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The recent announcement of India-Middle East-Europe Economic Corridor (IMEC) has the potential to make India an Asian hub in global supply chains.

About Supply Chains:

• It is described as global production networks, production fragmentation, or global value chains — refers to the geographical location of stages of production (such as design, production, assembly, marketing, and service activities) in a cost-effective manner.
• Evolution of Supply Chains: Global supply chains emerged as the dominant model in industrial production around the 1980s.
  • This shift from local and regional to global supply chains occurred gradually over the last century.
• Scope: Supply chains are prevalent in both simple (e.g., textiles, food processing) and complex industries (e.g., automobiles, electronics, pharmaceuticals).

Factors Driving the Shift in Global Supply Chains Away from China:

• Rising Wages: China’s labor costs have been steadily increasing over the years, reducing its cost advantage as a manufacturing hub. 
• Supply Chain Bottlenecks: China’s rapid economic growth led to supply chain bottlenecks, particularly in transportation and logistics. 
• Regulatory Concerns: Foreign firms operating in China have faced increasing regulatory scrutiny. 
  • Recently, the Beijing office of Deloitte Touche Tohmatsu was fined 211.9 million yuan ($30.8 million) on charges that it failed to adequately audit state-owned China Huarong Asset Management Co.
• Trade War with the US: The trade tensions and tariffs resulting from the trade war between China and the United States have created uncertainties and risks for companies with supply chains heavily reliant on China.
  • In 2018, the Trump administration initiated a trade dispute with Beijing. This led to a series of actions, including the imposition of tariffs by the United States on over $300 billion worth of Chinese goods. In retaliation, China imposed import levies on approximately $100 billion worth of American goods.
• Significant Export Declines: Mainland China and Hong Kong represent 20% of world exports of intermediate goods.
  • In the last quarter of 2022:
    • Exports from mainland China decreased by 15% year-on-year.
    • Hong Kong experienced a more substantial decline, with a 27% year-on-year drop in exports.
    • The United States, comprising 8.1% of world exports of intermediate goods, saw a 3% decline in shipments.
    • Japan, with a 4% share, faced a 13% decrease in exports.

India’s Emergence as an Attractive Supply Chain Hub:

• Competitive Factors:
  • Lower Costs in Southeast Asia: India, like Southeast Asian countries, offers cost advantages to foreign companies, including cheap labor and fiscal incentives.
  • Potential Complement to China: India can complement China as a manufacturing hub, benefiting from technology transfers and creating value-added jobs.
  • Sophisticated Manufacturing Sectors: India’s automotive, pharmaceutical, and electronics assembly sectors are already advanced, positioning them as potential winners in the global supply chain landscape.
    • This is seen in the ramped-up manufacturing of iPhones in the country, early technology transfer in the product cycle of the technologically advanced Mercedes Benz EQS to India, and Foxconn Technology Group developing a chip-making fabrication plant in Gujarat. 

• Global Perspective:
  • Shifting Perception: India’s ranking as the fifth-largest importer of intermediate goods in 2022 Q4 suggests a changing perception of its supply chain potential.
  • Export Growth Potential: India has the potential to double its 1.5% share of world exports of intermediate goods, indicating its growing role in global supply chains.
    • The countries ahead of India are China (23.4%), the US (16.2%), Germany (9.1%), and Hong Kong (6.0%).
  • Service Sector Opportunities: India’s service sector, including IT, back-office operations, financial services, and logistics, holds growth potential.
• Trade Policy Initiatives:
  • Bilateral Trade Deals: The Indian government’s emphasis on preferential trade through bilateral agreements with partners like the UAE and Australia.
    • The UAE-India Comprehensive Economic Partnership Agreement entered into force in May 2022.
    • Australia-India free trade agreement (FTA), and talks are ongoing to conclude the full FTA by the end of 2023.
    • Negotiations for a UK-India and EU-India FTA are in process.

Benefits for South Asia:

• Regional Stability and Economic Growth: As the focus on China+1 increases, India has a historic opportunity to promote industrialisation in South Asia, which would stabilise the region, increase jobs, and make it less vulnerable to Chinese enticements.
• Spillover Effects: Market-led spillovers from India’s supply chains can naturally benefit neighboring countries like Bangladesh and Sri Lanka, leading to job creation and economic growth.
• Entrepreneurship and Innovation: Leveraging India’s dynamic start-up culture and fintech capacity can attract young entrepreneurs from other South Asian nations, fostering innovation and entrepreneurship.

Challenges in Integrating India into Global Value Chains:

• Domestic Policy Challenges: Enterprises in India grapple with complex tax policies and procedures. The substandard quality of infrastructure poses significant obstacles.
  • Uncertainty in trade policy adds to the challenges of scaling up production in the country.
• Quality and Institutional Support: Indian firms struggle to meet international quality standards. They often lack the necessary institutional support.
  • Inadequate access to essential information further hinders their integration into Global Value Chains (GVCs).
• High Logistics Costs: High logistics costs in India, accounting for around 13-14% of GDP, are impacting its competitiveness adversely compared to developed nations where logistics costs are lower (8-10% of GDP).

