General Studies Paper 2

General Studies Paper 2Context: Recently, the Ministry of Tribal Affairs responded to a question in the Rajya Sabha, which raised concerns about the need for a revision in the criteria and procedure for inclusion in the Scheduled Tribes list.

The current procedure and criteria for inclusion

• According to the modalities, for inclusion first framed in 1999, the proposal for inclusion must originate from the respective State or Union Territory government.
  • Following this, the proposal is sent to the Union Tribal Affairs Ministry, which sends it to the Office of the Registrar General of India (ORGI).
• If the ORGI approves the inclusion, the proposal is forwarded to the National Commission for Scheduled Tribes.
  • theORGI continues to follow the criteria set out by the Lokur Committee in 1965 to decide whether a community can be included in the ST list.
    • These criteria include indications of primitive traits, distinctive culture, geographical isolation, shyness of contact with the community at large, and backwardness.
  • Only after the concurrence of these institutions, will the proposal go forward to the Cabinet to bring in the appropriate amendment to the Constitution (Scheduled Tribes) Order, 1950.
  • The final decision rests with the President’s office issuing a notification specifying the changes under powers vested in it from Articles 341 and 342.

Benefits of Inclusion in ST List / Constitutional Safeguards

• Reservation in educational institutions has been provided in Article 15(4) of the constitution while reservation in posts and services has been provided in Article 16(4), 16(4A) and 16(4B) of the Constitution.
• Specific safeguards have been provided in Article 244 read with the provisions contained in the Fifth and Sixth Schedules to the Constitution.
• Article 243D provides reservation of Seats for Scheduled Tribes in Panchayats.
• Article 330 provides reservation of seats for Scheduled Tribes in the Lok Sabha.

Criticism 

• Both the procedure and criteria for the inclusion of communities had been strongly criticised by an internal government task force formed in February 2014, for being “obsolete”, “condescending”, “dogmatic” and “rigid”.
• The committee, led by then-Tribal Affairs Secretary Hrusikesh Panda had also said that the procedure as it was being followed was “cumbersome” and “defeats the Constitutional agenda for affirmative action and inclusion”.
• The task force had concluded that these criteria and procedures were resulting in the exclusion of or delays in the inclusion of nearly 40 communities across the country.

Government Stands 

• The Tribal Affairs Ministry insisted that the current procedure for inclusion of communities in the Scheduled Tribes list was “adequate”.

Supreme Court’s Observations

• In March 2022, the Supreme Court said it wanted to fix fool-proof parameters to determine if a person belongs to a Scheduled Tribe. It referred this matter to a larger bench.

How many Scheduled Tribes are there officially?

• According to the Scheduled Tribes in India as revealed in Census 2011, there are said to be 705 ethnic groups listed as Scheduled Tribes under Article 342. Over 10 crore Indians are notified as STs, of which 1.04 crore live in urban areas. The STs constitute 8.6% of the population and 11.3% of the rural population.

General Studies Paper 2

Context: As the June 2023 deadline for completing the Smart Cities Mission approaches, the government has asked 20 of the worst-performing cities to buck up.

• • These 20 cities are the ones that have completed the fewest projects under the mission.

Smart Cities Mission (SCM)

• About:
  • The Smart Cities Mission is an initiative of the Union Housing and Urban Affairs Ministry that was launched by the Prime Minister on June 25th 2015.
  • Cities across the country were asked to submit proposals for projects to improve municipal services and to make their jurisdictions more liveable.
    • Between January 2016 and June 2018, the Ministry selected 100 cities for the Mission over five rounds.
• Four pillars:
  • Social Infrastructure,
  • Physical Infrastructure,
  • Institutional Infrastructure,
  • Economic Infrastructure.
• Need:
  • India is the world’s second-most populous nation.
  • 31% of India’s present population and contribute around 63% of GDP (Census 2011).
  • Urban areas are anticipated to house 40% of India’s people and contribute around 75% of India’s GDP by the year 2030.
• Objective & Significance:
  • To promote cities that provide core infrastructure and give a decent quality of life to their citizens, a clean and sustainable environment and application of ‘Smart’ Solutions.
    • The project proposals ranged from making certain stretches of roads more accessible and pedestrian-friendly to more capital-intensive ones like laying water pipelines and constructing sewage treatment plants.
    • Make Cities liveable, inclusive, and sustainable (Area-based development).
    • Create employment opportunities.
• Integrated Command and Control Centres:
  • All 100 cities have also constructed Integrated Command and Control Centres to monitor all security, emergency and civic services.
    • During the peak of the Covid-19 pandemic, these centres were converted into emergency response units by many of the cities.

