Deep Dive

Government-To-Government Defence Deals For India

Government-To-Government Defence Deals For India

The Indian government recently announced its intent to increase direct defence deals with other Governments, citing several benefits of doing such. Let us take a look at the types of defence deals, and how India plans to achieve ‘self-reliance’ in the sector.

Crux of the Matter

Direct Deals
The Indian government recently announced its intent to encourage “government-to-government” defence deals. The move comes in the light of the Government’s aim to have defence exports of $5 billion by 2025. The display of an increasing number of indigenous products at international shows will also be encouraged.

The target has been set for Defence PSUs (Public Sector Undertaking) and the Ordnance Factory Board to have 25% of their revenue by exports within the next 5 years, with the Government also encouraging the Indian private sector to get more involved in the defence sector amidst the latest aid scheme for the MSME.

Expected Exports
While India already exports arms to other nations, the following are expected to be exported in larger quantities which would significantly increase the defence export revenue:


Government To Government Deals
The Indian government would now be aiming for direct defence deals with other Governments, with an aim to reduce direct deals with private firms of other countries. Direct deals between Governments reduce direct dealings between one Government and the manufacturing company of the other country, which reduces corruption as the “middle-men” are removed from dealings. The manufacturing firm also becomes free to make deal with the private firms of the receiving country, making Transfer-of-Technology (ToT) for home production or any other investments in the private sector of the receiving country possible.

Examples

  • The recent deal of India concerning the Rafale jets was directly between the Governments of India and France. In 2015, Indian Govt withdrew from the previous deal between India and Dassault Aviation, and agreed on a €7.87 billion deal in 2016 with the French Government for 36 Rafale jets. Afterward, Dassault and Reliance formed the Dassault Reliance Aerospace Ltd (DRAL) to manufacture several jet components in India.
  • 22 Apache helicopters arrived in India from the US in July 2020 as the result of a 2015 contract for 22 helicopters for the Indian Air Force. Afterward, India and US signed another deal for six Apache helicopters, this time coming for the Indian Army. The Apache deals are hybrid in nature, consisting of:
    • Direct Commercial Sale (DCS) between Boeing and Ministry of Defence, covering “the aircraft (less engines/sensors), logistic support, spares and services”, and
    • Foreign Military Sale (FMS) or Govt-to-Govt deal between government of India and the US government, covering “munitions, training, aircraft certification, engines, radar” etc.
  • The Bofors Deal of 1986 was signed between Indian Government and the Swedish arms manufacturer Bofors, with India receiving 400 Howitzer guns worth ₹1,430 crores. However, it was later revealed that Indian politicians including Rajiv Gandhi allegedly received more than ₹60 crores in bribe.

Curiopedia
  • A war economy is the set of contingencies undertaken by a modern state to mobilize its economy for war production. Philippe Le Billon describes a war economy as a “system of producing, mobilizing and allocating resources to sustain the violence.”
  • Military Keynesianism is an economic policy based on the position that the government should raise military spending to boost economic growth. This type of economy is linked to the interdependence between welfare and warfare states, in which the latter feeds the former, in a potentially unlimited spiral.
  • Hughes Helicopters was a major manufacturer of military and civil helicopters from the 1950s to the 1980s. The Apache began as the Model 77 developed by Hughes Helicopters for the United States Army’s Advanced Attack Helicopter.
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Article 370: 1 Year Of Abrogation

Article 370: 1 Year Of Abrogation

With the abrogation of article 370 in Jammu & Kashmir completing first anniversary on 5 August, let us take a look at its history and the impact of its removal.

