PM IAS EDITORIAL NOV 16,17,18 – Plover Minds Institute LLP

Editorial 1 : Food flux

Context

Amid the cooler headline inflation, food price pressures pose a risk.

The rise in prices

In October, India’s consumer price inflation eased to a four-month low of 4.87%, while wholesale prices declined year-on-year for the seventh successive month by a minor 0.5%.
Although only marginally lower than the 5% retail inflation in September, October’s price rise pace — which is exactly the same as that in June — surely represents some relief for the third successive month from July’s 15-month high pace of over 7.4%.
Rural consumers still face a higher inflation of 5.1%, though.
Core inflation, which excludes energy and food costs, has eased further and household services inflation dropped below 4% after several months above.
The rise in prices of vegetables, which had surged over 37% in July, eased to 2.7% in October.
However, the overall uptick in food costs for households stayed firm at 6.6%, virtually unchanged from September, as other essential edibles saw faster price hikes or remained at elevated levels.
Some of these — like pulses (up 18.8%) and cereals (10.7%) — may be attributed to worries about the kharif output and uncertain rabi prospects as well as hikes in minimum support prices for crops.
Pulses prices were up 19.4% at the wholesale level, signalling that more pass-through to retail prices is likely.

The committee

The Monetary Policy Committee of the Reserve Bank of India, which meets early December for its next review, will not be too swayed by the October tidings.
As per its 5.6% average inflation projection for this quarter, down from 6.4% in the previous quarter, November and December may well see an average inflation of 5.95%, fractionally short of the central bank’s upper tolerance threshold.
Excluding edible oils, whose 13.7% year-on-year drop in prices played a key role in moderating the Consumer Price Index, would have meant a 5.6% rise in prices.
Base effects from last year, when the Ukraine conflict had spiked edible oil prices, will start to dissipate in coming months.
Similarly, while the 6.8% inflation recorded in October 2022 helped cool price rise last month, those base effects will surely ebb this month.
Retail inflation had eased to 5.88% last November, with the food price index rising just 4.7%, from 7% in the previous month.
Households that seem to have adjusted to the continuous recent rise in living costs, by pulling back on discretionary spends and downsizing essential consumption as per industrial output trends, are likely to remain cautious rather than loosen their purse strings anytime soon.

Conclusion

For an economy whose resilience relies on its domestic demand buffer against global shocks, reluctant or budget-cramped consumers are the biggest headwind for policymakers to strive to address.

Editorial 2 : Life over death

Context

Abolition of death penalty should form the core of any reform in justice system.

Abolition of death penalty

It is disappointing that the parliamentary committee that examined the Bharatiya Nyaya Sanhita (BNS), the proposed criminal statute likely to replace the IPC, has not made a recommendation to abolish the death penalty.
Instead, the standing committee on Home Affairs, despite submissions from experts and jurists on abolition, chose to make a bland recommendation that the matter may be left for the government to consider.
Its observation is limited to a remark that it has understood that the reason for a passionate argument against the death penalty is that the judicial system can be fallible and to prevent an innocent person from being wrongly sentenced to death.
However, domain experts had made some persuasive submissions before the panel: that instances of trial courts awarding death were on the rise, whereas statistical trends showed that the Supreme Court of India was leaning away from capital punishment.
And that social scientists had demonstrated it had no deterrent effect and that global opinion was in favour of its abolition.
The Court awarded the death penalty to only seven people from 2007 to 2022, while all death sentences were either set aside or commuted to life in 2023, as they did not fall under the “rarest of rare cases”.

Capital punishment over life

Members who added notes of dissent to the report also highlighted the argument that capital punishment has been shown to be no deterrent; that imprisonment for the remainder of the convict’s natural life will be a more rigorous punishment and provide scope for reform; and that most of those on death row came from underprivileged backgrounds.
They have also made the point that the three Bills proposing a new body of criminal law are substantially the same as the existing IPC, Code of Criminal Procedure and Evidence Act.
If at all, Parliament moves to enact the draft Bills, with changes suggested by the parliamentary panel, it will be in the fitness of things if it is used as an occasion to reconsider the need to retain the death penalty.
The BNS has defined ‘life imprisonment’ as a term for the remainder of one’s natural life, and this should be the default alternative to death sentences.
The case for abolition will gain strength if the trend of seeking premature release of life convicts on political grounds is arrested and life terms without remission become more common.

