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Insights SECURE SYNOPSIS: 21 DECEMBER 2019

SECURE SYNOPSIS: 21 DECEMBER 2019


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: Salient features of Indian Society, Diversity of India

1. India is unique in its religious, ethnic, linguistic and caste diversity; models of governance, applicable to homogenous societies, simply do not work here. Analyse. (250 words).

Indian Express

Why this question:

The nation’s socio-political fabric comes under tremendous strain in the aftermath of the passage of the Citizens’ Amendment Bill, as well as the impending creation of a National Register of Citizens.

Key demand of the question:

The question wants us to discuss the significance of India’s diversity and the perils of painting it in monochrome.

Directive:

Analyse – When asked to analyse, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary.

Structure of the answer:

Introduction:

Start by explaining in brief the diversity of India. Also throw light on the protests against the CAA Bill and NRC.

Body:

Discuss the significance of diversity to India.

  • Historically, the prime causes for India succumbing to foreign invaders have been lack of visionary leadership and absence of internal cohesion.
  • If history has a lesson for us, it is that divisive bigotry and religious hysteria can destroy nations while social cohesion and nationalism hold them together.

Further go on to define how these lead to tolerance and acceptance

Discuss the challenges in today’s India:

  • continuing agrarian distress — varying only in degree from state to state — and a slowdown in manufacturing, jobs have been scarce for a long time.
  • As schools and colleges continue to churn out young and hopeful job-seekers, frustration levels amongst the youth are rising.
  • The “demographic dividend” that India had once dreamt would help it overtake an “ageing China” is turning into a nightmare.
  • Placed 102 out of 117 countries in the 2019 Global Hunger Index, India remains home to a third of the world’s poor.
  • Our filthy cities, teeming with slums, have seen India placed at 129 out of 189 in the 2019 UN Human Development Index.

Provide measures to safeguard the diversity of India.

  • With the common man still in the quest for roti, kapda, makan, one had expected that utmost priority would be accorded by our elected representatives to addressing unemployment, hunger, healthcare and education.

Conclusion:

Conclude with balanced way forward.

Introduction:

Plurality and multiplicity characterize Indian society and culture. India has accommodated and assimilated various outside elements into its growing culture. However, it has never been a ‘melting pot’ in which all differences got dissolved and a uniform identity was created. India is a shining example of a ‘salad bowl’ in which different elements retain their individual identities and yet, together, they form a distinct recipe. However, the nation’s socio-political fabric comes under tremendous strain in the aftermath of the passage of the Citizens’ Amendment Bill, as well as the impending creation of a National Register of Citizens.

Body:

Religious diversity:

Indian society is multi-religious. While the state is secular, the people of India belong to different religions. Apart from the tribal societies, many of whom still live in the pre-religious state of animism and magic, the Indian population consists of the Hindus (82.41%), Muslims (11.6%), Christians (2.32%), Sikhs (1.99%), Buddhists (0.77%) and Jains (0.41%). The Hindus themselves are divided into several sects; in fact, Jainism, Sikhism, and Buddhism are all offshoots of the same root. Hinduism is also said to have incorporated many practices and beliefs of the local communities.

Articles 25 to 28 of the Constitution state that every citizen has the right to practice and promote their religions peacefully. And yet, we have witnessed religious riots in the country on several occasions.

Linguistic diversity:

India is rightly described as a polyglot country – a country of many languages. Linguistic research suggests that when means of trans­portation were less developed, there was little mobility of people. Therefore, communities confined to small areas spoke their own dialects. And these were spoken in a radius of 7-8 kms. That is why even today there are 1,572 languages and dialects that are each spoken by less than 1,00,000 speakers, besides the 18 Scheduled languages. Until recently, the Census of India collected only mother tongue statistics, which gave the wrong impression about the actual number of speakers of any language.

Religious and linguistic diversity are integral to the growth and development of our society:

  • In India, everyone is a minority depending upon the context. Hindus are the minority in Kashmir, Brahmins in Tamil Nadu, non-Christians in Nagaland, Mizoram and Meghalaya and of course, Muslims, Christians and Parsis in the whole of India.
  • If we look beyond India, in South Asia, Muslims are a minority in India, Nepal, Sri Lanka and Bhutan, but they are majority in Pakistan, Bangladesh, and Maldives.
  • Likewise, Buddhists are minority in all South Asian countries but are a majority in Sri Lanka.
  • If we take other signifiers such as language and ethnicity, there will be a different majority-minority dichotomy.

Homogeneity of model of governance doesn’t suit India:

  • Placed 102 out of 117 countries in the 2019 Global Hunger Index, India remains home to a third of the world’s poor.
  • Our filthy cities, teeming with slums, have seen India placed at 129 out of 189 in the 2019 UN Human Development Index.
  • religion cannot provide the glue to hold together two distinct ethnic entities, and East Pakistan freed itself to become Bangladesh.
  • India’s security, well-being and international image will be enhanced or undermined by pursuing majoritarianism of any kind by engendering insecurity in any segment of our heterogeneous society and alienating a major section of our citizens through intimidatory or discriminatory legislation

Conclusion:

Divisive bigotry and religious hysteria can destroy nations while social cohesion and nationalism hold them together. India has served as an exemplar of multicultural democracy. It is in that sense that India is a unity in diversity, guided by the principle of tolerance (Sahishnuta) and mutual respect. Hence, majoritarianism should be replaced by pluralism which promotes peaceful coexistence of diversities through the spirit of accommodation as well as solidarity.

 

Topic: India and its neighbourhood- relations.

