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[ Day 65 – Synopsis ] 75 Days Mains Revision Plan 2023 – GS3 & Ethics

GS3


 

Q1. Are there any challenges or drawbacks associated with providing legal backing to MSP? If so, what are they? (10M)

Introduction

The MSP is a minimum price guarantee that acts as a safety net or insurance for farmers when they sell particular crops. These crops are procured by government agencies at a promised price to farmers and the MSP cannot be altered in any given situation. While the government does declare the MSP twice a year, there is no law making MSP mandatory.

Body:

Challenges or drawbacks associated with providing legal backing to MSP:

  • Burden on exchequer: It would lead to a huge burden on the exchequer, since the government would have to procure all marketable surplus in the absence of private participation.
    • E.g. government would need an additional Rs 5 trillion to buy surplus crops.
  • Implementation Challenges: Even with legal backing, effective implementation of MSP requires strong procurement infrastructure and efficient distribution networks.
    • Ensuring timely procurement and payments can be challenging, especially for states with limited resources.
  • Diversity of Crops: Legal backing for MSP might work better for major crops like rice and wheat.
    • However, for minor and region-specific crops, market demand and supply dynamics can complicate the direct application of MSP.
  • Price Disparities: There can be disparities between MSP and actual market prices, leading to instances where farmers might not benefit fully from MSP due to market conditions.
  • Demand from other sectors: The enactment of a law mandating 100% procurement for all 23 crops with MSP could trigger similar demands from farmers engaged in cultivating fruits, vegetables, spices, and other agricultural products.
  • Increase in buffer stocks: This measure would lead to an increase in buffer stock capacity. Currently, the government holds grain stocks that exceed its buffer requirement by more than two-fold.
  • Unsustainable: NITI Aayog’s agricultural economist, Ramesh Chand, presented a policy paper opposing the legalization of MSP.
    • The paper argues that a fixed pre-determined price would discourage private traders during times of market surplus, making the government the main buyer of MSP-declared produce, an unsustainable approach.
  • WTO challenge: Developed nations at the WTO have consistently opposed India’s price support measures. In 2020, India invoked the Bali Peace Clause due to exceeding the support limit for rice in 2018-19.
    • A legally assured higher MSP could intensify opposition at the WTO.

Way forward:

  • Enhance agricultural investment: Improve irrigation, credit access, power availability, warehouse capacity, and extension services. Empower farmers with better bargaining abilities and options.
  • Strengthen industrial and service sectors: Agriculture forms 17% of GDP but employs 55% of the population. Expanding industries and services can absorb surplus farm labour, easing rural distress.
  • Implement direct cash transfers: Temporarily, direct cash transfers to rural poor can alleviate distress. Transitioning from $100 billion yearly subsidies to basic income is a progressive step.
  • Promote AMUL-like models: Bolster producer organizations to capture more of the value chain, ensuring better prices for farmers.

Conclusion

To achieve true financial sustainability for all farmers, holistic reforms encompassing market access, credit availability, technology adoption, and rural infrastructure are essential alongside MSP.

 

Q2. The Jal Jeevan Mission prioritizes involving marginalized and vulnerable communities in decision-making and water management. Elucidate (15M)

Introduction

Jal Jeevan Mission, is envisioned to provide safe and adequate drinking water through individual household tap connections by 2024 to all households in rural India. The programme will also implement source sustainability measures as mandatory elements, such as recharge and reuse through grey water management, water conservation, rain water harvesting.

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JJM involving marginalized and vulnerable communities in decision-making and water management:

  • Setting up Gram Sabhas (village councils): Gram Sabhas are the highest decision-making body in a village. The JJM requires that all decisions related to water supply and sanitation be taken at the Gram Sabha level, with the participation of all stakeholders, including marginalized and vulnerable communities.
  • Forming Village Water & Sanitation Committee (VWSC)/ Pani Samiti: these are groups of people who are responsible for managing the water supply in their community.
    • The JJM encourages the formation of VWSCs, with a focus on ensuring that marginalized and vulnerable communities are represented.
    • So far over 4.69 lakh VWSCs (Pani Samitis) have been constituted.
  • Providing training and capacity building: The JJM provides training and capacity building to marginalized and vulnerable communities so that they can participate effectively in decision-making and water management.
    • 104 Key Resource Centres (KRCs), and sector partners working in the area of water across the country.
  • Promoting social audits: Social audits are a way for communities to monitor the implementation of the JJM and ensure that their needs and priorities are being met.
    • The JJM encourages the conduct of social audits, with a focus on ensuring that marginalized and vulnerable communities are involved.
  • Water quality monitoring: is a key focus of the Jal Jeevan Mission. Each village trains five women to use Field Test Kits (FTKs) to detect contamination in water samples.
    • FTKs, provided to Panchayats, analyze nine parameters like pH, alkalinity, fluoride, and more.
    • Over 9.13 lakh women have been trained to test water quality using FTKs.

Some of the benefits of involving marginalized and vulnerable communities in decision-making and water management:

  • Accountability: These communities are more likely to hold authorities accountable for the quality and availability of water, resulting in improved governance and service
  • Social Inclusion: Prioritizing these communities ensures that historically marginalized groups such as Scheduled Castes, Scheduled Tribes, and women are included in planning and implementation, reducing social disparities and fostering social cohesion.
  • Local Knowledge: Marginalized communities often possess valuable traditional knowledge about local water sources, conservation practices, and water-related challenges.
    • Involving them helps integrate this knowledge into water management strategies.
  • Leadership Development: Active participation nurtures leadership skills among marginalized individuals, empowering them to advocate for their rights and needs beyond the realm of water management.
  • Capacity Building: Participation encourages skill development and capacity building among marginalized communities, equipping them with the tools to manage water resources effectively.

Conclusion

The Jal Jeevan Mission has transformed into a “Jan Andolan” or people’s movement, thanks to active involvement, particularly of women and rural communities. This collaborative effort emphasizes long-term drinking water security.

 


Ethics


 

Q3. While some corporates continue to be moral exemplars in showcasing high levels of corporate governance and ethical management; many seem to care less in the mad-rush to be rich. Critically analyse the statement in the context of many start-ups emerging in our country. (10M)

 

Introduction:

In India, exemplary instances of corporate governance and ethical management have illuminated the business landscape, showcasing the potential for harmonizing profitability with ethical values. Companies like Tata Group and Infosys, known for their principled leadership, commitment to social responsibility, and transparent governance practices, serve as beacons of ethical excellence. However, these are not completely representative of larger profit-chasing corporate sector in India, especially emergent startups.

Body:

Issues of corporate governance and ethical management in emergent startups:

  • Lack of regulatory scrutiny: Many startups operate in a regulatory grey area, allowing for potential violations of ethical standards and corporate governance practices.
  • Rapid growth pressure: The pursuit of rapid growth and investor expectations may compromise ethical decision-making and adherence to robust corporate governance.
  • Investor demands vs. Ethical values: Startups might face dilemmas when investor demands conflict with ethical principles, leading to compromises in governance practices.

Examples of startups with bivalent track record on corporate governance and ethical management:

  • Paytm: This Indian fintech giant has established transparent governance practices and while also being criticised for over-valued public issue and allegedly duping the small investor.
  • Zomato: The food delivery platform’s ethical stance against food wastage and green delivery exemplifies ethical leadership, however, it has been criticised for “gigification” of work, not providing good working conditions for delivery partners.
  • BYJU’S: The ed-tech unicorn prioritizes student data protection and privacy, while also being allegedly in violation of ethical conduct by forceful selling of costly courses to people who can’t afford them just to push revenue numbers.

Needful measures:

  • Regulatory framework strengthening: Implement stringent regulations and oversight for startups, ensuring compliance with ethical standards and governance norms.
  • Mentorship and guidance: Encourage experienced mentors to guide startups in ethical decision-making and governance practices.
  • Incorporating ethical education: Include ethical education in startup incubation programs to instil ethical values and governance awareness.
  • Industry collaboration: Facilitate collaboration between startups, established companies, and industry associations to promote ethical best practices.
  • Investor due diligence: Encourage investors to assess startups not only for financial potential but also for their commitment to ethical management.

Conclusion:

“We cannot be mere consumers of good governance; we must be participants; we must be co-creators.” – Rohini Nilekani

We as a society are also a significant stakeholder and must advocate towards such a future. By emulating the ethical champions in the startup ecosystem, embracing stringent regulations, and instilling ethical education, these new ventures can not only flourish financially but also contribute positively to society.

 


Case Study


 

Q4. You are the Indian employee of XYZ Pharmaceuticals Company which manufactures medicines for western countries alone. The company is located in USA. Incidentally, you come to know a fact that a medicine under development for some disease prevalent in Western countries is equally useful in curing a disease in developing countries of Asia. The aforementioned disease is prevalent among ultra-rich in western countries and the medicine will earn humungous profits to your company. But the disease that struck the developing countries is prevalent among ultra-poor tribal community and the company cannot reap profits from sale in Asia and so not interested in introducing the medicine in Asia.

 

How will you convince your CEO to introduce the medicine in Asian market keeping in mind the profit interests of your company and welfare of Asian tribal communities?

Introduction:

The pharmaceutical industry holds a unique position at the intersection of healthcare, ethics, and profitability. The case study underlines a scenario akin to Merck’s approach to ivermectin/Mectizan donation program, where ethical considerations trumped mere profit interests to serve distant vulnerable communities.

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Ethical issues in the case:

  • Profit maximization vs. Human welfare: The company’s focus on maximizing profits by catering exclusively to western markets clashes with the ethical obligation to prioritize the health and well-being of the ultra-poor tribal communities elsewhere.
  • Geographical disparities: The ethical dilemma is exacerbated by the stark contrast between the diseases prevalent in western countries and developing Asian countries.
  • Equity and social justice: The employee is confronted with the question of whether it is morally justifiable to withhold a potentially life-saving medicine from the ultra-poor tribal communities simply because the company cannot reap profits from the Asian market.
  • Corporate responsibility: The employee is confronted with the ethical challenge of advocating for corporate responsibility and persuading the CEO to consider the broader social impact of their decisions.
  • Professionalism and balancing stakeholder interests: Striking a balance between the financial interests of the company’s shareholders and the well-being of the Asian tribal communities presents a complex ethical dilemma.
  • Transparency and honesty: The employee faces the challenge of promoting transparency and honesty within the organization regarding the medicine’s applicability.

Convincing the CEO to Introduce the Medicine in the Asian Market:

  • Highlighting Corporate Social Responsibility (CSR): Emphasize that demonstrating corporate social responsibility enhances the company’s reputation and brand image.
  • Pros: Enhancing brand reputation, attracting socially conscious investors, and fostering goodwill among stakeholders.
  • Cons: Initial financial investment may be required, potential short-term profit loss in the Asian market.
  • Ethical leadership and long-term vision: Present the argument that ethical leadership entails making decisions that benefit society at large. Introducing the medicine in the Asian market aligns with the company’s long-term vision of making a positive impact beyond profit generation.
  • Pros: Demonstrating ethical leadership, ensuring sustainable growth, securing a loyal customer base, and potential expansion opportunities.
  • Cons: Short-term revenue might be impacted due to initial investment and lower profit margins in the Asian market.
  • Collaboration and partnerships: Propose collaborating with international organizations, NGOs, or governments to subsidize the medicine’s cost for the Asian tribal community.
  • Pros: Strengthening partnerships, sharing costs, gaining access to local expertise, and expanding market presence.
  • Cons: Complex negotiations, potential delays in decision-making, and dependency on external parties.
  • Creating a sustainable market: Highlight how a well-managed and regulated market can lead to long-term profitability through increased demand, market growth, and positive social impact.
  • Pros: Tapping into a new market, establishing long-term revenue streams, enhancing brand loyalty, and addressing societal needs.
  • Cons: Initial investments may be required, navigating regulatory challenges, shallower ethical practice.
  • Diversity and inclusivity: Emphasize the importance of diversity and inclusivity in decision-making and impact on long-term performance of the company.
  • Pros: Fostering a diverse and inclusive work culture, attracting talent, enhancing company reputation, and fulfilling social responsibility.
  • Cons: Potential resistance from internal stakeholders who prioritize short-term profits.

Merck case study:

  • Background: Merck, a pharmaceutical company, discovered Mectizan, an effective treatment for river blindness. However, due to limited profitability potential in the markets where these diseases were prevalent, Merck faced a moral and ethical dilemma regarding its responsibility to provide access to life-changing medicine.
  • Humanitarian Commitment: Merck decided to launch the Mectizan donation program in 1987, committing to donate the drug for as long as needed to eliminate river blindness and lymphatic filariasis.
  • Partnerships and Collaboration: Merck collaborated with organizations like the World Health Organization (WHO), local governments, and NGOs to ensure the effective distribution and administration of Mectizan in affected regions.
  • Long-term Impact: The program’s long-term focus resulted in substantial progress towards eradicating river blindness and lymphatic filariasis. This approach set a positive precedent for other pharmaceutical companies to engage in similar initiatives.
  • Recognition and Legacy: The Merck Mectizan donation program received international recognition and accolades, positioning Merck as a model for ethical corporate behaviour.

Conclusion:

By prioritizing the well-being of those in need over short-term profits, Merck’s initiative showcases the potential for positive change through collaborative partnerships and long-term dedication. The case and its approach can be used in persuading the CEO of XYZ pharmaceutical to consider such a program for the company’s product as well.


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