SECURE SYNOPSIS: 12 SEPTEMBER 2017
NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same time gives you extra points in the form of background information.
Topic: Poverty and developmental issues
“We should measure the health of our society not at its apex, but at its base.”
: Andrew Jackson
India is a vast country endowed with rich resources, relief features and biodiversity. It is called a melting pot of various castes, creeds and communities. Social and economic inequalities have existed in India from the ancient past and are still continuing today in varying degrees. Inequality is the difference in social status, wealth, or opportunity between people or groups. The inequality acts as the cause and result of various socio economic challenges.
There is a rural and urban divide in India. While the cities are developing fast on all major parameters, the villages remain backward.
It is a disturbing fact that the economic development in India has not been broad-based. There are regional disparities, viz. some regions are much more developed than others which remain backward. States like Punjab, Haryana, Tamil Nadu, Maharashtra, Karnataka and Gujarat are developed in every sense of the word. Industry, agriculture and services network in these states are adequate.
Implications of inequality:
High and sustained levels of inequality, especially inequality of opportunity can entail large social costs. Entrenched inequality of outcomes can significantly undermine individuals’ educational and occupational choices.
Inequality of outcomes does not generate the “right” incentives if it rests on rents. In that event, individuals have an incentive to divert their efforts toward securing favored treatment and protection, resulting in resource misallocation, corruption, and nepotism, with attendant adverse social and economic consequences.
Income inequality (as measured by the Gini coefficient, which is 0 when everybody has the same income and 1 when one person has all the income) negatively affects growth and its sustainability.
Higher inequality lowers growth by depriving the ability of lower-income households to stay healthy and accumulate physical and human capital.
Inequality dampens investment, and hence growth, by fueling economic, financial, and political instability.
Ways to tackle inequality in India:
Despite being important to the electorate, inequality is absent from major political campaigns. There is need to make inequality as a political agenda.
Government should work towards reducing asset inequality through redistributive land reforms but also through rationalising taxes, preventing monopoly of control over water, forests and mineral resources and reducing financial concentration.
There is need to tackle bias against caste and gender first of all by recognising the value and dignity of all work (including unpaid work) and all workers (including those in the most difficult arduous and degraded occupations).
Inequality can be reduced by providing greater voice to traditionally oppressed and suppressed groups, including by enabling unions and association, and making public and corporate private activity more transparent and accountable to the people generally.
The media in India plays a role in sustaining inequality. This is becoming an urgent problem. We must take measures to reduce corporate takeover and manipulation of mass media.
Policymakers should not forget that technology has helped in reducing some of the access barriers in India, particularly in relation to access to information. Policymakers should focus on making technology cheaper and deepening its penetration.
As far as India is concerned, most of the public places are inaccessible to people with disabilities. As per the 2011 census, India has about 2.7 million people with disabilities, and only a handful of those enjoy education and/or employment.
The gender inequality can be reduce by woman empowerment in genuine manner with a right based approach, rather that treating woman as a beneficiary of public schemes.
India cannot be included in the list of developed countries until all sections of its people are benefited from the fast economic progress which the country has been experiencing for the last decade or so. The executives and officials should implement such a policy whereby the weaker sections are economically uplifted and are able to lead a better life-enjoying at least the basic amenities and look higher in near future.
Topic: Indian Constitution- historical underpinnings, evolution, features, amendments, significant provisions and basic structure.
What is BIT?
Bilateral investment Treaties (BITs) are agreements between two countries for the reciprocal promotion and protection of investments in each other’s territories by individuals and companies situated in either State. They provide treaty based protection to foreign investment. The BITs are thus bilateral agreements by countries to protect the investment by each country’s investors in the other country. Though they are signed by governments, their beneficiaries are business entities.
New Model Bilateral Investment Treaty (BIT)
The government had brought a new Model Bilateral Investment Treaty (BIT) in 2015 and it became effective from April 2017 onwards, replacing the earlier framework. As a result of this change, new investment into the country has to be treated under the revised guidelines and negotiations should be started with partner countries.
Why the new Model BIT?
