GS Paper 1:

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116 people killed in a stampede at prayer meet in Uttar Pradesh’s Hathras

GS 1: Social Issues

 Why is it in the news?

• A tragic stampede during a prayer gathering in Fulrai village, Hathras district, Uttar Pradesh, claimed the lives of 116 individuals and left over 200 others injured on July 2.

More about the news

• The prayer meeting was organized by self-proclaimed godman Narayan Sakar Hari and was attended by more than 1 lakh people, predominantly women.
• The incident led to the death of 108 women and seven children at the hands of the crowded event.
• A probe team was established by Chief Minister Yogi Adityanath to investigate the causes of the tragedy.
• Eyewitnesses and officials described heart-wrenching scenes, including the absence of adequate medical help and the uncontrollable rush of devotees towards the godman.
• In response to the accident, relief measures were mobilized, and public assistance helplines were made available by the district administration.
• Political leaders, including the Chief Minister and Members of Parliament, expressed condolences and promised support for the affected families.
• International envoys also joined in expressing sorrow over the loss of lives and offered their sympathies to the victims’ families.

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GS Paper 2:

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Jaishankar to represent India in place of Modi at SCO summit in Kazakhstan

GS 2: International Relations- SCO

 Why is it in the news?

• External Affairs Minister S. Jaishankar is leading the Indian delegation at the Shanghai Cooperation Organisation (SCO) Council of Heads of State in Astana, Kazakhstan, on July 3 and 4 in lieu of Prime Minister Narendra Modi.

Overview of Shanghai Cooperation Organisation (SCO): ·        SCO is a permanent intergovernmental international organization established in 2001. It focuses on political, economic, and military cooperation to maintain peace, security, and stability in Eurasia. ·        The SCO Charter, signed in 2002 and effective from 2003, outlines the organization’s goals, principles, structure, and core activities. The official languages are Russian and Chinese. ·        Genesis: Ø  Shanghai Five – Before becoming the SCO, the organization was known as the Shanghai Five. Formed in 1996, it included Kazakhstan, China, Kyrgyzstan, Russia, and Tajikistan, and focused on border stability through demarcation and demilitarization talks with China. Later, Uzbekistan joined the Shanghai Five in 2001, prompting the organization to rename itself as the SCO. ·        India and Pakistan became members of the SCO in 2017. ·        The official working languages of the SCO Secretariat are Russian and Chinese.   ·        Main Objectives of SCO: Ø  Strengthen Member Relations: The SCO aims to enhance the relationships among its member states. Ø  Promote Multidimensional Cooperation: It seeks to foster cooperation in various sectors, including political affairs, economics, trade, scientific and technical fields, culture, education, energy, transportation, tourism, and environmental protection. Ø  Safeguard Regional Stability: One of the core objectives is to ensure regional peace, security, and stability. Ø  Create an Equitable International Order: The SCO strives to establish a democratic and equitable international political and economic order. ·        Composition: Members China, India, Kazakhstan, Kyrgyzstan, Russia, Pakistan, Tajikistan, Iran, and Uzbekistan Dialogue Partners Armenia, Azerbaijan, Cambodia, Sri Lanka, Turkey, Egypt, Nepal, Qatar, and Saudi Arabia Observers Afghanistan, Belarus, and Mongolia ·        Organizational structure of SCO: 1.        The Council of Heads of State: The highest decision-making body, comprising the heads of state of all member countries, meeting annually to set the strategic direction. 2.       The Council of Heads of Government: The second-highest council, holding annual summits to discuss multilateral cooperation. 3.       The Council of Ministers of Foreign Affairs: Comprising the foreign ministers of all member countries, it coordinates the organization’s foreign policy. 4.       The Council of National Coordinators: Manages the SCO’s current activities and prepares for meetings of the Council of Heads of State, Heads of Government, and Foreign Ministers. 5.       The Secretariat: Based in Beijing, it serves as the administrative arm of the SCO, coordinating and implementing the organization’s decisions; headed by the Secretary-General nominated by the Council of Ministers of Foreign Affairs and approved by the Heads of State Council. 6.       The Regional Anti-Terrorist Structure (RATS): Headquartered in Tashkent, Uzbekistan, it coordinates efforts among member countries to combat terrorism, separatism, and extremism. 7.       The SCO Business Council: Comprising representatives from member countries business communities, it promotes economic cooperation and investment among them. 8.       The SCO Interbank Consortium: Includes the central banks of all member countries, tasked with promoting financial cooperation among them. ·        Significance of Shanghai Cooperation Organization (SCO) Ø  Areas of Focus: The SCO primarily addresses regional security, combating terrorism, separatism, and extremism while promoting regional development. Ø  Global Reach: Encompasses 40% of the global population, nearly 20% of global GDP, and covers 22% of the world’s landmass. Ø  Strategic Importance: Acts as a catalyst for regional integration in Asia, enhancing stability and connectivity across borders. Ø  Role in Security: Serves as a bulwark against terrorism, drug trafficking, and promotes military and economic cooperation. Ø  Comparison with QUAD: SCO has shown greater capability in advancing shared military and security goals through initiatives like “Peace Mission” drills involving all members, surpassing the reformed Quad’s achievements in this regard.

• The summit will gather leaders from the Eurasian group, including Russian President Vladimir Putin, Pakistan PM Shehbaz Sharif, and the Presidents of Uzbekistan, Kyrgyzstan, Tajikistan, and host Kazakh President Kassym-Jomart Tokayev. Notably, Chinese President Xi Jinping is in Astana for bilateral meetings.

More about the news

• At the summit, discussions are expected to cover the organization’s activities, regional and international cooperation, as well as various relevant topics.
• While PM Modi may address the group virtually, his absence in Astana avoids potential diplomatic challenges.
• The SCO Council will adopt the Astana Declaration to enhance economic ties, connectivity, counter-terrorism efforts, and regional progress among member countries. The declaration is also likely to promote utilizing ports like Chabahar, Qasim, and Gwadar for trade routes.
• Further, India and Pakistan, SCO members since 2017, are anticipated to engage on issues such as terrorism and regional trade.
• Discussions at the summit will encompass recent developments in Afghanistan, particularly in light of ongoing UN talks with the Taliban.

