1. BRICS will help India in fighting COVID-19, says China Minister
Foreign Ministers express ‘grave concern’ over the impact of the pandemic
The Foreign Ministers of the BRICS (Brazil, Russia, India, China and South Africa) grouping on Tuesday expressed “grave concern” with regard to the global COVID-19 pandemic.
Addressing a virtual meeting, Chinese Foreign Minister Wang Yi expressed solidarity with India over the recent surge in COVID-19 cases, and said the grouping was ready to assist the country to fight the pandemic “as long as needed”.
The Ministers also agreed on reforming the multilateral system, which was the “first time” that such a consensus was reached, sources said.
“The Ministers expressed grave concern over the continuing public health, societal and economic impact of the COVID-19 pandemic globally. They expressed condolences for lives lost and pledged solidarity with the affected families,” a statement issued after the meeting said.
The gathering described the pandemic as one of the most serious challenges before the world, while also highlighting the importance of “respect for territorial integrity” and the “sovereign equality” of states.
In his comments, Mr. Wang said, “At this trying time, China stands in solidarity with India and all the BRICS countries. As long as it is needed by India, I believe that all BRICS partners, including China, will provide further support and assistance at any time. We are fully confident that India will certainly overcome the pandemic.”
Welcoming the participants, External Affairs Minister S. Jaishankar recollected the journey that the BRICS Foreign Ministers had undertaken since their first meeting in New York in 2006. India is the Chair of BRICS for 2021, when the organisation completes its 15th year of existence.
A joint statement issued after the meeting called for “equitable” access to vaccines, medicines and technologies as well as equipment to deal with the pandemic. “The Ministers reaffirmed the need to use all relevant measures during the pandemic, including supporting ongoing consideration in the WTO [World Trade Organization] on a COVID-19 vaccine intellectual property rights waiver and the use of flexibilities of the TRIPS [Trade-Related Aspects of Intellectual Property Rights] agreement and the Doha Declaration on the TRIPS agreement and public health,” the statement said.
The mention of the term “flexibilities” in the joint statement is being viewed as a normative step forward towards greater vaccine equality and availability in the world.
Apart from the support at the WTO, the Foreign Ministers also expressed support for the “comprehensive strengthening and reforming” of the UN Security Council, the General Assembly, the UN Secretariat and the Economic and Social Council.
The statement also reflected the grouping’s determination to deal with global terrorism and expressed commitment to fully implement the BRICS Counter Terrorism Strategy.
- BRICS is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China and South Africa.
- The BRICS Leaders’ Summit is convened annually.
- BRICS does not exist in form of organization, but it is an annual summit between the supreme leaders of five nations.
- The Chairmanship of the forum is rotated annually among the members, in accordance with the acronym B-R-I-C-S.
- BRICS cooperation in the past decade has expanded to include an annual programme of over 100 sectoral meetings.
- Together, BRICS accounts for about 40% of the world’s population and about 30% of the GDP (Gross Domestic Product), making it a critical economic engine.
- It’s an emerging investment market and global power bloc.
- The acronym “BRICS” was initially formulated in 2001 by economist Jim O’Neill, of Goldman Sachs, in a report on growth prospects for the economies of Brazil, Russia, India and China – which together represented a significant share of the world’s production and population.
- In 2006, the four countries initiated a regular informal diplomatic coordination, with annual meetings of Foreign Ministers at the margins of the General Debate of the UN General Assembly (UNGA).
- This successful interaction led to the decision that the dialogue was to be carried out at the level of Heads of State and Government in annual Summits.
- The first BRIC Summit took place in 2009 in the Russian Federation and focused on issues such as reform of the global financial architecture.
- South Africa was invited to join BRIC in December 2010, after which the group adopted the acronym BRICS. South Africa subsequently attended the Third BRICS Summit in Sanya, China, in March 2011.
- The BRICS seeks to deepen, broaden and intensify cooperation within the grouping and among the individual countries for more sustainable, equitable and mutually beneficial development.
- BRICS takes into consideration each member’s growth, development and poverty objectives to ensure relations are built on the respective country’s economic strengths and to avoid competition where possible.
- BRICS is emerging as a new and promising political-diplomatic entity with diverse objectives, far beyond the original objective of reforming global financial institutions.
Areas of Cooperation
1. Economic Cooperation
- There are rapidly growing trade and investment flows between BRICS countries as well as economic cooperation activities across a range of sectors.
- Agreements have been concluded in the areas of Economic and Trade Cooperation; Innovation Cooperation, Customs Cooperation; strategic cooperation between the BRICS Business Council , Contingent Reserve Agreement and the New Development Bank.
- These agreements contribute to realisation of the shared objectives of deepening economic cooperation and fostering integrated trade and investment markets.
2. People-to-People exchange
- BRICS members have recognised the need for strengthening People-to-People exchanges and to foster closer cooperation in the areas of culture, sport, education, film and youth.
- People-to-People exchanges seek to forge new friendships; deepen relations and mutual understanding between BRICS peoples in the spirit of openness, inclusiveness, diversity and mutual learning.
- Such People to people exchanges include the Young Diplomats Forum, Parliamentarian Forum, Trade Union Forum, Civil BRICS as well as the Media Forum.
3. Political and Security Cooperation
- BRICS member political and security cooperation is aimed at achieving peace, security, development and cooperation for a more equitable and fair world.
- BRICS provides opportunities for sharing policy advice and exchanges of best practices in terms of domestic and regional challenges as well as advancing the restructuring of the global political architecture so that it is more balanced, resting on the pillar of multilateralism.
- BRICS is utilised as a driver for South Africa’s foreign policy priorities including the pursuit of the African Agenda and South-South Cooperation.
4. Cooperation Mechanism
Cooperation among members is achieved through:
- Track I: Formal diplomatic engagement between the national governments.
- Track II: Engagement through government-affiliated institutions, e.g. state-owned enterprises and business councils.
- Track III: Civil society and People-to-People engagement.
Impacts of BRICS on global institutional reforms
- The main reason for co-operation to start among the BRICs nation was the financial crises of 2008. The crises raised doubts over sustainability of the dollar-dominated monetary system.
- The BRICs called for the “the reform of multilateral institutions in order that they reflect the structural changes in the world economy and the increasingly central role that emerging markets now play”.
- BRICs managed to push for institutional reform which led to International Monetary Fund (IMF) quota reform in 2010. Thus the financial crises had momentarily reduced western legitimacy and briefly let the BRICs countries become “agenda setters” in multilateral institutions.
New Development Bank
- NDB is headquartered in Shanghai.
- At the Fourth BRICS Summit in New Delhi (2012) the possibility of setting up a new Development Bank was considered to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies, as well as in developing countries.
- During the Sixth BRICS Summit in Fortaleza (2014) the leaders signed the Agreement establishing the New Development Bank (NDB).
- Fortaleza Declaration stressed that the NDB will strengthen cooperation among BRICS and will supplement the efforts of multilateral and regional financial institutions for global development thus contributing to sustainable and balanced growth.
- NDB’s key areas of operation are clean energy, transport infrastructure, irrigation, sustainable urban development and economic cooperation among the member countries.
