Editorial Discussion And Analysis(7th April)

 Inflation & Unemployment/ Indian Economy(GS 3)

Impact of Oil Price Shock (Indian Express , 7^th April 2022)

Small Firms vs Big Firms

• RBI’s database of around 2,700 firms shows that during the pandemic, large firms have taken market share from smaller firms.
• Their profitability has also risen while that of small firms has not.
• The underperformance of small firms comes in two distinct phases — one, the lockdown periods (in early 2020 and early 2021).
• Secondly, the commodity price shock period (commodity prices have been rising since mid-2021)
• For Large Firms their leverage has been their ability to cut costs, a lower interest rate environment, and access to buoyant capital markets.

Small Firms Take The Hit

• Commodity price shock will hurt small firms more than large firms.
• India has become more energy-efficient, and this trend has been led more by the large firms who have taken more efficiency-enhancing steps than the small firms.
• Large firms, by their sheer size, may have more bargaining power when buying raw materials.
• They can also pass on more of the input cost increases to consumers.
• Clear from the corporate results that the burden of rising input costs since mid-2021 has been higher for small firms.
• Survey results show that many have been pushed to shut shop in recent months, when prices have been rising.
• It’s not just the large firms that have done well, it’s also their employees.
• Staff costs of large firms have overshot pre-pandemic levels by a meaningful margin

Bearing the Double Shock

• 20% of the labour force works in the formal sector and has benefitted from improved jobs and wages
• The outperformance of the larger formal sector firms and the wealth effect from buoyant stock markets have played a role.
• 80% of the labour force works in the informal sector, equally split between agricultural and non-agricultural workers.
• Agricultural workers did well in the first half of the pandemic, given good monsoons.
• Thereafter, wages in this sector began to slow from mid-2021, led by a slowdown in MGNREGA works & volatile monsoon rains.
• If the weakness in the informal sector persists, it eventually shows up as lower demand

Way Forward

• Right policy mix can help control inflation and limit that pain endured by the informal sector.
• An appropriate strategy, whereby fiscal policy set by the government focuses on growth and monetary policy set by the RBI focuses on inflation can achieve an optimal outcome.

On the fiscal policy front

• Remaining generous with social welfare spending
• Sticking to capex plans outlined in the budget.

On the monetary policy front, the RBI can help 

• Limit the impact of higher input prices by gradually tightening monetary policy.
• Changing the stance from accommodative to neutral, and gradually hiking the repo rate

Social Justice (GS 2)

The Child at Centre (The Hindu, 7^th April 2022)

Mission Vatsalya

• On 2^nd February 2022, The Cabinet had approved 3 important Umbrella Schemes of the Ministry to be implemented in mission mode, viz., Mission Poshan 2.0, Mission Shakti and Mission Vatsalya.
• Children have been recognized by policy makers as one of the supreme national assets.
• India is home to 472 million children upto the age of 18 years and comprise 39 percent of the country’s population.
• The objective of Mission Vatsalya is to secure a healthy and happy childhood for every child in India.
• Foster a sensitive, supportive and synchronized ecosystem for development of children.
• Assist States/UTs in delivering the mandate of the Juvenile Justice Act 2015; achieve the SDG goals.

 

Context

• Mission Vatsalya, which has been operationalized, is one of the new triad of schemes along with Mission Shakti, and Poshan 2.0.
• It aims at securing a healthy and happy childhood for every child.
• Components of This Scheme includes
• Service delivery structures
• Institutional care/services 
• Non-institutional community-based care
• Emergency outreach services 
• Training and capacity building

Child Line

• The impact of this on one of the pillars of India’s child protection services, the ChildLine, has been giving child rights activists sleepless nights.
• ChildLine (1098), the 24-hour toll free helpline for children in distress, will be manned by the Home Affairs Ministry under Mission Vatsalya.
• ChildLine has been in operation for over 25 years, growing gradually to become one of the largest global networks to assist and rescue children in distress.
• It has functioned as a public-private partnership between the government and civil society organisations.
• The objective has been to provide a first-responder safety net, and kick start the process of rescue and rehabilitation of children

Concerns

• A road map to implement the scheme is not yet available.
• But it is understood that police personnel will first answer the call, handing over implementation to NGOs late.
• Children do not feel comfortable confiding in police personnel.
• This was proven beyond doubt during a short-lived experiment in Chennai around 2003 when ChildLine calls were diverted to All Women Police Stations (AWPS).
• They were inundated with calls, hampering regular work.
• Sometimes, all the children wanted was to spend some time talking to someone.
• Many a times they were making multiple blank calls before they picked up the courage to tell all.
• In many cases, police intervention was not needed at all.