Importance of SCO for India: ·        Counter-terrorism and Security Cooperation: India benefits from SCO’s focus on combating terrorism, crucial given regional threats and conflicts, especially with Pakistan. ·        Regional Stability: India’s SCO membership allows it to contribute to stability in Central Asia and beyond, aligning with its strategic interests. ·        Connectivity and Infrastructure: India aligns with SCO’s emphasis on connectivity, enhancing regional infrastructure and connectivity with neighboring countries. ·        Economic Cooperation: SCO membership offers India opportunities for economic collaboration, market access, technology, and investment prospects across member states. ·        Multilateral Diplomacy: India leverages the SCO platform for deeper engagement and diplomacy with member countries, enhancing regional integration. Ø       Cultural Cooperation: SCO member states, observers, and partners collectively boast 207 UNESCO World Heritage Sites, with an annual initiative designating one city from member countries as the tourism and cultural capital. ü  “Kashi” (Varanasi) has been designated as the first cultural capital of the SCO under this initiative. ·        Boosting Relations with Central Asia: SCO supports India’s “Connect Central Asia Policy,” aiding in regional integration, energy cooperation, and trade facilitation. Ø  Energy Security: India seeks to bolster its energy security by accessing Central Asia’s substantial oil and gas reserves through SCO cooperation. ü  The Samarkand Declaration, signed at the 22nd Summit, emphasizes connectivity, which is a priority for India, along with enhancing energy and food security. ·        Geopolitical Significance: SCO provides India a platform to manage its relationships with key players like Russia, China, and Pakistan while countering China’s influence in Eurasia. Challenges for India in SCO: ·        Balancing Relations with China and Russia: India’s participation in the SCO requires it to manage relations with China and Russia, which have different regional and global priorities. ·        Addressing Regional Security Concerns: India must collaborate with SCO members on security issues like terrorism and extremism, despite differing national interests. ·        Managing Relations with Pakistan: India’s complex history with Pakistan poses a challenge in navigating bilateral relations within the SCO framework. ·        Ensuring Economic Benefits: India needs to address barriers to economic integration within the SCO, including market access and infrastructure challenges. ·        Maintaining Strategic Autonomy: India must balance its policy of non-alignment with its commitments to the SCO, which could involve navigating differing geopolitical alignments. ·        Sovereignty Concerns: India’s stance against the Belt and Road Initiative conflicts with other SCO members’ support, posing sovereignty and policy alignment challenges. ·        Low Bilateral Trade: India faces a significant trade imbalance with SCO countries, especially compared to China, impacting economic relations and influence within the organization.

Fact-check unit needed to protect people from fake news: Centre in Bombay HC

GS 2: Polity and Governance- FCU 

Why is it in the news?

• Justice A.S. Chandurkar, the tiebreaker judge at the Bombay High Court, oversaw the proceedings where the Union government presented arguments in response to petitions filed by comedian Kunal Kamra and others challenging Rule 3(1)(b)(v) of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
• This Rule enables the government to institute a fact-check unit (FCU) tasked with detecting fake, false, and misleading information concerning its operations on social media platforms.

About Fact Check Unit (FCU): ·        Establishment: The Fact Check Unit (FCU) was established by the Press Information Bureau (PIB) in November 2019 to combat fake news related to the Government of India. ·        Objective: The FCU verifies claims regarding government policies, regulations, announcements, and measures to dispel myths, rumours, and false claims, providing accurate information to the public. ·        Organization: Ø  Leadership: Headed by a senior DG/ADG level officer of the Indian Information Service (IIS). Ø  Operations: Managed day-to-day by IIS officers at various levels. Ø  Reporting: Reports to the Principal Director General, PIB, who serves as the Principal Spokesperson of the Government of India. ·        Fact-Checking Procedure: The PIB fact-check unit categorizes information into three types – Ø  Fake News: Information that is entirely false and has the potential to deceive or manipulate the audience, regardless of intent to cause harm. Ø  Misleading: Content that selectively presents or distorts facts or figures, leading to potential deception or misunderstanding among readers. Ø  True: Information verified by the fact-check unit as factual and accurate. ·        Fact-Check Mechanism: Ø  Query Handling: Users submit queries via WhatsApp, email, or a web portal, each considered an actionable query if relevant to the Government of India. Ø  Verification Process: Involves rigorous cross-checking using government open-source information, technological tools, and verification from relevant government organizations.   Government’s Rationale for Notifying PIB’s Fact-Check Unit (PIB-FCU) as the Central Govt’s Fact-check Unit: ·        Addressing Fake News: The PIB-FCU aims to combat fake news and misinformation online, safeguarding society from potential harm. ·        Enhanced Social Media Accountability: Designating PIB-FCU as the official fact-checking unit increases accountability for social media intermediaries like Facebook and Twitter to remove false and misleading content. ·        Improving Cybersecurity: By regulating activities like sharing of deepfakes, PIB-FCU contributes to enhancing cybersecurity and preventing misuse of online platforms. ·        Preventing Hate Speech and Violence: Ensuring compliance with Indian laws, including the IT Act and national security regulations, helps curb hate speech and violence incited through social and digital media.   Concerns with Notification of Fact-Check Unit by the Government of India: ·        Impact on Freedom of Speech: There are fears that PIB’s fact-check unit could stifle free speech guaranteed under Article 19(1)(a), creating a climate where individuals may self-censor to avoid censorship or legal repercussions. ·        Potential Misuse of Power: The unit’s authority might be abused to suppress dissent or criticism of government actions, posing risks to democratic principles and human rights. ·        Conflict of Interest: Acting as judge, jury, and executor, the fact-checking unit faces significant conflicts of interest in its role. ·        Unclear Definition of Misinformation: The lack of a clear definition for “fake, false, or misleading” information creates ambiguity, potentially enabling arbitrary content censorship by the government. ·        Bypassing Legal Safeguards: Notification of the fact-checking unit could bypass established legal procedures outlined in judgments like Shreya Singhal v. Union of India and Section 69A of the IT Act, impacting the online freedom of expression.

More about the news

v  Article 19(1)(a) grants citizens the right to freely express their thoughts, opinions, and ideas.This includes the freedom to express oneself through speech, writing, printing, visual representations, or any other means.

• In defense of the FCU, Solicitor-General Tushar Mehta emphasized that it is a necessary tool to shield the public from erroneous information. Mr. Mehta asserted that the right to information and protection from misinformation are as vital as the right to freedom of speech and expression enshrined in Article 19(1)(a).

 

• Highlighting instances of fake news proliferating on social media, Mr. Mehta pointed out, “Several State governments like Kerala and Uttarakhand have established FCUs. Moreover, even private entities, such as news organizations collaborating with intermediaries, utilize FCUs to flag misinformation. Neglecting fact-checking responsibilities would be a failure in fulfilling our duty.”
• Mehta cited an example of false information circulating on social media about the Election Commission planning to levy a fine of ₹350 on individuals abstaining from voting. He stressed the gravity of such misinformation and questioned the opposition’s concerns regarding potential chilling effects on intermediaries removing content.
• Addressing the impact of misinformation during the pandemic, Mr. Mehta referenced how the U.S. struggled with false narratives circulating online.
• Further, the Central government will continue presenting its arguments on July 24 and 25, with petitioners set to respond on July 29, 30, and 31.

·        In April, the petitioners concluded their arguments by alleging that the FCU serves to impose blanket censorship on any content the government deems unfit for public discussion or scrutiny.

Courts subservient only to the might of the Constitution and no other authority: CJI

GS 2: Polity and Governance- SC

 Why is it in the news?

• Chief Justice Chandrachud stressed on the unequivocal supremacy of the Constitution over all other authorities, declaring that the courts should uphold no power other than that enshrined in the Constitution.
• He emphasized that the primary duty of the courts is to serve the litigants, functioning as not just centres of authority but also as crucial public service providers.

