9 PM Daily Current Affairs Brief – February 10th, 2023

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GS PAPER - 2

Exploring the blue in the India-France partnership

Source– The post is based on the article “Exploring the blue in the India-France partnership” published in The Hindu on 10th February 2023.

Syllabus: GS2- Bilateral grouping and agreements

Relevance– India and France bilateral relationship

News– India and France are celebrating 25 years of their strategic partnership.

What is the current status of the relationship between the two countries?

Strategic cooperationStrategic partnership was signed in 1998. They have shared values and aspirations of peace, stability. Both have a desire for strategic autonomy.

There are no real substantive disagreements between the two nations.

There is a high level India-­France political dialogue that is ongoing in defence, maritime, counterterrorism and the Indo­Pacific.

Trade and investment– France has emerged as a key trading partner of India. Annual trade was $12.42 billion in 2021­-22.

It is the 11th largest foreign investor in India with a cumulative investment of $10.31 billion from April 2000 to June 2022. It represents 1.70% of the total foreign direct investment inflows into India.

DExploring the blue in the India-France partnership partnership– It has emerged as a key defence partner for India, becoming the second largest defence supplier in 2017­-2021.

Key examples of defence cooperation are the induction of the French Scorpene conventional submarines, built under technology transfer agreement of 2005, and the Rafale fighter jets.

The Tata group has also tied up with Airbus to manufacture C­295 tactical transport aircraft in Vadodara, Gujarat.

There is a robust network of military dialogues. They regularly held joint exercises like Varuna, Garuda, and Shakti.

Civil nuclear cooperation– France was among the first countries with which India signed a civil nuclear deal. It has also played a critical role in limiting India’s isolation in the non­-proliferation order after the 1998 nuclear tests.

France supports India’s bid for permanent membership of the United Nations Security Council as well as its entry into the Nuclear Suppliers Group.

Climate change–  it is an area of importance for both. India has supported France in the Paris Agreement expressing its strong commitment towards mitigating climate change impact. Both countries launched the International Solar Alliance in 2015.

Cooperation in the Indian ocean– India and France are resident powers of the Indian Ocean and in the Indo ­Pacific. Both have signed “Joint Strategic Vision of India ­France Cooperation in the Indian Ocean Region” which presented a blueprint for a strengthening of ties. In operational terms, both do joint patrolling in the Indian Ocean.

Indo Pacific– Both countries have articulated their common vision for a free, fair and open Indo ­Pacific. It seeks to provide comprehensive solutions for maritime security, regional cooperation, and climate change adaptation.

India and France in September 2022 agreed to set up an Indo­-Pacific Trilateral Development Cooperation Fund that will support sustainable innovative solutions for countries in the region. The two partners have formed a trilateral grouping with the United Arab Emirates to ensure maritime domain awareness and security from the east coast of Africa to the far Pacific.

Global cooperation– While there are divergences over the Ukraine crisis, there is a broad understanding of each other’s position. Both countries are working together to coordinate on playing a constructive role in the crisis.

Mr. Macron and Prime Minister Narendra Modi are among the few world leaders who have maintained open communication channels with the Russian President and Ukraine’s President.

Both countries share concerns over the rise of China and its aggressive behaviour.

Cooperation in emerging areas– They are looking for cooperation in issues such as digitisation, cyber, green energy, a blue economy, ocean sciences, and space.

About Child marriages: In Assam, The Answer Is Schools, Not Jails

Source: The post is based on the article “In Assam, The Answer Is Schools, Not Jails” published in The Times of India on 10th February 2023.

Syllabus: GS 2 – Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes.

Relevance: About early child marriages.

News: Thousands are being arrested in Assam as part of a crackdown on child marriage.

Why arrest is not a correct solution for reducing early child marriages?

Studies from across the world and in India have shown that educational attainment and the socio-economic status of a household are the most significant correlates of child marriage.

People, mostly the poorest, are being punished through the arrests, for the state’s failure to provide good quality schooling and health facilities and its inability to empower its women.