1. “India- EU relations are like a loveless arranged marriage “. Critically discuss. (250 words)

ISPI online

Why this question:

For long, the EU and India partnership had been slow-moving and fragmented, struggling to maintain momentum. Unfairly large emphasis was laid on foreign policy cooperation, but on many issues divisions far exceeded commonalities, leading to disappointment and an overall delusion in the potential of the partnership. Today, not only do the EU and India have a thriving commercial relationship and growing security collaboration, but both partners have developed greater depth in political cooperation internationally while exploring new and innovative areas for further broadening their partnership.

Key demand of the question:

The question wants us to express our knowledge and understanding about the India-EU relations, its evolution, the concerns and challenges and the way forward.

Directive:

Critically discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments. When ‘critically’ is suffixed or prefixed to a directive, all you need to do is look at the good and bad of something and give a fair judgement.

Structure of the answer:

Introduction:

Provide the Background of India-EU relations.

  • India-EU relationship dates back to 1960s when India was the first country to establish relationship with European economic union which later evolved into common market -European union
  • For more than a decade, the EU and India partnership had been slow-moving and fragmented, struggling to maintain momentum. India was acknowledged as a strategic partner in 2004.
  • But fifteen years on there is still no mutually agreed set of clear priorities. The EU-India relationship fails to acknowledge each partner’s individual realities.

Body:

Discuss the following points:

  • Brief summary if India EU relations
    • Trade and Investment
    • Energy Cooperation
    • Research and development
    • And so on
  • Concerns in India-EU relations
    • India’s protectionism to automobile sector
    • India’s Intellectual property regime with the provision of compulsory licensing and manufacture of generic medicine
    • Domestic source obligation in the multi brand retail
    • European Union’s heavily subsidised agro industry. This could hurt Indian farmers
    • EU Import restriction: like ban on the import of mangoes from India
    • Work visa restriction – movement of skilled professionals
  • Way forward

Conclusion:

Based on your discussion, form a fair and a balanced conclusion on the given issue.

Introduction:

India-EU relationship dates back to 1960s when India was the first country to establish relationship with European economic union which later evolved into common market -European union. For more than a decade, the EU and India partnership had been slow-moving and fragmented, struggling to maintain momentum. India was acknowledged as a strategic partner in 2004. But fifteen years on there is still no mutually agreed set of clear priorities. The EU-India relationship fails to acknowledge each partner’s individual realities.

Body:

Various facets of India-EU bilateral relations:

  • Trade and Investment:
    • The EU is India’s largest trading partner, accounting for 12.9% of India’s overall trade. Further the trade in services have almost tripled in last decade.
    • Overall, the EU is the second largest investor in India, with €70 billion of cumulative FDI from April 2000 to March 2017, accounting for almost one quarter of all investments flows into India.
  • EU and India remain close partners in the G20 and have developed a regular macroeconomic dialogue to exchange experience on economic policies and structural reforms.
  • Energy Cooperation: EU – India Clean Energy and Climate Partnership.
  • Research and Development: India, participates in international ITER fusion. India also participates in research and innovation funding programme ‘Horizon 2020’
  • Environment and Water: The EU and India also cooperate closely on the Indian Clean Ganga initiative and deal with other water-related challenges in coordinated manner.
  • Migration and mobility: The EU-India Common Agenda on Migration and Mobility (CAMM) is a fundamental cooperation agreement between India and EU.
  • Development cooperation: Over €150 million worth of projects are currently ongoing in India.

Concerns in India- EU relations:

  • Poor outcomes of strategic summits: The relationship remained far too focused on set-piece summits rather than fostering dynamic everyday linkages. Meetings, including summits, would be ritually cancelled and the paucity of high-level bilateral visits revealed a lack of political will. Unfairly large emphasis was laid on foreign policy cooperation, but on many issues divisions far exceeded commonalities, leading to disappointment and an overall delusion in the potential of the partnership.
  • EU ‘s concerns with India’s ‘human rights violations: India doesn’t take kindly to being lectured to on issues which she considers herself competent of handling. For example, India considers human rights violations as a domestic issue and would wish to handle it within India’s political space. EU’s insistence on including HR provisions into Free Trade Agreement has hampered trade between the two.
  • On multilateralism, EU-India interaction and coordination within UN bodies is not robust.
  • India’s bilateral relations with member countries: Given the lack of cohesion among the EU constituents on strategic issues, India prefers establishing bilateral relations rather than dealing with the EU as a whole.
  • The case of the two Italian marines being tried in India was manslaughter has become a festering wound. The EU’s stand on the issue is seen by many in India as a challenge to her sovereignty.
  • Dual use technology: EU’s reluctance to provide India with strategic dual use technology has pushed India into a closer huddle with the US and other European countries like France. India therefore, doesn’t see the EU as a reliable partner.
  • EU is characterised by over-institutionalized and over-bureaucratized, which makes it far less attractive as a bilateral partner as compared to less institutionalised regimes such as the ASEAN and SAARC.
  • EU has next to nothing to contribute to her energy demand or other principal security interests.
  • When it comes to India’s desire to find a permanent place on the UNSC, it is not the EU but the existing European permanent members, the UK and France, who bring more value to the table for India.
  • Finally, the on-going Eurozone crisis has greatly undermined India’s confidence in the EU.
  • Currently EU is the largest trading partner of India and account for 20% of India’s trade and a major source of FDI whereas India is the 9th largest trading partner.
  • Although trade remains the primary focus, negotiations for The free trade agreement (FTA) which was launched in 2007 is still being dragged due to the following reasons:
    • EU’s concerns:
      • India’s protectionism to automobile sector
      • India’s Intellectual property regime with the provision of compulsory licensing and manufacture of generic medicine
      • Domestic source obligation in the multi brand retail
      • Duty and tariff protection in areas of wine, spirits and dairy products
      • Civil nuclear energy generation legislation
      • Data Security: Based on current standard of protection to data in India the EU refused to grant the status of Data Secure Nation. Data secure nation needs to protect the important data related to innovation, research, individual details, IP etc. to be safeguarded. This affects High end business products specifically. European companies doing outsourcing business with countries not certified as data secure have to follow stringent contractual obligations that increase operating costs and affect competitiveness.
      • Vodafone case has threatened EU investors from entering India due to retrospective taxation measures. So such taxation is also acting as road block.
    • India’s concerns:
      • European Union’s heavily subsidised agro industry. This could hurt Indian farmers.
      • EU Import restriction: like ban on the import of mangoes from India
      • Work visa restriction – movement of skilled professionals
      • Technology transfer issues