More about the news

• Delivering a speech on July 2, Chief Justice Chandrachud cautioned against hasty justice delivery and urged a commitment to upholding the principles of the rule of law and procedural safeguards.
• In addressing the pressing issue of climate change, the Chief Justice highlighted the extreme weather conditions experienced in Delhi, underscoring the need for infrastructure development aligned with environmental concerns. He urged the incorporation of environmentally conscious practices into daily life to combat climate change, particularly emphasizing the importance of reducing carbon emissions.

·        Chief Justice Chandrachud’s environmental concerns are mirrored in a recent landmark Supreme Court ruling that recognized the right to be protected against the adverse impacts of climate change as a fundamental human right under the Constitution. ·        The judgment pointed out the need to articulate this right distinctly, noting its interrelation with the right to a clean environment enshrined in Articles 14 and 21 of the Constitution.

 

Environment Protection under Constitutional Framework of India: ·        Fundamental right: Right to environment is also a right without which development of individual and realisation of his or her full potential shall not be possible. Articles 21, 14 and 19 of this part have been used for environmental protection. Ø   According to Article 21 of the constitution, “no person shall be deprived of his life or personal liberty except according to procedure established by law”. ü  Article 21 guarantees fundamental right to life  which includes “Right to environment, free of danger of disease and infection” is inherent in it. ü  The right to live in a healthy environment as part of Article 21 of the Constitution was first recognized in the case of Rural Litigation and Entitlement Kendra vs. State, AIR 1988 (Popularly known as Dehradun Quarrying Case). ü  In M.C. Mehta vs. Union of India, AIR 1987 SC 1086 the Supreme Court treated the right to live in pollution free environment as a part of fundamental right to life under Article 21 of the Constitution. ü  Other judgements – Vellore Citizens Welfare Forum vs. Union of India (1996), Arjun Gopal vs Union of India (2017), Supreme Court guidelines(2018). ·        Directive principles of State Policy: Article 48 -A of the constitution says that “the state shall endeavor to protect and improve the environment and to safeguard the forests and wild life of the country”. ·        Fundamnetal duty: Article 51-A (g), says that “It shall be duty of every citizen of India to protect and improve the natural environment including forests, lakes, rivers and wild life and to have compassion for living creatures”.

Great expectations, liberalism in dark times

GS 2: Miscellaneous

 Context

• Politics and philosophy aim to perceive unity in diversity, where contradictions merge in a multi-racial society. Achieving widespread concord represents the intellectual ideal of a state driven by coexistence and welfare for all.
• However, the global history of democracy reveals challenges to the very idea of liberalism, threatened from various angles.

About Liberalism: Definition: Liberalism is an ideology centered on principles such as individualism, freedom, toleration, and consent. According to liberal theory: ·        The primary goal is to ensure, protect, and expand individual freedom. ·        The role and functions of the State should be limited, intervening only when it enhances individual liberty. ·        State and governmental power should originate from and be accountable to individuals. ·        It advocates for limited political obligations, emphasizing voluntary consent and minimal coercion in governance.

 The Challenge to Liberalism

• Liberalism, which keeps power in check and protects fundamental rights, has long faced challenges. The pressing issue in times of rampant sectarianism is determining who has the “rights to have rights.” This question shapes civil discrimination, racist politics, and xenophobic bigotry.
• Further, the rise of right-wing nationalism and issues surrounding refugees and migrants highlight societal and ideological fissures.
• In the context of liberalism’s existential crisis, recent electoral shifts towards the right in the European Parliament indicate growing support for climate skepticism, anti-migration sentiments, and divisive nationalism.
• However, in India, voters recently opposed creeping authoritarianism and communalism, sending a message that they reject oppression and uphold democracy. The Indian electorate’s response has reaffirmed the strength of democracy by challenging communal oppression and fostering a diverse civil society.
• There is hope for a robust opposition and a government willing to listen and debate, ensuring the defence of fundamental rights. A new understanding of the distinction between private faith and public life could enhance coexistence without diminishing either.

 The Need for Political Dialogue

• A conversation between overzealous conservatives and the beleaguered left is crucial. Rational and just legislation and execution, along with responsiveness to marginalized populations, are essential.
• Human rights, often bestowed selectively by nation-states, explain many contemporary crises. The Indian voter has demonstrated a collective effort to challenge an imbalanced and oppressive regime, highlighting the importance of a vigilant opposition.
• The recent verdict in India is a triumph for democracy, countering a global trend of deceptive and authoritarian politics. It is hoped that the ruling dispensation will adopt tempered liberalism and that the opposition will champion humility, pluralism, and modesty. Political discourse must uphold dignity and reasoning, not perpetuate oppression through media and state apparatus.

 Natural Order vs. Civil Order

• Spinoza’s (philosopher) reflections on the natural and civil orders emphasize the necessity of law and morality in a state.
• In a civil setup, individuals are responsible to the state and guilty of spreading hatred or treachery. The disorder of nature is contrasted with the state’s predetermined order, where rationality and collective design prevail.
• The rise of anti-liberal tendencies underscores the need for political wisdom and the defense of democratic institutions.
• India’s general election results reflect a tension between hope and skepticism. The trajectory of its democracy and the need for political astuteness and dignified statesmanship will shape its future. Cohabitation and reaching out to opposing political players is essential.

Conclusion

• Indian politics must change to demonstrate that democratic forces are resilient when human dignity is at stake.
• The future is not only about personal liberty or democratic self-rule but also about moral significance.

Digital jurisprudence in India, in an AI era

GS 2: Polity and Governance- AI Jurisprudence

 Why is it in the news?

• Generative AI (GAI) has emerged as a transformative force with the potential to revolutionize society. However, existing legal frameworks and judicial precedents designed for a pre-AI world may struggle to effectively govern this rapidly-evolving technology.

v  Generative AI, or generative artificial intelligence – ·        is an advanced form of AI that autonomously generates content such as text, images, audio, and video. Unlike traditional AI systems focused on pattern recognition and predictions, generative AI creates original content. ·        Generative AI is powered by foundation models (large AI models) that can multi-task and perform out-of-the-box tasks, including summarization, Q&A, classification, and more. ·        It works by using a Machine Learning (ML) model to learn the patterns and relationships in a dataset of human-created content. It then uses the learned patterns to generate new content. ·        Typically, it starts with a simple text input, called a prompt, in which the user describes the output they want. Then, various algorithms generate new content according to what the prompt is asking for. ·        Popular Generative AI Tools: ChatGPT, Bard etc.

More about the news:

• One of the persistent issues in Internet governance is fixing liability on “intermediaries” for content hosted by them.
• The landmark Shreya Singhal judgment addressed this by upholding Section 79 of the IT Act, granting intermediaries ‘safe harbour’ protection contingent upon meeting due diligence requirements outlined in Section 3(1)(b) of the Information Technology (Intermediaries Guidelines) Rules. However, applying these rules to Generative AI tools poses challenges.
• There are divergent views on how GAI tools should be classified. Some argue they are akin to intermediaries since they function like search engines, albeit without hosting third-party links. Others view them as “conduits” for user prompts, altering outputs based on inputs—making generated content analogous to third-party speech, thus reducing liability.

