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Daily Current Affairs 18.03.2021 (India – Pakistan, Appropriation Bill)

Daily Current Affairs 18.03.2021 (India – Pakistan, Appropriation Bill)

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1. Serious issue if 3 cr. ration cards were cancelled, says SC

Revoked for no Aadhaar link, says plea

The Supreme Court on Wednesday said it was a “very serious” matter if the Centre had really cancelled around three crore ration cards, even those of tribal people and the poor, solely because they could not be biometrically linked with Aadhaar.

A Bench, led by Chief Justice of India Sharad A. Bobde, asked the Centre to respond to the allegation made in a petition by Koili Devi, represented by senior advocate Colin Gonsalves, that such cancellations had led to starvation deaths across the country.

Technological issues

“The insistence on Aadhaar and biometric authentication had led to the cancellation of nearly four crore ration cards in the country, according to the Union of India. The Union of India casually gives an explanation that these cancelled cards were bogus. The real reason is that the technological system based on iris identification, thumb prints, non-possession of Aadhaar, non-functioning of the Internet in rural and remote areas, etc., led to largescale cancellation of ration cards, without notice to the family concerned,” said a report submitted by the petitioner.

Speaking to The Hindu, Mr. Gonsalves said the “petition is based on reports that an estimated two to four crore ration cards have been cancelled in the country without prior notice to the beneficiaries”.

Right to food, which the ration card symbolised, cannot be curbed or cancelled because of lack of Aadhaar.

Ms. Koili Devi’s 11-year-old daughter, Santhoshi Kumari, was allegedly a victim of hunger death in Jharkhand in 2017.

She said the family’s ration card was cancelled due to non-linkage with Aadhaar. She sought an independent investigation into the starvation deaths, restoration of the cancelled ration cards and compensation for the death of her daughter.

Mr. Gonsalves said the government’s continued emphasis on Aadhaar was unfortunate as the Supreme Court had laid down in clear terms that “no insistence on Aadhaar can be done for statutory entitlements”.

“Tribals either do not have Aadhaar cards or the identification does not work in tribal and rural areas. Because of this reliance on Aadhaar cards, can you imagine three crore cards are gone…” he submitted.

“Three crore cards have gone?” the Chief Justice asked incredulously.

“Yes, starvation deaths are taking place. Three crore ration cards have gone… I can show the Union of India’s declaration. It is an announcement of the Prime Minister,” Mr. Gonsalves responded.

He argued that the States were in a denial mode, blaming the deaths on diarrhoea and malaria.

“In fact, anything but lack of food. This cruel exercise deprived millions of Indians living below the poverty line of food and led to starvation deaths in Jharkhand, U.P., Odisha, Karnataka, M.P., Maharashtra, Bihar, Chhattisgarh, West Bengal, Andhra Pradesh and other States,” the petitioner’s side said in a report prepared after going through the responses obtained from the States.

Additional Solicitor General Aman Lekhi said the statements made by the petitioner side were misplaced. Issuance of ration card was not dependent on the Aadhaar card. Alternative mechanisms were in place. Besides, the issuance of ration cards was primarily the responsibility of the State governments.

Mr. Lekhi said the petitioners should ideally move the respective High Court, rather than file an omnibus petition in the apex court. He said the petitioners had come directly to the apex court without raising their issue with the grievance redressal mechanism under the National Food Security Act.

“We are persuaded to consider this case because of their [petitioners’] statement that ration cards have been cancelled… That is a very serious matter,” Chief Justice Bobde said in response to Mr. Lekhi’s submissions for the Centre.

Even as the government highlighted the redressal mechanism within the Food Security Act as the right place to go, the petitioner side countered in its report to the court that “not a single State has appointed independent nodal officers or district grievance redressal officer under the Act”.

“All the States have mechanically granted additional designations to existing officers. In many cases, the officers given additional designations are from the Food Supply Department, and they are the main persons responsible for corruption in the food distribution system,” the report said.

It referred to the directions imposed by the Supreme Court in the Swaraj Abhiyan cases on the implementation of the Food Security Act, which included social audits, framing of rules and setting up vigilance committees.

The Hunger Watch Report of the Right to Food Campaign in 2020 characterised the hunger situation in India as “grave”. India ranks 94 out of 107 countries in the Global Hunger Index 2020 and is in the ‘Serious Hunger Category’.

Public Distribution System

Introduction

  • The Public distribution system (PDS) is an Indian food Security System established under the Ministry of Consumer Affairs, Food, and Public Distribution.
  • PDS evolved as a system of management of scarcity through distribution of food grains at affordable prices.
  • PDS is operated under the joint responsibility of the Central and the State Governments.
    • The Central Government, through Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation and bulk allocation of food grains to the State Governments.
    • The operational responsibilities including allocation within the State, identification of eligible families, issue of Ration Cards and supervision of the functioning of Fair Price Shops (FPSs) etc., rest with the State Governments.
  • Under the PDS, presently the commodities namely wheat, rice, sugar and kerosene are being allocated to the States/UTs for distribution. Some States/UTs also distribute additional items of mass consumption through the PDS outlets such as pulses, edible oils, iodized salt, spices, etc.

Evolution of PDS in India

  • PDS was introduced around World War II as a war-time rationing measure. Before the 1960s, distribution through PDS was generally dependant on imports of food grains.
  • It was expanded in the 1960s as a response to the food shortages of the time; subsequently, the government set up the Agriculture Prices Commission and the FCI to improve domestic procurement and storage of food grains for PDS.
  • By the 1970s, PDS had evolved into a universal scheme for the distribution of subsidised food
  • Till 1992, PDS was a general entitlement scheme for all consumers without any specific target.
  • The Revamped Public Distribution System (RPDS) was launched in June, 1992 with a view to strengthen and streamline the PDS as well as to improve its reach in the far-flung, hilly, remote and inaccessible areas where a substantial section of the underprivileged classes lives.
  • In June, 1997, the Government of India launched the Targeted Public Distribution System (TPDS) with a focus on the poor.
    • Under TPDS, beneficiaries were divided into two categories: Households below the poverty line or BPL; and Households above the poverty line or APL.
  • Antyodaya Anna Yojana (AAY): AAY was a step in the direction of making TPDS aim at reducing hunger among the poorest segments of the BPL population.
    • A National Sample Survey exercise pointed towards the fact that about 5% of the total population in the country sleeps without two square meals a day. In order to make TPDS more focused and targeted towards this category of population, the “Antyodaya Anna Yojana” (AAY) was launched in December, 2000 for one crore poorest of the poor families.
  • In September 2013, Parliament enacted the National Food Security Act, 2013. The Act relies largely on the existing TPDS to deliver food grains as legal entitlements to poor households. This marks a shift by making the right to food a justiciable right.

How PDS system functions?

  • The Central and State Governments share responsibilities in order to provide food grains to the identified beneficiaries.
  • The centre procures food grains from farmers at a minimum support price (MSP) and sells it to states at central issue prices. It is responsible for transporting the grains to godowns in each state.
  • States bear the responsibility of transporting food grains from these godowns to each fair price shop (ration shop), where the beneficiary buys the food grains at the lower central issue price. Many states further subsidise the price of food grains before selling it to beneficiaries.