- The NDB functions on a consultative mechanism among the BRICS members with all the member countries possessing equal rights.
Contingent Reserve Arrangement
- Considering the increasing instances of global financial crisis, BRICS nations signed BRICS Contingent Reserve Arrangement (CRA) in 2014 as part of Fortaleza Declaration at Sixth BRICS summit.
- The BRICS CRA aims to provide short-term liquidity support to the members through currency swaps to help mitigating BOP crisis situation and further strengthen financial stability.
- The initial total committed resources of the CRA shall be one hundred billion dollars of the United States of America (USD 100 billion).
- It would also contribute to strengthening the global financial safety net and complement existing international arrangements (IMF).
- The marked dominance of big three Russia-China-India is challenge for the BRICS as it moves ahead. To become a true representative of large emerging markets across the world, BRICS must become pan-continental. Its membership must include more countries from other regions and continents.
- The BRICS will need to expand its agenda for increasing its relevance in the global order. As of now, climate change and development finance, aimed at building infrastructure dominate agenda.
- As BRICS moves forward foundational principles of BRICS i.e. respect for sovereign equality and pluralism in global governance are liable to be tested as the five member countries pursue their own national agendas.
- The military standoff between India and China on the Doklam plateau, which has effectively brought to an end the naive notion that a comfortable political relationship is always possible amongst the BRICS members.
- China’s efforts to co-opt nation states, which are integral to its Belt and Road Initiative, into a broader political arrangement has potential to cause conflict among BRICS members especially China and India.
Importance for India
- India can benefit from collective strength of BRICS by way of consultation and cooperation on economic issues of mutual interests, as well as topical global issues, such as, international terrorism, climate change, food and energy security, reforms of global governance institutions, etc.
- India remains engaged with the other BRICS countries on its NSG membership.
- The NDB will help India to raise and avail resources for their infrastructure and sustainable development projects. The NDB has approved its first set of loans, which included a loan of US$ 250 million in respect of India for Multitranche Financing Facility for Renewable Energy Financing Scheme’.
2. DM Act is of 2005 vintage, was first enforced during pandemic
Centre issued notice to ex-Bengal Chief Secretary under it
Hours before he retired on May 31, former Chief Secretary of West Bengal Alapan Bandyopadhyay was served a show-cause notice by the Union Home Ministry under Section 51 of the Disaster Management (DM) Act, 2005, punishable by imprisonment of up to two years or a fine or both.
The Section pertains to “punishment for obstruction” for refusal to comply with a direction given by the Central government.
The DM Act, 2005, came into existence after the 2004 tsunami. It was invoked for the first time in the wake of the COVID-19 pandemic. On March 24, 2020, the Centre, through the National Disaster Management Authority (NDMA) headed by the Prime Minister, invoked the provisions of the Act to streamline the management of the pandemic, empowering district magistrates to take decisions and centralise other decisions on the supply of oxygen and movement of vehicles.
The Act has been extended across the country till June 30 and it is enforced by the Home Ministry.
The officer, by abstaining himself from the review meeting taken by Prime Minister Narendra Modi at cyclone-affected Kalaikunda in West Bengal on May 28, “has acted in a manner tantamount to refusing to comply with lawful directions of the Central Government and is thus violative of Section 51 (b) of the Disaster Management Act, 2005,” the notice to Mr. Bandyopadhyay said.
The Section prescribes “punishment for obstruction” for refusal to comply with any direction given by or on behalf of the Central government or the State government or the National Executive Committee or the State Executive Committee or the District Authority under the Act.
It says that violation shall be punishable with imprisonment for a term that may extend to one year or with a fine or both upon conviction. It adds that if “such refusal to comply with directions results in loss of lives or imminent danger thereof, shall on conviction be punishable with imprisonment for a term which may extend to two years”.
According to Meeran Chadha Borwankar, former Director-General of the Bureau of Police Research and Development (BPR&D), Section 51 of the Act has two important caveats. “Under the Act, the action on the part of the person has to be ‘without reasonable cause’ and ‘failure of an officer to perform the duty without due permission or lawful excuse’. I am sure the Chief Secretary had ‘reasonable cause’ and ‘lawful excuse’ for not attending the meeting,” he said.
Through the particular provision, the Home Ministry made spitting in public a punishable offence in April last year. The guidelines issued by the Ministry under the DM Act, binding on the States, made “wearing of face masks in public places mandatory”. On March 30, 2020, when thousands of migrants gathered at the Anand Vihar railway station in Delhi due to the sudden announcement of the countrywide lockdown, two Delhi government officers were suspended and two others were served show-cause notice by the Centre under the Act for dereliction of duty.
Disaster Management Act, 2005 and Disaster Management Framework in India
The Disaster Management Act, 2005 has been enacted as the central Act to deal with the management of disasters. This act envisaged a three tier Disaster Management structure in India at National, States and District levels. Under the act, the NDMA, SDMA, NEC, NDRF, NIDM and disaster related funds were established.
National Disaster Management Authority
The Disaster Management Act mandates the Central Government to establish NDMA as nodal authority with prime minister as its ex-officio chairperson. Further, it has maximum nine members nominated by Chairman (Prime Minister). The Chairman can nominate any of the nine members also as Vice-chairman of NDMA. The NDMA meetings are presided by the Chairman and such meetings are called for as and when PM thinks fit. If Chairman is not available for presiding the NDMA meeting, this job is to be done by Vice President. Officers, employees and consultants to the authority are provided by the Central Government.
Powers and Functions of NDMA
The key responsibilities of NDMA include laying down the policies, plans and guidelines for disaster management for ensuring timely and effective response to disaster. It lays down the policies on disaster management, approve the national plan, and approve plans developed by various ministries of the union, lay down the guidelines to be followed by the state authorities in drawing up state plans. NDMA also is mandated to recommend guidelines for the minimum standards of relief to be provided to persons affected by disaster. The minimum standards are as follows:
- Minimum requirements to be provided in the relief camps in relation to shelter, food, drinking water, medical cover and sanitation;
- Special provisions to be made for widows and orphans;
- Ex gratia assistance on account of loss of life as also assistance on account of damage to houses and for restoration of means of livelihood;
- Such other relief as may be necessary.
In case of a disaster of severe magnitude, the NDMA is empowered to recommend relief in repayment of loans or for grant of fresh loans to the persons affected by disaster.
Responsibilities of the Central Government
The DM Act puts on central government the obligation to take all measures necessary and expedient for the purpose of disaster management including coordination between ministries and department, state governments, various domestic and international agencies etc. It is also obliged to make proper allocation of funds.
National Executive Committee
Apart from NDMA, the central government also constitutes a National Executive Committee which is responsible for assisting NDMA in execution of various functions for disaster management. The secretary of the ministry which is responsible for disaster management is chairperson of NEC. The secretaries in the ministries of agriculture, atomic energy, defence, drinking water supply, environment and forests, finance (expenditure), health, power, rural development, science and technology, space, telecommunication, urban development, water resources and the Chief of the Integrated Defence Staff of the Chiefs of Staff Committee will be members of the NEC.
Powers and Functions of NEC
- Assist NDMA in its functions
- Implementing the plans and policies of NDMA
- Ensuring compliance with the directives of Central Government.