Main reason for bringing the Model BIT was the constant suing of the country by foreign firms. India was one of the most sued countries during 2015 and 2016. The government thus has modified the existing 1993 BIT framework and brought out the 2015 Model BIT. The move is important as it will help the country to make its treaty more specific in international arbitrations. The textual consistency of a countries’ BIT determines its success in BIT negotiations and disputes.
Current Discourse about BIT and issues involved:
Most existing BITs entered into at a time when India was keen to attract foreign investment, their provisions largely favour investors and do not adequately safeguard India’s legitimate concerns. As a result regulatory action has often been made the subject of BIT claims.
Hence appropriate dispute management requires serious and immediate consideration with respect to BIT.
The committee under Justice B N Krishna emphasizes a five-pronged dispute management strategy comprising a
- Focus on dispute management procedures
- A nodal agency representing the state
- Coordination at national and sub-national levels
- Counsel with special expertise
- Adequate funding for dispute resolution
There is the discussion about creation of the post of an international law adviser (ILA) with the rank of additional solicitor general, who shall be responsible for advising the government and coordinating its dispute resolution strategy.
The committee also recommends the creation of a five-member permanent inter-ministerial committee (IMC), comprising representatives from the ministries of finance, external affairs, law and justice, the ministry/department directly involved in the dispute, and the ILA as member-secretary, to effectively manage BIT disputes.
Standard procedures governing the conduct of India’s defence and inter-ministerial cooperation is another area for improvement while dealing with BITs.
Need has been expressed at national level that the government must establish a clear channel of communication for investors with grievances by notifying a nodal agency and a single point of contact in existing BITs.
Actions taken by state or local government agencies in respect of foreign investments without sufficient consideration of liability under BITs may put the Central government in the unenviable position of facing and defending large claims. A procedure could be established whereby state or local government agencies consult the nodal agency/the ILA prior to taking any action that may affect BIT commitments.
Features of Model BIT, 2015
The Model Treaty brings several provisions either new or modifications of the existing one. Important features are mentioned below.
- Enterprise based definition of investment instead of asset based definition:
The Model has adopted an ‘enterprise-based’ definition of investment that under which investment is treated as the one made by an enterprise incorporated in the host state. Under the earlier ‘asset based definition’ of investment included intellectual property and other assets that whereas these assets are not considered as assets under the new definition. The objective of adopting enterprise-based approach is to narrow the scope of protected investments and reduce the potential liability of the state under Investor-state dispute settlement (ISDS) claims.
- Exclusion of MFN treatment: The most important feature of the amended model is that it dropped the Most Favoured Nation (MFN) status previously included.
- State government as stake holders: Actions of the state Governments are included under the Model BIT.
- Fair and equitable treatment (FET): The Model BIT links Fair and Equitable Treatment to international laws. This is aimed to counter a broad interpretation and risk misuse.
5: Non-Discriminatory Treatment: The Model BIT includes a new clause on non-discriminatory treatment for compensation of losses.
- The Model BIT incorporates a clause for transparency, requiring the Parties (government and regulators) to ensure that all the laws, regulations, procedures and administrative rulings regarding matters covered in the BIT are published or are available for interested persons to get acquainted with them.
- The Model BIT mandates foreign investors to voluntarily adopt internationally recognized standards of corporate social responsibility.
- The Model BIT stipulates that the aggrieved investor should use all local remedies as well as negotiations and consultations initiating arbitrations against the host State.
All these provision though provide improvement on the previous BITs model, much needs to be done as far as the existing challenges about BITs are concern. The implementation of recommendations by Justice B N Krishna committee can solve the issues and create the positive atmosphere about the international investment in India.
Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
After the Doklam issue and recently happened 9th BRICS conference it can be rightly said that is the win diplomacy for both India and China. The future of Chinese existence in Doklam region cannot be predicted at this movement, but it has given a very positive message at international front about the diplomatic success of two string nations in Asia. In this environment, The developing relations between India and Japan are equally encouraging.