Importance of PDS

  • It helps in ensuring Food and Nutritional Security of the nation.
  • It has helped in stabilising food prices and making food available to the poor at affordable prices.
  • It maintains the buffer stock of food grains in the warehouse so that the flow of food remain active even during the period of less agricultural food production.
  • It has helped in redistribution of grains by supplying food from surplus regions of the country to deficient regions.
  • The system of minimum support price and procurement has contributed to the increase in food grain production.

Issues Associated with PDS System in India

  • Identification of beneficiaries: Studies have shown that targeting mechanisms such as TPDS are prone to large inclusion and exclusion errors. This implies that entitled beneficiaries are not getting food grains while those that are ineligible are getting undue benefits.
    • According to the estimation of an expert group set up in 2009, PDS suffers from nearly 61% error of exclusion and 25% inclusion of beneficiaries, i.e. the misclassification of the poor as non-poor and vice versa.
  • Leakage of food grains: (Transportation leakages + Black Marketing by FPS owners) TPDS suffers from large leakages of food grains during transportation to and from ration shops into the open market. In an evaluation of TPDS, the erstwhile Planning Commission found 36% leakage of PDS rice and wheat at the all-India level.
  • Issue with procurement: Open-ended Procurement i.e., all incoming grains accepted even if buffer stock is filled, creates a shortage in the open market.
  • Issues with storage: A performance audit by the CAG has revealed a serious shortfall in the government’s storage capacity.
    • Given the increasing procurement and incidents of rotting food grains, the lack of adequate covered storage is bound to be a cause for concern.
  • The provision of minimum support price (MSP) has encouraged farmers to divert land from production of coarse grains that are consumed by the poor, to rice and wheat and thus, discourages crop diversification.
  • Environmental issues: The over-emphasis on attaining self-sufficiency and a surplus in food grains, which are water-intensive, has been found to be environmentally unsustainable.
    • Procuring states such as Punjab and Haryana are under environmental stress, including rapid groundwater depletion, deteriorating soil and water conditions from overuse of fertilisers.
    • It was found that due to cultivation of rice in north-west India, the water table went down by 33 cm per year during 2002-08.

PDS Reforms

  • Role of Aadhar: Integrating Aadhar with TPDS will help in better identification of beneficiaries and address the problem of inclusion and exclusion errors. According to a study by the Unique Identification Authority of India, using Aadhaar with TPDS would help eliminate duplicate and ghost (fake) beneficiaries, and make identification of beneficiaries more accurate.
  • Technology-based reforms of TPDS implemented by states: Wadhwa Committee, appointed by the Supreme court, found that certain states had implemented computerisation and other technology-based reforms to TPDS. Technology-based reforms helped plug leakages of food grains during TPDS.

    • Tamil Nadu implements a universal PDS, such that every household is entitled to subsidised food grains.
    • States such as Chhattisgarh and Madhya Pradesh have implemented IT measures to streamline TPDS, through the digitisation of ration cards, the use of GPS tracking of delivery, and the use of SMS based monitoring by citizens.

Technology-based reforms to TPDS undertaken by some states

Type of reformBenefits of reformStates implementing reforms
Digitisation of ration cardsAllows for online entry and verification of beneficiary dataOnline storing of monthly entitlement of beneficiaries, number of dependants, offtake of food grains by beneficiaries from FPS, etc.Andhra Pradesh, Chhattisgarh, Tamil Nadu, Madhya Pradesh, Karnataka, Gujarat, etc.
Computerised allocation to FPSComputerises FPS allocation, declaration of stock balance, web-based truck challans, etc.Allows for quick and efficient tracking of transactionsChhattisgarh, Delhi, Madhya Pradesh, Tamil Nadu, etc.
Issue of smart cards in place of ration cardsSecure electronic devices used to store beneficiary dataStores data such as name, address, biometrics, BPL/APL category and monthly entitlement of beneficiaries and family membersPrevents counterfeitingHaryana, Andhra Pradesh, Odisha etc.
Use of GPS technologyUse of Global Positioning System (GPS) technology to track movement of trucks carrying food grains from state depots to FPSChhattisgarh, Tamil Nadu
SMS based monitoringAllows monitoring by citizens so they can register their mobile numbers and send/receive SMS slerts during dispatch and arrival of TPDS commoditiesChhattisgarh, Uttar Pradesh, Tamil Nadu
Use of web-based citizens’ portalPublicises grievance redressal machinery, such as toll free number for call centres to register complaints or suggestionsChhattisgarh

PDS vs. Cash Transfers

  • National Food Security Act,2013 provides for reforms in the TPDS including schemes such as Cash transfers for provisioning of food entitlements.
  • Direct Benefit Transfer (DBT) aims to:
    • reduce the need for huge physical movement of food-grains
    • provide greater autonomy to beneficiaries to choose their consumption basket
    • enhance dietary diversity
    • reduce leakages
    • facilitate better targeting
    • promote financial inclusion

Advantages and disadvantages of PDS and other delivery mechanisms

MachanismAdvantagesDisadvantages
PDSInsulates beneficiaries from inflation and price volatilityEnsures entitlement is used for food grains onlyWell-developed network of FPS ensures access to food grains even in remote areasLow offtake of food grains from each household High leakage and diversion of subsidised food grain Adulteration of food grainLack of viability of FPS due to low margins
Cash transfersCash in the hands of poor increases their choicessCash may relieve financial constraints faced by the poor, make it possible to form thrift societies and access creditAdministrative costs of cash transfer programmes may be significantly lesser than that of other schemesPotential for making electronic transferCash can be used buy non-food itemsMay expose recipients to price volatility and inflationThere is poor access to banks and post offices in some areas
Food couponsHousehold is given the freedom to choose where it buys foodIncreases incentive for competitive prices and assured quality of food grains among PDS storesRation shops get full food grains from the poor, no incentive to turn the poor awayFood coupons are not indexed for inflation; may expose recipients to inflationDifficult to administer; there have known to be delays in issuing food coupons and reimbursing shops

2. ‘India should make a move for peace’

Our only issue is basically over Kashmir, Pakistan PM says amid easing of tensions

Pitching for trade between Pakistan and its neighbours such as India, Pakistan Prime Minister Imran Khan said the entire region would benefit “if India makes a move, if the Kashmir issue is resolved”.

The comments came amid signs of a possible easing of relations, including a visit by the first sporting teams from Pakistan in years and talks on the Indus water treaty next week. Indian and Pakistani border commanders had last month agreed to abide by a ceasefire.

The Foreign Ministers of both countries have also been invited to the same regional conference on Afghanistan to be held in Dushanbe on March 30, which could be the first such opportunity for senior officials to meet since 2019.

“With India, it is very unfortunate that we have tried to resolve our issues through dialogue like civilised neighbours, but it has not worked out. Our only issue is basically over Kashmir,” Mr. Khan said at the Islamabad Security Dialogue on Wednesday, repeating an earlier statement made in Colombo in February.

He called India’s decision to amend Article 370 and reorganise Jammu and Kashmir as a “big jolt” that led to a “full breakdown in ties”.

“India will also benefit with more trade and connectivity to Central Asia. This [Kashmir] is the one issue that holds us back. We will try our full efforts but it is for India to make a move, until they do that, we cannot move forward,” he added, in a possible indicator that Pakistan expects steps from New Delhi on Jammu and Kashmir’s status before making the next move on trade.