Way forward

Remission should be a humanitarian act and never a source of political controversy.
Removing capital punishment from the statute book and introducing a rational and universal remission policy will be a substantive reform in the justice system.

EDITORIAL NOV 17

Editorial 1 : Challenging the Electoral Bond Scheme

Introduction:

Civil society has been campaigning for long to empower the voter by improving her access to background information on the candidates in the electoral fray, and to bring about greater transparency in the obscure domain of political funding.
In this, the instrument of public interest litigation (PIL) has been deployed to good effect. The campaign is premised on the citizen’s democratic right to information (RTI), which is integral to the fundamental right to speech and expression under the Constitution.

A veil over the corporate donor

Electoral Bond Scheme (EBS) was touted as a sincere effort to clean up electoral democracy by incentivising political donations through banking channels.
To begin with, the Foreign Contribution (Regulation) Act (FCRA) was retrospectively amended through the Finance Act of 2016 to permit Indian subsidiaries of foreign companies to donate to political parties. This was followed by an overhaul of the regulatory framework comprising the Representation of the People Act (RPA), the Companies Act, 2013, the Income Tax (IT) Act and the RBI Act through the Finance Act of 2017, despite strident protests from the RBI, the Election Commission of India (ECI) and Opposition parties.
The device of incorporating the amending Bills in the Finance Bill effectively short circuited the consideration of the legislative proposals by the Rajya Sabha and ensured their smooth passage.
Months before the EBS was promulgated, the Association for Democratic Reforms (ADR) and Common Cause filed a PIL to challenge the constitutionality of the amendments made in the Finance Act of 2017. The petition contended that these amendments infringed the citizen’s fundamental ‘Right to know’ under Article 19(1)(a), and were not saved by any of the permissible restrictions under Article 19(2).
The petition held that the impugned amendments jeopardised the country’s autonomy, militated against transparency, incentivised corrupt practices by lifting the caps on corporate donations and allowing contributions by loss making and shell companies. Consequently, the nexus between politics and big business was rendered more opaque.
The instrument would enable special interest groups, corporate lobbyists and foreign entities to secure a stranglehold on the electoral process and influence the country’s governance to public detriment.
By relieving the political parties of the duty to disclose the particulars of their donors, the amendments eroded the ECI’s constitutional role and deprived citizens of vital information concerning electoral funding. Further, the recourse to a money bill to amend the relevant laws subverted the legislative scheme envisaged in the Constitution.

Bonds, the favoured mode

Over time, electoral bonds have become the favoured mode of political donation. Bonds worth ₹13,791 crore have been sold in 27 tranches until July 2023. The ADR’s research has shown that electoral bonds accounted for 55.9% of the donations.

As per ADR report, BJP got the lion’s share of 74.5% of electoral bonds redeemed until 2020-21. INC was a distant second, at 11%, followed by the Biju Janata Dal, the YSR Congress Party and the Trinamool Congress.Over 94% of the electoral bond sales are in the denomination of one crore rupees — a sum beyond the capacity of individual donors. Moreover, particulars of individuals contributing ₹20,000 and above are duly disclosed in party accounts.

The expenditure on the last general election to the Lok Sabha has been estimated at between ₹55,000 to ₹60,000 crore. Most dealings of political parties continue to be in cash, but the receipts from electoral bonds enable them to meet their transactions with the formal economy, such as the costs of infrastructure expansion, equipment and publicity in the print, electronic and digital media. This gives them an enormous advantage over their rivals in influencing voter behaviour and electoral outcomes.
Meanwhile, a general election to the Lok Sabha and 30 elections to State Assemblies have been held. In most of these contests, the political formations in power have enjoyed the advantage of augmented inflow of corporate contributions, thanks to the EBS that inherently favours the incumbent.
Supreme Court (SC) of India did not take kindly to the petitioners’ repeated pleas to stay the impugned scheme, pending determination of the weighty issues raised in their petition. Solicitor General has argued that anonymity is central to the right to privacy of political donors, even though this fundamental right is not available to artificial legal persons.

Conclusion:

Based on the Supreme Court’s stellar record in expanding the scope of the right to freedom of speech and expression and empowering the voter to make an informed choice, one may hope that the next round of elections will be contested on a reasonably level playing field.

Editorial 2 : How was the first vaccine for chikungunya approved?

