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Rising global debt, loss of employment, runaway inflation and the slowdown in growth — these are among the challenges facing the global economy that are set to be on the centrestage as officials from 40 countries converged Sunday to kick off the first Sherpa track under India’s G20 presidency.
Udaipur was chosen as the location for the first official G20 event for a “mentally rejuvenating” and “spirituality invigorating” experience, as discussions focus on “looking beyond the crisis” to build new ways for improving livelihood and move towards an inclusive, ambitious, decisive and action-oriented development strategy.
There’s a huge challenge before all of us — the world is in the midst of a turmoil. We are passing through a massive geopolitical crisis, which is being witnessed before all of us in Europe.
We have seen the breakdown of global supply chains, we are seeing 70 countries of the world suffering from global debt, we are seeing huge crises of climate action and climate finance and on top of that, we are seeing challenges of literacy, health, of vast segments of population going below the poverty line,” India’s G20 Sherpa Amitabh Kant said at the first panel discussion on ‘Transforming Lives: Accelerating Implementation of SDGs.
And then there’s the challenge of inflation, the challenge of the slowdown of global growth. At this moment of crises, India is taking over the presidency of G20. Our belief is every crisis is a good opportunity and leadership is finding pathbreaking solutions in the midst of crisis.
The key responsibility of all Sherpas will be “to look beyond the immediate, to look beyond all the crisis, to see how we can shape a new future, how we can shape a completely new world.
Sherpas are personal representatives of leaders of member countries at such international summits, with the term being derived from the Nepalese who serve as guides for mountaineers in the Himalayas.
During its term, India will hold over 200 meetings across 32 different workstreams in 50 cities, involving ministers, government officials and civil society members, leading up to the final summit in New Delhi in September 2023. The timing of the summit is seen as crucial, coming ahead of the general elections in 2024.
The Editorial Page
A question of politics (Page no. 10)
(GS Paper 2, Polity and Governance)
The Supreme Court’s interrogation of the executive regarding the appointments to the Election Commission has foregrounded the issue of institutional independence.
However, the Court’s observations tend to frame institutional independence as a function of individual virtue instead of the distribution of political power.
While institutional leadership plays a pivotal role in elevating or degrading institutional integrity, the focus on selection glosses over variability in individual behaviour after occupying the seat of power.
This isn’t necessarily corruption but the outcome of the dialectical relationship between the individual, institution and the prevailing political context.
Indeed, often the balance of power has an outsized influence on how well “independent” institutions function in a democracy but this is often disregarded in favour of a more personalised analysis.
In a democracy, the source of political power is the organisation of public opinion. However, most institutions in a democracy are downstream of politics — their role is to enforce not build political consensus.
These institutions thus do not have an independent source of political power and rely instead on the backing from political intermediaries for their mandate. Institutions may be tasked to produce “truth” in line with defined processes such as investigative agencies.
Other institutions such as the judiciary and election commission may be required to adjudicate between competing claims in line with the existing normative consensus. Some like the RBI may be empowered for fixed functions like the monetary policy and so on.
In each of these instances, the institution and its role is an outcome of political consensus wherein political intermediaries have agreed to delineate some function of governance and bequeath it to this institution.
The institution draws legitimacy from the specific mandate but operates in the dynamic space in the changing balance of power between competing political factions.
The Ideas Page
Democracy interrupted (Page no. 11)
(GS Paper 2, Polity and Governance)
The rising number of elected representatives with criminal backgrounds in Parliament and state legislatures is a matter of deep concern to all law-abiding and right-minded citizens.
The increasing trend of criminalisation of politics is dangerous and has steadily been eating into the vitals of our democratic polity along with growing corruption of a humongous nature.
This perilous drift needs to be checked both by all political parties as well as the judiciary. Timely corrective measures need to be put in place without any further delay, for the common man to have faith in the fairness of the system.
Only a time-bound justice delivery system, firmer steps by the Election Commission of India (EC) and a proper strengthening of relevant laws can cleanse the body politic of this evil.
Fast-tracking the judicial process will weed out the corrupt as well as criminal elements in the political system. It is high time all political parties came together and developed a consensus on keeping criminals — some of them with serious charges including kidnapping, rape, murder, grave corruption and crimes against women — out of the system.