Mr. Khan’s visibly softened tone on India follows a speech by Foreign Secretary Harsh Shringla on Monday that also appeared to have toned down some of the language on Pakistan. “India desires good neighbourly relations with Pakistan and is committed to addressing issues, if any, bilaterally and peacefully. However, any meaningful dialogue can only be held in a conducive atmosphere and the onus is on Pakistan to create such an atmosphere,” Mr. Shringla said, giving India’s stated position, but without the usual reference to state-sponsored terrorism from Pakistan.

A Brief Background of India-Pakistan Relations

Ever since India’s independence and the partition of the two countries, India and Pakistan have had sour relations. Discussed below is a brief timeline of the relations between the two countries:

  • The Composite Dialogue between India and Pakistan from 2004 to 2008 addressed all outstanding issues. It had completed four rounds and the fifth round was in progress when it was paused in the wake of the Mumbai terrorist attack in November 2008.
  • Then again in April 2010, then Prime Minister Manmohan Singh and Pakistani PM Yousuf Raza Gillani on the margins of the SAARC Summit, spoke about the willingness to resolve the issue and resume the bilateral dialogue. 
  • In 2011, after a meeting between the Foreign Ministers of both the countries, the bilateral ties were resumed on issues including:
  • Counterterrorism & Humanitarian issues 
  • Economic issues at Commerce 
  • Tulbul Navigation Project at Water Resources Secretary-level
  • Siachen at Defence Secretary-level
  • Peace & Security including Confidence Building Measures (CBMs)
  • Jammu & Kashmir
  • Promotion of Friendly Exchanges at the level of the Foreign Secretaries. 
  • Cross LoC travel was started in 2005 and trade across J&K was initiated in 2009
  • India and Pakistan signed a visa agreement in 2012 leading to liberalization of bilateral visa regimes between the two countries

Conflict Zones between India and Pakistan

There have been a few constant factors which have led to the complex bilateral ties between the two countries. Discussed below are these factors as per the latest developments released by the Government authorities, as of February 2020:

Cross-border Terrorism 

  • Terrorism emanating from territories under Pakistan’s control remains a core concern in bilateral relations
  • India has consistently stressed the need for Pakistan to take credible, irreversible and verifiable action to end cross border terrorism against India
  • Pakistan has yet not brought the perpetrators of Mumbai terror attacks 2008 to justice in the ongoing trials, even after all the evidence have been provided to them
  • India has firmly stated that it will not tolerate and comprise on issues regarding the national security 
  • Based on attacks in India and involvement of the neighbouring country, the Indian Army had conducted surgical strike at various terrorist launch pads across the Line of Control, as an answer to the attack at the army camp in Uri, Jammu and Kashmir
  • India had again hit back over the cross border terror attack on the convey of Indian security forces in Pulwama by carrying out a successful air strike at a training camp of JeM in Balakot, Pakistan

Cross border terrorism is one of the biggest factors for the disrupted relations between India and Pakistan. 

Trade and Commerce

The figures for India Pakistan bilateral trade in the last 6 years is as follows:

2013-142014-152015-162016-172017-182018-19
ExportUS$2.2bnUS$1.85bnUS$2.1bnUS$1.83bnUS$1.92bnUS$2.06bn
ImportUS$0.426 bnUS$0.497bnUS$.441bnUS$.456bnUS$0.488bnUS$ 0.495 bn
Trade BalanceUS$1.8bnUS$1.3bnUS$1.7bnUS$1.3bnUS$1.435bnUS$1.57 bn

The trade agreement has also faced a downfall when it comes to the relations between India and Pakistan. In 2019, after the Pulwama terror attack, India hiked customs duty on exports from Pakistan to 200% and subsequently, Pakistan suspended bilateral trade with India on August 7, 2019. 

There are two major routes via which trade is commenced between the two countries:

  1. Sea Route – Mumbai to Karachi
  2. Land Route – via Wagah Border through trucks

Indus Waters Treaty

The 115th meeting of Permanent Indus Commission (PIC) was held on August 29 and 30, 2018 in Lahore. The Indian delegation was led by the Indian Commissioner for Indus Water (ICIW), while the Pakistan delegation was led by Pakistan Commissioner of Indus Water (PCIW). 

In the two days meeting both sides discussed Pakal Dul Hydroelectric Power Project (HEP), Lower Kalnai HEP and reciprocal tours of Inspection to both sides of the Indus basin. Subsequently, a delegation led by PCIW inspected Pakal Dul, Lower Kalnai, Ratle and other hydropower projects in the Chenab Basin between January 28 and 31, 2019.

People to People Relations

  • Since 2014, India has been successful in the repatriation of 2133 Indians from Pakistan’s custody (including fishermen), and still, about 275 Indians are believed to be in their custody
  • In October 2017, the revival of Joint Judicial Committee was proposed by India and accepted by Pakistan, wherein, the humanitarian issues of custody of fishermen and prisoners, especially the ones who are mentally not sound in each other’s custody need to be followed
  • The Bilateral Protocol on Visits to Religious Shrines was signed between the two countries in 1974. The protocol provides for three Hindu pilgrimage and four Sikh pilgrimage every year to visit 15 shrines in Pakistan while five Pakistan pilgrimage visit shrines in India.

Kartarpur Corridor

  • An agreement between India and Pakistan for the facilitation of pilgrims to visit Gurdwara Darbar Sahib Kartarpur, Pakistan, was signed on 24 October 2019 in order to fulfil the long-standing demand of the pilgrims to have easy and smooth access to the holy Gurudwara
  • The Kartarpur Sahib Corridor Agreement, inter alia, provides for visa-free travel of Indian pilgrims as well as Overseas Citizen of India (OCI) cardholders, from India to the holy Gurudwara in Pakistan on a daily basis, throughout the year.
  • On November 9, 2019, on the occasion of the 550th birth anniversary of Guru Nanak Dev ji, Prime Minister Narendra Modi inaugurated the corridor

Kashmir Issue

This is one of the most sensitive issues between India and Pakistan and has been a major cause of the sour relations the two countries share.  Article 370 gave Jammu and Kashmir a special right to have its own constitution, a separate flag and have their own rules, but in August 2019,  the Article was scrapped off and J&K now abides by the Indian Constitution common for all. It was given the status of a Union Territory and this move of the Indian Government was highly objected by Pakistan due to their longing of owning Kashmir entirely.

