General Studies Paper – 3

Context:

Dissonance in RBI’s inflation messaging.

Introduction

• The Monetary Policy Committee’s decision to hold benchmark interest rates level, while raising its forecast for full-year GDP growth by 50 basis points and flagging food price shocks-induced volatility in inflation, is replete with the risk of policymakers falling behind the curve on anchoring inflation expectations.

Monetary Policy Committee (MPC)

• The Finance Act of 2016 amended the Reserve Bank of India Act, 1934 (RBI Act) to establish a statutory and institutionalized framework for an MPC.
• A six-member MPC may be constituted by the central government in accordance with Section 45ZB of the amended RBI Act, 1934.
• The responsibility for setting the benchmark policy rate, or repo rate, needed to keep inflation within the designated target range falls on the MPC.
• MPC will have six members – the RBI Governor (Chairperson), the RBI Deputy Governor in charge of monetary policy, one official nominated by the RBI Board, and the remaining three members would represent the Government of India.
• The external members hold office for a period of four years.

Uncertainties in food prices

• After observing that “uncertainties in food prices along with unfavourable base effects are likely to lead to” headline inflation quickening in November-December, and that “recurring food price shocks are impeding the ongoing disinflation process”, the MPC has rather surprisingly opted to keep the RBI’s repo rate unchanged at 6.5% for a fifth straight bi-monthly meeting.
• To be sure, retail inflation has moderated since the MPC last met in early October, with the headline reading softening by almost two percentage points, from August’s 6.83% to 4.87% in October.
• But, by the MPC’s own reckoning, that moderation may be fleeting, as price gains accelerate yet again in November and December, and with volatility in oil prices and financial markets, amid heightened global uncertainty, there are added risks to the outlook on prices.

Households’ Inflation Expectations Survey’

• The RBI’s latest ‘Households’ Inflation Expectations Survey’, undertaken in November, reveals that most households expect faster inflation in the three-months- ahead and one-year-ahead time horizons, and at median levels of 9.1% and 10.1%, respectively, unequivocally underlining the fact that price gain expectations are still far from durably anchored.

Upgrading its projection for real GDP growth

• The dissonance in messaging from the central bank is exemplified in the MPC’s decision to upgrade its projection for real GDP growth in the fiscal year ending in March 2024 to 7%, from 6.5% as recently as in October.
• For this, it cites robust investment, besides continued strengthening in manufacturing, buoyancy in construction and a gradual rural recovery that it sees helping ‘brighten the prospects of household consumption’.
• If the RBI’s cumulative 250 basis points increase in the benchmark interest rate since May 2022 through to February 2023 and the subsequent retention of the 6.5% rate have not damped the growth impulses barring consumption, then it would indicate that consumption is still struggling to gain traction largely because, as Deputy Governor Michael D. Patra observed at the MPC’s last meeting, “people are not increasing discretionary spending in view of high inflation”.

Conclusion

• This seems to be borne out in the RBI’s November round of its bi-monthly ‘Consumer Confidence Survey’, which showed consumers retained negative sentiments on both current and future price conditions. With policymakers only too well aware that sans price stability, as Mr. Patra noted, “the benefits of expanding GDP and employment will be frittered away by the erosion of purchasing power”, the MPC has its task cut out.

General Studies Paper – 3

Context:

That many of these unapproved or banned FDCs contain antibiotics is cause for concern given the growing antibacterial microbial resistance in India.

Introduction

• A group of academics from India, Qatar and the United Kingdom recently published a worrying new study in the Journal of Pharmaceutical Policy and Practice (2023, 16:39) on the volume of unapproved and even banned fixed dose combination (FDC) of antibiotics that are being sold in India.
• Using sales data of the pharmaceutical industry, the study documents that in the year 2020, 60.5% FDCs of antibiotics (comprising 239 formulations) were unapproved and another 9.9% (comprising 39 formulations) were being sold despite being banned in the country.

What is fixed dose combination (FDC)?

• FDCs are combinations of one or more known drugs and can be useful in the treatment of some diseases since the combination can improve patient compliance.
• For instance, if a patient has to take three different medications for a particular treatment, she may forget to take one. But if all three medications are combined into one tablet or one syrup, the chance of her forgetting to take one or two of the drugs is reduced. For diseases such as AIDS, it is well documented that FDCs have proven to be very useful in improving patient compliance, which at the end of day improves treatment outcomes.

Central Drugs Standard Control Organisation (CDSCO)

• The Central Drugs Standard Control Organisation (CDSCO) under Directorate General of Health Services, Ministry of Health & Family Welfare, Government of India is the National Regulatory Authority (NRA) of India. Its headquarter is located at FDA Bhawan, Kotla Road, New Delhi 110002 and also has six zonal offices, four sub zonal offices, thirteen Port offices and seven laboratories spread across the country.
• Under the Drugs and Cosmetics Act, CDSCO is responsible for approval of New Drugs, Conduct of Clinical Trials, laying down the standards for Drugs, control over the quality of imported Drugs in the country and coordination of the activities of State Drug Control Organizations by providing expert advice with a view of bring about the uniformity in the enforcement of the Drugs and Cosmetics Act.

