To be fighting fit
First step in a long journey
Time to move beyond subsidies
To be fighting fit
Synoptic line: It throws light on issue of need for a comprehensive strategic review of the future threats to India.
(GS paper II)
- This year’s budget allocations is said to have “dashed hopes” for modernisation and the government’s Make in India efforts may end up a non-starter , the Army leadership has told a Parliamentary standing committee in the strongest statement to come from the military on finances available for new purchases in 2017-18 budget.
- Bu the ruling party’s spokespersons talked about how the government had worked to strengthen the military, while the Opposition accused them of paying inadequate attention to the forces.
- As usual reality lies somewhere between the two extremes. According to a recent report by Stockholm International Peace Research Institute, India was the largest arms importer in the last five years, accounting for 12% of global imports. The Indian defence budget has now overtaken that of the U.K. to become the fifth largest in the world.
- Despite this, as the Vice-Chief of Army Staff pointed out to Parliament’s standing committee on defence, the current capital allocation is insufficient even to cater for “committed liabilities”, which are payments for equipment under contractual obligation.
- Also, 68% of the Army’s equipment is under the ‘vintage’ category and the situation is unlikely to improve in the near future. Equally worrying is the adverse impact on infrastructure development and strategic roads where there is a severe shortage of funds.
- An insufficient defence budget impacts not only modernisation but also the current operational readiness of the force. Reduction in revenue allocation means cutting down on training requirements and routine replacement of items like surveillance and protective equipment.
Strategic environment in Asia
- Asia is developing into a multipolar system, with Russia, China, India and the U.S. jockeying for greater influence. According to John J. Mearsheimer in ‘The Tragedy of Great Power Politics’- “Asia will be an unbalanced multipolar system, because China will be much more powerful than all other Asian great powers, and thus qualify as a potential hegemony and when you have power asymmetries, the strong are hard to deter when they are bent on aggression.”
- Conventional state-on-state conflict is on the decline, particularly between nuclear nations. However, one region where such a possibility exists is South Asia. India faces not only a long-term strategic challenge from China but also the continuing efforts by Pakistan to somehow maintain a semblance of military balance with India by keeping the Indian Army tied down in Kashmir, and developing a credible nuclear force.
- In the U.S.’s National Intelligence Council report, ‘Global Trends: The Paradox of Progress’, India’s dilemma is neatly summed up, the report mentioned that “Geopolitically, South Asia’s greatest hope is India’s ability to use its economic and human potential to drive regional trade and development. At the same time, Afghanistan’s uncertain prospects, extremism and violence in Pakistan, and the ever-present risk of war between India and Pakistan probably represent the greatest challenge to unlocking the region’s potential.”
- As India ranked at 131 in the 2016 Human Development Report, and with 55.3% of the population living under “multidimensional poverty”, can it afford a higher defence budget? Conversely, can a weakened military support India’s ambition to achieving great power status? Japan, despite being the second largest economy at one time, was never considered a great power because of its limited military capability.
- Regular strategic consultations between the political and military leadership are rare, and when they do take place it is generally for crisis-management, not long-term strategy. But the security challenges, both internal and external, facing the country have to be squarely addressed. The government and the military need to quickly come together and be on the same page. Currently, there does not seem to be a coherent or common assessment, and one example of this is the debate on the two-front war.
- As the forces are ‘reasonably and sufficiently equipped’, the first step to resolve this contradiction is the comprehensive strategic review of the future threats to India. It will provide a clear picture to the political leadership, and also directions to the military on its doctrine and force structures. A long-term capability development plan can then be prepared by the military and approved by the government. This will form the basis for the defence budget. The annual bickering over the mismatch between what the military demands and the actual allocations made will be avoided.
- The government must also take a holistic look at all border-guarding forces — the Army, Assam Rifles, the Border Security Force and the Indo-Tibetan Border Police (ITBP). While the Army leads in responding to all Chinese provocations such as Depsang, Chumar and Doklam, the border is technically the responsibility of the ITBP under the Home Ministry.
- A country may provide its military with generous budgets and large cadres of manpower, but if the military’s doctrine is misguided, the training ineffective, the leadership unschooled, or the organization inappropriate, military capability will suffer. Need for the Military effectiveness, the outcome of the resources provided to the military and its capability to transform these resources into effective war-fighting capability.
