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Daily Current Affairs 21.09.2021 (The end of the doing business rankings, Western Ghats offer major additions to flora)

Daily Current Affairs 21.09.2021 (The end of the doing business rankings, Western Ghats offer major additions to flora)

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1.Western Ghats offer major additions to flora

Botanical Survey of India says 202 species were discovered across the country in 2020

The Botanical Survey of India, in its new publication Plant Discoveries 2020 has added 267 new taxa/ species to the country’s flora.

The 267 new discoveries include 119 angiosperms; 3 pteridophytes; 5 bryophytes, 44 lichens; 57 fungi, 21 algae and 18 microbes.

In 2020, 202 new plant species were discovered across the country and 65 new records were added.

With these new discoveries the latest estimate of plant diversity in India stands at 54,733 taxa including 21,849 angiosperms, 82 gymnosperms, 1,310 pteridophytes, 2,791 bryophytes, 2,961 lichens, 15,504 fungi, 8,979 algae and 1,257 microbes.

“The year 2020 will remain marked in global history for the outbreak of the COVID-19 pandemic, with the havoc it caused and still continues in 2021. This overwhelming addition of 267 plant taxa to Indian flora, which were discovered as either new species or as new distributional records for India, is nowhere less than the average number of new plant discoveries made from India during the past one-and-half decade,” said A.A. Mao, Director of the Botanical Survey of India.

Balsam blossoms

Among the new discoveries this year, nine new species of balsam (Impatiens) and one species of wild banana (Musa pradhanii) were discovered from Darjeeling and one species each of wild jamun (Syzygium anamalaianum) from Coimbatore in Tamil Nadu and fern (Selaginella odishana) were recorded from Kandhamal in Odisha. There are 14 new macro and 31 new micro fungi species recorded from various parts of India.

An assessment of the geographical distribution of these newly discovered plants reveals that 22% of the discoveries were made from the Western Ghats followed by the Western Himalayas (15%), the Eastern Himalayas (14%) and the Northeast ranges (12%). The west coast contributed 10% while the east coast contributed (9%) in total discoveries; the Eastern Ghats and south Deccan contribute 4% each while the central highland and north Deccan added 3% each.

Botanical Survey of India (BSI)

  • BSI is the apex research organization under Ministry of Environment and Forests (MoEFCC) for carrying out taxonomic and floristic studies on wild plant resources of country.
  • It was established in 1890 with objective to explore plant resources of country and to identify plants species with economic virtues.
  • It has nine regional circles situated at different regions of the country.

Primary functions of BSI

  • Exploration, inventorying and documentation of phytodiversity in general and protected areas, hotspots and fragile ecosystems in particular
  • Publication of National, State and District Floras.
  • Identification of threatened and red list species and species rich areas needing conservation.
  • Ex-situ conservation of critically threatened species in botanical gardens.
  • Survey and documentation of traditional knowledge (ethno-botany) associated with plants.
  • Develop National database of Indian plants, including herbarium and live specimens, botanical paintings and illustrations, etc.

2.The end of the doing business rankings

The Ease of Doing Business index was plagued with problems and deserved to be scrapped

On September 16, the World Bank Group scrapped its flagship publication, the ‘Doing Business’ report. This report publishes the influential annual ranking of countries on the Ease of Doing Business (EDB) index. The Group acted on its commissioned study to examine the ethical issues flagged in preparing the 2018 and 2020 editions of the EDB index. The allegation surrounding Kristalina Georgieva, Managing Director of the International Monetary Fund, is the proximate reason for scrapping the publication. As Chief Executive Officer of the World Bank in 2018, Ms. Georgieva is accused of having exerted pressure on the internal team working on the Doing Business report to falsely boost China’s rank by doctoring the underlying data. Similarly, tensions were also reportedly brought to bear in the case of Saudi Arabia’s rank, among others.

How the index works

The World Bank’s decision has wide ramifications, as the index serves varied purposes. Many countries showcase improved ranking to signal market-friendly policies to attract foreign investments. National leaders often set EDB rank targets. This helps them measure domestic policies against global “best practices” and browbeat domestic critics. Prime Minister Narendra Modi, for instance, wanted his administration to ensure that India breaks into the top 50 ranks of the EDB index. Some countries seem to use their political heft to improve their rank, polish their international image and sway public opinion (as appears to be China’s case).

The EDB index ranks countries by the simplicity of rules framed for setting up and conducting businesses. Peruvian economist Hernando De Soto’s theory underpins the index. The theory claims that secure property rights with minimal state interventions are a precondition for a free market to flourish. Management consultants and corporate lawyers collect the information for the index on time required for regulatory compliance — as per the statute (de jure) and not as practised (de facto) — from select cities and larger firms.

