Gist of EPW December Week 5, 2022

The Economic and Political Weekly (EPW) is an important source of study material for IAS, especially for the current affairs segment. In this section, we give you the gist of the EPW magazine every week. The important topics covered in the weekly are analyzed and explained in a simple language, all from a UPSC perspective.

TABLE OF CONTENTS

1. One health law
2. Mounting Fertiliser Subsidy in India
3. Reboot Export Strategies
4. Data protection legislation

1. One health law

Context: Rise of COVID pandemic has increased the importance of the ‘One Health concept’

Detail: 

What is one health concept: 

• One Health is a collaborative, multisectoral, and transdisciplinary approach working at the local, regional, national, and global levels with the goal of achieving optimal health outcomes recognizing the interconnection between people, animals, plants, and their shared environment.
• In other words, One Health is an approach that recognizes that the health of people is closely connected to the health of animals and our shared environment. The concept of One Health was first recognised in 2004 at the “One World, One Health: Building Interdisciplinary Bridges to Health in a Globalized World” symposium

Image: One health concept Source: https://www.who.int/

Need for One health concept: 

• Since the human population is increasing at a rapid pace as a result, more people live in close contact with wild and domestic animals, both livestock and pets. Close contact with animals and their environments make humans more vulnerable to diseases.
• The earth has experienced changes in climate and land use, such as deforestation and intensive farming practices. Disruptions in environmental conditions open up the new flood gates for many diseases. 
• Movement of people, animals, and animal products has increased from international travel and trade. As a result, diseases can spread quickly across borders and around the globe.

International scenario related to “ One Health Concept”

• Kenya adopted a One Health approach to prevent the spread of avian influenza in 2006, it was also effective during the 2006–07 outbreak of RVF limiting the number of human infections to 700 and deaths to 90 as opposed to 27,500 human infections and 170 deaths during the 1996–97 RVF outbreak.

What is the need of the One health Concept for India: 

• A One Health approach is crucial to understand, prevent and respond to zoonotic diseases or zoonoses transmitted between humans and vertebrate animals.
• India’s population is rising at a rapid pace and interaction between humans and animals is also rising. But, the gaps in legislation for One Health are glaring.
• Since One Health also encompasses other important health related issues, such as antimicrobial resistance and food safety, the proposed legal framework can also bring these other pressing issues in its ambit.
• In India, healthcare has largely been driven by reactive and curative approaches that focus on intervention-led care.
  • Preventive approaches of risk factors are neglected because of lack of initiative and preparation in this regard. 
  • Preventive healthcare in India accounts for only around 10% of the country’s overall healthcare expenditure.

Steps taken in this regard: 

• The  National Institute for One Health was recently established  in Nagpur. 
• The Institute will focus on increasing preparedness and laboratory capabilities for identification of novel and unknown zoonotic agents. 
  • This dedicated institute will be equipped with the Biosafety Level (BSL-IV) laboratory. 
  • It will help in investigation of outbreaks of emerging zoonotic agents concerned with public health and developing better control strategies. 

India is one of the most vulnerable countries when it comes to the spread and outbreak of the zoonotic disease. Additionally, with such a huge population it is more difficult  to manage the outbreak of the disease. Therefore it is important steps are taken to prevent the disease at the earliest level through proper planning and coordination.

2. Mounting Fertiliser Subsidy in India

Context: Union Finance minister seeks for the supplementary grant of a sum of 1.09 lakh crore for the Fertiliser subsidy in the 2022–23 budget. 

Introduction:

• The Union government recently sought an additional ₹3 lakh-plus crore as supplementary demands for grants for 2022-23, primarily to fund a higher subsidy bill on items such as fertilisers, food and LPG, with about 10% of the sum to further ramp up capital expenditure in sectors like roads and railways in 2023.
• The major spending includes ₹1.09 lakh crore for fertiliser and urea subsidies.
  • This is in addition to the budget estimate of 1.05 lakh crore in the current fiscal, which makes the total fertiliser subsidy more than 2.10 lakh crore. 
• More than ₹80,000 crore for the Department of Food and Public Distribution, three-fourth of which is earmarked for the Pradhan Mantri Garib Kalyan Anna Yojana, and ₹22,000 crore to be paid to oil marketing companies for losses on LPG cylinder sales.
• For the national rural employment guarantee scheme, an additional outlay of ₹16,400 crore has been sought.

