IAS Gyan

Daily News Analysis


6th May, 2020


Pathways to a more resilient economy

- Covid 19 is a catastrophe for both human lives and economy.

- Human being is capable of coming with new ideas, innovations in search for their visions.

- Institutions of governance are human inventions for directing human endeavours and for providing stability.


Reasons behind resistance to new ideas:

- The scientific establishment determines which ideas are worthy of admission.

- The King’s advisers do not want outsiders to dilute their influence in the court. The Establishment resists change.

- Therefore, fundamental reforms of ideas and institutions in human societies are always difficult, until a crisis.


Challenging principles by Covid 19:


De growth:

- The obsession with GDP is being challenged.

- A five-point ‘de-growth’ manifesto by 170 Dutch academics has gone viral amidst the heightened Internet buzz during the lockdown.

- Goals for human progress must be reset. What should we aspire for? In addition, how will we measure if we are getting there.


Strengthening of country boundaries:

- Boundary-lessness is a mantra for hyper-globalisers. Boundaries, they say, impede flows of trade, finance, and people. Therefore, removing boundaries is good for global growth.

- Countries at different level of development with differential access to resources must have different paths to development.

- WTO justifies blurring of boundaries by comparing whole world as a system with different countries as sub-systems.

- According to systems’ theory, sub-systems within complex systems must have boundaries around them, albeit appropriately permeable ones, so that the sub-systems can maintain their own integrity and evolve.

- Covid 19 has given another reason to maintain sufficient boundaries.


Central role of Government:

- Covid 19 has brought government role at center.

- Capitalist organisations are begging government to bail them out.


Challenge to dominant role of market:

- Whenever goods and services are left to markets, the dice is loaded against those who do not have money to obtain what they need.

- The “marketization” of economies has contributed to the increasing inequalities in wealth over the last 50 years, which Thomas Piketty and others have documented.


Justice and dignity

-  “Citizen” welfare, not “consumer” welfare, must be the objective of progress.

- Citizens have a broader set of needs than consumers.

- Citizens’ needs cannot be fulfilled merely by enabling them to consume more goods and services.

- They value justice, dignity, and societal harmony too.

- Economists’ evaluations of the benefits of free trade, and competition policy too, which are based on consumer welfare alone, fail to account for negative impacts on what citizens value.


Curtailment on Competition and Enhancement to Collaboration :

- Collaboration is essential for progress.

- Faith in “Darwinian competition”, with the survival of only the fittest, underlies many pathologies of modern societies and economies.

- Companies must improve their competitive abilities. Nations too.

-  Blind faith in competition misses the reality that human capabilities have advanced more than other species’ have, by evolving institutions for collective action.

- Further progress, to achieve the Sustainable Development Goals for example, will require collaboration among scientists in different disciplines, and among diverse stakeholders, and collaboration among sovereign countries.


Sharing of Intellectual Property rights:

- Intellectual property belongs to the public.

- We are living in an era of knowledge. Just as those who owned more land used to have more power before, now those who own knowledge have more power and wealth than the rest.

- Intellectual property monopolies are producing enormous wealth for their owners, though many were developed on the back of huge public investments.

- Moreover, powerful technologies can be used for benign or malign purposes.

- It is imperative to evolve new institutions for public ownership of technologies and for the regulation of their use.


Purpose of enterprises

- The paradigm shift necessary after the crisis will not be easy.

- There will be resistance to shifts in social, economic, and political power towards those who have less from those who have more within the present paradigm.

- COVID-19 has revealed structural weaknesses in the global economy. Putting fuel in the tank will not be sufficient. The vehicle must be redesigned too.

- While global attention understandably is focused on relief and recovery, this is the time to design for resilience.

- Designing of new economic system  will require collaboration between trade experts, Intellectual property rights experts and industry experts.

- The new economic system must aim for the new paradigm.

- Changes will also be necessary in our life patterns, our work and consumption habits, and in our personal priorities.

- New innovations would be needed for business models, survivals of the business enterprises and changing the 20th century paradigm that “the business of business must be only business”.


Basic aim of new paradigm:

- The redesign of economies, of businesses, and our lives, must begin with questions about purpose.

- What is the purpose of economic growth?

- What is the purpose of businesses and other institutions?

- What is the purpose of our lives?

- What needs, and whose needs, do institutions, and each of us, fulfil by our existence?


