18 Oct 2022: UPSC Exam Comprehensive News Analysis

E. Editorials

Category: SCIENCE AND TECHNOLOGY

1. Today’s weapon of choice, its expanding dimensions

Syllabus: Awareness in the field of IT and computers.

Mains: Cyber Space and Cyber Threat

Context: Recent arrest of a Russian national for breaching entrance exam software and use of cyberspace in the Russia-Ukraine Conflict.

Details:

• Cyber threat is emerging as a new challenge in the 21st century. It is not confined to any particular domain but it is the civilian sphere that is impacted the most. It has a cascading effect and concerns are often raised regarding the well-regulated world order.
• However, it is unfortunate that not enough attention is being paid to the cyber threat. As a consequence of the Russia-Ukraine War, the world seems to be more concerned about:
  • Military innovations based on Artificial Intelligence
  • Potential hot zones of crisis
  • Hybrid warfare
  • Weaponisation of everything
• A ‘proto-revolutionary’ outlook by the policymakers is the demand that has arisen because of cyber threats, and this is clearly lacking. The nature of present-day weapon choice is cyber and a lack of awareness on this front can be regrettable.

Cyberspace and Cyber Threats:

• Cyberspace has been defined as a superset of interconnected information and communication technology, software processes, hardware, services, data, and systems. 
• It forms a crucial aspect of national power. Cyber threats are not confined to merely one set of conflicts but are an all-pervading threat that embraces various regions and operates on different planes. Thus handling cyber threats requires both imaginative thinking and versatility. 
• Indian military demand for a cyber command seems to ignore the widely varying nature of the cyber threat. 
• Moreover, a group of experts in the United Nations is deliberating on promoting responsible behaviour of states in the field of cyberspace, but not much success has been achieved in this context.
• GREY ZONE OPERATION: Grey Zone Operation falls outside the traditional concepts of conflicts and is a modern-day battleground, particularly in regard to cyber warfare. They undermine the vitals of a state’s functioning. The convergence of emerging technologies with new hybrid usages poses various challenges to the security of institutions and nations.
  • Example of Grey Zone Warfare: A Russian was arrested in India for hacking computers involved in the conduct of entrance examinations of Indian Institutes of Technology (IITs), which is considered to be one of the most secure software in the world. It reflects that cyber-criminals are notably amplifying their ‘Grey Zone Warfare’ tactics.
• It takes a relatively long time for the general public to detect the nature and consequences of cyber-attacks because they usually look like random accidents. Sophisticated cyber forensics is required to understand the overall contours of an attack.
• Grey Zone Warfare will become the most dominant paradigm for the remaining century. It is extremely important to erect proper defences against such attacks.
• Breaching the security of entrance exam software impacts the prestige of a nation. Until now, technology was considered to be foolproof means to end malpractices, but the recent incident has raised the bar in terms of the intensity and scale of cyber attacks on other national assets and infrastructure.
• The extent to which the targeted system has been compromised is difficult to imagine until all the facts are analyzed. It has huge implications on the entire spectrum of technologically-driven aspirations including remote access functioning and regular business activity. 
• Some niche solutions against cyber intrusions are available, but they are not prominently known/used. It is very important for the authorities to take a leap of faith and install such solutions before the situation goes out of control.

For more information on cyber attacks, read here: Types of Cyber Attacks

Geopolitical Aspect of Cyber Space:

• The Russia-Ukraine crisis highlights the significance of cyberspace in the geo-political conflict. It has become an experiment for several countries that support the weaker nation against a more powerful one, through distortion of information and communication flows. Information and communication are considered to be essential in the success or failure of any war strategy. 
• This has added a new dimension (cyber) to the ongoing conflict. Though its impact on the course of the conflict is not specific, the potential for mischief is immense. 
• The Cambridge Analytica scandal and Facebook’s manipulation of personal data are some examples that show that the cyber realm is no longer safe and secure.
• Moreover, they pose ethical, legal, and real dilemmas. If left unchecked, the world will have to face serious repercussions. 

Also read: UPSC Exam Comprehensive News Analysis. March 15th, 2021: Future force for future wars

Nut Graf: Cyber threats are posing new challenges for states in almost all domains. It is emerging as a new battleground and requires urgent attention from all the stakeholders. Countries across the world should collaborate to regulate cyberspace and lay down proper rules and regulations to prevent future chaos and anarchy.

Category: ECONOMY

1. Recovery analysis that points out what India got wrong

Syllabus: Indian Economy and issues related to planning, mobilization of resources, growth, and development.

Mains: Economic Recovery post-COVID-19 pandemic.

Context: Release of World Bank Report – “Correcting Course”.