Deadlines under the mission

• The projects were supposed to be completed within five years of the selection of the city, but in 2021 the Ministry changed the deadline for all cities to June 2023.
  • As of March 2023, the 100 cities have issued work orders for 7,799 projects. Out of these, 5,399 projects have been completed, and the rest are ongoing.
  • Only around 20 cities are likely to meet the June deadline; the rest will need more time.
  • Among the laggards are six cities from the Northeast, five Union Territories, and three state capitals.
• The government has asked 20 of the worst-performing cities, ones that have completed the fewest projects under the mission to buck up.

Challenges

• Smart cities mission is a challenging project. 
  • Every city has its own set of challenges ranging from infrastructure, city dynamics, behavioral practice, etc.
• Infrastructure development:
  • A lot of challenges come up when a large scale infrastructure development is done.
  • The legal set-up, inconsistency in policies and regulatory norms are the major challenges in a country like India. They affect the actual execution of projects.
• Technical Constraints & Technological Obsoleteness: 
  • The smart city mission aims to harness the smart technologies to develop the city into a smart one.
  • However, most of the urban local bodies have a limited technical capacity to ensure the development of the smart cities.
  • These technical and technological limitations hinder the cost-effective and timely implementation of the smart steps.
• Financing For Project: 
  • Keeping the funds and finances flowing in for the smart cities mission is a challenge. Most ULBs are not even financially self-sustainable.
  • Getting the right finances flowing in for the completion of the project and later the maintenance of the technological developments in the smart cities can be a challenge.
• Transport:
  • Urbanizing the public transport for urban mobility is a challenge for the government due to the inadequate transport system currently persisting in the cities.
  • Various factors like lack of investment, high population density, zoning, and poor urban planning have been making the transit system in Indian cities inadequate.

Government Initiatives to Support the SCM

• Atal Mission for Rejuvenation and Urban Transformation (AMRUT):
  • It was launched in June 2015 by the Ministry of Housing and Urban Affairs. It Aims:
    • To ensure that every household has access to a tap with the assured supply of water and a sewerage connection.
    • To increase the amenity value of cities by developing greenery and well maintained open spaces like parks.
    • To reduce pollution by switching to public transport or constructing facilities for non-motorized transport.
• National Urban Digital Mission (NUDM): 
  • It will create a shared digital infrastructure for urban India.
  • It shall work across the three pillars of people, process, and platform to provide complete support to cities and towns.
• National Urban Learning Platform (NULP): 
  • It aims to propagate solutions and innovations that are underway, and act as an enabler of the rapid development of diverse new solutions developed by cities and states.
• Ease of Living Index (EoLI): 
  • The EoLI is an assessment tool by the Ministry of Housing & Urban Affairs that evaluates the quality of life and the impact of various initiatives for urban development in the city.
• India Smart Cities Awards Contest (ISAC): 
  • It was launched to reward the cities, projects and innovative ideas promoting ‘smart; development in cities.
• The Urban Learning Internship Programme (TULIP): 
  • TULIP is a program for providing fresh graduates with experiential learning opportunities in the urban sector.
    • It would help enhance the value-to-market of India’s graduates and help create a potential talent pool in diverse fields like urban planning, transport engineering, environment, municipal finance etc.

Way ahead

• As India continues its growth trajectory, the quality of its urbanisation will become paramount to ensure that this growth is sustainable and equitable.
• It is imperative that the government finds a solution to overcome these challenges to see the dream project of turning more than 100 Indian cities into smart cities.
  • The successful implementation of this mission requires a reinforced focus on building capacities at all levels to learn new approaches and technologies, and bring sensitisation towards new roles, responsibilities and attitudes.

General Studies Paper 2

Context: Two United States Senators, have introduced a bipartisan resolution in the upper chamber of Congress reiterating that the US recognises the McMahon Line as the international boundary between China and India in Arunachal Pradesh.

• The resolution reaffirms India’s well-known and established position that Arunachal Pradesh, which China calls ‘South Tibet’, is an integral part of India.

What is the McMahon Line?

• The McMahon Line serves as the de facto boundary between China and India in the Eastern Sector.
• It specifically represents the boundary between Arunachal Pradesh and Tibet, from Bhutan in the west to Myanmar in the east.
• China has historically disputed the boundary and claims the state of Arunachal Pradesh as part of the Tibetan Autonomous Region (TAR).

When was it drawn:

• The McMahon Line was drawn during the Shimla Convention of 1914, officially described as the Convention Between Great Britain, China, and Tibet.
• China was represented at the convention by the government of the Republic of China, which was in power in the mainland from 1912 to 1949.
• The McMahon Line delimited the respective spheres of influence of Tibet and British India in the eastern Himalayan region in what is today India’s Northeast and northern Myanmar. The border in this region was undefined prior to the signing of the convention.

What happened at the Shimla Convention of 1913-14?