How educational backwardness in Assam led to early child marriages?

Almost 86% of Assam’s population is rural. The state also has among the largest proportion of rural women who haven’t completed 10 or more years of schooling, roughly 74%.

According to the latest National Family Health Survey (2019-21), about one-third of rural women in the 20-24 age group in Assam were married before the age of 18.

Based on the recommendations of Niti Aayog, the Assam government shut down 1,700 government-run elementary schools and merged them with neighbouring schools as a part of the school’s ‘rationalisation’ plan. Such mergers usually hurt girl students the most as they often have to travel long distances to go to school.

About child marriages in other states

Early Child marriages
Source: TOI

According to the UNICEF study on child marriages in India, “among individual characteristics, the level of education of females has the most profound impact on the age they marry, irrespective of household wealth, locality and other characteristics.”

Though a Muslim girl can marry on completing 15 years or when she attains puberty according to Muslim personal law – a provision being challenged before the Supreme Court – child marriage is not exclusive to the community.  According to the 2011 Census, 84% of the 12 million children (7. 8 million girls) who married before 10 years in India were Hindus and mostly from rural India.

There are only two states – West Bengal (48%) and Jharkhand (36%) – with a higher proportion of rural women in the 20-24 age group who were married before 18. They also have roughly the same proportion of women who did not complete more than 10 years of schooling as Assam, about 74%.

What are the other reasons for early child marriages?

The other reasons are, a) Limited paid work opportunities for women and girls. For example, Assam has the second lowest female worker population ratio of just 14.2%, b) Poor quality and inaccessibility of facilities and services, whether in health or education.

The state governments should invest in more schools and improve the condition of existing schools

GS PAPER - 3

Global green growth conundrum

Source– The post is based on the article “Global green growth conundrum” published in the Business Standard on 10th February 2023.

Syllabus: GS3- Economy

Relevance– Green transition of economy across the globe

News– Green growth is the overarching theme across the world. Every country is wooing investment in manufacturing.There is a “buy local” wave depending on the “make at home” initiative.

What are initiatives taken by countries across the globe for domestic manufacturing of components needed for green transition?

The US climate law, the Inflation Reduction Act (IRA) passed last year offers incentives for local manufacturing of batteries and electric vehicles and also gives a boost to technologies like carbon capture.

As per BloombergNEF estimates, about $35 billion have been committed to the North American electric vehicle supply chain since the new law was passed. Over half of this is for battery manufacturing.

India’s self-reliance initiatives cover 14 sectors under the production-linked incentive scheme for domestic manufacturing including batteries and solar panels.

The European Union is planning its own set of incentives to boost local manufacturing and ensure that competitive offers by other countries do not affect investments and jobs. It has unveiled the  “Green Deal Industrial Plan for the Net-Zero Age”.

Canada plans to bring its own incentives in line with those of the US. Australia, Brazil and Chile are likely to explore similar options.

China has a dominant presence in the battery as well as the solar supply chain. It is considering proposals to restrict export of certain equipment for making solar ingots and wafers.

What shows the focus of the Indian government on green growth?

Green growth is the overarching theme across the world.

It was a core part of the Indian government’s Budget for 2023-2024. There were as many as 25 mentions of “green” in the Budget speech.

Budget announced a Customs duty exemption for import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles.

Rs 35,000 crore were allocated for priority capital investments towards energy transition and net zero objectives, and energy security.

What are examples of countries levying carbon border tax?

The European Union has recently agreed upon a carbon border adjustment mechanism. It would tax imports into the EU according to the amount of carbon emitted in their production.

Canada plans to introduce a similar levy, and the US is exploring its options.

India’s green hydrogen challenge

Source– The post is based on the article “India’s green hydrogen challenge” published in The Hindu on 10th February 2023.

Syllabus: GS3- Infrastructure: Energy

Relevance– Renewable sources of energy

News– On India’s 75th Independence Day, Prime Minister Narendra Modi announced the National Hydrogen Mission to make the country a production and export hub of green hydrogen.

