9 PM Daily Brief – July 7th,2020

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9 PM for Main examination

GS-2

  1. Reservation of China to the idea of Indo-Pacific
  2. India’s foreign relations and the course of history

GS-3

  1. Poverty Deepening Amidst the Lockdown
  2. Confronting air pollution and global warming
  3. Issues with social welfare program
  4. Centre’s over-reliance on cesses and surcharges put state finances at risk

9 PM for Preliminary examination

FACTLy


 1.Reservation of China to the idea of Indo-Pacific 

 Source: The Indian Express

Syllabus: GS 2-India and its neighborhood- relations

Context: Analysing the need to look carefully at Indian Ocean by India in the backdrop of India-China faceoff at Galwan Valley.

Indo-Pacific vision: It was presented by Indian PM in his address at the Shangri-La Dialogue in June 2018.

  • It is rooted in our historical associations with this region and India does not see the region as a strategy or as a club of limited members.
  • Inclusiveness, openness and ASEAN centrality and unity lie at the heart of the new Indo-Pacific.

China in Indian Ocean:

  • Historically: 
    • Chinese naval activity was limited to the East China Sea, the Bohai Sea, the Yellow Sea and the South China Sea.
    • Role in trade:The Indian Ocean trade especially beyond the Malacca Straits, was mainly carried on by Arab, Indian and Persian traders.
  • Today’s context: 
    • China is the second largest economy and the world’s largest trading nation.
    • The sea-lanes of communication in the Indian Ocean are vital to her economy and security.

China has undermined the idea of Indo-Pacific approach and described the idea as akin to sea-foam in the Pacific or Indian Ocean that will dissipate.

Reasons for increased Chinese actions in Indian Ocean:

  • After the founding of the People’s Republic in 1949: 
    • China initially focused on the consolidation of its homeland.
  • Malacca Dilemma:
    • China felt that others would block the Malacca Straits to “contain” it and strategised to dominate not just the Malacca Straits but the ocean beyond it.
  • By 2012:
    • A Maritime Rights and Interests Leading Group was established inside the Communist Party.
    • One of its reports to Party Congress saw the first official reference to “building China into a sea-power nation”.
    • Maritime Silk Road: The 21st Century MSR in October 2013 was carefully wrapped in terms of trade and finance in order to disguise its dual purpose.
    • China want to overcome some of its inherent deficiencies:

  • These deficiencies might be overcome by:
    • Carefully selecting sites to build ports such as Djibouti, Gwadar and Seychelles.
    • By conducting activities in a low-key manner to reduce the military color as much as possible.
    • By not unnerving India and America by first cooperating and then slowly penetrating into the Indian Ocean beginning with detailed maritime surveys, ocean mapping, port construction etc.

Way Forward

  • The Indo-Pacific idea might potentially derail China’s carefully crafted plans as it is inclusive, participative and evolving through open discussion.
  • China still thinks in terms of balance of power while speaking about a Community with a Shared Future of Mankind.
  • It should re-consider its position and view the Indo-Pacific idea as an instrument for advancing common interests and not make it a source of conflict or tension.

 2.India’s foreign relations and the course of history

Source: The Hindu

Syllabus: GS 2 India and its neighbourhood- relations

Context: Analysing the perception of national interest by different generations of leadership.

Background:

  • The Indian PM made a public and undisguised reference to China’s expansionism in his address to Indian troops.
  • China rejected the allegation of expansionism and said that they had signed boundary agreements with all except two of its neighbours.