- To act as a coordinating and monitoring body for disaster management
- Prepare the National Plan to be approved by the NDMA
- Prepare guidelines for different ministries with respect to disaster management.
- Provide technical assistance to state governments and authorities.
- Monitor the implementation of the National Plans and plans of various ministries
- Monitor implementation of the guidelines laid down by the NDMA
- Coordinate response in case of a disaster.
- Advise and assist various ministries and departments.
The National Plan is a Disaster Management Plan for the entire country. It is prepared by the NEC in consultation with the state governments and various bodies in the field of disaster management. Once prepared, NDMA approves it. The basic things to be included in national plan are as follows:
- What measures are to be taken for the prevention of disasters, or the mitigation of their effects?
- What measures are to be taken for the integration of mitigation measures in the development plans?
- What measures are to be taken for preparedness and capacity building?
- What will be the roles and responsibilities of different Ministries or Departments?
A National Plan has to be reviewed and updated annually. The central government would finance the measures to be carried out as per the plan. The copies of the plan shall be distributed to all ministries and departments and using this plan, the ministries would develop their own plans.
State Disaster Management Authority
A state Disaster Management Authority is to be established by every state government. The Chief Minister of the state is the chairperson of SDMA. There are maximum 9 members other than the chairperson. In case of a Union Territory with no assembly (Delhi and Puducherry), the Lieutenant Governor or the Administrator is the chairman of the SDMA. The SDMA will meet as and when the chairperson (CM) decides. Other employees and staff of the SDMA are appointed by the State Government.
Powers and Functions of SDMA
- To lay down the disaster management policies and plans for state
- To lay down state disaster management policy
- Approve state plans as per guidelines of national plans.
- To lay down guidelines to be followed by departments of the state.
- The act maintains that the CM , in case of emergency, would have the power to exercise all or any of the powers of the State Authority but the exercise of such powers shall be subject to ex post facto ratification of the State Authority.
State Executive Committee
The state government also creates a State Executive Committee to assist the State Authority in the performance of its functions and to coordinate action in accordance with the guidelines laid down by the State Authority and ensure the compliance of directions issued by the State Government under this Act.
Its powers and functions are almost a replica of the NEC at state level. Further, it can also among others can:
- Control and restrict, vehicular traffic to, from or within, the vulnerable or affected area
- Control and restrict the entry of any person into, his movement within and departure from, a vulnerable or affected area;
- Remove debris, conduct search and carry out rescue operations; provide shelter, food, drinking water, essential provisions, healthcare and services in accordance with the standards laid down by the National Authority and State Authority;
State Disaster Management Plan
Every State Executive Committee prepares a state disaster management plan as per the guidelines of the NDMA. State plan are approved by the State DM Authority. The state plan would comprise various vulnerabilities, measures to be adopted for prevention and mitigation, Capacity building measures, roles and responsibilities of various departments etc. The state plan has to be reviewed every year. The state government will finance the measures listed out in state plans.
District Disaster Management Authority
The DDMA are set up by state government via a notification in the state budget. It consists of Chairperson and seven members. The collector or District Magistrate or Deputy Commissioner would be the chairman. The Co-chairperson will be elected members of the local government. In the Sixth Schedule areas, the Chief Executive Member of the district council of autonomous district, shall be the co-Chairperson. The members will include Superintendent of the Police, Chief Medical Officer and other district level officers as nominated by the state government.
Powers and Functions of DDMA
The DDMA works as a district planning, coordinating and implementing body for disaster management. It will coordinate with the upper two tiers of the structure and will plan the implementation of the prevention, mitigation and preparedness at local level.
National Institute of Disaster Management
National Institute of Disaster Management has been established as a statutory body under DM Act. This institute is responsible for planning and promoting training and research in the area of disaster management, documentation and development of national level information base relating to disaster management policies, prevention mechanisms and mitigation measures. Its key functions include:
- Development of training material
- Formulate a comprehensive human resource plan
- Provide inputs to governments
- Develop educational materials for disaster management including academic and professional courses
- Promote awareness
- Conduct study courses
National Disaster Response Force
The act envisages constitution of the National Disaster Response Force for the purpose of specialist response to a threatening disaster situation or disaster. The general superintendence, direction and control of the Force shall be vested and exercised by NDMA.
National Disaster Response Fund
The DM Act 2005 calls upon the central government to constitute the National Disaster Response Fund for meeting any threatening disaster situation or disaster. The central government will be able to use the money from this fund to meet expenses for emergency response, relief and rehabilitation. Here we note that the erstwhile National Calamity Contingency Fund (NCCF) which was constituted as per the recommendations of the 11th Finance Commission has been merged into National Disaster Response Fund (NDRF) in line with the recommendation of the 13th Finance Commission. The amount collected from National Calamity Contingent Duty (NCCD) is transferred to the NDRF.
National Disaster Mitigation Fund
The act also calls upon the government to constitute a National Disaster Mitigation Fund for projects exclusively for the purpose of mitigation. They money from this fund is to be used by the NDMA for mitigation purposes.
The Disaster Management Structure in India
As per mandate of the Disaster Management Act 2005, the government created the NDMA as opposed to a separate ministry recommended by the Pant Committee. The disaster management set up was structured at three levels viz. national, state and district. The NDMA was set up as the apex body at the national level, while at the state level State Disaster Management Authorities (SDMA) were set up. These were headed by the Chief Ministers. At the district level District Disaster Management Authorities (DDMA) were set up. These were headed by the District Collectors and co-chaired by elected representatives of the local authorities. All these authorities were charged with the responsibility of formulating holistic and integrated plans for disaster management and ensuring the implementation of these plans when required.
The executive committee of the NDMA is called National Executive Committee (NEC). It coordinates the response on behalf of the NDMA. It consists of 14 Secretaries of the government of India as well as the Chief of the Integrated Defence Staff. To assist the NDMA two other bodies have been created called the National Institute of Disaster Management (NIDM) and the National Disaster Response Force (NDRF). The structure of the NDMA, evolved for disaster management at the national level, is shown in the adjacent graphics.
3. ‘China’s population norms serve as warning for India’
Need to focus on stabilisation: experts
China’s decision to relax its two-child norm and allow couples to have three children must serve as a warning for India that coercive population strategies can be counter-productive, say experts.
After enforcing one-child and two-child policies to control its population over the past four decades, China on Monday announced that it will allow couples to have a third child as it stares at a fast ageing population. India, on the other hand, has been toying with the idea of population control measures through a two-child norm, which found a mention in Prime Minister Narendra Modi’s Independence Day speech two years ago.
“India can learn from China’s failed experience of enforcing coercive population policies. Population control measures, however stringent, have landed China in a population crisis and in India it will be worse,” says Poonam Muttreja of the Population Foundation of India. “We will end up with the same issues of an ageing population and very few people to take care of them in another three decades. In Sikkim and Lakshadweep, we are already facing the same challenge of an ageing population, shrinking workforce and an increase in sex selective practices given that they have low fertility rates.”
