Syllabus: General Studies Paper 2

Context:

Recently, the U.S. Pacific Commander warned that China could invade Taiwan within the next six years as part of its strategy of displacing U.S. power in Asia. 

• If the rising confrontation between the United States and China erupts into a clash of arms, the likely arena may well be the Taiwan Strait. 

Historical background

• The Guomindang (KMT) forces under Chiang Kai-shek lost the 1945-49 civil war to the CCP forces under Mao Zedong. 
• Chiang retreated to the island of Taiwan and set up a regime that claimed authority over the whole of China and pledged to recover the mainland eventually.
• The CCP in turn pledged to reclaim Taiwan and achieve the final reunification of China. 
• Taiwan could not be occupied militarily by the newly established People’s Republic of China (PRC) as it became a military ally of the United States during the Korean War of 1950-53. 
• This phase came to an end with the 
  • U.S. recognising the PRC as the legitimate government of China in 1979, 
  • ending its official relationship with Taiwan and 
  • abrogating its mutual defence treaty with the island.

China-Taiwan relations

• Taiwan is the unfinished business of China’s liberation under the Chinese Communist Party (CCP) in 1949. 
• Taiwan (Republic of China) calls itself a democratic, self-ruled country, however, according to the “One China” policy, Beijing considers Taiwan a province of Mainland China.
  • One China Policy refers to the view that there is only one state called China despite the existence of two governments that claim to be China. 
  • As a policy it means that countries seeking diplomatic relations with China should sever the ties with the ‘Republic of China’ – Taiwan – and vice versa.
• China has promised a high degree of autonomy to the island under the “one country two systems” formula first applied to Hong Kong after its reversion to Chinese sovereignty in 1997. 
  • According to this formula, Hong Kong would retain its free market system and its political and judicial institutions and processes for a period of 50 years, thus enabling an extended and gradual transition. 
  • The same was promised to Taiwan, but with the added assurance that it could also retain its armed forces during the transition period.

Economic links between China and Taiwan:

• Between 1991 and 2020, the stock of Taiwanese capital invested in China reached U.S. $188.5 billion and bilateral trade in 2019 was U.S. $150 billion, about 15% of Taiwan’s GDP.
• By contrast the stock of Chinese capital invested in Taiwan is barely U.S. $2.4 billion although investments through Hong Kong may be considerable.
• China hopes that the considerable economic benefits that Taiwan business and industry enjoy would weaken opposition to unification. 
• China is capable of inflicting acute economic pain on Taiwan through coercive policies if the island demands independence.

Current tensions between Taiwan and China

• China, is committed to pursuing peaceful unification but retains the right to use force to achieve the objective. 
• The PRC has pursued a typical carrot and stick policy to achieve the reunification of Taiwan with the mainland. 
• The ruling Democratic Progressive Party (DPP) in Taiwan favours independence from China.
  • Ever since the DPP under Tsai Ing-wen won the presidential elections in 2016, China has resorted to a series of hostile actions against the island, which include economic pressures and military threats. 
  • The prospects for peaceful unification have diminished. 
  • Sentiment in Taiwan in favour of independent status has increased. 
• The escalating military threats against Taiwan, through daily violations of its air defence identification zone (ADIZ) and aggressive naval manoeuvres in the Taiwan Strait, are aimed at stopping any move towards independence and its closer military relationship with the U.S.

Syllabus: General Studies Paper 3

Context:

The UK is set to host the 26th UN Climate Change Conference of the Parties (CoP26) in Glasgow from October 31 to November 12 with a view to accelerating action towards the Paris Agreement’s goals. 

• India said that the focus should be on climate finance and the transfer of green technologies at a low cost.
• But the fact that 22 of the 30 most polluted cities in the world are in India is a major cause of concern. Delhi is the world’s most polluted capital as per the World Air Quality Report, 2020.