• The convention attempted to settle the question of Tibet’s sovereignty and avoid further territorial disputes in the region.
• The treaty divided the Buddhist region into “Outer Tibet” and “Inner Tibet” – the former would “remain in the hands of the Tibetan Government at Lhasa under Chinese suzerainty”, though China was not allowed to interfere in its affairs.
• The latter would be under the direct jurisdiction of the newly formed Republic of China.
• The latter of these newly decided boundaries would later be called the McMahon Line after McMahon, the chief British negotiator.

Why China did not sign the convention:

• Arguing that Tibet had no independent authority to enter into international agreements.

How was the border between British India and China decided?

• Following the “highest watershed principle”. This principle, considered to be the most logical way of drawing borders in mountainous regions by the British, basically drew the border along the highest ridge between two river plains.

Status of the McMahon line since 1914:

• After the communists took power in 1949, they pulled China out of all international agreements and the so-called “unequal treaties”.

General Studies Paper 2

Context: The Department of Commerce, Government of India, has implemented the Trade Infrastructure for Export Scheme (TIES)  to facilitate the growth of exports by creating appropriate infrastructure.

What are the Major Government Initiatives to Promote Export Growth?

• TIES Scheme:
  • The TIES scheme provides grants-in-aid to central/state government-owned agencies or their joint ventures for infrastructure projects with significant export linkages.
    • The infrastructure includes Border Haats, Land customs stations, quality testing and certification labs, cold chains, trade promotion centres, export warehousing and packaging, Special Economic Zones, and ports/airports cargo terminuses.
  • PM Gati Shakti National Master Plan (NMP):
    • The PM Gati Shakti NMP is a digital platform that integrates geospatial data  related to infrastructure in the country and planning portraits of various ministries/departments of the government.
      • This digital system helps in data-based decision-making for the synchronised implementation of infrastructure projects,aiming to reduce logistics costs and support economic activity in the country.
    • Duty Drawback Scheme:
      • The Duty Drawback Scheme rebates the incidence of customs duties on imported inputs and central excise duties on domestic inputs used in the manufacture of export goods.
        • This scheme is operated in terms of provisions of the Customs Act, 1962,read with the Customs and Central Excise Duties Drawback Rules, 2017.

What are the Challenges Related to Indian Export Growth?

• Rising Protectionism and Deglobalisation:Countries around the globe are moving towards protectionist trade policies due to disrupted global political order  (Russia-Ukraine War) and weaponization of supply chain, that is in way shrinking India’s export capacities.
• Lack of Basic Infrastructure:India’s manufacturing sector lacks sufficient manufacturing hubs, internet facilities and transportation are costly when compared to developed nations which is a huge deterrence to Industries.
  • India uses only 3% of its GDP for infrastructure construction each year, as compared to China’s 20% of its GDP. For infrastructure, Rs 10 lakh crore (3.3% of GDP) was allocated in the budget 2023-24, an increase of three times from 2019.
  • Uninterrupted  power supply is another challenge.
    
• Lack of Innovation Due to Low Spending On R&D:Currently, India spends about 7% of GDP on research and development. This prevents the manufacturing sector from evolving, innovating and growing.

Way Forward

• Filling Up Infrastructural Gaps:A robust infrastructure network – warehouses, ports, testing labs, certification centres, will help Indian exporters compete in the global market.
  • It also needs to adopt modern trade practicesthat can be implemented through the digitisation of export processes. This will save both time and cost.
• Exploring Joint Development Programmes:Amidst a wave of deglobalisation and slowing growth, exports cannot be the sole engine of growth.
  • India can also explore joint development programmes with other countriesin sectors like space, semiconductor,   solar energy to improve India’s medium-term growth prospects.
• Frontlining MSME Sector:Currently,  MSMEs  contribute to one-third of the country’s GDP, account for 48% of exports making them key players in achieving ambitious export targets.
  • It is important for India to link Special Economic Zones with the MSME sector and incentivize small businesses.

General Studies Paper 2

Context: Recently, the US, UK and Australia have unveiled details of their plan to create a new fleet of nuclear-powered submarines, aimed at countering China’s influence in the   Indo-Pacific region. Under the AUKUS pact Australia is to get at least three nuclear-powered submarines from the US.

• The AUKUS agreement,which involves Australia acquiring nuclear-powered submarines with the help of the US and the UK, is being praised and criticized simultaneously. It is viewed as a means of strengthening deterrence and stability in the Indo-Pacific. However, China sees it as a dangerous alliance that the US is building in the area, along with the  Quadrilateral forum or the Quad.
• This pact will trigger multiple strategic consequences for Asia, including India.However, it is also an opportunity for India to develop a unique set of arrangements with the US and its allies.

What is AUKUS Grouping?