 

·        In Christian Louboutin Sas vs Nakul Bajaj and Ors (2018), the Delhi High Court restricted safe harbour protection to “passive” intermediaries, referring to entities merely transmitting information. Yet, distinguishing between user-generated and platform-generated content with Large Language Models (LLMs) is increasingly complex. Moreover, liability for AI chatbots arises only upon reposting by users on other platforms; merely responding to user prompts isn’t considered dissemination.

• Generative AI outputs have triggered legal conflicts globally. For instance, in June 2023, a US radio host sued OpenAI, alleging defamation by ChatGPT. Ambiguity in classifying GAI tools—intermediaries, conduits, or active creators—complicates liability assignment, especially in user repost scenarios.
• Regarding copyright, the Indian Copyright Act of 1957 provides protection only to works authored by humans. Globally, reluctance persists on extending copyright to AI-generated works. Should copyright laws evolve to accommodate AI? Would co-authorship with humans be mandatory for AI-generated works? Recognizing authorship—whether to the user, the program, or the programmer—remains
• Under current Indian law, copyright owners can sue for infringement, but liability for AI-generated infringement is unclear. ChatGPT’s ‘Terms of Use’ attempt to shift liability to users for illegal outputs, but enforceability in India is uncertain.
• The S. Puttaswamy judgment (2017) laid the foundation for privacy jurisprudence in India, leading to the Digital Personal Data Protection Act, 2023 (DPDP). While traditional data handling raises privacy concerns, Generative AI adds complexity. The DPDP introduces rights like erasure and the right to be forgotten, yet AI models trained on data can’t truly “unlearn,” posing challenges to personal data control.

Suggested steps

• It includes a sandbox approach for GAI platforms to foster responsible development while identifying legal issues.
• Data acquisition for GAI training needs legal compliance overhaul, possibly through licensing and revenue-sharing models. Centralized platforms akin to Getty Images for licensing data could simplify access and ensure integrity.

Conclusion

• The jurisprudence around Generative AI demands a comprehensive re-evaluation of digital laws in India.
• A holistic, government-wide approach and judicious interpretations by constitutional courts are crucial to harnessing AI’s benefits while safeguarding individual rights.

 France: India’s steady partner in green growth

GS 2: International Relations: India- France 

Why is it in the news?

• On July 14, 2023, in Paris, President Emmanuel Macron and Prime Minister Narendra Modi elevated the ‘Partnership for the Planet’ as one of the three pillars of the Indo-French Horizon 2047 Roadmap.

v  Following Prime Minister Modi’s participation in France’s Bastille Day celebrations, India and France marked their 25-year strategic partnership by 2023(established in 1988) with the unveiling of the “Horizon 2047” roadmap(which will celebrate the centenary of India’s independence, the centenary of the diplomatic relations between the two countries and 50 years of the strategic partnership). v  Under the Horizon 2047 framework, India and France have established three key pillars to further strengthen their enduring partnership: 1.        Partnership for security and sovereignty 2.       Partnership for the planet 3.       Partnership for the people v  Partnership for the planet includes several initiatives: Ø  Financing the energy transition: Financing India’s sustainable cities program, CITIIS 2.0, with INR 9,230 million from the French Development Agency, co-financed by the EU and KFW, and INR 2,460 million from Proparco for clean energy projects. Ø  Blue Economy: Collaboration between NIOT and IFREMER for the Deep Ocean Mission, focusing on scientific and technical cooperation in ocean exploration and research. Ø  Energy Security and Climate Goals: India and France collaborate to shift towards a low-carbon economy, ensuring energy security while meeting SDG7 and Paris Agreement targets through increased use of clean energy, including nuclear power. Ø  Climate Action in Indo-Pacific: Joint initiatives like Indo-Pacific Parks Partnership, International Solar Alliance, and Indo-Pacific Oceans Initiative promote sustainable development and climate resilience in the region, supported by initiatives like SUFIP for sustainable finance. Ø  Electronuclear Collaboration: Progress on Jaitapur Nuclear Power Project includes training Indian engineers for EPR reactors, fostering skills development, and advancing modular reactor technologies. Ø  Decarbonated Hydrogen Innovation: India and France cooperate on green hydrogen production and regulatory standards, facilitating industrial partnerships for deployment. Ø  Renewable Energy Advancement: Joint efforts under International Solar Alliance enhance solar energy capacities globally, with specific programs like STAR-C and solar academy initiatives in Senegal. Ø  Hydropower and Energy Efficiency: Collaboration includes upgrading hydropower facilities, promoting run-of-river solutions, and boosting energy efficiency across urban, industrial, and transport sectors, leveraging expertise in energy data collection and analysis.

 This decision reflects the intensification of Indo-French cooperation over the past few years on issues such as climate change, biodiversity, health, and environment.

• It also shows a deep convergence of views between France and India: our two countries champion the idea that socioeconomic development and environment protection can go hand in hand, are committed to bridging North-South divides, and believe that we can together find sustainable solutions for the world and for our own green transitions.
• This has led to high-profile joint initiatives on the world stage, such as the International Solar Alliance. But the ‘Partnership for the Planet’ is more than that: it is made up of tangible projects in India, which advance a greener, more inclusive future.

More about the news

• A priority partner, the French Development Agency (AFD), is India’s steadfast partner to achieve its sustainability goals, operating through AFD, its private sector arm Proparco, and the technical cooperation agency Expertise France.
• The AFD Group pursues a holistic approach to development, harmonising growth with Sustainable Development Goals (SDGs) across 4,200 projects in over 150 countries.
• In India, AFD has committed over €4 billion since 2008 across sectors like energy transition, sustainable urban development, biodiversity conservation, and reducing inequalities, making India its top financial exposure partner with 83% of its portfolio contributing to climate change mitigation and adaptation, and 63% addressing gender equality.
• In 2023, AFD approved nearly €400 million for climate change projects in India, including credit lines to public banks, disaster risk management support for Himachal Pradesh, a national urban water management program, environment protection initiatives with Rajasthan and Himachal Pradesh, and green credit lines for electric buses and energy-efficient housing. Private sector projects, like Proparco’s €11.2 million investment in Sahyadri and €33 million in Quadria for healthcare, exemplify the impact of private sector-led initiatives in achieving SDGs.

Conclusion

• Looking forward, the partnership aims to expand into the Indo-Pacific, enhance green technologies, and foster innovation, underscoring France’s commitment as India’s enduring ally in its journey towards resilience and equitable growth.