The pharmaceutical industry’s love for FDCs

• Pharmaceutical companies in India use these FDCs to escape liability under multiple laws without much concern for public health.
• One such law is the Drugs (Prices Control) Order (DPCO), under which the government fixes the prices of individual drugs. Since drug combinations were traditionally not covered under the DPCO, the pharmaceutical industry decided that making FDCs provided an easy way to escape the remit of the DPCO.

Bewildering variety of FDCs

• Driven by this cold logic of the market, and not public health, the Indian pharmaceutical industry introduced an astounding variety of FDCs that lacked any medical rationale.
• For example, anti-inflammatory drugs were combined with vitamins, antihistamines were combined with anti-diarrhoeal agents, penicillin was combined with sulphonamides, and vitamins were combined with analgesics. These were combinations not found in any other country.

Advantages for the pharmaceutical company

• The first, the fact that because of the bewildering variety of FDCs being sold in the market, there were no standards set by bodies such as the Indian Pharmacopoeia Commission for testing these drugs for quality of manufacture.
• The second advantage of going down the FDC route is that it gives individual companies a reason to charge higher prices for their drugs. For example, if 20 different pharmaceutical companies were manufacturing and selling a drug such as azithromycin, they would have to compete furiously and reduce prices to capture a larger share of the market.
• But if they combine azithromycin with another drug, for example, cefixime to create a FDC, they can claim it as a new unique product catering to a specific need, thereby allowing them to charge a higher price until others introduce similar products, at which point the first mover may try to create a new FDC.

On the regulatory radar since 1978

• The FDC problem has been on the regulatory radar since 1978 when the first government committee studied the issue and admitted that we had a problem on our hands.
• At the time, there was no system under the colonial-era Drugs and Cosmetics Act, 1940 to vet drugs for safety and efficacy prior to their sale in India.
• This meant that each State drug controller could hand out manufacturing licences for any drug formulation and there was little that the central government could do to stop their sale.
• In 1982, Parliament changed the law to give the central government the power to “prohibit” the manufacture of specific drugs that lack therapeutic value or justification.
• Later in that decade, in 1988, the central government amended the rules to introduce a new requirement for manufacturers of all “new drugs”, including FDCs, to submit proof of safety and efficacy to the Drugs Controller General of India (DCGI) who heads the Central Drugs Standard Control Organization (CDSCO).

Anti-microbial resistance

• Antimicrobial resistance (AMR) threatens the effective prevention and treatment of an ever-increasing range of infections caused by bacteria, parasites, viruses and fungi.
• AMR occurs when bacteria, viruses, fungi and parasites change over time and no longer respond to medicines making infections harder to treat and increasing the risk of disease spread, severe illness and death. As a result, the medicines become ineffective and infections persist in the body, increasing the risk of spread to others.
• Antimicrobials – including antibiotics, antivirals, antifungals and antiparasitics – are medicines used to prevent and treat infections in humans, animals, and plants. Microorganisms that develop antimicrobial resistance are sometimes referred to as “superbugs”.

Unabated licensing

• Despite the law being crystal clear on the issue, State drug controllers have simply ignored the law to continue issuing manufacturing licences for FDCs not approved by the DCGI with impunity.
• The manufacturers selling these FDCs that have not been approved by the DCGI can technically be prosecuted by the Central government for violating the law.
• Instead of ordering criminal prosecutions, the Ministry of Health is playing a game of whack-a-mole by constantly invoking its powers under Section 26A to prohibit the manufacture of specific FDCs.
• It has issued 444 orders under this provision since 1983, banning mostly FDCs. Many of these orders have been embroiled in complex litigation, with the courts muddying the waters with inconsistent decisions.

Conclusion

• The fact that these academics have discovered 239 unapproved FDCs being sold in 2020 in just one category of FDCs (their previous studies have revealed similar unapproved FDCs in other therapeutic categories), more than 42 years after the problem was first flagged is an astonishing indictment of the incompetence of the drug regulatory framework in India. As they point out in their paper, unregulated FDCs may end up contributing to the AMR problem in India. It is vital for the Ministry of Health to take immediate action.

General Studies Paper – 2

Context:

Threats from contracting glaciers should be in the same category of risk as cyclones and earthquakes.

Introduction

• Few barometers measure the climate crisis as evocatively as the state of glaciers, a key component of the cryosphere. The World Meteorological Organization’s recent report, The Global Climate 2011-2020, gives a broad view of the planet’s response to greenhouse gas emissions.

Cryosphere

• The cryosphere contains the frozen parts of the planet. It includes snow and ice on land, ice caps, glaciers, permafrost, and sea ice.
• This sphere helps maintain Earth’s climate by reflecting incoming solar radiation back into space.
• As the world warms due to increasing greenhouse gases being added to the atmosphere by humans, the snow and ice are melting. At sea, this exposes more of the dark ocean below the ice, and on land, the dark vegetation below.
• These dark surfaces then absorb the solar radiation causing more melting. This creates a positive feedback loop, which exacerbates the impacts of climate change.

Section on the state of glacier health

• In the section on the state of glacier health, it points out that, on average, the world’s glaciers thinned by approximately a metre a year from 2011 to 2020.
• When compared across decades, there is significant regional variability, but the overall pattern remains that glaciers in all regions of the world are becoming smaller. In fact, some of the reference glaciers, which are used to make long-term assessments of glacier health, have already melted away as the nourishing winter snow is completely melting away during summer.
• In Africa, glaciers on the Rwenzori Mountains and Mount Kenya are projected to disappear by 2030, and those on Kilimanjaro by 2040.
• The report points to the rapid growth of pro-glacial lakes and the likelihood of glacier lake outburst flood (GLOF), posing additional threats to ecosystems and livelihoods.