India has long been concerned about curbing population “explosion”, but needs to focus its attention on population stabilisation instead. “India has done very well with its family planning measures and now we are at replacement level fertility of 2.1, which is desirable. We don’t need any coercive measures. But we need to sustain population stabilisation because in some States, including Sikkim, Andhra Pradesh, Delhi, Kerala and Karnataka, the total fertility rate is way below replacement level, which means we will experience in 30-40 years what China is experiencing now,” says Niranjan Saggurti, Director, Population Council of India.
Replacement level fertility is the level of fertility at which a population exactly replaces itself from one generation to the next.
4. NCPCR tracks data on orphans
9,346 children have either lost a parent or been abandoned during pandemic
Bal Swaraj, an online tracking portal of a national child rights body, shows details of nearly 10,000 children in the country in immediate need of care and protection. They include children aged between zero and 17 orphaned or abandoned during the COVID-19 pandemic since March 2020.
The National Commission for Protection of Child Rights (NCPCR) informed the Supreme Court that these children ran a high risk of being pushed into trafficking and flesh trade. It said it had received several complaints of government authorities illegally transferring details of children to private entities and NGOs.
A Bench of Justices L. Nageswara Rao and Aniruddha Bose is suo motu examining ways to protect children who have suffered personal loss and trauma due to the pandemic.
“The cataclysmic COVID-19 pandemic devastated the vulnerable sections of society… there are a number of children who have become orphans due to the demise of either the breadwinner of the family or of both their parents,” the court’s amicus curiae, advocate Gaurav Agrawal, said.
On May 28, the Bench directed the Centre to state welfare measures for the children orphaned by the pandemic. The NCPCR, represented by advocate Swarupama Chaturvedi, and the States were asked to compile data identifying children in need of immediate care. District authorities were asked to immediately cater to the basic needs of food, shelter and clothes to orphaned and abandoned children. “The district authorities are directed to upload the information of children who have become orphans after March, 2020 on the portal “Bal Swaraj” before tomorrow evening [May 29],” the Bench had ordered.
Bal Swaraj records the details of 9,346 children who are in need of care and protection as of May 29. Of this, children who have lost either parent are 7,464, those orphaned and abandoned are 1,742 and 140 respectively. The portal shows that children aged between eight and 13 form the highest age bracket who are in dire need of help. There are 3,711 of them.
The NCPCR affidavit also provided Statewise data on the total number of children orphaned, abandoned or having lost a parent since March 2020 when the pandemic first hit the country. Interestingly, West Bengal authorities have provided the details of only one child while Delhi has listed only five children on the NCPCR portal as of May 29.
District authorities of Uttar Pradesh have listed 2,110 children orphaned, abandoned or lost a parent. Tamil Nadu lists 159 children, Kerala 952, Bihar 1,327, Maharashtra 796, Karnataka 36, Andhra 116, Haryana 776, Jammu and Kashmir 375 and Gujarat 434, among other States as of May 29.
The NCPCR said the uploading of data on the Bal Swaraj portal was an ongoing process.
National Commission for Protection of Child Rights (NCPCR)
Set up in March 2007 under the Commission for Protection of Child Rights Act, 2005.
It works under the administrative control of the Ministry of Women & Child Development.
Definition: The Child is defined as a person in the 0 to 18 years age group.
The Commission’s Mandate is to ensure that all Laws, Policies, Programmes, and Administrative Mechanisms are in consonance with the Child Rights perspective as enshrined in the Constitution of India and also the UN Convention on the Rights of the Child.
Under the RTE Act, 2009, the NCPCR can:
- Inquire into complaints about violation of the law.
- Summon an individual and demand evidence.
- Seek a magisterial enquiry.
- File a writ petition in the High Court or Supreme Court.
- Approach the government concerned for prosecution of the offender.
- Recommend interim relief to those affected.
This commission has a chairperson and six members of which at least two should be women.
- All of them are appointed by Central Government for three years.
- The maximum age to serve in commission is 65 years for Chairman and 60 years for members.
About Child Welfare Committees:
As per the Section 27(1) of Juvenile Justice (Care and Protection of Children) Act, 2015 (JJ Act), Child Welfare Committees (CWCs) are to be constituted by State Government for every district, for exercising the powers and to discharge the duties conferred on such Committees in relation to children in need of care and protection under JJ Act, 2015.
Composition of the committees:
The Committee shall consist of a Chairperson, and four other members as the State Government may think fit to appoint, of whom atleast one shall be a woman and another, an expert on the matters concerning children.
Chairperson and the members shall be above the age of thirty-five years and shall have a minimum of seven years of experience of working with children in the field of education, health, or welfare activities, or should be a practicing professional with a degree in child psychology or psychiatry or social work or sociology or human development or in the field of law or a retired judicial officer.
5. China reports human case of bird flu strain
China reported the world’s first human infection of the H10N3 bird flu strain on Tuesday but said the risk of it spreading widely among people was low.
A 41-year-old man was admitted to hospital with fever symptoms in Zhenjiang on April 28 and was diagnosed with H10N3 a month later, the National Health Commission (NHC) said in a statement.
“The risk of large-scale spread is extremely low,” the NHC said, adding that the man was in a stable condition.
It described H10N3 as low pathogenic — less likely to cause death or severe illness — in birds. Several strains of bird flu have been found among animals in China but mass outbreaks in humans are rare. The last human epidemic of bird flu in China occurred in late 2016 to 2017, with the H7N9 virus.
Bird Flu Threat
- Bird flu, also known as Avian influenza (AI), is a highly contagious viral disease affecting several species of food-producing birds (chickens, turkeys, quails, guinea fowl, etc.) as well as pet birds and wild birds.
- Occasionally mammals, including humans, may contract avian influenza.
- Influenza viruses are grouped into three types; A, B, and C. Only type A is known to infect animals and is zoonotic, meaning it can infect animals and also humans. Type B and C mostly infect humans and typically cause mild disease.
- Avian influenza virus subtypes include A(H5N1), A(H7N9), and A(H9N2).
- Influenza viruses are classified into subtypes based on two surface proteins, Hemagglutinin (HA) and Neuraminidase (NA). For example, a virus that has an HA 7 protein and NA 9 protein is designated as subtype H7N9.
- Highly Pathogenic Avian Influenza (HPAI) A(H5N1) virus occurs mainly in birds and is highly contagious among them.
- HPAI Asian H5N1 is especially deadly for poultry.
- Avian Influenza outbreaks can lead to devastating consequences for the country, particularly the poultry industry.
- Farmers might experience a high level of mortality in their flocks, with rates often around 50%.
- Strict biosecurity measures and good hygiene are essential in protecting against disease outbreaks.
- If the infection is detected in animals, a policy of culling infected and contact animals is normally used in an effort to rapidly contain, control and eradicate the disease.
- India’s Status:
- Previously in 2019, India was declared free from Avian Influenza (H5N1), which had also been notified to the World Organization for Animal Health (OIE).
- The status will last only till another outbreak is reported.