Way forward:

  • A framework addressing the above mentioned issues could go a long way in strengthening ties in light of India and EU’s affinities and common concerns such as increasing fundamentalism.
  • India EU FTA has a lot of road blocks but it is in benefit of each other. EU will gain market of 1.2 billion whereas India will gain in terms of Technology, Investments from EU.
  • Both are needed to be pragmatic in approach while working on it in future. India’s share in services trade with EU can grow manifold.
  • Cheaper imports of European luxury items like cars, wine, European expertise in agriculture, infrastructure and urban management can augment Indian drive in make in India, Swachh Bharat Abhiyan & agricultural research.
  • The EU has capacitates to deal with issues like global governance, climate change and the 2030 agenda for sustainable development. India must utilise this through bilateral dialogues and consultations.
  • Working on FTA and realising concrete results in other areas can make the India-EU partnership truly strategic. Deepen the strategic relations and go ahead with the long-term view on global and regional challenges, and a rule-based international order.

 

Topic: India and its neighbourhood- relations.

2. India-Israel ties has moved from hate to clandestine relations to strategic partnership. Elaborate. (250 words)

Times Of India

https://economictimes.indiatimes.com/news/economy/foreign-trade/india-israel-explore-new-areas-of-cooperation-to-boost-financial-ties/articleshow/70549085.cms

Why this question:

Israel and India are exploring to open new vistas of partnership in the world of finance, including collaboration between market regulators and allowing Israeli investment in corporate bonds, taking advantage of a favourable climate in both countries.

Key demand of the question:

One must explain how has the bilateral relations between evolved from outright hate in 1950’s to strategic partnership today. Also discuss about how there is a co-operation today in various fields from agriculture to defence to science and technology.

Directive word

Elaborate – Give a detailed account as to how and why it occurred, or what is the particular context. You must be defining key terms where ever appropriate, and substantiate with relevant associated facts.

Structure of the answer:

Introduction:

In a few introductory lines define the current bilateral relations between India and Israel.

Body:

Discuss the evolution of India-Israel bilateral relations from 1948 onwards.

Trace the changes in trends of co-operation.

How and why is there a shift?

Discuss the various areas of co-operation.

Talk about the significance of growing India-Israel strategic relations.

Conclusion:

Conclude with way forward.

Introduction:

Israel and India are exploring to open new vistas of partnership in the world of finance, including collaboration between market regulators and allowing Israeli investment in corporate bonds, taking advantage of a favourable climate in both countries.

Body:

Evolution of Relations between India and Israel:

  • Outright hate:
    • For two countries that came into being in the same year — 1947, though Israel formally became free in 1948 — and from the same colonial master, the British, India’s relations with the newly created nation bordered on outright hostility, with New Delhi voting against the creation of the State of Israel at the UN in 1947 and also against its admission to the UN in 1949.
  • Grudging acceptance:
    • In 1950, India recognised Israel as a separate country, allowing it to appoint an honorary consul in Mumbai — a local Jewish resident — in 1951.
    • That was upgraded to a consulate in 1953, leading to a slow uptick in bilateral ties — most notably in 1956 when the Israeli foreign minister Moshe Sharett visited India in the backdrop of the Suez crisis.
  • Secret Alliance:
    • The 1962 India-China war was the first time that India reached out to Israel for help with arms and ammunition, with then Indian PM Jawaharlal Nehru writing to his Israeli counterpart Ben Gurion, who responded by sending ships loaded with weapons.
    • Even as the two nations publicly maintained distance — thanks to Tel Aviv’s pro-Washington stance and India’s founding of the Non-Aligned Movement (NAM) in 1961, which was a de facto pro-Soviet forum — Israel responded to India’s call for help in the 1971 war with Pakistan and the 1999 Kargil war.
    • Today, India is Israel’s largest weapons buyer while Israel is the second largest weapons supplier for India, after Russia.
    • Not just weapons, India’s spy agency RAW, established in 1968 during Indira Gandhi’s tenure as PM, actively collaborated with Mossad, the Israeli Intelligence agency.
  • The thaw:
    • It was in 1992, with P V Narasimha Rao as PM that India finally established diplomatic relations with Israel — with several factors contributing to the decision.
    • Chief among them were the crumbling of the Soviet Union and the start of the Israeli-Palestinian peace process in 1991, involving not just Tel Aviv and the PLO, led by Yasser Arafat, but also Arab countries like Syria, Jordan and Lebanon — both of which gave New Delhi the necessary leeway to correct its pro-Soviet and pro-Arab tilt in its global diplomacy.
    • India’s public stance against Israel was seemingly an economic and political necessity to keep the oil-rich West Asian nations and certain domestic political constituents happy — with Arafat reportedly ready to help Indira Gandhi rally Muslim votes in India in her favour.
  • Open season:
    • The first inkling that the tide had turned in Israel’s favour came in 2015 when India abstained from voting against Israel at the UN Human Rights Commission.
    • That was followed by the first ever visit of an Indian PM to Israel when Modi paid a three-day visit in 2017 — even though it did vote against the move by US to recognise Jerusalem as Israel’s capital.

