UPSC Daily Current Affairs- September 27, 2022 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly PDF Download

GS-I

Process of sustainable tourism should be holistic and inclusive

Context

• The three-day National Conference of State Tourism Minister was held at Dharamshala, a first of its kind meeting aimed  to discuss, debate and deliberate on modes and mechanisms to develop tourism in India .
• The three-day National Conference concluded with the adoption of “Dharamshala Declaration” which affirms commitment toward developing “sustainable and responsible tourism” and positions India as a “global leader in the tourism sector by 2047”.

About tourism

Tourism is travel for pleasure or business; also the theory and practice of touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tours.

Types of tourism

• Domestic tourism: Refers to activities of a visitor within their country of residence and outside of their home (e.g. a Indian visiting other parts of India)
• Inbound tourism: Refers to the activities of a visitor from outside of country of residence (e.g. a Spaniard visiting Britain).
• Outbound tourism: Refers to the activities of a resident visitor outside of their country of residence (e.g. an Indian visiting an overseas country).

What is “The Dharamshala Declaration” is all about?

• Aim of the declaration: The Dharamshala Declaration aims to recognise India’s role in contributing towards global tourism as well as focusing on recovery by also promoting domestic tourism.
• Action plan: In the declaration, the Tourism Ministry has come up with a with a action plan to encourage more Indians to travel domestically and explore India’s natural, cultural, and spiritual beauty while simultaneously reaching the goal of an ‘Ek Bharat Shrestha Bharat’ (interaction and mutual understanding).
• Strategy: The Tourism Ministry has also been working with the Ministry of External Affairs to identify 20 Indian missions abroad with the highest tourist footfalls to India and build country-specific strategies to attract foreign tourists.
• Plan according to G-20: The Dharamshala Declaration affirms the plan to position India as a major tourism destination during its presidency of G-20 next year. India’s age-old dictum of ‘Atithi Devo Bhava’ will come to the fore as it welcomes delegates from the 20 countries/European Union.
• Necessary steps: The Ministry of Tourism also plans to work with other Ministries to bring in necessary interventions such as visa reforms, ease of travel, travel-friendly and improved immigration facilities at airports.
• National Tourism policy: Drafted with a holistic vision and strategy to revive India’s tourism and targets to contribute USD 1 trillion to the GDP by 2047.

A draft on National Tourism Policy 2022

• Framework
  • Draft on National Tourism Policy 2022 aims at improving the framework conditions for tourism development in the country.
  • Supporting tourism industries, strengthening tourism support functions and developing tourism sub-sectors.
  • Impetus to digitalisation, innovation and technology through the National Digital Tourism Mission and skilling through the Tourism and Hospitality Sector Skill Mission.
  • The policy also gives a special impetus to private sector participation through public-private-partnerships (PPP)
• Guiding Principles
  • Promoting sustainable, responsible and inclusive tourism in line with our civilisational ethos From Gautama to Gandhi, India has always spoken about the inherent need to live harmoniously with nature and within our means.
  • The National Green Tourism Mission aims at institutionalising green approach.

Tourism Potential in India

• Employement generation: India has huge tourism potential. If capitalised properly it can emerge as one of the leading sectors to contribute to GDP and also has the potential to augment employment.
• The Pandemic cost and recovery: The pandemic has caused conspicuous losses for this sector but over the past few months, all the major tourism indices such as domestic air passenger traffic, hotel occupancy and tourist footfalls have shown signs of recovery and are going back to pre-pandemic levels.
• Short term estimate: By 2024, in short term the country is estimated to contribute USD 150 billion to the GDP from tourism, USD 30 billion in Foreign Exchange earnings and can get 15 million foreign tourist arrivals..
• Medium term by 2030: It is estimated to grow at seven to nine per cent Compound Annual Growth Rate in the coming decade. In the medium term, that is 2030, the tourism-related goals are USD 250 billion GDP contribution; 137 million jobs, 56 million foreign tourist arrivals and USD 56 billion in foreign exchange earnings.
• Visionary schemes: The visionary schemes like Swadesh Darshan or Dekho Apna Desh have the potential to increase tourism value while maintaining cultural integrity and ecological sustainability of the places.
• Dekho Apna Desh: Dekho apna desh rolled out in 2020 envisages encouraging domestic tourism, urging people to visit places in India. India is a land of rich cultural heritage.

Conclusion

• If the goal of positioning of India as one of the world’s best tourism destinations by 2047, there is need to integrate various schemes of different ministries. 
• Need to involve various stakeholders, and local communities; necessary interventions at urban and rural level should be a priority.

Context

The district administration of Tirunelveli in Tamil Nadu along with Ashoka Trust for Research in Ecology and the Environment (ATREE), a non-profit Organisation, are using a ‘hyper local’ approach called TamiraSES to restore the Thamirabarani River.

What is the Project About?

• Need
  • The Thamirabarani is of great importance to southern Tamil Nadu environmentally and historically. But it too has suffered, which is why the restoration project has been started.
  • While the Thamirabarani landscape, in general, appears water-rich, it faced severe drought in 2016 despite the diverse water storage systems in place.
  • Settlements have been on the rise, which has led to the shrinkage of agricultural land and water bodies.
• TamiraSES project
  • It is a district level initiative, which aims to restore the Social Ecological Systems of Tamiraparani river riverscape from head-waters to the estuary to enable conditions for native biodiversity to thrive and maintain and enhance multiple ecosystem services to local stakeholders.
  • Five social ecological observatories will be set up as part of the first phase of the project. These will serve as pilots to scale up from the learnings from these sites.
  • The idea is to rejuvenate not just the Thamirabarani but all the water bodies in the riverscape of Tirunelveli.

What are the Key Points of Thamirabarani River?

• The Thamiraparani is the only perennial (continuous flow of water) river in Tamil Nadu.
• This is the shortest river in the state, the Thamirabarani starts in Pothigai hills of the Western Ghats in the Ambasamudram taluk, flows through Tirunelveli and Thoothukudi districts and empties at Korkai (Tirunelveli district) into the Gulf of Mannar (Bay of Bengal). It thus originates and ends in the same state.
• The river supports wildlife such as the Nilgiri marten, slender loris, lion-tailed macaque, white spotted bush frog, galaxy frog, Sri Lankan Atlas moth and the great hornbill.
• Besides the ecosystem services it provides, the river also has historical value for the people of the state. It is mentioned extensively in Sangam Era literature.

GS-II

Context

Recently, the Supreme Court (SC) has referred to a larger Bench the issues relating to the norms for imposing the Capital Sentence.

What has the Court Said?

• The current referral of the three-judge bench of the Supreme Court to a five-judge bench is based on an argument that the process of same-day sentencing is hopelessly tilted against the accused.
• The Bench said that the State is given an opportunity to present aggravating circumstances against the accused throughout the duration of a trial.
• The accused, on the other hand, is able to produce evidence showing mitigating circumstances in their favour, only after their conviction.

What are the Issues?

• There are conflicting judgments on when and how the sentencing hearing must take place mainly on whether it is necessary to hold the hearing on sentencing on a subsequent day and not on the day of the conviction.
• The issue pertains to giving meaningful opportunity to those found guilty of a capital offence to present mitigating factors and circumstances so that they can better plead for a life term instead of a death sentence.
• The issue arises from the legal requirement that whenever a court records a conviction, it has to hold a separate hearing on the quantum of sentence.

What are the Legalities and Judgements?

• Section 235 of the Code of Criminal Procedure (CrPC) says if the accused is convicted, the judge will hear the accused on the question of sentence and then pass sentence.
  • This process is significant if the conviction is for an offence that entails either death or life imprisonment.
• Section 354(3) says that when there is death Punishment or imprisonment for life, the judgment will have to state the reason for why the sentence was awarded.
• If the sentence is death, “special reasons” will have to be provided in the judgment.
• In 1980, the Supreme Court upheld the constitutionality of capital punishment in ‘Bachan Singh v State of Punjab’ on the condition that the punishment will be awarded in the “rarest of the rare” cases.
  • Crucially, the ruling also stressed that a separate sentencing hearing would be held, where a judge would be persuaded on why the death sentence need not be awarded.
• This position was reiterated in several subsequent rulings of the court, including in ‘Mithu v State of Punjab’, a 1982 ruling by a five-judge Bench that struck down mandatory death sentence as it falls foul of the right of an accused to be heard before sentencing.

What are the Views on Same-Day Sentencing?

• Even though a separate hearing on sentencing is practiced in all trials, most judges do not adjourn the case to a future date to go through this.
• As soon as the verdict of ‘guilty’ is pronounced, they ask counsel on both sides to argue on sentencing.
• There is a view that such ‘same-day’ sentencing is inadequate and violates natural justice as convicts do not get enough time to gather mitigating factors.
• In a series of judgments, the Supreme Court has advocated that the sentencing hearing be done separately, that is, at a future date after conviction.
• However, in a contradiction of sorts, several judgments have upheld the practice of ‘same-day’ sentencing.

What is the likely Outcome?

• The Constitution Bench may lay down comprehensive guidelines on the manner in which sentencing decisions can be arrived at.
• The SC may make it necessary for the trial court to get to know the accused better before passing the sentence.
• The courts may draft the help of psychologists and psychoanalytical experts.
  • A study into the childhood experiences and upbringing of the accused, mental health history in the family and the likelihood of traumatic past experiences and other social and cultural factors may be mandated to be part of the sentencing process.
• This may mean that trial courts will be better informed than now, when only basic data such as educational and economic status are ascertained before a sentence is imposed.

Context

The Karnataka government recently tabled The Kannada Language Comprehensive Development Bill which gives preference to Kannadigas in government jobs and also provides for a reservation to locals in private jobs generated in the state.

What does the Karnataka legislation envisage?

• Apart from ensuring job guarantee to Kannada speakers, the Bill pushes for the use of Kannada in institutes of higher learning and for sops to industries that employ locals.
• Features highlighted in the Bill include reservation in higher, technical and professional education to those who studied in Kannada medium schools.
• It seeks introduction of Kannada as essential language for seeking employment in the state government.
• Also, industries will be entitled to concessions, tax rebates and deferment of taxes if they provide reservation for Kannadigas, as per the state’s industrial policy.

What is Quota for Locals?

• Article 16 of the Constitution guarantees equal treatment under the law in matters of public employment. It prohibits the state from discriminating on grounds of place of birth or residence.
• Article 16(2) states that “no citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State”.
• The provision is supplemented by the other clauses in the Constitution that guarantee equality.
• However, Article 16(3) of the Constitution provides an exception by saying that Parliament may make a law “prescribing” a requirement of residence for jobs in a particular state.
• This power vests solely in the Parliament, not state legislatures.

Why does the Constitution prohibit reservation based on domicile?

• When the Constitution came into force, India turned itself into one nation from a geographical unit of individual principalities and the idea of the universality of Indian citizenship took root.
• India has single citizenship, and it gives citizens the liberty to move around freely in any part of the country.
• Hence the requirement of a place of birth or residence cannot be qualification for granting public employment in any state.

But are reservations not granted on other grounds such as caste?

• Equality enshrined in the Constitution is not mathematical equality and does not mean all citizens will be treated alike without any distinction.
• To this effect, the Constitution underlines two distinct aspects which together form the essence of equality law:
  • Non-discrimination among equals, and
  • Affirmative action to equalize the unequal

Supreme Court rulings on quota for locals

• The Supreme Court has ruled against reservation based on place of birth or residence.
• In 1984, ruling in Dr. Pradeep Jain v Union of India, the issue of legislation for “sons of the soil” was discussed.
• The court expressed an opinion that such policies would be unconstitutional but did not expressly rule on it as the case was on different aspects of the right to equality.
• In a subsequent ruling in Sunanda Reddy v State of Andhra Pradesh (1995), the Supreme Court affirmed the observation in 1984 ruling to strike down a state government policy that gave 5% extra weightage to candidates.
• In 2002, the Supreme Court invalidated appointment of government teachers in Rajasthan in which the state selection board gave preference to “applicants belonging to the district or the rural areas of the district concerned”.
• In 2019, the Allahabad HC struck down a recruitment notification by the UP PSC which prescribed preference for women who are “original residents” of the UP alone.

Why it is a bad idea?

• Against Equality as well as meritocracy: It goes against the Constitution of India. In fact, it violates several fundamental rights, such as freedom to move anywhere, the right not to be discriminated on the basis of place of birth, the right to be treated equally before laws and the right to pursue one’s livelihood.
• Migration criteria not justified: The actual data on inter-State migration shows that inter-State migration is relatively low in India. Migration often bring skills, motivation, energy which may be in short supply or lacking locally.
• Free movement of labour: A more analytical aspect to highlight is that free movement of labour partly compensates for the uneven economic progress of different States. The idea also goes against the established fact that migration of labour is good for the economy.
• Un-ease of doing business: Local reservation in the private sector may not be the ideal solution to tackle the unemployment crisis. In fact, it can deter the corporate sector from investing in states that come up with such a rule.
• Scapegoating the private sector: What distinguishes the private sector from the public sector is the inherent competition and a hunger for improvement. In such a scenario, chief ministers should do well to engage with the private sector in a much more holistic manner, and not burden it with unfeasible rules.
• MSMEs to be hit harder: MSMEs could be the hardest hit. They do not have the necessary capital to relocate and many studies have shown that more than 50 per cent of employees are not residents of the state.

Arguments in favour of quota in private

• Avoiding encroachments: Often the privileged castes (or groups) use nefarious arguments to protect their interests.
• Foul argument of merit: Reservations once accepted in the constitutional framework are not a charity that is to be kept away from the ‘meritocracy’ of ‘private’ operations.
• Ensuring equal opportunity: Like all other constitutional guarantees, one may feel the necessity to get ensured of equal opportunity in all spaces.
• Preventing exclusion: Giving preference and quotas for socially and educationally deprived sections in the private space is, therefore, in keeping with this fundamental tenet.

Conclusion

• The politics of identity and polarization on region/religious lines seems inadequate for the elections.
• The philosophy and pragmatism of universal excellence through equality of opportunity for education and advancement across the nation is part of our founding faith and constitutional creed.
• Clearly, this is not the appropriate domain of being “vocal for local”.
• Although some reservations may still be necessary for the socio-political condition in India, reservation on the basis of domicile or residence within a State would be highly discriminatory.
• It is more likely that such politically motivated steps would be overturned by the judiciary as has been done several times in the past.

Context

Senior Advocate Mukul Rohatgi has declined the government’s offer to be Attorney General (A-G) for India after “second thoughts”.

Who is the Attorney General for India?

• The Constitution of India places the post of the A-G on a special footing.
• The A-G is the Government of India’s first law officer, and has the right of audience in all courts of the country.
• Article 76(2) of the Constitution says “it shall be the duty of the Attorney-General to give advice to the Government of India upon such legal matters, and to perform such other duties of a legal character, as may from time to time be referred or assigned to him by the President”.
• The A-G is also supposed to “discharge the functions conferred on him by or under this Constitution or any other law for the time being in force”.
• Under Article 88, the “Attorney-General of India shall have the right to speak in, and otherwise to take part in the proceedings of, either House, any joint sitting of the Houses, and any committee of Parliament of which he may be named a member”. However, he “shall not by virtue of this article be entitled to vote” in the House.
• Also, the A-G for India is not, like the A-G for England and Wales and the A-G of the United States, a member of the Cabinet.

Who can become Attorney General for India?

• Under Article 76(1), the A-G is appointed by the President from among persons who are “qualified to be appointed a Judge of the Supreme Court”.
•  Article 76(4) says “the Attorney-General shall hold office during the pleasure of the President, and shall receive such remuneration as the President may determine.”

Powers and Functions

• He is necessary for advising the Government of India on legal matters referred to them.
• They also perform other legal duties assigned to them by the President.
• He has the right of audience in all Courts in India as well as the right to participate in the proceedings of the Parliament, though not to vote.
• The AGI appears on behalf of the Government of India in all cases (including suits, appeals and other proceedings) in the Supreme Court in which GoI is concerned.
• They also represent the Government of India in any reference made by the President to the Supreme Court under Article 143 of the Constitution.
• They cannot defend an accused in criminal proceedings and accept the directorship of a company without the permission of the Government.
• The AG is to be consulted only in legal matters of real importance and only after the Ministry of Law has been consulted.
• All references to the AG are made by the Law Ministry.

Limitations to his powers

• He should not advise or hold a brief against the Government of India
• He should not defend accused persons in criminal cases without the permission of the government of India
• He should not accept appointment as a director in any company without the permission of the government

Context

G7 nations and partner countries including India recently signed “2022 Resilient democracies statement”-We, the Leaders of Germany, Argentina, Canada, France, India, Indonesia, Italy, Japan, Senegal, South Africa, the United Kingdom, the United States of America, and the European Union, affirm our commitment to strengthening the resilience of our democracies and to working towards equitable, inclusive and sustainable solutions to global challenges, including climate change and the COVID-19 pandemic, and reaffirm our commitment to the rules-based international order.

How do we define Democracy?
“Government of the people, by the people and for the people” the words used by Abraham Lincoln in the year 1863 while talking about democracy.

Purpose of democracy
Cornerstones of democracy include freedom of assembly, association, property rights, freedom of religion and speech, inclusiveness and equality, citizenship, consent of the governed, voting rights, freedom from unwarranted governmental deprivation of the right to life and liberty, and minority rights.

Democracy Report 2022

• The study, titled ‘Democracy Report 2022: Autocratisation Changing Nature?’ states that more than twice as many countries are undergoing Autocratisation as are witnessing democratization.
• The conceptual scheme takes into account not only the electoral dimension (free and fair elections) but also the liberal principle that democracy must protect “individual and minority rights”.
• The V-Dem report classifies countries into four regime types based on their score in the Liberal Democratic Index (LDI): a)Liberal Democracy b)Electoral Democracy c)Electoral Autocracy and d)Closed Autocracy.

Where do the Reports and Indices put India?

• Sweden based Sweden-based V-Dem Institute was harsher in its latest report on democracy. It said India had become an “electoral autocracy”.
• US-based non-profit Freedom House downgraded India from a free democracy to a “partially free democracy”.
• India, described as a “flawed democracy”, slipped two places to 53rd position in the latest Democracy Index published by The Economist Intelligence Unit.

Status of Supporters of Democracy

• Decolonised African Countries
  • The number of African countries that have adopted democratic systems of government has grown since decolonisation, the collapse of communism and the ending of a number of civil wars.
  • Some countries, such as Ghana, are seen as resilient democracies, while for others the democratic transition is more fragile, after months of pro-democracy protests in 2019 in Sudan, a civilian-led transitional government is now paving the way for democracy after decades of military rule.
• India as example
  • India is the world’s largest democracy. India is staying as one unit despite having vast no of cultures, languages and religions. This is possible because of the democracy in India.
  • Minorities and disadvantaged sections are represented in parliament which enabled inclusive growth.
  • When India got independence, its economy was in shambles. Extreme poverty, unemployment, food insecurity were the major problems before Indian government. But India’s democratic constitution successfully balanced development and welfare of the country.
  • Now, India is one of the fastest growing economies in the world.

What are critics arguing?

• Democracy in crisis: Democracy is more in crisis than ever before, with the onset of centralisation of power, with a foreign policy defying public opinion, with the media centralised, and with corporate control of the economy tighter than ever.
• Increasing polarity: Threatening world order is emerging, which seeks to abrogate all individual rights and divide us along the extremist polarities that we thought had been neutralised.
• Global Crisis: We move into this new stage of conflict carrying the risk of a nuclear tragedy, further exacerbated by the collective buttressing of a global crisis of the novel coronavirus pandemic, uncontrollable ecological disasters, and food and water deficiency.
• Populism: Blatant fascist leanings of the so-called “democracies”, and escalating hunger and disease in Africa and other parts of the under-developed world give enough evidence that democracy faces serious issues of populism.
• Other global problems: Growing economic discrimination, overpopulation and environmental degradation, Misgivings about moral progress, about mutual understanding, exacerbate the dismal situation that faces humanity.

What can be done to strengthen the democracies further?

• Strengthening public support: To protect freedom domestically and build support for a foreign policy that protects democratic rights and values abroad, it is essential to foster a stronger public understanding of democratic principles, especially among young people. civic education is necessary.
• Rule of law: In order to maintain trust in public institutions, the principles of legality, legal certainty and prohibition of arbitrariness of the executive powers, judicial independence, impartiality, and equality before the law need to be respected.
• Individual rights: Democracy entails the right of individuals to participate in and influence the development of society, with free and fair elections at its core. Without an active turnout in elections and proper mechanisms for participation, the essence of democracy can be lost.
• Free speech: Free speech guard the freedom of expression and opinion, and affirmation of commitment to the very idea of democracy and a move towards opposing oppression and violence.

Conclusion
Democracy is always a work in progress. The key ingredients of democracy are effective and accountable institutions, and leadership. Institutions build resilience by embedding norms and standards and bridging periods of weak leadership.

Context

Make in India completes eight years of path-breaking reforms and annual FDI doubles to USD 83 billion in 2022.

What do we Know about the Make in-India Programme?

• About
  • Launched in 2014, Make in India aims to transform the country into a leading global manufacturing and investment destination.
  • The initiative is an open invitation to potential investors and partners across the globe to participate in the growth story of ‘New India’.
  • Make In India has substantial accomplishments across 27 sectors. These include strategic sectors of manufacturing and services as well.
• Objectives
  • To attract foreign investment for new industrialisation and develop the already existing industry base in India to surpass that of China.
  • Target of an increase in manufacturing sector growth to 12-14% per annum over the medium term.
  • To increase the share of manufacturing sector in the country’s Gross Domestic Product from 16% to 25% by 2022.
  • To create 100 million additional jobs by 2022.
  • To promote export-led growth.
• Outcomes
  • FDI inflows: FDI inflows in India stood at USD 45.15 billion in 2014-2015 and have since consecutively reached record FDI inflows for eight years.
    • The year 2021-22 recorded the highest ever FDI at USD 83.6 billion.
    • On the back of economic reforms and Ease of Doing Business in recent years, India is on track to attract USD 100 Billion in FDI in the current Financial Year (2022-23).
  • The import of toys in FY21-22 has reduced by 70% to USD 110 Mn (Rs. 877.8 cr.). India’s export of toys registers tremendous growth of 636% in April-August 2022 over the same period in 2013
  • Production Linked Incentive (PLI): The Production Linked Incentive (PLI) scheme across 14 key manufacturing sectors, was launched in 2020-21 as a big boost to the Make in India initiative.

What are the Initiatives to Support Make in India Scheme?

• National Single Window System (NSWS)
  • The National Single Window System (NSWS) has been soft-launched in September 2021 to improve the ease of doing business by providing a single digital platform to investors for approvals and clearances.
  • This portal has integrated multiple existing clearance systems of the various Ministries/Departments of the Government of India and State Governments to enhance the investor experience.
• Gati Shakti: The Government has also launched a programme for multimodal connectivity to manufacturing zones in the country, called the Prime Minister’s Gatishakti programme, which will ensure logistical efficiency in business operations through the creation of infrastructure that improves connectivity.
• One-District-One-Product (ODOP): This initiative aims at facilitating the promotion and production of indigenous products from each district of the country and providing a global platform to the artisans and manufacturers of handloom, handicrafts, textiles, agricultural and processed products, thereby further contributing to the socio-economic growth of various regions of the country.
• Improving toy exports and reducing Imports: To address the import of low-quality and hazardous toys and to enhance domestic manufacturing of toys, several strategic interventions such as increase of Basic Custom Duty from 20% to 60%, implementation of Quality Control Order, mandatory sample testing of imported toys, granting more than 850 BIS licenses to domestic toy manufacturers, development of toy clusters etc. have been taken by the government.
• Scheme for building Semiconductor Ecosystem: Recognising the importance of semiconductors in the world economy, the Government has launched a USD 10 billion incentive scheme to build a semiconductor, display, and design ecosystem in India.

What are the Issues Related to the Make in India Programme?

• Investment from Shell Companies: Large part of the Indian FDI is neither foreign nor direct but comes from Mauritius-based shell companies which are suspected to be investing black money from India only, which is routed via Mauritius.
• Low Productivity: The productivity of Indian factories is low and workers have insufficient skills.
  • McKinsey report states that Indian workers in the manufacturing sector are, on average, almost four and five times less productive than their counterparts in Thailand and China.
• Small Industrial Units: The size of the industrial units is small for attaining the desired economies of scale, investing in modern equipment and developing supply chains.
• infrastructure: Electricity costs are almost the same in India and China but power outages are much higher in India.
• Transportation: Average speeds in China are about 100 km per hour, while in India, they are about 60 km per hour. Indian railways have saturated and Indian ports have been outperformed by a lot of Asian countries.
  • The 2018 World Bank’s Logistics Performance Index (LPI) ranked India 44th among 160 countries. Singapore was ranked seventh, China 26th and Malaysia 41th. The average ship turnaround time in Singapore was less than a day and in India, it was 2.04 days.
• Red Tapism: Bureaucratic procedures and corruption make India less attractive for investors.

GS-III

Context

The government has extended the launch of new Foreign Trade Policy (FTP) (2022-27) by six more months and would continue with the existing one.

Why such delay in Foreign Trade Policy?

• Geopolitical uncertainty: The geo-political situation is not suitable for long-term foreign trade policy, said Union Commerce Minister.
• Global recession: Currently, fears of a recession in major economies like the US and Europe have escalated a panic among investors.
• Decline in USD inflows: Foreign investors have begun to pull back their money from equities.
• Rupee depreciation: The US Dollar is at a 22-year high, while the Rupee hit a new all-time low of $81.6.
• Huge trade deficit: The trade deficit widened by more than 2-folds to $125.22 billion (April – August 2022) compared to $53.78 billion in the same period last year.

What is a Foreign Trade Policy?

• India’s Foreign Trade Policy (FTP) is a set of guidelines for goods and services imported and exported.
• These are developed by the Directorate General of Foreign Trade (DGFT), the Ministry of Commerce and Industry’s regulating body for the promotion and facilitation of exports and imports.
• FTPs are enforceable under the Foreign Trade Development and Regulation Act 1992.

What is India’s Foreign Trade Policy?

• In line with the ‘Make in India,’ ‘Digital India,’ ‘Skill India,’ ‘Startup India,’ and ‘Ease of Doing Business initiatives, the Foreign Trade Policy (2015-20) was launched on April 1, 2015.
• It provides a framework for increasing exports of goods and services, creating jobs, and increasing value addition in the country.
• The FTP statement outlines the market and product strategy as well as the steps needed to promote trade, expand infrastructure, and improve the entire trade ecosystem.
• It aims to help India respond to external problems while staying on top of fast-changing international trading infrastructure and to make trade a major contributor to the country’s economic growth and development.

Issues with FTP (2015-2020)

• Acting on Washington’s protest, a WTO dispute settlement panel ruled in 2019 that India’s export subsidy measures are in violation of WTO norms and must be repealed.
• Tax incentives under the popular Merchandise Exports from India Scheme (MEIS) (now renamed as RODTEP Scheme)and Service Exports from India Scheme (SEIS) programmes were among them.
• The panel found that because India’s per capita gross national product exceeds $1,000 per year, it may no longer grant subsidies based on export performance.

Way forward

• WTO-compliance: With incentives under MEIS and SEIS in the cloud, WTO-compliant tax benefits are a must.
• Access to credit: Credit availability has long been a need of exporters, particularly MSMEs.
• Infrastructure upgrade: China’s network of ports, motorways, and high-speed trains, which are among the greatest in the world, is one of the reasons it is a manufacturing and export powerhouse.
• Digitization and e-commerce boost: India requires innovative trading procedures as a result of Covid-19 breaking old supply channels.