Trade Agreement between India and Pakistan

The two countries had signed a Trade agreement which was mutually beneficial for both. Discussed below are the ten Articles of the Trade Agreement:

Article I – exchange of products shall be done based on the mutual requirement of both the countries, ensuring common advantages

Article II – With regard to the commodities/goods mentioned in Schedules ‘A’ and ‘B’ attached to this Agreement, the two Governments shall facilitate imports from and exports to each other’s territories to the extent permitted by their respective laws, regulations and procedures

Article III – The import/export shall take place only through commercial means approved by both side

Article IV – With respect to commodities/goods not included in Schedules ‘A’ and ‘B’ export or import shall also be permitted in accordance with the laws, regulations and procedures in force in either country from time to time

Article V – Each Government shall accord to the commerce of the country

Article VI – There are a few exceptions for Article V

Article VII – The General Agreement on Tariffs and Trade must be followed

Article VIII – Border trade shall be allowed for the day-to-day requirement of commodities

Article IX – For proper implementation of the agreement, meetings can be done every six months

Article X – The Trade Agreement between the two countries waa effective from February 1, 1957

List of Products India Imports from Pakistan

Raw juteHides and skinsFish including dried fish, poultry and eggs
Betel leaves & nutsCoriander and methi seedsSpices
HoneyBooks and periodicals, and newspapersCinema films
CementSaltpetreMachine Tools
Bicycles and spare partsSurgical InstrumentsSports goods
Wood and timber all sorts, other than hard wood

List of Products India Exports to Pakistan

CoalFire bricksLime and Lime Stone
Mica and BauxitePigments and dry coloursDyeing and tanning substances
Drugs and medicines, including Ayurvedic and Unani MedicinesMill board and straw boardMachinery and Millwork
Electric instruments apparatus appliancesElectric cables and wires, Fluorescent electric tubes, Electric insulation material, Accumulators and batteriesSanitary ware
Essential oils, Tea, Coffee, SugarSpicesFresh Fruits

3. Appropriation Bill gets the nod of Lok Sabha

Vardhan lists steps taken to improve healthcare infra

The Lok Sabha on Wednesday cleared the Appropriation Bill, allowing the Central government to draw funds from the Consolidated Fund of India for its operational requirements and implementation of various programmes.

The Bill was passed after Speaker Om Birla put it through guillotine, a legislative mechanism to approve the fast-tracking of the passage of outstanding demands for grants without discussion. Over the past few days, the Lok Sabha discussed the demands for grants for Railway, Education and Health Ministries.

On Wednesday, 26 members of the House participated in a debate on the Demand for Grants under the Health Ministry.

In his reply to the debate, Union Health Minister Harsh Vardhan listed the steps taken by the Narendra Modi-led government to improve the healthcare infrastructure, emphasising on the initiatives to contain the pandemic.

Responding to the concerns raised by several members that the proposed allocations for various other departments such as water, sanitation, nutrition, Ayush and health research, had also been subsumed, Dr. Vardhan said the Centre had adopted a holistic approach towards health and well-being since day one.

He said if the government ensured safe drinking water, sanitation and made arrangements for nutrition to children, it would take care of a majority of health issues.

During the pandemic, the Union Minister said, the country achieved self-reliance in the production of PPTs, N-95 masks, diagnostic kits, ventilators and allied articles. On the criticism about slow pace of inoculation, Dr. Vardhan said the day India had recorded three million vaccinations, eight million were vaccinated in the entire world. India’s share was about 36%.

 Types & Stages of a Bill – Indian Polity Notes

The Indian Parliament legislates with the use of governmental acts. These acts are introduced into the Indian Constitution only after the draft bills are passed by the parliament. There are various types of bills that are introduced in either house of the Parliament to enact a law.

Types of Bills in India

There are four types of bills that are introduced in the Indian Parliament for different purposes.

The table below mentions the different types of bills and their significance:

Types of Bills in India
S.NoName of the BillSignificance
1Ordinary Bill (Article 107, Article 108)Concerned with any matter other than financial subjects
2Money Bill (Article 110)Concerned with financial matters like taxation, public expenditure, etc
3Financial Bill (Article 117 [1], Article 117[3])Concerned with financial matters (but are different from money bills)
4Constitutional Amendment Bill (Article 368)Concerned with the amendment of the provisions of the Constitution.

There are a few differences between these types of bills which are important to be understood for civil services examination. The difference between various types of bills are given in the tables below:

  • Difference between Ordinary Bill and Money Bill in India
DifferenceOrdinary BillMoney Bill
IntroductionIn either Lok Sabha or Rajya SabhaOnly in Lok Sabha
Introduced ByMinister or a Private MemberOnly a Minister
President’s RecommendationNot NeedOnly after he recommends
Rajya Sabha’s RoleCan be amended/rejected by Rajya SabhaCannot be amended/rejected by Rajya Sabha. (It has to return the bill with/without recommendations)
Can be detained by the Rajya Sabha for a maximum period of six months.Can be detained by the Rajya Sabha for a maximum period of 14 days only.
President’s AssentSent for his assent only after being approved by both the housesSend for his assent only after Lok Sabha’s approval. (Rajya Sabha approval is not required)
Can be rejected, approved, or returned for reconsideration by the President.Can be rejected or approved but cannot be returned for reconsideration by the President.
Joint Sitting of Both HousesIn case of deadlock, there is a provision of a joint sittingNo chance of disagreement, hence, no provision of a joint sitting

What Are The Important Steps in Making of a Law in India?

There are separate procedures for the enactment of the four types of bills. These procedures to enact the bills are laid down by the Indian Constitution. They are given below:

  • Stages of passing an Ordinary Bill

There are five stages through which an ordinary bill has to go through before it finally becomes an act:

StagesDetails
First ReadingA minister or a member introduces the bill in either house of the Parliament. He asks for leave before introducing the bill. He reads the title and objective of the bill. After the introduction, the bill is published in the Gazette of India Note: No discussion on the bill takes place in this stage If the bill is published in the Indian Gazette before its introduction, the minister/member does not have to ask for leave
Second ReadingStage of General Discussion- Four actions can be taken by the house on the bill: It may take the bill into consideration immediately or on some other fixed date It may refer the bill to a select committee of the House It may refer the bill to a joint committee of the two Houses It may circulate the bill to elicit public opinion Note: Select Committee- Has members of the house where the bill is introduced Joint Committee- Has members from both the houses
Committee Stage: Select Committee examines the bill thoroughly and in detail, clause by clause. It can also amend its provisions, but without altering the principles underlying it. After completing the scrutiny and discussion, the committee reports the bill back to the House.
Consideration Stage: The House, after receiving the bill from the select committee, considers the provisions of the Bill clause by clause. Each clause is discussed and voted upon separately. The members can also move amendments and if accepted, they become part of the bill.
Third ReadingOne of the two actions take place: Acceptance of the Bill (If the majority of members present and voting accept the bill, the bill is regarded as passed by the House) Rejection of the Bill Note: No amendments to the bill are allowed A bill is deemed to have been passed by the Parliament only when both the Houses have agreed to it, either with or without amendments.
Bill in the Second HouseThe first three stages are repeated here i.e.: First Reading Second Reading Third Reading The second house can take one of the four actions: It may pass the bill as sent by the first house (ie, without amendments) It may pass the bill with amendments and return it to the first House for reconsideration It may reject the bill altogether It may not take any action and thus keep the bill pending Note: The bill is deemed to have been passed if both the houses accept the bill and the amendments If the second house takes no action for 6 months, a deadlock appears which is acted upon through a joint sitting (summoned by President) of both the houses
Assent of the PresidentOne of the three actions can be taken by him: May give his assent to the bill (The bill becomes an act and is placed on statute book) May withhold his assent to the bill (The bill ends and does not become an act) May return the bill for reconsideration (The houses can/cannot make amendments and send it back to the President after which he has to give assent) Note: President only enjoys ‘Suspensive Veto.’ 
  • Stages of passing a Money Bill
Money Bill in India
Unlike Ordinary Bill, Money bill is introduced only in Lok Sabha on the recommendation of President which is a must.
The bill, moved on the recommendation of the President and introduced in the Lok Sabha is termed as a government bill. Note: All government bills are introduced only by the minister.
After Lok Sabha passes the bill, it is moved to Rajya Sabha which has only restricted powers. It cannot reject or amend the bill. Note: Rajya Sabha has to return the bill within 14 days with or without recommendations of the amendments If it does not return the bill within the prescribed days, the bill is deemed to have been passed Lok Sabha may or may not accept the amendments.
After passing through both the houses, the President’s assent is required. He can take two actions: Give assent Withhold assent Note: President can’t return the bill for reconsideration
After President’s assent, the bill becomes the act and is published in the Indian Statute Book. 
  • Stages of passing a Constitutional Amendment Bill
Constitutional Amendment Bill
IntroductionIn either house of the parliament Note: Can’t be introduced in the state legislatures
Introduced byEither by a minister or by a private member Note: It does not require prior permission of the president.
Majority NeededMust be passed in each House by a special majority, that is, a majority (that is, more than 50 per cent) of the total membership of the House and a majority of two-thirds of the members of the House present and voting
Joint SittingThere is no provision for joint sitting in case of deadlock
Role of State LegislatureIf the bill seeks to amend the federal provisions of the Constitution, it must also be ratified by the legislatures of half of the states by a simple majority, that is, a majority of the members of the House present and voting
President’s AssentHe must give his assent Note: He can’t return the bill He can’t withhold the bill unlike in the case of ordinary bills
After President’s assent, the bill becomes a Constitutional Amendment Act and the Constitution stands amended in accordance with the terms of the Act. To read more about the important amendments in Indian Constitution for UPSC, candidates may check the linked article.

