tinglado-mediafiles.s3.amazonaws.com€¦ · web viewthe hindu; page no. 1. resuscitating...

Daily News Simplified - DNS

07 05 20Notes

Title Resuscitating multilateralism with India's help (Page number 06)

Syllabus GSII: international Relations

Theme How can India play a crucial role in the emerging multilateralism

Highlights Context: The article explains as to how India can revive multilateralism in the world

which is at its weakest

SL. NO. TOPICS

THE HINDUPAGE NO.

1 Resuscitating multilateralism with India's help 06

2 A war like state and a bond to rescue 06

3 Rent control amidst pandemic 07

4 Pigs die of suspected hog cholera in Meghalaya 11

Dated: 07. May. 2020DNS Notes - Revision

in present times especially due to corona virus.

What do we mean by Multilateralism? Multilateralism is when at least three governments participate in a particular

issue or to try to solve a problem. Multilateralism is an example of cooperation among world governments and

used in contrast with unilateralism. Unilateralism is when a state acts without regard to the support or interests of

other states. Further, multilateralism is also different from Bilateralism whereby two

countries engage on different fronts such as trade, diplomacy, sharing technical or academic expertise etc.

What is Global Supply Chain? A global supply chain is a dynamic worldwide network when a company

purchases or uses goods or services from overseas. It involves people, information, processes and resources involved in the production, handling and distribution of materials and finished products or providing a service to the customer.

Global supply chains are networks that can span across multiple continents and countries for the purpose of sourcing and supplying goods and services. Global supply chains involve the flow of information, processes and resources across the globe.

Low-cost country sourcing is linked to global supply chains and refers to the procurement of products and services from countries with lower labour rates and reduced production costs than that of the home country.

How has globalization nurtured and impacted Multilateralism?Understanding Globalization

When we talk of ‘globalisation’ we often refer to an economic system that has emerged since the last 50 years or so. However, the making of a global world has a long history of trade, of migration, of people in search of work, the movement of capital, and much else.

All these aspects have led to visible signs of global interconnectedness in our present lives. Globalisation is also best understood through the term “global supply chain” in the modern context. And this global supply chain has among other factors has also helped the growth of multilateralism.

Nurturing Post 2nd World War, the assumption for the world following multilateral system

was that peace and prosperity were synonymous as like-minded countries were considered members of the system also because they had similar beliefs and purpose in the world.

Countries with fundamentally different domestic systems of governance and beliefs did not form a part of this multilateral order, as was the case with the Soviet bloc in the Cold War years.

Corona Virus has heightened crisis of Multilateralism


According to the article, pandemic of corona virus has heightened the crisis of multilateralism which has already been impacted by paralysis of all three functions of the World Trade Organization (WTO) namely negotiation, dispute settlement, and transparency

Further, denting of credibility of World Health Organisation (WHO) amid the pandemic has further aggravated the problem.

Weaponization of Multilateral System – Capturing Global Supply Chain However, no one realized that multilateral system built for the welfare of all

could be weaponized for nationalistic gains at the expense of other countries. The impact of globalization and multilateralism can be understood from the

way whole world has reacted to corona virus by locking down every aspect of lives including halting of the global supply chain.

The misuse of rules of WTO by few countries especially China for their own advantage through forced technology requirements, intellectual property rights violations, subsidies and increasing dependency of the world because of their manufacturing prowess – has given them an unfair advantage.

The threat of corona virus and its impact has provided with more alarming examples as to how damaging can be if global supply chain is weaponised or made dependent on one country.

China’s Threats Post crisis, many countries including India were in need of medical equipments

to deal with the pandemic such as masks, personal protective equipment, ventilators and other items.

Since China was already prepared to supply the needful, it offered to sell these products to countries in need. However, China also threatened countries who complained of faulty equipment.

So, when India complained that test kits imported from China were faulty, China slammed it for “irresponsible” behavior. When Australia indicated that it would conduct an independent investigation of China’s early handling of the epidemic, China threatened it with economic consequences.

China started predatory takeovers of companies in India, EU and also in other parts of the world, as if China was waiting to take action when situation rapidly worsened in other regions of the world.

Lessons for other nations including India The pandemic is teaching countries through bitter experience that weaponised

interdependence is not just a theory but a practice that is rapidly evolving spearheaded by China.