When criminals turn into elected representatives and become law-makers, they pose a serious threat to the functioning of a democratic system.
The very future of our democracy gets imperilled when such offenders masquerade as leaders, making a travesty of the entire system. Can we expect the youth to look up to such “leaders” and see role models in them?
We take pride in being the largest democracy, but if we do not correct this fundamental flaw of letting criminals and the corrupt turn into elected representatives, we would have failed the people of this great nation.
It is not enough for India to be the world’s largest democracy — it must also evolve into the ideal one. As we assume leadership at several levels on the world stage, it is important for India to showcase itself as a model democracy and the global moral compass.
The nutrition challenge (Page no. 11)
(GS Paper 2, Issues related to poverty and hunger)
The Registrar General of India has confirmed that India’s maternal mortality rate was 97 during 2018-2020. During 2001-03, it was 301. The infant mortality rate was 58 in 2005. In 2021 it was 27.
While we have reasons to be less unhappy, we still have a long way to go. The pace of decline, however, has gained momentum post-2005.
The National Rural Health Mission (NRHM) was launched in 2005 to provide accessible and affordable healthcare through a public system of primary healthcare.
And to provide secondary and tertiary care services in public systems alongside the private capacity to ensure good quality services at effective rates. Unfortunately, allocations for NRHM did not keep pace.
But, it seems to have had a positive impact on many indicators. Health facilities started looking better with untied funds, doctors, drugs and diagnostics became a reality, institutional deliveries jumped, vacancies of ANMs (Auxiliary Nurse Midwife) and nurses started getting filled up, and the community’s ASHA worker started putting pressure on public systems to perform by getting patients there.
First, NRHM had a clear thrust on crafting credible public systems in primary health. Community connect, human resource capacity mattered and flexible financial resources were available at all levels.
Second, the central, state and local government partnership with civil society, with the full involvement of frontline workers was a thrust. Planning had to begin from below.
Community monitoring was civil society led. Third, the approach was pragmatic and provided for diversity of state-specific interventions.
The decentralised planning process, where the states came up with their annual plans on the basis of district health action plans, became the norm.
Fourth, institution building was facilitated in work with panchayats and facility-specific Rogi Kalyan Samitis or hospital management committees.
Express Network
Women constitute one-third of Internet users in India: Study (Page no. 12)
(GS Paper 1, Social Issues)
Women constitute only one third of internet users in India, said a study conducted by NGO Oxfam India.According to ‘India Inequality Report 2022: Digital Divide’ released by the NGO on Sunday, Indian women are 15 per cent less likely to own a mobile phone and 33 per cent less likely to use mobile internet services than men.
In Asia-Pacific, India fares the worst with the widest gender gap of 40.4 per cent, says the study. The report also points to rural-urban digital divide.
Despite registering a significant (digital) growth rate of 13 per cent in a year, only 31 per cent of the rural population uses Internet compared to 67 percent of their urban counterparts.
The report analyses the primary data from Centre for Monitoring Indian Economy’s (CMIE) household survey held from Jan 2018 to Dec 2021.
Among states, Maharashtra has the highest internet penetration, followed by Goa and Kerala, while Bihar has the lowest, followed by Chhattisgarh and Jharkhand.
As per the NSS (2017-18), only about 9 per cent of the students who were enrolled in any course had access to a computer with internet and 25 percent of enrolled students had access to the internet through any kind of devices.
The digital push driven by the pandemic resulted in India experiencing the largest number of real-time digital transactions in 2021 at 48.6 billion.
However, the likelihood of a digital payment by the richest 60 per cent is four times more than the poorest 40 per cent in India.
In rural India, the tendency to use formal financial services is lowest for ST households, followed by SC households and OBC households.
In Kaziranga, Indo-French partnership bears fruit (Page no. 12)
(GS Paper 3, Environment)
Artificial highlands where animals can escape during floods; more than 200 anti-poaching camps; alternate livelihood training for local communities — these measures at the Kaziranga National Park in Assam will form the cornerstone of an Indo-French initiative announced earlier this year.
With French and Indian technical and financial support, the Indo-Pacific Parks Partnership will facilitate partnership activities for interested natural parks of the Indo-Pacific region. These activities include biodiversity conservation, wildlife management and engagement with local communities.
