📰 India, Chinese troops came face-to-face at Naku La in Sikkim last week
The clash occurred as People’s Liberation Army troops attempted to intrude into Indian territory, a defence source said
•Indian and Chinese troops clashed at Naku La in North Sikkim last week which resulted in some minor injuries on both sides, it has been learnt.
•“It is clarified that there was a minor face-off at Naku La area of North Sikkim on January 20, 2021 and the same was resolved by local commanders as per established protocols,” the Army said in a statement.
•The clash occurred as People’s Liberation Army (PLA) troops attempted to intrude into Indian territory, a defence source said. There were some minor injuries on both sides but the situation was resolved and under control, the source stated.
•There was a clash at Naku La on the night of May 9 last year which also resulted in injuries on both sides. There was a clash at Pangong Tso also at that time as the nine-month-long standoff began at several locations across Eastern Ladakh.
•The clash occurred amid high alert and heavy deployment of troops along the Line of Actual Control on both sides since the standoff began. With peak winters and extremely low temperatures, the situation has been largely quiet as both sides dug in while diplomatic and military-level talks continue attempts to work out an agreement for disengagement and de-escalation.
•The Indian and Chinese armies on Sunday held another round of Corps Commander-level talks with an aim to move forward on disengagement of troops from all the friction points in eastern Ladakh.
•The eighth and last round of the talks had taken place on November 6 during which both sides broadly discussed disengagement of troops from specific friction points.
While some species are found only in the unique ecosystem, one in three species have been recorded in the region
•Indian Sunderbans, which is part of the largest mangrove forest in the world, is home to 428 species of birds, a recent publication of the Zoological Survey of India (ZSI) States.
•The publication, “Birds of the Sundarban Biosphere Reserve”, released earlier this month by the ZSI, not only documents the avifauna of the Sunderbans, but also serves as comprehensive photographic field guide, with detailed distribution and locality data for all the species from the region.
•Authors of the publication said the book with photographs of male and female of species is aimed to kindle interest and spread knowledge about birds among people from all walks of life — from forest staff to tourists to amateur birdwatchers.
•The Indian Sunderbans, which covers 4,200 sq km, comprises of the Sunderban Tiger Reserve of 2,585 sq km — home to about 96 Royal Bengal Tigers (as per last census in 2020 ) — is also a world heritage site and a Ramsar Site. The publication has been compiled by three scientists — Kaliash Chandra, Director ZSI, Gopinathan Maheshwaran, head of the bird section of the ZSI and Amitava Majumdar.
•The scientists said that of the 428 birds listed, some, like the Masked Finfoot and Buffy fish owl, are recorded only from the Sunderbans. The area is home to nine out of 12 species of kingfishers found in the country as well rare species such as the Goliath heron and Spoon-billed Sandpiper.
•Highlighting the significance of the publication, Dr Chandra said India has over 1,300 species of birds and if 428 species of birds are from Sunderbans, it means that one in every three birds in the country is found in the unique ecosystem.
•“The publication not only highlights the ecological and conversation aspect of the Sunderbans but through detailed description of bird species and localities where they are found we want to encourage bird-watching,” Dr Chandra said.
•Pointing out that scientists and nature lovers are observing 125th birth anniversary year of Salim Ali, the Birdman of India, the ZSI director said bird watching not only brings people closer to nature but also creates awareness and livelihood opportunities for the locals.
•Principal Chief Conservator of Forest and Head of Forest Force, West Bengal, Ravi Kant Sinha said the Sunderbans are the most diverse of natural landscapes and accounts to 60 % of all mangrove forests in the country.
•“The mudflats exposed in the low tides, rich in microorganism deposited during tidal activity are ideal feeding for migratory birds. These mudflats and wetlands of Sunderbans act as a stopover site for migratory flight south (south wards) and back,” Mr. Sinha added.