So, the article highlights that in these circumstances where the world is somehow fighting the pandemic, repeated calls by heads of governments and international organisations urging countries to remain committed to multilateralism does not gather much steam.

So, there is a need to reform and strengthening of Multilateralism

How do we Reform Multilateralism?1. By reassurance from all major nations of the world including USA, China, Russia,


India and others to follow rules of WTO in trade and commerce to collectively strengthen the Global Supply Chain in a non-autocratic

way Not to weaponize Global Supply Chain through coercive means Strengthened global value chain in a democratic way ensures global

stability and peace and prosperity for all. 2. There is need for strategic de-coupling i.e. using different supplier countries

which should be handled in co-operation with other like-minded countries. 3. Now this will not happen overnight and will cause considerable disruption to

existing global value chains thereby resulting in decrease in overall gain. However, according to the author participation by more countries is necessary as it will make us less dependent on any one country and will increase our overall security despite decrease in profit.

4. It will reset the multilateral order as it will require closer cooperation from and maintain social distancing from others. Membership of such renewed world order will not be universal and rather depend on sharing of first order values such as pluralism, democracy, liberalism, animal welfare rights, and more.

How can India play the Leadership Role in strengthening Multilateralism?India stands to gain as an alternative for China

Most countries in the west seeks gradual decoupling from China and for them India as of now is the best alternative.

India needs to utilise this opportunity not only for itself but also for greater public good and here India’s cooperation with like-minded actors will be key.

India can work closely with the Alliance for Multilateralism (an initiative launched by Germany and France) to shape both the alliance itself and the reform agenda at large. Working together with a group of countries from the developed and developing countries could further amplify India’s voice.

The Alliance for Multilateralism, launched on 2 April 2019 by the French and German Foreign Ministers, is an informal alliance of countries that are convinced that multilateralism founded on respect for international law is the only reliable guarantee for international stability and peace and that the challenges we are facing can only be solved through cooperation. It aims to bring together willing partners who can express themselves and take action.

India can play a Major Role at Multilateral Forum India can play a major role not only by addressing the fundamental problems

of multilateralism but also by assuming leadership role in strengthening constructive transnational cooperation especially when United States faces multiple internal challenges including the prospects of a deeply divisive Presidential election in November, 2020.

India also has strong chance to revive gradual socialization of China into international system as global credibility of China has impacted due to origin of corona virus from Wuhan in China. Further, this global credibility has also impacted the global supply chain as China is the manufacturing hub of the world as of now.


India could lead a coalition to bridge this deficit of trust through a regime of incentives and sanctions that seek to embed Beijing into a much more guided and directed socialisation into the rules of the international system.

So, India has a unique opportunity to not only to improve global credibility of China but also make China accept norms and rules governing multilateral forums and institutions.

The current crisis in multilateralism could be a remarkable opportunity for India, a country whose pluralism, democracy, and liberalism have often been underestimated by the West.


Personal Notes


Title A war like state and a bond to rescue (Page Number 6)

Syllabus GS III: Economy Theme Exploring a less used mechanism to finance the COvid-19 pandemic

Highlights Context: Recently, the Union Finance Minister has announced Rs 1.70 Lakh Crore relief

package under Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the battle against Corona Virus.

However, the fiscal stimulus provided by the Government is hardly around 1% of India's GDP which is insufficient.

In this regard, this article highlights that since we are waging a war against Virus, we need to look at war-time methods of raising finances. One such innovative method of financing is CONSOL Bonds.

UNDERSTANDING CONSOL BONDS

What are CONSOL Bonds? The CONSOL Bonds are the perpetual interest-bearing bonds which are issued by the Governments to raise finances during war-like situations. Being perpetual bonds, these bonds do not have maturity period. The investor is paid only interest on such bonds. When will the Bonds be redeemed?

Since the Bonds do not have maturity period, the Government is not under any obligation to pay back the money. Usually, the Government repays back its borrowings, when its financial position is strong enough.

For example, the British Government had issued CONSOL Bond in 1917 to finance its first world war. The Bonds carried an interest rate of 5%. In 2014 (almost a century later), the British Government repaid 10% of the total outstanding CONSOL Bond debt.

What are the benefits and Risks for Investors?Benefits:

Investors get annual interest payments through investment in CONSOL Bonds Risk-Free Investment (Issued and guaranteed by the Governments) Enables the Citizens to contribute financially to the cause of a country. This would

give them a sense of participation and promote unity within the country.