Context:

Recently, the world’s first vaccine for chikungunya was approved by the Food and Drug Administration (FDA) in the U.S. The vaccine has been manufactured by Valneva under the brand name Ixchiq. It has been approved for administration in people who are 18 years or older, and are at increased risk of exposure to the virus.
Ixchiq is administered as a single dose by injection into the muscle. It contains a live, weakened version of the chikungunya virus and may cause symptoms in the vaccine recipient similar to those experienced by people who have the disease.

About chikungunya:

Chikungunya, is characterised by severe joint pain and impaired mobility, and comes with fever. It is a viral infection (CHIKV) transmitted primarily by the Aedes aegypti and Aedes albopictus mosquitoes and has been described as “an emerging global health threat.”
The WHO fact sheet says Chikungunya is prevalent in Africa, Asia, and the Americas; but sporadic outbreaks have been reported in other regions. As per the National Centre for Vector Borne Diseases Control, India had above 93,000 suspected chikungunya cases until September in 2023.
Since 2004, outbreaks of CHIKV have become more frequent and widespread, partly due to viral adaptations allowing the virus to be spread more easily by the Aedes albopictus mosquitoes.
The joint pain is often debilitating and varies in duration; it can last for a few days, but also be prolonged over months. Other symptoms include joint swelling, muscle pain, headache, nausea, fatigue and rash.
While severe symptoms and deaths from chikungunya are rare and usually related to other coexisting health problems, it is believed that the numbers are generally underestimated, because chikungunya is often misdiagnosed as dengue or zika, as symptoms can seem similar.
As of now, there is no cure, only symptomatic relief, with analgesics to help with the pain, antipyretics for the fever, rest, and adequate fluids. Prevention includes mosquito control activities, primarily falling under public health outreach and routine civic maintenance. Individuals are also advised to use medicated mosquito nets and ensure that there is no water stagnation in any containers at home, in order to prevent the breeding of mosquitoes.

Indian Government Initiative to Control Chikungunya:

National Vector Borne Disease Control Programme (NVBDCP) is a comprehensive programme for prevention and control of vector borne diseases namely Malaria, Filaria, Kala-azar, Japanese Encephalitis (JE), Dengue and Chikungunya. It works under the Ministry of Health and Family Welfare.
Integrated Disease Surveillance Programme (IDSP) launched during 12th Plan (2012–17) under the National Health Mission, sets up a Central Surveillance Unit (CSU) at Delhi, State Surveillance Units (SSU) at all State/Union Territories (UTs) head quarters and District Surveillance Units (DSU) at all Districts. Its objectives are to strengthen/maintain decentralized laboratory based and IT enabled disease surveillance systems for epidemic prone diseases to monitor disease trends, to detect and respond to outbreaks in the early rising phase through trained Rapid Response Teams (RRTs).

Conclusion:

Hopefully, inspired by the fasttrack pathway drawn up by research into COVID, this approval will fast track the roll out of vaccines in countries where chikungunya is more prevalent, including Brazil, Paraguay, India and parts of western Africa.

EDITORIAL NOV 18

Editorial 1 : The geopolitical fallout of the Israel-Hamas war

Introduction:

The United States, the reigning superpower of the region since the end of the Second World War, had begun shifting its strategic focus to more conventional rivals such as Russia and China. But, to maintain its hold over and interests in the region, what the U.S. sought to do was to bring two of the pillars of its regional policy, Israel and the Gulf Arabs, closer. The Abraham Accords were a result of this policy.

A common Jewish-Arab front

In a relatively peaceful West Asia, a common front would allow the U.S. to free up resources from the region which it could use elsewhere. On the other side, the U.S.’s deprioritisation of West Asia led Gulf Arabs to make their own tactical changes in foreign policy for a more predictable and stable relationship in the region. This opened an opportunity for China.

Role of China:

China, which has good ties with countries across the Gulf, played the role of a peacemaker. The result was the Iran-Saudi reconciliation agreement. The U.S.’s response to the Saudi- Iran détente was to double down on the Abraham Accords.
The Biden administration invested itself in talks between the Saudis and the Israelis. It was so confident about prospects of a deal that it unveiled the India-Middle EastEurope Economic Corridor (IMEC) proposal earlier this year, which hinged on Arab-Israel peace deal, and sold it as an alternative to China’s outreach into the region, the Belt and Road Initiative (BRI). Then came the October 7 Hamas attack on Israel.