Reasons behind rising fertiliser subsidy:

• According to the World Bank, the fertiliser price index has risen around 15% in 2022 from earlier, and the prices have increased more than three times in two years.
• This is mainly due to the increased global demand, rise in the cost of inputs for fertilisers, shortage of supply in the international market, domestic policies, geopolitical risk, and the Russia–Ukraine war. 
• Chemical fertiliser products are in high demand in important crop-growing regions, which has fueled the price increase.
  • Crops like corn and soybeans had a greater need for potash and phosphatic fertilisers at the global level due to increased crop acreage. 
• Prices have also increased as a result of rising input costs for producing different fertiliser products.
  • In the case of phosphatic fertilisers, raw materials like sulphur and ammonia have faced a sharp increase in prices due to the COVID-19 restrictions. 
• The factors like the high cost of inputs due to unfavourable weather led to supply shortages in the domestic markets of many countries. This resulted in fertilisers falling below the requirements in the global market. 
• Reduced fertiliser availability in the domestic market led several economies to implement policies to meet domestic availability demands. 
  • For example, the policies adopted in China, the lead producer and consumer of fertiliser products globally, led to banning export to the international market. 
  • Such a move resulted in a reduced supply in the international market for fertilisers. 
  • The rising coal prices in China have also forced manufacturing companies to cut production. 
  • Russia and Egypt have also capped exports as part of their policies. 
  • From the geopolitical side, the imposition of economic sanctions by the European Union and the United States on Belarus, which meets one-fifth of the world potash demand, has created uncertainty in the potash market. 
• The Russia-Ukraine war has created a supply shortage in the international market and a natural gas price hike.

India’s dependency on Fertiliser import:

• To meet its domestic demand, India imports a significant quantity of fertilisers. In FY22, urea consumption stood at 341.73 lakh MTs, of which 250.72 lakh MTs was met through indigenous production and 91.36 lakh MTs through imports; mainly from China (25.91 lakh MTs), Oman (15.88 lakh MTs) and UAE (7.95 lakh MTs), according to government data.
• India’s fertiliser imports had been rising even before the Russia-Ukraine conflict due to pandemic-related disruptions. 
• With low self-sufficiency, volatility in global fertiliser supplies will have a major impact on India
• In Financial Year 2021, more than a fourth of the urea requirement was imported.
  • Urea is highly subsidised at Rs 5,360 per tonne in India.
  • The fertiliser subsidy (revised estimate) has crossed over 1,00,000 crore for the last two years. It reached a record high of `1,40,122.32 crore in 2021–22. 
• India boosted its fertiliser imports from nations including Canada and Israel to ensure sufficient supplies for the coming summer sowing season after the disruption of shipments caused by Russia-Ukraine war.
• Importing various fertiliser products paying higher prices almost emptied the fertiliser subsidy allocated in the budget 2022–23 as India spent 94.83% of 1.05 lakh crore by October 2022.

Image Source: Money Control

Reducing import dependency:

• Reducing the fertiliser import dependency, especially urea, has been a major goal of the union government over the years. 
  • India has revived four urea plants, namely Ramagundam (Telangana), Gorakhpur (Uttar Pradesh), Barauni (Bihar), and Sindri (Jharkhand) in this regard.
• To contain the subsidy, the government is stressing the need to move towards natural or organic farming. 
• Economic Survey (2021–22) also specifies the importance of finding alternative fertilisers and reducing the use of chemical fertilisers in agriculture.
• However, establishing joint ventures abroad, where the feedstocks and raw materials are less expensive, is the greatest method to reduce the fertiliser subsidy.
  • As of now, India has only one joint venture abroad to supply urea, and one is proposed. 
• In order to obtain cheaper fertilisers, India must push manufacturers to establish joint ventures abroad and to implement buy-back agreements.

3. Reboot Export Strategies

Introduction:

• The growth in Indian merchandise exports has abruptly slowed after rebounding sharply after the pandemic to a record 44.8% in 2021-22.
  • Monthly foreign trade data show that the merchandise export growth, which averaged around a quarter in the first few months of 2022–23, has suddenly stagnated and even declined in the last three months ending November 2022. 
• As per the report by CARE Ratings, slowing global growth and cooling demand are likely to shrink India’s goods exports by more than 2% in 2022-23 and grow just 1.5% next year.
• The European Union has recently announced that it will levy a carbon border adjusted mechanism on imports of iron and steel, cement, aluminium, fertilisers, electricity, and hydrogen from October 2023. Other countries may also enforce similar environment-friendly tariffs and expand the list of products covered by them which will further negatively impact India’s Exports.

Trends in Exports:

• Overall exports during April to November 2022 showed a healthy double-digit growth of 11.1%. The numbers are misleading because most of this growth was fuelled by oil exports, which shot up by almost half, even while growth of non-oil exports slumped to just 2.4% during the period.
• The export slump in 2022–23 has been extensive with growth slowing down in five of India’s top 10 markets. 
  • The worst-hit merchandise export markets were China and Bangladesh, where exports have even declined in the first eight months of the fiscal year. 
  • Even exports to advanced economies like the United States, the United Kingdom, and Singapore, which are in the grip of a slowdown are badly affected.
  • However, exports to other major markets like the United Arab Emirates, the Netherlands, Brazil, Saudi Arabia, and Indonesia have remained robust.
• The product composition of merchandise exports also shows that the slowdown has affected many important sectors. 
  • The worst-hit export sectors are base metals and the textile and clothing segments where exports have declined in April–November 2021–22. 
  • The gems and jewellery sector has seen its exports almost stagnate. 
  • Exports of other important products like chemicals and transport equipment have also slowed down. 
  • Only oil and agriculture product exports continue to register robust growth. 
• The ongoing surge in imports has exacerbated the impact of the export slowdown. The numbers for the April–November period show that the import growth has almost been three times faster than that of exports. 