What are some facts about the National Hydrogen Mission?

It has an initial outlay of Rs 19,744 crore over the next five years. The target is 5 million metric tonnes production per annum with an associated renewable energy capacity addition of about 125 GW by 2030.

It will lead to savings of $12.5 billion from fuel imports, averting 50 MMTs of annual emissions of Carbon dioxide, fresh investments of $100 billion, and 6,00,000 green jobs.

What are challenges in production and use of green hydrogen?

Electrolyser challenge: According to IEA, as of 2021 the global manufacturing capacity of electrolysers stands at 8 GW/year.

If India were to achieve its 2030 target, it would need 60-100 GW of electrolyser capacity. It is almost 12 times the current global production capacity.

India currently has launched projects to manufacture electrolysers, but the actual numbers as of today are negligible.

Access to critical minerals such as nickel, platinum group metals and rare earth metals could hinder scaling up electrolyser manufacturing capability in India.

These resources are concentrated in countries such as China, Democratic Republic of Congo, Australia, Indonesia, South Africa, Chile and Peru. India also has limited processing capabilities in these minerals.

Energy source challenge: As per current estimates a completely efficient electrolysis system would require 39 kWh of electricity to produce 1 kg of hydrogen. Green hydrogen requires renewable energy as a source of electricity.

India currently estimates a capacity of 125 GW of renewable energy to meet its green hydrogen 2030 targets. So far India has only achieved 119 GW of the 175 GW targeted capacity using solar, wind, bio-power and small hydro.

In addition to the generation capacity, the transmission capacity for cross-border exchange of power between states is a critical requirement.

End use challenge: Currently, most of the demand for hydrogen comes from the chemical industry to produce ammonia for fertilisers, refining for hydrocracking and the desulphurisation of fuels.

It can be a source of heat for industries such as steel, cement and aluminium production. It can be used as fuel for heavy duty vehicles, aviation and shipping.

The conversion efficiency from one form of energy carrier to another in the end use application will determine the scale of green hydrogen’s applicability.

Hydrogen is a highly combustible and volatile element. Its potency in other forms such as ammonia or methanol is only relatively reduced.

It is critical to establish safety standards for storage and transportation. It will add to the cost of hydrogen as a fuel.

Endogenous resources challenge: In the case of India, approximately 50 billion litres of demineralised water supply will be required for production of green hydrogen.

Several parts of India are already severely water-stressed. So, solutions need to be found to cater to this additional water demand.

Desalination has been suggested. But, this will increase the physical footprint of the required infrastructure. It will lead to more land use, impact biodiversity and create limitations in the location of electrolysers.

What is the way forward to overcome these challenges?

India needs to set up large scale manufacturing for electrolysers, building expertise and securing geo-political partnerships for procurement of critical minerals. There is a need for improving the overall technical and economic viability of electrolysers.

Proposed green hydrogen hubs will be required to strike a fine balance between availability of renewable energy and being close to hydrogen demand centres for economic feasibility.

India needs to add close to 100 GW of overall renewable energy capacity per year over the next seven years and. Dispatch corridors and mechanisms should be made available..

India must avoid growing into a dystopia

Source– The post is based on the article “India must avoid growing into a dystopia” published in The Hindu on 10th February 2023.

Syllabus: GS3- Indian economy

Relevance– The focus of economic growth has been on income generation. The development of masses is often neglected.

News– The focus of economic growth has been on income generation. The development of masses, rising inequalities and employment generation is neglected.

What is the economic scenario of India?

Private investment plans during the first nine months of this year to be over 50% greater than what they were a year ago.

India it seems is on a roll as far as economic growth is concerned.

India has overtaken the United Kingdom to become the world’s fifth largest economy.

The London Based consultancy Centre for Economics And Business Research (CEBR) predicted that by 2035, India’s economy would reach $10 trillion and become the world’s third largest by 2037.

Why is the West interested in the growth of the Indian economy?

