CURRENT AFFAIRS – 15/06/2023

The government will appoint a Finance Commission in the next few months to determine how much of the Centre’s tax revenue should be given away to States (the vertical share) and how to distribute that among States (the horizontal sharing formula).

In the pre-reform period, the Finance Commission recommendations were not that critical because the Centre had other ways to compensate States, or indeed to play favourites, through plan financing and public sector undertaking (PSU) investments. Post-reforms, fresh PSU investments have thinned out and the Planning Commission was abolished in 2014 with the result that the Finance Commission remains virtually the sole architect of India’s fiscal federalism. Its responsibility and influence are, therefore, much larger.

Currently, the Centre gives away 41% of its tax pool to the States. For sure, States will demand that this proportion be raised, but I do not see much room for stretching this further given the Centre’s expenditure needs and the constraints on its borrowing limit. Therefore, much of the debate will centre on the horizontal distribution formula.

When the previous Finance Commission was appointed in 2017, its terms of reference became quite contentious because it was asked to take into account the 2011 population figures in determining the expenditure needs of a State. This was a departure from the standard practice until then of mandating Finance Commissions to use the 1971 population numbers so as not to give a perverse incentive to States to neglect family planning with an eye on a higher share of devolution. States which had done well in stabilising population growth rates, typically the southern States, protested against this change in the base year, calling it a ‘penalty for good performance’.

A similar conflict arises with regard to revenue deficit grants that the Finance Commission awards to States which remain in deficit on the current account even after tax devolution. In theory, revenue deficit grants have a neat rationale — that every State in a country should be able to provide a minimum level of service to its residents even if it involves an element of cross-subsidisation. The worry is that this too has become a perverse incentive. Why bother raising revenues on your own when the Finance Commission will compensate you?

Historically, Finance Commissions have struggled to determine how much a State’s deficit is due to its fiscal incapacity and how much is due to fiscal irresponsibility. They have tried to tweak the distribution formula to support deficit States without penalising responsible States, a mathematically impossible task since you cannot give more to a State without giving less to another. The net result is that every horizontal distribution formula has been criticised as being inefficient or unfair or both.

These faultlines across States have in fact deepened in recent years along political, economic and fiscal dimensions. When the Bharatiya Janata Party (BJP) lost the Karnataka election last month, many political commentators read that as a north-south divide, with the BJP being confined to the northern States while the Opposition parties rule the southern States. Similarly, many headline numbers suggest that the southern States of the country are doing better in terms of infrastructure, private investment, social indicators and the rule of law, which has put them on a virtuous cycle of growth and prosperity and widened the north-south gap.

The bottom-line though is that it is in the very nature of horizontal distribution that richer States compensate poorer States. How to ensure that this happens without deepening the divide will challenge the government in defining the terms of reference of the Finance Commission, and of the Finance Commission itself in delivering on those terms of reference.

The terms of reference of the Finance Commission enjoin it to take into account the expenditure needs and revenue earning capacity of the Centre and States. I believe the forthcoming Finance Commission should use this leverage to focus on two issues in particular.

The first is the egregious practice by the Centre of increasingly resorting to a levy of cesses and surcharges rather than raising taxes. A white paper released by the Tamil Nadu government a couple of years ago pointed out that the proportion of cesses and surcharges in the Centre’s total tax revenue had nearly doubled from 10.4% in 2011-12 to 20.2% in 2019-20.

There is a perverse incentive in operation here. The straightforward option for raising revenues is to raise taxes, but if the Centre does that, it has to part with 41 paise to States. On the other hand, if it raises the additional rupee by way of a surcharge, it gets to keep all of it. When the Constitution was amended in the year 2000 giving States a share in the Centre’s total tax pool, the implicit understanding was that the Centre will resort only sparingly to cesses and surcharges, and not as a matter of routine as has become the practice. As a result of this breach of understanding, States have felt cheated out of their legitimate share of national tax revenue. The next Finance Commission should lay down guidelines for when cesses and surcharges might be levied, and also suggest a formula to cap the amount that can be raised.

The second issue of focus for the Finance Commission should be government spending on what has come to be called freebies. All political parties are guilty on this count, some more than others, but trying to apportion blame will be a wrong start.

In a poor country, where millions of households struggle for basic human needs, it sounds cruel to argue against safety-nets for the poor. But it is precisely because India is a poor country, that we need to be more circumspect about freebies.