UK may have a new government — this time Labour could be better for India

GS 2: International Relations: India-UK

 Context

• As the Tories in Britain face a historic defeat in tomorrow’s elections, India stands well-placed to advance its bilateral relationship under a new Labour government led by Keir Starmer.
• The Conservative Party, despite deserving much criticism for its tumultuous 15-year tenure, has positively reoriented ties between London and Delhi.
• Shedding some of Britain’s colonial baggage, the Tories unshackled British policy towards India from the Pakistan and Kashmir factors, framing the engagement in a broader Indo-Pacific context. They also negotiated a roadmap for transforming bilateral relations across various domains, including green transition, defence, new technologies, and maritime security. The Migration and Mobility Agreement addressed challenges of illegal immigration and eased the flow of Indian talent into the UK.
• Despite unresolved issues, such as Delhi’s concerns about anti-India activities in Britain and resistance from Britain’s permanent establishment to a fresh relationship, the Tories made significant strides.

An Analysis

• However, Labour’s return to power might reignite some of India’s anxieties about bilateral ties, reminiscent of the late 1990s when Labour’s tenure saw a disastrous turn in India-UK relations. The 1997 visit by Queen Elizabeth II to India, meant to signal post-colonial reconciliation on the 50th anniversary of India’s Independence, became a diplomatic debacle.
• During a stopover in Pakistan, British Foreign Secretary Robin Cook’s comments about mediating on the Kashmir issue were dismissed by Indian Prime Minister Inder Kumar Gujral, who derided Britain as a “third-rate power.” The Queen’s visit to Jallianwala Bagh to express regret for the 1919 massacre was marred by Prince Philip’s controversial remark about the death count, causing a massive uproar in India. Although British PM Tony Blair tried to limit the damage, the squabbles over Pakistan and Kashmir shadowed Labour’s tenure, compounded by Cook’s “ethical foreign policy,” identity politics, and pandering to anti-India groups.
• David Cameron, leading the Conservatives to victory in 2010, sought to put the past behind, but it took another decade to establish an ambitious vision for an India-British partnership. The return of Labour, however, is unlikely to reopen old wounds.
• Starmer has extinguished the anti-India fires lit by Jeremy Corbyn (a British politician who was Leader of the Opposition and Leader of the Labour Party from 2015 to 2020. The Labour Manifesto’s 2019 references to Kashmir triggered a storm in Delhi, mobilizing the Hindu community to support the Tories. Yet, Starmer has crushed radical ideologies and signalled intent to build on Tory foundations.
• Labour is reaching out to the Hindu vote, as are the Tories. Starmer’s visit to the Swaminarayan Temple in Kingsbury included promises to protect British Hindus’ interests. However, Labour cannot ignore other minorities, including the 1.2 million-strong Pakistani diaspora (compared to the 1.5 million-strong Indian diaspora). UK-based Khalistani groups will continue to lobby for an anti-India agenda.
• For Delhi, managing the resonance of India’s domestic politics and the Subcontinent’s fractures within the large South Asian diaspora in the UK involves maintaining pressure to curb anti-India activity and engaging with Britain’s “deep state” to manage issues arising from the diaspora.
• Building on positive potential while shedding misperceptions about Britain is crucial. Gujral’s description of Britain as a “third-rate power” was erroneous; in the mid-1990s, Britain’s GDP was higher than China and India combined. Today, while India’s economy is slightly larger than Britain’s ($4 trillion to $3.5 trillion), its per capita income is much lower ($3,000 compared to Britain’s $50,000). A deeper partnership with Britain, given its financial clout, technological depth, and global reach, can significantly benefit India.

Conclusion

• Starmer’s push towards political moderation offers India an opportunity to strengthen ties with Britain. David Lammy, expected to be the next foreign secretary, recently laid out an ambitious vision for the India-UK relationship, criticizing the Tories for over-promising and under-delivering. Lammy’s emphasis on “progressive realism” signals a pragmatic approach, unlike Cook and Corbyn’s rhetoric on a “values-based foreign policy.” Starmer and Lammy advocate for Britain to engage with the world as it is, not as it wishes it to be, presenting a promising prospect for India-UK relations.

Overview on UK lection 2024: ·        The United Kingdom is set to hold general elections on July 4, 2024, after a five-year period. These elections will determine the new Prime Minister. The main contenders are the current Prime Minister, Rishi Sunak, leader of the Conservative Party, and Keir Starmer, leader of the Labour Party. ·        Current Political Landscape Ø  Conservatives: Currently hold a majority with 344 out of 650 seats in the House of Commons. Ø  Labour Party: The main opposition party led by Keir Starmer. Ø  Election Process Ø  Total Constituencies: 650 Ø  Majority Requirement: A party needs to win at least 326 seats to hold the majority in the House of Commons. ·        Appointment of Prime Minister: The leader of the party that wins the majority is invited by the monarch (currently King Charles III) to form a new government. ·        Recent Developments Ø  Parliament Dissolution: The current parliament was dissolved on May 30, 2024, following the announcement of the general election date. ·        This election is crucial as it will reshape the composition of the House of Commons and determine the leadership of the UK.

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The two vaccines that brought us to the brink of eradicating polio

GS 3: Science and Technology- Polio

 Why is it in the news?

• Back in 1948, a momentous discovery unfolded as microbiologists John F. Enders, Thomas Weller, and Frederick Robbins delved into experimenting with various viruses in cell cultures.
• Amid their research, a serendipitous find emerged when a virus found in their freezer unexpectedly thrived in human muscle and skin cells using their groundbreaking method. This pivotal breakthrough tackled a formidable scientific challenge of the era.
• Their breakthrough innovation enabled the successful cultivation of the poliovirus in non-nerve cells, revolutionizing the scientific landscape.

Background ·        During the mid-20th century, a prevailing belief held by researchers was that the poliovirus could solely flourish in nerve cell cultures. This misconception stemmed from struggles infecting rhesus macaques orally, limiting success to direct injections into the nervous system. Unbeknownst to them, the challenge lay in the poliovirus strains in use. ·        Given the virus’s exclusive affinity for human hosts and its resistance to infecting non-human primates, cultivating polio in non-nerve cells posed a formidable barrier. ·        However, the groundbreaking work of Enders and his team allowed for large-scale production of the poliovirus, propelling vaccine research forward.

Missing the Eradication Mark

• The eradication of polio stands as a top priority for the World Health Organization (WHO). While Africa celebrated being declared polio-free in August 2020, recent reports highlight a resurgence of the wild poliovirus in urban centres of Afghanistan and Pakistan, underscoring emerging challenges.
• This setback is attributed to vaccine hesitancy, fuelled by misinformation, conflict, poverty, and limited access, particularly in isolated regions of these countries.
• Regrettably, the WHO’s Global Polio Eradication Initiative faces delays in meeting its 2024 eradication deadline due to these obstacles.
• The initiative’s struggles in Afghanistan and Pakistan dim the glow of a remarkable global achievement: the eradication of polio from most regions, achieved through two pioneering vaccines developed within a year of each other. These vaccines, while distinct in administration, protective efficacy, components, and immune system targeting, played pivotal roles in the collective fight against polio.