Concerns for India

• According to the Global Carbon Atlas, India ranks third in total greenhouse gas emissions by emitting annually around 2.6 billion tonnes (Bt) CO2eq, preceded by China (10 Bt CO2eq) and the United States (5.4 Bt CO2eq), and followed by Russia (1.7Bt) and Japan (1.2 Bt). 
• Per capita emissions: Of these top five absolute emitters, the US has the highest per capita emissions (15.24 tonnes), followed by Russia (11.12 tonnes). 
  • India’s per capita emissions is just 1.8 tonnes, significantly lower than the world average of 4.4 tonnes per capita. 
• Emissions per unit of GDP: China ranks first with 0.486 kg per 2017 PPP $ of GDP, which is very close to Russia at 0.411 kg per 2017 PPP $ of GDP. 
  • India is slightly above the world average of 0.26 (kg per 2017 PPP $ of GDP) at 0.27 kg, while the USA is at 0.25, and Japan at 0.21. 
• India ranked seventh on the list of countries most affected due to extreme weather events, incurring losses of $69 billion (in PPP) in 2019 (Germanwatch, 2021). 
  • In our Nationally Determined Contributions (NDCs) submitted in 2016, India committed to “reduce emission intensity of its GDP by 33 to 35 per cent by 2030 from 2005 level.”
• Sector-wise global emissions show that electricity and heat production and agriculture, forestry and other land use make up 50 per cent of the emissions. 
• Sector wise emissions in India: The largest chunk (44 per cent) belongs to the energy sector, followed by the manufacturing and construction sector (18 per cent), and agriculture, forestry and land use sectors (14 per cent), with the remaining being shared by the transport, industrial processes and waste sectors. 
  • The share of agriculture in total emissions has gradually declined from 28 per cent in 1994 to 14 per cent in 2016. 
  • However, in absolute terms, emissions from agriculture have increased to about 650 Mt CO2 in 2018, which is similar to China’s emissions from agriculture.
• Agricultural emissions in India are primarily from the livestock sector (54.6 per cent) in the form of methane emissions due to enteric fermentation and the use of nitrogenous fertilisers in agricultural soils (19 per cent) which emit nitrous oxides; 
  • Rice cultivation (17.5 per cent) in anaerobic conditions accounts for a major portion of agricultural emissions followed by livestock management (6.9 per cent) and burning of crop residues (2.1 per cent). 
  • The winter months in Delhi become a challenge as stubble burning in adjoining states and low wind speeds take the AQI beyond 300 on average, while the safe limit is below 50.
  • Agricultural soils are the largest single source of nitrous oxide (N2O) emissions in the national inventory. 
  • Almost 70 per cent of the granular fertilisers that are thrown over plants are polluting the environment and leaching into the groundwater while polluting the same. 

Syllabus: General Studies Paper 3

Context:

The Monetary Policy Committee of the Reserve Bank of India maintained the status quo in the policy rates as also in the policy stance in its fourth bi-monthly meeting this fiscal. 

Key points

• There was agreement on the part of all members to hold the repo and reverse repo rates unchanged at 4 per cent and 3.35 per cent.
  • Repo rate is the rate at which the Central Bank grants loans to commercial banks against government securities. Reverse repo rate is the interest offered by RBI to banks that deposit funds with them.
  • The purpose of keeping an asymmetric gap between the reverse repo rate and repo rate is to make it relatively unattractive for banks to passively deposit funds with the RBI and instead, to use these funds for lending to productive sectors of the economy.
• There were expectations that the RBI would go for normalisation of the extra-loose monetary and liquidity policies being pursued since the onset of the pandemic in March last year. 
  • Monetary policy normalisation means monetary tightening. 
  • Normalisation means removal of excess liquidity that was injected by the RBI with a view to supporting ‘a speedy and durable economic recovery’. 

Concerns with excess liquidity in market:

• The surplus liquidity in the banking system witnessed a three-fold increase from a daily average of ₹3 lakh crore in March, 2020 to ₹9 lakh crore in September, 2021 and further to ₹9.5 lakh crore in the first few days of October. 
  • As per the estimation made by the RBI in this regard, the extra liquidity amounts to more than ₹13.0 lakh crore — about 25 per cent of the country’s GDP.
• Higher inflation: The risk of delaying normalisation for too long would be the prospects of higher inflation. A view was expressed by a member of the MPC that monetary accommodation appears to be stimulating asset price inflation to a greater extent than it is mitigating the distress in the economy.

RBI’s dilemma

• One, at this stage of the Covid-19 pandemic, whether continuation of extra-loose monetary and liquidity policies would result in more macroeconomic benefits than costs.
• Two, given the fact that the actual CPI inflation at above 5 per cent has been consistently exceeding the 4 per cent target, will the MPC not be diluting its mandate by prioritising growth over inflation? 
• The country’s GDP is still below the pre-pandemic level and, hence, there is significant slack in resource utilisation in the economy which needs to be reduced expeditiously to spur growth. 
  • Ample liquidity infusion and significant interventions in the forex and G-Sec markets are necessary to ensure not only their orderly functioning but also to guide price discovery in them. 
• The dominant view appears to interpret the MPC’s (4 +/-2) per cent inflation targeting framework to mean that in the current exceptional and pandemic-ravaged time, the effective target should be 6 per cent and not 4 per cent. 
• There seems to be a lack of clarity on the precise meaning and implications of the +/-2 per cent band around 4 per cent.