In theory, the restraints imposed by the Fiscal Responsibility and Budget Management (FRBM) Act should have acted as a check on such populist spending, but governments have found ingenious ways of raising debt without it appearing in the budget books. It is not easy to unambiguously define a freebie, and any check on this will be contested as infringing on the sovereignty of elected governments. Nevertheless, the next Finance Commission should bite the bullet in the interest of long-term fiscal sustainability and lay down guidelines on the spending on freebies.

After the BJP lost the Karnataka election, the Prime Minister said that the guarantees offered by the Congress in Karnataka were impossible to implement, and if taken forward, ‘the country and the State concerned will become bankrupt.’ Strong words indeed. In the State Assembly elections to be held later this year, the Prime Minister should walk the talk and invest his political capital to show that the promise of good governance can trump the lure of freebies.

That will embolden the Finance Commission to formalise a mechanism for a restraint on freebies.

“If you were a young boy, I could have offered you a bouquet of medicines. Unfortunately, for both of us, you are a lovely young girl,” said my daughter’s neurologist, writing out her prescription. And then he began to explain the possible side-effects, some mild, some severe. Exactly three decades ago, the U.S. National Institutes of Health (NIH) Revitalization Act of 1993 mandated the inclusion of “women and minorities” in clinical trials in a bid to reduce health disparities. Yet, to date, the male model of medicine is thriving, and so is the tendency of treating women as smaller men despite a growing body of research insisting on physiological differences (beyond the reproductive organs) between the sexes. The genetic and epigenetic differences between men and women are also extensively documented.

In India, the “pharmacy of the world”, the gender disparity in clinical trials has even bigger implications, thanks to generic drug production and consumption. It has been demonstrated in various studies that women’s bodies respond differently to the components of generic drugs.

Professor Cassandra Szoeke, Director of Healthy Ageing Program at the University of Melbourne, Australia, says that thanks to the recent inclusion of women in clinical trials for generic medicine, we now know that “nearly one-fifth of medications showed a difference in the active dose between men and women”. Women have been either overdosing, as in the case of Zolpidem, a common sleep medicine, or not getting enough, as in the case of several pain medicines, for decades now thanks to their underrepresentation in clinical trials.

It is not just about treatment but also testing and diagnosis where women have been getting a rough deal. Take, for instance, mental health. According to a study conducted in Tamil Nadu by Nobel laureates Abhijit Banerjee and Esther Duflo, along with their research partners, “26 per cent of men and 31 per cent of women aged 61-70 have symptoms indicating a high likelihood of depression”.

The study firmly notes that depression rates and the prevalence of anxiety are higher for women than for men worldwide in general. One can add to this a study on human capital conducted by Ernst R. Berndt and others that states that women with an early onset of depression “are less likely to obtain college degrees and less likely to pursue postgraduate degrees”. We see the vicious cycle of women’s underrepresentation here.

Like depression, cardiac issues are now acknowledged as having a slightly more prevalence in women. Yet, they continue to be diagnosed and treated like ‘lesser men’. Study after study demonstrates that women are less likely to receive appropriate medications, diagnostic tests and clinical procedures even in developed countries such as Canada and Sweden. The stereotype of the “hysterical woman” continues to haunt women even when they need urgent clinical interventions.

The exclusion of women from clinical trials and research projects addressing sex-agnostic critical illnesses such as cancer and heart disease has resulted in a limited understanding of sex-specific symptoms and responses to treatment. When it comes to sex-specific illnesses such as breast or endometrial cancers, polycystic ovarian syndrome, and pregnancy-related issues, there are serious gaps in research that can only be explained by an apathy towards “women’s only” issues. United States-based studies show that the funding received for research in migraine, endometriosis and anxiety disorders is much lower in proportion to the burden of these illnesses.

‘If men menstruated there would be several multi-million dollar projects studying cramps’ — this meme is not funny any more when you look at mortality numbers because of poor reproductive health. World Health Organization data from 2017 show that “every day about 808 women die due to complications of pregnancy and childbirth”. Almost all of these were preventable but occurred “due to interaction between pre-existing medical conditions and pregnancy”. Pregnant women are further down the ladder of representation in clinical trials and research.

In an equitable world, women would be accepted as an individual category, with race, age and class as subcategories. And an equal amount of time and resources would be spent in finding and providing treatment and health care. How can women even aspire to have access to equal health care when their ailments are not even understood?