📰 EC to soon begin mock trials for remote voting: CEC
The Election Commission has collaborated with IIT-Madras to work on a new technology which will allow electors to vote from faraway cities without going to designated polling station of their constituencies
•Mock trails for remote voting facility for electors would begin soon, Chief Election Commissioner Sunil Arora has said.
•In his message to mark the 11th National Voters’ Day, he said a research project on remote voting using cutting-edge technology has already begun.
•“There has been a good progress in this regard and mock trials will begin soon,” Arora said on Sunday, adding the poll panel’s proposal to extend postal ballot facility for overseas Indian voters is under active consideration of the Law Ministry.
•The Election Commission has collaborated with IIT-Madras to work on a new technology which will allow electors to vote from faraway cities without going to designated polling station of their constituencies.
•Explaining the ‘blockchain’ technology involved in the project, former Senior Deputy Election Commissioner Sandeep Saxena had earlier said the concept is a “two-way electronic voting system in a controlled environment on white-listed IP devices on dedicated Internet lines enabled with biometric devices and a web camera”.
•Saxena, however, made it clear that voters will have to reach a designated venue during a pre-decided period of time to be able to use this facility.
•“It does not mean voting from home. After a voter’s identity is established by the system, a blockchain-enabled personalised e-ballot paper will be generated.
•“When the vote is cast, the ballot will be securely encrypted and a blockchain hashtag generated. This hashtag notification will be sent to various stakeholders, in this case the candidates and political parties,” the official said.
•The encrypted remote votes so cast will once again be validated at the pre-counting stage to ensure that they have neither been decrypted nor tampered with or replaced.
•“Suppose there is a Lok Sabha election and a Chennai voter is in Delhi. Instead of returning to vote in his or her constituency or missing out on voting, the voter can reach a pre-designated spot set up by the EC, say in Connaught Place, in a particular time window and can cast his vote,” Saxena had said.
•He said such voters may have to apply in advance to their returning officers to exercise the option.
📰 Troubled waters: On Palk Bay fishing conflict
The Palk Bay conflict is exacting a high toll, and cries for early resolution
•The tragic death of four fishermen from Tamil Nadu — one of them a Sri Lankan Tamil refugee living in India — allegedly when the Sri Lankan Navy was about to arrest them last week, is yet another instance of the unresolved fisheries conflict in the Palk Bay taking an unacceptable toll of lives. While fishermen in Tamil Nadu say the four were killed in an attack by the Sri Lankan Navy, the latter maintains that they died when their trawler collided with a naval vessel while trying to avoid being apprehended. India has lodged a strong protest with the Sri Lankan authorities, who have set up a committee to find a permanent solution to the incursions by Indian fishermen. It was less than a month ago that the two countries resumed discussions through their Joint Working Group on fisheries after a three-year gap. India sought the early release of fishermen arrested in Sri Lankan waters, as well as the boats in Sri Lankan custody. Sri Lanka underscored the need to curb the illegal fishing, which adversely affects the livelihood of its war-affected fishermen. When the two sides decided to create a joint working group some years ago, they had agreed that there would be no violence or loss of life in the handling of the fishermen and that a hotline would be established between the respective Coast Guards. It is unfortunate that the hotline is yet to be operationalised, and deaths continue to occur.
•The humanitarian approach that has been expected to be the cornerstone of the approach to this conflict has not always been discernible. The plan to wean away Tamil Nadu fishermen from the tendency to exploit the remaining fishery resources on the Sri Lankan side by replacing their trawlers with deep sea fishing vessels has not really taken off. Attempts to forge a negotiated settlement through direct talks involving fishermen from both sides have also reached a stalemate. Sri Lanka favours joint patrolling by both countries, and a ban on unsustainable fishing practices by Tamil Nadu fishermen — such as bottom trawling — but the latter want a lengthy phase-out period. Political leaders in Tamil Nadu rarely acknowledge that the State’s fishermen contribute immensely to the problem by crossing territorial waters. Nor is there sufficient recognition that the incursion into Sri Lankan waters is driven by trawler owners who force their poor employees to do so, who then get killed or arrested, leading to the festering conflict. So far there has not been enough political resolve to end this conflict. A comprehensive solution, one that would severely curtail unauthorised fishing and help in an orderly sharing of and sustainable use of resources by fishermen from both sides, is long overdue.