Syllabus: General Studies Paper 3

Context:

Recently two significant documents relating to the Indian agriculture sector were released.

• The first is a consultation paper on the India Digital Ecosystem of Agriculture (IDEA) from the Ministry of Agriculture and Farmers’ Welfare(MoA&FW) and the second on Indian Agriculture: Ripe for Disruption from a private organisation, Bain and Company.

Salient features of papers:

• IDEA paper: It talks about a digital revolution in the agriculture sectorand predicts a revolutionary investment growth in agri-logistics, offtake, and agri-input delivery by 2025.
  • Every segment of present-day life including agriculture is data-hungry.
  • The MoA&FW report describes creating data to fuel the growth.
  • The farmer and the improvement of farmers’ livelihood is proposed to happen through tight integration of agri-tech innovation and the agriculture industry ecosystem to farming and food systems.
  • The IDEA principles explicitly talk about openness of data, which means open to businesses and farmers, indicating the kind of integration it aims at.
  • Value-added innovative services by agri-tech industriesand start-ups are an integral part of the IDEA architecture.
• The Bain reportis a data-based prediction on agri-business scenarios, anchored to the agricultural set-up at present and predicting its future trajectories in another 20 years.
  • It includes targeting the production of alternative proteins, and food cell-based food/ingredients and initiating ocean farming, etc.
  • The report has a ‘today forward– future back approach’and predicts a drastic investment opportunity development by 2025.
  • The agriculture sector (currently worth $370 billion), is estimated to receive an additional $35 billion investment.
  • The twoenabling conditions for such investment opportunities are the changes in the regulatory framework, especially recent changes in the Farm Acts and digital disruption.
  • There are benefits from huge investments into the agri-ecosystem which include doubling farmers’ income
  • The report has convincingly demonstrated the business opportunity available in supply chains between farm to Agricultural Produce Market Committee (APMC) mandiand mandi to the customer, which can be realised with the support of digital disruption and the latest agriculture reforms.

Govt. initiatives for digitisation of agriculture

AgriStack

• AgriStack will create “a unified platform for farmers to provide them end to end services across the agriculture food value chain,” amid a broader push to digitise data in India, from land titles to medical records.
• Tech firm Microsoft will run a pilot for the agriculture ministry’s AgriStack in 100 villages in six Indian states.

Objectives: It aims to “develop 

• Farmer interface for smart and well-organised agriculture” aimed at improving efficiency and reducing waste.
• Each farmer will have a unique digital identificationthat contains personal details, information about the land they farm, as well as production and financial details.
• Each ID will be linked to the individual’s digital national ID Aadhaar.
• Linking market places: It aims to integrate all digital marketplaces for agriculture commodities and inputs, thereby providing single log in access to farmers to these marketplaces and access to financial assistance.
• Database creationfrom particularly three schemes: PM-KISAN (Pradhan Mantri Kisan Samman Nidhi), Soil Health Card and PM Fasal Bima Yojna (crop insurance scheme).
  • The data from these three schemes will be compiled and compared with land records data.
  • If there is a mismatch, it will be shared with the local authorities for validation and field survey.
  • The field data received from local authorities will be updated with the compiled data to create “clean, unique, standardised, verified data for AgriStack”.

Syllabus: General Studies Paper 2

Context:

The lack of a coherent international response to the COVID-19 pandemic is proof of an absence of international order and of the ineffectiveness of multilateral institutions. 

Changing world order

• The following factors are changing the dynamics of the global order:
  • Stagnation in the global and Indian economies 
  • Retreat from globalisation
  • the regionalisation of trade, 
  • a shifting balance of power, 
  • the rise of China and others, and 
  • structural China-United States strategic rivalry 
  • Inequality between and within states has bred a narrow nationalism

After Effects of COVID-19 crisis:

Crumbling world order

• UN’s insignificance: The United Nations Security Council took so long to meet (that too inconclusively) to discuss the pandemic is a ringing testimony to the UN’s insignificance.
• Ineffective regional initiatives: For example Prime Minister’s SAARC initiative, curiously resurrecting a practically dead institution, was short-lived. 
  • The EU was clueless when the virus spread like wildfire in Europe. Its member states turned inward for solutions: self-help, not regional coordination.
  • Reason for failure of global governance: The global institutional framework is unrepresentative, a pawn in the hands of the great powers, cash-strapped, and its agenda is focused on high-table security issues. 

