DAILY NEWS ANALYSIS 21 MAY
EDITORIALS
Grasping the defence self-reliance nettle
Indian Defense:
1. India had the dubious distinction of being the world’s largest arms importer, accounting for about 12% of global arms imports.
2. Saudi Arabia jumped to first place in 2018 and 2019, but India still takes over 9% of global imports.
3. This external dependence for weapons, spares and, in some cases, even ammunition creates vulnerabilities during military crises.
4. COVID-19 has, once again, focused minds on the impact of supply chain disruptions on both civil and defence sectors.
Indian Steps
1. Notify a list of weapons systems for sourcing entirely from Indian manufacturers, the promise to progressively expand this list
2. A separate Budget provision for domestic capital procurement will encourage our private defence manufacturers, whose research capacities, technological skills and quality commitment are often better appreciated by foreign clients for whom they are subcontractors.
3. New Defence Procurement Procedures (DPP) 2020 are under formulation.
4. Chief of Defence Staff (CDS) has been tasked with promoting indigenous equipment in the armed forces.
5. Promised a time-bound defence procurement process
6. Overhauling of trial and testing procedures
7. Establishment of a professional project management unit.
8. Over the past five years, the Indian government has approved over 200 defence acquisition proposals, valued at over Rs. 4 trillion, but most are still in relatively early stages of processing.
Corporatizing the Ordnance Factory Board:
1. Backbone of indigenous supplies to our armed forces, from weapons systems to spares, ammunition and auxiliaries (including uniforms and boots).
2. Their structure, work culture and product range now need to be responsive to technology and quality demands of modern armed forces.
3. Corporatisation, including public listing of some units, ensures a more efficient interface of the manufacturer with the designer and end user.
4. The factories would be better integrated into the larger defence manufacturing ecosystem.
Many platforms and subsystems, developed in India and qualified in trials, like Akash and Nag, the Light Combat Aircraft and the Light Combat Helicopter, artillery guns, radars, electronic warfare systems and armoured vehicles face hurdles to their induction by our armed forces.
FDI impact
- The liberalisation of foreign direct investment in defence manufacturing, raising the limit under the automatic route to 74%, should open the door to more joint ventures of foreign and Indian companies for defence manufacturing in India.
- It would also sustain a beehive of domestic industrial activity in the research, design and manufacture of systems and sub-systems.
- Our companies, which have long been sub-contractors to prominent defence manufacturers abroad, would now get the opportunity to directly contribute to Indian defence manufacturing.
Challenges:
1. Corporatisation of ordinance factory is being opposed by employees and unions. It may lead to long litigation process,
2. Increased FDI may not be saviour because many foreign firms may not want to establish any kind of tie ups with Indian firms as it involves technology transfer.
3. In India, FDI policy is generally tangled around the fine print which curtails participation.
4. Notifying the material to be purchased locally is already part of the Defense procurement policy
5. The policy can create challenges for import in case of necessity.
6. Indian quality requirements have generally been criticised for being too ambitious and coming out of the fiction books.
7. Defense deals are mired in corruption and strategic partnership route mentioned in defense procurement policy 2016 has not gone anywhere.
Way Forward:
- A long-term integrated perspective plan of the requirements of the armed forces should give industry a clear picture of future requirements.
- DPP 2020 should incorporate guidelines to promote forward-looking strategic partnerships between Indian and foreign companies, with a view to achieving indigenisation over a period of time for even sophisticated platforms.
- Cost evaluation has to evolve from mechanical application of the L1 (lowest financial bid) principle to prioritising indigenous content.
- The definition of indigenisation itself needs to privilege technology over value or volume.
- Investment, Indian or foreign, will be viable only if the door to defence exports is opened, with a transparent policy.
- To give private industry a level playing field for developing defence technologies, conflicts of interest, created by the role of our Defence Research and Development Organisation (DRDO) as the government’s sole adviser, developer and evaluator of technologies have to be addressed. Of the key components of any major reform — money, method and mindset — mindset is the most critical and the most intractable. It takes a crisis to change it.
Working safely
Principles of safe working in the economy:
- Reducing the number of people present at any given time is a universal principle, either through resort to shifts, or arrangements to enable employees to work from home.
- Physical distancing of at least one metre,
- Mandatory use of face masks or covers,
- Frequent hand washing with soap, respiratory etiquette, sanitising contact surfaces and self-monitoring of health.
- Employees need only be nudged into adopting them through persistent communication, free provisioning of masks and sanitising materials, and organising office space suitably.
- Employers should see the value of keeping staff attendance at safe levels even within the legally permitted ceiling, which now extends to 50% in specified sectors and even in some government offices.
- Failure to maintain distancing, more so in a poorly-ventilated, closed environment, gives the virus a free run, as Chennai’s wholesale vegetable market showed starkly.