This is how bills become acts and Indian Parliament legislates. Similarly, the State Legislature of India has to legislate acts and for that state government has to introduce bills. The procedure of passing a bill through the state legislature is almost similar to the central legislation. 

4. ‘Tough’ to withdraw troops from Afghanistan by May 1, says Biden

Taliban warns of consequences if U.S. fails to meet deadline

U.S. President Joe Biden has said that it would be “tough” to meet the deadline to withdraw American troops from Afghanistan by May 1, as agreed with the Taliban in a deal secured under Donald Trump.

“Could happen, but it is tough,” Mr. Biden said when asked about the May 1 deadline in a TV interview broadcast on Wednesday. “I’m in the process of making that decision now.”

The Taliban quickly reacted to Mr. Biden’s comments, with a spokesman saying there would be “consequences” if the U.S. did not stick to the agreed timetable — further raising pressure on the fragile peace process.

“The Americans should end their occupation in accordance with the Doha deal and fully withdraw their forces from Afghanistan by May 1,” Taliban spokesman Zabihullah Mujahid said.

“If they don’t do it, be it for any reason and pretexts, then they will be responsible for the consequences,” he said, adding that “the people of Afghanistan will make their decision”.

Mr. Biden also took a direct swipe at Mr. Trump’s Afghanistan policy, saying it “was not a very solidly negotiated deal” that the then-President oversaw.

“The failure to have an orderly transition from the Trump presidency to my presidency… has cost me time and consequences. That’s one of the issues we’re talking about now, in terms of Afghanistan,” Mr. Biden added.

US- Taliban Deal

Background of the Deal

  • On 11 September 2001, terrorist attacks in America killed nearly 3,000 people. Osama Bin Laden, the head of Islamist terror group al-Qaeda, was quickly identified as the man responsible.
  • The Taliban, radical Islamists who ran Afghanistan at that time, protected Bin Laden, refused to hand him over. So, a month after 9/11, the US launched airstrikes against Afghanistan.
  • The US was joined by an international coalition and the Taliban were quickly removed from power. However, they turned into an insurgent force and continued deadly attacks, destabilising subsequent Afghan governments.
  • Since then, the US is fighting a war against the Taliban.
  • Donald Trump’s 2017 policy on Afghanistan, was based on breaking the military stalemate in Afghanistan by authorising an additional 5,000 soldiers, giving US forces a freer hand to go after the Taliban, putting Pakistan on notice, and strengthening Afghan capabilities.
  • However, the US realised that the Taliban insurgency could not be defeated as long as it enjoyed safe havens and secure sanctuaries in Pakistan, the US changed track and sought Pakistan’s help to get the Taliban to the negotiating table.
  • The negotiations began in September 2018 with the appointment of Ambassador Zalmay Khalilzad to initiate direct talks with the Taliban. After nine rounds of US-Taliban talks in Qatar, the two sides seemed close to an agreement.

Salient Features of the Deal

  • Troops Withdrawal: The US will draw down to 8,600 troops in 135 days and the NATO or coalition troop numbers will also be brought down, proportionately and simultaneously. And all troops will be out within 14 months.
  • Taliban Commitment: The main counter-terrorism commitment by the Taliban is that Taliban will not allow any of its members, other individuals or groups, including al-Qaeda, to use the soil of Afghanistan to threaten the security of the United States and its allies.
  • Sanctions Removal: UN sanctions on Taliban leaders to be removed by three months and US sanctions by August 27. The sanctions will be out before much progress is expected in the intra-Afghan dialogue.
  • Prisoner Release: The US-Taliban pact says up to 5,000 imprisoned Taliban and up to 1,000 prisoners from “the other side” held by Taliban “will be released” by March 10.

Challenges in the Deal

  • One-Sided Deal: The fundamental issue with the U.S.’s Taliban engagement is that it deliberately excluded the Afghan government because the Taliban do not see the government as legitimate rulers. Also, there is no reference to the Constitution, rule of law, democracy and elections in the deal.
    • Taliban is known for strict religious laws, banishing women from public life, shutting down schools and unleashing systemic discrimination on religious and ethnic minorities, has not made any promises on whether it would respect civil liberties or accept the Afghan Constitution.
    • Therefore, Shariat-based system (political system based on fundamental Islamic values) with the existing constitution is not easy.
  • Issues with Intra-Afgan Dialogue:
    • President Ashraf Ghani faces a political crisis following claims of fraud in his recent re-election.
    • The political tussle is between Ashraf Ghani (who belongs to the largest ethnic group in Afghanistan- the Pashtun) and Abdullah Abdullah (whose base is among his fellow Tajiks, the second largest group in Afghanistan).
    • If there are any concessions made by Mr Ghani’s government to the Taliban (predominantly Pashtun) will likely be interpreted by Mr Abdullah’s supporters as an intra-Pashtun deal reached at the cost of other ethnic groups, especially the Tajiks and the Uzbeks.
    • Consequently, these ethnic fissures may descend into open conflict and can start the next round of civil war.
  • Thus, the lifting of the US military footprint and the return of a unilateral Taliban could set the stage for the next round of civil war that has hobbled the nation since the late 1970s.
  • Problem with Prisoner’s Swap: The US-Taliban agreement and the joint declaration differ:
    • The US-Taliban pact says up to 5,000 imprisoned Taliban and up to 1,000 prisoners from “the other side” held by Taliban “will be released” by March 10.
    • However, the joint declaration lays down no numbers or deadlines for the prisoner’s swap. Afghanistan President held that there is no commitment to releasing 5,000 prisoners. He also held that such prisoners’ swap is not in the authority of the US, but in the authority of the Afghan government.
  • Also, the Taliban is fragmented or divided internally. It is composed of various regional and tribal groups acting semi-autonomously.
    • Therefore, it is possible that some of them may continue to engage in assaults on government troops and even American forces during the withdrawal process.
    • It is unclear if there is a date for the complete withdrawal of US troops or for concluding the intra-Afghan dialogue, or how long the truce will hold.

