An independent fiscal watchdog for Parliament Editorial 21st Sep’19 TheHindu

Headline : An independent fiscal watchdog for Parliament Editorial 21st Sep’19 TheHindu

Details :

Access to all of good quality analysis on economic, fiscal or financial matters is important for democracy:

  • For an effective democracy, it is important for our electorate and the representatives to have an independent, non-partisan source for these hard facts and evidence.
  • This is particularly important for our Parliament, which controls where and how money flows into our government and our country.
  • But besides the few Ministers privy to expertise from the civil service, most parliamentarians do not benefit from timely access to good quality analysis on economic, fiscal or financial matters.

Need a non-partisan body like Parliamentary Budget Office (PBO) in India:

  • A non-partisan body needs to be appointed with expertise in budgetary, fiscal and economic matters.
  • Regardless of a majority or minority government, this body serves parliamentarians equally and without prejudice.
  • This body exists in many countries around the world, usually called as Parliamentary Budget Offices (PBOs).

 

Work of PBOs:

  • These bodies help shape the debate and discourse around the state of the nation’s finances and the fiscal implications of significant proposals.
  • The work done by PBOs helps drive smarter, more focused debate in the media and with our electorate.
  • Besides costing policies and programmes, PBOs provide significant and sometimes the sole source of information on fiscal and economic projections.
  • Another data point, different from the government’s, generated by an independent, non-partisan office, helps the parliamentarians to ensure that these projections and estimates continue to be reliable enough for them to make decisions on.

Example of how this body will be useful:

  • In the recent time, the Rafale deal controversy in India resulted from uncertainty regarding the true lifecycle costs of the aircraft bought.
  • If parliamentarians could access analysis, information and research about defence costing from a PBO (like they do in Canada), they could hold the government to account in case of any discrepancies.

 

Will there be conflict with the office of CAG?

  • A question that arises is the necessity of such an office when we already have an auditor general (CAG).
  • However, an Auditor General’s role is to provide retrospective audits and analysis of the financial accounts and performance of government operations. These audits are often focused on the day-to-day goings on of government, and often hone in on the performance of the civil service.
  • On the other hand, the PBO provides prospective, forward-looking economic and fiscal projections, as well as policy costings.
  • This distinguishes PBO it from an auditor general, which provides useful information, but only after the fact.

 

Examples of PBO like institutions internationally:

  • Internationally, offices like PBO have been established across the world.
  • The most prominent such office is the Congressional Budget Office in the United Stateswhich provides impartial advice to both the houses of the legislature.
  • Offices in the Netherlands, Korea, Australia and the United Kingdom have also been established for varying lengths of time.
  • PBOs are also making an appearance in emerging economies in Sub-Saharan Africa and Southeast Asia.
  • Wider role in some countries:
    • In some countries, including Australia, the Netherlands, and most recently, Canada, PBOs have also been playing the role of costing electoral platforms during an election campaign.
    • In this period, PBOs provide independent cost estimates of electoral platform measures to political parties.

 

Way forward – India should consider having a PBO:

  • Legislatures across the world have witnessed an increasingly stronger executive try to wrest away its rightful power of the purse.
  • The amount of information parliamentarians need to scrutinise in Budget documents has exponentially increased and a PBO would assist parliamentarians in this process of scrutiny.
  • As the process toward the Union Budget 2020 has already kicked off, it would be relevant for parliamentarians to examine the case for a PBO more deeply.

 

Importance:

GS Paper II: International Relations

Section : Editorial Analysis

Science for disaster management Editorial 31st Aug’19 TimesOfIndia

Headline : Science for disaster management Editorial 31st Aug’19 TimesOfIndia

Details :

Managing disaster and emergency risks:

  • In an increasingly interconnected world, disaster and emergency risks are becoming more complex and difficult to manage.
  • Therefore, it is critically important to optimise the application of scientific and technological capabilities to understand, reduce and manage disaster and emergency risks.

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Use of science and technology:

  • Over the last 20 years, science and technology have brought a deeper understanding of how disaster risks are created and how they can be managed.
  • We now have reliable information on hazard patterns, data on people (their exposure to hazards), capital assets and economic activity.
  • We also have a much greater understanding of fragility or vulnerability of people, assets and systems.
  • This can be seen from the huge improvements in various things like
    • Forecasting extreme climate and weather events
    • Our improved understanding of disasters (like earthquakes and landslides)
    • Our ability to model risks and anticipate the impact of disasters even before reaching the disaster site

Increased outreach to scientific community:

  • The National Disaster Management Authority (NDMA) is reaching out to the scientific community and working towards a futuristic agenda for disaster risk management in the country.