Approaches of former governments in Foreign Policy:

  • Nehru’s approach:
    • China policy:
      • He was convinced that China would not attack India and his Defence Minister had likely played a big part in inclining Nehru towards this conviction.
      • None of his advisers cautioned him against this miscalculation as most of them had no experience in foreign relations.
      • He was not guided by any ideological considerations and still dreamt of India playing a big role on the world stage and believed that China could be a partner in that endeavor.
    • Kashmir policy:
      • No Himalayan blunder:
        • When a ceasefire was called for in January 1949, it was not because he was pacifist by nature or that he trusted the UN or any other country to label Pakistan as aggressor and persuade it to vacate the aggression.
        • Ground Reality: TheIndian Army was in no position to run over the whole of Jammu and Kashmir at that time which has been definitively and conclusively brought out by respected scholars as well as in the official history of the war published by the Defence Ministry.
      • No ideological bias:
        • The writer believed that national interest was the guiding principle in foreign policy of Nehru as he described foreign policy as essentially selfish in a response to a letter by Albert Einstein.
        • Interest with West: India needed technology and other assistance which he convinced could be obtained only from America.
        • He looked towards Soviet Union only after the Americans concluded the military agreement with Pakistan.
      • His mistakes and the blunder over China were caused by wrong assessments and not due to any ideological factors.
    • Indira Gandhi approach:
      • “Verify and still not trust approach”:
        • Her basic approach was that there is no such thing as trust in international relations.
        • She expects to have normal and peaceful relations with Pakistan in future but never with China as it is an expansionist power.
      • Handling Pakistan:
        • She is accused of being naive and too trusting when she allowed Pakistan’s 90,000 prisoners of war (POWs) to return to their country without getting anything in return.
        • Available options: Whether she should have asked Pakistan to vacate all the territory it had occupied in Jammu and Kashmir or she should have kept the POWs in our country for long.

Conclusion:

  • The previous leaderships must be held accountable for the mistakes or blunders they might have committed but they acted in the prevailing circumstances according to their perception of national interest.
  • For example-One government might conclude that the civil nuclear deal with the US served India’s national interest and some other government in different circumstances may think otherwise.

3.Poverty Deepening Amidst the Lockdown

Source – The Hindu

Syllabus – GS 3 – Inclusive growth and issues arising from it

Context – Several news reports and surveys on the plight of India’s less-privileged workforce during the lockdown have highlighted the massive scale of falling incomes and loss of means of livelihood.

Issues related to poverty estimation in India

  1. Low thresholdsleading to conservative poverty numbers.
  2. Irregular updating of official poverty lines
  3. Unavailability of data on consumption expenditurefrom National Sample Surveys.

Data on Poverty

  1. 42% of total population– According to the household consumption expenditure reported in the Periodic Labor Force Survey (PLFS), 2017-18 and applying State-specific poverty lines (used by the erstwhile Planning Commission in 2011 based on the Tendulkar Committee recommendations, adjusted with current price indices), about 42% or around 56 crore people were ‘officially’ poor before the lockdown was announced.
  2. 2. 20% just above the poverty line– Another 20-crore people were within a narrow band 20% above the poverty line. A modest dip in earnings — and hence a fall in consumption spending — would push a majority of them into the vortex of poverty and hunger.
  3. Impact of Lockdown – The estimates from the PLFS data extrapolated for the year 2020 suggest that about an additional 40 crore people were pushed below the poverty line due to the lockdown.
  • Phenomena of poverty deepening– Those who were already poor are going to suffer a further worsening in their quality of life, a phenomenon known as poverty deepening.

Inadequacy in state responses

  1. Inadequate and poorly conceived MGNREGA– The demand for work is anticipated to increase by 25% with reverse migration-fueled increase in rural labor supply. However, there is a token increase of National Rural Employment Guarantee Act (NREGA) wage by Rs 20 (Rs 182 to Rs 202).
  2. 2. No focus on equitable distribution of goods– The expanding of food coupons to non-ration card holders in Delhi suggests that such measures are likely to exclude marginalized communities including Dalits and Muslims at the lowest strata of the work hierarchy.

Suggested Solutions

  1. Focusing urban areas– Around 12 crores of this lockdown-induced newly poor are in urban areas. Thus, a ‘direct’ employment program implemented through municipal corporations could be introduced to guarantee 20 days of work in urban areas. This will also stop the reverse migration from urban to rural areas.
  2. 2. Wage subsidy–To encourage a revival of small and medium enterprises (SMEs) in the most prominent clusters, wage subsidy can be provided in the employer-contractor facilitation programs.