Reference: https://www.thehindu.com/opinion/lead/pathways-to-a-more-resilient-economy/article31512646.ece


Boost wages to stimulate India’s growth


- Migrant workers are suddenly feeling desolate in their places of work and desperate to return to their villages, in the aftermath of the COVID-19 outbreak.

- We need to plan for an economic growth driven by rising — and not stagnant — wages.

- A development model that is dispersed far and wide across the country and not centered in a few big cities.


Patchy data

- Out of India’s total workforce of 471.5 million, only 12.3% are regular workers receiving some form of social security,

- The rest are mostly casual workers or petty producers surviving under various degrees of informality (figures for 2018).

- According to the 2011 Census, there were 54.3 million persons (workers as well as non-workers) in the country who migrated from one State to the other.

- The ‘heartland’ States of Uttar Pradesh, Bihar, Rajasthan and Madhya Pradesh accounted for 48.9% of these inter-State migrants, much higher than their combined share in India’s population (of 36.8%).


Migration of Workers

- Workers migrate from villages to urban centers, as the growth of rural incomes has not kept pace with the rising numbers and aspirations of the young in the countryside.

- Workers’ shift out of agricultural occupations as well as out of their rural bases is set to accelerate, unless new economic opportunities are created in the countryside.

- Their livelihoods are directly or indirectly linked to economic activities that cater to the demand from the relatively affluent in India and abroad (such as from industries producing sophisticated IT products).


Widening the demand base

- Even as they work long hours often under exploitative conditions, informal workers manage to earn and consume only very little.

-  According to the official consumption-expenditure surveys (for 2011-12), the richest 5% accounted for as much as 64.4% of the value of overall consumption of durable goods (such as of furniture or refrigerators) in urban India.

- The share of the poorest 50% was only 13.4%.


Impact of COVID-19:

- The COVID-19 pandemic is set to cause long-term disruptions to the existing structure of demand

- Economic activities have now been halted for weeks on end, and no end seems to be in sight for the downward slide in export demand

- Businesses in India and elsewhere are concerned that even after the lifting of the lockdown, they will have to operate at a fraction of their installed capacities due to the sagging demand conditions.


Role of Businesses:

- The crisis in the economy can be overcome only by widening the sources of demand, by raising the consumption of and investment for the poor.

- Consider, for instance, the setting up of industries linked to food processing or affordable housing in rural areas.

- Food processing can help boost farmer incomes, reduce food spoilage, create rural employment and, above all, improve the availability of nutritious food to the needy.

- Firms should assist in raising workers’ wages and incomes, and thereby, in enlarging the size of the markets.

- Even with higher wages, profit rates will not dip because the larger demand allows firms to utilise their capacities better.


Increase government spending

- Governments must increase spending on the economy, in areas such as infrastructure and innovation.

- Government spending can boost the “animal spirits” of the private investors, as had been suggested by John Maynard Keynes amidst the great depression of the 1930s.

- The ideas of Keynes and his followers had helped to fuel an unprecedented economic boom in the U.S. and European countries for almost three decades after the end of the Second World War in 1945.

- Battered by an oppressive economic system and now by an unpredictable virus, India’s working classes deserve long-lasting relief and comfort.

- What is needed is a massive expansion in government spending, which will uplift workers’ skills as well as their incomes and purchasing power.

- This will include investments in healthcare, education, roads, rural infrastructure, agricultural research, public transport, and so on — perhaps similar in scale and ambition to the post-war reconstruction efforts in western nations following the Second World War.

- The rising numbers of the young in India, especially in its northern and eastern States, offer a potentially new source of demand that could sustain the economy over the next few decades.


Reference: https://www.thehindu.com/opinion/op-ed/boost-wages-to-stimulate-indias-growth/article31512239.ece


It’s time for a virtual judiciary


- Today, ‘work from home’ is a concept whose time has come like never before.

- Many offices are gearing up for the new normal of staying at home and working, as restrictions are expected to continue for an indefinite period.

- This brings us to the question, how can we use technology to ensure speedy disposal of cases?


Need of the Virtual Judiciary:

- The Economic Survey of 2019-20 mistakenly argues for more court infrastructure and judges to solve the problem. On the contrary, the existing infrastructure is grossly under-utilised.