However, challenges remain in application of Science & Technology:

  • At the systemic level, there are two principal challenges worth highlighting.
  1. On-the-ground application of technology:
  • There is still a time lag between the availability of scientific and technological capability and its on-the-ground application.
  • For example, mobile computing has been around for more than a decade, yet few post-disaster damage assessments make full use of the technology to come up with quick, rigorous and geo-referenced assessments.
  • Similarly, new products and technologies are emanating from the defence establishment that may be useful in disaster response, but their usage is minimal.
  1. Giving right direction to scientific development:
  • The second challenge is on the scientific development side.
  • We need to ensure that research is focussed on developing methodologies and tools that respond to real-world challenges and facilitate the shift from disaster management to disaster risk management.
  • In this context, there have been some positives in India as it has pursued the application of science and technology for disaster risk management.
  • For example, India has systematically pursued the application of space-based technologies for disaster risk management.
  • Our national system of science has also continually evolved over the years to meet the needs of disaster risk management professionals.
    • For example, some years ago, a number of scientific disciplines were brought together under the umbrella of ministry of earth sciences.

Principles for the next generation of our scientific efforts for disaster risk management:

  • We now have to look at the next generation of our scientific efforts to address disaster risk management challenges.
  • The next generation of scientific efforts need to be guided by the following three principles:
  • Sharper definition of disaster risk management problems:
    • We need a sharper definition of disaster risk management problems to galvanise scientific efforts that lead to progress.
    • With disaster risk management maturing in India, should be possible to articulate specific requirements from the scientific community.
  • Search for scalable, affordable and sustainable solutions:
    • While promoting the application of science for disaster risk management at the local level, we should search for scalable, affordable and sustainable solutions.
    • In most parts of the country and indeed the world, disaster risks are building up at an alarming rate.
    • Our ambition must match the scale of the problem.
  • Multi-disciplinary approach:
    • We need to enlarge the scope of multi-disciplinary work.
      • For example, this may include seismologists interacting with landslide experts, flash flood experts and meteorologists.
    • We need to study the interaction between hazards, current and future exposure (population, property and economic activity), and vulnerability.
    • This will require multi-disciplinary effort that will push us beyond our comfort zones.

Technology should be complemented by deeper understanding of social and economic processes:

  • Over the last few years, there is a lot of enthusiasm for application of big data, machine learning, and artificial intelligence for disaster risk management.
  • However, we must recognise that these technologies are not a substitute for a deeper understanding of social and economic processes that make our society vulnerable.

Good risk governance practices should not be overlooked:

  • Technology can be complementary, but is not a substitute for the fundamental principles of good risk governance characterised by a responsive government and a risk-aware community.
  • The new methods and tools should supplement and not supplant the time tested practices of good disaster risk management.

Way ahead – Coalition for Disaster Resilient Infrastructure:

  • In this context, India, with UK and other partners, will be launching a global Coalition for Disaster Resilient Infrastructure.
  • The Coalition would prove to be a key milestone towards further strengthening our collaboration.

Importance:

GS Paper III: Disaster Management

Section : Editorial Analysis

Incisive interventions that blunt the RTI’s edge Editorial 10th Aug’19 TheHindu

Headline : Incisive interventions that blunt the RTI’s edge Editorial 10th Aug’19 TheHindu

Details :

Meaning of Democracy:

  • Democracy has to percolate beyond the bare promises of formal political equality.
  • Along with a system of popular sovereignty founded in universal adult franchise, it also assures a set of rights, among others, to a freedom of expression, life and personal liberty, and equal opportunity and status.
  • India’s Constitution provides a framework for governance by pledging to people a set of inviolable guarantees.

Need to negotiate with the State to realize the rights of democracy:

  • Realising the full value of those guarantees at times requires a negotiation with the state.
  • Lead to RTI:
    • One such negotiation resulted in the enactment in 2005 of the Right to Information Act (RTI Act).
    • The law proved transformative to India’s democracy; it revolutionised the citizen’s ability to engage with the state, and bring out uncomfortable truths about the government.

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Importance of RTI Act

Information fundamental to freedom of expression:

  • Information often acts as a great leveller, and helps in taking up democratic action.
  • Therefore, for democracy to be valuable, citizens must possess a right to freely express themselves.
  • It ought to follow then that it is only when citizens have a right to know what the state is up to, where governance is transparent, can their speech have genuine meaning; only then can they constructively participate in the veritable marketplace of ideas.