Glacier Lake Outburst Flood (GLOF)

• A Glacial Lake Outburst Flood, or GLOF, is sudden release of water from a lake fed by glacier melt that has formed at the side, in front, within, beneath, or on the surface of a glacier.
• GLOF can be impounded by moraine complexes, glacial ice or even bedrock and, as a result of breaching, slope failure, overtopping or other failure mechanisms, lead to catastrophic phenomena in the high mountains that threaten people’s lives, livelihoods and regional infrastructure.

Fury of Glacier Lake Outburst Flood (GLOF)

• The fury of a GLOF event was brought home this year by the destruction of the Chungthang dam in Sikkim after the South Lhonak Lake flooded from a melting glacier, triggering catastrophe downstream.
• Earlier this year, a separate report by the International Centre for Integrated Mountain Development found that the disappearance of glaciers in the Hindu Kush Himalayas was “65% faster in the 2010s than in the previous decade”.
• At the current rate of global greenhouse gas emissions, which is expected to see temperatures increase by 2.5°-3°C by the end of the century, the volume of glaciers is forecast to decline anywhere from 55% to 75%.
• This means sharp reductions in freshwater supply in the immediate vicinity of 2050. The sensitivity of glacier systems to warming underlines the need for their careful monitoring. Despite awareness of the risks posed by Himalayan glaciers there is no early warning system for the likelihood of GLOF events.

Conclusion

• Much like warnings before cyclones, floods and earthquakes, authorities must elevate threats from contracting glaciers to the same category of risk. Correspondingly, there is a need to make comprehensive risk assessments, map regions of vulnerability and commission infrastructure development with the highest standards of care.

General Studies Paper – 2

Context:

Most South Asian states are sceptical of India’s primacy in their own ways.

Introduction

• The proverbial Achilles heel of Indian foreign policy continues to be its neighbourhood. Contemporary Indian foreign policy has an ambitious vision — from being the leader of the global South, to be an arbiter in global geopolitical contestations, to making a serious claim to be a pole in world politics.
• But South Asia is not only not keen to jump on the bandwagon of the India story, but it is also seemingly holding India back, albeit indirectly. Neighbourhoods are difficult for any major power, but contemporary India is faced with an exceptionally hard one, complicated by a rising superpower in its neighbourhood, for the first time in its history.

Types of dilemmas that India faces in the neighbourhood.

• The rise of politically anti-India regimes in South Asia such as the one in the Maldives where the new government is effectively asking Indians to pack up and leave. While the Maldives is anti-India in an instrumental sense, a Khaleda Zia-led government in Dhaka, which goes to the elections early next year, could turn out to be ideologically anti-India.
• The second type of dilemma India faces in the neighbourhood is structural, resulting from Beijing’s growing influence in South Asia.
• The growing entanglement of the region’s smaller states in the Belt and Road Initiative (BRI) and other Chinese projects.
• Beijing’s assiduous outreach to South Asian states when the rest of the international community abandons or avoids them for normative or other reasons — as was the case with Taliban-led Afghanistan, military-ruled Myanmar and crisis-hit Sri Lanka. India does too, but the overall impact of China’s outreach is far higher than that of India primarily as a function of deeper pockets.
• Finally, China’s desire to settle border disputes with its neighbours (minus India), as seen in the case of Bhutan, is also a strategy to win over the region.

Causes behind the dilemmas.

• The first is the regional geopolitical architecture characterised by five overlapping elements.
• Contemporary South Asia is characterised by a diminishing presence of the United States, which, for a long time, was a geopolitical constant in the region. For New Delhi, Washington’s presence in South Asia was not always advantageous, but its departure is disadvantageous, in particular given how China has filled the power vacuum created by Washington’s departure.
• The aggressive and stupendous rise of China has come as a ‘geopolitical buffer’, at least for now, for the smaller states in the region which have become adept at using the ‘China card’ in their foreign policy assertions. While our neighbours are keen to practise strategic autonomy with us, there is little appetite to do so vis-à-vis China.
• Third, in one of the least interconnected regions in the world, and poor, it is natural that the inhabitants of the region will tilt towards a power with the ability to cater to their material needs. With India’s ability to meet those needs being limited, China is that power.
• Fourth, India, for the most part, has had a normative and political approach towards the region, with the states in the region acquiescing, rebelling, and falling in line given the absence of choices. Beijing has changed that India-centric calculus by offering itself as the no-frills non-normative alternative. For the first time in modern South Asian history, the region is a ‘norms-free-zone’.
• Finally, for much of its independent existence, New Delhi enjoyed unrivalled primacy in the region. Today, the downside of being the resident power in South Asia — with all its attendant cultural, ethnic, refugee and other spillovers — is felt more sharply than being the primary power. China, on the other hand, is the region’s non-resident power which benefits from the absence of complications — ethnic, linguistic, religious — arising out of being a resident power.
• The second cause behind India’s regional dilemma is related to its policy stance which exhibits a deep-seated status quo bias when it comes to dealing with the region’s domestic politics and the multiplicity of actors/power centres therein.
• Furthermore, India’s dilemmas are also caused by two mistaken assumptions that we have long held.
• For one, there has, for some time, been a strong belief in India that South Asia minus Pakistan would be amenable to Indian geopolitical reasoning which prompted an attempt to deal proactively with South Asia without Pakistan. However, in retrospect, one has to admit that this policy has not exactly panned out that way India imagined.
• The second (mistaken) assumption that New Delhi approached the neighbourhood with was that India’s special relationship with the region rooted in culture, soft power, history and ethnicity would help the country deal with the neighbourhood better than those without intimate knowledge of the region, namely China.