More powerful China

• China appeared to use its manufacturing power to its geopolitical advantage. Beijing has offered medical aid and expertise to those in need; 
• This will aid Beijing’s claims to global leadership, push Huawei 5G trials as a side bargain, and showcase how the Belt and Road Initiative is the future of global connectivity. 
• Weakened economic globalisation: Economists are warning of a global recession.The COVID-19 shock will further feed states’ protectionist tendencies fueled by hypernationalism. 

We are entering a new polarised information age, and face ecological crises of climate change, an existential threat.  The COVID-19 pandemic has accelerated some of these changes and transformed others. 

Asia as the nucleus

• All the above factors have shifted the geopolitical and economic centres of gravity from the Atlantic to Asia.
• Asia is the center of geopolitical rivalries, and the U.S. remains the most formidable power, though its relative power is declining. 
• China sees a window of opportunity but is acting in a hurry.
• China’s crowded geography constrains her both on land and at sea but we can expect her profile and power to continue expanding, particularly in our neighbourhood. 
• As neighbours and in the present situation, a mix of confrontation and cooperation is likely to continue to mark India’s relations with China.
• There is very little possibility of conventional conflict between the great powers in Asia, though other forms and levels of violence and contention in the international system will rise, with Taiwan a special case.

Challenges and opportunities for India

• Increasing security congruence with the U.S. could enable growing cooperation in fields significant for India’s transformation: energy, trade, investment, education and health. 
• Other areas in which India and the U.S. could increase cooperation are: climate change and energy, on tech solutions for renewable energy, and on digital cooperation. 
• Building broader coalitions in the developing world on issues of common interest. This is the time of transition when new global standards and norms are being developed, particularly in the digital space. India can and must be present at the creation. 
• India should create a Maritime Commission, a Bay of Bengal Initiative with partner countries, and cooperate with South East Asia in maritime security, cybersecurity and counter-terrorism. We should aim for multipolarity in Asia.
• The core strategic principles in Non-Alignment 2.0 are still relevant: independent judgement, developing our capacities, and creating an equitable and enabling international order for India’s transformation. 
• Preserving India’s strategic autonomy: One productive way to do so would be through issue-based coalitions including different actors, depending on who has an interest and capability.
• Revive SAARC: India could be the primary source of both prosperity and security in the neighbourhood — the subcontinent and the Indian Ocean Region. It can be done through SAARC.
• The over securitisation (militarization) of policy towards our neighbours has hurt trade, criminalised our borders, and enabled the large-scale entry of Chinese goods destroying local industry in the northeast. 
• While lessening dependence on China, and seeking external balancing, our primary effort has to concentrate on self-strengthening. If there is one country which in terms of its size, population, economic potential, scientific and technological capabilities can match or even surpass China, it is India.
• Economic policy must match political and strategic engagement: Globalisation has been central to India’s growth. 
• A more active regional and international role for India is incompatible with a low Indian global trade.
• Self-reliance in today’s world and technologies can only be realised as part of the global economy. 
• National unity: We should affirm our own strength and historic national identity.

Syllabus: General Studies Paper 2

Context:

A policy is needed to guide the planning and management of cities towards enabling India’s growth 

Background:

• As India urbanises, it must ensure that its cities offer a decent quality of life and facilitate job creation. 
• These imperatives are fundamental to India’s ambitions of becoming a five trillion-dollar economy by 2025 and a 10 trillion-dollar economy by 2030.
• From a population of 377 million in 2011, Indian cities are projected to house 870 million people by 2050, according to the UN’s projections — by far the highest among all nations. 
• Delhi is likely to become the world’s most populous urban agglomeration by 2030, surpassing Tokyo. Clearly, a major demographic transformation is taking place.

Urbanisation

• In general usage, urbanization refers to the relative concentration of a territory’s population in towns and cities (i.e. relative urban growth). It may also refer to the process of being urban.
• As a demographic process, which is the commonest use of the term, urbanization involves towns and cities growing in relative size within a space economy through, first, an increasing proportion of the population living in an urban place and, second, their concentration in the target urban settlement. The end of the sequence is an almost completely urbanized society, with the great majority of the population living in just a few larger places.
• Linked to these demographic processes (with migration the main contributor to urban growth) are the structural changes in the society consequent upon the development of capitalism (i.e. structural urbanization). Cities are the foci of production, distribution, and exchange process, because of the economies of scale and scope from agglomeration. Urbanization is the necessary component of industrialization and development (though seen over urbanization)
• Finally, there is behavioural urbanization. Urban areas especially the larger ones are centres of social change. Values, attitudes, and behaviour patterns are modified in the urban milieu (known as urbanism) and new forms (which may be reflected in townscape as with architectural styles) then spread through the urban system through diffusion processes.