• It is a trilateral security partnership for the Indo-Pacific, between Australia, the UK and the US (AUKUS) which was signed in 2021.
• The major highlight of this arrangement is the sharing of US nuclear submarine technology to Australia.
• Its Indo-pacific orientation makes it an alliance against China’s assertive actions in the  South China Sea.
• It involves a new architecture of meetings and engagements between the three countries, as well as cooperation across emerging technologies (applied AI, quantum technologiesand undersea capabilities).

What are the Concerns related to AUKUS Grouping for Asia?

• Regional Security:
  • The AUKUS partnership has been perceived as a challenge to the security and stability of the region,particularly by China. The agreement includes the sharing of sensitive defense technologies and intelligence, which has raised concerns about its impact on the strategic balance in the region.
• Diplomatic Implications:
  • The AUKUS partnership has also been viewed as a diplomatic setback for countries such as India, Japan, and South Korea, which have traditionally been seen as key allies of the United States in the region.
  • These countries fear that the new partnership will sideline them and reduce their influence in the region.
• Impact on Non-Proliferation:
  • The AUKUS partnership involves the transfer of nuclear-powered submarine technology to Australia, which has raised concerns about its impact on global non-proliferation efforts.Some experts have expressed concern that this move could set a dangerous precedent and encourage other countries to pursue nuclear capabilities.
• Economic Consequences:
  • The AUKUS partnership has also raised concerns about its economic implications, particularly for countries such as India that have significant defense industries. The agreement is expected to lead to increased competition and could potentially impact the ability of these countries to sell defense equipment to Australia.

What will be the Strategic Consequences for India?

• Strengthening ties with Australia:
  • With Australia’s upgraded scientific and technical capabilities,there is an opportunity for India to deepen its S&T cooperation with Australia, which could eventually expand to sensitive strategic areas.
  • This would enhance India’s own technological capabilities and contribute to regional peace and security.
• Recognizing the Continuing Global Strategic Salience of Britain:
  • India tends to neglect the strategic importance of Britain, but the AUKUS deal may boost UK’s profile in Asia.
  • India could explore opportunities for closer cooperation with Britain on Indo-Pacific security issues.
• Embracing the idea of an “Anglosphere”:
  • Despite India’s difficult past relations with the Anglosphere, the AUKUS deal has brought enduring geopolitical bonds between the US, UK, Australia, Canada, and New Zealand back to life.
    • An Anglosphere is also called the world of English-speaking people bound by common political beliefs, similar legal traditions, and shared geopolitical interests.
  • India could explore opportunities to expand its ties with the English-speaking world,particularly in the areas of technology and defense.
• Developing a Unique Set of Arrangements:
  • With the US seeking to boost the strategic capabilities of its allies and partners in the Indo-Pacific, India has a rare opportunity to develop its own set of arrangements with the US and its allies.
  • This could involve closer military cooperation, joint exercises, and intelligence sharing,among other things.

How can India Safeguard its Strategic Interests?

• Exploring Opportunities for Collaboration:
  • India can explore opportunities for collaboration and technology transfer with the AUKUS countries, while also ensuring that its own national security interests are not compromised.
  • India can seek collaborations with AUKUS countries in areas such as maritime security, cybersecurity, and intelligence sharing.
• Maintaining Balance:
  • India should maintain a balance between its engagement with AUKUS and other key partners, such as Russia, France, and Japan.
  • India should avoid being drawn into a zero-sum game and strive to maintain strong ties with all relevant countries.
  • This is particularly important given the complex geopolitical landscape of the Indo-Pacific region.
• Strengthening Quad:
  • India should work towards strengthening the Quad, which could provide a counterbalance to AUKUS and help promote a rules-based regional order.
  • India should leverage the Quad to promote regional stability and balance of power.
• Ensuring the Interest of Smaller Countries:
  • India needs to ensure that the interests of smaller countries in the region are not overlooked in any engagements with AUKUS. India should take a leadership role in promoting a cooperative and inclusive approach to regional security issues.
  • This could involve initiatives such as capacity building for smaller countries in the region and promoting greater regional integration and connectivity.

General Studies Paper 1

Context: The 3rd Session of the National Platform for Disaster Risk Reduction (NPDRR) has concluded in New Delhi.