India has several progressive policies with respect to women’s health including the right to abortion. It is time for policy intervention in the space of sex-specific research in medicine and the implementation of outcomes.

India’s G-20 presidency may be an opportune time to highlight this issue in alignment with Sustainable Development Goals on women’s health.

Notwithstanding contention regarding the assessment methods of various global surveys, it is true that India’s high prevalence of stunting, wasting, and anaemia continues to pose public health risks for children and women. India must strengthen its existing social sector schemes, such as the Integrated Child Development Services (ICDS), to tackle this. The ICDS targets children aged 0-6 years, pregnant women, and lactating mothers; addresses non-formal pre-school education; and breaks the cycle of malnutrition, morbidity, and mortality.

Empirical research highlights the correlation between early-life poverty, malnutrition, and inadequate stimulation, and later cognitive and economic challenges. Studies have shown that interventions focusing on nutrition, education, and health during early childhood can significantly improve human capital, particularly in developing countries. A study published in World Development demonstrated the ICDS’s positive impact on cognitive achievements, especially among girls and those from economically disadvantaged families. Another peer-reviewed study in The University of Chicago Press Journals found that children who were exposed to ICDS during the first three years of life completed 0.1-0.3 more grades of schooling than those who were not. In a study published in the Natural Library of Medicine, it was found that adolescents aged 13-18, who born in villages with proper ICDS implementation, showed a 7.8% increased likelihood of school enrolment and completed an average of 0.8 additional grades compared to their peers who did not have access to the ICDS.

As we commend the remarkable strides made by ICDS, it is imperative to acknowledge the pressing need for a thorough reassessment of our approaches. Despite four decades of relentless efforts, the ICDS still faces the herculean task of ameliorating the nutritional and health outcomes for children aged 0-6 years.

A significant first step towards fortifying the programme is to empower Anganwadi workers. Though the cornerstone of the ICDS, they are frequently stretched beyond their limits. As principal operatives in the Poshan 2.0 initiative, these workers bear the onus of advancing child nutrition, health, and education in their communities. Their roles vary widely from employing modern technology, like smartphones and applications, to practical tasks such as delivering health education, managing feeding programmes, and liaising with auxiliary nurse midwives and other healthcare professionals.

An additional Anganwadi worker could be added to each of India’s 13,99,661 Anganwadi centers to lessen the load of these workers. Implementing this approach could yield at least five advantages. First, it would lead to better health and educational outcomes. A large-scale randomised controlled trial by Alejandro Ganimian, Karthik Muralidharan and Christopher Walters in Tamil Nadu, conducted to evaluate the effects of increasing staff levels within the ICDS framework, revealed significant outcomes. The addition of a half-time worker effectively doubled the net preschool instructional time, which led to improvements in math and language test scores for children enrolled in the programme. Second, children who remained enrolled also exhibited reduced rates of child stunting and severe malnutrition.

Third, the cost of a nationwide roll-out of this model is relatively insignificant in comparison to the potential advantages it offers. The estimated long-term benefits, based on expected improvements in lifetime earnings, would be around 13 to 21 times the expenses.

Fourth, the new Anganwadi worker can be given the responsibility of concentrating only on preschool and early childhood education. This would allow existing workers to dedicate more time to child health and nutrition. It would also enable the Anganwadi workers to expand their outreach and serve a larger number of families.

Fifth, apart from improving the well-being of rural communities, this would create job opportunities for local residents, particularly women. It would lead to the creation of 1.3 million new jobs for women across India.

The operationalisation of the Saksham Anganwadi and Poshan 2.0 proposal hinges on its status as a Centrally Sponsored Scheme. State governments oversee its execution, including administration, management, and monitoring. Consequently, Anganwadi worker recruitment falls under their jurisdiction, guided by regulations and region-specific criteria. This decentralised approach promotes tailored, efficient implementation. The Government of India provides funds for Anganwadi workers’ and helpers’ honorariums on a cost-sharing basis.

Apart from this, the data have shown a significant variation in implementation of the ICDS and the level of skills of Anganwadi workers. This requires further investments in the training programme. Additionally, the exigency for infrastructural improvement in India’s Anganwadi centers cannot be overstated. A disconcerting 2.5 lakh centres operate without functional sanitation facilities and 1.5 lakh centres lack access to potable water. Approximately 4.15 lakh Anganwadi centers do not possess their own pucca building.

To unlock the ICDS’ full potential and address persistent issues, it is essential to revisit and re-evaluate its strategies and implementation. Empowering Anganwadi workers is just a start.