The Kaziranga project is a part of a larger Assam Project on Forest and Biodiversity Conservation (APFBC) for which the Agence Française de Développement (AFD) has committed funding of €80.2 million for a 10-year period, between 2014-2024. The project conceptualised the reforestation of 33,500 hectares of land and the training of 10,000 community members in alternate livelihoods by 2024.
But it is the 457 sq km Kaziranga National Park that remains the heart of the programme.Chief Conservator of Forests and Kaziranga National Park and Tiger Reserve Director JatindraSarma says that the population of animals in the park is the healthiest it has ever been. With the aid of AFD funding, conservation has been ramped up with few poaching cases recorded in the past five years.
Sarma adds that what the AFD programme has been most effective in is the skilling of communities in the area, particularly forest-dwelling communities.
Assam officials say that many of the community members would sometimes be engaged in illegal tree felling by middlemen for illegal timber trade, and would also give shelter to poachers, which no longer happens.
The illegal timber trade is one of the main reasons for the degradation of forests around the reserve. The Assam government has now begun a massive reforestation drive with the help of the AFD.
Explained
Iran’s morality police, ‘disbanded’ amid street protests (Page no. 13)
(Miscellaneous)
Iran’s public prosecutor said on Sunday that the country’s dreaded morality police — the same force in whose custody 22-year-old MahsaAmini died in September — has been disbanded.
If the announcement is followed through — there was no confirmation from the Interior Ministry, and state media said the public prosecutor was not responsible for overseeing the force — it would signal an extraordinary concession from the Iranian regime to the women who have over the past couple of months led the most powerful and sustained street protests since the Islamic Revolution of 1978-79.
The morality police “was abolished by the same authorities who installed it,” Attorney General Mohammad JafarMontazeri said, the AFP reported. “Both parliament and the judiciary are working [on the issue],” he said as part of the statement.
The Gasht-e Ershad are part of the police force and supervised by Supreme Leader Ayatollah Ali Khamenei, but the elected government has a say in their activities through the Interior Ministry. Both men and women officials are part of the morality police.
MahsaAmini was allegedly beaten by the morality police who had detained her for “incorrectly” wearing the mandatory hijab. The Iranian government has denied that Amini was assaulted, and has accused the United States and Israel of orchestrating the popular protests across the country.
Over the past weeks, the protests have expanded from anger over the hijab regulation to a wider dissatisfaction with state representatives seen to be reinforcing these laws.
Iran has a long history of policing the hijab. During the reign of Reza Shah Pahlavi in 1936, the hijab was actually banned in an effort to “modernise” the country. The police would then remove the hijab from the heads of women seen wearing it in public.
This situation was turned on its head after the Revolution, when conservative forces aligned with Ayatollah Ruhollah Khomeini deposed Mohammed Reza Pahlavi, son of Reza Shah, and proclaimed the Islamic Republic.
While wearing the hijab was made mandatory, a force was constituted to enforce the rules on morality and the public appearance of women only in the 1990s, after the war broke out with Saddam Hussein’s Iraq, and the regime felt the need to centralise its power and underline an Iranian national identity.
Hopeful signs on food inflation (Page no. 13)
(GS Paper 3, Economy)
Consumer price inflation fell from 7.41% year-on-year in September to 6.77% in October — and food inflation fell even more, from 8.60% to 7.01%.
But that isn’t the only data point the Reserve Bank of India’s monetary policy committee (MPC) may consider at its next interest-rate action meeting from December 5-7.
How much to hike, if at all, would depend on how it perceives inflation — especially food, which has a 45.86% weight in the consumer price index — to pan out in the coming months.There are two reasons for cautious optimism here.
The accompanying chart shows movements in the UN Food and Agriculture Organization’s (FAO’s) Food Price Index (FPI) over the last two-and-a-half years.
The index — a weighted average of the international prices of a basket of food commodities over a base period value, taken at 100 for 2014-16 — soared from a low of 91.1 points in May 2020 (when Covid lockdowns worldwide triggered a “collapse of demand”) to an all-time high of 159.7 points in March 2022 (following Russia’s invasion of Ukraine, leading to disruptions and “collapse of supply”).