Major causes of urbanization

• Industrial revolution: Industrial employment catches the attention of people from rural to urban areas. In the urban areas, people work in modern sector in the occupations that assist national economic development. This represents that the old agricultural economics is changing to a new non-agricultural economy. This is the trend, which will build a new modern society (Gugler 1997).
• The emergence of large manufacturing centres.
• Job opportunities: There are ample job opportunities in megacities therefore village people or individuals from town frequently migrate to these areas.
• Availability of transportation: Due to easy transport, people prefer to stay in big cities.
• Migration: Migration is the main cause of the rapid growth of mega-cities. Migration has been going on for centuries and it is a normal phenomenon. When considering urbanization rural-urban and urban-rural and rural-rural migrations are very important. Urban-urban migration means that people move from one city to another. People may move to the city because they are forced by poverty from the rural communities or they may be pulled by the magnetism of city lives. A combination of these push and pull factors can force people to migrate to cities (Gugler 1997).
• Infrastructure facilities in the urban areas: Infrastructure has a vital role in the process of urbanization in the development of countries. As agriculture becomes more fruitful, cities grow by absorbing the workforce from rural areas. Industry and services increase and generate higher value-added jobs, and this led to economic growth. The geographic concentration of productive activities in cities creates agglomeration economies, which further raises productivity and growth. The augments income and demand for agricultural products in cities.

Problems faced by Urban Governance

• Planning

Planning is mainly centralized and till now the state planning boards and commissions have not come out with any specific planning strategies and depend on Planning commission for it. This is expected to change in present government, as planning commission has been abolished and now focus is on empowering the states and strengthening the federal structure.

In fact for big cities the plans have become out-dated and do not reflect the concern of urban local dwellers, these needs to be take care by Metropolitan planning committee as per provisions of 74th amendment act. Now the planning needs to be decentralized and participatory to accommodate the needs of the urban dwellers.

Also there is lack of human resource for undertaking planning on full scale. State planning departments and national planning institutions lack qualified planning professional. Need is to expand the scope of planners from physical to integrated planning- Land use, infrastructure, environmental sustainability, social inclusion, risk reduction, economic productivity and financial diversity.

• Finances

Major challenge is of revenue generation with the ULBs. This problem can be analyzed form two perspectives. First, the states have not given enough autonomy to ULBs to generate revenues and Second in some case the ULBs have failed to utilize even those tax and fee powers that they have been vested with.

There are two sources of municipal revenue i.e. municipal own revenue and assigned revenue. Municipal own revenue are generated by municipal own revenue through taxes and fee levied by them. Assigned revenues are those which are assigned to local governments by higher tier of government.

There is growing trend of declining ratio of own revenue. There is poor collection property taxes. Use of geographical information system to map all the properties in a city can have a huge impact on the assessment rate of properties that are not in tax net.

• Regulator

There is an exponential increase in real estate, encroaching the agricultural lands. Also, the rates are very high, which are not affordable and other irregularities are also in practice. For this, we need a regulator, which can make a level playing field and will be instrumental for affordable housing and checking corrupt practices in the Real estate sector.

Syllabus: General Studies Paper 3

Context:

In June 2021, the Reserve Bank of India (RBI) published a “Consultative Document on Regulation of Microfinance”. 

• While the declared objective of this review is to promote the financial inclusion of the poor and competition among lenders, the likely impact of the recommendations is unfavourable to the poor. 
• Microfinance means providing small loans (microcredit) to very poor families to help them engage in productive activities or nurture their tiny businesses. 

Key recommendations of the RBI document

• The current ceiling on rate of interest charged by non-banking finance company-microfinance institutions (NBFC-MFIs) or regulated private microfinance companies needs to be removed, as it is biased against one lender (NBFC-MFIs) among the many (commercial banks, small finance banks, and NBFCs). 
• It proposes that the rate of interest be determined by the governing board of each agency, and assumes that “competitive forces” will bring down interest rates. 
• The RBI did not mention any initiative to expand low-cost credit through public sector commercial banks to the rural poor, the bulk of whom are rural women (as most loans are given to members of women’s groups).
• It also proposes to de-regulate the rate of interest charged by private microfinance agencies.
• According to current guidelines, the ‘maximum rate of interest rate charged by an NBFC-MFI shall be the lower of the following: 
  • the cost of funds plus a margin of 10% for larger MFIs (a loan portfolio of over ₹100 crore) and 12% for others; or 
  • the average base rate of the five largest commercial banks multiplied by 2.75’. 
• In June 2021, the average base rate announced by the RBI was 7.98%. The “official” rate of interest on microfinance was between 22% and 26% — roughly three times the base rate.