Re-regionalisation of Palestine

Hamas, a Sunni Islamist militant group which has been controlling Gaza since 2007, looked at these two realignments differently. For Hamas, the coming together of Iran, a Shia theocratic republic which also has been its patron for years, and Saudi Arabia, a Sunni monarchy that has been wary of the Hamas brand of political Islam, is a welcome development. But Hamas saw Saudi Arabia normalising ties with Israel, which has been occupying Palestinian territories at least since 1967, as a setback.
In 1978, when the Camp David Agreement was reached, Egypt got the Israelis to sign the Framework For Peace Agreement, which became the blueprint for the Oslo process in the 1990s. Jordan signed its peace treaty with Israel only after the first Oslo Accord was signed in 1993.
But when the United Arab Emirates (UAE), Bahrain and Morocco signed the Abraham Accords in 2020, Israel did not make any concessions for the Palestinians. This was the clearest sign yet that Arabs were ready to delink the Palestine question from their engagement with Israel, which boosted Tel Aviv’s efforts to localise the Palestine issue — to treat it as a mere security nuisance while continuing the occupation without consequences.
When Saudi Arabia and Israel were in talks, nobody expected the Benjamin Netanyahu government, the most far right government in Israel’s history, to offer concessions to the Palestinians. So, understandably, one of the goals of the October 7 Hamas attack was to break the walls of localisation, re-regionalise the Palestine issue, and thereby scuttle the Saudi-Israel peace bid.

Israel’s vengeful onslaught on the Gaza Strip, which followed the Hamas attack, killing at least 11,500 Palestinians, a vast majority of them women and children, made sure that Hamas met its goal, at least for now.

The way Arabs see it

Both the Arabs and Israel were ready to sidestep the Palestine question and chart a new course of partnership. But new regional realities emerged after October 7. The Palestine issue has now come back to the fore of the West Asian geopolitical cauldron.
Second, Israel’s disproportionate and indiscriminate attack on Gaza has triggered massive protests across the Arab Street, mounting enormous pressure on monarchs and dictators.
Third, there is always the Iran factor. Ever since the Palestine issue got re-regionalised, Iran has stepped up its proPalestine rhetoric and called for collective action against Israel, while its proxies, the Houthis in Yemen and Hezbollah in Lebanon, have launched limited attacks on Israel. Iran is trying to claim the leadership of the Islamic world, bridging the ShiaSunni divide.
Mohammed bin Salman, the Saudi Crown Prince, has relinked the Palestine issue with peace talks with Israel. This is a setback for both America and Israel. The U.S. might still hope that the situation would be conducive to reboot the Abraham Accords once the dust settles. This is entirely possible.
But a key challenge is that it is still not clear what Mr. Netanyahu’s endgame is in Gaza. He has already signalled that Israeli troops would continue to play an overall security role in the enclave — which means, Israel would reoccupy the territory from where it withdrew in 2005.
The U.S. had proposed that post the war, the Palestinian Authority, which runs parts of the West Bank with limited powers, should take over Gaza as well. But Mr. Netanyahu has shot down that proposal.
So, if Israel reoccupies the territory, home to 2.2 million people living in distress and misery, the current wave of violence would only be the beginning of a long spell.

Regional dynamics

The Iran-Saudi reconciliation, under Chinese mediation, itself was a setback for the U.S. In recent years, Arab countries have also shown an increasing hunger for autonomy. The UAE and Saudi Arabia refused to join American sanctions against Russia after the Ukraine war.
Saudi Arabia continued its Organization of the Petroleum Exporting Countries (OPEC) Plus cooperation with Moscow, defying Washington’s requests and diktats.
China is playing an increasingly greater role in the Gulf, which includes secret plans to build a military facility in the UAE. The current crisis is expediting these changes in the regional dynamics.

Conclusion:

The situation in Gaza is effectively back to the pre-2005 days, but the geopolitical reality is entirely different from the early 2000s when the U.S. was the sole superpower in the region. Russia and China may not replace America in West Asia in the near future given the U.S.’s huge military presence, but the growing footprint of other great powers is offering space for better manoeuvrability for regional players.

Editorial 2 : State of the economy — temper the euphoria

Context:

In its semiannual report, World Economic Outlook, ‘Navigating Global Divergences’ October 2023, the International Monetary Fund (IMF) has revised its projected GDP growth rate for India for 2023-24 to 6.3%, up from the earlier 6.1%. For India’s policymakers, it is a vindication of their short term economic management. Official spokespersons have sought the IMF’s endorsement to silence its critics.