Details:

• “Correcting Course”, a report released by World Bank analyses the impact of the COVID-19 pandemic on global poverty. The findings of the report are:
  • The number of people living in extreme poverty increased by 90 million, as against the forecast. It thus implies that global poverty reached 9.3% in 2020 from the earlier 8.4% in 2019. 
  • It should be noted that this is the first time in two decades that the poverty levels have increased. 
  • Inequalities across the world have also widened. This is evident from the relative impacts felt on incomes in the richest and poorest countries.
  • Moreover, economic recovery has also remained uneven across the world.
• The report focused on the usage of fiscal policy tools in dealing with the pandemic. It was observed that poorer countries were unable to use it effectively, and thus felt the impact of the pandemic more in comparison to lesser degree impacts on richer nations. 
• The report identified three priority areas for fiscal policy to aid post-pandemic recovery. They are:
  • Targeted subsidies benefitting the poor
  • Public investment for resilience in the long term
  • Revenue mobilization that relies on progressive direct taxation instead of indirect taxes
• Similarly, a paper titled – “Fiscal policy and income inequality: The role of taxes and social spending”, also concludes that fiscal policy has various benefits in post-pandemic recovery.

India-specific findings in the report:

• Indian economy continues to be sluggish in 2022.
• The World Bank report used the Consumer Pyramids Household Survey (CPHS) by the Centre for Monitoring Indian Economy (CMIE) because the official poverty data is missing in India since 2011. 
• According to the estimate of the report, 5.6 crore people in India have slipped into poverty as the GDP of India dropped by 7.5% in the year 2020-21. 
• Moreover, the population below the poverty line was 10% in 2020.
• Initiatives taken by the government:
  • Indian Government provided a fiscal stimulus of ₹2 lakh crore which was 1% of GDP. But, incremental spending was reflected by a small fraction. 
  • The minor increase in wages (by ₹20 per day) under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was a long-pending decision but was inadequate to cope with the pandemic. 
  • The majority of India’s stimulus package was in the form of credit lines and refinancing schemes for private enterprises. These are considered to be inefficient ways to realize the goal of putting money in the hands of the general public and boosting household consumption.
  • Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY) which provided food assistance to 80 crore people in India was a good step. It was started in April 2020 and is currently estimated to cost approximately ₹3.90 lakh crore. 
  • India continued the reduced corporate tax rate (announced in September 2019). 
    • According to the Parliamentary Committee on Estimates, the decline in corporate tax from 30% to 22% cost the exchequer around ₹1.84 lakh crore loss in two fiscal years and the corporate profits increased (as per CMIE report).
• Despite the World Inequality Report terming India as a ‘poor and very unequal country’, Wealth Tax and Inheritance tax has not been reintroduced by India. Moreover, there have been repeated increases in the rates on a wide range of products (including fuel and cooking prices) which are under the ambit of Goods and Services Tax (GST). It should be noticed that indirect taxes put a disproportionate burden on the poor section of the population.

Also read: Economic Recovery Post-Pandemic

Nut Graf: The fiscal policy measures prove to be the most important instrument in dealing with the post-pandemic economic recovery. India also has taken such policy measures but they seem to be inadequate to some extent as the share of poverty has increased. The need of the hour is a course correction in fiscal policy measures.

2. Strengthening dollar shrinks foreign reserves across nations

Syllabus: Impact of policies of the developed countries on different countries.

Mains: Indian economy – Exchange rate and Foreign exchange reserves.

Prelims: Foreign exchange reserves.

Context: Strengthening of dollars in the international market.

Details:

• The exchange rate of the rupee is weakening and India’s foreign exchange reserves are also decreasing. The rupee has reached the 82-dollar mark and the foreign reserves are at a two-year low.
• The reasons for such developments are:
  • The Ukraine crisis 
  • The aggressive monetary stance of the U.S. Federal Reserve: The steep increases in interest rates have made the dollar more attractive. As a result, the dollar has surged by 15% and other currencies have depreciated.
• Foreign Exchange Reserves:
  • They consist of gold, foreign currency assets, special drawing rights (SDR) with the International Monetary Fund, and reserve tranche position. 
  • They are controlled by the monetary authority of the country and are used to absorb economic shock. They also provide confidence to the market and build the capacity to intervene in foreign exchange markets.
  • They are an important indicator that reflects the economic health and import capacity of a nation. According to a Bloomberg report, dwindling forex reserves have led to a shortage of dollars in many import-dependent countries and they are finding it difficult to purchase commodities like wheat and rice. 