Empowerment of citizens:

  • Citizens are also empowered under the RTI Act to seek and obtain any information from public authorities, barring a few exempted categories.
  • This freedom to secure information that the law provides has helped open the government up to greater scrutiny.

 

Important role of CIC and ICs in effectiveness of RTI Act:

  • It is when a plea for information goes unheeded that the CIC and the ICs play an especially vital role.
  • Should the initial request for information made to a public information office fails, the petitioner is entitled to lodge an appeal to an authority within the department concerned.
  • Should that also fail, a further appeal can be made to the office of the CIC or the State Information Commission.

 

Right to Information (Amendment) Bill, 2019

  • The government recently got the Right to Information (Amendment) Bill, 2019 passed in Parliament, to amend the RTI Act to dilute the statutorily fixed tenure and service conditions of Information Commissioners.

Term of Information Commissioners:

At Present:

  • The Chief Information Commissioner and Information Commissioners (appointed at the central and state level) have a fixed term of five years.

Proposed Amendment:

  • The amendment bill proposes to change the period of office of Chief Information Commissioner and Information Commissioner as for such term as may be prescribed by the Central Government.

Determination of salary:

At Present:

  • The Act states that the salary of the CIC and ICs (at the central level) will be equivalent to the salary paid to the Chief Election Commissioner and Election Commissioners, respectively.
  • Similarly, the salary of the CIC and ICs (at the state level) will be equivalent to the salary paid to the Election Commissioners and the Chief Secretary to the state government, respectively.

Proposed Amendment:

  • The salary, allowances, and terms and conditions of service of the CIC and the ICs will be determined by executive guidelines.

 

Reason for the amendments:

  • The government said tha thte Information Commission was a statutory body and it was an anomaly to equate it to a constitutional body like Election Commission.
  • The mandate of Election Commission of India and Central and State Information Commissions are different. Hence, their status and service conditions need to be rationalised accordingly.

 

Criticism of the amendments

It undermines the Freedom of Expression:

  • At the first look, the amendments might not strike as being especially harmful.
  • But the RTI Act is not an ordinary statute. It is a law that provides the basic right to freedom of information. Although such a right is not enumerated in the Constitution, the Supreme Court has repeatedly affirmed its position as intrinsic to the right to freedom of expression.
  • Citizens have a right to know what the state is up to, and take decisions or express themselves, and RTI enables this. If it is ineffective, freedom of expression of citizens is undermined.

ICs may come under political influence:

  • Until now, the RTI Act granted an acceptable level of independence to ICs.
  • By placing their terms of service on a par with those of the ECs the law insulated the ICs from political influence.
  • The idea is that security in office is imperative if members must intervene without fear or favour to ensure that the law’s mandate is met.

 

Conclusion:

  • The RTI Act, in its original form, was far from flawless, especially in that it did not do enough to open up public authorities to complete scrutiny. But the present amendments, far from strengthening the existing regime, subvert the independence of the information commission.
  • With the withering of that independence, the right to freedom of information also begins to lose its thrust.

 

Importance:

GS Paper II: Polity & Governance

 

Section : Editorial Analysis

Languages and civilisation Editorial 5th Apr’19 IndianExpress

Headline : Languages and civilisation Editorial 5th Apr’19 IndianExpress 

Details : 

Importance of language:

  • Language is a tool for intellectual and emotional expression.
  • Language is a vehicle for the transmission of culture, scientific knowledge and a worldview across generations.
  • It is the vital, unseen thread that links the past with the present.
  • The great Indian poet Acharya Dandi had said that if the light of language does not exist, we will be groping in a dark world.

Indian literary tradition:

  • There is a rich literary tradition in many languages, especially the ones recognised as classical languages by the Government of India.
  • Modern Indian languages have ancient roots and are derived in some way from the classical languages.

Great Sanskrit literary heritage in India: 

  • Sanskrit, of course, is one of the oldest Indo-European languages, dating back to the second millennium BC.
  • The manuscripts still in existence in Sanskrit number over 30 million, one hundred times those in Greek and Latin combined, constituting the largest cultural heritage that any civilisation has produced before the invention of the printing press.
  • Since studying the classical languages and literature would provide access to authentic sources of history, the National Mission for Manuscripts was set up in 2003.
  • Preservation of ancient texts is only the first step. We need to encourage scholars to do research using these primary sources and unearth new nuggets of knowledge.
  • It is important to study ancient texts and propagate them among modern audiences.