Concerns

• Microfinance is becoming increasingly important in the loan portfolio of poorer rural households. 
  • A study of two villages from southern Tamil Nadu found that a little more than half of the total borrowing by households resident in these two villages was of unsecured or collateral-free loans from private financial agencies (SFBs, NBFCs, NBFC-MFIs and some private banks).
• Unsecured microfinance loans from private financial agencies were of disproportionate significance to the poorest households — to poor peasants and wage workers, to persons from the Scheduled Castes and Most Backward Classes.
• These microfinance loans were rarely for productive activity and almost never for any group-based enterprise, but mainly for house improvement and meeting basic consumption needs.
• High interest rates: Poor borrowers took microfinance loans, at reported rates of interest of 22% to 26% a year, to meet day-to-day expenses and costs of house repair.
  • Whereas crop loans from Primary Agricultural Credit Societies (PACS) in Tamil Nadu had a nil or zero interest charge if repaid in eight months. 
  • Kisan credit card loans from banks were charged 4% per annum (9% with an interest subvention of 5%) if paid in 12 months (or a penalty rate of 11%). 
  • Other types of loans from scheduled commercial banks carried an interest rate of 9%-12% a year. 
• The actual cost of microfinance loans is even higher: This is because every month the principal amount is reduced but the interest charge is the same. 
  • An “official” flat rate of interest used to calculate equal monthly instalments actually implies a rising effective rate of interest over time.
  • A processing fee of 1% is added and the insurance premium is deducted from the principal. As the principal is insured in case of death or default of the borrower or spouse.Aa high interest rate is in response to a high risk of default.
  • The borrowers do not understood the charges.
• Contrary to the RBI guideline of “no recovery at the borrower’s residence”, collection was at the doorstep. Note that a shift to digital transactions refers only to the sanction of a loan, as repayment is entirely in cash. 
  • If the borrower is unable to pay the instalment, other members of the self-help group have to contribute, with the group leader taking responsibility. 

Microfinance in India

• Microfinance, also called microcredit, is a type of banking service provided to unemployed or low-income individuals or groups who otherwise would have no other access to financial services.
• In India, all loans that are below Rs.1 lakh can be considered as microloans.
• There are different types of financial services providers for poor people- non-government organizations (NGOs); cooperatives etc.
• Non-Banking Finance Company (NBFC)-MFIs in India are regulated by The Non-Banking Financial Company -Micro Finance Institutions (Reserve Bank) Directions, 2011.
• Priority Sector Lending

• All scheduled commercial banks and foreign banks (with a sizable presence in India) are mandated to set aside 40% of their Adjusted Net Bank Credit (ANDC) for lending to these sectors.
• Regional rural banks, co-operative banks and small finance banks have to allocate 75% of ANDC to PSL.
• Lending by small finance banks (SFBs) to NBFC-MFIs has been recently included in priority sector advances. 

Syllabus: General Studies Paper 3

Context:

The Ease of Doing Business Index (EoDB) has been abolished as the flagship product created by the World Bank came under attack on grounds that its data was modified.

Background:

• Recently World Bank informed it had paused the next Doing Business report and initiated a series of reviews and audits of the report and its methodology.
• World Bank also informed that it will be working on a new approach to assessing the business and investment climate.
• Ease of Doing Business Rankings was paused as World Bank found data irregularities on Doing Business 2018 and 2020 which were reported internally in June 2020.
• Ethical Issues: Distortion of data in the internal reports raised ethical matters, including the conduct of former Board officials as well as current and/or former Bank staff, leading to this decision of World Bank.

Ease of Doing Business Rankings: Key Points

• Background: The Ease of Doing Business Report was introduced by the World Bank in 2003.
• Objective: to provide an assessment of objective measures of business regulations and their enforcement across 190 economies.
• Parameters used for Ranking: Ease of Doing Business Report used the following ten parameters-
• Starting a Business,
• Dealing with Construction permits,
• Electricity availability,
• Property registration,
• Credit availability,
• Protecting minority Investors,
• Paying Taxes,
• Trading across borders,
• Contracts enforcement, and
• Resolving Insolvency.

Significance of Ease of Doing Business Report:

• Informs the actions of policymakers,
• Helps countries make better-informed decisions, and
• Allows stakeholders to measure economic and social improvements more accurately
• Acts as a valuable tool for the private sector, civil society, academia, journalists, and others, broadening understanding of global issues.

Ease of Doing Business Rankings: India’s Performance

• India showed the most notable improvement in 2017, 2018, and 2019 Ease of Doing Business Ranking.
• India’s 2017 Ranking- 100th Rank
• India’s 2018 Ranking- Placed at 77th Position
• India’s 2019 Ranking (most recent)- Secured 63rd Ranking

India’s ranking in the Ease of Doing Business Report basically depended on the performance of only two cities- Delhi and Mumbai.