- There are tribunals such as the Income Tax Tribunal that function only half-day most of the time. To make matters worse, most courts are closed for Christmas and summer vacations.

- Judges are not accountable for efficiency and performance.

- Thousands of Indians cannot afford to go to court as legal costs are high and legal procedures are complicated.

- It is a fact that most tax matters do not necessitate personal hearings.

- Tax cases reach tribunals and higher courts after lower authorities record all the facts. The High Courts and the Supreme Court deal with issues or interpretation of the law.

- The bane of the court system is that lawyers on both sides need to be physically present in court, which leads to adjournment for various reasons.

- The fact that the jurisdiction of a court is defined by geography makes no sense in matters such as taxation and company law.


Working of the Virtual Judiciary:

- We can submit all the papers via mail.

- The judge can decide the case based on all the available information.

- Wherever the judge requires clarifications, he or she can seek the same through email.

- After considering all the material available, the judge can pass a draft order and send it to both sides for any comments, which they may want to provide.

- Thereafter, the judge can, after considering the comments, pass the final order.

- This will enhance the quality of the judgment and also eliminate obvious errors.


An efficient judiciary

- Not only will a virtual judiciary result in substantial savings in costs but will also lead to speedy disposal of cases.

- The productivity of lawyers will increase substantially as visits to courts and long waiting hours will be more an exception than a rule.

- If this practice is extended to other civil cases, efficiency will double, even treble, in judicial functioning.

- All judges should be empowered to handle any case, wherever it originates.

- This will result in multiple advantages — the principal one being better utilisation of manpower and infrastructure by equitably distributing the work.

- Also, malpractices will be limited as there will no longer be familiarity between lawyers and judges in a city.



- If vested interests are kept aside and collective will to initiate what is for the common good takes precedence, a virtual judiciary can become a part of our lives.



DRDO develops a disinfection tower

About Disinfection tower:

- It is an ultraviolet (UV) disinfection tower for rapid and chemical-free disinfection of high infection-prone areas.

- The equipment named UV Blaster is “useful for high-tech surfaces like electronic equipment, computers and other gadgets in laboratories and offices that are not suitable for disinfection with chemical methods.

- The product is also effective for areas with a large flow of people such as airports, shopping malls, metros, hotels, factories and offices.


About DRDO:

- The Defence Research and Development Organisation (DRDO) is an agency of the Government of India, charged with the military's research and development, headquartered in Delhi, India.

- It was formed in 1958 by the merger of the Technical Development Establishment and the Directorate of Technical Development and Production of the Indian Ordnance Factories with the Defence Science Organisation.

- It is under the administrative control of the Ministry of Defence, Government of India.



New health warnings on tobacco product packs


-The Union Health Ministry notified a new set of images with specified health warnings for all tobacco product packs by making an amendment to the Cigarettes and other Tobacco Products (Packaging and Labelling) Rules, 2008.



- All tobacco products manufactured or imported or packaged on or after September 1 shall display the first image

- Those manufactured or imported or packaged on or after September 1, 2021 shall display the second image.

- Violation of the provision is a punishable offence with imprisonment or fine as prescribed in Section 20 of the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003.


Cigarette and Other Tobacco Products Act:

- It is an Act of Parliament of India enacted in 2003 to prohibit advertisement of and to provide for the regulation of trade and commerce in and production, supply and distribution of cigarettes and other tobacco products in India.

- The Act prohibits smoking of tobacco in public places, except in special smoking zones in hotels, restaurants and airports and open spaces.

- Advertisement of tobacco products including cigarettes is prohibited.

- No person shall participate in advertisement of tobacco product, or allow a medium of publication to be used for advertisement of tobacco products. 

- Tobacco products cannot be sold to person below the age of 18 years, and in places within 100 yards radius from the outer boundary of an institution of education, which includes school, colleges and institutions of higher learning established or recognized by an appropriate authority.

- A person who manufactures tobacco products and fails to adhere to the norm related to warnings on packages on first conviction shall be punished with up to 2 years in imprisonment or with fine which can extend to Rs. 5000, in case of subsequent conviction shall be punished with up to 5 years in imprisonment or with fine which can extend to Rs. 10000.