6. ‘Europe should speak in one voice’
Pro-China 17+1 grouping has not proved beneficial, says Lithuanian Ambassador
In May, Lithuania announced it would pull out of the China and Central & Eastern European (CEE) 17+1 mechanism, which is seen as a pro-China grouping of countries within the EU. Denying that the decision came because of U.S. pressure, Lithuania’s Ambassador to India Julius Praneviciusspoke about the growing tensions between the European Union and China over a number of issues, including sanctions and trade negotiations:
The Lithuanian Foreign Minister has announced that Lithuania is pulling out of what is called the ‘17 plus one’ grouping of Central and Eastern European countries with China. What was the main trigger for this?
We began this format [grouping with China], this kind of cooperation, nine years ago, but we discovered that the whole thing is not so beneficial, and so we started to gradually withdraw from that format. And, indeed, last month our Minister officially announced that Lithuania no longer considers itself a ‘17 plus one’ format member and will not participate in this initiative.
I would also say that we had expected that our trade would benefit a lot, that our exports would grow as a result of this grouping, and we didn’t see it happening. But the main reason is our membership at the European Union. We want Europe to speak in one strong voice, and in that sense the ‘17 plus one’ format became a divisive forum. We would prefer to keep the dialogue as 27 members plus one, meaning that the entire European Union will engage as one with China on all aspects.
Tensions between China and Lithuania have been building up over a number of issues: Lithuania’s new ties with Taiwan, its Parliament’s resolution on Uighurs, and then Chinese sanctions on Lithuanian and EU politicians, which led to the EU putting the Comprehensive Agreement on Investment on hold.
Well, we decided to set up a trade office in Taipei, which is part of our broader reach out to Asia, and to be more active and to be more present in different parts of this continent. This is not so unusual — around 15 European countries, and I think about 60 countries all have the trade missions in Taiwan. This move was driven by our trade and economic needs, as well as our decision to broaden resources in Asia, and we are also establishing new embassies in South Korea and Singapore. This should not reflect on our bilateral relations with China.
On the sanctions, it was China that decided to impose entry bans and sanctions against some European politicians and academics, and that has had an impact on EU-China relations. Yes, the Lithuanian Parliament had a resolution on the situation in Xinjiang (calling for UN enquiry into treatment of Uighurs), but that is their decision, they are keen to observe what is happening in different parts of the world.
What is Lithuania’s stand on the Belt and Road Initiative, which is causing concerns in other European countries more recently, like Montenegro, over the debt incurred?
In our case, the investments from China are not very large, and China ranks 40th among all the countries in the world on FDI in Lithuania.
We also have a well-functioning system of screening of all the foreign direct investment that was introduced in 2002, and a special commission that checks them. We don’t have any issues that would makes us fear China’s presence in this area, as you said with the examples of some other countries.
India is now back in negotiations with the EU on a free trade agreement, just as the EU put a hold on its Comprehensive Agreement on Investment (CAI) with China. Have Lithuanian tensions with China come up in bilateral discussions in New Delhi?
We very much welcome the decisions of the most recent summit for European leaders and Prime Minister Modi and the decision to launch the discussion on trade agreements. In terms of our bilateral cooperation, we haven’t discussed our stance on the ‘17 plus one’ format with Indian counterparts recently, but when we do have ministerial meetings, we will discuss what is happening more broadly in the world, as we always do.
China’s 17+1 Cooperation Forum
- The forum is an abbreviation for Cooperation between China and Central and Eastern European Countries.
- It is an initiative by the Chinese Ministry of Foreign Affairs to promote business and investment relations between China and 16 countries of CEE (CEEC).
- The countries are Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Greece, Hungary, Latvia, North Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia.
- The format was founded in 2012 in Warsaw to push for the cooperation of the “17+1” (the 17 CEE countries and China).
- Its goals are to promote the Chinese Belt and Road Initiative and enhance cooperation in the fields of infrastructure, transportation, and logistics, trade and investment”.
7. Editorial-1: COVID diplomacy 2.0, a different order of tasks
Indian diplomacy will have to handle the fallout of the vaccine collapse and bio-research regulations
Prime Minister Narendra Modi’s words on Buddha Purnima, that in times to come the planet will remember events as either “pre-Covid or post-Covid” could not hold truer than for India’s diplomatic structure worldwide. In the past month, the focus for the Ministry of External Affairs (MEA) and Missions abroad has shifted. While the focus in 2020, during the first wave of the pandemic, was on coordinating exports of COVID-19 medicines, flights to repatriate Indians abroad (the ‘Vande Bharat Mission’) after the lockdown, and then exporting vaccines worldwide (‘Vaccine Maitri’), after the second wave, Covid Diplomacy 2.0 has a different order of tasks, both in the immediate and the long term.
The health crisis
The immediate imperative was to deal with oxygen and medicine shortages that claimed the lives of thousands in the matter of a few weeks across the country. In Delhi alone, more than 3,000 people died in the last week of April, including some from Delhi’s diplomatic community, which comprises officials, retired diplomats and foreign diplomats.
The Ministry of External Affairs has had to deal with internal health concerns while galvanising help from abroad for others. It did not help that medical protocols to treat COVID-19 have changed constantly; if the first rush was about bringing in Remdesivir and favipiravir from the United States and Russia, Indian missions are now requesting black fungus medication, as the previous ones have been dropped from the protocol. Despite all this, the Ministry of External Affairs has completed the task of bringing in supplies in a timely manner, and with success.
Handling vaccine shortages
The rest of the year, if not much of 2022 will focus on bringing in vaccines. The shortage of vaccines in the country has arisen from three factors: the failure of the Government to plan and place procurement orders in time; the failure of the two India-based companies to produce vaccine doses they had committed to, and the MEA’s focus on exporting, not importing, vaccines between January and April this year. The challenge now for diplomats has been made all the more imperative by these failures, and much harder, as the visit of the External Affairs Minister, S. Jaishankar, to Washington last week showed. With the companies manufacturing AstraZeneca and Sputnik-V stretched as far as future production is concerned, and Chinese vaccines a non-starter given bilateral tensions, it is clear that the Narendra Modi government is looking to the U.S. to make up the shortfall.
The aim is to do this in several ways. These include requesting the U.S. to share a substantial portion of its stockpile of AstraZeneca doses and to release more vaccine ingredients which are restricted for exports; to buy more stock outright from the three U.S. manufacturers, Pfizer, Moderna and Johnson & Johnson, and to encourage production in India of these vaccines. On each of these issues, the MEA has had to negotiate a difficult route. The U.S. government is holding up its AstraZeneca exports until its own United States Food and Drug Administration approves them; while it has released a small amount (20 million doses) of vaccineingredients and components, it has not changed the policy yet. Production of Johnson & Johnson single-dose vaccines in India, as had been announced during the Quad summit, will take some time. And as they were originally meant for distribution in South East Asia, it is unclear how many will be provisioned for India.
Even buying vaccines directly will need nimble negotiations as the U.S. companies seem set on getting both an indemnity waiver from India as well as Emergency Use Authorisation prior to supplying them. While the government has relaxed its rules for American and other foreign manufacturers, waiving the need for bridge-trials prior to clearance, these demands will need considerable backtracking from firmly held principles. The Government may also need to make a U-turn from its publicly announced policy that States in India will need to negotiate purchases directly, as the U.S. manufacturers want centralised orders, with payments up-front. Diplomats working to help tie up contracts have their work cut out as time is of the essence for India to complete its vaccination goals ahead of a possible third wave of the pandemic.