Crux of the Matter

History Of Article 370

  • 1808: Jammu won by the Sikhs under Maharaja Ranjit Singh.
  • 1819: Kashmir was added to the Sikh territory.
  • 1822: Ranjit Singh appointed General Gulab Singh as the “Raja of Jammu”.
  • 1846: After the Anglo-Sikh war, Britain grants Gulab Singh the rule of J&K in exchange for a sum of ₹75 lakh. The Dogra dynasty is established.
  • October 1947: Maharaja Hari Singh signed the Instrument of Accession (IoA) in favour of India after Pakistani armed men attack the state. Initially granted the Indian Parliament the “power to legislate in respect of J&K only on the matters of defence, external affairs, and communications”.
  • 1948: India and Pakistan go to the United Nations over the occupation of Kashmir, and Sheikh Abdullah appointed the Prime Minister of J&K in March.
  • 1950: The Constitution of India is formed, containing Article 370 under the heading of ‘Temporary, Transitional and Special Provisions’ to provide special status to J&K. Except “defence, foreign affairs, finance, and communications”, the Centre required approval of the state government to implement any laws. The Constitution also contained Article 35A which allowed J&K to define “permanent residents” and provide “special rights and privileges” to them.
  • 1956: J&K implements its own constitution.
  • 1965: The title of the Prime Minister of J&K is changed to Chief Minister. Sheikh Abdullah became the CM with Congress support, but removed and reinstated several times, with Central rule being imposed at times.
  • 1980s-90s: Increase in activities of separatist militants. The targeted killing of Kashmiri Pandits forces them to flee the state.
  • 2019: Indian govt “abrogated” Article 370 using provisions of Article 370 to the point of making it defunct – J&K to be treated as any other state/UT. The state was turned into 2 UTs – J&K a UT with legislature, and Ladakh without legislature.

Impact Of Removal

  • People from all over India would now be able to purchase property in the state and settle there (under certain conditions).
  • Non-permanent residents of the state are now eligible to apply for government jobs in the state.
  • J&K assembly would have to comply with the national laws, just like all other Indian states.
  • End of discrimination against women concerning property. Earlier, a woman from the state would lose her property rights if she married a person from outside the state.
  • Prohibition of Child Marriage Act now applicable in the state.
  • Increase in democratic functioning: Block development polls occurred in Oct, 2019 for the first time in J&K with a 98.3% voter turnout.
  • Private Universities are expected to open in the state for the first time, and industrialization would now be possible in the state.

Case Of Valmikis
Valmikis belonging to the Scheduled Caste (SC) from Punjab were brought for sanitation work in the state in 1957. However, they were not provided the ‘permanent residency’. Consequently, they had no right to vote in the state elections, and could not avail reservation benefits as the state did not provide their SC certificates. The absence of certificate also rendered them ineligible for promotions as only the post of ‘safai karamcharis’ was available to them. The plight of the children of the Valmiki community was exacerbated as they were eligible to study only up to graduation in the state, and were consequently eligible only for the position of a sweeper.

The removal of Articles 370 and 35A ended all the mentioned discriminations faced by the Valmiki and other non-permanent resident communities in J&K.

Curiopedia
  • Naya Kashmir was the name given to the memorandum by Sheikh Abdullah, the leader of Kashmir’s leading political party in 1944. It was the outline of a plan to convert the Jammu and Kashmir state from an absolute monarchy to a constitutional democracy.
  • Our Moon has Blood Clots: The Exodus of the Kashmiri Pandits is a 2013 memoir by Indian author Rahul Pandita about the exodus of Kashmiri Hindus in the late 1989 and early 1990.
  • Pheran is the traditional outfit for both males and females in Kashmir. The pheran consists of two gowns, one over the other. According to some sources, the pheran was introduced by Mughal emperor Akbar when he conquered the valley in 1586.
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History Of Ayodhya Ram Temple

History Of Ayodhya Ram Temple

With the date of inauguration of the construction of the Ram Temple in Ayodhya on 5th August, let us take a look at the long history of the temple, permeated by conflicts at certain intervals.

Crux of the Matter

Foundation
The Ceremony for the Ram Mandir in Ayodhya would be held on 5th August, 2020 to initiate the construction of the temple by “the installation of a 40 kg silver brick as the foundation stone by the Prime Minister”.

Only 5 people are expected to be on stage including PM Modi and UP CM Yogi Adityanath to maintain social distancing. The Temple construction is expected to be done in “3 to 3.5 years”. The dimensions of the temple are expected as follows:
Width: 270- 280 feet
Height: 161 feet
Length: 280-300 feet

With such dimensions, it is expected to be the 3rd largest Hindu temple of the world after the Angkor Wat temple complex in Cambodia and the Sri Ranganatha Swamy temple in Tiruchirapalli, Tamil Nadu.

Soil and holy water from temples and rivers across India have reached the temple site as “blessings”, including contributions from the Sangam – the confluence of Ganga, Saraswati, and Yamuna rivers – and soil from Kamakhya temple (Assam), Char Dhams and several other places of worship.

Timeline Of Dispute

  • 1528: Babri Mosque constructed in Ayodhya by Mir Baqi, the commander of Mughal emperor Babur. Hindus allege that Ram temple at the site was demolished to construct the mosque, and claim the place claimed as the place of birth of Lord Ram (Janmbhoomi).
  • 1859: Fence to separate places of worship constructed by British, with the Inner court provided to Muslims and the Outer court provided to Hindus.
  • 1885: Court rejected Mahant Raghubir Das’s plea to construct a temple on Ram chabootra.
  • 1949: Idol of Lord Ram ‘resurfaces’, and the Government declares it a “disputed site” and locks up the premises.
  • 1950: Plea filed by Gopal Singh Visharad to allow worship of idols installed at ‘Asthan Janmabhoomi’.
  • 1959: Nirmohi Akhara, a denomination of Hindu religion worshipping Lord Ram, files suit to claim possession of the disputed land, and claims itself a “custodian” of Ram Janmbhoomi.
  • 1961: The UP Central Sunni Waqf board files suit claiming possession of the mosque and disputed land, and demands the removal of Lord Ram idols from the Mosque.
  • 1983: The Vishwa Hindu Parishad (VHP) starts nationwide movement demanding construction of temple at the disputed site.
  • 1986: Local court directs the gates to be opened and allows Hindus to worship inside the Mosque. The Babri Masjid Action Committee is set up by Muslims.
  • 1989: Shilanyas ceremony performed by the VHP, where the first stone is placed in the plan of construction of the Ram temple.
  • 1990: BJP leader LK Advani leads Rath Yatra (procession) from Somnath to Ayodhya to demand construction of the temple.
  • 1992: The Babri Mosque is demolished by ‘Kar Sewaks’ comprising of VHP, Shiv Sena and BJP workers.
  • 2002: Allahabad High Court begins hearings concerning the ownership of the disputed land.
  • 2010: Allahabad HC directed a 3-way division of land between the Sunni Waqf board, Nirmohi Akhara, and Ram Lalla (infant form) represented by Hindu Mahasabha.
  • 2011: The Supreme Court (SC) stays the Allahabad HC order.
  • 2019: In August, the SC starts daily hearings after the mediation failed.
  • November 2019: The SC orders the disputed 2.77-acre land to be given to a trust for the construction of Lord Ram temple and allots 5 acres of land for Mosque construction at a different site in Ayodhya.
  • February 2020: The Shri Ram Janmabhoomi Teertha Kshetra Trust (Temple Trust) is announced for the construction of the temple.
  • March 2020: First phase of construction begins, as idols of deities are shifted to temporary places where they would be kept till the construction of the temple is complete.
  • May 2020: The Temple Trust claims the discovery of “a five-foot Shivlinga, seven pillars of black touchstone, six pillars of red sandstone, structures of flowers and broken idols of deities” at the Ram Janmabhoomi.

Curiopedia
  • The word “Ayodhya” is a regularly formed derivation of the Sanskrit verb yudh, the initial ‘a’ is the negative prefix; the whole, therefore, means “not to be fought”. This meaning is attested by the Atharvaveda, which uses it to refer to the unconquerable city of gods.
  • Angkor Wat is a temple complex in Cambodia and the largest religious monument in the world. It was built by the Khmer King Suryavarman II in the early 12th century in Yaśodharapura, the capital of the Khmer Empire, as his state temple and eventual mausoleum. Since around 1850, the Cambodian flag has featured a depiction of Angkor Wat in the center.
  • Shri Ram Janmabhoomi Teerth Kshetra is a trust set up for the construction and management of Shri Ram temple in Ayodhya. It was created as per the verdict of the Supreme Court of India. Prime Minister Narendra Modi announced the formation of the trust in the Lok Sabha on 5 February 2020. The trust is led by Mahant Nrityagopal Das.
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Understanding Midday Meals In India

Understanding Midday Meals In India

Akshaya Patra recently raised funds for Midday Meals amidst Covid-19 pandemic, adding to the history of the provision of such in the country. Let us understand how midday meals work in India.

Crux of the Matter

Recent Fund Raising
Akshaya Patra, the world’s largest midday meal provider working as a not-for-profit organization, recently raised $950,000 through a virtual event of Texas to provide meals amidst the Covid-19 pandemic. The event was named ‘Virtual Gala’ and was attended by philanthropists from all over the world. The aim of the meeting was to help Akshaya Patra in eradicating “childhood hunger” in India.

In the latest New Education Policy (NEP) 2020, the Indian government also proposed ‘breakfast’ as a supplement to the midday meal.

History Of Midday Meals In India

  • 1925: Midday Meal started in Madras for disadvantaged and underprivileged children.
  • 1980s: Gujarat, Kerala, Tamil Nadu, and the Union Territory of Pondicherry were providing Midday Meals on a state basis.
  • 1995: The National Programme of Nutritional Support to Primary Education (NP-NSPE) was launched, aiming to enhance children’s health and also increase enrollment in schools.
  • 2001: The Midday Meal Scheme (MDMS) was launched on a national level. The scheme was mandated to provide children in every Government and Government-aided primary school a “prepared Mid Day Meal with a minimum content of 300 calories of energy and 8-12 gram protein per day for a minimum of 200 days”.

Current Status

  • The Midday Meal Scheme (MDMS) is currently run in “Government, Govt. Aided, Local Body, EGS and AIE Centres, Madarsa and Maqtabs supported under Sarva Shiksha Abhiyan and National Child Labour Project (NCLP) Schools run by Ministry of Labour”.
  • The Government also mandates a minimum nutritional requirement of the meal. Primary class students are provided 100 gm of rice/grains while the Upper primary class students are provided 150 gm of such. The minimum calorific intake mandated for students is 450 calories for the Primary students and 700 calories for Upper primary students.
  • The aim of Middy Meals is not only to enhance health but also to eradicate “classroom hunger” which affects students’ learning. The scheme also aims to “socialize” children of different caste and religious groups together, and provide employment to disadvantaged groups.
  • More than 25 lakh cooks are employed for Midday Meal provision (2016-17), and more than 11.6 crore children in the country are aided by the Mid Day Meals.
  • Midday meal sharing by Centre and States in India


Impact

  • A 2011 study has found that the Mid Day Meal increased overall enrollment in schools by 13% over a period of 10 years.
  • Studies have also found that the average reading score “for children who ate school lunches for three to four years” was 18% higher than those having for less than a year.

Non-Govt Schemes
Several NGOs are offered contracts to provide the Midday Meals across the country. These operate as either ‘centralized’ by setting up large “factory-like” kitchens or as ‘decentralized’, where the region and the roads are inadequate to set up large production settings.

Akshaya Patra
Akshaya Patra is the largest Midday Meal provider in India, run by the International Society For Krishna Consciousness (ISKCON). It provides free Midday Meals to over 1.8 million children in 19,039 Government schools and Government-aided schools, having set up 52 kitchens in 12 states and 2 Union Territories. The organization has also aided in the time of Covid-19 by providing 70 million servings of ‘dry rations’ and cooked meals.

Other Organisations
Some other NGOs facilitating the provision of Midday Meals are Jay Gee Humanitarian Society & People’s Forum, Naandi Foundation Ekta Shakti Foundation, Isha Education, Rajasthan Bal Kalyan Samiti (RBKS), Milaan Be The Change, etc.

Several community programs are also run like the Tithi Bhojan (Gujarat), where people are encouraged to celebrate family events by providing Midday Meals in the locality. The Tithi Bhojan has been adopted across the country by the names “Sampriti Bhojan” in Assam, “Sneh Bhojan” in Maharashtra, “Shalegagi Naavu Neevu” in Karnataka, “Utsav Bhoj” in Rajasthan, etc.