About the Session:

• The session deliberated on  10-point agenda on Disaster Risk Reduction given by Prime Minister Shri Narendra Modi and the Sendai Framework apart from other issues.
• Organized by: Ministry of Home Affairs (MHA)+ National Disaster Management Authority (NDMA)+ National Disaster Response Force (NDRF)+ National Institute of Disaster Management (NIDM)
• Theme: “Building Local Resilience in a Changing Climate

PM’s 10-Point Agenda:

• Importance of Local Resilience in Disaster Risk Reduction E.g.
  • Prime Minister’s 10-Point Agenda: Building local capacities and initiatives
  • Kutch (Gujarat):Bhunga houses of Kutch survived the earthquake to a large extent
  • Kerala:Traditional houses known as “Nalukettu,” are built with sloping roofs to prevent waterlogging during floods.
  • Local Disaster volunteers: Apada Mitra, Yuvak Mandal and Sakhi Mandal
• Need for Development Sectors to Imbibe Principles of Disaster Risk Management
• Importance of Risk Coverage for All
• Women’s Leadership and Greater Involvement in Disaster Risk Management
• Investment in Global Risk Mapping
• Leveraging Technology for Disaster Risk Reduction
• Developing a Network of Universities to Work on Disaster-Related Issues
• Utilizing Social Media and Mobile Technologies for Disaster Risk Reduction
• Learning from Disasters through Post-Disaster Studies
• Need for Greater Cohesion in International Response to Disasters E.g. in wake of the recent Earthquake in Syria and Turkey, United Nations Satellite Centre (UNOSAT) activated its emergency GIS mapping service

What is Disaster Risk Reduction?

• Disaster risk reduction is aimed at preventing new and reducing existing disaster risks and managing residual risk, all of which contribute to strengthening resilience and therefore to the achievement of sustainable development.

Initiatives for Disaster Risk Reduction (DRR)

• Global:
  • Sendai Framework(2015): Successor instrument to the Hyogo Framework for Action (HFA)
  • Global Platform for Disaster Risk Reduction, 2022
  • Climate Risk and Early Warning Systems (CREWS)( Under the World Meteorological Organization): It provides access to early warnings in the Least Developed Countries (LDCs) and Small Island Developing States (SIDS).
  • Sectoral Guide on Climate Information & Early Warning Systems (by Green Climate Fund): It identifies investment opportunities in him impact sector for DRR
• India’s Initiatives:
  • Coalition for Disaster Resilient Infrastructure Society (CDRIS): To increase the resilience of infrastructure systems to climate and disaster risks
  • National Disaster Management Plan2016 (NDMP): To coordinate response to natural or man-made disasters and for capacity-building in disaster resiliency and crisis response.
  • India aims to achieve zero mortality in all disastersin collaboration with state governments and response agencies
  • The Disaster Management Act, 2005, seeks to mainstream disaster risk reduction into development planning

General Studies Paper 2

Context: India is expected to be the third-largest economy in the world by 2030, after the US and China. According to the International Monetary Fund (IMF), India’s economy will grow by 6.8% compared to the US’s 1.6%. Despite its economic growth, women’s participation in the country’s economy, polity and society has not kept pace.

• Elections in India have witnessed a striking contrast in recent times.The female voter turnout has increased in the country as the seven out of eight states that went to the polls in 2022 saw a jump in female voter turnout.
• Though this sounds promising, the increasing proportion of women voters seen in local, state and general elections has not translated into more women contesting elections.
• So, the need of the hour is to address the roadblocks in the representation of women in politics. In order to achieve gender equality and ensure that women have equal opportunities to participate in politics, policymakers, civil society organizations, and the general public will have to work together.

What is the State of Women in Politics and Bureaucracy?

• In Politics:
  • As per data compiled by the Inter-Parliamentary Union (IPU),in India, women make up 14.44% of the 17^th Lok Sabha.
  • As per the latest available report of the  Election Commission of India (ECI), women represent 10.5% of all Members of Parliament as of October 2021.
    • For all the state assemblies, female MLAs’ representation stands at an average of 9%.
    • India’s ranking in this regard has fallen over the last few years. It is currently behind Pakistan, Bangladesh and Nepal.
  • In Bureaucracy:
    • Women’s participation is low enough for several public services jobs at the Centre and states to facilitate free applications for women candidates.
    • Despite this, as per Indian Administrative Services (IAS) data and the central government’s employment census of 2011, less than 11% of its total employees were women,which reached 13% in 2020.
    • Further, only 14% of Secretaries in the IAS were women in 2022.
      • There are only three women chief secretaries across Indian states and union territories.
    • India has never had a woman cabinet secretary. There have been no women Secretaries of Home, Finance, Defence and Personnel, either.
  • Other Sectors:
    • Only 20.37% of Micro, Small and Medium Enterprises(MSMEs)  owners are women, 10% of start-ups  are founded by females, and 23.3% of women are in the labour force.

Why are Women Underrepresented in Politics and Bureaucracy?