Impact of Export Slowdown:

• Due to the above trend, the merchandise trade deficit has shot up by around three-fourths to around $198 billion in the first eight months of 2022-23 which is marginally higher than the trade deficit in the whole of 2021–22.
• According to the International Monetary Fund (IMF), the merchandise trade deficit, which nearly doubled to $190 billion in 2021-22, is now expected to rise by half to $287 billion in 2022-23.
• As a result, the proportion of the merchandise trade deficit financed by the services trade surplus will fall by half in three years, to 43%. As a result, the current account deficit will triple to 3.5% of GDP in 2022-23, the highest level in the last decade.
• A surging current account deficit and erratic inflows in the capital account would reduce  foreign exchange reserves to $541 billion in 2022–23. 
  • This will drag down the import cover of goods and services to just 6.7 months in 2022–23, the lowest level since 1997–98 which will create more external sector vulnerabilities.

Novel Strategies to improve exports:

• To meet these new challenges, trade promotion policies must be revamped with focus on accelerating the integration of Indian exports in global value chains. 
• Larger infrastructure investments are necessary  to improve trade logistics. 
• A reduction of tariffs on intermediate goods is also needed as foreign value addition now accounts for almost one-fifth of the Indian exports. 
• Improved free trade agreements with major trading partners are also required to facilitate the flow of goods and services.
• The Foreign Trade Policy for 2015–20, which was extended to 2022 must be reformulated to target goods and services exports of $900 billion.
• Many export promotion schemes that do not meet World Trade Organization criteria must be redesigned.

4. Data protection legislation

Context: Growing importance of the data and its cross country flow has made a data protection law imperative. 

Detail: 

• The recent IBM report on “Cost of a data breach” disclosed a loss of nearly `176 million in 2021–22 to data breaches by Indian firms, which is 6.6% increase from 2021 and nearly 25% increase from 2020.
• Data protection regulations ensure the security of individuals’ personal data and regulate the collection, usage, transfer, and disclosure of the said data.

Image: data protection

Source: https://towardsdatascience.com/

What are the key elements of the data protection: 

• There are three most important element of the data protection regime
  • Confidentiality: The data is retrieved only by authorised operators with appropriate credentials.
  • Integrity: All the data stored within an organisation is reliable, precise, and not subject to any unjustified changes.
  • Availability: The data stored is safely and readily available whenever needed.

State of Data Protection Legislation in India: 

• Data protection regime was first conceived in 2012 with the Justice A P Shah Committee Report on Privacy. 
• Followed by the 2017 landmark judgement by the Supreme Court of India, declaring the right to privacy as a fundamental human right.

Image: Evolution of data protection legislation

Source: EPW

Critique of data protection in India: 

• Informed consent management protocol: There is a concern regarding consent-seeking process that should be free, informed, specific, clear, and capable of being withdrawn as easily as it is to provide consent.
  • The draft PDPB, 2019 and the draft DPB, 2021 makes consent-seeking necessary for the processing of personal data, but only does so at the beginning of the data collection.
• Concept of choice and privacy: Choice and privacy is inherently linked to consent this adds another layer of complexity, by assuming that citizens are aware and empowered enough to be able to protect their own data and privacy. 
  • In India, where a majority of the population is living in poor socio-economic conditions, and have a limited understanding of their rights, clarity on the concepts of privacy and consent, especially in relation to the use of technology is elusive
• Roles and obligations of the data fiduciaries: There is a lack of clarity on the role of the data fiduciary with respect to protection of the data government versus private, healthcare providers, data management entities and authorities such as the Data Protection Authority (DPA) creates opportunities for these stakeholders to potentially take advantage of the policies in their interests.
• Security measures: The Data Protection Bill, 2021 do not specify any time period for breach notification. As a result of which data protection regime remains ineffective. 
• There are two ways to ensure the security of personal and sensitive data. Both are preventive measures, and ought to be hard-wired into any legislation: 
• Preventing unauthorised access internally as well as externally through identity access management; and 
• Preventing data theft and breaches through end-to-end encryption.But these measures are not taken into account. 
• Data localisation: The data localisation regime has been recently relaxed on the argument that data localisation can potentially increase trade and market access barriers for the digital firms and also does not necessarily lead to better privacy protection. 

Steps that needs to be taken: 

• Informed, and easy consent-seeking process: Consent giving and withdrawing mechanism must be made transparent and easily understandable. 
• The efforts to regulate the overall data protection should aim at ensuring there are no conflicting or overriding clauses that can potentially confuse data fiduciaries with subsections dedicated to specific sectors and domains. 
• incorporating robust security measures and processes, including identity access management for regulating unauthorised access to data , and end-to-end encryption.

Data constitutes one of the most important assets of any country and therefore all out effort should be made to protect the breach of data in the country. Proper legislation involving all the stakeholders must be devices for an effective data management regime.

Read previous EPW articles in the link.

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