What can be done?

• It is the time in which India should made a mental switch and acknowledged that South Asia and its balance of power have changed fundamentally.
• Old South Asia where India enjoyed primacy no longer exists. ‘Southern Asia’ which has pretty much replaced South Asia is a space where China has emerged as a serious contender for regional primacy.
• India’s neighbours and periphery are China’s too, even if we do not like it.
• Such a realistic and pragmatic framing would help India deal with the reality as it is rather than working with the mental frame of Indian primacy which is long gone.
• New Delhi must proactively pursue the involvement of friendly external actors in the region. That is the only way to deal with the impending possibility of the region becoming Sino-centric.
• Indian diplomacy must be flexible enough to engage multiple actors in each of the neighbouring countries. The art of diplomacy is not about hating the anti-India elements in the neighbourhood, but, instead, lessening their anti-India attitude.
• Finally, here is the highlighting of an issue that has been spoken of ad nauseum — India needs more hands for its diplomatic pursuits. The glaring shortage of sufficient diplomats to implement the foreign policy of a country of 1.4 billion people will prove to be India’s single most crucial challenge going forward.

Conclusion

• The more India’s role in world affairs grows, the more the shortage of personnel will be felt by us and others. If the current state of affairs continues, there will be no one to show up with the Indian flag when opportunities beckon, or crises emerge.

General Studies Paper – 2

Introduction

• It has been more than five and a half years since an elected government collapsed and Governor’s rule was imposed in Jammu & Kashmir amidst the suspension of the elected Assembly — a step that heralded dramatic changes in the erstwhile State.
• Subsequently, Article 370 that provided for special status for the erstwhile State was removed, the State bifurcated with the region encompassing Jammu and the Kashmir Valley made into a new Union Territory and Ladakh hived off into another.

Jammu and Kashmir Reorganisation Act, 2019

• The Jammu and Kashmir Reorganisation Act divides the Indian-administered state into two Indian-administered union territories, Jammu and Kashmir, and Ladakh.
• Whereas the former, Jammu and Kashmir, will have a legislative assembly, the latter, Ladakh, will be administered by a lieutenant governor alone.
• The union territory of Ladakh will include the districts of Leh and Kargil, while all other districts will be accorded to Jammu and Kashmir.
• Of six Lok Sabha seats allocated to the former state, one will be allocated to Ladakh and five to the Jammu and Kashmir union territory. The High Court of Jammu and Kashmir will function as the High Court for both the union territories.
• The act provides that the administration of the Jammu and Kashmir will be as per Article 239A of the Indian constitution. Article 239A, originally formulated for the union territory of Puducherry, will also be applicable to Jammu and Kashmir.
• A lieutenant governor appointed by the president will administer the union territory of Jammu and Kashmir, which will have a legislative assembly of 107 to 114 members. The legislative assembly may make laws for any of the matters in the state list except “public order” and “police”, which will remain as the law-making powers of the union government.

Constitutionality of these changes

• The constitutionality of these changes is still under question and the Supreme Court has reserved its verdict on it. But this has not deterred the Union government from bringing about legislation that will change the make-up of the UT’s prospective Legislative Assembly beyond the completion of the delimitation exercise.

Jammu and Kashmir Reservation (Amendment) Bill, 2023.

• On Wednesday, the Lok Sabha passed the Jammu and Kashmir Reorganisation (Amendment) Bill, 2023 and the Jammu and Kashmir Reservation (Amendment) Bill, 2023.
• These Bills do not necessarily bring about any significant change.
• The first increases the total number of Assembly seats from 107 to 114, with reservation of nine seats for Scheduled Tribes (a first), besides empowering the Lieutenant-Governor to effect some nominations.
• The second seeks to replace the term “weak and underprivileged classes (social castes)” in the J&K Reservation Act, 2004, enacted by the State legislature, to “Other Backward Classes” as declared by the UT.

Feeling of Alienation

• Propriety would have demanded that even these changes could have waited for the Supreme Court’s verdict, which is due soon, on the legality of the abrogation of special status besides the bifurcation of the erstwhile State and the procedure adopted to do so.
• Without the involvement of elected representatives from J&K in the process, the changes proposed in the Lok Sabha would only seem to be acts that are presented as fait accompli to the UT’s citizens.
• This should also be taken together with the fact that the last five and a half years have seen the suspension of political and civil liberties of politicians; arbitrary arrests and detentions; communication shutdowns; a chilling effect on the media; and, more recently, long power cuts. Any change to the political life of J&K, citing its status as a region affected by separatism and terrorism, should not be done in a way that the citizens feel alienated.