Risks: One major risk is that these bonds are not redeemable. The repayment of these

bonds is at the discretion of the Government. Examples of CONSOL Bonds issued in past

The first CONSOL Bond was issued by the British Government in 1751 and carried an interest rate of 3%. Subsequently, between the years 1914 and 1917, the Britain Government issued CONSOL Bonds to finance the First World War.

Similarly, the US Government issued CONSOL bonds in 1870s to raise finances.

HOW ISSUANCE OF CONSOL BONDS WOULD BENEFIT INDIA?


Most of the Economists have pointed out the Fiscal stimulus package in India must be at least 5-10% of its GDP. But the question which arises here is how do we raise extra financial resources without affecting the macro-economic stability of India?

This is so because, on one hand, the revenue receipts of the Government are set to decline due to COVID-19. On the other hand, the Fiscal deficit of the Centre is already much higher. Hence, financing the COVID-19 pandemic would be extremely tricky question for the Government.

The issuance of CONSOL Bonds would thus enable the Indian Government to come out of the tricky situation.

WAY FORWARD

Looking at the advantages associated with the CONSOL bonds, the Indian Government need to deliberate on the issue of such bonds to finance the fiscal stimulus package for COVID-19. Instead of donating money to PM-CARES fund, the Indian citizens can park their money in the CONSOL Bonds. The proceeds of the bonds can then be used for everything ranging from Personal Protective Equipment for doctors to a stimulus for small and medium-sized enterprises.

Further, since the Indian Economy is facing slowdown, there are no attractive investment options for Indian investors except Gold. Hence, the CONSOL Bonds can act as attractive risk-free investment option for the retail investors within India. The government can consider a phased redemption of these bonds after the economy is put back on a path of high GDP growth.

Personal Notes


Title Rent control amidst pandemic (Page Number 7)

Syllabus GS III: Economy

Theme Issues arising out of Tenancy laws in India

Highlights Context: Considering the distressing situation caused due to corona virus, landlords

have been asked not to take rent at least for two months especially for the poor migrant families who do not have other housing options or savings.

Government, civil society, academia, and migrants themselves are urging landlords to stop evictions as it would exacerbate the pandemic.

The government as of now is using Disaster Management Act, 2005 to excuse rent and stop eviction. The focus must shift from DMA to Rent Control Acts to regulate rental housing.

This is where Model Tenancy Act, 2019, could be useful as it regulates rental housing market.

DRAFT MODEL TENANCY ACT Ministry of Housing and Urban Affairs (MHUA) released the draft Model

Tenancy Act, 2019, which aims to regulate rental housing by creating Rent Authorities, Rent Courts & Rent Tribunals. The Union Finance Minister in her Budget Speech of 2019-20 expressed the need to remove archaic laws on tenancy and introduce reform to align tenancy market with present market rate.

Purpose of the Act With the commitment to provide Housing for all by 2022, the Act envisages to

balance the interest and rights of both the owner and tenant and to create an accountable and transparent ecosystem for renting the premises in disciplined and efficient manner.

It will enable creation of adequate rental housing stock for various income segments of society including migrants, formal and informal sector workers, professionals, students etc. and increase access to quality rented accommodation, enable gradual formalization of rental housing market.

It will help overhaul the legal framework vis-à-vis rental housing across the country. It is also expected to give a fillip to private participation in rental housing for addressing the huge housing shortage across the country. It also lays down obligations of tenants and landlords.

The Draft MTA will also promote growth of rental housing and investment in the sector and promote entrepreneurial opportunities and innovative mechanism of sharing of space. This MTA will be applicable prospectively and will not affect the existing tenancies.

Existing rent control laws are restricting the growth of rental housing segment and discourage the landowners from renting out their vacant premises.

Housing for All by 2022 The Union Cabinet in 2015 approved “Housing for All by 2022” under Pradhan

Mantri Awas Yojana (Urban) which is aimed for urban.


Its components include: Slum rehabilitation of Slum Dwellers with participation of private developers

using land as a resource. Promotion of affordable housing for weaker section through credit linked

subsidy. Affordable housing in partnership with Public & Private sectors; and Subsidy for beneficiary-led individual house construction or enhancement.