📰 After the storm: On tightening scrutiny of large NBFCs
The RBI’s plan to tighten scrutiny of large NBFCs is critical for financial stability
•The RBI has proposed a significant shift in its regulatory approach towards India’s non-banking financial companies (NBFCs), from a general approach of light touch regulation to one that monitors larger players almost as closely as it does banks. If implemented, this could be the biggest overhaul of the regulatory framework for such finance companies (or shadow banks) in over two decades. After multitudes of investors were left high and dry as CRB group firms reneged on high-interest fixed deposits in 1997, Parliament bestowed greater powers over such firms to the central bank to fix the mess. The trigger now is similar though the scale of the problem has changed. The size of NBFC balance sheets is now more than a quarter of that of banks’ balance sheets, from just about 12% in 2010. In absolute terms, their balance sheets have more than doubled, from ₹20.7-lakh crore in 2015 to ₹49.2-lakh crore in 2020. While this growth is a reflection of how lighter regulations have given them the flexibility to meet a range of financing needs, from home loans to micro-finance and large infrastructure projects, it also manifested into a systemic risk. And that risk was apparent when one of the largest infrastructure investment-focused NBFC players, IL&FS, unravelled in 2018, with its payment defaults catalysing a crisis for the entire sector. The collateral damage meant NBFCs could not raise funds easily, and faced liquidity pressures that escalated to solvency concerns in some instances.
•The descent of one such player, Dewan Housing Finance Corporation Limited (DHFL), began around the same time — its creditors approved a resolution plan for the firm last week. The RBI’s proposed regulatory reaction to such large NBFC failures that have had a systemic impact on the sector, could not have come sooner. It has sought to strike a balance between the need to be nimble and mitigate systemic risks, with a four-tiered regulatory structure. This entails a largely laissez-faire approach for smaller NBFCs, plugging some of the arbitrages available to mid-sized NBFCs vis-à-vis banks, and imposing tougher ‘bank-like’ capitalisation, governance and monitoring norms for the largest players and those which could pose a systemic risk due to the nature of their operations. A top tier has been envisaged with even more scrutiny, but the RBI wants to ideally use this approach only when a certain large player poses ‘extreme risks’. Given the banking sector’s own woes over the past two years (PMC Bank, Yes Bank, Lakshmi Vilas Bank), a holistic reboot of the oversight mechanism for NBFCs and banks is critical to retain confidence and maintain financial stability which central bank Governor Shaktikanta Das has termed a ‘public good’. It is hoped that the blueprint for the regulation of NBFCs which can lend for activities banks often do not support, be it micro-loans or infrastructure projects, is formalised soon. This would ensure the fledgling economic recovery is not hampered by funding constraints.
📰 A big push for education
The pandemic gives us a chance to make education systems more inclusive, flexible, and resilient
•On January 24, we celebrated the third edition of the International Day of Education, a day proclaimed by the United Nations General Assembly to honour education and its value to humanity and sustainable development. This day provides an opportunity to discuss the importance of education for citizens around the world, and to find ways to advocate for inclusive quality education.
Education disrupted
•Our theme for 2021, ‘Recover and Revitalize Education for the COVID-19 Generation’, places an emphasis on the way the pandemic has negatively affected learning outcomes for students globally and how we should innovate and combine resources to invest more in education.
•About 1.6 billion students from some 190 countries were affected by the shutdown of schools caused by COVID-19, reversing years of progress in education. In India, more than 1.5 million school closures affected about 286 million schoolchildren. This added to the six million girls and boys who were already out of school prior to the crisis.
•According to UNESCO estimates, schools worldwide were closed for an average of three and a half months since the onset of the pandemic. This figure rises to more than five months when localised school closures are taken into account.