Impact of the Deal on Other Stakeholders

  • US: The promise to end America’s “endless wars” in the greater Middle East region was one of the central themes of US President Donald Trump’s election campaign in 2016. This deal may demonstrate progress on that front in his bid for re-election later this year.
    • Though, the US doesn’t recognise Taliban as a state under the name of Islamic Emirate of Afghanistan (key demand of Taliban), though many experts are of the view that this deal is a little more than a dressed-up U.S. surrender that will ultimately see the Taliban return to power.
  • Pakistan: The deal provides the strategic advantage to Pakistan, who is a long-time benefactor of the Taliban.
  • China: After the launch of the China-Pakistan Economic Corridor (CPEC), Pakistan is seen as more of a protectorate state of China. Thus, China may leverage Pakistan’s influence on the Taliban, to propel its strategic projects like the Belt and Road Initiative.

Impact of this Deal on India

This deal alters the balance of power in favour of the Taliban, which will have strategic, security and political implications for India. The deal may jeopardise the key stakes of India in Afghanistan:

  • India has a major stake in the stability of Afghanistan. India has invested considerable resources in Afghanistan’s development.
  • India has a major stake in the continuation of the current Afghanistan government in power, which it considers a strategic asset vis-à-vis Pakistan.
    • An increased political and military role for the Taliban and the expansion of its territorial control should be of great concern to India since the Taliban is widely believed to be a protégé of Islamabad.
  • As Afghanistan is the gateway to Central Asia, the deal might dampen India’s interest in Central Asia.
  • Withdrawal of US troops could result in the breeding of the fertile ground for various anti-India terrorist outfits like Lashkar-e-Taiba or Jaish-e-Mohammed.
History of India-Taliban Relations India and the Taliban share a bitter history.IC-814 hijack in 1999 (India’s passenger plane was hijacked and taken to Kandahar in Afghanistan- under the control of Taliban) made India to release terrorists — including Maulana Masood Azhar who founded Jaish-e-Mohammed that went on to carry out terror attacks on Parliament (2001), in Pathankot (2016) and in Pulwama (2019).Also, the Taliban perceived India as a hostile country, as India had supported the anti-Taliban force after the 9/11 attacks.India never gave diplomatic and official recognition to the Taliban when it was in power during 1996-2001.However, as the Taliban’s role in Afgan peace process becomes inevitable, India started to make some strides towards the Taliban.Earlier, India was part of the Moscow-led talks with the Taliban in November 2018, which two former Indian diplomats attended as “non-official representatives”.India is now moving to diplomatically engage with the Taliban. India’s presence at the agreement-signing ceremony is the first sign of a possible diplomatic opening.

5. New DFI must curb reliance on foreign funds, says K.V. Kamath

India’s sovereign rating must go up at least a notch: former development banker

Making a case for an upgrade in India’s sovereign rating, former New Development Bank president K.V. Kamath on Wednesday said the new development finance institution (DFI) cleared by the Union Cabinet must be careful about preventing ‘excessive reliance’ on foreign funds.

“With all the efforts that the government is making, I would think that the sovereign rating itself would need to move up. I don’t think that they can hold India’s rating where it is; wherever you look at, this rating is misplaced by at least a notch, if not more,” Mr. Kamath said. The Economic Survey 2020-21 had also argued India’s sovereign ratings did not reflect its fundamentals. “Never in the history of sovereign credit ratings has the fifth-largest economy in the world been rated at the lowest rung of the investment-grade (BBB-/Baa3),” it had noted, adding that it also damages foreign portfolio investment flows.

Speaking at a programme titled ‘Shaping Development Finance Institutions: New Opportunities and Policy Options’ hosted by the India International Centre and RIS, Mr. Kamath said the new DFI should be able to borrow from abroad at sovereign rates but called for careful consideration before foreign capital was pursued.

“The institution will have to carefully assess if you are going to use external borrowing for rupee needs, what the total cost is and if it’s still attractive to a borrower.”

He stressed even global development banks’ soft loans were ‘not really soft’ and ‘excessive reliance on international funds’ would not be prudent.

Development Finance Institution

  • These are specialized institutions set up primarily to provide development/ Project finance especially in developing countries.
    • These DFIs are usually majority-owned by national governments.
    • The source of capital of these banks is national or international development funds.
    • This ensures their creditworthiness and their ability to provide project finance in a very competitive rate.
  • How is it different from commercial banks?
    • It strikes a balance between commercial operational norms as followed by commercial banks on the one hand, and developmental responsibilities on the other.
    • DFIs are not just plain lenders like commercial banks but they act as companions in the development of significant sectors of the economy.
  • Evolution of DFIs in India:
    • The first DFI was the Industrial Financial Corporation of India (IFC) that was launched in 1948.
    • IDBI, UTI, NABARD, EXIM Bank, SIDBINHBIIFCL etc are the other major DFIs.
    • Later several of them were converted into banks as industry like ICICI Bank, IDBI Bank etc.
  • Classification of development Financial Institutions:
    • Sector specific financial institutions: These financial Institutions  focusses on a particular sector to provide project finance. Ex: NHB is solely related to Housing projects, EXIM bank is oriented towards import export operations.
    •  Investment Institutions: These are specialized in providing services designed to facilitate business operations, such as capital expenditure financing and equity offerings, including initial public offerings (IPOs).Ex: LIC, GIC and UTI

6. Editorial-1: Re-evaluating inflation targeting

The evidence and trends for inflation in India go against the benefits claimed for the policy

As the term of the original agreement between the Centre and the Reserve Bank of India (RBI) on inflation targeting ends on March 31, evaluations of this aspect of monetary policy have begun to emerge in the public domain. Two points have been made: first, that the inflation rate has remained within the prescribed band of 2% to 6% since 2016, when inflation targeting was introduced, and secondly that the RBI has succeeded in anchoring inflationary expectations. In fact, the lower inflation rate has been seen as the outcome of the latter. Our long-term research on inflation in India suggests that the evidence, however, is not conclusive on the efficacy claimed for inflation targeting.

Though macroeconomic policy may not be of wide interest, a rudimentary understanding of what is meant by inflation targeting may be useful. Inflation targeting is only one of a set of imagined inflation control policies. Globally, inflation control became de rigueur after the high inflation that followed the oil shock in the early 1970s. In fact, well before inflation targeting was advanced, Milton Friedman had brought inflation control to the centre stage through his relentless highlighting of the ever-lurking threat of inflation.

On the other hand, in India, policymakers had engaged with inflation since the 1950s, when plans to industrialise met the challenge of inflation. Thus, scepticism about inflation targeting as a strategy of inflation control does not imply that inflation control is not a legitimate objective of economic policy. While the monetarist Friedman had prescribed money-supply targeting as the means to control inflation, inflation targeting prescribes the use of the interest rate to target inflation. So, really, what is new about inflation targeting is only the instrument chosen, not the goal itself. There is, however, the vague suggestion that it is likely to be more effective than the monetarist approach, as the instrument, the policy interest rate, is under the direct control of the central bank.