India Japan relations: encouraging scenario
Narendra Modi launched the Asia-Africa Growth Corridor, a project New Delhi and Tokyo have conceived together.
Ahmedabad-Mumbai bullet train will probably reassert Japan’s will to build an ambitious strategic partnership with India. The two countries are quietly firming up plans to take their ties “beyond the bilateral” in the form of cooperation in building infrastructure and connectivity in 3rd countries.
Recently the PM of Japan called for boosting the country’s defenses in the face of North Korean threats, warning that Tokyo needs to be able to protect itself.
The open sky agreement between India and Japan is also expected to bring down airfares , encourage connectivity and passenger travel between the two countries resulting in reduction in airfares on these routes.
Recently, India and Japan came together to deepen security linkages as well. This included collaboration on research into unmanned ground vehicles and robotics and the possibility of joint field exercises between their armies.
Both countries have reaffirmed their commitment to work together for India to become a full member in multilateral export control regimes such as the NSG, Wassenaar Arrangement and the Australia Group.
All these positive vibes in India Japan relations must not be seen as an option to India China relation or the strategy to challenge China, because:
- China is strongest economy in Asia and holds immense potential to be so in coming future as well.
- It is the largest trading partner of India, India simply cannot afford to economic cost of turning away from China in possibility of future opportunities.
- The border dispute between India and China are not fully solved. The Chinese behaviour about the border aspects can hardly predicted and thus it is always better to keep communication channels open for dialogues between two countries.
- The BRICS coalition is taking a very positive as it can be seen in recent success of 9th BRICS summit held in China. The decision to designate Pakistan based organisations as “terrorist” Islamist groups including the LeT, the Haqqani network, the TTP and Jaish-e-Mohammed is success for Indian side.
- The Chinese stake at various locations such as Hambantota deep sea port in Srilanka and Gwadar cannot be challenged by India.
All these aspects clearly indicate the Chinese strength and capabilities. India needs to balance the good relations with both Japan and China and must not see them as contrary to each other. It is not necessary always to choose between the two. Both China and Japan are important partners for India and thus a rational diplomatic strategy for balance is requirement of contemporary critical issues.
Topic: India and its neighborhood- relations.
Afghanistan’s strategic position at the crossroads of so many trade routes has for centuries made it vulnerable to invasion by distant as well as neighbouring powers, and this situation persists today. A proper understanding of this, demands a wider understanding of the whole region’s major players, their current and future strategies, both locally and globally. India is one of the important stakeholders at international forum trying to bring peace and stability in Afghanistan.
Importance of Afghanistan for India:
During the 1980s and 1990s, because of local and regional developments, India had lost contact with the governments and people in these two countries. Now, New Delhi is trying to re-establish the old ties.
India has invested $10.8 billion in Afghanistan which includes setting up of Iron mines, 6 steel plants and 800 Mega Watt power plants, hydroelectric power projects, roads and other investments. India is also involved in many projects like building hospitals and parliament building.
The Salma Dam known also known as Afghanistan-India friendship dam took 40 years for its completion. India also sees Afghanistan as an essential component of the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline. To address its energy needs to sustain its economic growth, pipelines from Iran and Central Asia would be extremely important.
Afghanistan is also extremely interested in becoming the transit country for not only gas, but also an electricity grid. The CASA 1000 is a parallel initiative, linking Central Asia and South Asia, especially Afghanistan and Pakistan, with the electricity grid in Uzbekistan, Tajikistan and Turkmenistan.
India would like to see a stable and democratic government in Afghanistan and making continuous efforts for it.
Another issue is connectivity where India is helping Afghanistan-Iran Connectivity. India is building Chabahar port in Iran and has built the zaranj delaram highway.
The development of Chabahar Trilateral Agreement between India, Afghanistan and Iran will prove to be a game changer.
India’s current plans about Afghanistan:
There is the significant shift going on in India’s policy towards both Afghanistan and Pakistan. In contemporary context, substantive strategic engagement with Afghanistan is a necessary component of India’s Pakistan policy.
India can certainly develop some leverage and influence the outcomes in Afghanistan and the Subcontinent’s north-west through purposeful actions on the ground. India’s has always been sensitive to Pakistan’s neuralgia about Delhi’s expanding role in Afghanistan.
The recent announcement by United States to continue its military presence in Afghanistan complicates the India’s further role in Afghanistan.
India continues to confirm its strong presence in Afghanistan matters by using its inherent soft powers. This relation has helped India to criticised terrorism from international forum as well.
There is huge scope for India to work with Afghanistan in terms of expertise that India can provide in democratic institutional management and civil services establishments.
In the light of recent Doklam standoff and BRICS summit India needs to leverage its best diplomatic skills while dealing with Afghanistan as Afghanistan is not just corridor to central Asia but also the emerging nation in Asian continent which India must continue and enhance its bilateral relations.
Topic: India and its neighborhood- relations.
Introduction :- The 2015 Rohingya refugee crisis refers to the mass migration of thousands of Rohingya people from Myanmar (also known as Burma) and Bangladesh in 2015, collectively dubbed “boat people” by international media. Nearly all who fled traveled to Southeast Asian countries including Malaysia, Indonesia and Thailand by rickety boats via the waters of the Strait of Malacca and the Andaman Sea.
Why no country wants Rohingya’s :-
- Lack of citizenship
Myanmar doesn’t accept Rohingya’s as their own citizen. And from here itself starts the problem, they are refugees in their own country. Even the name Rohingya is taboo in Myanmar.
- Many of the neighbouring nations already host Rohingya’s:
Many of us might be appalled by the action of countries like Malaysia and Thailand, but we need to remember that these nations already host large numbers of Rohingya’s. For example Malaysia hosts around 40,000 Rohingyas.
- Absence of support from rich neighbouring nations:
In Asia-Pacific region we have a few rich nations who could extend some helping hands like China, Japan, Australia, Singapore and India. But many problems prevail like China is behaving in its own interest, Singapore and Japan have no refugee policy. Australia which is already having tough policy in refugees including opening offshore refugee detention centre has been of no help. New Zealand has no independent stand of its own
- Refugee status and international refugee conventions:
Most of these nations are not signatory of Convention on status of refugees, so for them everyone entering their borers without a paper is illegal migrant. They are illegals and hence put in ‘detention centers’ and then sent back to fields of Myanmar.
- Muslim identity of Rohingya’s also make other countries suspicious about their appearance. The Islamophobia and issues of terrorism associated make countries feel reluctant to accommodate Rohingya’s.
Why deportation of Rohingya not easy :-
- The deportation plan is worrisome as Myanmar had in the past refused to accept the Rohingya as its citizens.
- The Indian government had started to make noises about the deportation of Rohingya refugees just before a terrorist attack by Rohingya militants led to a massive security crackdown in Myanmar’s Rakhine state. Deporting Rohingy’s in such horrific situation is against humanist stand.
- India has never signed the UN Refugee Convention, which spells out the rights of refugees and the responsibilities of countries. Nor does it have a domestic refugee law. Hence India cannot carry out deportations of Rohingyas as per international law.
- India has always stood for humanitarian assistance and deporting Rohingya’s can accuse India of being intolerant or inhuman in dealing with Rohingyas.
India’s stance till now:-
- India refused to let the Rohingya refugees enter their Country, however later it was found that around 40,000 Rohingya’s immigrants have taken shelter in Assam, West Bengaland Jammu & Kashmir. The news however created a dissatisfaction among general public that Muslims entertainment in Jammu will change the Demography of Hindu Majority Jammu and may lead to violence in the future by giving reference to the exodus of Kashmiri Pundits by Kashmiri Muslims earlier.
- On September 14, Govt of India begin Operation Insaniyat as Humanitarian assistance to Bangladesh Govt to manage the huge Rohingya refugee influx. Indian foreign ministry stated that India will provide free food materials, tea, mosquito nets and technical assistance to Govt of Bangladeshand Rohingya refugees.
Conclusion :– Enforcing the laws in the case of illegal migrants should not be mistaken for lack of compassion. Also when there are growing calls from the international community to the Myanmar government to end violence in Rakhine state and address the Rohingya conundrum, it would not be a wise strategic move for India to ignore them. While the government may take a conscious decision to publicly support Myanmarese leader Aung San Suu Kyi, at the same time it should gently prod her government to adopt a positive attitude toward resolving the Rohingya problem with the help of the international community.
Topic: Effects of liberalization on the economy,
Introduction :- The economic liberalisation in India refers to the economic liberalisation, initiated in 1991, of the country’s economic policies, with the goal of making the economy more market and service-oriented and expanding the role of private and foreign investment. Specific changes include a reduction in import tariffs, deregulation of markets, reduction of taxes, and greater foreign investment. Liberalisation has been credited by its proponents for the high economic growth recorded by the country in the 1990s and 2000s. Its opponents have blamed it for increased poverty, inequality and economic degradation.
A recent paper by Thomas Piketty and Lucas Chancel titled ‘Indian income inequality, 1922-2014: From British Raj to Billionaire Raj?’ points to widening income inequality in India post liberalization.
Impact on income growth of poor :-
- Average annual real per adult income growth for this “middle 40%” was 1.9% during 1951 and 1980, which went up to 2.02% between 1980 and 2014.
- Top 10% of the population hogged the lion’s share of the growth in income. Hence the people in the lower 90% of the population saw a decline in income growth or just a minor improvement.
- The average income of an adult in the top 1% is about 70 times the average of the bottom half and 35 times that of the “middle 40%”.
- These findings have debunked our cherished belief that a rising tide of economic growth will necessarily lift everybody’s boats.
However it should be noted that liberalization has increased inequality, but that is rationalized as the price to pay for higher growth.
- The economist Simon Kuznets, who said that inequality will increase initially as an economy develops, but will ultimately drop.
- The resultant Kuznets curve, as this depiction of the trajectory of inequality is named, is an inverted ‘U’.
- So a rise in inequality is perfectly fine, it’s just the effect of high growth in the economy.
- Those of us who are in the best position to profit from that growth, either by virtue of higher initial wealth, or higher educational opportunities, benefit the most, of course.
- But the important point is that everyone gains, even the poorest.
CASE STUDY :- China, which too went in for liberalization after 1980, saw its middle 40% capture 43% of the growth in incomes between 1980 and 2014. Growth there has been much more egalitarian than in India, although this may partly be the legacy of the earlier Maoist era.
Topic: Indian economy – growth and development
Introduction :- The Phillips curve is an economic concept developed by A. W. Phillips showing that inflation and unemployment have a stable and inverse relationship. The theory states that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment. However, the original concept has been somewhat disproven empirically due to the occurrence of stagflation in the 1970s, when there were high levels of both inflation and unemployment.
The concept behind the Phillips curve states the change in unemployment within an economy has a predictable effect on price inflation. The inverse relationship between unemployment and inflation is depicted as a downward sloping, concave curve, with inflation on the Y-axis and unemployment on the X-axis. Increasing inflation decreases unemployment, and vice versa. Alternatively, a focus on decreasing unemployment also increases inflation, and vice versa.
PHILLIP CURVE AND INFLATION :-
The underlying logic behind the Phillips curve is that wages are quite “sticky”, or inflexible, in a market economy, so unemployment is bound to shoot up whenever workers refuse to accept lower wages.
Inflation, which increases nominal but not real wages, is assumed to trick workers into accepting a lower remuneration for their services; it is thus an indirect wage cut that helps prevent an increase in unemployment.
However it helps only conditionally in forecasting inflation,
“Do Phillips curves conditionally help to forecast inflation?”, a 2017 paper by Michael Dotsey, Shigeru Fujita and Tom Stark published by the Federal Reserve Bank of Philadelphia, however, argues that central bankers may be using the wrong economic model to frame policy.
- It is argued that there is no real trade-off between inflation and unemployment, as assumed by generations of economists, as models based on the Phillips curve have a poor forecasting record. Ex. The stagflation of the 1970s proved quite convincingly that high unemployment and high inflation can very well co-exist.
- Wages may not be as rigid as many economists assume, which means that they could adjust downward quite comfortably in many cases.
- Loose monetary policy, apart from ramping up inflation, often also causes structural distortions in the economy which lead to higher unemployment.
Topic: Indian economy – growth and development; Investments models; Infrastructure
Introduction :- Prime Ministers Narendra Modi and Shinzo Abe will be laying the foundation stone of the Mumbai-Ahmedabad High Speed Rail (MAHSR) project, popularly known as the bullet train, on September 14 in Ahmedabad. This visionary project will herald a new era of safety, speed and service and help the Indian Railways craft a pathway to becoming a global leader in scale, technology and skill.
Huge investment in bullet trains yield dividends to India in many ways :-
- Project could provide an important boost to public investment.
- Attractive low-cost long-term financing :- India is getting help from bilateral, regional institutions to finance its ambitious bullet train projects. India is getting the loan for the MAHSR at close to almost zero cost.
- Stimulus for advanced components’ manufacture and construction. One of the stated objectives of the bullet project is “Make in India”, which is being actioned even before the commissioning of the project.
- Employment opportunity :- The bullet train projects are great for construction sector in India. According to a report the MAHSR has potential to create 20000 direct jobs and 16000 indirect jobs.
- Increase in professional capacity-building like A dedicated High Speed Rail Training Institute is being developed at Vadodara. They will also serve as a backbone for the development of other high speed corridors in India.
- Cutting edge operational technology :- India is getting cutting-edge operational technology in totality through such projects.
- Given the traffic density in corridor like Mumbai Ahmedabad, this project could lead to a significant reduction in India’s carbon footprint.
- It will also address the safety and security aspects of fast speed transportation in India as Indian Railways have been presenting a gloomy side now a days.
India is one of the fastest growing economies of world today. Infrastructure plays critical role in It. Implementing and boosting projects like bullet trains which have very satisfactory performances all over world can be further gamechanger in country like India in terms of human resource, economy and technological advancement.
Topic: Citizen’s Charters
Introduction :- The Citizen’s Charter and Grievance Redressal Bill 2011 also known as The Right of Citizens for Time Bound Delivery of Goods and Services and Redressal of their Grievances Bill, 2011 or Citizens Charter Bill was proposed by Indian central legislation. It was tabled by V. Narayanasamy, Minister of State for Personnel, Public Grievances and Pensions, in Lok Sabha in December 2011. The bill lapsed due to dissolution of the 15th Lok Sabha.
Salient features :-
- The Bill seeks to create a mechanism to ensure timely delivery of goods and services to citizens.
- Every public authority is required to publish a citizens charter within six months of the commencement of the Act. The Charter will detail the goods and services to be provided and their timelines for delivery.
- A citizen may file a complaint regarding any grievance related to: (a) citizens charter; (b) functioning of a public authority; or (c) violation of a law, policy or scheme.
- The Bill requires all public authorities to appoint officers to redress grievances. Grievances are to be redressed within 30 working days. The Bill also provides for the appointment of Central and State Public Grievance Redressal Commissions.
- A penalty of up to Rs 50,000 may be levied upon the responsible officer or the Grievance Redressal Officer for failure to render services.
Key Issues and Analysis
- Parliament may not have the jurisdiction to regulate the functioning of state public officials as state public services fall within the purview of state legislatures.
- This Bill may create a parallel grievance redressal mechanism as many central and state laws have established similar mechanisms.
- Companies that render services under a statutory obligation or a licence may be required to publish citizens charters and provide a grievance redressal mechanism.
- The Commissioners may be removed without a judicial inquiry on an allegation of misbehaviour or incapacity. This differs from the procedure under other legislations.
- Appeals from the Commissions’ decisions on matters of corruption will lie before the Lokpal or Lokayuktas. The Lokpal and some Lokayuktas have not been established.
- Only citizens can seek redressal of grievances under the Bill. The Bill does not enable foreign nationals who also use services such as driving licenses, electricity, etc., to file complaints.