- A comprehensive and an integrated approach to border management could result in considerable savings. There is a crying need to move towards greater integration among the three services and with the Ministry of Defence (MoD). The luxury of each service running its own training, administrative and logistics system is no longer affordable. The MoD, staffed entirely by civilians, seems oblivious to defence requirements and follows a procurement process which appears completely broken.
Question – Critically analyse why the military must focus on capability for future war-fighting, not mere numbers?
First step in a long journey
Synoptic line: It throws light on the issue of assessment of the National Medical Commission Bill.
(GS paper II)
- Article 47 of the Indian Constitution makes it clear that the state is duty-bound to improve public health, but India continues to face a health crisis, with an absolute shortage of and an inequitable presence of doctors and over-burdened hospitals.
- The quality of the health-care experience too needs attention. It is ironic that, while India is a hub for medical tourism (in 2016, India issued 1.78 lakh medical visas), it is a common sight in government hospitals to have patients sleep in corridors waiting for their outpatient department appointments.
- The Indian Medical Association getting ready later this month to challenge the National Medical Commission (NMC) Bill, 2017, now before a parliamentary standing committee. The bill seeks to address the problems.
Assessment of the bill
- Although India has 10 lakh medical doctors, it needs 3,00,000 more in order to meet the World Health Organisation standard of the ideal doctor-population ratio. There is an 81% shortage of specialists in community health centres (CHC), the first point of contact for a patient with a specialist doctor.
- The most affected ones are poor and rural patients who are then forced to consult quacks. Also 82.2% of providers of “modern medicine” in rural areas do not have a medical qualification. Rural India, which accounts for 69% of the population, faces another issue -only 21% of the country’s doctors serve them.
- The insertion of Section 10A in the Indian Medical Council Act was followed by an exponential rise in the number of private medical colleges. This was encouraged as there was, and still is, a shortfall in the number of medical practitioners. However, the high capitation fees charged by these colleges can have a negative effect in terms of affordability of medical services.
- The regulatory authority has been unable to act despite the fact that over half the 60,000 medical students graduating every year are from private medical colleges. With corruption in the issuing of licences and regulatory requirements, many such academic institutions have a faculty of questionable standards, with obvious repercussions on the quality of education imparted.
- The Bill puts in place a mechanism to assess and rate medical colleges regularly, with a high monetary penalty for failure to comply with standards. Three such failures will result in de-recognition of a college.
- There is also an enabling provision for the government to regulate the fees of up to 40% seats in private medical colleges. NITI Aayog data show that this amount falls in a Goldilocks zone, wherein the regulation can be made revenue neutral for the college by nominally raising fees for non-regulated students.
- The Bill goes a step further with a relaxation of the criteria for approving a college in specific cases. Currently, there is a blanket standard for establishing a medical college in India, which disregards the contextual realities in some areas such as difficult terrain or a low population density. For instance, Arunachal Pradesh, Mizoram, and Nagaland do not have a single medical college.
- India has a well-thought-out, three-tier public health-care system which rests on a base of sub-centres (SC) and primary health centres (PHCs) which take care of common ailments. Patients in need of specialist consultations go up the chain to secondary centres (CHCs) , or tertiary centres, which are district hospitals (DHs) or medical colleges. However, because of a poor vanguard, patients who can be treated at the “base” (SCs or PHCs), go straight to the “apex” (CHCs or DHs).
- The Bill has facilitated this by providing for a bridge course for AYUSH/non-allopathic doctors. This course, to be designed by a joint sitting of all medicine systems, will ensure that non-allopathic doctors are trained to prescribe modern medicines in a limited way, within the scope of primary care. A parallel is the system of “barefoot doctors” in China.
- Strengthening primary centres can ensure that the pyramid rests on its base again. With the government now planning to revamp 1,50,000 sub-centres into health and wellness centres by 2022, there is need for an equivalent number of mid-level providers. For this, India’s 7,70,000 AYUSH (Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy) practitioners can be tapped.
- As the Bill seeks to make structural changes in a stagnant and increasingly exploitative health-care system, it can be looked at as a step in the right direction.
Question – Highlight the provisions of The National Medical Commission Bill, also explain how it seeks to make structural changes in an exploitative health-care system?
