25 Jul 2022: UPSC Exam Comprehensive News Analysis

B. GS 2 Related

Category: GOVERNANCE

1. Indian sports bodies under scandal and scrutiny

Syllabus: Important Aspects of Governance, Transparency & Accountability

Mains: Role of State in sports governance

Context: Recently several sports organizations in India have come under various controversies.

What are the issues?

• The Executive committee of All India Football Federation(AIFF) was dissolved by the Supreme Court for violating the Government of India’s sports code. The administration of AIFF is done by the court mandated Committee of Administrators (CoA).
  • It was mandated that by the end of July, AIFF’s constitution should be amended with necessary provisions and the elections completed by September 15. If not, India would face a FIFA ban.  
• In recent communication between the International Olympic committee (IOC) and Indian Olympic Association (IOA) , IOC has expressed concerns about the multiple legal proceedings that caused delays and created unnecessary complications in the elections.
• Hockey India is also  being administered by the CoA as the Delhi High Court found Hockey India’s executive board in violation of the National Sports Code. 
  • The International Hockey Federation has advised hockey India to conduct elections based on the rules laid down by the Indian government before the 2023 World Cup hosted by India in January.  
• In February this year, the Delhi High court appointed Gita Mittal as the chairperson of the CoA to administer the Table Tennis Federation of India, which was suspended following an inquiry into the match-fixing allegations raised by one of India’s leading players.
• The Supreme Court in 2017 had appointed a CoA in place of BCCI for Cricket administration reforms as suggested by the Justice R.M. Lodha committee.
• Recently, the  CBI registered a case against the former President of International Hockey Federation and IOA  for alleged misappropriation of Hockey India’s funds.

What is the Sports Code? 

• The Government of India in 2011 introduced the National Sports Development Code of India to ensure good governance practices in the management of sports at the national level without interfering in the autonomy of the national sports bodies.
• The National Sports Code laid down restrictions regarding age and tenure of the administrators.
• Violation of the code can put respective federations under a CoA. 

Way Forward:

• By clearly outlining the rights and duties of the administrative bodies, proper checks and balances should be put in place. 
• They should be bought under the ambit of RTI to make the system transparent.
• A separate ‘Corporate Functions’ group can be formed to address the issues of financial irregularities and revenue management.
• Auditing by government agencies will subject these bodies to greater public scrutiny and bring in greater accountability.

Nut Graf: Given the close association of sports with national pride and the influence it has on the psyche of the country, the state’s role is imperative in sports governance. However, this role has to be subtle so that it does not violate the Olympic charter. India can follow the US model of sports administration which is completely open with a minimum role of state in sports governance.

E. Editorials

Category: INTERNATIONAL RELATIONS

1. MC12 over, it’s ‘gains’ for the developed world

Syllabus: Important International Institutions, agencies and fora – their Structure, Mandate.

Prelims: WTO; Bali peace clause

Mains: Outcomes at the MC12 and concerns for India

Context:

• Recently concluded 12th Ministerial Conference (MC12) of the World Trade Organization (WTO).

Loss for India at the MC12:

• The article expresses concerns over the fact that India found itself on the losing side at the 12th Ministerial Conference negotiations of the WTO, whereas the European Union (EU) and some other developed countries were able to get most of the recently concluded MC12.

TRIPS waiver:

• As against the comprehensive TRIPS waiver demanded by India and South Africa for the production of vaccines, therapeutics and diagnostics, the final agreement pushed by the developed countries block led by EU at the MC12 amounts to only cosmetic simplification in certain procedural aspects of compulsory licensing in patent rules and could be of very little help in ensuring access to quality and affordable vaccines and medicines for all. Hence this outcome represents a big gain for the developed countries and a loss for developing countries like India.
• In October 2020, India and South Africa put forth a proposal seeking to temporarily suspend the protection of intellectual property rights to help aid in the production of vaccines, therapeutics and diagnostics to help overcome the COVID-19 pandemic. 

For detailed information on this issue refer to the following article:

https://byjus.com/free-ias-prep/upsc-exam-comprehensive-news-analysis-may07-2021/#Intellectual%20property%20waiver%20for%20Covid-19%20vaccines

Environment issues:

• The developed economies led by the EU have managed to create a window to pursue negotiations on issues related to trade and environment at the WTO. This could adversely impact the economic growth prospects of developing countries and remains a major issue of concern.