Areas of Co-operation:

  • Economic Relations:
    • Trade, technology and tourism are the three key areas in India-Israel economic relations.
    • Over the last 25 years, bilateral trade has increased from $200 million to more than $4 billion (excluding defence) in 2016-17.
    • Given India’s large market and huge consumer base, the numbers are low compared to India’s economic relations with other countries.
    • Israel will invest $68.6 million to boost cooperation with India in areas like tourism, technology, agriculture and innovation over a period of four years.
    • The Securities and Exchange Board of India (Sebi) and its Israeli counterpart are exploring partnerships and the two sides are also focusing on cyber security collaboration to safeguard their financial markets
  • Defence Ties:
    • India already has robust defence ties with Israel which is expected to strengthen further.
    • India is the largest arms buyer from Israel; trade is to the tune of approximately $600 million.
    • If defence ties keep increasing at the same rate, Israel may replace Russia as India’s largest arms supplier.
    • Last year, India signed the biggest weapons deal in Israeli defence history, which is nearly $2 billion.
    • This will provide India with an advanced defence system of medium-range surface-to-air missiles, launchers and communications technology.
  • Counter Terrorism and Cyber Security:
    • In counter terrorism, intelligence gathering and retaliation, Israel has an exceptional good record and India need to learn from Israel how they have been able to mount surgical strikes all over.
    • Both India and Israel are vulnerable to cyber-attack. Cyber security would be very important concern of all governments.
  • Water and Agriculture:
    • India and Israel are set to jointly develop new crop varieties and share post-harvest technologies following the success of the 10-year-old Indo-Israeli Agriculture Project (IIAP).
    • Israel has become one of the foremost technology superpowers in areas such as rainwater harvesting, use of oceanic water and using that for irrigation in the driest land.
    • Israel has mastered water conservation techniques and India can learn from it.
    • It helps India to face its water stressed condition.
    • Another area of potential cooperation is cleaning polluted rivers.

Conclusion:

For too long, India has, under the guise of maintaining its strategic autonomy, shied away from explicit friendships in the international scenario. The India-Israel relationship must continue to expand. What just needs to be done away with is the normative posturing of the relationship which could potentially endanger India’s international relations and also its domestic situation.

 

Topic: Important International institutions, agencies and fora- their structure, mandate.

3. Asia-Africa Growth Corridor is considered as a game-changer for India, Japan and Africa. Examine.  How is it different from China’s Belt and Road Initiative (BRI)? (250 words)

You tube

VIP India

Why this question:

The AAGC is a roadmap for opportunities and aspirations in Asia and Africa. It was launched with an aim to prioritize development projects in health and pharmaceuticals, agriculture and agro-processing, disaster management and skill enhancement. The idea of AAGC had emerged in the Joint Declaration issued by Prime Minister Mr. Narendra Modi and his Japanese counterpart Shinzo Abe in November 2016. It will focus on people centric sustainable growth strategy details of which would be evolved through a process of detailed consultation across Asia and Africa.

Key demand of the question:

The question wants us to talk how the AAGC will impact the relations between India, Japan and African countries. One must talk about the benefits of the AAGC, the challenges and finally have to differentiate between AAGC and China’s BRI.

Directive word:

Examine – When asked to ‘Examine’, we have to look into the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.

Structure of the answer:

Introduction:

write a few introductory lines about AAGC and its mandate.

Body:

Discuss in detail about the AAGC initiative.

  • AAGC aims to be an efficient and sustainable mechanism for linking economies, industries and institutions, ideas and people in Africa and Asia in an inclusive manner.
  • There is vast and untapped potential in both Asia and Africa which needs to be explored for shared growth, development, peace, prosperity and stability of these regions.
  • Four main components of AAGC are:
    • Development and cooperation projects
    • Quality infrastructure and institutional connectivity
    • Capacity and skill enhancement
    • People to people partnerships

Now discuss the implications on India, Japan and African countries.

Finally, discuss how AAGC works vis-à-vis BRI.

  • AAGC is a consultative initiative which is essentially a sea corridor unlike OBOR, which entails development of a land.
  • AAGC is said to link Africa with India and other countries of South-East Asia and Oceania.
  • The initiative is considered to be a “distinct initiative” which would be profitable and bankable, borne out of a consultative process, unlike the ‘government – funded model’ of the BRI project.
  • The AAGC is built on the pivot that rather than excessive emphasis on trade and economic relations, the centrality of people in Africa needs to be brought to the fore front

Conclusion:

based on your discussion, form a fair and a balanced conclusion on the given issue.

Introduction:   

The AAGC is a roadmap for opportunities and aspirations in Asia and Africa. It was launched with an aim to prioritize development projects in health and pharmaceuticals, agriculture and agro-processing, disaster management and skill enhancement. The idea of AAGC had emerged in the Joint Declaration issued by Prime Minister Mr. Narendra Modi and his Japanese counterpart Shinzo Abe in November 2016. It will focus on people centric sustainable growth strategy details of which would be evolved through a process of detailed consultation across Asia and Africa.

Body:

AAGC- a game changer:

Four main components of AAGC are:

  • Development and cooperation projects
  • Quality infrastructure and institutional connectivity
  • Capacity and skill enhancement
  • People to people partnerships

For India:

  • The AAGC echoes India ‘s current development agenda based on promoting sustainable and inclusive growth.
  • India’s proposed long term development strategy, the India 2031-32 Vision by National Institution for Transforming India (NITI Aayog) calls for “transformation of India into a prosperous, highly educated, healthy, secure, corruption free, energy abundant, environmentally clean and globally influential nation”.
  • It foresees India’s positive role in shaping the global agenda on sustainable development and international cooperation based on principles of solidarity, equity and sharing.
  • AAGC also acknowledges the symbiotic relationship between security and growth endorsed through Prime Minister Modi’s policy of SAGAR- Security and Growth for All.
  • SAGAR emphasises India’s determination to support the local initiatives to promote economic development and security in the Indian Ocean region.
  • The AAGC also calls for maritime connectivity across the Indian Ocean region through India’s Sagarmala policy.