Classical languages of India:

  • Some languages have been given classical language status because of their ancient literary heritage.
  • For instance, Tamil literature dates back to 500 BC, Telugu to 400 BC, Kannada to 450 BC, Malayalam to 1198 AD and Odia to 800 AD.
  • Each of these languages has a rich treasure house of literature, examples include:
    • Sangam literature and Tholkappiyum in Tamil
    • Kavitrayam’s Andhra Mahabharatam in Telugu
    • Ramacharitham of Cheeraman in Malayalam
    • Kavirajamarga of Amoghavarsha in Kannada
    • Kharavela’s inscriptions in Odia
  • For each of the populations speaking these languages, their literature is a matter of pride and distinct identity and the language is a goddess to be revered. There are songs in praise of these languages in Telugu, Kannada and Tamil.

Honouring those working on classical languages:

  • Recently, President’s award was given to scholars of Sanskrit, Pali, Prakrit, Arabic, Persian, Telugu, Kannada, Odia and Malayalam for their service in the preservation and development of classical languages.
  • It shows nation’s appreciation and recognition to renowned scholars who are keeping alive the traditional knowledge and acting as the intellectual bridge between the past and the present.

Falling linguistic diversity of India harms our cultural richness:

  • India is a multilingual country where more than 19,500 languages or dialects are spoken.
  • However, studies by experts estimate that almost 600 languages are on the verge of extinction and that more than 250 languages have disappeared in the past 60 years.  
  • Almost 97 per cent of the population speaks one of the 22 scheduled languages.
  • When a language dies, an entire culture dies.

Preserving and developing India’s linguistic heritage: 

  • Our languages are a crucial part of our history, our culture and our evolution as a society.
  • It is important to protect and conserve our linguistic heritage.
  • Protecting our cultural heritage, including languages, is our constitutionally-mandated duty.

Leveraging technology:

  • The resources required to develop language technology and artificial intelligence-based tools are inadequate or unavailable for many Indian languages.
  • We must harness the power of technology to preserve and promote our languages and culture.

Governmental efforts:

  • The Government of India launched the Linguistic Data Consortium for Indian Languages (LDC-IL) in 2008 and has been preparing high-quality linguistic resources over the last 11 years in all the scheduled languages of India.
  • The Data Distribution Portal is also being launched, where more and varied datasets will be added using several types of AI-based technologies such as automatic dictation, speech recognition, language understanding, machine translation, grammar and spell check.
  • The Central Institute of Indian Languages has been doing commendable work to provide linguistic resources in Indian languages.

A multi-pronged approach:

  • Language preservation and development needs a multi-pronged approach.
    • Education: It should begin at the primary school level and be continued to higher levels of education. Functional literacy in at least one language should be ensured.
    • Usage at homes: More and more people should start using their native languages at home, in the community, in meetings and in administration.
    • Encouraging literature: More people should write poetry, stories, novels and dramas in these languages. We must accord a sense of dignity and a sense of pride to those who speak, write and communicate in these languages.
    • Publications: We must encourage Indian language publications, journals and children’s books.
    • Dialects and folk literature must be given adequate focus.

Conclusion:

  • Language promotion should be an integral part of good governance.
  • Language should become a catalyst for inclusive development.
  • By harnessing technology, the mission of “digital India” can be a mission for a literate India and a mission for an inclusive knowledge society.

Importance:

GS Paper I: Society

Section : Editorial Analysis

Editorial : Agriculture sector

Headline : Time for India to relook the agricultural sector Editorial 30th Mar’19 FinancialExpress

Details :

India’s progress in agriculture:

  • India has made significant strides in agriculture and food security since independence.
  • It has transformed from a food deficit nation to ensuring its food security despite an almost four-fold increase in population.

But time has come to relook at agriculture in India:

  • India needs to shift from subsistence agriculture to robust agricultural systems that do all of the following:
    • Provide food security for all its citizens
    • Ensure income security for its farmers
    • More diversified and better nutrition for its citizens
    • Globally competitive farm productivity levels

 

Measuring productivity:

Productivity in agriculture can be looked at in two ways:

  1. On a per hectare basis – India lags but is doing ok
  • Over the past few decades, India has increased its productivity on a per hectare basis.
  • However, India still lags behind many emerging market peers and most developed nations on this metric.
  1. On a per farm worker basis – India is doing very poorly
  • India is one of the least productive in agriculture on a per farm worker basis amongst major economies.
  • Due to small size of farm holdings:
    • About 45% of India’s workforce is involved in agriculture compared to national best practices of less than 1%.
    • The disproportionately large labour force in agriculture is related to the size of India’s landholdings.
    • From an average of 2.7 hectares in 1970, India’s farms have become progressively more fragmented, with the latest Agriculture Census 2015-16 showing that India’s average farm size is now 1 hectare.
      • Compare this to say, Canada (~300 hectares), Argentina (~500 hectares) and Ukraine (~1,000 hectares).
    • Small landholdings have constrained mechanisation, technology adoption, and economies of scale do not accrue at such levels of landholding.