For more information on Forex Reserves, read here: Forex reserves

Impact on different currencies:

• Strong currencies like the euro and pound have weakened against the dollar. 
• The Japanese yen is at a 24-year-low. It breached the 145 per dollar mark and its reserves fell by $54 billion in a span of one month.
• Several other currencies such as the rupee are also at their all-time low.
• Central banks across the world have adopted various measures to defend their currencies. Consequently, reserves have depleted by more than $100 billion each in Japan, China, Singapore, and Switzerland. The reserves of Singapore saw the sharpest decline in percentage terms and China’s reserves fell the most in absolute terms. 

Figure 1: Change in a currency’s value against the dollar in 2022 (data till October 7)

India’s Foreign Reserves:

• India has the fifth-highest reserves in the world. India’s reserves are usually a product of capital flows which implies funds through foreign investments, borrowings, etc. It is not much dependent on the current account which is the net income earned through exports of goods and services and remittances.
• India’s reserve declined by $97 billion in a span of nine months. 
• This is considerably higher than the situation of reserves during the 2008 global financial crisis which was approximately $37.3 billion and the period of crisis in 2013 nearly $16.6 billion. 
• The pace of foreign reserves depletion is a cause of concern.

Figure 2: Month-wise level of India’s forex reserves in 2008, 2013, and 2022

• Valuation Loss: The value of the euro, pound and yen weakened as the dollar strengthened. These are also part of India’s foreign reserves and their weakening caused further reductions in reserves. This is called a valuation loss.

Nut Graf: The strengthening of dollars has weakened all other currencies in the world and has impacted the foreign exchange reserves of several countries. The impact is also felt in the Indian economy. The central banks across the world are taking measures to support their dwindling economies.

Category: POLITY

1. Judicial comity over arithmetic

Syllabus: Structure, organization, and functioning of the Judiciary.

Mains: Reconsideration of lower bench decisions and associated issues.

Prelims: Facts about SC benches.

Details:

• A Constitution Bench of the Supreme Court (SC) has unanimously ruled out that a judgment given by a larger Bench will bypass the ruling of a smaller Bench. This would be irrespective of the number of judges that will constitute the majority in the larger Bench. Such laws are based on the principle that a Bench with greater strength is more probable to arrive at a correct decision.
• It is also a well-accepted fact that the decision by a superior court is binding on a lower court and that the decision by a larger Bench will hold more priority against the smaller Bench of the same court. 
• The above laws thus ensure stability and consistency in the rulings of the Indian Judiciary. 

Details associated with Bench strength:

• The cases before SC are heard and decided by a Bench of two judges called the Division Bench or a Bench of three judges called the Full Bench. 
• It is a precedent that a Bench of equal strength should not reconsider or overrule a decision of a coordinate Bench. However, it can doubt its correctness. In case of doubt or conflict between the decisions of co-equal Benches, reference is made to the Chief Justice of India (CJI), who further constitutes a larger Bench to reconsider the matter. 
• The larger Benches examine the question/correctness of the ruling and the majority opinion expressed by them becomes the final verdict. This decision is binding on the lower Benches.
• However, the issue is that the majority decision is considered the ruling of the entire Bench which also includes the dissenting judges. For instance, the correctness of a law unanimously ruled by a five-judge Bench is doubted and can be overruled by four judges of a seven-judge Bench.
• SC observed that if the number of judges is to have salience instead of the strength of the Bench, then every decision of a larger bench can be doubted and overruled on the basis of the plurality of opinions. This would topple the certainty and stability of decisions. 
  • The observation of SC in this context holds rationale, as per a study that analyzed the matter in depth.
  • But it should also be noted that a blanket adherence to the Doctrine of Precedents can also have serious consequences because the correctness of a decision would become more associated with numbers instead of reasons. 
  • Moreover, SC justified the binding nature of the larger Bench’s view saying that this view was arrived at after deliberation by more judges.

Practices across the world:

• An anomaly of this kind is usually avoided in countries like the United States and South Africa citing the reason that any reconsideration of a precedent is a matter deliberated by the entire court instead of division(s). 
• In countries like Australia and the U.K. (that are similar to India), reconsidering a precedent is a delicate and grave judicial responsibility. The act of redeciding a precedent is extremely rare and would be examined by all ‘available judges’. 

Way Ahead:

• SC should not consider the term ‘larger Bench’ in the literal sense of being merely greater in strength than the lower Bench, but should instead aim to have a quorum with a break-even or a greater majority than the lower Bench. For example, a five-judge unanimous decision should be referred to a nine-judge Bench instead of seven, so that it would in any case be decided by a majority of at least five judges. 

Also read: What is a Constitutional Bench?

Nut Graf: The matter of reconsidering a ruling of a lower bench should be seriously considered and the correctness of a judicial decision should be given more importance than the strength of benches. India can also learn from the best practices across the world to evolve a fair and robust mechanism to deal with such a delicate matter.

Read the previous CNA here.