For Japan:

  • The Asia Africa Growth Corridor highlights Japan’s policy of promoting Free and Open Indo- Pacific.
  • Abe advocated that Japan and India being like-minded maritime democracies, should promote freedom and prosperity in “broader Asia”, at the confluence of two seas- the Indian and Pacific Ocean. He also proposed an “arch of freedom and prosperity”.
  • This strategy aims at combining the dynamics of Asia and Africa and envisions a greater regional integration along the coastlines of the Indian Ocean / Pacific Ocean. The aim is to improve connectivity, growth and stability in the region.
  • Like India, Japan too, has called for connecting Asia and Africa through development of infrastructure. This approach is clearly visible in Abe’s Partnership for Quality Infrastructure (PQI).
  • The AAGC seeks to reiterate Japan’s focus on promoting quality infrastructure is diverse areas such as power, transport, port development etc.

For Africa:

  • The AAGC also reflects the current African plan for the transformation of the continent in the next 50 years- the Agenda 2063.
  • This plan seeks to accelerate the implementation of past and existing continental policies for growth and sustainable development. Agenda 2063 calls for achieving seven African aspirations over the fifty-year period:
    • A prosperous Africa based on inclusive growth and sustainable development
    • An integrated continent politically united based on the ideals of pan Africanism and the vision of African Renaissance
    • An Africa of good governance, democracy, respect for human rights, justice and rule of law
    • A peaceful and secure Africa
    • Africa with strong cultural identity, common heritage, values and ethics
    • An Africa whose development is people driven
    • An Africa as a united, resilient and influential global player.
  • The Agenda 2063 also highlights African countries’ aim to partner with like-minded external partners for promoting African growth and development.
  • the AAGC dovetails African priorities with those of India and Japan.

AAGC vis-à-vis BRI:

  • AAGC is said to link Africa with India and other countries of South-East Asia and Oceania.
  • AAGC emphasises on inclusivity and centrality of people, rather than focusing only on trade and economics.
  • China’s BRI regional connectivity project, is perceived as more centralised and trade-oriented.
  • India has great trade and network experience in Africa and Japan has very advanced technology. Japan’s ability to deliver quality infrastructure will play a major role in developing this corridor.
  • This combination will give China tough competition for market share.
  • As the Chinese economy is facing a slowdown, India will hopefully be on the upswing with the AAGC vision.
  • The approaches of India and China towards Africa are essentially different.
  • China concentrates on infrastructure and cheque-book diplomacy (foreign policy which openly uses economic aid and investment between countries to win diplomatic favour.)
  • India promotes a broader spectrum of cooperation projects and programmes focussed on the development of Africa’s human resources.
  • China goes solo, while India is desirous of working with other willing nations to assist Africa.

Way forward:

  • Efforts should be made to fast track the next steps to turn these innovative ideas to reality.
  • India and Japan do not have the luxury of time in view of China’s rapidly expanding footprint in Africa.
  • Increase the scope of their development projects, create synergy among themselves, engage proactively with other willing partners.
  • China’s substantial success needs to be matched by sustained India-Japan cooperation in Africa.

Conclusion:

The AAGC is being developed in cooperation with the international community to promote development cooperation and industrial network in Asia and Africa. It sets a model for inter-regional growth, propelled by mutual trust and cooperation among partner countries. It is a new model of bilateral and triangular cooperation, where partners combine their strengths to advance regional and global growth. The AAGC may yet prove to be a growth and trust multiplier in Asia and Africa, and beyond.

 

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

1. As the years rolled by the “Twin Balance Sheet problem” morphed into a “four balance sheet challenge” — comprising banks, infrastructure, plus NBFCs and real estate companies — for the economy. Discuss.  (250 words)

Indian Express

Economic Time

Hindustan Times

Why this question:

India is facing a “Great Slowdown” with its economy headed for intensive care unit primarily due to a “second wave” of the twin balance sheet crisis at banks, former Chief Economic Adviser Arvind Subramanian has said. In a new working paper published by Harvard University’s Center for International Development last week, Arvind Subramanian, who was India’s chief economic advisor between October 2014 and August 2018, and Josh Felman, former IMF resident representative to India, give a detailed understanding of how the Indian economy lost its way.

Key demand of the question:

The question is in the backdrop of India’s Great Economic Slowdown. One must provide the details for the economic slowdown and how the twin-balance sheet is now a four-balance sheet problem. Provide measures to tackle the issue.

Directive:

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer

Introduction:

In brief explain what the economic slowdown in India. TBS-1 was about bank loans made to steel, power, and infrastructure sector companies during the investment boom of 2004-11 turning bad. TBS-2 is largely a post-demonetization phenomenon, involving non-banking financial companies (NBFCs) and real estate firms.

Body:

Explain about the twin-balance sheet syndrome.

Now move on to discuss the reasons for the TBS to become four balance sheet challenge

  • Since the Global Financial Crisis, India’s long-term growth has slowed as the two engines propelling rapid growth — investment and exports — sputtered.
  • Today, the other engine — consumption — has also stalled. As a result, growth has plummeted precipitously over the past few quarters
  • Dwelling into the current problem facing the economy, he said, after demonetization, considerable amounts of cash made their way to banks, who on-lent a major part of that to NBFCs. The NBFCs, in turn, channelled this money to the real estate sector. By 2017-18, NBFCs were accounting for roughly half of the estimated Rs 5 lakh crore of outstanding real estate loans.
  • The collapse of IL&FS in September 2018 was a “seismic event” not only because of the Rs 90,000 crore-plus debts of the infrastructure-cum-lending behemoth, but also its “prompting markets to wake up and reassess the entire NBFC sector

Provide measures to tackle it.