Both the FPI and its two key component indices — cereals and vegetable oils, which had exhibited ever higher volatility — have come down from those peaks.
The FPI has fallen every single month since March, to 135.7 points in November. More significant are vegetable oils. At 154.7 points last month, the index was 16.2% down from a year ago and 38.6% from the March 2022 high.
The effects of world prices easing are being felt most clearly in edible oils. Over the last six months, the all-India average modal (most-quoted) retail prices of soyabean and palm oil have come down from Rs 180 to Rs 160 and from Rs 165 to Rs 110 per kg respectively. Not surprising, given that India imports roughly 60% of its edible oil requirements.
Economy
Digital lending: No clarity, awaiting RBI response, say bank &fintechs (Page no. 15)
(GS Paper 3, Economy)
Two months after the Reserve Bank issued guidelines on digital lending, banks, non-banking financial companies and fintech players are still awaiting clarity on many aspects, including the First Loss Default Guarantee (FLDG) system and challenges that banks face while collaborating with fintechs.
On the other hand, hundreds of illegal lending apps, which are not under the RBI ambit, are yet to be reined in by the state governments.
Banks, NBFCs and fintechs have sought clarification from the RBI on First Loss Default Guarantee (FLDG), on which RBI has advised the regulated entities to follow its September 2021 directions on securitisation, especially, synthetic securitisation. FLDG is a lending model between a fintech and a regulated entity in which a third party guarantees to compensate up to a certain percentage of default in a loan portfolio of the regulated entities (RE).
Synthetic securitisation means a structure where credit risk of an underlying pool of exposures is transferred through the use of credit derivatives or credit guarantees to hedge the credit risk of the portfolio.
This is an issue on which we have written to RBI asking for more clarity as the guidelines just refer to the earlier issued securitisation norms. We are yet to hear from RBI on it.
According to Aditya Kumar, co-founder and CEO, Niro, a fintech firm, the RBI has been vague about FLDG and there is no clarity on what is permissible and what is not permissible as far as these partnerships are concerned.
The RBI needs to provide clarity on what it means and what is the importance of these co-lending regulations by non-regulated entities.
On September 2, the RBI came out with guidelines on digital lending aimed at protecting customers from unethical business practices, such as mis-selling, breach of data privacy, unfair business conduct, charging of exorbitant interest rates, adopted by digital lenders.
However, as per the findings of an RBI Working Group, released in November 2021, as many as 600 out of 1100 lending apps currently available for Indian Android users across 80 application stores are illegal apps.
OPEC+ keeps steady policy amid weakening economy,Russian oil cap (Page no. 15)
(GS Paper 3, Economy)
The Saudi-led OPEC oil cartel and allied producers including Russia did not change their targets for shipping oil to the global economy amid uncertainty about the impact of new Western sanctions against Russia that could take significant amounts of oil off the market.
The decision at a meeting of oil ministers comes a day ahead of the planned start of two measures aimed at hitting Russia’s oil earnings in response to its invasion of Ukraine.
Those are: a European Union boycott of most Russian oil and a price cap of $60 per barrel on Russian exports imposed by the EU and the Group of Seven democracies.
It is not yet clear how much Russian oil the two sanctions measures could take off the global market, which would tighten supply and drive up prices.
The world’s No. 2 oil producer has been able to reroute much, but not all, of its former Europe shipments to customers in India, China and Turkey.
The impact of the price cap is also up in the air because Russia has said it could simply halt deliveries to countries that observe the limit. But analysts say the country would likely also find ways to evade the cap for some shipments.
On the other side, oil has been trading at lower prices on fears that coronavirus outbreaks and China’s strict zero-COVID restrictions would reduce demand for fuel in one of the world’s major economies.
Concerns about recessions in the U.S. and Europe also raise the prospect of lower demand for gasoline and other fuel made from crude.
That uncertainty is the reason the OPEC+ alliance gave in October for a slashing production by 2 million barrels per day starting in November, a cut that remains in effect.
Analysts say that took less than the full amount off the market because OPEC+ members already can’t meet their full production quotas.
An OPEC+ statement Sunday pushed back against criticism of that October decision in view of the recent weakness in oil prices, saying the cut had been “recognized in retrospect by the market participants to have been the necessary and the right course of action towards stabilizing global oil markets.