Important Features of the Act It stipulates a robust grievance redressal mechanism comprising of Rent

Authority, Rent Court and Rent Tribunal. The Model Act lays down various rules, including that the security deposit to

be paid by the tenant should not exceed two months’ rent for residential property, and should be a minimum of one month’s rent for non-residential property. Receipt of the security deposits must be given to the tenants.

The Act mandates that no person will let or take any rental premises without an agreement in writing, in both urban and rural areas.

Within two months of executing rental agreement both landowner and tenant are required to intimate to the Rent Authority about the agreement and within seven days a unique identification number will be issued by the Rent Authority to the both the parties.

A digital platform will be set up in the local vernacular language of the State for submitting tenancy agreement and other documents.

If a tenancy for a fixed term ends and has not been renewed and the premises have not been vacated by the tenant at the end of such tenancy, the tenancy shall be deemed to be renewed on a month-to-month basis on the same terms and conditions as were in the expired tenancy agreement, for a maximum period of six months.

The landowner shall give a notice in writing three months before he revises the rent. If the tenant does not gives notice of termination, then the tenant shall be deemed to have accepted the increase in rent.

No tenant shall directly or indirectly sublet or assign, whole (or part) of the premises for a rent that is higher than the rent (or the proportionate rent) charged by the landowner to the tenant.

Misuse of the premises, as defined, includes public nuisance, damage, or its use for “immoral or illegal purposes”. If the tenant refuses to vacate, the landlord can claim double the monthly rent for two months, and four times the monthly rent thereafter.

The Rent Court can allow re-possession of the property by the landlord if the tenant misuses the premises, after being served a notice by the landowner.

The Model Act repeals previous laws and this is significant as it was a necessary condition for many World Bank-funded projects in India.

Drawbacks of Model Tenancy Act Informal tenancies: Majority of tenancies in India are informal in nature and

formalising all existing informal tenancies might escalate the rent through the country.

Proper Implementation of the Act with respect to documentation of every rent


agreement taking place in the country. Prospective Application - MHUA has clarified that the Model Act would be

applicable prospectively and will not affect the existing tenancies. So, all future tenancies under the present Act shall be eligible to approach Rent Courts & Tribunals for adjudication process thereby leaving the older and informal tenancies.

Fresh Tenancies - The new Act will be applicable only to fresh tenancies. Thus, the twin problems of resolving older disputes and informal arrangements will continue.

State Subject - Land and urban development are state subjects. So, the central Model Act will not be binding on the states unless they draft their legislation based on the Model Act. Just like RERA, the rental Act rules are prone to dilution at the state level (due to political compulsions) since land is essentially a state subject.

Politically Sensitive Issue in major urban cities - Repeal of rent control Acts has been a politically sensitive issue in the cities, especially in South Mumbai, where old properties in prime locations have been occupied for decades by residential and commercial tenants at negligible rents.

Way Forward - As per Census 2011, nearly 1.1 crore houses were lying vacant in the country and making these houses available on rent will complement the vision of ‘Housing for All’ by 2022. The existing rent control laws are restricting the growth of rental housing and discourage the owners from renting out their vacant houses due to fear of repossession. One of the potential measures to unlock the vacant house is to bringing transparency and accountability in the existing system of renting of premises and to balance the interests of both the property owner and tenant in a judicious manner. Implementation of The Model Tenancy Act will help in achieving the above mentioned objectives.

Personal Notes


Title Pigs die of suspected hog cholera in Meghalaya (Page Number 11)

Syllabus Prelims: General Awareness


Theme Basic information about a swine disease

Highlights Context: Pigs die of suspected hog cholera in Meghalaya Suspected hog cholera has killed at least a dozen pigs across

two districts of Meghalaya. Hog cholera, also known as classical swine fever (CSF).

About this disease: This coincided with the death of more than 2,900 pigs in Assam

due to African swine fever (AFS), a first in the Indian subcontinent.

Classical swine fever (CSF) is a highly contagious viral disease of pigs caused by a Pestivirus from the Flaviviridae familly. Clinically, it is indistinguishable from African swine fever and can cause very serious losses.

Classical swine fever (CSF) is one of the most important viral diseases of domestic pigs and wild boar. It has tremendous impact on animal health and pig industry and is therefore notifiable to the World Organization for Animal Health.

Humans are not affected by this virus.

Personal Notes

tinglado-mediafiles.s3.amazonaws.com€¦ · web viewthe hindu; page no. 1. resuscitating...

Documents