India is a democracy in the east and also the largest one in terms of population. All the countries in the West are democracies. So, they see a possible alliance of interests.

India’s growing economic size has made it attractive in a way that it was not before. Its fast growth is an investment opportunity for the surplus savings of the West. Investing money in India is likely to yield the highest returns globally.

What is the status of employment in India?

Government data show that in mid­ 2022, unemployment among urban males was much higher than it was a decade ago.

Data from the Centre For Monitoring Indian Economy show that the number of people employed in December 2022 was less than it was in 2016.

Clearly, the growth of the national economy has not generated an equal growth in employment.

What are the impacts of growth on Environment?

Uncontrolled growth will almost certainly result in ecological insecurity. .

The construction of new elevated national highways destroys agricultural land and jeopardising

livelihoods.

Plans for infrastructure aimed at religious tourism in Uttarakhand and Kerala have caused landslides and flooding. It led to suffering for their people.

What can be done to improve employment opportunities for the masses?

Employment opportunities for the mass population will arise only when there is demand for goods in the production of which they can participate.

Growth of the IT sector or of exportable manufactures will not be of much use for them. They possess low education and skills.

Increased demand for goods of mass consumption alone will lead to an expansion in the demand for these workers.

For an expansion of this demand, low inflation is essential. Only then will low ­income households have enough to demand more manufactured goods.

A concerted policy focus can create the conditions for employment generation in India. Welfarism, defined by the free or subsidised distribution of private goods, is no substitute.

What is the way forward for economic policy?

India needs growth as it has a backlog of poverty. But growth alone is not enough for improving the lives of the poorest. It is ecologically harmful.

Size is valuable only when it enhances the well being of the population.

Unintended consequences – Subsidy on EVs must be revisited

Source: The post is based on the article “Unintended consequences – Subsidy on EVs must be revisited” published in the Business Standard on 10th February 2023.

Syllabus: GS 3 – Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

Relevance: About Subsidy on EVs.

News: Government subsidy provided for electric vehicles (EVs) under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme might have some unintended consequences.

Why government is providing Subsidy on EVs?

The government is subsidising EVs a) To help consumers make the transition of adoption of EVs, b) EVs will help reduce vehicular pollution in cities, c) The EVs will assist the government in containing the import of fuel, d) To improve external financial balance.

Read more: Our unique EV transition is a leadership opportunity

How do the Subsidy on EVs cause unintended consequences?

Market participants aim to maximise returns, But this profit maximisation is not always in line with the spirit of the rules designed by the state. This might hold true for EVs. Hence, EV subsidies cause unintended consequences. Such as,

a) Some electric two-wheeler manufacturers have been violating rules at different levels, b) Some firms were not following the localisation norms and depend on imports, presumably to contain costs, c) EV makers are also being probed for bypassing the price cap set by the government.

All this partly defeats the purpose of the EV subsidies, because it would not help develop an indigenous value chain to enable sustainable growth. Hence, the government has so far barred 17 manufacturers from the pool of 64 registered under the scheme.

How India can revamp the Subsidy on EVs that are causing unintended consequences?

At the micro level, the scheme will need to be redesigned. Such as a) Instead of capping the price, the government can give subsidies directly to the consumer, like direct benefit transfer, lower interest rates on loans for EVs, etc, b) The localisation condition can be monitored with better use of technology.

Disinvestment in India: Trends and Challenges – Explained, pointwise

For 7PM Editorial Archives click HERE
Introduction

In the Union Budget 2023-24, the Government has set a target of INR 51,000 crore for Disinvestment. This is the lowest target set by the Government in the last 7 years. The Government has not met the disinvestment target for 2022-23. So far, the Government has realised INR 31,106 crore to date, of which, INR 20,516 crore (~66% of the budgeted estimate) came from the IPO of 3.5% of its shares in the Life Insurance Corporation (LIC). Since 2010-11, the Government has been able to realize the budget target of Disinvestment only twice, in 2017-18 and 2018-19. While some experts have commended the Disinvestment policy of the Government, some other have criticized it, both for its policy approach as well as execution.