• Weightage of Mumbai- 47%
• Weightage of Delhi- 53%

Syllabus: General Studies Paper 2

Context:

The US has invited India to join the Artemis accords. Separately, at the summit of the Quadrilateral Forum, QUAD leaders agreed to set up a new Quad working group on outer space. 

• The growing commercialisation and militarisation of outer space have triggered the interest of the Quad leaders.

Significance of Moon exploration

• As technological capabilities grow, nations are looking beyond near-earth space ( also called the “brown waters”) to inter-planetary probes and deep space research.
• Nations are seeking routine access to the moon. Their attention has turned to the cis-lunar space, or the volume between the orbits around the earth and moon.

China’s Lunar Missions

• Beijing’s lunar mission, Chang’e, was unveiled in 2007. Since then, China has put two spacecraft in lunar orbit (Chang’e 1 and 2) and landed two rovers on the moon (Chang’e 3 and 4). 
  • Chang’e is the first to land on the far side of the moon that can’t be seen from the earth. 
  • The Chang’e 5 brought lunar material back to the earth. The last time a mission returned with lunar rock was the Soviet Luna 24 in 1976.
  • The next moon missions — Chang’e 6,7, and 8 — could contribute to the construction of an International Lunar Research Station in the south pole of the moon. 
• International Lunar Research Station: The ILRS will have a space station orbiting the Moon, a base on the surface that will have several intelligent robots performing a variety of jobs. 
  • To support the ILRS, Beijing aims to build a super-heavy rocket Long March CZ-9. 
  • It is expected to carry at least 50 tonnes to the moon. For a comparison, the payload of the Chandrayaan-2 launched by India’s PSLV rocket in July 2019 was about four tonnes.

Russia’s Moon explorations

• Russia, once a leading space actor, has now joined hands with China on the ILRS. Russia is reviving its Luna series of probes to the moon to complement the Chinese efforts.
• Luna 25, 26 and 27 will work in tandem with Chang’e 6,7 and 8 to undertake expansive reconnaissance and develop techniques for ultra-precise landings on the moon. 
• Together, these missions will lay the basis for the second stage of ILRS — a joint construction of the lunar base — starting from 2026.
• Russia is also threatening to cut off space cooperation with the US. It is a cooperation that emerged during the Cold War and has expanded since then.
• The US reached the moon in the 1960s. It shut down the Apollo programme in the early 1970s. 
• Geopolitics is driving Russia towards China. Space cooperation has become an extension of their strategic partnership against America. 
  • The broad advance of Beijing’s space programme, across the civilian and military domains, and its deepening collaboration with Moscow has shaken America.

Artemis Accords

• The Trump administration announced plans to put astronauts back on the moon by 2024. The new project was named Artemis.
• Artemis Accords are an agreement to abide by a broad set of principles to guide the expanding human activity on the moon – ranging from mining resources to setting up lunar colonies.
• It involves the construction of a permanent space station orbiting the moon, called Lunar Gateway, and a surface presence at the south pole of the moon that is supposed to have ice and could sustain future human activity. 
• The Artemis Accords will describe a shared vision for principles, grounded in the Outer Space Treaty of 1967, to create a safe and transparent environment which facilitates exploration, science, and commercial activities for all of humanity to enjoy.
• The eight signatories were from Australia, Canada, Italy, Japan, Luxembourg, United Arab Emirates, United Kingdom, and the United States. Since then, many others have joined — Brazil, South Korea, New Zealand, and Ukraine.
• The US is looking for partners for its Artemis programme.

Significance of Artemis Accords- Preserving the Outer Space Treaty(OST)

• The OST says outer space, including the moon and other celestial bodies, “is not subject to “national appropriation by claim of sovereignty, by means of use or occupation, or by any other means”. 
  • It declares that outer space shall be the “province of all mankind” and its use “be carried out for the benefit and in the interests of all countries”.
• One of the consequences of the growing lunar activity is the pressure on the current international space legal regime — the 1967 Outer Space Treaty. 
  • Earlier there were no capabilities on the earth to exploit outer space for commercial and military gain. That situation is changing, due to the advances in space technologies and the expansive investment of resources by major powers.
  • The breakdown of the post-Cold War harmony among the major powers has added fuel to the fire on the moon and set the stage for a prolonged geopolitical contestation for the moon.
• The US is promoting the Artemis Accords to preserve the OST regime in relation to the moon and promote transparency, interoperability, emergency assistance, and peaceful international cooperation.