• Patriarchal Mindset:
  • India is a deeply patriarchal society,and women are often considered inferior to men.
  • This mindset is deeply ingrained in society and affects the way people perceive women’s abilities to lead and participate in politics.
• Social Norms and Stereotypes:
  • Women in India are often expected to conform to traditional gender roles and are discouraged from pursuing careers in politics.Social norms and stereotypes dictate that women should prioritize their roles as wives and mothers, and politics is often considered a man’s domain.
• Lack of Access to Education:
  • Women in India have historically had limited access to education,which has hindered their ability to participate in politics. Even though there have been improvements in recent years, many women still lack the necessary education and skills to run for political office.
    • According to the Annual Status of Education Report (ASER) 2020 5% of children between the ages of 6-10 were not enrolled in school, and 15.9% of children between the ages of 11-14 were not enrolled in school.
  • Limited Representation in Political Parties:
    • Women are often underrepresented in political parties,making it difficult for them to rise through the ranks and secure party nominations for elections.
    • This lack of representation can be attributed to gender bias within political parties and the perception that women are not as electable as men.
  • Violence and Harassment:
    • Women in politics are often subjected to violence and harassment, both physical and online,which can deter them from entering politics or speaking out on issues. The lack of safe and inclusive spaces in politics is a significant barrier to women’s participation.
  • Unequal Opportunities:
    • Women in politics often face unequal opportunities, such as lower salaries, less access to resources, and limited networking opportunities. This inequality can make it challenging for women to compete with male candidates and succeed in politics.
  • Structural Impediments:
    • Structural impediments to women’s empowerment, in general, are the primary issues that make it difficult for them to be a part of the services.
    • Service conditions involving postings in distant cadres, patriarchal conditioning and balancing family commitments along with the requirements of this job are some of the social factors that lead women to opt out of the civil services.
    • Furthermore, there is a general perception that women should be preferred for “soft” ministries like Social Welfare, Culture, Women and Child Development.

How can Women be more Effectively Represented in Politics?

• Reservation of Seats:
  • One of the most effective ways to increase women’s representation in politics is to reserve seats for women in legislative bodies.
  • This has been implemented in some states like Bihar, Odisha, and West Bengal, where a certain percentage of seats are reserved for women in local bodies.
• Political Parties should ensure Women Representation:
  • Political parties should ensure that women are given adequate representation in candidate selection for elections.
  • They should make an effort to recruit women candidates and give them priority in winnable seats.
• Education and Training:
  • Education and training programs can be conducted to empower women to participate in politics.
  • This will help women to build their confidence and skill set, and understand the complexities of politics.
• Encourage Participation from Local Women Leaders:
  • Women’s representation in politics can be increased by encouraging and supporting local women leaders.This can be achieved through mentorship programs and other support initiatives.
• Address Violence against Women in Politics:
  • Violence against women in politics is a significant barrier to their effective representation.Steps such as raising awareness, creating safe environment etc, should be taken to address this issue and ensure the safety and security of women in politics.
• Address Social and Cultural Barriers:
  • Women’s effective representation in politics can be hindered by social and cultural barriers such as patriarchy and gender norms.These issues should be addressed through campaigns, education and awareness programs, and social reform initiatives like Beti Bachao  Beti Padhao Scheme, Sukanya Samriddhi Yojana.
• Provide Support for Work-Life Balance:
  • Many women face challenges in balancing their political responsibilities with their family and personal lives.Providing support for work-life balance, such as flexible schedules, childcare, and parental leave, can help to address this issue.
    • Recently, Kerala government announced to grant menstrual leave for female students in all state universities under the Department of Higher Education.
  • Increase Visibility and Recognition:
    • Women in politics should be given greater visibility and recognition for their accomplishments.
    • This can help to inspire other women to get involved in politics and to create a culture of greater gender equality in politics.

General Studies Paper 3

Context: Recently, the California-based Silicon Valley Bank (SVB), a cornerstone of the US technology and startup industries, has failed. This marks the biggest bank failure since the 2008 financial crisis. The Silicon Valley Bank crisis has resulted in the subsequent seizure of SVB assets by regulators has generated a global wave of risk aversion, particularly among start-ups, including Indian startups.

About the Silicon Valley Bank Crisis

• After the pandemic in 2021, the US Federal bank adopted the easy money policy and pump huge money into the market. During this period SVB deposits also increased.
  Subsequently, SVB decided to heavily invest in the bond market, where bonds had been issued at lower interest rates.
• After a period of record low-interest rates during the pandemic, central banks around the world, led by the US Federal Reserve, started raising key rates aggressively to tackle inflation. This has dampened investor sentiments and also hit the businesses of tech and start-up-focused lenders like SVB.
• This is because investors do not like to take risks when the money available to them becomes expensive due to higher interest rates. As a result of the higher interest rates, investors in technology start-ups became reluctant to take risks.
• As higher interest rates led to a funding crunch for technology start-ups, SVB’s clients started pulling out their money to meet their liquidity needs.
  Under this pressure to meet customer withdrawals, SVB sold a $21 billion portfolio consisting mostly of US Treasuries at a huge loss of $1.8 billion.
• Moody’s immediately downgraded the bank’s credit rating to Baa1 negative outlook from A3.
• This was followed by further losses to SVB. To fill this loss, SVB announced it would sell $2.25 billion in common equity and preferred convertible stock. This sudden announcement triggered concerns about its balance sheet and its shares plummeted 60%.
  SVB also failed to find alternative sources. Hence, it ended up being shut down by regulators, following which it was handed over to the FDIC.
• The FDIC has added that it would seek to sell SVB’s assets, adding that future dividend payments may be made to uninsured depositors.