Conclusion:

Conclude by suggesting what should be the way forward.

Introduction:   

India is facing a “Great Slowdown” with its economy headed for intensive care unit primarily due to a “second wave” of the twin balance sheet crisis at banks, former Chief Economic Adviser Arvind Subramanian has said. In a new working paper published by Harvard University’s Center for International Development last week, Arvind Subramanian, who was India’s chief economic advisor between October 2014 and August 2018, and Josh Felman, former IMF resident representative to India, give a detailed understanding of how the Indian economy lost its way. TBS-1 was about bank loans made to steel, power, and infrastructure sector companies during the investment boom of 2004-11 turning bad. TBS-2 is largely a post-demonetization phenomenon, involving non-banking financial companies (NBFCs) and real estate firms.

Body:

According to the paper, Indian economy is facing both structural (that is, more long-term issues related to the overall framework of the economy such as the flexibility or inflexibility of labour laws etc.) and cyclical (that is, more short-term issues such as a bad monsoon that disrupts production of food articles etc.) challenges.

Twin-balance sheet problem:

  • In the Economic Survey of 2017-18 that the economy was facing a TBS problem. The two balance sheets he referred to belonged to the Indian banks (especially public sector banks or the government-owned banks) and the corporate sector, respectively.
  • The balance sheets of Indian banks were burdened by a high proportion of non-performing loans and the balance sheet of corporates were clogged because they had over-borrowed and were unable to pay.
  • The origins of India’s TBS was traced to the economic boom that happened between 2005 and 2009.
  • This was a period when economic prospects were rosy and the economy was growing at near double-digit growth rates.
  • As such, companies threw caution to the wind and borrowed heavily in the hope of making profits in the future.
  • The banks, especially the government-owned ones, too, ignored prudential norms and lent a lot of money to companies in the hope that this would help boost economic growth.
  • The Economic prospects collapsed quite sharply after the Global Financial Crisis (GFC) and a high proportion of companies found that their projects were no longer viable.
  • The end result was that the companies were left with huge loans they could not pay back in time and the banks were left with huge loans that had turned duds.
  • This essentially meant that neither the Indian companies were in position to invest nor were the Indian banks in a position to lend.

Economy kept going from 2014 to 2018:

  • even though the TBS problem remained unsolved yet, thanks to a sharp fall in crude oil prices, Indians experienced an income boost.
  • government funded economic activity in the country not directly but indirectly through government backed institutions such as Food Corporation of India and National Highways Authority of India.
  • These are called “off-budget” items which should ideally be counted in the fiscal deficit but are not.
  • India’s growth was boosted by a lending spree provided by non-banking financial companies (NBFCs) like IL&FS and DHFL.
  • NBFCs took over the leading role of lending to the economy because banks were still struggling with NPAs and were largely unwilling to lend directly to businesses.
  • The credit provided by NBFCs fuelled both private consumption and business investment, and through this route fuelled GDP growth.
  • The authors state that these factors papered over the disruptions caused by demonetisation and GST introduction.

Towards “Four Balance Sheet” challenge:

  • In short, there are two broad but interlinked reasons. One, the unresolved TBS problem, and two, the fall of NBFCs and the real estate sector. Together, they make for the Four Balance Sheet Challenge for the Indian economy.
  • even after the introduction of the Insolvency and Bankruptcy Code (IBC) in December 2016. The data shows that the IBC resolution has been much slower than expected. Moreover, the recovery rates are nowhere near what were hoped for.
  • while the unresolved TBS problem provided a progressively weakening ecosystem of banks and companies, the collapse of some of the leading NBFCs has proven to be trigger for the sharp growth deceleration.
  • ILFS was a behemoth, with Rs. 90,000 crores of debt, so its failure sent shockwaves throughout the financial system.
  • The failure was completely unexpected, prompting markets to wake up and re-assess the entire NBFC sector.
  • Much of the NBFC lending had been channelled to one particular sector, real estate. And that sector itself was in a precarious situation.
  • The real estate story is about builders launching numerous projects since the start of mid-2000s in the hope that these flats would be lapped up.
  • But after the Global Financial Crisis, the demand for flats as well as bank funding for builders collapsed.
  • The real estate sector was unable to pay back to the NBFCs, which, in turn, starting defaulting.

Measures needed:

  • The first major action — almost a pre-condition for righting the economy — could be a Data Big Bang, which instil confidence and produce a reliable basis for policy making.
  • This must comprise the publication of unreleased reports together with a strategy for improving official statistics in at least three areas: the real sector (GDP, consumption, and employment), fiscal accounts, and stressed assets in the banking system.
  • A new asset quality review to cover banks and NBFCs must be conducted.
  • Also changes to the Insolvency and Bankruptcy Code (IBC) be made to ensure that participants actually have incentives to solve the problem.
  • Creation of two executive-led public sector asset restructuring companies (bad banks), one each for the real estate and power sectors, while at the same time strengthening oversight, especially of NBFCs.
  • Recapitalization of banks should be linked to resolution and reforms such as shrinking public sector banking should be undertaken.
  • The private final consumption expenditure, or spending by individuals, government spending, private investment and net exports. These engines need a spark in the upcoming Budget to be presented on February 1.

 

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

2. ‘Government has no business being in business’. Examine in light of the India’s approach to disinvestment since liberalisation. Analyse whether there is a need to relook at the policy of disinvestment? (250 words)

The Hindu

The Hindu Business Line

Why this question:

Last month, the Cabinet approved sale of the government’s stake in Bharat Petroleum Corporation Limited, a navratna public sector company with oil refining and marketing operations. BPCL’s stake alone is expected to raise about ₹60,000 crore for the exchequer this year, and given the fiscal pressures the government is facing on the tax revenue front, such large-scale disinvestment will help.

Key demand of the question

One needs to examine the India’s path of disinvestment since liberalisation, discuss the macro features of the policy of disinvestment and analyse whether there is a need to have a relook at it.

Directive word

Examine – When asked to ‘Examine’, we have to look into the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.

Analyse – When asked to analyse, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary.

Structure of the answer

Introduction:

In a few introductory lines brief define the disinvestment. Give the context of recent sale of stakes in BPCL.

Body:

       The question must discuss the following points:

  • Present the evolution of disinvestment in India.
  • Discuss how the disinvestment has fared and loopholes/challenges for disinvestment.
  • Mention the cases of air India sale, and the hesitant approach in case of IDBI etc. shows the reticence of government towards disinvestment.
  • Examine whether disinvestment has yielded results. Whether private management can take PSUs to bigger scales.

Also discuss why there is a need to remain cautious with respect to disinvestment and measures to attain the same.

Conclusion:

Give a balanced way forward.

Introduction:

Disinvestment, or divestment, refers to the act of a business or government selling or liquidating an asset or subsidiary or the process of dilution of a government’s stake in a Public Sector Undertaking (PSU). Last month, the Cabinet approved sale of the government’s stake in Bharat Petroleum Corporation Limited, a navratna public sector company with oil refining and marketing operations. BPCL’s stake alone is expected to raise about ₹60,000 crore for the exchequer this year, and given the fiscal pressures the government is facing on the tax revenue front, such large-scale disinvestment will help.

Body:

India’s approach to disinvestment since liberalisation:

  • In the Interim Budget of 1991-92, it was announced that the Government would disinvest up to 20% of its equity in selected PSEs in favour of mutual funds and financial and institutional investors in public sector.
  • In the Budget speech of 1992-93, the cap of 20% was reinstated and the list of eligible investors was enlarged to include FIIs, employees and OCBs.
  • In April 1993, the Rangarajan Committee recommended disinvesting up to 49% of PSEs equity for industries explicitly reserved for the public sector and over 74% in other industries. But the then Government did not take any decision on the Committee’s recommendations.
  • In 1996, as per the Common Minimum Programme (CMP), the Budget speech of 1996-97 announced the setting up of Disinvestment Commission for 3 years (For more details about the Disinvestment Commission, click here). CMP also emphasized adding more transparency to the disinvestment process and examine the non – core areas of public sector.
  • In the Budget speech of 1998-99, it was announced that the Government shareholding in CPSEs should be brought down to 26% on case-to-case basis, excluding strategic CPSEs where the Government would retain majority shareholding. The interest of workers was to be protected in all the cases. For this purpose, on 16 March 1999, the Government classified the PSEs into Strategic and Non-Strategic areas. It was decided that Strategic PSEs would be those in areas of:
    • Arms and ammunition and allied items of defence equipment, defence aircraft and warships
    • Atomic energy (except in the areas related to the generation of nuclear power and applications of radiation and radio-isotopes to agriculture, medicine and non-strategic industries)
    • Railway transport
    • All other PSEs were to be considered Non-Strategic.
  • In the Budget speech of 1999-2000, it was announced that the Government would continue to strengthen the Strategic units and “privatizing” the Non-Strategic ones through gradual disinvestment or strategic sale and devise viable rehabilitation strategies for weak units.
  • The 2000-01 Budget speech focused on restructuring and revival of viable CPSEs, closure of PSEs which cannot be revived; bringing down Government shareholdings in Non-Strategic CPSEs to 26% or lower, if necessary, and protection of the interest of workers. The receipts from disinvestment would be used for the social sector, restructuring of CPSEs and for retirement of public debt.
  • In the suo motu statement of 2002, specific aim was given to the Disinvestment Policy- modernization and upgradation of PSEs, creation of new assets, generation of employment and retiring of public debt.

 

  • In the Budget speech of 2003-04, the Government announced details regarding the setting up of Disinvestment Fund and Asset Management Company to hold, manage and dispose the residual holdings of Government.
  • In 2004, with the change in the Government, there was a change in the outlook of Disinvestment Policy.
  • In 2005, the government formed a National Investment Fund or NIF, to which the proceeds of disinvestment were channelled. The mandate of the Fund, managed by professional investment managers, was to utilise 75% of annual funds in social sector schemes to promote education, health and employment.
  • But with the economic slowdown of 2008-09, and later a drought, this was waived for three years — and later, in 2013, restructured to provide flexibility in using the Fund.
  • The NDA government has enjoyed the best of market conditions, with equities soaring in its first year, but like many previous governments, is yet to carry out asset sales consistently over a fiscal year — pushing it till the end, with resultant impact on valuation and proceeds.

India’s current disinvestment policy (2014 onwards):

  • Public Sector Undertakings are the wealth of the Nation and to ensure this wealth rests in the hands of the people, promote public ownership of CPSEs
  • While pursuing disinvestment through minority stake sale in listed CPSEs, the Government will retain majority shareholding, i.e. at least 51 per cent of the shareholding and management control of the Public Sector Undertakings
  • Strategic disinvestment by way of sale of substantial portion of Government shareholding in identified CPSEs upto 50 per cent or more, along with transfer of management control.

Outcome of disinvestment policy:

  • While strategic sale deals in the past have seen a few mis-steps, they’ve also yielded convincing success stories like Hindustan Zinc’s, which has seen a hundred-fold increase in its profits on the back of a six-fold expansion in capacities, since its takeover by Vedanta in 2002.