Syllabus: General Studies Paper 2

Context:

The current controversy over AUKUS — the trilateral security pact between Australia, the United Kingdom and the United States, has revealed the hazards of group diplomacy.

• Today, the world has a whole spectrum of groups — from the European Union at one end to the African Union at the other — with varying shades of cooperation. 
• Groups with acronyms such as North Atlantic Treaty Organization (NATO) and the Association of Southeast Asian Nations (ASEAN) and numerical groups from a notional G-2 to a real G-77 which has more than a 100 members exist.

Relevance of multilateral groupings

• • Many of the newly founded groupings do not have regional, ideological or thematic homogeneity to lend them a reason for forming a group. The time, the money and the energy spent on convening summits do not seem justified. 
  • Lack of agenda: Finding the agenda for these organisations and groups is another difficult exercise. E.g the growing agenda of the United Nations includes everything from peace on earth to celestial bodies and even UFOs. 
  • Undermining genuine organizations: BRICS undermined the relevance of another, less ambitious, group of India, Brazil and South Africa (IBSA), which had several common interests. As candidates for permanent membership of the Security Council, they had specific ideas on UN reform and on South-South cooperation.
    • A Goldman Sachs economist found similarities among fast growing economies such as China, Russia, India and Brazil and recommended massive western investments in these countries. 
    • The countries concerned formed an intergovernmental group called BRIC and later BRICS, with South Africa added as a representative of the African continent. 
    • China quickly assumed the leadership of BRICS and tried to seek changes in the international economic system by establishing a bank, with the possibility of credit for its members. 
  • Lack of consensus on critical issues: The recent BRICS summit had Afghanistan on its agenda and the diverse group was able to reach a conclusion only with different conditions. Russia and China were more sympathetic to the Taliban than the others. 
    • At the Shanghai Cooperation Organisation (SCO) summit, delegations found some common elements of concern with dramatically different approaches. 
    • The SCO started off as a friendly group of China and some of the former Republics of the Soviet Union, but with the addition of India, Pakistan and Iran, it became a diverse group and it could not reach agreement. 

• The Quad and AUKUS

• • New Delhi’s reluctance to directly engage China has driven the U.S. to new alliances such as a second Quad and then AUKUS. 
  • US, Afghanistan, Uzbekistan, Pak announce new Quad group for Afghan peace process
  • The U.S. wants to fortify itself with allies against China. 
  • But the negative reaction of France to AUKUS has raised the issue of loyalty among allies.
  • AUKUS is a new trilateral security partnership for the Indo-Pacific, between Australia, the UK and the US (AUKUS).
  • The major highlight of this arrangement is the sharing of US nuclear submarine technology to Australia.

India’s experiences with  groupings

• Decreasing relevance of South Asian Association for Regional Cooperation (SAARC): India joined the Association with a number of conditionalities such as the exclusion of bilateral issues, decision-making by voting, and holding of meetings without all members being present. 
  • But despite the imperative for cooperation in vital fields, SAARC became an arena for India bashing, particularly by Pakistan. 
  • India boycotted the SAARC Summit that was proposed to be held in Pakistan. 
  • SAARC became a liability as it was clear that the region was not mature enough to have a regional instrumentality.
• Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), an international organisation of seven South Asian and Southeast Asian nations which are dependent on the Bay of Bengal: Bangladesh, Bhutan, India, Nepal, Sri Lanka, Myanmar and Thailand. 
  • The group remained dormant for many years till it was revived a few years ago as an alternative to SAARC. 
  • Though it has an ambitious agenda for sectoral cooperation, it has not gained much momentum.
• Indian Ocean Rim Association (IORA): The organisation was first established as the Indian Ocean Rim Initiative in Mauritius in March 1995 and formally launched on March 6-7 1997 (then known as the Indian Ocean Rim Association for Regional Cooperation). It also has not achieved much significance.
• On the other hand, India is not a member of the two active groups, Asia-Pacific Economic Cooperation (APEC) and Nuclear Suppliers Group (NSG). India has major stakes in them. We campaigned actively for membership of these two bodies, but gave up when we made no headway. 
  • India tried to acquire membership of Missile Technology Control Regime (MTCR), NSG, the Wassenaar Arrangement and the Australia Group. It got membership of MTCR, Wassenaar and the Australia Group. India missed NSG’s membership due to opposition from China.
  • The Nuclear Suppliers Group (NSG) is for the control of nuclear-related technology.
  • The Australia Group (AG) is for control of chemical and biological technology that could be weaponized.
  • The Missile Technology Control Regime (MTCR) is for the control of rockets and other aerial vehicles capable of delivering weapons of mass destruction.
  • The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies.