The Hindu Editorial Analysis- 3rd August 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

The Five Guidelines to a Dragon-Elephant Tango

Why in News?

The Chinese Ambassador to India stresses the significance of enhancing China-India relations through the "Five Mutuals": mutual respect, understanding, trust, accommodation, and achievement.

• Highlighting shared historical connections and common objectives, the ambassador calls for collaboration and peaceful coexistence, with the aim of nurturing a prosperous future for both countries.

Introduction

• The bond between China and India is crucial for regional and worldwide dynamics, showcasing shared objectives and historical connections.
• Being two of the biggest developing nations, they aim to boost collaboration through concepts like mutual respect, understanding, and trust.
• The "Five Mutuals" framework strives to address past discrepancies, encourage peaceful coexistence, and seek out common growth prospects, all contributing to a harmonious and prosperous future for both nations and the globe.

Five Guidelines of ‘Mutuals’

• China and India are nearby countries with a shared past and similar goals of revitalization.
• Bilateral connections between China and India are highly important on a global scale.
• Leaders from both nations have stressed the idea that China and India should collaborate and grow together instead of being competitors.
• There are five main principles called the "Five Mutuals": respectful interaction, understanding each other, building trust, adjusting for each other, and achieving together.
• These principles are crucial for building a steady and positive relationship between the two countries.

Mutual Respect

• Mutual respect is essential for building relations between China and India.
• Both nations have distinct cultures, traditions, and paths of progress that should be honored and accepted.
• It's crucial to look at each other with an open attitude, valuing each other's progress and global significance.
• Collaborative actions must be taken to enhance growth and well-being on national, regional, and global scales.

Mutual Understanding

• Mutual understanding is crucial for the relationship between China and India.
• Both countries have supported each other in their fights for independence and revival.
• China acknowledges India's hopes for national progress and backs its independent foreign policy.
• Despite both being among the largest developing nations, there is not enough mutual exchange and understanding.
• It is important to promote dialogue and communication at all levels to enhance mutual understanding and political trust.

Mutual Trust

• Mutual trust is very important for the growth of China-India relations. 
• In a changing and unsure global situation, China and India must avoid doubt and collaborate for the good of both. 
• Seeing each other as partners and chances rather than dangers is vital for living together peacefully. 
• Trust in politics can boost friendly interactions, but a lack of it can block cooperation. 
  • Mutual trust: Vital for China-India relations.
  • International environment: Unpredictable, China and India should cooperate.
  • Viewing each other: As partners and opportunities is key.
  • Political trust: Enhances exchanges, lack of it hinders cooperation.

Mutual Accommodation

• Mutual accommodation is crucial for the progress of China-India relations.
• As neighboring nations, differences and tensions are normal, but they should be handled with wisdom and dialogue.
• Both countries must consider each other's central interests and main worries while looking at the relationship as a whole.
• Collaboration should not be disturbed by isolated incidents or disagreements.

Mutual Accomplishment

• Mutual achievement is the aim of China-India relations.
• Both nations, as growing economies, share common interests and chances for working together.
• New reforms and progress in both countries offer fresh chances for mutual gain.
• The joint goal of growth and rejuvenation can lead to increased collaboration, particularly in the Global South.
• By collaborating, China and India can promote togetherness and collaboration, adding to a collective future for all people.

Five Principles of Peaceful Coexistence

• The Five Mutuals align with the Five Principles of Peaceful Coexistence and show mutual respect, sensitivity, and interests.
• These guidelines aim to carry out the agreement made by leaders from both countries.
• Even though there are sometimes difficulties in China-India relations, both sides can concentrate on the future to manage bilateral relations positively.
• The past and cultural connections, like the ambassador's trip to Nalanda University, demonstrate the chance for strong future relations.
• With guidance from their leaders, China and India can collaborate to encourage a peaceful coexistence and path for development.

Conclusion

• China and India believe they can effectively handle their relationship with good leadership.
• Both countries are wise and capable of living together peacefully and progressing together.
• They see working together, described as a "Dragon-Elephant Tango," as the best way forward.

