general government spending during these tumultuous years heightens the risks to economic recovery.
  • If these trends were to hold for the other states as well, then it would imply that the “additional” spending by the central government, over and above its budget estimate ,is likely to be offset by the decline in spending by states.
  • In effect, the total general government spending may end up being around or even lower than what was budgeted for before the onset of the pandemic.
  • States, though, expect the situation to reverse in the coming fiscal year, with most projecting a return to revenue surpluses even as the Centre will continue to run revenue deficits.
  • This anomaly is unlikely to be resolved unless the root cause of the situation — the nature of the fiscal compact between the Centre and the states — is addressed.
  • It is true that the economic hit from the pandemic is uneven — the growth projections accompanying these budgets, though to be taken with a pinch of salt, suggest that some states expect to do better than others.
  • Considering the breadth and depth of this crisis, there is a case for far greater spending than what is visible in these budgets.

Question: –

“A deterioration in fiscal marksmanship will mean that expenditure in the coming fiscal year will also end up being lower than what has been budgeted for.” Critically Explain.

How e-commerce marketplaces can drive MSME makeover

Why in News: –

Syllabus: 

GS 3: Mobilization of Resources
Growth & Development
  • E-commerce marketplaces are today the best possible enablers for this transformation at minimal cost, innovation and investment.
  • China captured the world market through the traditional method of having guilds and business centres to do transactions by providing a single-window approach. But the world has changed.
  • Now to compete successfully in established supply chains, the best way is to invest in digital transformation and leverage modern technology.
  • Today, digital empowerment is the key differentiator. Without that, our MSMEs will not be future ready.
  • India has put a goal of inclusive development and enhancing livelihoods.
  • The Prime Minister has given the slogan of “vocal for local” and spoken several times about his vision of Atmanirbhar Bharat.

Contribution of E-commerce: –

  • E-commerce can contribute significantly in achieving this vision.
  • It allows for products even from hinterlands to get to the national market, thus, providing opportunities to artisans and small sellers from Tier-2/3 towns to sell online to customers beyond their local catchment.
  • By investing in supply chains, the e-commerce sector provides opportunities for MSMEs to partner them in supply and delivery networks.
  • Start-ups and young brands are also finding opportunities to build national brands and even going global.
  • This leads to additional income generation through multiple livelihood opportunities and thus contributes to economic prosperity and inclusive growth.
  • Many offline stores are also adopting e-commerce to leverage these opportunities and the traditional and modern retail models are moving towards more offline and online collaborations.

Hurdles In Building A Robust E-Commerce Sector:

  1. First, address the roadblocks that the e-commerce sector suffers in terms of ease of doing business online. Sellers on e-commerce marketplaces do not get advantage of GST threshold exemption for intra–state supplies that offline sellers enjoy because they have to “compulsorily register” even though their turnover is low.
  2. Second, the government would do well to simplify the “Principal Place of Business” (PPoB) requirement especially for online sellers by making it digital and not requiring physical presence to expand their reach outside their home state.
    • Today, the sellers, as in offline, are required to have a physical PPoB which, given the nature of e-commerce, is not practical.
    • Replace physical PPoB with Place of Communication.
    • Eliminating the need for state specific physical PPoB requirement will facilitate sellers to get state-level GST with a single national place of business.
  1. Third, provide MSMEs with handholding support to understand how e-commerce functions.
    • The government can collaborate with e-commerce entities to leverage their expertise and scale to create special on-boarding programmes, hold series of awareness sessions, provide common but important services like imaging and cataloguing, etc. These can be provided by state governments.
    • Equally important is to examine the existing schemes and benefits for MSMEs, which were formulated with an offline, physical market in mind, and tweak them to include the special needs to leverage online sales channels.
    • For example, MSMEs could be given fiscal incentives to access markets and invest in digital marketing.
    • The objective is to incentivise those who shift to the digital mode.
  1. Fourth, build infrastructure — both physical and digital infrastructure is important for digital transformation.
    • The road and telecom network will facilitate not just access to the consumer but also enable the seller from remote areas to enter the larger national market as well as the export market.
    • A robust logistic network and warehouse chains created by e-commerce platforms enable similar access and reach.
    • The National Logistics Policy should focus on e-commerce sector needs.
  1. Fifth, dovetail the skilling policy and programmes with the requirements of the e-commerce sector to meet future demand of the sector.
  1. Sixth, take specific steps to increase exports via e-commerce. Identify products that have potential for the export market, connect e-commerce with export-oriented manufacturing clusters, encourage tie-ups with sector-specific export promotion councils, leverage existing SEZs to create e-commerce export zones.
    • India Posts can play a significant role by creating e-commerce specific small parcel solutions at competitive rates, building a parcel tracking system, and partnering with foreign post offices to enable customs clearances.

Way Forward: –

  • In order to give Indian e-commerce exporters that competitive advantage they need in order to succeed in global markers, specific policy provisions that provide incentives for e-commerce exports, create more awareness and enable end to end digitisation for e-commerce exports are critical.
  • There is an urgent need to create a consolidated policy framework for e-commerce exports. Policies like the upcoming Foreign Trade Policy needs to be fully leveraged.
  • The Foreign Trade Policy should identify these areas and include e-commerce export specific provisions in the revised policy that comes into effect in April this year.

Question: –

E-commerce can contribute significantly in achieving Atmanirbhar Bharat. Critically evaluate.
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