The story so far:

Three States, Gujarat, Maharashtra and Telangana, have deferred a proposal, approved by the Centre’s Genetic Engineering Appraisal Committee (GEAC), to test a new kind of transgenic cotton seed that contains a gene, Cry2Ai, that purportedly makes cotton resistant to pink bollworm, a major pest. This conflict shows that a broad acceptance of genetically modified crops continues to be elusive.

There are an array of crops — brinjal, tomato, maize, chickpea — in various stages of trials that employ transgenic technology. However, cotton remains the only transgenic crop that is being commercially cultivated in India. After a long hiatus, the GEAC, the apex technical body charged with evaluating proposals for testing genetically modified (GM) seeds, approved the environmental release of Mustard hybrid DMH-11 and its parental lines, during its 147th meeting on 18 October, 2022 for seed production and testing. This is one step away from full commercial cultivation.

However, the GEAC, which is under the Union Environment Ministry, isn’t the final arbiter in the case of GM crops. There is a long-standing litigation in the Supreme Court on the permissibility of allowing transgenic food crops in farmer fields based on petitions filed by activist Aruna Rodrigues and Gene Campaign, an NGO. Following the GEAC approval for DMH-11, the petitioners approached the apex court asking for a stay on the release of the crop because it would encourage farmers to spray herbicides, which are banned in India. Hearings on this case are still ongoing. In 2017, the GEAC had accorded a clearance for GM mustard, but went back on its decision and imposed additional tests. In 2010, the GEAC had approved GM brinjal, but this was put on an “indefinite moratorium” by the United Progressive Alliance government.

The process of developing transgenic crops is an elaborate one as inserting transgenic genes into plants to elicit a sustained, protective response is a mix of both science and chance. There are multiple safety assessments done by committees before they are cleared for further tests in open plots of lands, which are located at either agricultural universities or are plots controlled by the Indian Council for Agricultural Research (ICAR). A transgenic plant can apply for commercial clearance, only after it has proven to be demonstrably better than comparable non-GM variants on claimed parameters (for instance, drought tolerance or insect resistance) without posing ecological harm to other species that may be being cultivated in the vicinity. Open field trials often take place over multiple crop seasons, and types of geographical conditions, to assess its suitability across different States.

The cotton seed has been developed by the Hyderabad-based Bioseed Research India with Cry2Ai which makes it resistant to pink bollworm. The first generations of transgenic cotton had been developed to inure cotton against a more widespread pest called American bollworm. The Cry2Ai seed has passed preliminary, confined trials and was recommended by the GEAC to be tested in farmer’s fields at Telangana, Maharashtra, Gujarat and Haryana. Agriculture being a State subject in most cases, companies interested in testing their seeds need approvals from the States for conducting such tests.Only Haryana gave permission for such tests.

This was after the GEAC in October 2022 sent letters to all States to “communicate their views/comments” within two months on the proposal. Telangana requested GEAC for a 45-day extension to consider the proposal. On May 16, Telangana responded that it would not allow trials to be conducted in the current cropping season. Gujarat later responded that the proposal was “unacceptable” to them, but did not furnish reasons.

Following these responses, the GEAC has asked the Department of Biotechnology (DBT) and the ICAR to “jointly organise capacity-building activities with regard to GM crops for apprising the State/UT Government(s) about the technology involved and the regulatory framework in place for evaluation of these GM crops.” Activist groups objected to the GEAC asking States to furnish reasons for disapproval and said that it was tantamount to a “biased lobbying approach”, according to Kavitha Kuruganti, a member of the Coalition for a GM-free India.

The GEAC consists of a panel of plant biotechnologists and is headed by a senior official of the Environment Ministry and co-chaired by the scientist of the DBT. To resolve the issue of States not according approvals on testing, because of differing attitudes to GM crops, the GEAC is considering a proposal by the DBT to declare some regions across India as ‘notified testing sites’. There are 42 such proposed sites and, if it goes through, companies wanting to conduct trials of GM crops at these locations won’t need the permission of States for trials.

Overall consumption and sharing of news declined in India from last year’s figures, along with a sharp decrease in access to online news (-12 percentage points), while television, too, saw a 10 percentage points decline as a news source, according to the Reuters Institute Digital News Report, 2023, released on Wednesday.

The 12th edition of the report, produced in collaboration with the Asian College of Journalism, surveys the news consumption habits of consumers across 46 markets.