Logical vulnerabilities

However, what has remained hidden in public discourse is the economic model that underlies inflation targeting. This model revolves around the proposition that inflation reflects “overheating”, or economic activity at a level greater than the “natural” level of output, having been taken there by central banks that have kept interest rates too low, at a level lower than the “natural” rate of interest. From this follows the recommendation that the cure to inflation is to raise the rate of interest set by the central bank, the so-called policy rate, which in India is termed ‘repo’ rate. A feature of this theory of inflation is that its central construct, the natural level of output, is unobservable. This makes it next to impossible to verify the explanation, which is also self-referential. The exponent starts out by stating that the inflation rate is rising as the output is higher than its natural level, but when asked how it has been concluded that output is actually higher, the response is “for inflation is rising”. Understanding phenomena on the basis of faith is not scientific. Despite this logical vulnerability, inflation targeting is a reality in that it is the Centre’s stated policy of inflation control.

Our work demonstrates that the model that underlies inflation targeting is not statistically validated for Indian data. But instead of going into specifics, we scrutinise in this article whether recent history supports the claim that inflation targeting has been successful on the grounds that the inflation rate has remained within the band agreed to between the government and the RBI, and whether it has been achieved by “anchoring inflation expectations”.

Inflation in India entered the prescribed band of 2% to 6% two years before inflation targeting was adopted in 2016-17. In fact, inflation had fallen steadily since 2011-12, halving by 2015-16. This by itself suggests that there is a mechanism driving inflation other than what is imagined in inflation targeting.

The view is further strengthened by the finding that the decline in inflation over the five years concerned was led by the relative price of food. While falling food-price inflation per se does not rule out the possibility that expectations of inflation may have fallen in this period, it would be difficult to explain why expectations would have fallen so sharply even in the absence of inflation targeting, considered essential for anchoring expectations. Recall that the adoption of the policy in 2016 came after inflation had entered the prescribed band. RBI data on household expectations show them remaining well above 6% for twelve years up to 2020. Finally, it is the flaring up of both inflation and inflation expectations after March 2020, when the COVID-19 lockdown was announced, that makes it difficult to believe the thesis of an “overheating” economy. Why did expectations soar if they had been anchored through inflation targeting? On the other hand, we can explain the flaring up of inflation in terms of food prices, as supply chains were disrupted due to the lockdown.

In conclusion, for the sake of argument, let us assume that over the past five years, inflation in India has been controlled via inflation targeting. It may then be asked what the benefits of this have been. We can think of five variables of interest in this context, namely growth, private investment, exports, non-performing assets (NPAs) of commercial banks, and employment.

Conflicting patterns

The economy’s trend rate of growth actually began to decline after 2010-11. So, inflation targeting could not have caused it, but it is of interest that sharply falling inflation could do nothing to revive growth, belying the proposition that low inflation is conducive to growth.

For investment, there is reason to believe that higher interest rates, the toolkit for inflation targeting, may have been harmful. The swing in the real interest rate of over 5 percentage points in 2013-14 was powered further in 2016, when inflation targeting was adopted, and could have contributed to a declining private investment rate. It is interesting that policy entrepreneurs assert that the benefits of low inflation may be considerable for private investment.

We need to say nothing about exports and employment, except that they had fared poorly since inflation targeting became official.

Finally, NPAs. It has long been recognised that a central bank focusing on inflation may lose control of financial stability. NPAs have grown since 2016, and the cases of IL&FS, PMC Bank, PNB and YES Bank suggest that poor management and malfeasance in the financial sector could escape scrutiny when the central bank hunkers down to inflation targeting.

We end with two points. Inflation control will always be relevant but there is no conclusive evidence that the policy has worked in India. Secondly, the presumed benefits of low inflation are yet to surface. So, we should guard against the possibility that inflation targeting may deliver the worst of all worlds, i.e., raising interest rates, with all negative consequences, without lowering inflation. Lastly, assuming that the decline in inflation in India is due to inflation targeting would stand in the way of acknowledging the source, the vagaries of the price of food.

7. Editorial-2: Looking beyond privatisation

Placing PSBs in the hands of private players is not a panacea for India’s banking sector woes

In the recent Budget session, the Union government announced its intent to privatise Public Sector Banks (PSBs). While improving efficiency has been cited as the reason for this move, it is not clear whether privatisation brings efficiency or reduces associated risks. Around the world, innumerable private banks have failed, thus challenging the notion that only private banks are efficient. Similarly, if private enterprises are the epitome of efficiency, why do private corporate entities have such large volumes of NPAs?

Bank nationalisation ushered in a revolution for India’s banking sector. Before nationalisation, barring the State Bank of India, most banks were privately owned and they largely benefited the rich and the powerful. The nationalisation of 14 private banks in 1969, followed by six more in 1980, transformed the banking sector, created jobs, extended credit to the agriculture sector and benefited the poor. Areas that had so far been neglected, including agriculture, employment-generating productive activities, poverty alleviation plans, rural development, health, education, exports, infrastructure, women’s empowerment, small scale and medium industry, and small and micro industries, became priority sectors for these banks.

Equitable growth

The move also helped in promoting more equitable regional growth, and this is evident from RBI data. There were only 1,833 bank branches in rural areas in the country in 1969, which increased to 33,004 by 1995 and continued to grow over the next decades. Banking services also reduced the dependence on moneylenders in rural regions. Nationalised banking improved the working conditions of employees in the banking sector, as the state ensured higher wages, security of services, and other fringe benefits.

As an institution, PSBs are vehicles of the Indian economy’s growth and development, and they have become the trustees of people’s savings and confidence. The PSBs played a huge role in making the country self-sufficient by supporting the green, blue, and dairy revolutions. They have also contributed significantly to infrastructural development.

Public sector banks in India are currently earning considerable operating profits, to the tune of ₹1,74,390 crore in 2019-20 and ₹1,49,603 crore in 2018-19. Why is the government then, instead of strengthening PSBs, starving them of the required capital and human resources through disinvestment and the proposed privatisation? Placing such a huge network of bank branches and the infrastructure and assets in the hands of private enterprises or corporates may turn out to be an irrational move. It could lead to denial of convenient and economical banking services to the common man; the risks of monopoly and cartelisation may only complicate the issue.

Stringent laws

Furthermore, in the context of privatisation and efficiency, it is unfair to blame PSBs alone for the alarming rise of NPAs. On the contrary, stringent measures are required to recover large corporate stressed assets, which is a key concern for the entire banking sector. This must include strong recovery laws and taking criminal action against wilful defaulters. So far, the government has not exhibited a firm willingness to implement these measures. Wilful default by large corporate borrowers and subsequent recovery haircuts, imposed through the ill-conceived Insolvency and Bankruptcy Code, has resulted in a heap of write-offs, putting a big dent on the balance sheets of PSBs. This has not only affected the profitability of the banks, but has also become an excuse to allege inefficiency.

There is an urgent and imperative need to bring in a suitable statutory framework to consider wilful defaults on bank loans a “criminal offence”. A system to examine top executives of PSBs across the country will also help in improving accountability. But privatisation of PSBs is not a definitive panacea for the problems of the banking sector in India.