Time to move beyond subsidies
Synoptic line: It throws light on the issue of the U.S. complaint to the WTO against India’s export promotion schemes.
(GS paper III)
- India’s export promotion schemes face an uncertain future after the United States Trade Representative (USTR) decided to challenge their legality in the World Trade Organisation (WTO).
- The complaint of the USTR is that India is violating its commitments under the Agreement on Subsidies and Countervailing Measures (SCM Agreement) using five of the most used export promotion schemes, namely, the export-oriented units scheme and sector-specific schemes, including electronics hardware technology parks scheme, merchandise exports from India scheme, export promotion capital goods scheme, special economic zones and duty-free import authorisation scheme.
- The main argument of the USTR is that India’s five export promotion schemes violate Articles 3.1(a) and 3.2 of the SCM Agreement, since the two provisions prohibit granting of export subsidies. Until 2015, India had the flexibility to use export subsidies as it is among the 20 developing countries included in Annex VII of the agreement that are allowed to use these subsidies as long as their per capita Gross National Product (GNP) had not crossed $1,000, at constant 1990 dollars, for three consecutive years.
- This provision applicable to the Annex VII countries was an exception to the special provisions provided to the developing countries (the so-called “special and differential treatment”) for phasing out export subsidies. Except Annex VII countries, all other developing countries were allowed a period of eight years from the entry into force of the WTO Agreement, i.e. 1995, to eliminate export subsidies.
- As India had crossed the $1,000 GNP per capita threshold in 2015 became known when the WTO Secretariat produced its calculations in 2017. An interpretation provided in a 2001 report of the Chairman of the Committee on Subsidies and Countervailing Measures, which is also considered as the document providing the methodology for implementing Annex VII of the agreement, says that countries like India must eliminate export subsidies immediately upon crossing the above-mentioned threshold. In the Doha negotiations, India and several other Annex VII countries sought an amendment of the agreement so as to enable them to get a transition period.
- In 2011, India, along with Bolivia, Egypt, Honduras, Nicaragua and Sri Lanka, argued that the Annex VII countries should be eligible to enjoy the provisions applicable to the other developing countries, namely, those that had GNP per capita above the threshold. The latter set of countries was required to phase out their export subsidies within eight years of joining the WTO.
- Additionally, they were allowed to enter into consultations with the Committee on Subsidies and Countervailing Measures, not later than one year before the expiry of the transition period, to determine if there was a justification for the extension of this period, after examining all of their relevant economic, financial and development needs. But this proposal, like all other proposals made as a part of the Doha Round negotiations, remains unaddressed.
- This is not the first time that the U.S. has put India’s export promotion schemes under the scanner; although this is the first instance when its Trade Administration has initiated a WTO dispute involving these schemes.
- In 2010, the U.S. had questioned the export incentives provided to the textiles and clothing sector as a whole, arguing that this sector had a share in global trade exceeding 3.25% and had therefore become export competitive.
- The U.S. pointed out that according to Article 27.5 of the SCM Agreement, any Annex VII developing country which had reached export competitiveness in one or more products must gradually phase out export subsidies on such products over a period of eight years. There was, therefore, considerable pressure on the Department of Commerce to consider its future strategies regarding export promotion schemes.
- The Foreign Trade Policy (FTP) of the National Democratic Alliance government unveiled in 2015 did some serious introspection about the future of export promotion schemes, the first time that any government had done so.
- The policymakers recognised that the extant WTO rules and those under negotiation were aimed at eventually phasing out export subsidies. The FTP took this as a pointer to the direction which export promotion efforts in the country must take in the future: a movement towards more fundamental systemic measures and away from incentives and subsidies.
- A similar note was sounded in the mid-term review of the FTP released in December 2017. This document was significant also because the Indian government showed its awareness that the country was at the verge of losing the benefits of being an Annex VII country.
- The utility of export subsidies to promote exports has long been questioned. While the real impact of these subsidies has never been clearly measured, what has been quite evident is they have benefited the rent-seekers. There is, therefore, a strong case for the government to invest in trade-related infrastructure and trade facilitation measures, which can deliver tangible results on the export front.
Question – As the U.S. is complaining to the WTO against India’s export promotion schemes, explain the reasons why India should move beyond subsidies?