International Relations/ India’s Neighbourhood (GS 2)

Repairing India Nepal Relationship (The Hindu, 7^th April 2022)

Author: – Rakesh Sood 

Positive outcomes

• Nepal Prime Minister, Sher Bahadur Deuba, paid a long-awaited visit to India last week.
• The outcome might appear modest but what is significant is that India and Nepal effectively managed to steer clear of divisive issues.
• Among the highlights was the operationalisation of the 35 kilometre cross-border rail link from Jayanagar (Bihar) to Kurtha (Nepal).
• The ₹787 crore project had been ready for over a year but operationalisation was held up
• The second project that was inaugurated was the 90 km long 132 kV double circuit transmission line connecting Tila (Solukhumbu) to Mirchaiya (Siraha) close to the Indian border.
• In addition Nepal’s was inducted into the International Solar Alliance

China’s growing Role

• With the abolition of the monarchy, China has shifted attention to the political parties and to institutions such as the Army
• Prime Minister Narendra Modi has often spoken of the “neighbourhood first” policy.
• He started with a highly successful visit in August 2014 but then saw the relationship take a nosedive in 2015.
• India was getting blamed for interfering in the Constitution drafting process and then for an “unofficial blockade.”
• It reinforced the notion that Nepali nationalism and anti-Indianism were two sides of the same coin.
• China has overtaken India as the largest source of foreign direct investment
• Today, China is also engaged with airport expansion projects at Pokhara and Lumbini.

Managing Differences

• The political narrative has changed in both countries and these issues can no longer be swept under the carpet or subsumed by invoking a ‘special relationship’
• To build upon the positive mood, it is necessary these issues be discussed, behind closed doors and at Track 2 and Track 1.5 channels.
• Due to Demonetisation, many Nepali nationals who were legally entitled to hold ₹25,000 of Indian currency (given that the Nepali rupee is pegged to the Indian rupee) were left high and dry.
• The need today is to avoid rhetoric on territorial nationalism and lay the groundwork for quiet dialogue where both sides display sensitivity.

Kalapani Issue

• While 98% of the India-Nepal boundary was demarcated, two areas, Susta and Kalapani remained in limbo
• In November 2019, India issued new maps following the division of the State of Jammu and Kashmir as Union Territories
• Though the new Indian map did not affect the India-Nepal boundary in any material way, Mr. Oli expanded the Kalapani area dispute.
• The then PM of Nepal, KP Oli he got a new map of Nepal, showing Kalapani to be a part of Nepalese territory.
• He got it endorsed by the legislature through a constitutional amendment.
• While it did not alter the situation on the ground, it soured relations with India and added a new and emotive irritant.

The Territorial Dispute Between India and Nepal

• The border dispute between India and Nepal is centred in the regions of Kalapani, Lipulekh, Limpiyadhura (all three in Uttarakhand), and Susta (Bihar).
• The Kalapani area, consisting of at least 37,000 hectares of territory in the High Himalayas, is the largest territorial dispute between Nepal and India.
• It’s in Uttarakhand’s Pithoragarh district, at the far eastern part.
• It is a significant tri-junction in South Asian diplomacy since it connects India, China, and Nepal.
• The Treaty of Sugauli, negotiated between the Gurkha lords of Kathmandu and the East India Company in 1816, is considered the only legitimate document on boundary delineation in Nepal.

UPSC PYQ (2018)

Consider the following statements:

1. In the first Lok Sabha, the single largest party in the opposition was the Swatantra Party.
2. In the Lok Sabha, a “Leader of the Opposition” was recognized for the first time in 1969.
3. In the Lok Sabha, if a party does not have a minimum of 75 members, its leader cannot be recognized as the Leader of the Opposition.

Which of the statements given above is/are correct?

1. 1 and 3 only
2. 2 only
3. 2 and 3 only
4. 1, 2 and 3

Question Framed From Editorials

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