 Systemic vs. Mucosal

• In a seminal moment in late 1949, Enders shared his team’s method of culturing the poliovirus with Jonas Salk of the University of Pittsburgh.
• Salk then formulated the first successful polio vaccine, leveraging the innovative cultivation method to generate an immunity-inducing vaccine administered into the muscle, triggering systemic immunity.
• Diving into the intricacies of the immune system, comprising the systemic and mucosal components, Salk’s vaccine marked a milestone in the fight against polio.
• Following Salk’s inactivated polio vaccine (IPV), Albert Sabin introduced another groundbreaking vaccine, utilizing live polio strains attenuated through macaque cell culture—culminating in the oral polio vaccine (OPV).
• The OPV leveraged the natural route of infection, delivering a robust mucosal immune response at the point of viral entry to combat polio effectively.

What is Polio? ·        Overview: Polio is a viral infectious disease that can cause severe paralysis and, in some cases, death, primarily affecting the nervous system. ·        Types: There are three distinct wild poliovirus strains: Wild Poliovirus type 1 (WPV1) ; Wild Poliovirus type 2 (WPV2) AND Wild Poliovirus type 3 (WPV3). While symptomatically identical, these strains differ genetically and must be eradicated individually. ·        Transmission: The virus spreads person-to-person mainly through the faecal-oral route or occasionally through contaminated water or food. It predominantly impacts children under 5 years old. ·        Symptoms: Most polio infections are asymptomatic or cause mild symptoms like fever, fatigue, nausea, headache, and limb pain. In rare cases, it leads to permanent paralysis, respiratory muscle paralysis, or brain infection, which can be fatal. ·        Prevention and Treatment: There is no cure for polio, but it can be prevented through immunisation. ·        Vaccines: Ø  Oral Polio Vaccine (OPV): Administered orally, starting with a birth dose for institutional deliveries, followed by three primary doses at 6, 10, and 14 weeks, and a booster at 16-24 months. Ø  Injectable Polio Vaccine (IPV): Given alongside the third dose of DPT (Diphtheria, Pertussis, Tetanus) under the Universal Immunization Programme (UIP) to enhance protection against polio.   India’s Eradication of Polio: ·        India was certified as polio-free by the World Health Organisation (WHO) in 2014, following three consecutive years without any reported cases. ·        The successful Pulse Polio Campaign played a crucial role, ensuring that all children received polio drops. ·        The country’s last case of wild poliovirus was reported on January 13, 2011, marking a significant milestone in the eradication efforts.   Initiatives to Eradicate Polio: v  World Polio Day: Held annually on October 24th to emphasize global vigilance in the fight against polio. ·        Global Efforts: Ø  Global Polio Eradication Initiative (GPEI): Launched in 1988 by national governments and WHO to eradicate polio globally. It has resulted in 80% of the world’s population living in certified polio-free regions. Ø  Vitamin A Supplementation: During polio immunization campaigns, systemic administration of vitamin A has prevented an estimated 1.5 million childhood deaths. ·        Initiatives in India: Ø  Pulse Polio Programme: Started to achieve universal coverage with Oral Polio Vaccine (OPV). Ø  Intensified Mission Indradhanush 2.0: Nationwide immunization drive launched to commemorate 25 years of the Pulse Polio Programme (2019-20). Ø  Universal Immunization Programme (UIP): Introduced in 1985, expanded to improve immunization coverage, service quality, establish reliable cold chain systems, implement district-wise monitoring, and attain vaccine production self-sufficiency.

Conclusion

• As the world battled polio, both IPV and OPV served distinct purposes, with the former prioritizing safety and the latter offering enhanced protection and ease of administration, illustrating a unique one-two punch strategy in polio eradication efforts.
• In summary, the altruistic decisions of Jonas Salk and Albert Sabin to forgo patenting their vaccines fortified the WHO’s arsenal against polio.

Mixed Signals

GS 3: Economy- Manufacturing Sector 

Why is it in the news?

• In May, the production data for the eight core infrastructure sectors indicated a general slowdown in industrial activity due to a widespread heatwave.
• The increased use of power for cooling systems and fans in homes, offices, and factories across the country impacted various sectors differently.
• While coal and electricity generation saw double-digit growth at 2% and 12.8%, respectively, other sectors like crude oil, fertilizers, and cement experienced a decline compared to the previous year. Additionally, growth in natural gas, refinery products, and steel sectors also slowed down.

Overview on Core sector: ·        The core sector comprises eight key sectors crucial to the Indian economy: Coal, Crude oil, Natural gas, Refinery products, Fertilisers, Steel, Cement, and Electricity. ·        Together, these sectors account for approximately 40.27% of the Index of Industrial Production (IIP), significantly influencing corporate profits and overall GDP growth. ·        The growth of these sectors serves as a leading indicator of monthly industrial performance. ·        The Index of Eight Core Industries is released by the Office of Economic Adviser under the Department for Promotion of Industry and Internal Trade (DPIIT) in the Ministry of Commerce and Industry.

More about the news

• The economic effects of the heatwave were notably felt in Northern India, leading to disruptions in construction activities and a high peak power demand. As a result, the demand for cement and steel decreased, reflecting the impact of the soaring temperatures on the construction sector.
• The continuous contraction in fertilizer production for the fifth consecutive month raised concerns about the agriculture sector’s weakness in rural regions. Despite these challenges, there was a slight improvement in the farm input index in May, offering a glimmer of hope.
• While official data from the core sectors and the Index of Industrial Production are delayed by over a month, the HSBC India Manufacturing Purchasing Managers’ Index (PMI) for June showed an optimistic outlook.
• The PMI reading of 58.3 indicated a rebound in factory activity from the previous month, with increased output and hiring to meet rising demand. However, rising staff expenses and material costs led to inflationary pressures, prompting manufacturers to raise selling prices.
• Overall, the economy continues to face obstacles, as shown by declining confidence in future output among survey respondents. Policymakers have an opportunity to address these challenges and boost momentum in key industrial sectors through potential policy adjustments in the upcoming Union Budget.

For further information refer article on 29/06/2024 – Coal, electricity buoy core output in May

Is the bad loan problem shifting to individuals from industries?

GS 3: Economy- NPAs 

Why is it in the news?

• The evolution of India’s bad loan problem has undergone a significant shift from being predominantly associated with large industries to increasingly involving retail borrowers.

An Analysis

• Historically, banks heavily lent to large industries, leading to substantial non-performing assets (NPAs) when many of these businesses failed to repay their loans. This issue came to a head in 2015 when an RBI review revealed that around 10% of loans had turned bad by 2017, prompting widespread concern and necessitating measures like the Insolvency and Bankruptcy Code to recover these debts.