Conclusion

• The first order of business in J&K has to be the restoration of the democratic process by holding popular elections and the restoration of its Statehood. This should help not just fill a glaring void in public life in the region in the immediate but also set the stage for addressing the long-pending issues that have led to the persistence of militancy.

General Studies Paper 2

Context: The Multidimensional Poverty Index exaggerates the National Democratic Alliance’s success in fighting deprivation.

Introduction

• Samuel Johnson, a profound literary critic, and essayist, wrote, “Poverty is a great enemy to human happiness; it certainly destroys liberty, and it makes some virtues impracticable, and others extremely difficult.” In sharp contrast, conventional measures of poverty in terms of income are limited and narrowly focused on scarcity of resources to eke out a bare subsistence. But there is much more to poverty than a bare subsistence, as emphasised by Johnson and others.

Concept of capability

• Nobel Laurate Amartya Sen pioneered a rich, innovative, and broader perspective on well-being, focusing on capabilities and functioning’s. While capabilities are abilities to do this or that in a free and fair environment, functioning reflect achievements.
• An ability to live a healthy life, for example, is not necessarily related to affluence as it could result in obesity and vulnerability to non-communicable diseases.
• Achievements such as being healthy, on the other hand, require a nourishing diet and physical exercise.
• Professor Sen has, however, resisted aggregation of concepts such as capabilities into an overall measure of well-being as he believes that each capability is important in itself.

The MPI story

• Unfortunately, the United Nations Development Programme (UNDP) seized upon capabilities to construct an overall measure of human development with uniform weights of the three components: health, education and standard of living and their sub-indices.
• Following this methodology, NITI Aayog and the UNDP released recently a National Multidimensional Poverty Index/MPI: A Progress Review 2023, also replicated in the UNDP Report, Making Our Future: New Directions for Human Development in Asia and the Pacific, released on November 7, 2023.
• Hence, these reports suffer from the same flaws as the UNDP human development index: aggregation with uniform weighting. But, the MPI story is further distorted, as elaborated on below.
• Astonishingly, the MPI 2023 estimates show a near-halving of India’s national MPI value and a decline from 24.85% to 14.96% between 2015-16 and 2019-21. This reduction of 9.89 percentage points implies that about 135.5 million people have exited poverty between 2015-16 and 2019-21.
• Besides, the intensity of poverty, which measures the average deprivation among the people living in multidimensional poverty, reduced from 47.14% to 44.39%.

Estimates, misleading and ill-informed.

• The MPI relies upon National Family Health Survey (NFHS) 4 and 5, which are not detailed enough for its estimation. Moreover, NFHS 5 is blocked as its estimate of open defecation contradicted exaggerated official claim of its complete elimination.
• Ideally, NFHS 4 and 5 should have been combined with the 75th Round of the NSS on household consumption expenditure. Unfortunately, this was abandoned too, as leaked poverty estimates indicated a rise.
• What casts further doubts is the havoc caused by the COVID-19 pandemic in 2020-21. Millions lost their livelihoods, thousands died in reverse migration and from a lack of access to vaccines and medical care.
• In fact, as a consequence of this epidemic, there was a huge economic shock from which the Indian economy has been struggling to recover. To illustrate, GDP growth has declined from 8% in 2015-16 to 3.78 % in 2019-20 and slumped -6.60 in 2020-21, as also per capita income.

Focus on covariates

• Our recent analysis focuses on covariates of the MPI that include per capita state income, its square, share of criminals among State MPs, share of urban population, and health and education expenditure and unobserved state fixed effects (e.g., how progressive a State is).
• If we compare elasticities of MPI with respect to each covariate (i.e., proportionate change in MPI due to a proportionate change in a covariate such as State per capita income), the largest reduction in MPI is due to higher State per capita income. But since income decreased drastically, MPI spiked.
• The next in order of importance is urban location. A 1% increase in urban location results in a 0.90% increase in MPI. This is not surprising as rural-urban migration is associated with growth of slums and sub-human living conditions.
• However, reverse migration during COVID-19 may explain why the effect on MPI is less than proportionate.
• Both health care and education expenditure are associated with lower MPI — the elasticity of the latter is higher (in absolute value), implying that a 1% increase in the latter reduces MPI more than the same increase in the former.
• As State-level estimates suggest a decline in educational expenditure, a rise in MPI is likely. Although State-level health expenditure rose to combat COVID-19, it fell far short of what was needed.
• If the share of Members of Parliament with criminal cases in total State MPs exceeded 20%, the higher was the MPI. This is not surprising as criminal Members of the Legislative Assembly and MPs are notoriously corrupt and siphon-off funds allocated for social safety nets and area development programmes.
• Indeed, what is alarming is their rising share — 24% of the winners in the Lok Sabha election in 2004 had a criminal background; it rose to 30% in the 2009 general election, 34% in the 2014 election, and 43% in the 2019 election.

Reduction between 2015 and 2019-21 is considerably lower than the official estimate.

• If we go by our estimates of MPI, the reduction between 2015 and 2019-21 is considerably lower than the official estimate: 4.7 percentage points compared with 9.89 percentage points.
• Our selective review of MPI estimates shows that poverty rose in India’s most populous State, Uttar Pradesh, by over seven percentage points.
• Of the States that went to the elections in November (Chhattisgarh, Madhya Pradesh, Mizoram, Rajasthan and Telangana), we find that the MPI fell in Chhattisgarh (by over six percentage points), in Rajasthan (by two percentage points) and, most strikingly, in Madhya Pradesh (by about eight percentage points).