As per the report, India registered a small decrease of 3 percentage points in overall trust in news (38%) from last year’s figure, and was ranked 24th among 46 countries in this regard. Finland remained the country with the highest levels of overall trust in news (69%), while Greece had the lowest levels (19%), globally. “Among individual news brands, public broadcasters like DD India, All India Radio, and BBC News retained high levels of trust among survey respondents in India, emphasising the importance of public service media,” the report noted.

YouTube was the most preferred social media platform for news with 56% of the respondents accessing it. WhatsApp (47%) and Facebook (39%) were the next two preferred social media platforms for news in India among the survey respondents. Dainik Bhaskar, a Hindi daily, featured among the top 10 brands accessed both online and offline by the survey respondents.

Globally, the report found that “video-based content, distributed via networks such as TikTok, Instagram and YouTube, is becoming more important for news, especially in parts of the Global South, while legacy platforms such as Facebook are losing influence”.

Barely 28% of respondents said they accessed news via Facebook in 2023, as against 42% in 2016. Part of the reason for this, the report observed, was Facebook pulling back from news at the same time that YouTube and TikTok began to attract larger chunks of young audiences.

On the other hand, news usage for the other social media giant, Twitter, remained relatively stable following Elon Musk’s takeover, with the usage of alternative networks such as Mastodon extremely low.

The fastest-growing social network used by the survey respondents for any purpose was TikTok (used by 44% of the 18-24 age group), with 20% of them using it for news. The app was most heavily used in parts of Asia, Latin America and Africa.

Interestingly, and worryingly for traditional media, the survey found that users of TikTok, Instagram and Snapchat paid more attention to celebrities and social media influencers than they did to journalists and media companies when it came to news topics. This was in sharp contrast to legacy social networks such as Facebook and Twitter, where news organisations still attracted the most attention.

In a related finding, the report noted that “stated preferences by audiences to directly visit news websites continue to decline”. Globally, “the proportion that say their main access point is via a news website or app has fallen from 32% in 2018 to 22% in 2023”, while dependence on social media access for news has grown from 23% to 30%, the report noted.

Summing up this trend, Rasmus Kleis Nielsen, Director of the Reuters Institute for the Study of Journalism, observed, “Younger generations increasingly eschew direct discovery for all but the most appealing brands. They have little interest in many conventional news offers oriented towards older generations’ habits, interests, and values, and instead embrace the more personality-based, participatory, and personalised options offered by social media, often looking beyond legacy platforms to new entrants, many of whom drive few referrals to media organisations and do not prioritise news.”

The report also found that news podcasting continued to resonate with educated and younger audiences though it remained a minority activity overall. About 34% of the respondents accessed a podcast monthly, while 12% accessed a show on news and current affairs. The report also flagged a continuing trend — which it highlighted in last year’s report as well — of news avoidance (partly for mental health-related reasons) in a large number of countries. Among news avoiders, around half (53%) tried to avoid all news periodically, while 32% tended to avoid “difficult topics”.

For this report, the Asian College of Journalism provided support in identifying news brands and other specific details relevant to the Indian market in the survey questionnaire, verifying the Hindi translation of the questionnaire, and contextualising the main findings for India in its country profile.

Construction of a 360-metre-long bridge across the Purna river between Bilimora and Surat stations in Gujarat was fraught with challenges for the National High Speed Rail Corporation Ltd. (NHSRCL), the implementing agency for the bullet train project to connect Mumbai and Ahmedabad.

Of the 24 river bridges on the high-speed rail corridor, 20 are being constructed in Gujarat and four in Maharashtra. The Purna river bridge is the second of these bridges to be completed.

“The foundation work was challenging as water levels in the river kept rising about five to six metres every fortnight during high tides,” senior officials in NHSRCL said.

Continuous monitoring of high and low tides from the Arabian Sea was carried out during the construction, they further said.

The bridge consists of nine full span girders of 40 metres each. While the girders horizontally support the bridge, the piers are vertical structures.

The first river bridge was completed in January 2023, built over the Par river between Vapi and Bilimora stations in Valsad district of Gujarat.

Officials said that a 1.2-km bridge on the Narmada Bharuch will be the longest bridge to be constructed in Gujarat.

Work on the foundation and piers and other infrastructure works are in progress over the Sabarmati, Mahi, Narmada, Tapi and other rivers in different districts of Gujarat, they said.

Officials estimate that the bullet train will be operational by 2026.