Patents, diplomatic fallout
Nor will the promise of patent waivers, from India’s joint proposal at the World Trade Organization (WTO) reap early benefits, despite support from world leaders such as the U.S., Russia and China. As Mr. Modi during his virtual summit meet with European Union leaders in early May, or as diplomats negotiating to bring Quad partners Japan and Australia, and BRICS partner Brazil on board have found, many countries are still holding out on the idea of freeing up intellectual property rights on vaccines for three years. That could ultimately hold up proceedings at the WTO, as it works by consensus.
The third big challenge for Indian diplomacy is to manage the fallout of the vaccine collapse. Domestically, the Government has defended its decision to export more than 66 million vaccines doses to 95 countries between January and April this year, pointing out that only 11 million were grants from India, 35 million were commercial exports and 20 million were sent as part of the global COVAX coalition commitments. Its adding that all exports were stopped as soon as cases in India began to soar is an argument that does not wash internationally. Both India’s neighbours and partners in Africa as well as global agencies depending on India for vaccines have been left in the lurch by the Government’s failure to balance its vaccine budget.
Perhaps the most egregious case is that of Bhutan and its vaccine drive which depended entirely on India’s promise of vaccines for its whole population. In March, once India completed delivery of the first batch, of 550,000 Covishield doses, Bhutan completed the administration of the first dose to 93% of its population in a record 16 days. Two months later, Bhutan does not have any vaccines to complete the second dose and has been left requesting other countries for vaccines so it does not miss the deadline amidst a rising number of cases there. Others in the neighbourhood and further afield have fully-paid-up-but-unfulfilled orders. It is no surprise that each of India’s neighbours has now sought help from China and the U.S. to complete their vaccination drives. Making amends and regaining trust for India’s vaccine and pharmacy exports in the future is going to be a challenge left to the MEA and its missions in several capitals.
Tracing virus pathways
Finally, as more waves of COVID-19 are being speculated, it is becoming increasingly clear that there must be a fuller understanding of what caused it, and India, as one of the worst pandemic-hit countries, must be at the forefront of demanding accountability. Eighteen months, 170 million cases and over three million deaths later, the World Health Organisation (WHO) which studied “pathways of emergence” of SARS-CoV2 in Wuhan, listed four possibilities: direct zoonotic transmission, an intermediate host, cold chain or transmission through food, or a laboratory incident. While WHO has concluded that the fourth pathway is “extremely unlikely”, scientists and agencies around the world are now calling for more research and transparency from China, particularly over the activities at the Wuhan Institute of Virology. Beijing appears adamant on blocking these studies and even the U.S. appears to have dragged its feet on a conclusive finding, possibly because the U.S. National Institutes of Health had funded some of the Wuhan Institute’s research, and its Office of the Director of National Intelligence decided last year to discount the “lab-leak” theory.
India, which has now begun to speak up on the issue, must call for a more definitive answer and also raise its voice for a stronger convention to regulate any research that could lead, by accident or design, to something as diabolical as the current pandemic. Towards that end, it is necessary to revamp the 1972 Biological Weapons Convention (formally known as The Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on their Destruction) to institute an implementation body to assess treaty compliance, and build safer standards for the future. With its seat at the UN Security Council as non-permanent member and its position on WHO’s Executive Board, India could seek to regain the footing it has lost over the past few months of COVID-19 mismanagement, by taking a lead role in ensuring the world is protected from the next such pandemic.
8. Editorial-2: Breaking the cycle of child labour is in India’s hands
Though the pandemic has amplified its contributing factors, policy and programmatic interventions can save children
The true extent of the impact of the COVID-19 pandemic on child labour is yet to be measured but all indications show that it would be significant as children are unable to attend school and parents are unable to find work. However, not all the factors that contribute to child labour were created by the pandemic; most of them were pre-existing and have been exposed or amplified by it.
What the data show
As the world enters the third decade of the 21st century, 152 million children around the world are still in child labour, 73 million of them in hazardous work. A Government of India survey (NSS Report No. 585, 2017-18, Statement 3.12, p.35) suggests that 95% of the children in the age group of 6-13 years are attending educational institutions (formal and informal) while the corresponding figures for those in the age group of 14-17 years is 79.6%. Hence, a large number of children in India remain vulnerable, facing physical and psychological risks to a healthy development.
The Census of India 2011 reports 10.1 million working children in the age group of 5-14 years, out of whom 8.1 million are in rural areas mainly engaged as cultivators (26%) and agricultural labourers (32.9%). While multiple data vary widely on enrolment/attendance ratios in India, UNESCO estimates based on the 2011 Census record 38.1 million children as “out of school” (18.3% of total children in the age group of 6-13 years). Work performed may not appear to be immediately dangerous, but it may produce long-term and devastating consequences for their education, their skills acquisition, and hence their future possibilities to overcome the vicious circle of poverty, incomplete education and poor quality jobs. A Rapid Survey on Children (2013-14), jointly undertaken by the Ministry of Women and Child Development and UNICEF, found that less than half of children in the age group of 10-14 years have completed primary education. These remain challenges we must overcome.
A decrease in India
One piece of good news is that child labour in India decreased in the decade 2001 to 2011, and this demonstrates that the right combination of policy and programmatic interventions can make a difference. Policy interventions such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005, the Right to Education Act 2009 and the Mid Day Meal Scheme have paved the way for children to be in schools along with guaranteed wage employment (unskilled) for rural families. Concerted efforts towards convergence of government schemes is also the focus of the implementation of the National Child Labour Project. Ratifying International Labour Organization Conventions Nos. 138 and 182 in 2017, the Indian government further demonstrated its commitment to the elimination of child labour including those engaged in hazardous occupations.
The Ministry of Labour and Employment-operated online portal (www.pencil.gov.in) allows government officials, law enforcement agencies and non-governmental organisations to share information and coordinate on child labour cases at the national, State and local levels for effective enforcement of child labour laws. While child labour has declined during the past decade globally, estimates indicate that the rate of reduction has slowed by two-thirds in the most recent four-year period. These positive and negative trends have to be taken into account when developing India’s policy and programmatic response during and after the novel coronavirus pandemic.
The economic contraction and lockdowns ensuing from the pandemic have affected all countries in Asia, leading to income reductions for enterprises and workers, many of them in the informal economy. The large number of returned migrant workers has compounded the socio-economic challenges. India experienced slower economic growth and rising unemployment even before the pandemic. Subsequent lockdowns have worsened the situation, posing a real risk of backtracking the gains made in eliminating child labour. With increased economic insecurity, lack of social protection and reduced household income, children from poor households are being pushed to contribute to the family income with the risk of exposure to exploitative work.
Challenges in education
With closure of schools and challenges of distance learning, children may drop out leaving little scope for return unless affirmative and immediate actions are taken. As many schools and educational institutions are moving to online platforms for continuation of learning, the ‘digital divide’ is a challenge that India has to reconcile within the next several years. The NSS Report No. 585 titled ‘Household Social Consumption on Education in India’ suggests that in 2017-18, only 24% of Indian households had access to an Internet facility, proportions were 15% among rural households and 42% among urban households. The Annual Status of Education Report (ASER) 2020 survey highlights that a third of the total enrolled children received some kind of learning materials from their teachers during the reference period (October 2020) as digital mode of education was opted for.