Way Forward – The neo-liberal growth that we have experienced since the 1990s has been largely through breaking the back of the laboring class. In post corona India, we need policy measures to alter the course of economic progress and reorient development programs for benefit of all stakeholders including the labor class.

4.Confronting air pollution and global warming

Source: The Hindu

Syllabus: GS-3 Environment

Context: Covid-19 pandemic has challenged to re-think and re-align strategies for combatting air pollution and global warming.

Status of air pollution in India

  • According to WHO, of the 20 most polluted cities in the world, the top 14 are Indian cities. These include Kanpur, Faridabad, Varanasi, Gaya, Patna, Delhi, Lucknow, Agra, Muzaffarpur, Srinagar, Gurgaon, Jaipur, Patiala, and Jodhpur
  • Exposure to outdoor and indoor air pollution contributed to over 1.2 million deaths in India in 2017 and is the 3rd largest cause of death among all health risks (State of Global Air, 2019).

Correlation to Covid-19 and Air Pollution:

  • A recent study by Harvard University has shown the correlation between long-term exposure to air pollution and Covid-19 morbidity and mortality. Those living in polluted cities are likely to have poor respiratory, cardiac and other systems and hence are more vulnerable to Covid-19.
  • There is an association between pollution levels in cities (despite the improvements during the pandemic) and COVID-19 infections and death rates- such a link has been observed in New York City and the northern provinces of Italy.
  • Delhi, Maharashtra, Gujarat, and Tamil Nadu, in the top tier of pollution concentration, have also seen high deaths and infections per thousand people.

Covid-19 lockdowns and Air Pollution status:

  • According to a study conducted by the Indian Institute of Technology (IIT) Delhi, the India has witnessed 43, 31, 10, and 18% decrease in PM 2.5, PM 10, CO, and NO2 levels respectively during the lockdown period.
  • In Europe, 11,000 air-pollution related deaths were estimated to have been averted since the start of lockdowns

Climate Change Vulnerability of India

  • According to Global Climate Risk Index, 2020 India is the fifth most vulnerable of 181 countries to the effects of climate change.
  • India had the most (2,081) deaths in 2018 due to extreme weather events caused by climate change–cyclones, heavy rainfall, floods and landslides.
  • Economic losses due to climate change were the second highest in the world with a loss of Rs 2.7 lakh crore ($37 billion)
  • Further, global warming intensifies heat waves and worsens respiratory illnesses.
  • Mosquito-borne diseases in India have been connected to global warming through both increased rainfall and heat waves.

Suggested Reforms:

  • Larger allocations and subsidies to initiatives like the National Solar Mission. Spending on reducing air pollution and GHGs provides estimated health benefits of 1.4 to 2.5 times more than the cost of the actions.
  • Reforms should encourage public transportation, expand electric vehicles, and provide inter-connectivity between the metro and buses.
  • Investment in new technologies for cleaner air. Examples: smog free towers, vertical forests.
  • In managing health risks, emission reduction should be coupled with a stronger public health system.
  • Reduce regulatory barriers that restrict the flow of capital to green projects.
  • National Disaster Management Authority (NDMA) should be used as a platform to combat air pollution as an emergency.

5.Issues with social welfare program

Source – Indian Express

Syllabus – GS 3 – PDS and issues arising out of it

Context – Large sections of poor are unlikely to benefit from extension of food grains scheme which was announced recently by Prime Minister

 Changes introduced in scheme and its fallout

New Benefits for vulnerable sections Associated issues
1. Extension of free food grains for those covered under NFSA till November. a. Economists estimate that 100 million names have not been updated in NFSA lists.

b. Inclusion-Exclusion error – The process of selection of beneficiaries has always been fraught with targeting errors.

c. Failure of technology – The insistence on linkage with Aadhaar has deprived scores of genuine beneficiaries.

d. Top-Down approach – It is unclear if the migrants will receive additional food grains. As the food ministry has uniformly increased coverage by 10 per cent for all states, irrespective of their levels of out-migration or in-migration.

e. Issue with One Nation One Ration Card –Many states have discontinued biometric authentication at ration shops, to prevent the spread of the infection from the glass sensor.  Thus, Aadhar enabled One Nation One Ration card scheme will suffer invariably.