-Centre has released a booklet on protocol to be followed:
Other protocols:
- Testing of the symptomatic cases at the workplace
- Quarantining of both the worker and close contacts
- Two-day closure of offices experiencing an outbreak
At this stage of the pandemic, when a gradual resumption of economic activity in multiple sectors ranging from construction to food takeaways is a necessity, the most feasible interventions at the workplace are voluntary and those that cost the least.
There may still be occasion to resort to intermittent lockdowns if opening up leads to mounting cases.
Reference: https://www.thehindu.com/todays-paper/tp-opinion/working-safely/article31637100.ece
Lack of social security for women in informal economy needs to be addressed
Context:
- More than 90 per cent of working people in our country are engaged in the informal economy.
- The most vulnerable are women who suffer from multiple disadvantages — as women, as poor, informal workers and as members of the socially disadvantaged castes and communities that predominate the informal sector.
- They keep the wheels of our economy turning with their labour, and yet they have limited or no social protection to act as a cushion in hard times.
- Social security for all informal workers, including migrants, has been a long-standing demand of unions like the Self-Employed Women’s Association, SEWA, and other national unions.
Social Security for Women:
-Need for social security must include at least health care, child care, insurance, pension and housing with basic infrastructure like a tap and toilet in every home.
- The current pandemic has brought home the fact that those states with strong public health systems, decentralised planning and implementation through PRIs with active community participation, and partnerships with civil society organisations — local cooperatives, unions, collectives and others — were able to meet the COVID-19 challenge and flatten the curve.
- Much has been written about Kerala. Goa, Sikkim and other states, too, have shown us the way.
1. Public Health
- Commitment for the investments outlined in the National Health Policy 2017—2.5 to 3 per cent of GDP has to be allocated for public health
- Main investment in primary health care and a force of frontline workers, preferably women, to tackle both communicable and non-communicable diseases.
- Investing in them and their capacity building will serve as a bulwark for the daily health crises that people face.
- Both policy documents call for universal health care — leaving no one behind.
2. Childcare Services:
- Childcare is an essential service required for poor, working women — indeed, for all working women in India.
- Full day childcare will enhance female workforce participation.
- Our studies over the years have shown that women’s incomes double as a result of full-day care for their young children.
- Women can bring in better quality food for their families, and that their older children — especially girls — can go to school, as they are relieved of childcare responsibilities
- We can build on the already existing Integrated Child Development Scheme (ICDS) infrastructure and convert these into centres for overall child development with nutrition, health care, early childhood and value-based education.
- Local women are most suited to running such holistic childcare centres with proper capacity-building training and support, and fair remuneration at minimum wage level.
- Local level to young children of working women but also provides livelihood and respect for the care-givers in their communities.
- Similarly, Mobile Creches has developed low-cost but high quality models of care, including for migrant construction workers.
3. Insurance Cover
- PMJAY may have made a solid start for some but there are still lakhs of workers who are not eligible due to the enrolment criteria or because they are still struggling to fully comprehend the system.
-Health insurance is not the only coverage that workers need.
- They require a comprehensive cover with products covering several of the many risks they face every day — life, accident, asset, crop and cattle and small animal insurance, to mention a few.
- SEWA experience shows that bundling of products — providing them through one window and at the same time — and tailoring services to the needs of the working poor is what works best.
- They are ready to pay if they trust the service and see the system servicing their needs promptly.
- Recently, the Insurance Regulatory and Development Authority of India (IRDAI) has developed an important set of recommendations to increase the spread of micro insurance, both bundled and unbundled products, in low-income populations.
4. Pension
- Pension is well-recognised as another essential aspect of social security.
- We need to set up a taskforce to examine how social security can reach all informal workers in the simplest, most timely and appropriate manner.
- This applies to housing and basic infrastructure as well which are huge issues in and of themselves.
Way Forward:
1. Government must set up task force having members from different walk of life to make suitable recommendations and ensuring social security for all.
2. Some years ago, Ministry of labour and employment had given recommendation to make finance ministry as nodal ministry and along with other ministry to plan for universal social security. We need to revisit them.
3. Identification of informal workers through portable identity cards and digitalisation.
INTERNATIONAL RELATIONS
Nepal’s new political map claims India’s territories
Nepal Steps:
- Unveiled a new political map that claimed Kalapani, Limpiyadhura and Lipulekh of Uttarakhand as part of its sovereign territory.
- Nepali diplomatic sources maintain the region of Kalapani and the contiguous areas to the east of the river Kali and Susta on the Uttar Pradesh-Bihar border are the only parts of the nearly 1,800-km India-Nepal boundary that remain unresolved.
- The area of Susta near Gorakhpur can also be noted in the new map.
Government Claim:
- Nepal’s new official map is “artificial” and unacceptable to India.
- This unilateral act is not based on historical facts and evidence.
- It is contrary to the bilateral understanding to resolve the outstanding boundary issues through diplomatic dialogue.