The challenges are significant and manifold but it is not impossible to meet them if the right level of commitment among all the relevant stakeholders and the right mix of policy and programmatic interventions are present. It is through strategic partnerships and collaborations involving government, employers, trade unions, community-based organisations and child labour families that we could make a difference building back better and sooner. As we reinforce the commitment to protect children from unacceptable forms of work, our focus to mitigate the aftermath of the pandemic also remains. We need a strong alliance paving our way towards ending child labour in all its forms by 2025 as countries around the world have agreed to in Sustainable Development Goal 8.7.
We — governments, employers, unions, civil society organisations and even individuals — must rise and pledge to ‘Take Action against Child Labour’ as a part of the UN’s declaration of 2021 as the International Year for the Elimination of Child Labour. Our actions today will determine the future of children tomorrow.
9. Editorial-3: Tenuous revival
Creating jobs and boosting incomes, along with vaccination, can sustain the economy
The national income estimates released by the NSO posit an economy that appears to have found some footing in the January-March quarter before the pandemic’s second wave hit. GDP expanded by 1.6% in the final quarter of the last fiscal, an acceleration from the 0.5% growth in the preceding three-month period, that marginally softened the extent of the full-year’s record contraction to 7.3%. The Centre had earlier projected full-year GDP to contract by 8%. There was a 3.7% growth in fourth-quarter gross value added, with all but two of the economy’s eight broad sectors posting expansions. Mining and quarrying and the worst-hit contact-intensive omnibus services category of trade, hotels, transport, communications and broadcasting contracted 5.7% and 2.3%, respectively. Still, the pandemic’s crushing impact over the preceding three quarters meant that only the agriculture, forestry and fishing and the utility services recorded full-year growth. On the expenditure side, private consumption spending appeared to have rebounded to growth for the first time in four quarters, posting an expansion of 2.7% that moderated the full-year’s contraction to 9.1%. And gross fixed capital formation, a proxy for private investment, jumped 11% in the three-month period, most likely helped in fair measure by an increase in capital spending by the Government.
The NSO data, however, needs to be seen in perspective. With the ground having shifted since March with the surge in COVID-19 infections, it is vital to correlate the figures with on-the-ground information. Manufacturing GVA appeared to have gained some traction in the last quarter (a 6.9% expansion), following a return to growth in the September-December period after five straight quarters of contraction. Disappointingly, IHS Markit’s Manufacturing PMI survey for May showed the key sector facing the prospect of stagnation as weakening demand pushed increases in new orders and output to 10-month lows. Similarly, the fiscal 2020-21 provisional estimates for private consumption spending — the bulwark accounting for over 50% of GDP — showed the expenditure figure at ₹75.6-lakh crore, its weakest level in three years. Here again, the Refinitiv-Ipsos Primary Consumer Sentiment Index for May, showed consumer confidence had tumbled by 6.3 percentage points from April as fears over the pandemic’s impact depressed respondents’ outlook on all four fronts including jobs and personal financial conditions. With unabated job losses pushing overall unemployment to a one-year high of 11.9% in May, as per CMIE data, and rural areas ravaged, only an accelerated nationwide vaccine roll-out and direct job and income boosting measures can prevent the economy from backsliding again.
10. Editorial-4: When two is too little
China’s demographic interventions have hadunintended social, economic consequences
Six years after abandoning the “one child policy” of 1979, China’s Communist Party has now introduced a “three child policy”. The move is to “improve China’s population structure, actively respond to the ageing population, and preserve the country’s human resource advantages”, the party’s Politburo said on May 31. The once-in-a-decade population census, released on May 11, may have prompted the latest change, recording 12 million births in 2020, the lowest since 1961. The census said there were 264 million in the 60 and over age group, up 5.44% since 2010 and accounting for 18.70% of the population. After the one child policy, China’s fertility rate fell from 2.75 in 1979 to 1.69 in 2018. Monday’s announcement is as much an acknowledgement as may ever come of the unintended consequences of deeply intrusive family planning measures, going back even before 1979, to Mao’s “later, longer, fewer” campaign, which itself, ironically, followed his exhortations to have more children to build the workforce. The party officially still defends the one child policy — that it prevented an additional 300 million births. Yet, the urgency of recent measures suggests otherwise, as China grapples with both an ageing and deeply gender-imbalanced population, and demographers’ worst fears of countries getting old before they get rich.
In 2013, China allowed couples to have a second child if either parent was an only child, with the two child policy introduced in 2015. Explaining why the measures did not boost birth rates, economists Jin Zhangfeng, Pan Shiyuan, and Zheng Zhijie wrote last year the two child policy “substantially increase[d] the number of second-child births” among those “less sensitive to child-rearing costs” but “substantially decrease[d] the number of first-child births” attributing it to rising costs. “Other developing countries, even without China’s stringent child-limitation policies, have also experienced declines,” they argued, suggesting “policy makers should give priority to reducing the child-rearing costs borne by prospective parents rather than simply relaxing or even abolishing birth quotas”. The latest announcement did acknowledge those broader structural problems, pledging to reduce families’ spending on education. It is, however, by no means an abandoning of China’s family planning policies. The entrenched — and widely reviled — family planning bureaucracy remains in place, and this week’s statement underlined that the “current reward and assistance system and preferential policies” for those following rules continue. Even leaving aside the strong moral argument against intrusive family planning — enforcement has meant forced abortions, sterilisations, and other abuses, some of which are still being reported in parts such as the Muslim-majority Xinjiang region — China’s experience is a reminder of the unintended social and economic consequences of state-led demographic interventions.
11. Editorial-5: What explains the surge in FDI inflows?
Unprecedented short-term foreign portfolio investments are entirely responsible for the surge
Total foreign direct investment (FDI) inflow in 2020-21 is $81.7 billion, up 10% over the previous year, reported a recent Ministry of Commerce and Industry press release. It further added, “Measures taken by the Government on the fronts of Foreign Direct Investment (FDI) policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country.” The short press release highlighted industry and State-specific foreign investment figures without detailed statistical information.
The Reserve Bank of India (RBI) bulletin, which was released a week earlier, has the details. They are conceptually more transparent and consistent. The table below summarises the main headings for 2019-20 and 2020-21 and the percentage growth rate.
What accounts for gross inflow?
“Gross inflows/gross investment” in the RBI report is the same as “total FDI inflow” in the press release, identical to the Commerce Ministry’s estimate. The gross inflow consists of (i) “direct investment to India” and (ii) “repatriation/disinvestment”. The disaggregation shows that “direct investment to India” has declined by 2.4%. Hence, an increase of 47% in “repatriation/disinvestment” entirely accounts for the rise in the gross inflows. In other words, there is a wide gap between gross FDI inflow and direct investment to India.
What is repatriation? Why is it so significant? FDI inflow increasingly consists of private equity funds, which are usually disinvested after 3-5 years to book profits (per its business model). In principle, private equity funds do not make long-term greenfield investment.
