Gist of EPW September Week 4, 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. National Health Accounts, 2018–19
2. The Growing Significance of Shanghai Cooperation Organisation
3. The Use and Abuse of Oath-taking
4. Leveraging Trade in High Technology for Emergence: The BRICS Experienceaking

1. National Health Accounts, 2018–19

Context

The release of findings of the National Health Accounts (NHA) Estimates for India for 2018-19.

National Health Accounts (NHA) Estimates

• The NHA Estimates report is prepared by the National Health Systems Resource Centre (NHSRC).
  • NHSRC was designated as National Health Accounts Technical Secretariat (NHATS) in 2014 by the Union Health Ministry.
• The NHA estimates are prepared by using an accounting framework based on the internationally accepted standard of System of Health Accounts, 2011, developed by the World Health Organization (WHO).
• The NHA Estimates is an important report which provides key insights on India’s total expenditure on healthcare by the government, the private sector, individuals, and NGOs and the flow of these funds.
• NHA Estimates also provide data about the sources of healthcare spending, who manages this spending, who provides healthcare services, and which services are being utilised.
• The NHA estimates for India 2018-19 is the sixth consecutive NHA estimates report prepared by NHSRC.

Key Highlights of National Health Accounts, 2018–19

Image Source: Indian Express

• As per the estimates, private- and public-owned hospitals continue to be the major players in the healthcare sector of the country.
  • The private players account for about 33% of the total healthcare expenditure and the public or government players account for 25% of the total healthcare expenditure.
• The latest estimates indicate that there has been an increase in the share of government health expenditure in the total GDP of the country from 1.13% in 2014-15 to 1.28% in 2018-19.
  • Further, the government’s share has increased almost by two times to 40.6% in the last 15 years.
• The latest Estimates also highlight a huge drop in out-of-pocket expenditure by patients.
  • The out-of-pocket healthcare expenses by people account for about 48.2% of the total health expenses in the year 2018-19 which has reduced significantly from 62.6% recorded in 2014-15.

Image Source: PIB

• Inpatient curative care services which have accounted for 33% of the total healthcare spending are the most important healthcare function.
  • Further, medicines and healthcare goods, and outpatient curative care have all accounted for about 20% each in the total healthcare spending.

Cause of concern

• It is to be noted that the percentage of spending on preventive healthcare which has gained a lot of significance in recent years was seen to be less than 10% of total healthcare spending.
• The percentage of total health expenditure has reduced by about 25% in the last 15 years. 
  • i.e. between 2004-05 and 2018-19, the total health spending declined from 4.2% to 3.2% of the GDP.
  • This is completely opposite to the global trends where the share of healthcare expenditure in global GDP has increased by nearly two times in the last 20 years.
• Further, India’s out-of-pocket spending is still high as compared to other low and middle-income countries as the out-of-pocket spending in India for the year 2018-19 was recorded at 2.87 lakh crores which was equivalent to 1.52% of the GDP.
  • Also, the drastic reduction in out-of-pocket expenditure is not because of any increase in government spending or insurance coverage as seen in developed nations, but instead, it is because fewer people are seeking care which signifies existing distress in the system.
• The trends in the total per capita spending on healthcare are also a cause of concern as the per capita total health spending at current prices has increased by almost four times in the last 15 years.

Interstate disparities

The National Health Accounts Estimates for 2018-19 have revealed the large-scale disparities existing between the states in terms of healthcare spending as seen below:

• Total healthcare expenditure: the total healthcare spending in the major states varied from a low of 1.6% of the gross state domestic product to a high of 4.9%. 
• Per capita total healthcare spending: The disparities in the per capita total healthcare spending was seen to be much wider as the southern states performed better than the northern states in this aspect.
  • Example: Per capita total healthcare spending was seen to be ₹1,517 in Bihar as compared to ₹9,871 in Kerala.
• Per capita healthcare expenditure by various state governments: the per capita government spending on healthcare was seen to be higher ( ₹2,000 to ₹4,000 range) in states such as Tamil Nadu, Uttarakhand, Kerala, and Himachal Pradesh as compared to less than ₹1,000 in Bihar and UP.
• Out-of-pocket expenditure: the percentage of out-of-pocket spending in the total healthcare expenditure was also skewed across the states. 
  • It accounted for about 66% in states like Punjab, Kerala, West Bengal, and UP as compared to 33% in states like Assam, Uttarakhand, and Karnataka.

Conclusion

• The National Health Account Estimates for 2018-19 indicate that despite the marginal improvements such as the increase in the share of government expenditure and the reduction in the share of out-of-pocket spending, the Indian healthcare sector is still lagging behind in achieving global benchmarks. 
• The huge interstate disparities in healthcare and out-of-pocket spending need immediate attention. 
• The prevalence of communicable diseases along with the increase in the burden of non-communicable diseases requires the formulation of innovative programmes to address the issues.
• Furthermore, the regulatory regime must be strengthened to ensure that healthcare service providers comply with the established rules and regulations and provide crucial healthcare services at affordable prices.