Issue of stock holding:

• The Indian Minister of Commerce and Industry, Piyush Goyal had set the issue of having a permanent solution to public stockholding as being India’s top most priority. Despite having the support of more than 80 developing countries, this issue has not found mention anywhere in the ministerial outcome. 
• The WTO members have termed food security issue being multi-dimensional and have called for a comprehensive solution. This marks a set-back for India which had been successful to earn a respite in the form of the Bali Peace clause.

Fisheries subsidy issue:

• In the area of fisheries subsidies, India has been able to get only a reprieve of two years to have suitable regulatory mechanisms in place to monitor fish catch and reporting. The failure to do so will result in the prohibition of subsidies to traditional fishermen in India. This would adversely impact the livelihood of fishermen in India.

Taxation of electronic transmission:

• India has also failed in securing the right to raise revenues by taxing electronic transmissions. This robs India of the potential to raise tax revenues.

Recommendations:

• The outcomes of the MC12 are indicative of the difficult path ahead for India at the WTO negotiations. The article calls on India’s negotiators to learn lessons from the dynamics at the MC12, and make course corrections to protect India’s interest both in the short as well as long terms.

Nut Graf: The outcomes of the MC12 of the WTO have not been satisfactory for India wherein issues of concern for India were either overlooked and some agreements are detrimental to India’s interests.

Category: ECONOMY

1. Weighing in on India’s investment-led revival

Syllabus- Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

Mains- Importance of gross fixed capital formation in an economy; Scenario in India.

Context:

• Speaking at the third G20 Finance Ministers and Central Bank Governors meeting in Bali, the Indian Finance Minister, Nirmala Sitaraman noted the importance of public capital expenditure programmes in ensuring India’s long-term economic growth prospects.

Background:

Success of public investment-led economic growth:

• Public investment-led economic growth has been observed in India.
• To overcome the challenge of economic contraction brought out by the Asian financial crisis of 1997, the then government initiated large scale public infrastructure projects in road building. It initiated Golden Quadrilateral project aimed at linking metro cities with high-quality roads and the Pradhan Mantri Gram Sadak Yojana to ‘provide good all-weather road connectivity to unconnected habitations’ in rural areas. 
• The increase in public investment apart from helping create productive assets for the Indian economy also helped crowd in private investment. 
• These initiatives helped in an economic revival in India in the 2000s wherein the GDP grew at 8%-9% annually.

Concerns/challenges:

• The article expresses serious doubts over the public investment led economic growth in India based on the following arguments.

Expansive definition of investment:

• Though the fixed investment to GDP ratio stood at an impressive 32% in 2021-22 (Ministry of Finance’s Monthly Economic Review), the article argues against going by the face value of this number. The budgetary definition of investment refers to financial investments (which include purchase of existing financial assets, or loans offered to States) and not just capital formation which is a better indicator of the expansion of the productive potential in the economy.

Lag in investment:

• Though there has been an upturn in the aggregate fixed capital formation to GDP ratio in the recent times, the rate is still lower than that observed in the early 2010s. 

Investment distribution:

• While there has been an upturn in gross capital formation and investments in India in recent years, the disaggregation of such investment by sector, types of assets and mode of financing are better indicators of the productive potential of such investments 
• In recent times, the shares of agriculture and industry in fixed capital formation/GDP has fallen while the share of Services’ sector has risen. Also within the services sector, the rise has been most notable in transport sector and within transportation sector, it is mostly roads. Thus there has been a very lop-sided growth in investment when it comes to sector wise investments. 
• The services sector is not very employment intensive. This is of concern for a developing economy like India where inclusive growth acquires great importance. Also, for healthy domestic output growth, there is a need for balance between “directly productive investments” (in farms and factories) and infrastructure investments. 
• The share of manufacturing sector in the investment ratio has witnessed a substantial fall in the last few years. With declining investment share, industrial output growth rate has fallen in India. This has resulted in India’s import dependency going up.
• The public sector’s share stands at 20%, while the private sector still accounts for a substantial share in investments. This is indicative of the limited impact of public expenditure.

Lack of domestic capacity:

• The lack of domestic capacity for essential raw industrial materials and capital goods remain major challenges for the Indian economy. 
• This excessive dependency will render India vulnerable to any global and regional economic disruptions.

Other challenges:

• The prospects of sustaining investment recovery are likely to get harder with a depreciating rupee and rising inflation

Nut Graf: While the attempts to ramp up public investment to aid economic revival in India are welcome, there continues to remain doubts over the efficacy of such a policy given the associated concerns and challenges when it comes to public investment in India.