 

Ways to improve per-farm productivity

  1. Farms need to get bigger:
  • Land is a state subject, and so states must take the lead in reforms in this regard to allow farm sizes to grow.
  • Land Leasing:
    • One way to achieve bigger land sizes is land leasing.
    • States can come up with their own laws with suitable modifications to NITI Aayog’s Model Land Leasing Act, 2016, as per their needs.
    • Digitisation of land records critical for this:
      • Accelerating the digitisation of land records is critical for smooth implementation of this game-changing reform.
      • Telangana has made significant progress in this regard and other states must follow their example.
  • Farmers’ collectives:
    • A stronger push is needed to collectivise farmers through various farmer producer companies (FPCs), farmer producer organisations (FPOs) and cooperatives, for bringing collective benefits from scale.
  1. Reducing wastage by strengthening supply chains:
  • The benefits of rising productivity will not accrue to farmers unless the supply and value chain is strengthened, especially in the case of horticulture products.
  • NITI Aayog’s Strategy Document points out that the annual cost of post-harvest losses can be nearly Rs. 1 lakh crore.
  • The study by the Central Institute of Post-Harvest Engineering & Technology (CIPHET) indicated that the largest amount of losses accrue at the harvesting stage, then at the sorting/grading stage, followed by the transport one.
  • Markets and packaging closer to farms:
    • We need to target the creation of packhouses much closer to the farm gate.
    • Gramin Rural Agricultural Markets (GrAMs):
      • The GrAMs scheme is targeting the transformation of 22,000 rural periodic markets close to the farm gate.
      • An important component of this scheme is that these GrAMs be kept out of the purview of the State APMC Acts.
      • Promoting FPC and FPO ownership of these GrAMs should be considered.
      • Similarly, private sector enterprises willing to establish backward linkages should partner with state governments in organising their sourcing through GrAMs.
  1. Taking farmers out of farming:
  • Larger farms with a strengthened supply chains, marketing reforms etc. are incremental solutions to agrarian distress which could collectively serve to double the final output of the overall food supply chain in the country.
  • However, even with these reforms, the problem of dismally low productivity per farm worker is not yet suitably addressed.
  • Pulling cultivators into non-farm or off-farm activities is also required.
  • Remunerative jobs outside agriculture:
    • This requires more remunerative jobs being created outside agriculture.
    • Creating blue collar jobs in and around agriculture is an attractive option.
    • The food processing industry has the potential to generate substantial employment.
    • The ‘Make in India’ initiative could be a driver of absorbing some of the labour from rising farm productivity. For speedier progress, labour intensive sectors like the construction sector can absorb labour rapidly.
  • Farming as a Service (FaaS):
    • FaaS – delivering farm mechanisation solutions, transport solutions or extension services etc. – offers employment generation capacity as well.
    • It has the potential to reduce costs for farmers besides generating rural employment.
    • For example, Madhya Pradesh has had success in promoting the custom hiring centre (CHC) model.
  • PPPs in extension services:
    • Partnering with the private sector in delivering extension services is another avenue towards generating rural employment.
    • NITI’s Strategy for New India @ 75 pitches for public-private partnership in extension delivery through Krishi Vigyan Kendras (KVK).

 

Conclusion:

  • As productivity increases, systems need to be in place for farmers to benefit from the produce, and avoid distressed sales and depressed prices (especially in the case of horticulture products).
  • We have to focus more on efficient evacuation with marketing facilities and processing facilities closer to the farm gate.
  • Improving productivity should be accompanied by developing an efficient value chain, with adequate grading/sorting and assaying facilities, marketing reforms, encouraging contract farming, and boosting investment in the food processing industry.
  • It should also be accompanied by boosting construction and manufacturing in rural areas to absorb the labour generated by higher farm productivity.