About Insolvency and Bankruptcy Code, 2016 (IBC): ·        About: The Insolvency and Bankruptcy Code (IBC), 2016 outlines a structured framework for addressing bankruptcy and insolvency cases involving companies, individuals, and partnerships within a specified time limit. Ø  Insolvency occurs when an individual or entity’s liabilities surpass their assets, making it impossible to generate sufficient funds to meet financial obligations as they fall due. Ø  Bankruptcy is a legal status declaring a person or company unable to settle their outstanding debts according to agreed terms. ·        The Insolvency and Bankruptcy Code (Amendment) Act, 2021 modifies the Insolvency and Bankruptcy Code, 2016. Ø  This amendment targets to establish a streamlined insolvency resolution process specifically for corporate entities categorized as micro, small, and medium enterprises (MSMEs) under the code. Ø  The objective is to achieve faster, cost-efficient, and maximally beneficial outcomes for all involved stakeholders. ·        Applicability: The provisions of the Code are applicable to companies, limited liability entities, firms, and individuals (i.e. all entities other than financial service providers). ·        Objectives : Ø  Maximizing the value of assets owned by debtors. Ø  Fostering entrepreneurship and business growth. Ø  Ensuring prompt and effective resolution of insolvency cases. Ø  Balancing the interests of all parties involved. Ø  Facilitating a competitive market environment and robust economy. Ø  Establishing a framework for handling cross-border insolvency matters.

• As banks intensified efforts to recover from these losses, they scaled back lending to industries and focused on improving their financial health. By 2024, the financial stability of banks was notably enhanced, with the RBI’s Financial Stability Report highlighting a decade-low in Gross Non-Performing Assets (GNPA) ratios. This positive trend was largely achieved through stricter lending practices and successful recovery mechanisms.

RBI’s Financial Stability Report (FSR): ·        About the report: The Financial Stability Report (FSR), issued biannually (every six months) by the RBI, provides a comprehensive assessment of financial stability and the resilience of India’s financial system. ·        Prepared by the Sub-Committee of the Financial Stability and Development Council (FSDC), chaired by the Governor of RBI, the report evaluates risks impacting the financial sector. ·        Key Findings (March-end 2024): Ø  GNPAs Decline: Scheduled commercial banks reported a significant decrease in Gross Non-Performing Assets (GNPAs), reaching a multi-year low of 2.8%. Ø  Net NPA Ratios: Net NPA ratios also dropped to 0.6%, marking a positive trend in asset quality management. ·        Implications: The decline in NPA ratios indicates improved asset quality and resilience in the banking sector, contributing to overall financial stability. ·        Policy Considerations: The findings underscore the effectiveness of regulatory measures and policy interventions aimed at enhancing financial sector stability and managing risk.

• However, the reduction in lending to industries meant that banks sought new avenues for loans to maintain profitability. This period coincided with a significant uptick in retail lending, encompassing personal loans, credit card receivables, housing loans, and other consumer products. The surge in retail loans was further fuelled by the proliferation of digital lending platforms and instant loan apps, which simplified the borrowing process, especially for younger, digitally-savvy consumers.
• As a consequence, the retail sector surpassed both industries and services in terms of outstanding loans, prompting regulatory attention from the RBI to curb potential risks. Despite regulatory interventions, such as tightening norms for digital lending apps, the overall performance of retail loans appeared robust. For instance, the GNPA ratio for personal loans dropped to a mere 1.2% by March 2024, marking it as the lowest across all sectors.

Associated Challenges

• Nevertheless, the RBI remains vigilant due to emerging signs of stress within the retail lending sector. Notably, there has been a concerning increase in slippages — new additions of bad loans — from retail loans, accounting for a significant portion of overall NPAs in recent years. In fiscal year 2024, retail loan slippages constituted 40% of fresh NPA additions, highlighting a growing area of concern.
• Another worrisome indicator is the persistence of delinquency levels among small borrowers, particularly those with personal loans below ₹50,000. Many of these loans were sanctioned by Non-Banking Financial Companies (NBFCs) and Fintech lenders operating through digital platforms, which have faced scrutiny for aggressive lending practices.
• Google’s removal of numerous suspicious loan apps from its Play Store underscores the regulatory challenges associated with digital lending.

Conclusion

• While the overall health of India’s banking system appears stable, these symptoms of stress among retail borrowers serve as cautionary signals for future risks.
• The RBI’s continued monitoring and regulatory actions are aimed at pre-empting potential systemic issues, ensuring that the banking sector remains resilient in the face of evolving challenges focused now on individual borrowers rather than just industries.

On improving rural mobile connectivity

GS 3: Science and Technology- Applications

 About the news

• Mobile devices have become indispensable in daily life, serving purposes from communication with friends and family to conducting financial transactions via UPI and accessing the internet.
• These devices rely on cellular (mobile) wireless networks for connectivity. A cellular network, exemplified by 5G networks, comprises interconnected network equipment that facilitates data movement between devices and other networks like the Internet.
• This network structure is divided into two main components: the Access Network (AN) and the Core Network (CN).
• The Access Network (AN) consists of base stations that provide wireless connectivity within a specific coverage area for mobile devices. These base stations are typically installed across the region, often seen as towers with antenna boxes at the top.
• In contrast, the Core Network (CN) of a cellular network houses equipment that connects to external networks such as the Internet. Unlike AN base stations, the CN operates centrally, potentially distant from individual base stations. The CN is linked to base stations via an optical fibre link known as the backhaul. All data from a user’s device, whether destined for the Internet or another user’s device, must pass through both the base station and the CN. This central role of the CN is critical for supporting user mobility, a fundamental capability of cellular networks.

Challenges to rural connectivity

• Cellular networks, while seemingly ubiquitous, exhibit stark differences in deployment and usage between urban and rural areas, particularly pronounced in developing countries like India.
• Urban tele-density stands at 127%, whereas rural tele-density is significantly lower at 58%, indicating a digital divide where urban users average 1.27 mobile connections compared to just 0.58 for rural users.
• The lower income levels in rural areas pose a significant barrier to the deployment and adoption of cellular networks. Many rural residents find mobile services unaffordable. Additionally, rural areas often have lower population densities, scattered clusters of villages separated by vast distances, and remote locations. Installing fibre infrastructure to connect base stations in such remote areas, like those in the Himalayas, is not only costly but also challenging.
• Current cellular network technologies, such as 5G, primarily target urban populations in economically developed regions, focusing on high data rates and low latency.
• Consequently, rural connectivity remains underdeveloped, highlighting the need for research and innovation to address the unique challenges of rural communication infrastructure.

New IEEE 2061-2024 standard

• A Research group at IIT Bombay, under the leadership of Professor Abhay Karandikar, has long focused on enhancing rural connectivity, culminating in the development of solutions that form the foundation of the newly approved IEEE 2061-2024 standard. This standard delineates a wireless network architecture tailored for affordable broadband access in rural areas.
• The IEEE-2061 network features both Access Network (AN) and Core Network (CN) components akin to traditional cellular networks. However, its AN is heterogeneous, incorporating various types of base stations. This includes macro-BS for extensive coverage and Wi-Fi for localized, high-speed connectivity within villages.
• Unlike homogeneous networks like 5G, which deploy uniform base stations with smaller coverage areas, IEEE-2061’s design allows seamless device transition between Wi-Fi and macro-BS connectivity without service disruption, facilitated by integrated AN control functionalities.
• As wireless technologies continue to evolve, including 4G, 5G, 6G, Wi-Fi, and others, the IEEE-2061 standard promotes their coexistence and mutual reinforcement within a heterogeneous network framework. This integration aims to mitigate issues such as call drops, ensuring robust and uninterrupted connectivity across rural landscapes.