What is Disinvestment?

Disinvestment, or divestment, refers to sale of assets or a subsidiary by the Government like the sale of Public Sector Enterprise/Unit (PSE/PSU) by Union or State Government. The sale of Enterprise can be full (i.e., 100% of Government ownership is sold) or partial. Accordingly the disinvestment can be classified as minority disinvestment, majority disinvestment or complete privatisation.

In minority disinvestment, the Government retains a majority in the company, typically greater than 51%, thus ensuring management control. In the case of majority divestment, the government hands over control to the acquiring entity but retains some stake. In complete privatisation, 100% control of the company is passed on to the buyer.

Methods of Disinvestment

Initial Public Offering (IPO): It is offer of shares by an unlisted PSE or the Government out of its shareholding or a combination of both to the public for subscription for the first time.

Further Public Offering (FPO): It is offer of shares by a listed PSE or the Government out of its shareholding or a combination of both to the public for subscription.

Offer for Sale(OFS) of Shares by Promoters through Stock Exchange: This method allows auction of shares on the platform provided by the Stock Exchange. This method has been extensively used by the Government since 2012.

Strategic Sale: It refers to sale of substantial portion of the Government share holding of a PSE, up to 50%, or such higher percentage as the competent authority may determine, along with transfer of management control.

Institutional Placement Program (IPP): Under IPP, only Qualified Institutional buyers can participate in the offering. Qualified Institutional Buyers are those institutional investors who are perceived to possess expertise to evaluate and invest in the capital markets.

CPSE Exchange Traded Fund (ETF): Disinvestment through ETF route allows simultaneous sale of Government’s stake in various PSEs across diverse sectors through single offering. It provides a mechanism for the Government to monetize its shareholding in those CPSEs which form part of the ETF basket.

What are the reasons for undertaking Disinvestment?

Government Revenue: With disinvestment the Government can earn revenue which can be used for meeting expenditure obligations including on welfare measures. Proceeds from disinvestment of assets are used to finance the budget deficit, invest in the economy and various development/social sector programmes, and pay the national debt.

Improve Competition: The privatisation of State-owned companies paves the way for the entry of increasing number of businesses into the industry. This boosts market competitiveness and ultimately results in an improvement in market efficiency. Additionally, it assists businesses that are run by the public sector in modernising their technology in order to boost their level of competitiveness.

Reduce Government’s Role: According to economy and policy experts, the Government should be involved only in strategic sectors. For rest of the sectors, the Government should let the private sector efficiencies take control (subject to effective regulation). Government should focus more on the welfare sector.

Efficiency: It is commonly believed that interference by the Government in the PSUs impact their independence and functioning e.g., in PSEs, new investments can driven by political factors rather than pure economic logic. Similarly PSEs may employ more workers than actually needed. Private sector firms tend to be more competitive. Hence, reduction in Government control enhances overall economic efficiency. So it makes sense to privatize inefficient public sector enterprises.

Valuation: Dilution of Government shareholding, and giving the shares for retail trading opens up the market. It increases the liquidity of the shares and helps get better/realistic valuation.

What has been the trend of disinvestment in India?

The process of disinvestment began in 1991, post the economic reforms. The Industrial Policy Statement of 1991 stated that the Government would divest a portion of its holdings in selected PSEs, but it did not specify the extent of the disinvestment.

Between 1991-1998, the Government could realize only INR 17,557 crore (equivalent to ~INR 90,000 crore in 2022 prices). The pressure of coalition politics limited the political will to push for disinvestment.

In 1996, the Government established the Public Sector Disinvestment Commission (under G. V. Ramakrishna) for a 3-year term with the goal of developing an overall long-term disinvestment programme (like extent of disinvestment, mode of disinvestment) for PSEs.

Between 1999 and 2004, the Government implemented some of the recommendations of the Disinvestment Commission like reducing the government’s shareholding in selected PSEs to 26% in order to facilitate ownership changes. In 1999, the Government stated its policy would be to strengthen strategic PSEs and privatise non-strategic PSEs through disinvestment. In December 1999, the Department of Disinvestment was established.