2. The Growing Significance of Shanghai Cooperation Organisation

Context

• Samarkand recently hosted the 22nd leaders’ summit of the Shanghai Cooperation Organisation (SCO).
• Apart from the participation from the regular members the summit saw high level participation from countries such as Turkey, Belarus etc.
• During the summit, Iran accession to the SCO as a full member took place. 
• Belarus is also likely to gain the status of a full member of the SCO at the next summit to be held in India. 
• Turkey, Egypt, Qatar, Saudi Arabia, Bahrain, the United Arab Emirates, the Maldives, and Myanmar are all aspiring to be members of the SCO.
• The above developments are indicative of the rising importance of the SCO.

Factors contributing to the growing significance of SCO:

Depleting perception of the west led order:

• The rising importance of the SCO is an indicator of the growing strategic exhaustion with the US-led world order and an increasing number of countries perceiving the decline of the western power in global geopolitics. This has led to more and more countries looking for alternatives to the current global order ruled by the US and its Western allies.

Rising stature of China:

• China’s economic power and its potential to bring investments and infrastructure into countries are a major attractive force for the countries in the region.

Significance of the region:

• There is growing interest in the Central Asian region and Eurasian landmass given the economic potential as well as the strategic importance of the region. The SCO members together account for 30% of the global gross domestic product and this is a major advantage that this association enjoys.

Recommendations:

Guard against excessive anti-Americanism agenda:

• The member countries of SCO should guard against SCO becoming a geopolitical arena focused exclusively on anti-Americanism. This is all the more important for countries like India, which is also a part of the Quadrilateral Security Dialogue and has to do a balancing act to ensure that it does not antagonise the US by travelling an extra mile to strengthen SCO.

Focus on economic aspects:

• Rather than focussing on the Russo-China geopolitical competition with the US, the SCO should become a global economic platform. It should move towards building efficient transportation corridors connecting the Eurasian continent to the Indo- Pacific coasts. This will help reduce the existing inequalities between the coastal regions and land-locked countries by offering the world greater options for trade and commerce.

3. The Use and Abuse of Oath-taking

Context

This article discusses the significance of oath-taking virtue in governance and its eroding value in the recent past.

Oath of office in India

• An oath of office is an oath of assurance that an individual declares before assuming the duties of an office.
• All Government servants are mandated to take an oath of allegiance to the Constitution of India in the prescribed form and the oath is also to be taken by all new entrants to Government service. 
• The oath/affirmation can be made in English or Hindi or in any official regional language with which the Government servant is conversant. 
• The Third Schedule of the Constitution contains the Forms of Oaths or Affirmations for the offices of:
  • Union Ministers
  • Parliament Election Candidates
  • Members of Parliament (MPs)
  • Supreme Court Judges
  • Comptroller and Auditor General
  • State Ministers
  • State Legislature Elections’ Candidates
  • State Legislature Members
  • High Court Judges

Significance of oath-taking virtue

• The oath-taking virtue is an important part of the constitutional machinery of liberal democracies such as India.
• Oath-taking virtue requires the oath-taker to bear true allegiance and a firm commitment to norms and established principles that ensure social order.
• Oath-taking performs the function of strengthening normative commitments among the individual whose political consciousness struggles with flickering dispositions. 
• Oath-taking and abiding by the oath play a key role in defending the democratic order in society.
• Oath-taking is also important to put in place ethical and moral barricades which enhance the political efficacy of the individuals by restraining them from undertaking unethical practices.
• An oath of office makes the individuals accountable for their actions.
• Oath-taking virtue also helps ensure that individuals irrespective of their political parties abide by the values enshrined in the Constitution.

Diminishing value of Oaths among political leaders

• Experts opine that the oath-taking as an ethical barricade seems to have lost its hold over the elected representatives of the people.
• In recent times, various instances of violation of oaths can be seen for the purpose of political opportunism. 
• The increasing instances of defections among the political parties in the country are also said to be the cases for violations of oath.
• The violation of the constitutional oath by the elected representatives will have serious implications on the public aspirations and democratic discourse.
• The violations of the principles of constitutional oath will also result in diluting the assurance and trust that are embodied in the office of public representatives and officials.
• Furthermore, oath-taking is a virtue that must not have any instrumental reasons because the use of reasons as an instrument undermines the efficacy of an oath.

Conclusion

The oath-taking virtue is a pure and simple moral tool rather than a political tool which ensures that political leaders and other public officials remain committed to the normative principles enshrined in the Constitution. Any erosion in the value of the oath will only lead to the diminishing of the value of the individual/violator in the eyes of the public.

4. Leveraging Trade in High Technology for Emergence: The BRICS Experience

Context

This article examines the trends and strengths of the BRICS countries in high-technology trade.