•Because of dire fiscal challenges and the overwhelming need to prioritise public health and social safety spending, global education financing has been significantly reduced. UNESCO estimates that of the $11.8 trillion global COVID-19 fiscal response, a mere 0.78% (or $91 billion) was allocated to education, with $73 billion spent in high-income countries.
•Yet, the governments of South Asia have made some real progress towards protecting education funding. On average, it is estimated that South Asia allocated 0.85% of its fiscal package to education, compared to 0.73% for Europe and North America and 0.69% for Latin America and the Caribbean.
•These shifts in public expenditures were mainly driven by Information and Communication Technology measures to support the delivery of education through a mix of radio, television, and mobile technology, as well as the home delivery of printed learning materials for the most vulnerable students who are excluded from technology.
•In India, inspired by the release of the National Education Policy (NEP), the Education Ministry has made significant efforts to develop courses to reach all learners via the Internet and the airwaves. The introduction of the NEP and the counter-effects of the pandemic have in fact provided a groundswell of change on which true reform is riding.
•Still, much more needs to be done as remote learning remains out of reach for more than 500 million students globally. As we continue to struggle through this volatile situation, it is more than ever our duty to ensure that learning never stops. To highlight the remaining challenges, UNESCO is releasing new global figures now, one year into the COVID-19 pandemic, which show that over 800 million students, or more than half the world’s student population, still face significant disruptions to their education, ranging from full school closures to reduced or part-time academic schedules.
A clarion call
•The learning crisis brought about by the pandemic therefore represents a clarion call to governments, development partners and businesses to increase funding and make education systems more resilient, inclusive, flexible, and sustainable.
•Now is the time to step up collaboration and international solidarity and place education at the centre of the recovery and the transformation towards more inclusive, safe, and sustainable societies. The pandemic has been devastating but we can also see it as an opportunity to rededicate ourselves to a big push for education across South Asia.
📰 In agri-credit, small farmers are still outside the fence
The agriculture sector’s performance has not been commensurate with the increasing subsidised credit it receives
•Farmers on the warpath would mean that agriculture reforms have again occupied centrestage not just in the minds of the politicians but also policymakers. To enable small farmers to diversify their crops or improve their income they must have access to credit at reasonable rates of interest. This has been an agenda of the triad of the Centre, the States and the Reserve Bank of India (RBI) for decades. Unfortunately, while the volume of credit has improved over the decades, its quality and impact on agriculture has only deteriorated. Agricultural credit has become less efficient in delivering agricultural growth. Otherwise, why should over 85% of farmers’ income remain stagnant over the years? Any other sector which has access to a low rate of interest credit has always boomed and ballooned so much so it has created a bubble of its own.
•Every year, the central government announces an increase in the target of subsidised agriculture credit limit and banks surpass the target. On February 1, Budget day, the Union Finance Minister will again set a new agricultural credit target for 2021-22. In 2011-12, the target was ₹4.75-lakh crore; now, agri-credit has reached the target of ₹15-lakh crore in 2020-21 with an allocated subsidy of ₹21,175 crore. The question is: where is the credit and subsidy going and are they really benefiting the farmers?
Most small farmers left out
•In the last 10 years, agriculture credit increased by 500% but has not reached even 20% of the 12.56 crore small and marginal farmers. Despite an increase in agri-credit, even today, 95% of tractors and other agri-implements sold in the country are being financed by non-banking financial companies, or NBFCs, at 18% rate of interest; the banks’ long-term loans rate of interest for purchasing of the same is 11%.
•The central bank, the RBI, has also questioned agricultural households with the lowest land holding (up to two hectares) getting only about 15% of the subsidised outstanding loan from institutional sources (bank, co-operative society). The share is 79% for households belonging to the highest size class of land possessed (above two hectares), beneficiaries of subsidised institutional credit at 4% to 7% rate of interest. As in the Agriculture Census, 2015-16, the total number of small and marginal farmers’ households in the country stood at 12.56 crore. These small and marginal holdings make up 86.1% of the total holdings. As in the Situation Assessment Survey of Agricultural Households by the National Sample Survey Office (NSSO), Ministry of Statistics and Programme Implementation, the share of institutional loans rises with an increase in land possessed — showing that the bulk of subsidised agri-credit is grabbed by big farmers and agri-business companies.