Origin of Dispute:
- Recently inaugurated lipulekh road to Mansarovar passes through the disputed region and will cut travelling time to Mansarovar pilgrimage destinations. Nepal has said that the region belongs to them.
- Indian map published in November 2019 to showcase recently carved out Ladakh had shown Kalapani in India’s territory.
- Nepal had also expressed displeasure that the 2015 agreement between India and China for using the Lipulekh pass for trade was reached without consulting it
- Nepal maintains that not just the Kalapani region, but Limpiyadhura and Lipulekh are parts of its territory as demarcated in the 1816 Treaty of Sugauli.
Treaty of Saugauli:
- The treaty that established the boundary line of Nepal.
- It was signed on 2 December 1815 and ratified by 4 March 1816 between the East India Company and King of Nepal following the Anglo-Nepalese War of 1814-16.
- The treaty has demarcated border of the Nepal.
China accuses India of trespass, Line of Actual Control heats up
Chinese comment:
- Accused the Indian Army of crossing into its territory and of “blocking” its patrols and “attempting to unilaterally change the status” on the Line of Actual Control (LAC) between the two countries in Sikkim and Ladakh.
- Asked the Indian side to “immediately withdraw the personnel across the line,
- Restore the status quo of the relevant areas,
- Strictly restrict the front line troops,
- Observe the important consensus reached by the leaders of the two countries
Faceoff has taken place in NakuLa (Sikkim), Pangong Tso Lake and Galwan River Nala.
POLITY
Chhattisgarh to reward farmers through new scheme
The Rajiv Gandhi Kisan Nyaya Yojana
About the Scheme:
- Farmers in Chhattisgarh would get up to ₹13,000 an acre a year under a new income support programme.
- In the first instalment, ₹1,500 crore would be distributed among 18 lakh farmers, more than 80% of them small and marginal.
- The scheme would cover rice, maize and sugarcane farmers to begin with, and would expand to other crops later.
- Rice and maize farmers would get ₹10,000 an acre while sugarcane farmers would get ₹13,000.
- The additional income to farmers would increase rural demand and also act as a stimulus for the State’s economy.
ENVIRONMENT
Locusts cross Thar desert to invade 16 districts in Rajasthan
Locust invasion:
- The invasion of locusts had started from the India-Pakistan border on April 11 and they have now crossed the Thar desert and affected 16 of the 33 districts in Rajasthan.
- Locust swarms have travelled far in search of food because of lack of vegetation in the agricultural fields after the rabi crop harvest.
Government steps:
- State government had provided 45 vehicles to Jodhpur-based Locust Warning Organisation of the Union Ministry of Agriculture and Farmers’ Welfare for their sprayers and deployed 70 vehicles for surveys in the fields.
- While 600 tractor-mounted sprayers were also involved in the control operations
- Bids had been invited for drones to spray pesticides in the areas inaccessible to vehicles
- ₹10 crore provision for providing plant protection chemicals to the farmers at 100% subsidy.
About Locust invasion:
- The U.N. Food and Agriculture Organisation had recently warned that locusts were breeding in large numbers in Sudan and Eritrea on Africa’s Red Sea Coast as well as in Iran.
ECONOMY
Cabinet okays NBFC liquidity plan
Context:
The Union Cabinet has approved a ₹30,000-crores special liquidity scheme for non-banking finance companies (NBFCs) and housing finance companies aimed at improving the cash position of these entities.
About the Plan:
- A special purpose vehicle (SPV) would be set up by a public sector bank to manage a Stressed Asset Fund (SAF) whose special securities would be guaranteed by the Government of India and purchased by the Reserve Bank of India (RBI) only.
- The SPV would issue securities as per requirement subject to the total amount of securities outstanding not exceeding ₹30,000 crore to be extended by the amount required as per the need.
- The proceeds of sale of such securities would be used by the SPV to acquire short-term debt of NBFCs/HFCs.
- The scheme will be administered by the Department of Financial Services.
Criticism:
- The co-chairman, FIDC, the industry body of NBFCs, termed the scheme a non-starter due to the short tenure of the funds.
- The funds will be made available for a tenure of up to three months while a majority of the lending done is for a tenure of 2-3 years.
- In order to prevent any asset-liability mismatch, the expectation was for a tenure of three years.
Reference: https://www.thehindu.com/business/Industry/cabinet-okays-nbfc-liquidity-plan/article31635301.ece
Prelims Bits
About Naku La:
- Naku La is a pass in Sikkim at an altitude of more than 5,000 metres above the mean sea level.
Galwan River:
- The Galwan River flows from the disputed Aksai Chin region in southern Xinjiang of China to Ladakh of India.
- It originates in the area of Samzungling on the eastern side of the Karakoram range and flows west to join the Shyok River.
- The Galwan river is to the west of China's 1956 claim line in Aksai Chin.
- However, in 1960 China advanced its claim line to the west of the river along the mountain ridge adjoining the Shyok river valley.
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