PYQ: ‘China is using its economic relations and positive trade surplus as tools to develop potential military power status in Asia’, In the light of this statement, discuss its impact on India as her neighbour. (150 words/10m) (UPSC CSE (M) GS-2 2017)

An Unstated Shift in Modi’s Economic Direction

Why in News?

The article talks about India's fresh Employment Linked Incentive (ELI) plan, which shifts focus from past strategies centered on GDP growth to directly creating jobs.

• It criticizes previous approaches like 'Make in India' and incentives linked to production, emphasizing the necessity for policies that prioritize generating employment to tackle the country's job shortage.

Introduction: A Shift in Economic Policy

• The Indian government has introduced a new scheme, called Employment Linked Incentive (ELI), to encourage companies to hire more workers by offering financial rewards for each new employee.
• This move represents a significant shift from past economic strategies, moving away from focusing solely on GDP growth towards creating jobs and balancing capital and labor.

Previous Initiatives and Their Shortcomings

• Over the last ten years, the government mainly followed the Washington Consensus model for the economy. This model focused on growing by making things efficiently, assuming that creating jobs would happen on its own.
• Initiatives like 'Make in India', which began in 2014, aimed to increase manufacturing to make more jobs but did not work as well as hoped for job creation.
• In 2019, the government reduced corporate taxes, hoping it would lead to more investments and jobs. However, instead of hiring more people, many companies used the money saved to invest in technology.
• The Production Linked Incentive (PLI) scheme started in 2020 offered big money rewards to companies that met production goals. But even with this, there wasn't a significant increase in job opportunities.

Employment Linked Incentive (ELI): A New Direction in Economic Policy

• The ELI scheme acknowledges the failings of past approaches and provides direct rewards to companies for hiring more people rather than using indirect methods.
• By reducing labor costs, ELI aims to motivate businesses to increase their workforce, similar to how production incentives work in the PLI scheme.
• Unlike the Production Linked Incentive (PLI) scheme, which concentrates on boosting production, Employment Linked Incentive (ELI) focuses on ensuring that economic advantages benefit workers, thus aiming to promote economic growth and enhance living standards.

Addressing the Disconnect Between GDP Growth and Employment

• ELI signifies a change in how the government views the economy. It shows that just increasing GDP doesn't always lead to more jobs or better living conditions for regular people.
• This new understanding pushes for direct actions by the government to make jobs, moving away from only caring about how much the economy produces to focusing on getting more people employed.
• The ELI program is the start of this new way of thinking. It wants to make the economy fairer so that everyone benefits more equally from its growth.

Potential Impact and Criticisms

• While the ELI might not completely change the job market, it could impact business choices slightly, pushing companies to prefer human labor over using machines.
• If widely accepted in different fields, the ELI plan could significantly help create jobs by encouraging practices that require more human effort instead of relying heavily on machinery.
• Opponents, especially from certain economic groups, argue that ELI could lower efficiency and competitiveness as it might discourage the use of automation and technological progress.
• However, the current system that values capital more than labor and prioritizes GDP over job opportunities is increasingly viewed as unsustainable in a democratic setting.

The Broader Context of Job Deficit and Policy Innovation

•  The shortage of jobs in the economy has resulted in politically motivated suggestions, like job reservations for locals, showing the pressing need for effective job creation strategies. 
•  Just criticizing such suggestions without providing workable options is unproductive, underscoring the necessity for innovative thoughts to tackle the job deficiency. 
•  While conventional economic changes are commonly mentioned as answers, the ELI plan presents a fresh approach, seeking to correct the imbalance between capital and labor and boost job growth in a concrete manner. 

Conclusion: A Step Towards Inclusive Economic Growth

• Whether or not ELI proves to be a cure-all for unemployment, it signifies a significant policy change moving away from trickle-down economics to more direct, grassroots approaches.
• The program shows a willingness to embrace ideas from various political viewpoints for the overall national benefit, as demonstrated by its incorporation into the national budget.
• Ultimately, the ELI initiative demonstrates a readiness to venture into new paths for economic progress, with a focus on creating jobs and promoting fair growth as primary goals for India's future.

PYQ: Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss. (250 Words /15 marks)(UPSC CSE (M) GS-2 2022)