Conclusion

In conclusion, not only does the MPI exaggerate the NDA’s success in fighting deprivation but also perhaps more seriously obfuscates conventional measures of it which may unravel a contradictory story of poverty.

General Studies Paper 3

Context: Healthier inflows from GST offer policy makers the bandwidth to fix its flaws.

 Introduction

• The Goods and Services Tax (GST), which turns six and a half years old this month, has yielded almost ₹3.4 lakh crore through October and November. While revenues in October marked the second highest monthly collections, November’s kitty is the third highest.
• Both these months also recorded accelerated revenue growth after a sequence of slowing upticks that culminated with September recording a 27-month trough of 10.2%.

Goods and services tax (GST)

• GST is a unified tax system that replaced multiple indirect taxes levied by both the Central and State Governments. Under GST, both the Central and State Governments share the authority to levy and collect taxes on goods and services. This has led to greater harmonization and uniformity in the tax structure across States, promoting economic integration.
• The GST system follows a dual structure, comprising Central GST (CGST) and State GST (SGST), levied concurrently by the Central and State governments, respectively. Additionally, an Integrated GST (IGST) is levied on interstate supplies and imports, which is collected by the Central Government but apportioned to the destination state.

Festive fervour

• Festive fervour surely bolstered last month’s nearly ₹1.68 lakh crore of GST revenues, which were based on transactions in October, and that trend may persist this month as well on the back of anticipated last-minute Deepavali spending.
• Prior to this two-month spike, GST revenues had crossed ₹1.65 lakh crore on only three occasions, which were typically driven by year-end compliances.
• Now, the average monthly collection so far in 2023-24 stands at ₹1.66 lakh crore, and economists believe central GST receipts may surpass Budget estimates even if one factors in a relative slowdown in the final quarter of this year.

GST Council

• The process for creating GST Council started in India when the Constitution (One Hundred and Twenty-second Amendment) Bill 2016, for the introduction of Goods and Services Tax (GST) was accorded assent by the President on 8th September 2016. As per Article 279A (1) of the amended Constitution, the president should approve to constitute within 60 days of the commencement of Article 279A.
• The GST Council, consisting of the Union Finance Minister and representatives from all States and Union Territories, was established to make decisions on various aspects of GST, including tax rates, exemptions, and administrative procedures. It played a crucial role in shaping the GST framework in India.
• The GST Council will make recommendations on:
• GST shall include taxes, cesses, and surcharges;
• Goods and services which possibly will be subject to, or exempt from GST;
• The threshold maximum value of turnover for the function of GST;
• Rates of GST;
• GST laws, principles of levy, apportionment of IGST and principles associated with place of supply;
• Special provisions with respect to the eight northeastern states, Himachal Pradesh, Jammu and Kashmir, and Uttarakhand; and other associated matters.
• Other matters pertaining to the implementation and regulation of GST in India.

Moving from “uncertainty to certainty”

• With revenues buoyant, in no small part due to tighter compliance and a crackdown on tax evaders, the government must consider resetting its ambitions and work towards making the GST a truly good and simple tax, as it was promised to be.
• At a recent industry interaction, responding to concerns about the manner in which a spate of GST demand notices and investigations have unfolded in recent months, Finance Minister Nirmala Sitharaman said the GST is still at a stage of moving from “uncertainty to certainty” on some grounds and those aspects are being sorted out now.
• That certainty needs to be pursued at a broader level to provide genuine comfort to investors about India’s tax regime being stable and predictable. For one, pending taxpayer appeals against central GST levies have risen by a quarter this year to hit nearly 15,000 cases by October and it is necessary that appellate tribunals cleared by the GST Council become operational at the earliest to unwind this pendency and set clear precedents for future tax treatment disputes.
• It is equally critical to lay down a road map to bring in excluded items such as petroleum and electricity into the GST framework as well as the rejig of its complicated multiple rate structure.

Conclusion

• With the general election ahead, some dithering on such reforms may be understandable, but the GST Council must not lose focus of the unfinished agenda and keep deliberating on its to-do list, so that these steps can be fast-tracked after the Lok Sabha election.

General Studies Paper 3

Context: Major world economies seem unwilling to move away from fossil fuel.

Introduction

• The boundary wall enclosing discussions around global climate is 1.5°C, or the average increase in global temperatures since pre-industrial times. Now that 1°C is crossed, all the wrangling under way at the climate summit in Dubai is to cap the half-degree rise.

Fossil Fuels

• Fossil energy sources, including oil, coal and natural gas, are non-renewable resources that formed when prehistoric plants and animals died and were gradually buried by layers of rock. Over millions of years, different types of fossil fuels formed — depending on what combination of organic matter was present, how long it was buried and what temperature and pressure conditions existed as time passed.
• Today, fossil fuel industries drill or mine for these energy sources, burn them to produce electricity, or refine them for use as fuel for heating or transportation. Over the past 20 years, nearly three-fourths of human-caused emissions came from the burning of fossil fuels.