During this period (1999-2004), the Government realized INR 27,599 crore (~ INR 93,300 crore in 2022 prices) in just five years (1999-2004).

Between 2004-09, the pace of disinvestment fell, again due to pressure of coalition politics. In this period, INR 11,591 crore were earned through disinvestment. The pace picked between 2009-14, with proceeds rising to INR 1.2 lakh crore.

The revenues through disinvestment have risen rapidly since 2014. Total INR 4.48 lakh crore have been earned. This represents ~70% of the earning through disinvestment since 1991.

As part of the May 2020 Atmanirbhar Bharat package to stabilise the lockdown-hit economy, the Government announced a Public Sector Enterprise Policy to encourage private sector participation and reduce government involvement in business. In the Union Budget 2020-21, the Government announced a new policy for strategic disinvestment in PSEs.

The government also launched the National Monetisation Pipeline (NMP) to generate new revenue streams by unlocking the value of previously unutilised and underutilised public assets.

Trend of Disinvestment in India since 2010-11 UPSC

What is the latest policy on Disinvestment?

The disinvestment policy will cover existing Central Public Sector Enterprises (CPSEs), Public Sector Banks, and Public Sector Insurance Companies.

The government has classified the public sector under 2 categories: Strategic Sector and Non- strategic Sector.

In Non-strategic sectors, the Government will exit from all businesses. It will keep only a ‘bare minimum’ presence in four broad strategic sectors, i.e. (a) Atomic energy, Space and Defence; (b) Transport and Telecommunications; (c) Power, Petroleum, Coal, and other minerals; (d) Banking, Insurance, and financial services.

The government will incentivize States for disinvestment of their Public Sector companies.

The new policy is significant as it goes beyond the past case-by-case approach and lays down a rationale for deciding the future ownership pattern of 439 CPSEs, including their subsidiaries. For instance, it is now clear that 151 public sector firms in non-strategic sectors (including 83 holding companies and 68 subsidiaries) will either be closed or sold. The policy also brings public sector banks and insurance entities into the ambit of disinvestment for the first time.

The Government will also monetize the surplus land with Government Ministries and Departments and PSEs. The Cabinet has already approved the creation of National Land Monetisation Corporation.

What are the challenges and concerns related to Disinvestment?

First, the Sale of profit-making and dividend-paying PSUs would result in the loss of regular income to the Government. Disinvestment has become just a resource raising exercise by the government. There is no emphasize on reforming the PSUs.

Second, the valuation of shares has been affected by the Government’s decision not to reduce government holdings below 51%. With the continuing majority ownership of the Government, the public enterprises would continue to operate with the earlier culture of inefficiency.

Third, Government is not willing to give up its control even after strategic disinvestment. In the Budget (2019-20) Speech the Union Finance Minister stated that government will change the policy of ‘directly’ holding 51% or above in a CPSU to one whereby Government’s total holding, ‘direct’ plus ‘indirect’, is maintained at 51%. It means government will still exercise its control over PSUs. This will reduce the interests of buyers.

Fourth, The process of disinvestment is suffering from bureaucratic control. Almost all processes starting from conception to the selection of bidders are suffering due to it. Moreover, bureaucrats are reluctant to take timely decisions in the fear of prosecution after retirement.

Fifth, Strategic Disinvestment of Oil PSUs is seen by some experts as a threat to National Security. Oil is a strategic natural resource and possible ownership in the foreign hand is not consistent with strategic goals.

Sixth, Loss-making units don’t attract investment. It depends upon the perception of investors about the PSU being offered. This perception becomes more important in the case of strategic sales, where the amount of investment is very high.

Seventh, Complete Privatization may result in public monopolies becoming private monopolies, Private monopoly has a tendency to exploit their position to increase costs of various services and earn higher profits.