What is the reason behind Silicon Valley Bank Crisis? 

Aggressive raising interest rates:

• Global borrowing costs have risen at the fastest pace in decades over the last year as the Federal Reserve lifted U.S. rates by 450 basis points from near zero, while the European Central Bank hiked the eurozone by 300 bps.
• Due to this, the value of existing bonds that were issued at lower interest rates has fallen. Banks, which bought these bonds are sitting on steep unrealised losses.
  Another facet of the rising interest rates was the decline in funding for startups as the venture capital ecosystem don’t want to take risk.
• Heavy investment in long-term government bonds: SVB’s invest heavily in US government bonds. A spike in interest rates has led to a sell-off in bonds, leaving banks exposed to potential losses on the securities they hold.
• A downturn in technology stocks: Silicon Valley Bank was hit hard by the downturn in technology stocks over the past year.
  “Run on the bank”: The bank failed after depositors — mostly technology workers and venture capital-backed companies — began withdrawing their money in panic, creating a “run on the bank”.
• Soft Regulations: In 2018, regulations were loosened for regional banks like SVB – among other things, it reduced the amount of potential loss reserves mandated for these banks.

What will be the potential impact of the Silicon Valley Bank Crisis on the World Economy?

• Impacts on small businesses: According to a petition to the US government, around 10,000 small businesses with accounts in Silicon Valley Bank may be unable to pay their employees in the next 30 days, and approximately 1 lakh jobs are anticipated to be affected as a result of the collapse.
• Impact the technology industry: It will immediately impact the US technology industry and US competitiveness worldwide and ultimately set back US competitiveness by a decade or more.
• Can trigger a run on the bank: Its collapse has already instilled fear among founders and management teams to look for safer havens for their remaining cash, which can trigger a bank run on every other smaller bank.
• Vulnerability to the rising cost of money: The SVB crisis spread concern about hidden risks in the banking sector and its vulnerability to the rising cost of money.

What will be the potential impact of the SVB Crisis on India? 

According to some experts, India is unlikely to be affected by any contagion effects. This is because:

• Indian banks have minimal exposure to US lenders.
• In its 2022 Financial Stability Report (FSR), the Reserve Bank of India (RBI) said that macro-level stress tests for credit risk showed that domestic banks would be able to comply with minimum capital requirements even under severe-stress scenarios.
• Improved capital-to-risk-weighted-assets ratio (CRAR): The system-level CRAR in 2023, under baseline, medium and severe stress scenarios, is projected at 14.9%, 14% and 13.1%, respectively, the RBI said.

Note: The minimum regulatory requirement for CRAR for scheduled commercial banks is 9%. Adding on a counter-cyclical buffer, the requirement is 11.50%.

• Improvement in NPA: Banks have stepped up efforts to clean up asset quality and their profitability has also improved. Further, gross NPAs were at a seven-year low of 5% as of September 2022.
• The increase in the 10-year yield has been less than the policy rate hikes by the RBI.
• Banks have sharply reduced the modified duration of their bond portfolios over the last six years, according to the latest RBI data.

Note: Modified duration refers to the change in the value of a bond when interest rates change. The higher the modified duration of the bond portfolio, the more the risk of incurring losses when bond yields rise.

Benefits for the Indian economy from the SVB crisis:

• Boom for emerging markets: A fall in US bond yields typically improves the appeal of higher-yielding fixed-income assets in emerging markets.
• Bring corporates back to India: Falling US dollar rates coupled with SVB Crisis might bring back big corporates in India, who had shifted to overseas lending due to depreciation in Indian National Rupee (INR) against the US dollar.”

Impacts on Indian start-ups:

• Most of the named Indian startups got money from SVB, they are not depositors. SVB either lent them money (as venture debt) or invested in them in the form of equity. It realised its profits via a sale or got repaid by the companies, depending on the structure. Therefore, there is no impact on the start-ups themselves.
• However, some start-ups with deposits in SVB are impacted. For example, among its most notable funding was an investment of a total of $1.7 million in One97 Communications, the parent company of Paytm. Other start-ups that had received funding from SVB include Bluestone and Carwale.

What should be done to prevent big bank failures? 

