- Swiss cheese model and defence reforms
- Debtors need waivers that banks can’t afford
- The de-escalation road map for India and China
Focus: GS-III Internal Security
Understanding Swiss Cheese model in simple terms
The Swiss cheese model is associated with accident investigation in an organisation or a system
- A system consists of multiple domains or layers, each having some shortcomings.
- These layers are visualised in the model as slices of Swiss cheese, with the holes in them being the imperfections.
- Normally, weaknesses get “nullified” because of the holes being unaligned. So, when there is a hole in a spot on one layer, the next layer does not have a hole and it is covered.
- At some point, the holes in every slice align to let a hazard pass through and cause an accident – this is because weaknesses are not covered.
Three slices in defence set-up
In a nation’s defence preparedness, Swiss Cheese model works in the reverse way: The slices represent the major constituents in a nation’s war-making potential, while the holes are pathways through which the domains interact.
At the macro level, there are only three slices with holes in each. These must align to ensure that a nation’s defence posture is in tune with its political objectives.
In the Indian defence set-up, the three slices are:
- The policymaking apparatus comprising the Department of Military Affairs (DMA) and Ministry of Defence (MoD)
- The defence research and development (R&D) establishment and domestic manufacturing industry
- The three services – Indian Army, Indian Navy and Indian Air Force.
Access to the right equipment
- India’s security managers have to factor in the increasingly belligerent posture of the country’s two adversaries – Pakistan and China.
- Such a security environment (with Terrorist activities in Jammu and Kashmir and ongoing incidents along the northern border with China) demands that the capability accretion of the three services be increased.
- Enter the well-meaning government diktat for buying indigenous only, but for that, in-house R&D and manufacturing entities have to play ball.
Way Forward: To work on the slices of Swiss Cheese
- So, the Swiss cheese slice representing indigenous R&D and a manufacturing supply chain that ensures quality war-fighting equipment, at the right time and in required quantities, still needs some work.
- The forthcoming reform of creating theatre commands is the most talked about result of jointness expected from the Swiss cheese slice in which lie the DMA and a restructured MoD.
- The three services that constitute the third Swiss cheese slice have to contend with the other two slices being in a state of flux for some time to come.
-Source: The Hindu
Focus: GS-III Indian Economy
Why in news?
India’s Supreme Court has sought the response of the finance ministry on demands by debtors for an interest waiver during the moratorium until August.
Argument calling for a waiver
The moratorium lacks generosity, since credit charges are only to be held in abeyance, not pardoned, with the eventual burden piling up month after month, made heavier still by interest charged on unpaid repayments.
Arguments against a waiver
- Earlier, the Reserve Bank of India (RBI) had filed its own response on the matter, opposing any waiver of interest charges.
- By RBI’s calculations, even if just 65% of outstanding term loans were to go interest-free for six months, banks would lose ₹2 trillion.
- Such a large loss would threaten the financial viability of banks and jeopardize the interests of depositors.
Analysing what could happened if a waiver is given
- A large-scale write-off could threaten the stability of our banking sector.
- The capital buffers of banks may soon be at risk of getting exhausted, and it is not clear how these would be refilled.
- If depositors begin to lose confidence in the system, it could set off panic runs on banks and turn them into a failure.
Conclusion and Options for Way Forward
As it happens, our economic revival plan expects loan disbursals to play a starring role. In the case of grants to micro, small and medium enterprises, the Centre offered to make good any losses suffered by banks.
- Perhaps the government could revise its stance on the moratorium to stump up some money to relieve other borrowers of some debt as well. This would widen its fiscal deficit further, but there may be no other way to make the current loan moratorium meaningful.
- A better way to prop up the economy would be to impart a direct stimulus.
Focus: GS-II International Relations
Why in news?
The India-China face-off began with an incident at the Pangong Tso Lake in Ladakh along the Line of Actual Control (LAC) took place in May 2020.
What is the problem at the border?
- Troops of both countries have been face-to-face at the Pangong Tso Lake in May 2020 and in the Galwan Valley and Demchok in Ladakh.
- The trigger for the face-off seems to be China’s opposition to India building a road around the Pangong Tso Lake and a link road connecting Darbuk, Shyok, and Daulat Beg Oldi in Galwan Valley, close to the LAC.
- India has been building border infrastructure in recent years, but is still behind China, which has motorable roads right up to the LAC.
- This time Chinese troops have intruded in larger numbers and have done so in areas such as Galwan Valley, where there was no dispute earlier.
What has been done to ease tensions?
- India and China have had at least three meetings at the level of major generals and many at the level of brigadiers since the face-off began.
- Earlier, small patrols from both sides used to come face-to-face and, with senior officers of the Indian Army and the People’s Liberation Army (PLA) of China intervening, disengagement was quick.
- This time, the Chinese have stayed put with a rise in troop numbers last month, diverting personnel from a military exercise in Tibet to the LAC.
- India rushed reinforcements, supported by heavy vehicles and equipment, to mirror the Chinese deployment.
Where do talks for disengagement take place?
- India and China have five established locations for Border Personnel Meetings, including Daulat Beg Oldi and Chushul in Ladakh, Bum La and Kibithu in Arunachal Pradesh, and Nathu La in Sikkim.
- Ceremonial meetings are also held on occasions such as India’s Independence Day on 15 August or People’s Liberation Army Day on 1 August.
What has been done at the diplomatic level?
- India and China have been working at the level of senior diplomats to sort out the impasse.
- India’s ambassador to China Vikram Misri has been having talks with officials in the Chinese foreign ministry, while China’s ambassador to India, Sun Weidong, has had meetings in New Delhi.
- Both countries are also working through the Working Mechanism for Consultation and Coordination on India-China Border Affairs set up in January 2012 to de-escalate tensions between the neighbours.