Performance of Indian economy:

That the economies that were worst affected during the COVID19 pandemic were also the ones to record a steep recovery is widely acknowledged. India, which was one of the worst affected, has followed the pattern.
During the second quarter of 2020, India’s GDP contracted by 25.6%, quarter on quarter, the worst among the world’s major economies in 2020. Taking a slightly longer view, India’s real (inflation adjusted) annual GDP growth rate slowed down from 6.8% in 2016-17 to 2.8% in 2019-20, immediately prior to the pandemic.
Real per capita income level in 2021-22, at ₹1.09 lakh, was higher than that in 2019-20 by about ₹600. In the following year, 2022-23, recovery gained momentum as domestic supplies were restored and global supply chains were straightened out.

Effects are cause for concern

Surely, output recovery is welcome, yet its effects on employment, its quality and persistence of inflation of essential food items affecting the poor the most remain causes of concern — as many critics have highlighted. However, even focusing on output recovery, a sectoral view with trade dimension, would perhaps expose chinks on the armour.
Policymakers need to temper their optimism by taking a slightly longer view with a wider angle — appreciating the fast changing geopolitical underpinnings of economic policy making. It perhaps bears repetition that 2022-23 heralded the end of globalisation as we knew it (since the Berlin Wall’s collapse in 1989) with tectonic shifts in the world geopolitical order, revealing India’s persistent vulnerabilities of oil and food shocks.

Growing deficit with China

However, the immediate concern is India’s susceptibility to its soaring deficit with China. India’s economic frailty has increased even as the net exports (exports minus imports) to GDP ratio has declined sharply.
India’s dependence on Chinese imports of manufactures seems structural, and not easily corrected by changes in relative prices. In May 2020, the government initiated the Atmanirbhar Bharat Abhiyan, amidst the Galwan crisis to curb Chinese imports of critical industrial products. China accounts for: 15%- 16% of India’s imports and a third of India’s trade deficit.
Willy nilly, India undid many import restrictions, as domestic production was getting throttled for lack of critical Chinese inputs. Industrial growth rates as per the Index of Industrial Production (IIP), despite its limitations, shows an alarming regression over a longer period. During the boom period (2004-05 to 2013-14), manufacturing grew at an annual average rate of 5.7%.
From 2011-12 to 2021-22, gross fixed capital formation (GFCF) to GDP ratio at current prices, declined steadily from 34.3% to 28.9% — an unprecedented fall in post independent India. And its public sector share has remained constant at 8% (National Accounts).
Net foreign direct investment (FDI excluding disinvestment and outward foreign direct investment), to current GDP ratio fell from 3.6% in 2008 to 2.4% in 2022 (World Development Indicators). The official optimistic picture of public investment growth since FY22, based on budgetary statistics, seems suspect.

Public investment has three parts:

Investment by government
Central public sector undertakings (PSUs)
State PSUs

Public investment by State governments, based on the Centre’s loans and advances to States, is conditional upon policy reforms. The widely reported rise in the Centre’s investment is apparently due to the merging of extrabudgetary borrowing by central PSUs with the Centre’s own Budget. Hence, the projected boost in public investment seems illusory. Combining the three items, public investment seems around 6% of GDP — perhaps similar to its pre-COVID-19 levels.

Credibility of the HDI

On social development, official spokespersons and critics have battled over the veracity of multidimensional poverty measure (MPI), and the unrepresentativeness of the Global Hunger Index (GHI). Instead, the UN Development Programme’s Human Development Index (HDI) may be more credible and an acceptable measure.
The value of India’s HDI index moderated from 0.645 in 2018 to 0.633 in 2021; and, its global rank went down by one rank during 2015 to 2021 — meaning that other countries have performed better than India.

Concerns::

To sum up, our economic recovery is weak with following concerns:

Strategic threat posed by an unrelenting rise in trade deficit with China, despite government’s best efforts
Its mirror image is a decline in industrial output growth rates, especially capital goods’ decimation
A decade long, unprecedented, decline in the economy’s fixed investment rate; with an unchanging public sector’s share in it,
India’s HDI ranking slipping

Conclusion:

Official commentators would perhaps do well to engage with its critics in appreciating the gravity of economic setbacks in recent years than scoring brownie points over the IMF’s short term growth projections.