 Suggested solution

1. Increasing liquidity – The PM has yet to extend cash transfers in Jan Dhan bank accounts of 200 million women. So families who relied on these modest Rs 500 deposits in the last three months have more resources to survive with more liquidity.

2. Providing pension – The FM only provided a one-time grant of Rs 1,000 to 32 million National Social Assistance Program pensioners which can be provided once more to help the old age and dependent citizens.

3. Upgrading MGNREGA – There is a compelling need to increase the guaranteed employment to 200 days per year for all households nationwide and boost wages of those who are forced to live on wages less than the minimum wages stipulated for unskilled agricultural workers.

 Way forward – Expansion and universalisation of the PDS, pensions, cash grants and employment guarantee schemes in both urban and rural areas are essential to tide through these difficult times.

6.Centre’s over-reliance on cesses and surcharges put state finances at risk

Source: Live Mint

Syllabus: GS 3-Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment

Context: Analyzing the over reliance of the central government on cesses and surcharges.

Background:

· State’s share: Their share has remained well below the 14th Finance Commission recommendation of 42% from the divisible pool of central taxes during the five-year period to FY20.

· The transfers are plummeting to 32.4% in FY20.

Cesses: Imposed on specific purposes.

Surcharges: Tax on taxes.

Role of cess and surcharge in economy:

  • The Constitution allows the Centre to levy them and need not share it with state governments.
  • Nature: They are meant to be temporary.
  • Changes with GST: The introduction of GST has subsumed many cesses but the government has imposed fresh cesses such as Swachh Bharat cess and Krishi Kalyan cess to finance Swachh Bharat initiatives and to promote initiatives to improve agriculture respectively.

Issues in States’ finances due to cess and surcharges:

  • The CAG has pointed out the lack of transparency and incomplete reporting in accounts on the utilization of amounts collected under cesses.
  • By States:
    • States are opposing the permanent nature of such cesses and a majority of them had told the 14th Finance Commission that they should either be eliminated or, if continued beyond a specified period, should form part of the divisible pool.
    • In FY20, the central government increased the rate of road and infrastructure cess and the special additional excise duty on the central excise on petroleum products which reduces the sharable portion of Centre’s gross tax revenue (GTR).
    • This led to a fall of shares of states in the Centre’s GTR from 36.6% in FY19 to 32.4% in FY20.
    • These changes have happened at a time when the states’ own tax revenues are suffering on account of the ongoing economic slowdown.
  • Problems due to GST:
    • Squeezing of state’s taxation authority: AsStates don’t have any autonomy on GST rates.
  • Falling tax buoyancy of the Centre:
    • The Centre has relied relatively more on them to meet its own expenses.
    • FY20 was particularly difficult because GTR contracted on account of falling nominal gross domestic product growth and corporate tax reforms.

Revenue buoyancy, end of GST compensation period and Centre’s increasing reliance on cesses and surcharges should be considered together because they are interlinked.

Way Forward

  • The 15th Finance Commission had ordered a study on the matter from Vidhi Centre for Legal Policy.
  • The study’s report has suggested:
    • All cesses in force for a long duration or where there is evidence of non-utilization and diversion of funds should be abolished.
    • In future, cesses should be imposed for a narrowly defined purpose and with a clear estimation of the amount of money aimed to be raised by the centre.
    • For surcharges, income tax rates should be rationalized instead of using surcharges as a proxy for a progressive tax to impose additional burden on relatively richer taxpayers.

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