Insufficiency of Global pledges

• Global pledges to cut emissions are insufficient to achieve this. Current estimates are that to limit warming to 1.5°C, the world requires three times more renewable energy capacity by 2030, or at least 11,000 GW.
• That there is wide global consensus on the need for this tripling was first formally articulated in the New Delhi Leaders’ Declaration at the G-20 summit in Delhi in September.

UN Framework Convention on Climate Change – UNFCCC

• The UN Framework Convention on Climate Change (UNFCCC) sets out the basic legal framework and principles for international climate change cooperation with the aim of stabilizing atmospheric concentrations of greenhouse gases (GHGs) to avoid “dangerous anthropogenic interference with the climate system.”
• To boost the effectiveness of the 1992 UNFCCC, the Kyoto Protocol was adopted in December 1997. It committed industrialized countries and countries in transition to a market economy to achieve quantified emissions reduction targets for a basket of six GHGs.
• The Kyoto Protocol’s first commitment period took place from 2008 to 2012. The 2012 Doha Amendment established the second commitment period from 2013 to 2020. In December 2015, parties adopted the Paris Agreement, which requires all parties to determine, plan, and regularly report on the nationally determined contribution (NDC) that it undertakes to mitigate climate change.
• Parties also submit aggregate progress on mitigation, adaptation, and means of implementation, which are reviewed every five years through a Global Stocktake.

Run up to the Dubai summit.

• In the run-up to the Dubai summit, it was perceived that this would be widely endorsed by the larger group of about 190 countries signatory to the UN convention on climate. It turns out that, so far, 118 countries have endorsed the pledge and two major countries, i.e., India and China, have so far abstained from signing.
• The Global Renewables and Energy Efficiency Pledge, while still a draft text, says that in their pursuit of tripling renewable energy capacity, signatories should also commit to “…phase down of unabated coal power, in particular ending the continued investment in unabated new coal-fired power plants”. This is a major red line for India.

India’s stand

• While India has positioned itself as a champion for renewable energy — its 2030 targets as articulated in its formal, nationally determined contributions (NDC) speak of tripling renewable energy capacity to 500 GW from the current 170 GW — it has reiterated several times that it could not be forced to give up certain fuels. Coal-fired plants are responsible for nearly 70% of India’s greenhouse gas emissions.

Other Developed countries stand.

• Developed countries that have made commitments to give up coal often have other large, fossil-fuel resources as back-up. The United States joined 56 other countries at Dubai in a commitment to completely eschew coal for its energy use, by 2035. However, the U.S. only draws about 20% of its energy from coal and at least 55% from oil and gas, with plans to produce more of it in 2030 than at present.

Conclusion

• The paradox of the world’s major economies’ commitment to renewable energy is that it is not, as of now, actively geared to replace fossil fuel. Till there is an honest commitment to actually replace existing and future fossil capacity with clean energy, pledges and declarations are worth little more than the paper they are drafted on.

General Studies Paper 2

Context: As both the State and Central government were perceived to be corrupt, the Congress benefited

Introduction

• We define corruption as the abuse of entrusted power for private gain. Corruption erodes trust, weakens democracy, hampers economic development, and further exacerbates inequality, poverty, social division and the environmental crisis.
• Exposing corruption and holding the corrupt to account can only happen if we understand the way corruption works and the systems that enable it.

Prevention of Corruption act, 1988.

• On September 9, 1988, the Prevention of Corruption Act, 1988 (henceforth abbreviated as PCA) became operative. Its goal was to increase the overall effectiveness of anti-corruption statutes by broadening their scope and fortifying their provisions.
• Features of the act:
• With minor modifications to the original language, it combines the Criminal Law Amendment Act, 1952, the Prevention of Corruption Act, 1947, and Sections 161 to 165-A of the Indian Penal Code.
• The definition now includes terms like “public servant” and “public duty.”
• As stated in the CrPC, it has moved the burden of proof from the prosecution to the person facing charges.
• The Act’s provisions make it very clear that an officer, not a person lower in rank than Deputy Superintendent of Police, must conduct the investigation.
• Bribery, misappropriation, gaining a financial advantage, having assets that are out of proportion to one’s income, and similar corrupt practices are all covered by the Act.

Impact on electoral politics

• The political atmosphere during the Telangana Assembly elections was marked by accusations from the Congress and the BJP against the BRS government. The K. Chandrashekar Rao-led government was alleged to be involved in corruption throughout its tenure. The findings of the CSDS-Lokniti post-poll study indicate that corruption emerged as a prominent source of dissatisfaction for the voters.
• Approximately half the voters in the State felt that corruption had increased over the past five years. Only about a quarter believed that there was a decrease in corruption. Two in 10 voters felt that there was no change in corruption in the last five years. Public discontent can also be gleaned from the fact that the issue of corruption was ranked as the second most unacceptable action of the BRS government. One in 10 voters identified this issue as a significant concern.
• This has an impact on voter choices. The perception of corruption in the BRS and BJP governments, coupled with the attribution of anti-corruption efforts to the Congress, played a significant role in shaping voters’ preferences towards Congress.

The Representation of the People Act (RPA),1951

• Important features:
• It controls how elections and by-elections are actually conducted.
• It offers the administrative tools needed to hold elections.
• It has to do with political party registration.
• It outlines the requirements as well as the exclusions from House membership.
• It has measures to stop other offenses and corrupt behaviour.
• It establishes the process for resolving questions and disagreements following elections.