Reference: https://www.thehindu.com/todays-paper/tp-life/new-health-warnings-on-tobacco-product-packs/article31506379.ece



Villagers in Assam get respite as hanging fence deters jumbos

About Manas National Park:

- Manas National Park or Manas Wildlife Sanctuary is a national park, UNESCO Natural World Heritage site, a Project Tiger reserve, an elephant reserve and a biosphere reserve in Assam, India.

- Located in the Himalayan foothills, it is contiguous with the Royal Manas National Park in Bhutan.

- The park is known for its rare and endangered endemic wildlife such as the Assam roofed turtle, hispid hare, golden langur and pygmy hog. 

- The name of the park is originated from the Manas River.

- The Manas river is a major tributary of Brahmaputra River, which passes through the heart of the national park.


Reference: https://www.thehindu.com/todays-paper/tp-life/villagers-in-assam-get-respite-as-hanging-fence-deters-jumbos/article31506378.ece



China launches new rocket, spacecraft


- China successfully launched a new rocket and prototype spacecraft.

- It is a major test of the country’s ambitions to operate a permanent space station and send astronauts to the Moon.

- The spaceship will one day transport astronauts to a space station that China plans to complete by 2022 — and eventually to the Moon.

- It will have capacity for a crew of six.

- The spaceship and capsule are slated to return to a landing site by Friday after completing their test flights.


Reference: https://www.thehindu.com/todays-paper/tp-international/china-launches-new-rocket-spacecraft/article31513943.ece


Ships on way to the Maldives, UAE

Operation Samundar Setu:

-  Dispatched two ships, INS Jalashwa and INS Magarto Maleto repatriate stranded Indian citizens.

-  INS Shardul and INS Airavat had set sail to the UAE. 

- A total of 1,000 persons are planned to be evacuated during the first trip, catering for COVID-related social distancing norms vis-a-vis the carrying capacity and medical facilities available on board.


Reference: https://www.thehindu.com/todays-paper/tp-national/ships-on-way-to-the-maldives-uae/article31513989.ece


Amid high inflation, Iran to get a new currency

Iran Steps:

- Replaced the rial with another basic unit of currency called the toman.

- Each toman will be worth 10,000 rials under the new system.

- It has slashed four zeros off its face value.

Reasons behind it:

- The COVID-19 pandemic, which turned Iran into a regional epicentre of the disease, have played a decisive role.

- American sanctions on Iran has further devalued the currency.


Reference: https://www.thehindu.com/todays-paper/tp-international/amid-high-inflation-iran-to-get-a-new-currency/article31513945.ece



India needs a big stimulus package: Abhijit Banerjee

Comment of Abhijit Banerjee:

- India needs a large enough stimulus package to increase spending and revive demand to face the challenge posed by the COVID-19 pandemic.

- We are still talking about 1% of GDP. The U.S. has gone for 10% of GDP.

- Giving money in the hands of everybody, so that they can buy in stores or they buy consumer goods.

- Because when the MSME people get money, they spend it and then it has the usual Keynesian chain reaction


Reference: https://www.thehindu.com/todays-paper/india-needs-a-big-stimulus-package-abhijit-banerjee/article31514038.ece



3 Indian photographers win Pulitzer Prize

Awards to Indian Photographers:

- The Associated Press was awarded the feature photography prize for images showing life in Kashmir as India revoked its semi-autonomous status.

- Three photographers — Mukhtar Khan, Yasin Dar and ChanniAnand —were named for the award.


About Pulitzer Prize:

- The Pulitzer Prize is an award for achievements in newspaper, magazine and online journalism, literature, and musical composition in the United States.

-  It was established in 1917 by provisions in the will of Joseph Pulitzer, who had made his fortune as a newspaper publisher, and is administered by Columbia University.

- Prizes are awarded yearly in twenty-one categories.


Pulitizer and India:

- In 1937, Gobind Behari Lal became the first Indian to win a Pulitzer. He won the award in the reporting category, along with four others, for “coverage of science at the tercentenary of Harvard University”. 

- In 2003, Geeta Anand was part of a team of reporters at the Wall Street Journal that won the Pulitzer Prize for explanatory reporting for a series on the impact of corporate scandals in America. 

- In the non-journalism category, author Jhumpa Lahiri (who has also written Namesake and Lowland) won the Pulitzer in 2000 in the fiction category for her book Interpreter of Maladies.

Reference: https://www.thehindu.com/todays-paper/tp-international/3-indian-photographers-win-pulitzer-prize/article31513948.ece