8. Editorial-3: Aligning a missile deal with destination Manila

India’s emergence as a regional security provider will depend on the way it handles the BrahMos sale to the Philippines

Earlier this month, India and the Philippines signed the “Implementing Arrangement” for “procurement of defense material and equipment procurement”. This agreement lays the groundwork for sales of defence systems such as the highly anticipated export of the BrahMos cruise missile, through the government-to-government route. As the Secretary, Philippine Department of National Defense publicly acknowledges, the archipelagic country’s intention of purchasing the missile, and a potential export deal for India, moves one step closer to reality. This deal will be of great significance for multiple reasons, and even though the procurement process is progressing steadfastly, there are many challenges that lie ahead.

Features of the system

Research and development of the BrahMos cruise missile systems began in the late 1990s. Manufactured by BrahMos Aerospace Limited, a joint venture between the Defence Research and Development Organisation and the joint stock company Military Industrial Consortium NPO Mashinostroyenia (earlier known as the Federal State Unitary Enterprise NPOM of Russia), this is the first supersonic cruise missile to enter service. Capable of attaining a speed of Mach 2.8 (almost three times the speed of sound), it has a range of at least 290 km (a new version can reach up to 400km).

Travelling with such velocity means that it would be difficult for air defence systems utilising surface-to-air missiles to intercept the BrahMos while making it easier for it to target and neutralise advanced fighter jets such as the Chinese J-20 fighter aircraft moving at less than Mach 2. Even so, efforts to increase the speed and range of the missile in its next iterations are under way, with a goal of achieving hypersonic speeds (at or above Mach 5) and a maximum range of 1,500 km.

Early naval and land variants of the BrahMos were inducted into service by the Indian Navy in 2005 and the Indian Army in 2007. Subsequently, an air-launched variant was successfully tested in November 2017 by the Indian Air Force from its Sukhoi-30MKI fighter jet, giving the missile a dominating presence in all three domains.

Export as a goal

These advanced and powerful capabilities of the BrahMos not only augment the strength of the Indian military but make it a highly desirable product for other countries to procure as well. Exporting the system, hence, has been on the agenda for more than a decade. Doing so would boost the credibility of India as a defence exporter, help it meet the target of $5 billion in defence exports by 2025, and elevate its stature as a regional superpower. Countries such as Vietnam, the Philippines, Indonesia, the United Arab Emirates, Argentina, Brazil, and South Africa have so far shown an interest in acquiring the systems.

Geo-political impact

The implications of the Philippines becoming the first country to import the BrahMos would be wide-ranging and consequential in the Indo-Pacific. To begin with, it would caution China, with whom the Philippines has been engaged in a territorial conflict in the South China Sea, and act as a deterrent to Beijing’s aggressive posturing. Indeed, this is why China has been wary of the Association of Southeast Asian Nations (ASEAN) countries acquiring defence systems such as the BrahMos. Further, taking lessons, other nations threatened by Chinese belligerence may come forward to induct the BrahMos into their arsenal, thereby boosting India’s economic, soft, and hard power profile in the region and providing the Indo-Pacific with a strong and dependable anchor with which they can protect their sovereignty and territory.

Possible hurdles

The Government of India has prioritised making the country ‘Atmanirbhar’ in the defence manufacturing sector and establishing itself as a major defence exporter. The Philippines, on the other hand, has decided to buy the BrahMos out of geopolitical and strategic necessities. Nonetheless, two major roadblocks still remain in the Manila deal.

The first is the Countering America’s Adversaries Through Sanctions Act (CAATSA), which aims to sanction individuals and entities who engage in a “significant transaction” with a listed entity. So far, Turkey and China have been penalised under CAATSA for purchasing the S-400 Triumf air defense systems from Russia. NPO Mashinostroyenia is one of the listed Russian entities. And since 65% of the components, including the ramjet engine and radar seeker used in the BrahMos, are reportedly provided by NPO Mashinostroyenia, the export of the missile systems may attract sanctions. Remarkably, the United States, of which India is a major defence partner, has maintained ambiguity over whether it will introduce sanctions over India’s acquisition of the S-400, licensed production of the AK-203 assault rifle, and export of the BrahMos. Hesitant of being sanctioned themselves, countries may shy away from purchasing the BrahMos. However, there is an excellent case for India to receive a waiver from CAATSA, especially vis-à-vis the BrahMos that can help contain a confrontational China.

The second issue pertains to financing. A regiment of the BrahMos, including a mobile command post, four missile-launcher vehicles, several missile carriers, and 90 missiles, reportedly costs around $275.77 million (₹2,000 crore). Ravaged by the COVID-19 pandemic, many countries which are interested in the BrahMos would find it difficult to purchase it. The cost of the systems has been a major hurdle in moving forward to reach a deal with the Philippines. To remedy this, India has offered a $100 million line of credit, and the Philippines is thinking of purchasing just one battery of the BrahMos, consisting of three missile launchers with two to three missile tubes each.

With India determined to develop itself as a hub of defence manufacturing, how it handles the sale of the BrahMos would be an important factor in its potential emergence as a net provider of regional security in the Indo-Pacific.

9. Editorial-4: Allaying concerns

Public trust is a key ingredient to successful vaccination programmes

A little over 392 million doses of vaccine have been administered globally, according to the Bloomberg Vaccine Tracker, with India accounting for around 9% of them. In the last week, there have been a flurry of reports from Europe, of blood clots developing in a very small fraction of those vaccinated and leading to a cascade of European countries announcing a temporary halt to their vaccination programmes involving the AstraZeneca (AZ) vaccine. WHO and the European Medicines Agency have underlined that there is no causal link between vaccines and the occurrence of such clots. In fact, there are less than 40 such occurrences reported so far, and that is much below the background of about 1,000 to 2,000 blood clots every single day in the general population, say studies based on the U.S. population. These organisations advocate that the ongoing vaccination drives continue, even accelerate, as the rate of vaccination is not keeping pace with what is required to control the pandemic. However, there are good reasons too for the countries to have called for a temporary halt. The AZ, Pfizer and Moderna vaccines have been released under emergency use authorisations, meaning that the entire profile of risks associated with them have not been thoroughly studied. History is replete with instances of vaccines that have been taken off even years after approval after a slight increase in untoward complications. As of now, the risk of dying from serious COVID-19 far outweighs that from vaccine reactions and it is such a calculation that weighs on the minds of regulators before approving vaccines.

Unlike drugs administered to the sick, vaccines have a higher bar of proving themselves safe as they are given to the healthy. Regulators of all countries rely on the experiences of others, as exemplified in India alone where it was AZ trials in the United Kingdom that paved the way for approval in India. Therefore, a warning in one country must immediately activate the sensors in another. India has a long experience with vaccinations as well as expertise in evaluating risk; however, transparency and prompt data sharing, thereby building public trust, is not one of its strong suits. This was evidenced by the approval of vaccines in spite of scant efficacy data. There is almost no information by the National Committee on Adverse Events Following Immunisation on the nature of serious adverse events following immunisation. This is in contrast to the frequent analyses shared by organisations such as the U.S. Centers for Disease Control and Prevention on adverse events. Public trust is a key ingredient to successful vaccination programmes and this can be only earned by the government’s zealous attention to allaying concerns.

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