•A loose definition of agri-credit has led to the leakage of loans at subsidised rates to large companies in agri-business. Though the RBI had set a cap that out of a bank’s overall adjusted net bank credit, 18% must go to the agriculture sector, and within this, 8% must go to small and marginal farmers and 4.5% for indirect loans, bank advances routinely breach the limit.
•In 2017, 53% of the agriculture credit that the National Bank for Agriculture and Rural Development (NABARD) provided to Maharashtra was allocated to Mumbai city and suburbs, where there are no agriculturists, only agri-business. It made indirect loans to dealers and sellers of fertilizers, pesticides, seeds and agricultural implements undertaking work for farmers.
Many irregularities
•A review by the RBI’s internal working group in 2019 found various inconsistencies. It found that in some States, credit disbursal to the farm sector was higher than their agriculture gross domestic product (GDP) and the ratio of crop loans disbursed to input requirement was very unevenly distributed. Examples are in Kerala (326%), Andhra Pradesh (254%), Tamil Nadu (245%), Punjab (231%) and Telangana (210%). This shows the diversion of credit for non-agriculture purposes. One reason for this diversion is that subsidised credit disbursed at a 4%-7% rate of interest is being refinanced to small farmers, and in the open market at a rate of interest of up to 36%.
•Subsidised credit should be the ‘cause for viable agriculture but, unfortunately, the agriculture sector’s performance has not been commensurate with the subsidised credit that it has received’. Even new farm laws have not addressed the reform in the agriculture credit system.
•The way forward is to empower small and marginal farmers by ‘giving them direct income support on a per hectare basis rather than hugely subsidising credit. Streamlining the agri-credit system to facilitate higher crop loans to farmer producer organisations, or the FPOs of small farmers against commodity stocks can be a win-win model to spur agriculture growth’.
Technology as a solution
•With mobile phone penetration among agricultural households in India being as high as 89.1%, the prospects of aggressive effort to improve institutional credit delivery through technology-driven solutions can reduce the extent of the financial exclusion of agricultural households. Farmers have been able to avail themselves of loans through mobile phone apps, says a media report. These apps use satellite imagery reports which capture the extent of land owned by farmers in States where land records are digitised and they grow the crop to extend the Kisan Credit Card loans digitally. Instant, otherwise, farmers have to produce the certified land record copy from the revenue department, which is much time consuming. Other steps are reforming the land leasing framework and creating a national-level agency to build consensus among States and the Centre concerning agriculture credit reforms to fill the gap and reach out to the most number of small and marginal farmers.
📰 The shipping sector is at sea
Sagarmala provides hope for improving carrying capacity and developing infrastructure and ports
•The major economies of the world have always realised the potential of shipping as a contributor to economic growth. Today, for instance, control of the seas is a key component of China’s Belt and Road Initiative (BRI). China is trying to take control of the Bay of Bengal and the Indian Ocean Region.
•However, geographically, China is not as blessed as India. It has a great variety of climates and it has a coast only in the east; yet, seven of the top 10 container ports in the world are in China, according to the World Shipping Council. What aided China’s growth are strong merchant marine and infrastructure to carry and handle merchandise all over the world.
•Prior to the 16th century, both India and China were equal competitors on GDP. Historical records prove that India had maritime supremacy in the world. But over the past 70 years, India has lost its global eminence in shipping due to poor legislation and politics.
Helping foreign shipping liners
•Starting from the establishment of new ports in independent India to the establishment of the present-day Chabahar Port in Iran, all of India’s actions on the shipping front have been counter-effective. This is due to a visionless administration. All the shipping infrastructure in peninsular India only helps foreign shipping liners. India has concentrated only on short-term solutions.