BRICS countries

• BRICS is an acronym for the combined economies of Brazil, Russia, India, China and South Africa.
• The BRICS group comprises key emerging economies with significant influence on both political and economic global affairs.
• BRICS has become the fastest and largest emerging market economy and accounted for over 24% of the global gross domestic product (GDP) and a 16% share in global trade. 
  • Thus BRICS countries have become crucial engines of global economic growth in recent years. 
• BRICS countries have collaborated to work on key issues under the three pillars of political and security; economic and financial; and cultural and people-to-people exchanges.

Learn more about – BRICS

High-technology products (HTP) – BRICS countries

• High-technology products (HTP) account for the largest proportion of trade in terms of value and are most dynamic in nature. 
• HTPs are those that are produced as a result of a high level of innovation and R&D. 
• These products can be either final products or can also serve as intermediate inputs. 
• Revenues gained from renting intellectual assets, manufacturing and assembly HTPs have become important sources of income growth.

Global Trends in HTP and the Performance of BRICS Countries

• Various studies indicate that the production and exports of HTP in sectors such as electronic goods and computers have shifted towards emerging and developing economies.
• Between 2005 to 2016, HTP accounted for nearly 20% of the total global trade of merchandise goods. 
  • Global exports of HTP increased from 18.90% of total merchandise exports in 2005 to 20.20% in 2016.
  • Similarly, global imports increased from 18.94% in 2005 to 20.91% in 2016.
  • During this period, the contribution of BRICS countries to HTP has increased significantly.
• The value of HTP exports from BRICS countries witnessed a massive  increase from about $272.02 billion in 2005 to $775.14 billion in 2014. 
  • The imports also posted a remarkable growth from about $286.25 billion in 2005 to $622.51 billion in 2016.
• BRICS countries have their strengths in the production of high-technology goods.
  • Among the BRICS countries, China has proven capacity to be the leader in global production and trade. 
    • At present, China accounts for around 25% of global exports in HTP.
  • Countries like India and Brazil have demonstrated large-scale technological development.
  • BRICS countries also possess key advantages in areas such as pharmaceutical, biotechnology, and machinery.

Top exports in HTP from BRICS countries

• India: Pharmaceutical products, aircraft-related technologies and electrical machinery.
  • Key markets: the US, U.A.E., Singapore, Germany, the UK, France, Sri Lanka and China.
• China: Telecommunication equipment, computers, semiconductors, and electrical equipment.
  • Key markets: the US, Japan, South Korea, and Germany.
• South Africa: Aircraft and telecommunication equipment.
  • Key markets: India, the US and other least developed countries in Africa.
• Russia: Aircraft-related technologies, power generating equipment, measures and control apparatus.
  • Key markets: Ukraine, Germany and India. 
• Brazil: Aircraft equipment, electrical instruments and high-technology pharmaceutical products.
  • Key markets: the US, Argentina, Germany, China and Mexico. 

Information Technology Agreement and its Impact

• The Information Technology Agreement (ITA) was concluded by 29 participants at the Singapore Ministerial Conference of the World Trade Organization (WTO) in December 1996.
• Since then, the number of members has increased to 82 which represents around 97% of world trade in IT products.
• The ITA provides for the complete elimination of duties on Information Technology Products (ITP) and the initial agreement did not include provisions on non-tariff issues.
• The ITA also mandated members to provide all other participants with the details of developing measures and product coverage. 
• Discussions on the extension of the ITA to include coverage of more electronic products and non-tariff measures including standards started after the signing of the ITA in 1996. 
• ITA 2 – on the sidelines of the 10th Ministerial Conference of the WTO in Nairobi, Kenya in 2015, several key meetings took place to expand the ITA and eliminate tariffs on an additional list of 201 products valued at $1.3 trillion in annual trade.
• India joined ITA in 1997, China joined in 2003, Russia joined in 2013 while Brazil and South Africa are yet to join ITA.
• The impact of ITA
  • ITA has helped to enhance market access for ITP by eliminating tariffs.
  • Exports of the products covered under the ITA increased significantly from $549 billion in 1996 to about $1.7 trillion by 2015. 

• • The share of the ITP in global merchandise exports was seen to be 9.5% in 2010 which was more than the trade in all agricultural products (9.2%) and automotive products (7.2%).

• • ITA also provided a huge momentum to the expansion of global production networks (GPNs) and multinational companies (MNCs) which have increased their investments in manufacturing in low-cost countries.
  • ITA has also significantly benefited East Asian countries such as South Korea, Taiwan, Malaysia, Thailand, and Singapore by boosting the growth in trade in ITP.

Conclusion

• Despite the prevailing heterogeneous nature in terms of the size and character of the economies, the aspirations and scope of industrial development are similar among the BRICS countries.
• The newly industrialised countries of Asia which are smaller in size in national income and populations have provided a multitude of opportunities for trade and investment for the BRICS countries.
• As production and trade in HTP offer a wide range of opportunities, the sector needs proactive policy support and collaborations between emerging economies.
• The BRICS countries which are known for having converging economic interests must look to establish an alliance to promote treaties and negotiations on non-tariff measures.

Read previous EPW articles in the link.

EPW Week 4, September 2022:- Download PDF Here