Curiopedia
  • Madhu Pandit Dasa is the chairman and founder of the Akshaya Patra Foundation. He is also awarded Padma Shri Award by GOI for his services towards the youth of India through Akshaya Patra.
  • CLT India (Children’s LoveCastles Trust) is an Indian non-profit, non-government organization based in Jakkur, Bengaluru. It was founded in 1997. It aims to provide education using technology to the under-served communities and its solutions serve the base of the pyramid. CLT started with providing midday meals.
  • In 1982, ‘Food for Learning’ was launched with assistance from the Food and Agriculture Organization (FAO). Initially, the program was aimed at scheduled caste and scheduled tribe girls.
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Viral Acharya Raises Critical Points For RBI & Govt

Viral Acharya Raises Critical Points For RBI & Govt

Former RBI Deputy Governor Viral Acharya in his latest book “Quest For Restoring Financial Stability In India”, says that fiscal dominance in India has become a mainstream practice that hinders the growth of banks and eventually results in the slow growth of the nation. His critical views on RBI’s functioning and the central bank’s relationship with the government have become the talk of the town. Let us simplify them and understand.

Crux of the Matter

Acharya on Fiscal Dominance
Viral Acharya is a former RBI Deputy Governor and currently a professor at NYU Stern. He has mentioned that Fiscal dominance is hampering the growth of India. Fiscal dominance is a situation in which the government has high debt and deficit. Because of limited funds, the government is unable to recapitalize public banks when they have to recognize bad loans in the books. Instead, the government pressurizes RBI to ease credit norms so that banks can avoid NPA recognition. This is like keeping the house clean by shoving al the dust under the carpet. Acharya said that it is not too late to infuse capital into banks and NBFCs.

On Non-Performing Assets
In an interview with India Today, Acharya said that growing NPAs during Covid-19 would be a concern. NPAs are expected to rise to ~12.5%, i.e. of the ₹100 loans given by a bank, ₹12-13 would be unrecoverable and banks will have to set aside a provision for the bad loan.

  • 2021 figures are estimation by RBI


NPAs are loans that cannot be recovered. Viral Acharya also criticized the practice of evergreening of loans in India. Let us understand it through an example what it means and what are its implications:

Mr. A took a loan of ₹10 lakh but is now unable to pay back the principal amount and/or interest. Now, Mr. A may take an additional loan to pay off the interest, or principal and interest both. Banks allowed this practice because that particular loan would not have to be categorized as an NPA and hence, no provision amount needed to be set aside.

  • NPA classification in India (as per RBI)


On RBI’s Autonomy
Acharya writes in the book that RBI’s autonomy was being compromised and hinted that he left for the same reason. Acharya left the post before the completion of his tenure. He also pointed out that Former RBI Governor Urjit Patel would have also left for a similar reason.

The government was trespassing on the autonomy of the regulator, rowing back on prudent measures and making unreasonable demands.

Viral Acharya, Former RBI Deputy Governor


Urjit Patel’s Resignation
Urjit Patel possibly resigned amidst the government trying to dilute the clause of Prompt Corrective Action. PCA is a framework under which banks with weak financial metrics are put under watch by the RBI. Besides that, the government wanted RBI to formulate policies to help it borrow more and ease up on defaulters. It also wanted the RBI to transfer surplus funds in the form of an interim dividend a few months before the 2019 Lok Sabha elections. All these factors might have caused Patel’s exit.

Also Read: Changes In RBI Accounting Year To Put Curbs On Contentious Interim Dividends

Curiopedia
  • “Yaadon Ke Silsile” is a music album by Viral Acharya. The funds raised through the album were funneled into charity – Pratham – which works to educate children.
  • “The Third Pillar: How Markets and the State Leave the Community Behind” is a book by Raghuram Rajan. The book was shortlisted for the financial times and McKinsey business book of the year award 2019.
  • As of January 2017, Viral was appointed to serve a three-year term as a Deputy Governor of the Reserve Bank of India. He resigned from the post in July 2019 with 6 months left for his completion of a term.
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