• Maintain constant vigil: All the stakeholders, including bank boards, auditors and the regulator have to maintain constant vigil, given the high stakes for safety and stability.
• Indian banks should keep capital as measured under the current Basel regime (international standards set by bank regulators).
• Ensure Cooperation and coordination: Cooperation and coordination among all central banks will be helpful in bringing transparency and accountability and also help in minimising the spillover effect of bank failure.
• Ensure proper selection: The selection of the board of directors has to be prudent. The auditors’ selection has to be done with care.
• Board members of banks usually spend most of their meeting time on governance issues, business updates, and “problem children.” They should focus instead on the businesses that use the most capital.

Strict actions from central banks: The central bank has to continuously monitor the lending institutions on various parameters including fit and proper. While supervising the banks, the Central bank should not avoid any loopholes in the management and should take strict action against them.

General Studies Paper 2

Context: Recently, India and the US have signed Memorandum of Understanding (MoU) on establishing the  Semiconductor Supply chain during India – USA 5th Commercial Dialogue 2023, which can help India realize its long-nurtured dream of becoming a hub for electronic goods.

• The MoU seeks to establish a collaborative mechanism between the two governments on semiconductor supply chain resiliency and diversificationin view of US’s CHIPS and Science Act and India’s Semiconductor Mission.   

What is the Significance of the Deal?

• Commercial Opportunities:
  • The US and China are giants in chip manufacturing. So, this pact with the US to strengthen cooperation in the semiconductor sector to facilitate commercial opportunities and development of innovation ecosystemsis likely to help India immensely.
• Electronics Supply Chain:
  • It can help India get aligned into a more central role in the global electronics supply chain.
• Can Address Semiconductor Crunch:
  • The crunch in semiconductors supply began during the  Covid-19 and went on to intensify in 2021. A Goldman Sachs report suggested that at least 169 industries had been impacted by the global chip supply shortage in 2021.
  • The crunch has eased now but some disruptions in the supply chain still exist.
• Realignment towards Chip Manufacturing:
  • From a domestic perspective, this could also prompt a potential realignment of India’s current policy approach on chip manufacturing:which is currently focused, almost entirely, on the manufacture of mature nodes – generally defined as chips that are 40 nanometres (nm) or above and find application in sectors such as the automotive industry – before trying to attempt an entry into the more advanced nodes (smaller than 40nm), which are far more strategic, but require exceptional manufacturing capabilities and project execution skills.

What are the Challenges for India?

• High Investments Required:Semiconductors and display manufacturing is a very complex and technology-intensive sector involving huge capital investments, high risk, long gestation and payback periods, and rapid changes in technology, which require significant and sustained investments.
• Minimal Fiscal Support from Government:The level of fiscal support currently envisioned is minuscule when one considers the scale of investments typically required to set up manufacturing capacities in the various sub-sectors of the semiconductor industry.
• Lack of Fabrication Capacities:India has a decent chip design talent but it never built-up chip fab capacity.  The ISRO and the DRDO have their respective fab foundries but they are primarily for their own requirements and are also not as sophisticated as the latest in the world.
  • India has only government-owned semiconductor fabrication unit- can be added as there might be other private fabs old fab which is located in Mohali, Punjab.
• Extremely Expensive Fab Setup:A semiconductor fabrication facility (or fab) can cost multiples of a billion dollars to set up even on a relatively small scale and lagging by a generation or two behind the latest in technology.
• Resource Inefficient Sector:Chip fabs are also very thirsty units requiring millions of litres of clean water, an extremely stable power supply, a lot of land and a highly skilled workforce.

Where does India Stand in the Semiconductor Market?

• India currently imports all chips and the market is estimated to touch USD 100 billion by 2025 from USD 24 billion now. However, for the domestic manufacturing of semiconductor chips, India has recently launched several initiatives:
  • The Union Cabinet has allocated an amount of Rs 76,000 crore in 2021 for supporting the development of a ‘semiconductors and display manufacturing ecosystem’.
    • Consequently, a significant number of incentives would be provided to design companies to design chips.
  • India has also launched the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)for manufacturing of electronics components and semiconductors.
  • In 2021, India announced its roughly USD 10 billion-dollar Production-Linked Incentive (PLI) schemeto encourage semiconductor and display manufacturing in the country.
  • In 2021, the MeitY also launched the Design Linked Incentive (DLI) Schemeto nurture at least 20 domestic companies involved in semiconductor design and facilitate them to achieve a turnover of more than Rs.1500 Crore in the next 5 years.
• India’s own consumption of semiconductors is expected to cross USD 80 billion by 2026 and to USD 110 billion by 2030.

Way Forward

• It is likely that India will achieve its long-nurtured dream of becoming an electronics hub and help ensure that there is no demand-supply gap in semiconductors.
• It is also likely that buyers won’t ever have to wait for the second key to their vehicles.