Need to relook at the policy of disinvestment:

  • Government has mostly used disinvestment for fiscal reasons rather than growth objectives.
  • Process of disinvestment is not favoured socially as it is against the interests of socially disadvantaged people.
  • Loss making units don’t attract investment so easily.
  • Over the years the policy of divestment has increasingly become a tool to raise resources to cover the fiscal deficit with little focus on market discipline or strategic objective.
  • Government presence in non-strategic sectors not only distorts competitive dynamics for private players, it also results in consumers and taxpayers bearing the brunt of inefficient PSU operations.
  • Sometimes with the emergence of private monopolies consumer welfare will be reduced.
  • Mere change of ownership from public to private does not ensure higher efficiency and productivity.
  • It may lead to retrenchment of workers who will be deprived of the means of their livelihood.
  • Private sector governed as they are by profit motive has a tendency to use capital intensive techniques which will worsen unemployment problem in India.

Way forward:

  • Define the priority sectors for the government based on its strategic interests.
  • Investment in PSU’s has to be in terms of generation of adequate social and strategic returns.
  • Financial return cannot be the sole reason for investment in PSUs. They have to serve social/strategic purposes. The key role of a PSU is to maintain competition in the sector and limit excessive monopoly.
  • Government ownership is required for sectors with strategic relevance such as defence, natural resources, etc. The government should, therefore, exit non-strategic sectors such as hotels, soaps, airlines, travel agencies and the manufacture and sale of alcohol.
  • The outlook towards strategic divestment should move from the current policy of emphasizing on public ownership and retaining majority shareholding to looking at the strategic interest.
  • It is important to realize that ownership is not a substitute for regulation. Therefore, instead of creating PSUs in non-priority sectors, the government should look into strengthening the regulatory framework that ensures efficient market conditions. The regulations should also ensure that the basic necessities of the consumers are met.

 

Topic: Contributions of moral thinkers and philosophers from India and world.

1. “We are never truly free till we master and understand our own selves”. In light of this statement, discuss Gandhiji’s views on self-development. (250 words).

The Hindu

Key demand of the question:

The question wants us to write in detail about the importance of self-development and personality for every individual to realise his/her true potential.

Directive:

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer

Introduction:

In a few introductory lines define what is self-development.

Body:

Discuss the importance of self-development.

Discuss Gandhiji’s idea and how he promoted the idea of self-development.

  • Gandhiji’s emphasis on subjecting the body to harsh discipline finds echo in the Indic traditions, which are in a way wary of the deha or the body.
  • Satyagraha, too, at one level, was a relentless pursuit of truth by an individual. If we were to go by its literal meaning in Hindi, then it is a “struggle for truth”.
  • It was as much spiritual as it was political.
  • The individual self and its mastery over its body and its spiritual self thus constituted important elements of the Gandhian discourse on politics.

Conclusion:

based on your discussion, form a fair and a balanced conclusion on the given issue.

Introduction:

Self-Development is about upgrading and nurturing one’s external and internal identity to attain a valuable change in life. Having a personality that leaves lasting first impressions is significant in today’s world. People continuously work on making their personality highly-influential and unique the moment they come to their senses in life.

Body:

Moral ethics are the basis of this trait and help a person in improving their character in becoming a better version of themselves. Many people suffer and lack interest in building their personality based on morality and good character. A progressing mind and growing personality will never go out of fashion. The role of ethnicity in personality development is very beneficial.

Gandhiji’s idea of self-development:

  • Through Physical activities:
    • Gandhiji’s emphasis on subjecting the body to harsh discipline finds echo in the Indic traditions, which are in a way wary of the deha or the body.
    • He subjected his deha to all kinds of austerities, which thus became the site of most Gandhian experiments.
    • For instance, Gandhiji walked all his life, made others walk with him, and also had the courage to walk all by himself.
    • Walking reflected some deeply held Gandhian beliefs and philosophies. At one level, it was an attempt to disrupt, if not deconstruct, the mechanical rhythms of industrial time and reconnect with natural time. It represented forward movement, progress and the onward march of the satyagrahi.
    • Walking for him was a way of conditioning the body and subjecting it to rigorous practice. Bodily rigour, he believed, was necessary for disciplining the mind.
  • Through sovereignty over self:
    • To attain Swaraj, one had to first master the swa or self. In other words, attaining political sovereignty required one to first attain sovereignty over one’s own self.
    • This sovereignty of, and over, the self is essential for understanding Gandhiji’s conception of Swaraj.
    • Satyagraha, too, at one level, was a relentless pursuit of truth by an individual. If we were to go by its literal meaning in Hindi, then it is a “struggle for truth”.
    • It was as much spiritual as it was political.
    • The individual self and its mastery over its body and its spiritual self thus constituted important elements of the Gandhian discourse on politics.
  • Through strong Willpower:
    • Willpower means the ability to distinguish between the good, the bad, and making constant efforts in doing the good only.
    • With ethics and moral values comes willpower.
    • A person with strong willpower will always make the right decisions, and he will always work towards achieving his goals and aims of life.
    • A person with no willpower will soon discontinue running the race of life. He’ll feel a burden on his shoulders while always focusing on the negativity revolving around his life.
    • Good willpower nurtures self-growth in individuals making them strong enough to overcome any challenge life throws at them.
  • Having a Good Heart:
    • Having a good heart simply means having generosity and kindness for others.
    • Having a heart of gold is an ethical trait that shapes one’s personality more pleasantly.
    • Good-hearted people do well for others without having to ask for anything in return.
    • People who do not own this personality development trait tend to feel angry, become ignorant, and are of no help for others.
  • By Showing Respect:
    • Respect means a gesture of valuing someone or something with etiquette and good manners.
    • The importance of respecting others and ways to show it is simple and easy to adopt.
    • Personal development and ethics are linked to the moral values of respecting others.
    • A person who does not know how to show respect to elders or even young fellows gets highly ignored and disrespected by others.

Conclusion:

The impact of ethics in nurturing personality is immensely vast. Self-improvement, self-growth, and self-development all depend on personal ethics and the moral values of a person.