Advanced countries usually hold the index’s top ranks. India ranked low, around 130-140, till 2014. However, it zoomed to the 63rd position in 2019-20 (see table). Showcasing the accomplishment, India has claimed success of the ‘Make in India’ campaign. The flagship initiative, launched in 2014, sought to raise the manufacturing sector’s share in GDP to 25% (from 16-17%) and create 100 million additional jobs by 2022 (later revised to 2025).

The success is absent on the ground, however (see table). The annual growth rate in GDP manufacturing (at constant prices) fell from 13.1% in 2015-16 to (-) 2.4% in 2019-20. Net FDI inflow to GDP ratio has fluctuated around 1.5%. The fixed investment to GDP ratio (at current prices) fell from 30.1% in 2014-15 to 26.9% in 2019-20. Why is there such a disconnect between the stellar rise in EDB index rank and economic outcomes?

The theory underlying the EDB index could be suspect, the measurement and data could be faulty, or both. For example, China’s phenomenal economic success, especially its agricultural performance (after the reforms in 1978), is perhaps the most unmistakable evidence demonstrating that lack of clarity of property rights may not be the binding constraint in a market economy. What matters is economic incentives. Measuring regulatory functions underlying the index could be tricky and subjective and possibly politically motivated as well, as the controversies surrounding the index seem to suggest. Instances of data manipulation brought to light by the independent investigating agency seems to vindicate such a view.

The EDB index also seems vulnerable to a tweaking of the underlying method. For instance, India’s improved ranking was reportedly an outcome of such an effort. When the index was re-estimated with unchanging procedures, the needle hardly moved. Similarly, Chile’s rank on the EDB index sharply rose when the conservative government was in power and went down when the socialists were ruling despite no changes in policies and procedures. This was reportedly the result of the fine-tuning of the methodology and had profound political implications. Former World Bank Chief Economist, and later Nobel Laureate, Paul Romer, publicly apologised to Chile’s socialist President for World Bank’s less-than-professional conduct in preparing the index.

Weakening labour regulations

Closer home, India has weaponised the mandate to improve the rank in the EDB index to whittle down labour laws and their enforcement and bring them close to the free-market ideal of ‘hire and fire’. Most States have emulated Maharashtra’s lead of administrative fiat, which renders labour laws toothless by dismantling official labour inspection systems and allowing employers to file self-regulation reports.

The government has farmed out critical safety regulations such as annual inspection and certification of industrial boilers to ‘third party’ private agencies (compliance reportedly honoured more in the breach than in observance).

The Labour Department’s inspection is now not mandated; it is optional only by prior intimation to employers. Such abdication of the government’s responsibility towards workers has reportedly affected industrial relations. The workers’ strike at Wistron’s iPhone assembly factory in Karnataka last year is an example. Further, severe industrial accidents are rising, damaging life and productive industrial assets. Though comprehensive data are lacking, available evidence indicates a sharp upturn in such accidents in recent years, which may be associated with the lack of independent inspections and employers’ self-reporting of labour law compliance.

The World Bank’s decision to scrap its annual publication Doing Business report is welcome. Investigations into “data irregularities” in preparing the EDB index, as brought out by the independent agency, seems to confirm many shortcomings repeatedly brought to light for years now. The index appears motivated to support the free-market ideal. It is dressed up under scientific garb and is underpinned by seemingly objective methods and data collection. Strong leaders (and motivated officials) seem to have used their position to manipulate the index to suit their political and ideological ends.

India claimed the success of its Make in India initiative by relying on its ranking on the EDB index without tangible evidence. It weaponised the index to weaken labour regulations. Handing over law enforcement to employers by self-reporting compliance seems to have increased industrial unrest and accidents. It perhaps calls for honest soul-searching as to what havoc a questionable benchmark can wreak.

Ease of Doing Business Report

  • The report was introduced in 2003 to provide an assessment of objective measures of business regulations and their enforcement across 190 economies on ten parameters affecting a business through its life cycle.
  • The report measures the performance of countries across 10 different parameters namely-
    • Starting a Business,
    • Dealing with Construction permits,
    • Electricity availability,
    • Property registration,
    • Credit availability,
    • Protecting minority Investors,
    • Paying Taxes,
    • Trading across borders,
    • Contracts enforcement, and
    • Resolving Insolvency.
    • This time two more parameters were considered namely, employing workers and contracting with the government but these are not included in the score and rankings.
  • It ranks countries on the basis of Distance to Frontier (DTF) score that highlights the gap of an economy with respect to the global best practice. For example, a score of 75 means an economy was 25 percentage points away from the frontier constructed from the best performances across all economies and across time.
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