Conclusion

• This has an impact on voter choices. The perception of corruption in the BRS and BJP governments, coupled with the attribution of anti-corruption efforts to the Congress, played a significant role in shaping voters’ preferences towards Congress.

General Studies Paper 3

Context:

The lasting impact of the episode of the American indictment against an Indian national will lie in the image India wishes to project to the world.

Introduction

• In the shadowy world of espionage, intelligence and covert operations, the only rule is to never get caught carrying out a mission. In the more visible world of public diplomacy, the only rule is to never get caught telling a lie or denying what might turn out to be true.
• The recent publication of a United States Department of Justice indictment against an Indian national for targeting wanted Khalistani separatists in North America, at the behest of a government official who may or may not have been acting alone, is as yet an unproven allegation that must stand trial, but is one that has nonetheless cast a dark shadow on New Delhi’s credibility in terms of both covert capacity and public messaging, which must be addressed.

Other operations in the limelight

• The indictment also comes on the heels of a number of intelligence operations that have been challenged in courts in other friendly countries in recent years: from the forcible return of a United Arab Emirates princess, Latifah, by the Indian Coast Guard in international waters in 2018 that has been criticised by a court in the United Kingdom, to the “attempted kidnap” of businessman-on-the-run Mehul Choksi from Antigua to Dominica by British nationals alleged to have been working for Indian agencies in 2021, and the conviction of eight former Indian naval officers in Qatar for espionage, which is now in appeal.
• While the extra-judicial military court trial against former Indian naval officer Kulbhushan Jadhav in Pakistan since 2016 has been challenged by India at the International Court of Justice (ICJ), the fact that he was operating his business from Iran, a friendly neighbour, has no doubt been noted.
• Meanwhile, the circulation of a list of alleged operations against wanted Khalistani and Pakistani operatives not just in Pakistan but also in Nepal, Italy, the United Kingdom and Thailand, has been hailed in the media as proof of the Indian security establishment’s global reach.

Troubling questions thrown up.

• It is in this context that the government must engage with the troubling questions thrown up by the latest allegations — by the U.S. of a conspiracy to murder Gurpatwant Singh Pannun in New York, that also indicates a link to the murder of Hardeep Singh Nijjar in Canada, and the direct allegation by Canada, made by its Prime Minister Justin Trudeau on the Nijjar killing.
• To begin with, the text of the American indictment unravels two conspiracies — one carried out by the Indian who has been indicted, Nikhil Gupta, who was allegedly directed by a senior government intelligence official, and the other carried out by the Federal Bureau of Investigation and Drug Enforcement Administration, to entrap him by providing an undercover officer to him as the hitman.
• The fact that the U.S. government did not share all that it knew with India questions the claims made otherwise that the two countries have, between them, reached the pinnacle of security cooperation this year.

Trust is still an issue.

• For the U.S., it is also obvious that it does not trust the information India has shared on Mr. Pannun, Nijjar and the Khalistani separatist movement, and hence is more focused on the plot against them than it is on curbing their activities. For India, given India’s deep concerns with Mr. Pannun’s radical rhetoric, even broadcasting a threat against Air India flights, and threats to diplomats and embassies, the U.S.’s actions are a breach of trust.
• The actions hark back to the nature of intelligence sharing in 2008, when the U.S. warned India about the impending 26/11 terror threat (November 2008 Mumbai attacks), but did not divulge that the source of the information was Lashkar-e-Taiba operative David Coleman Headley, who even re-entered India with another diabolical plan in 2009.
• What this indicates is that while bilateral ties and strategic ties are growing in different spheres, trust between both countries has not kept apace. While much commentary is focused in the short term on whether Mr. Biden will confirm his attendance at the Republic Day parade and the Quad summit (Australia, India, Japan and U.S.) in January, it is the impact on the longer arc of the relationship that both sides must focus on.
• By extension, South Block must also look at the impact of its actions among western allies including the “Five Eyes” intelligence partnership (Australia, Canada, New Zealand, the U.K. and the U.S.). By rejecting Canadian allegations outright, expelling diplomats and suspending visas, while accepting the U.S.’s allegations more calmly and setting up a high-level inquiry to investigate them, New Delhi has demonstrated a double standard in its international engagements.

Impact on the neighbourhood

• Further afield, India must address the impact of the case on the neighbourhood. Countries such as Sri Lanka and Bangladesh stood with India on the Canada issue, but as details of the U.S. indictment are revealed, South Asian capitals, and not just Islamabad, will be studying the footprint of Indian agencies in their countries as well.
• South Block and its embassies in the neighbourhood will have to go the extra mile to assure the neighbours, especially in Kathmandu, Dhaka, Male and Colombo, where reports about India’s “hand” in domestic politics is often discussed in exaggerated tones.

Conclusion

• Eventually, the lasting impact of the episode will lie in the image India wishes to project to the world — as a “hard power” that is willing to risk international ire and ties in pursuing those it considers a threat in any corner of the world in any manner it deems fit.
• Or that of an adherent to international law that builds its case through its diplomats, turning global opinion in its favour to achieve its ends, albeit at the risk of being seen as a “soft power”. The Ministry of External Affairs has said categorically that covert, extra-judicial assassinations are not this government’s policy and that the allegations will be investigated. A deeper investigation would reveal whether India’s actions align with its values and interests.