Eighth, using funds from disinvestment to bridge the fiscal deficit is an unhealthy and short-term practice. This is not sustainable in the long term. Government should focus on increasing its revenue from more reliable resources and cut down Fiscal Deficit.

What are the NITI Aayog’s recommendations on Disinvestment?

First, The Aayog’s disinvestment proposals should go to directly to the Cabinet Committee on Economic Affairs (CCEA) instead of the respective Ministry. This would shorten the process.

Second, Government should consider appointment of Advisors and Asset valuers to speed up the process of disinvestment.

Third, an independent professional agency should be set-up to speed-up the Asset Monetisation Programme.

What should be the approach going ahead?

First, the Government should increase the operational autonomy of PSEs. It can be supplemented by strong governance measures like listing on stock exchanges. It will increase the transparency in their performance.

Second, the government must also try to provide the bidders with a fair valuation of the Government entities. It will boost their confidence in the disinvestment process.

Third, the Government should also reduce its involvement in the management and day-to-day operations of the PSEs. The Government should reform their boards and reorganize the structures. This will attract more buyers and get better valuations.

Conclusion

Disinvestment has several benefits. It can help enhance competition in various sectors and improve efficiencies. It also helps raise revenue for the Government, which can be spent on welfare measures. However, the Government should take care to ensure its presence in certain strategic sectors like banking, energy etc. It will ensure the social obligations and strategic interests intricately linked with these sectors are secured.

Syllabus: GS III, Indian Economy and Issues related to mobilization of resources.

Source: The Hindu, The Hindu BusinessLine, Economic Times, PRS, DIPAM

GS PAPER - 4

India must become a knowledge republic as it charts its way ahead

Source: The post is based on the article “India must become a knowledge republic as it charts its way ahead” published in the Live Mint on 10th February 2023.

Syllabus: GS 4 – Strengthening of ethical and moral values in governance

Relevance: India as a knowledge republic.

News: Recently, a prominent NRI has said that India should work on ways to become a knowledge republic.

What is a knowledge republic?

Knowledge has a crucial role in building India’s republic. It represents India’s collective desire to learn and apply that learning, the ability to learn and create systems of learning, and the know-how Indians have gathered as a civilization.

The knowledge republic must comprise knowledge in economy, society, and even in diplomacy. Becoming a knowledge republic is a worthy choice as a unified objective of nationhood, especially for India.

Why India is still at crossroads in building a knowledge republic?

Right after the Independence, the environment of resource constraints and weak economic growth kept India from becoming a knowledge republic. At that time India has been busy with setting priorities in order.

Eventually, India has come out of those traps and has expressed itself globally as a leading nation.

Why it is time for India to become a knowledge republic?

India’s young demographic profile: India still has undisputed strength that will continue at least in the foreseeable future.

The paradox at the global level: The world at present is facing a) ecological crises in times of improved living standards, b) rising inequality in times of large wealth creation, c) depression and loneliness in times of a growing population, and d) humans losing to machines in times of rapid innovation.

In this paradoxical nature of modern development, India has emerged on the world stage as a responsible power and trustworthy partner. It can lead global efforts in fundamental thinking for problem-solving.

India’s civilizational heritage: Indian civilisation always revered knowledge. For instance, India’s richness of languages, the vastness of scriptures, the lore of ancient universities and the living tradition of rishis are testimony to the nation’s respect for knowledge.

Even now, there is a special place for teachers, gurus and knowledgeable people in the Indian heart. Typical Indian parents see education as a ticket to professional success and save significantly to support their children’s studies.

What should be done to make India as a knowledge republic?

Make the domestic environment competitive: The government has to double the investment in youth talent through education, strengthen avenues for research and innovation, and continue policy reforms that lead to its gainful occupation, including entrepreneurship. This will also showcase India’s talent to global markets.

Inculcate knowledge in governance: Indian society’s reverence for knowledge should be acknowledged and leveraged in policymaking and nation-building.

Worship of knowledge can pave the way for a modern republic. It is time for India to choose that path and move ahead.

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