- Resuscitating multilateralism with India’s help
- A war-like state and a bond to the rescue
- A Roadmap for Manufacturing
- Bubonic plague leading to Epidemic Diseases Act
RESUSCITATING MULTILATERALISM WITH INDIA’S HELP
Focus: GS-II Governance
Even as the coronavirus pandemic unleashes its devastation across the globe, the great and the good have been quick to remind us of the value of multilateralism and the necessity to preserve it.
India may be uniquely positioned to help resuscitate multilateralism.
India can start playing a role
United States facing multiple internal challenges including the prospects of a deeply divisive Presidential election.
China is facing a global crisis of credibility.
Hence, India could assume leadership in strengthening constructive transnational cooperation.
Deepened by the pandemic
- The paralysis of all three functions of the World Trade Organization (WTO) — negotiation, dispute settlement, and transparency- afflicts multilateralism.
- Countries with fundamentally different domestic systems of governance do not form a part of the multilateral order, as was the case with the Soviet bloc in the Cold War years.
- The misuse of existing rules (or loopholes within the existing rules) by several countries, especially by China (e.g. via forced technology requirements, intellectual property rights violations, and subsidies), to gain an unfair advantage in trade relations was already attracting critique.
China’s Actions: Weaponsied Interdependence?
- When the European Union (EU) put up export restrictions, China stepped in at Serbia’s request.
- When India complained that test kits imported from China were faulty, China slammed it as “irresponsible”.
- When Australia indicated that it would conduct an independent investigation of China’s early handling of the epidemic, China threatened it with economic consequences.
- There are risks that several countries, including the EU and India, see – the predatory takeovers of their companies by China.
- Hence, it seems that weaponised interdependence is not just a theory but a practice that is rapidly evolving.
- There is the need for reassurance and policies that reflect a renewed commitment to the purpose of multilateralism.
- There is an urgent need for some strategic decoupling, handled smartly in cooperation with other like-minded countries.
- Along with cooperation, there is the need for a multilateralism that recognises the need for decoupling will necessitate closer cooperation with some and distancing from others.
- Increasing economic integration and shared prosperity would help enhance these affinities and contribute to peace.
A role for India
- The current crisis in multilateralism could be a remarkable opportunity for India, a country whose pluralism, democracy, and liberalism have often been underestimated by the West.
- India has also maintained a consistent reserve about a blanket entrenchment in global value chains.
- India could work closely with the Alliance for Multilateralism (an initiative launched by Germany and France) to shape both the alliance itself and the reform agenda at large.
- Working together with a group of countries from the developed and developing countries could further amplify India’s voice.
-Source: The Hindu
A WAR-LIKE STATE AND A BOND TO THE RESCUE
Focus: GS-II Governance
- In the Budget before the pandemic, India projected a deficit of ₹7.96-lakh crore. The financial deficit number is set to grow by a wide margin due to revenue shrinkage from the coming depression that will most certainly be accompanied by a lack of appetite for disinvestment.
- In addition to the expenditure that was planned, the government has to spend anywhere between ₹5-lakh crore and ₹6-lakh crore as stimulus.
- While the 60% increase in ways and means limits for States is a welcome move, many States have already asked for double the limits due to the shortages in indirect taxation collections from Goods and Services Tax, fuel and liquor.
Echo from the past: Using Bond
- As we wage a united war against this virus, it would be interesting for us to look at war-time methods of raising financing. One such method that has been used as early as the First World War is the Consol Bond.
- It would be interesting to figure what would happen – if the Prime Minister had made a similar call to every citizen of our country to invest in the government bonds instead of making donations.
Why is Bond a better option?
- There is no denying the fact that the traditional option of monetising the deficit by having the central bank buy government bonds is one worth pursuing.
- With the fall of real estate and given the lack of safe havens outside of gold, the bond would offer a dual benefit as a risk-free investment for retail investors.
- The government can consider a phased redemption of these bonds after the economy is put back on a path of high growth — a process that might take that much longer for every day we extend this lockdown.
-Source: The Hindu
A ROADMAP FOR MANUFACTURING
Focus: GS-II Governance
- Within the manufacturing sector MSMEs are the hardest hit, with many of them getting close to bankruptcy.
- At a global level, there is a very clear indication that companies that are doing business in China are now looking to consider other attractive investment destinations.
- Potentially, India can take the lead and present itself as the most compelling destination to receive overseas investments compared to its immediate competitors.
- Given the fact that Make in India campaign is on since past five years, and in the backdrop of India reducing corporate tax rates significantly, India’s investment attractiveness should have stood out by itself.
- Initial trends show that India is getting a very negligible piece of this investment, and the bulk of the shift goes to Vietnam, Indonesia and Malaysia.
Imperatives to cater to:
Carry out essential reforms
The Government facilitated many business processes reforms, collectively termed ‘ease of doing business’ (EoDB).
The far-reaching and business friendly reforms carried out by Telangana called TS-iPASS have been recognised as amongst the best in the country.
Time is also ripe to introduce long pending reforms in labour laws, bankruptcy laws etc., and guarantee consistency in state policies.
Create industrial infrastructure as a mission over next year
The biggest USP of China has been its large-scale industrial parks with the highest quality of infrastructure.
The Centre should work with states to develop large self-contained industrial parks and industrial corridors.
Improve competitiveness of exports
Export markets offer a good opportunity for domestic manufacturing to tide over the present crisis in a short period of time.
We need to carefully identify the main reasons which have pulled down India’s exports in all these years, and offer targeted solutions to each.
Bailout for SMEs
Direct financial assistance for the SMEs in the worst affected sectors, easy and very soft credit for others, along with deferment of statutory dues are some of the way forwards.
Empowered Strategy Group
Methods to revive the manufacturing sector as well as attracting new investments to the country require bold and pragmatic vision as well as a detailed implementation plan.
An Empowered Strategy Group comprising central government representatives, few state governments, industry leaders, bankers, policy experts can be tasked to work on this urgent imperative.
-Source: Times of India
BUBONIC PLAGUE LEADING TO EPIDEMIC DISEASES ACT
Focus: GS-II Governance
- The Centre amended the Epidemic Disease Act, 1897, making attacks on healthcare workers a cognisable, non-bailable offence, on March 2020.
- The colonial-era Act empowers the state governments to take special measures and prescribe regulations in an epidemic, defines penalties for disobedience of these regulations, and provides for immunity for actions taken under the Act “in good faith”.
How did the Epidemic Diseases come to be?
- Epidemic Diseases Bill 1897, was tabled during an outbreak of bubonic plague. Plague had taken root in Bombay has been gradually extending to other parts of the country.
- The Bill called for special powers for governments of Indian provinces and local bodies, including to check passengers of trains and sea routes.
- The British government was particularly worried about Calcutta, then the Indian capital, hence, the Bill was being tabled and passed hurriedly.
- Woodburn was told that “many of the (Indians) would rather die of the plague than allow themselves to be segregated or removed”.
What has changed about the law now?
Through an ordinance on April 22, the Cabinet amended the Act to say that commission or abetment of acts of violence against healthcare service personnel shall be punished with imprisonment for a term of three months to five years, and with fine of Rs 50,000 to Rs 2 lakh.
In case of causing grievous hurt, imprisonment shall be for a term of six months to seven years and with fine of Rs1 lakh to Rs 5 lakh.
-Source: Indian Express