Similarly, measured on a net basis (that is, “direct investment to India” net of “FDI by India” or, outward FDI from India), direct investment to India has barely risen (0.8%) in 2020-21 over the last year.
What then accounts for the impressive headline number of 10% rise in gross inflow? It is almost entirely on account of “Net Portfolio Investment”, shooting up from $1.4 billion in 2019-20 to $36.8 billion in the next year. That is a whopping 2,526% rise. Further, within the net portfolio investment, foreign institutional investment (FIIs) has boomed by an astounding 6,800% to $38 billion in 2020-21, from a mere half a billion dollars in the previous year.
So, the mystery of the surge in gross FDI inflows is solved. It is entirely on account of net foreign portfolio investment. What is portfolio investment, and how is it included in FDI inflow? FDI inflow, in theory, is supposed to bring in additional capital to augment potential output (taking managerial control/stake). In contrast, foreign portfolio investment, as the name suggests, is short-term investment in domestic capital (equity and debt) markets to realise better financial returns (that is, higher dividend/interest rate plus capital gains). But the conceptual distinctions have blurred in official reporting, showing an outsized role of FDI and its growth in India.
If the deluge of FII inflow did little to augment the economy’s potential output, what then did it do? It added a lot of froth to the stock prices. When GDP has contracted by 7.3% (as per the official estimates released last Monday) in 2020-21 on account of the pandemic and the economic lockdown, the BSE Sensex nearly doubled from about 26,000 points on March 23, 2020 to over 50,000 on March 31, 2021. BSE’s price-earnings (P-E) multiple — defined as share price relative to earnings per share — is among the world’s highest, close behind S&P 500 in the U.S.
Thus the surge in total FDI inflow during the pandemic year is entirely explained by booming short-term FIIs in the capital market – and not adding to fixed investment and employment creation.
For years now, the government has showcased the rise in gross FDI inflows as a badge of the success of its economic policies to counter the widespread criticisms of output and investment slowdown and rising unemployment rates (especially during the last year).
As Figure 1 shows, between 2013-14 and 2019-20, the ratio of net FDI to GDP has remained just over 1% (left-hand scale), with no discernible rising trend in it. Likewise, the proportion of net FDI to gross fixed capital formation (fixed investment) is range-bound between 4% and 6% (left-hand scale). These stagnant trends are evident when the economy’s fixed investment rate — gross fixed capital formation to GDP ratio — has plummeted from 31.3% in 2013-14 to 26.9% in 2019-20 (right-hand scale). Thus, FDI inflow’s contribution to domestic output and investment remains modest.
To sum up, the Commerce Ministry press release claims an unprecedented surge in gross foreign capital inflow of $81.7 billion in 2020-21, rising 10% over the previous year. The rapid influx is evidence of the success of the economic policies during the pandemic, the government claims. Is it so? Probably not. Unprecedented short-term foreign portfolio investments are entirely responsible for the surge. And within the portfolio investment, FIIs shot up to $38 billion in 2020-21, from half a billion-dollar the previous year. The flood of FIIs has boosted stock prices and financial returns. These inflows did little to augment fixed investment and output growth.
12. Editorial-6: A fatal war on transparency
Official secrecy on pandemic policies aggravates a crisis
In August 2020, the Modi government constituted the National Expert Group on Vaccine Administration for COVID-19 (NEGVAC) as a nodal agency on all matters related to vaccine administration and rollout. Asked under the Right to Information (RTI) Act for details of the NEGVAC’s meetings, the Health Ministry, which anchors the expert group, replied that it does not know where the concerned documents are. Asked for the dates and minutes of meetings of other task forces constituted to deal with the pandemic, Dr. Nivedita Gupta of the Indian Council of Medical Research (ICMR) denied the request with this bizarre logic: “The information is not in the public domain”. Asked for the Memorandum of Understanding (MoU) between the ICMR and Bharat Biotech for the rollout of Covaxin, she gave the same response.
Through seven years in power, the Modi government has systematically hobbled the RTI Act. In the face of the pandemic, its war on transparency brings fatal consequences. Brazen denials mark its responses to RTI requests filed over the past year. Such secrecy runs through the full spectrum of COVID-19-related matters — from vaccine manufacturing and pricing decisions, to last year’s lockdown planning and the establishment and running of the ₹10,000 crore-plus PM CARES fund. Opacity serves as a cover for large-scale over-centralisation and misgovernance.
Botched up vaccination programme
Despite thousands of daily deaths, the government continues to withhold information on critical life-saving policies and decisions. Take, for example, India’s botched up vaccination programme. On January 3, the Drugs Controller General of India (DCGI) approved Covaxin. Until today, Bharat Biotech has not published peer-reviewed interim efficacy analyses from Phase 3 clinical trials. The DCGI has denied RTI requests about its decision to grant emergency approval to Covaxin and Covishield, claiming that information about efficacy and safety constitutes confidential commercial information. But such data are routinely published in peer-reviewed journals and disclosed to the public by regulators. Effectively, the DCGI is keeping secret decision-making on what it called a “110% safe vaccine”. But people being administered Covaxin had to consent to a declaration that in case of serious adverse impacts, compensation will be awarded only if a causal link to the vaccine is established.
Second, the rollout of vaccines is badly hit by shortages. Against the target of 30 crore Indians being vaccinated by July, only over 4 crore have been fully vaccinated so far. Covaxin is developed with the help of the ICMR’s National Institute of Virology (NIV) and the Council of Scientific and Industrial Research-Indian Institute of Chemical Technology (IICT), and co-owned by the ICMR. Its production is the easiest for the government to ramp up, and massive vaccine production capacity in the public sector is lying idle. So, what explains the government-enabled scarcity of vaccines?
Like the ICMR, the NIV too refuses to disclose the MoU with Bharat Biotech, and the full extent of public investment into Covaxin’s research and development. Similarly, asked for details of the research collaboration with Bharat Biotech, and investment of public funds in Covaxin, the IICT too denies information, calling the request “an unwarranted invasion of privacy”. Meanwhile, Covaxin has reached private hospitals as among the most expensive vaccines in the world, at over ₹1,200 a dose. And the ICMR is earning 5% royalties on the vaccine. This and other scraps of information are public only thanks to the Supreme Court hearing a suo motu PIL on the pandemic. The government’s summary dismissals not just violate citizens’ fundamental right to information but also push RTI requests into an appeal process that can take over two years. Time and resources go waste as citizens have to approach Information Commissions and High Courts to access basic information.
Effective planning and administration cannot occur in the dark, and experts attribute the death toll and suffering to mismanagement and lack of preparation as much as the virus itself. Official secrecy is undermining the capacity of scientists, public health and policy experts to provide timely feedback and suggestions to the government. Such is the information blackhole that over 900 scientists have appealed to the Prime Minister for access to information and data. But little has changed.
The Supreme Court should order the government to suo motu disclose information related to COVID-19 policies, in line with Sections 4 and 7 of the RTI Act, which deal with proactive and urgent disclosures with consequences for life and liberty. Writing about famines in colonial India, Amartya Sen argued that mass hunger and death do not occur where information flows freely. Ditto for pandemic management.