 

Importance:

GS Paper III: Economy

 

Section : Editorial Analysis

China slowdown presents India an opportunity to shine Editorial 20th Feb’19 LiveMint

China slowdown presents India an opportunity to shine Editorial 20th Feb’19 LiveMint

Details :

Middle income trap:

  • Many countries that have succeeded in moving out of mass poverty (through rapid economic growth) have struggled in their effort to move to mass prosperity.
  • Research by economists showed that the most common point when inertia sets in (that is per capita income levels stagnate), is when average incomes are either around $11,000 or $15,000 a year.
  • This is the famous middle income trap.
  • Fewer countries emerge from it than enter it.

Reasons for this:

  1. Initial growth is input intensive:
    • Economic growth in the initial phases is predominantly driven by the use of more inputs (labour, capital etc.).
    • The labour force is growing. Investment rates are high.
  2. At a certain stage, productivity growth is required to leap to the next phase of development:
    • After the initial growth phase, the need for productivity growth kicks in.
    • The transition from one phase to the other—from using more inputs to using them more productively—is not an easy one.
  3. Most countries find this transition difficult:
    • Economies such as South Africa and Brazil have not, for decades, been able to get out of this “middle income trap”.
    • The countries of East Asia also painfully realised this in 1997.

 

China has arrived at that point:

  • China has entered challenging territory of “middle income trap”.
  • The International Monetary Fund (IMF) estimates that average incomes in China will be $10,098 this year.

Inputs peaked and now looking for productivity growth:

  • The Chinese labour force seems to have peaked. The investment rate is already unsustainably high.
  • China is now struggling with the challenge of finding ways to switch the economic growth model from input intensity to productivity growth.

China’s efforts to get out of the middle income trap has led to financial stress:

  • China has responded to its challenges of productivity through stimulus measures.
  • The credit booms directed by the government have raised the risk of a financial meltdown.
    • The true fiscal deficit, which includes subnational borrowing as well as money raised off balance sheet (many local governments in China raise debt without showing it on balance sheet in order to avoid lending limits imposed by central government), is perhaps close to 10% of Chinese GDP.
  • Most of this is connected to the challenge of changing the growth model to escape the middle income trap.

 

China’s worries ahead:

  • The ruling Chinese Communist Party fears that any economic collapse will lead to a political collapse of the sort the Soviet Union saw in 1991.
  • It is also worried about the sort of financial meltdown that many Asian countries saw in 1997.
  • Another fear is a long stagnation (very low growth rates) like the one Japan encountered after its financial bubble burst in 1989, at the very end of its economic miracle.

But China can still come out of the middle income trap:

  • Economists have been forecasting the collapse of China for two decades but that has not happened so far.
  • China to its credit has seen the most spectacular economic boom in human history as well as the most astonishing development story ever.
  • So the possibility that China will extricate itself from the middle income trap should not be dismissed.

 

Can India catch up with China while it slows down?

China’s economic status built through very high growth rate for a long time:

  • In the two decades before its structural slowdown began in 2013, China expanded its economy at double digits in nine years while it grew in excess of 9% for another six years.
  • China has on average been growing around two percentage points faster than India since the early 1990s.

India grew fast only for a few years:

  • India had one year of double digit growth and three years of 9%-plus growth in the same period.
  • As a result, China moved ahead very rapidly.

India lags behind China is many ways:

  1. Gap in living standards:
    • The Indian average income in 2019 is broadly similar to the Chinese average income in 2006. This means is that India is now 13 years behind China in terms of living standards.
    • There is a similar gap when it comes to the size of the economy (GDP).
  2. Gap in global strategic heft:
    • China’s economic power gives it enormous strategic heft which it uses aggressively.
    • Indian economy needs to grow fast for a long time to achieve similar status.
  3. Gap in social development:
    • There is a large gap between India and China for social development indicators such as health and education.

 

Now India has a chance to close the gap:

  • With China slowing down, India has a chance to close the gap on China.
  • India has been growing faster than China in the past couple of years, and has taken over as the fastest growing major economy in the world.
  • That is likely to continue as the Chinese economy continues to lose momentum.

Depends on policy choices:

  • However, whether the income gap can be closed, or at least narrowed, depends on whether India can improve its economic trajectory even while China slows down.
  • A lot depends on the respective policy responses in the two countries.
  • It depends on whether China can come up with policies to change its growth model without a financial shock.
  • It depends on whether India can accelerate its growth rate over the next two decades.

 

Conclusion:

  • The China slowdown is an opportunity for India to close the gap.
  • The first condition for that will be policy reforms to sustain higher economic growth.

 

Importance:

GS Paper II: International Relations

Section : Editorial Analysis