The middle-mile network

• Furthermore, the IEEE-2061 standard advocates for the deployment of a multi-hop wireless middle-mile network to expand connectivity in regions where optical-fibre infrastructure is lacking. This approach offers a cost-effective solution for establishing connectivity over long distances without the need for expensive and challenging optical fibre installations.
• The IEEE-2061 network is designed to flexibly employ technologies such as satellites or long-range Wi-Fi for the middle-mile, ensuring adaptable connectivity solutions.
• In addition, the IEEE-2061 AN (Access Network) provides both a direct and alternate path to the Internet, unlike traditional 4G/5G networks where Internet access is routed exclusively through the CN (Core Network). This direct connectivity from the AN to the Internet bypasses the centralized CN, which is crucial in rural areas where many mobile users remain stationary. This feature allows for more efficient data routing, enabling direct communication between nearby users within the AN itself, akin to a direct connection from Belagavi to Hubballi without the need to route through Bengaluru first (AN to AN instead of AN-CN-AN).

Why Modi-nomics has failed to attract foreign investment

GS 3: Economy- Modinomics

Context

• Modinomics has failed to attract significant foreign investment due to a fundamental misunderstanding of risk, despite efforts to enhance returns. Although designed to boost investment and encourage global firms to “Make in India,” both foreign and domestic investments, particularly in manufacturing, have been tepid.

Make in India Initiative Overview: ·        Make in India initiative was launched on September 25, 2014, to encourage investment, innovation, and manufacturing excellence in India. ·        Objectives: Ø  Facilitating Investment: To attract both domestic and foreign investment into various sectors of the economy. Ø  Fostering Innovation: Promoting innovation to enhance productivity and competitiveness in manufacturing. Ø  Building Manufacturing Infrastructure: Developing world-class infrastructure to support manufacturing activities. Ø  Ease of Doing Business: Improving the business environment by simplifying regulations and procedures. Ø  Skill Development: Enhancing skill development initiatives to create a capable workforce. Ø  Creating a Conducive Environment: Establishing favorable conditions for investment through policy reforms and industry-government partnerships. ·        Achievements: Since its inception, Make in India has achieved significant milestones and currently focuses on 27 sectors under Make in India 2.0. ·        Coordination: Ø  Manufacturing Sectors: Coordinated by the Department for Promotion of Industry and Internal Trade (DPIIT) to implement action plans. Ø  Service Sectors: Coordinated by the Department of Commerce to foster growth and investment opportunities. ·        The initiative aims to continue fostering growth, innovation, and economic development across various sectors of the Indian economy.

An Analysis

• The government has rolled out numerous measures over the past decade, such as infrastructure improvements, corporate tax cuts, production subsidies, protective tariffs, and cleaned-up bank balance sheets. However, the response from the private sector remains weak.
• The reason lies in the focus of these measures. While they aim to reduce costs, increase revenues, and enhance after-tax profits—ultimately increasing returns—firms are also extremely sensitive to risk. Unlike portfolio investors who can quickly withdraw their investments, manufacturing investments are large, indivisible, and difficult to reverse, requiring careful risk assessment.
• In Modi’s first term, efforts were made to mitigate investment risks by restoring macroeconomic stability through an inflation targeting regime and fiscal deficit reduction. Legal recourse via the Insolvency and Bankruptcy Code (IBC) was also provided to banks. However, in the second term, risk mitigation measures diminished, and some actions increased investor risk.

About Insolvency and Bankruptcy Code, 2016 (IBC): ·        About: The Insolvency and Bankruptcy Code (IBC), 2016 outlines a structured framework for addressing bankruptcy and insolvency cases involving companies, individuals, and partnerships within a specified time limit. Ø  Insolvency occurs when an individual or entity’s liabilities surpass their assets, making it impossible to generate sufficient funds to meet financial obligations as they fall due. Ø  Bankruptcy is a legal status declaring a person or company unable to settle their outstanding debts according to agreed terms. ·        The Insolvency and Bankruptcy Code (Amendment) Act, 2021 modifies the Insolvency and Bankruptcy Code, 2016. Ø  This amendment targets to establish a streamlined insolvency resolution process specifically for corporate entities categorized as micro, small, and medium enterprises (MSMEs) under the code. Ø  The objective is to achieve faster, cost-efficient, and maximally beneficial outcomes for all involved stakeholders. ·        Applicability: The provisions of the Code are applicable to companies, limited liability entities, firms, and individuals (i.e. all entities other than financial service providers). ·        Objectives : Ø  Maximizing the value of assets owned by debtors. Ø  Fostering entrepreneurship and business growth. Ø  Ensuring prompt and effective resolution of insolvency cases. Ø  Balancing the interests of all parties involved. Ø  Facilitating a competitive market environment and robust economy. Ø  Establishing a framework for handling cross-border insolvency matters.

• Three main types of state actions have heightened these risks.

1) The first is the promotion of “national champions,” where the government abruptly changes policies to favour select domestic firms, deterring other companies from entering the market. This has been seen in sectors like retail, airports, cement, ports, telecoms, and media. The privileged status of groups like Reliance and Adani has created a perception of an uneven playing field.

2) The second risk is direct and coercive state actions, such as aggressive tax collection and selective raids by tax authorities and regulatory agencies. High-profile cases involving Cairn/Vedanta and Vodafone have damaged investor confidence due to the government’s retrospective tax impositions and reluctance to honor international arbitration rulings. This selective enforcement of tax demands undermines long-term revenue benefits and creates an unpredictable business environment.

3) Finally, supply chain risks arise from increased tariffs, product bans, and other trade barriers that threaten firms’ access to raw materials and inputs from abroad. For India to be internationally competitive, manufacturing firms need assurance of consistent access to low- cost supplies.

• To reassure investors, the government needs to adopt measures similar to Vietnam’s strategy of signing free trade agreements (FTAs) with major trading powers. This would ensure reliable supply chains. More broadly, reducing risk requires persistent efforts and restraint from counterproductive actions. Establishing a favourable risk environment is challenging but essential for attracting investment.
• Comparing Modinomics to China’s model, it becomes clear that China’s success was not only about subsidies and infrastructure but also about minimizing investors’ risks. While India operates within a democratic and procedural framework that cannot fully emulate China’s centralization, the recent issues in China have made investors more willing to consider Indian opportunities, albeit cautiously.

Conclusion

• Reversing India’s high-risk reputation will be difficult, but necessary steps can improve the situation. Addressing investor concerns about expropriation risks, ensuring fair competition, and maintaining liberalizing policies will be crucial for attracting and sustaining foreign investment.