•In the past, colonial traders had strong merchant marine, but they also developed optimum shore-based infrastructure with road and rail connectivity to facilitate their trade. There was balanced infrastructure onshore and at sea. Shore-based infrastructure was developed to cater to the carrying capacity. This needs to be understood with a clear economic sense.
•Foreign ship owners carry our inbound and outbound cargo. This is the case in container shipping too. As a country, we have still not optimised our carrying capacity. Foreign carriers and their agents continue to ransack EXIM trade with enormous hidden charges in the logistics cycle. Much of foreign currency is drained as transhipment and handling cost every day.
•Given this state of affairs, members of our maritime business community have also preferred to be agents for foreign ship owners or container liners rather than becoming ship owners or container liners themselves. This is a historical mistake and a major economic failure of the country. As a result, there is a wide gap between carrying capacity and multi-folded cargo growth in the country.
•Today, Ministry officials are happily relaxing “Cabotage” regulation in the name of coastal shipping. This benefits only the foreign container-carrying companies and not Indian shipowners. Official actions allow foreign carriers to enjoy the situation here and push the Indian tonnage owners to vanish from the scene. Starting from the Swadeshi Steam Navigation Company of V.O. Chidambaram Pillai to the Scindia Steam Navigation Company of our times, Indian owners have not got the blessings of successive governments.
•In the port sector, instead of creating regional cargo-specific ports in peninsular India, the bureaucracy has repeatedly allowed similar infrastructural developments in multiple cargo-handling ports. As a result, Indian ports compete for the same cargo. If we make our major ports cargo-specific, develop infrastructure on a par with global standards, and connect them with the hinterlands as well as international sea routes, they will automatically become transhipment hubs. We need to only concentrate on developing the contributing ports to serve the regional transhipment hubs for which improving small ship coastal operations is mandatory.
•It is our long-cherished dream to be competent and cost-effective in international supply chain logistics. We need quality products to be available in global markets at a competitive price. This will happen only if we develop balanced infrastructure onshore as well as at sea.
A ray of hope
•Sagarmala, a government programme to enhance the performance of the country’s logistics sector, provides hope. Its aims are port-led industrialisation, development of world-class logistics institutions, and coastal community development. When Sagarmala initiates infrastructural development on the shorefront, this will also get reflected in domestic carrying capacity.
•As of now, shipbuilding, repair and ownership are not preferred businesses in peninsular India. The small ship-owning community in India also prefers foreign registry for their ships instead of domestic registration. If this has to change, there needs to be a change in the mindset of the authorities and the maritime business community.
•With the call for ‘Make in India’ growing louder and with simultaneous multi-folded cargo growth in the country, we need ships to cater to domestic and international trade. Short sea and river voyages should be encouraged. The ship-owning spirit of the Indian merchant marine entrepreneur has to be restored. Shipbuilding and owning should be encouraged by the Ministry. The National Shipping Board is an independent advisory body for the Ministry of Shipping, where the Directorate General of Shipping (DGS) is a member. The NSB should be able to question the functioning of the DGS, which is responsible for promoting carrying capacity in the country.
•Sagarmala should include coastal communities and consider evolving schemes to harness the century-old ship-owning spirit and sailing skills of peninsular India. Coastal communities should be made ship owners. This will initiate carriage of cargo by shallow drafted small ships through coast and inland waterways. All minor ports in peninsular India will emerge as contributing ports to the existing major ports and become transhipment hubs on their own. Old sailing vessel owners should be encouraged to become small ship owners.
•It is sad that most of the global shipping companies which depend on Indian cargo for their business have Indians as either commercial heads or Indian crew onboard their ships. The creamy layer from management and nautical institutions are employed out of India. When the most creative human resource is not used in the country, what is the point of declaring that India has the number one youth population in the world?
•The youth population is merely a number, not a skill-based strength. In the coastal region, their strength has not been tapped. This is a point of concern and Sagarmala should concentrate on consolidating the strength of the coastal youth and make them contribute to the nation’s economy with pride.