Strategies for India’s Future in Supply Chains: Learn from China’s experience

• Promotion of Export-Oriented FDI:
  • Maintain an open-door policy for foreign direct investment (FDI) in manufacturing.
  • Offer competitive fiscal incentives and create modern special economic zones through public-private partnerships.
  • Simplify business processes through digitalization of tax, customs, and administration.
  • Pursue high-quality free trade agreements to facilitate global trade.
• Smart Business Strategies for Local Companies:
  • Small and mid-sized enterprises should act as industrial suppliers and subcontractors to larger exporters.
  • Consider business strategies such as mergers, acquisitions, and alliances with multinationals and large local companies.
  • Invest in domestic technological capabilities to meet international standards in terms of price, quality, and delivery.
• Caution in State Intervention:
  • Exercise caution when replicating China’s state interventionist model, as it carries the risk of government failure and cronyism.
  • Engage with think tanks to gain insights into effective policies and practices.
  • Focus on targeted interventions in new industrial activities with comparative advantages.
  • Improve coordination between central and state governments.
• Investment in Education:
  • Invest in tertiary-level education, particularly in science, technology, engineering, and mathematics (STEM) fields to enhance the skill base.
• Policy Initiatives for South Asia: The Indian government should consider two policy initiatives to promote regional supply chains.
  • Make in South Asia Programme: Expand the “Make in India” initiative to a “Make in South Asia” program. 
    • Offer fiscal incentives to Indian manufacturers to expand into Bangladesh and Sri Lanka, focusing on industries like food processing, textiles, apparel, and automotive.
  • Comprehensive FTAs: Establish comprehensive bilateral Free Trade Agreements (FTAs) with Bangladesh and upgrade the Indo-Sri Lanka FTA.
  • Strengthen regional rules-based trade and investment to integrate these countries into supply chain activities centered on India.

Conclusion:

• Unless India creates channels for South Asia, it has no offer for the Global South. The fresh supply chains opening up with the US are a good place for India to start its global integration journey, Neighborhood First.

News Source: The Indian Express

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UNICEF’s representative hailed India for making great progress in making plans and budgets more responsive.

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• India today is looked upon as a leader in gender-responsive budgeting, especially in South Asia.
• Throughout the G20 Presidency, India has kept the spotlight on investing in the SDGs, and on gender equality.

About Gender Responsive Budgeting:

• Gender budgeting is a fiscal strategy to achieve equality between women and men by focusing on how public resources are collected and spent.
• GRB is good Practice: Helps to understand the implications of fiscal decisions on gender.Not a new budget process but rather integration of gender approach into all stages of the budget cycle.
• Gender Budgeting and the Budget:
  • The Budget is an instrument for fulfilling the obligations of the state set by the government in allocating resources.
  • Most governments have expressed a commitment to gender equality objectives and to gender mainstreaming.
  • Existence of Gap: Between policy statements and the ways in which governments raise and spend money.
    • GRB initiatives can help to close these gaps, ensuring that public money is raised and spent more effectively.

GRB in India:

• GRB began in India in 2005-2006 as a fiscal innovation, every year since then the Ministry of Finance has been publishing “Gender Budget Statements” along with the Union Budget.
• Gender budgeting in India encompasses four sequential phases viz. knowledge building and networking, institutionalising of the process, capacity building, and enhancing accountability.
• In the 2023-24 Union budget, the Finance Minister emphasised ‘nari-shakti’ (woman power) and shifted the focus from women’s development to women-led development.

Significance of GRB:

• Achievement of Gender Equity/Equality – The Constitution of India not only grants equality to women, but also empowers the State to adopt measures of positive discrimination in favour of women.
  • For example, Article 15(3) provides that the state may not prevent itself from making laws that provide special provisions for women and children, Article 42 seeks to ensure humane work conditions and provide for maternity relief, and Article 51A (e) imposes on every citizen by way of fundamental duty the responsibility to renounce practices derogatory to the dignity of women.
• Improving Literacy: The Government has been successfully running the Vidhyashakti program with focus on female literacy.
• Monitoring The Achievement Of Policy Goals: GRB is a tool to monitor the achievement of the goals of the National Policy for Empowerment of Women 2001 and other policy goals.
• Economic Growth: India has also promoted female entrepreneurship through initiatives such as Start-up India, the Pradhan Mantri Mudra Yojana etc. These have had a positive impact on women’s control over resources and savings. 
  • The Bharatiya Mahila Bank Ltd, first of its kind in the banking industry in India and the Pradhan Mantri Jan Dhan Yojana besides promoting financial inclusion are emerging as a catalyst for gender justice and equality.
• India as Role Model: According to the UNDP, India offers a leading example of gender budgeting in the region. 
  • Other countries in South Asia including Nepal, Sri Lanka, Pakistan and Bangladesh, also began working towards the development of a similar gender budgeting model.

Challenges Still Remain:

• Education: According to the World Bank India report, while male literacy rate in the country is at 84.7 percent, for females, it is 77 percent.Economic Opportunities: According to the Periodic Labour Force Survey 2021-22, only 32.8 percent of women between 15-29 years were part of India’s labour force in 2021-2022, while men were at 77.2 percent.
• Political Representation: Despite accounting for around half of India’s population, women do not have proportionate numbers in decision-making bodies.
  • Women comprise only 14.44 percent of the 545 members of the 17th Lok Sabha.
  • In 2022, only 14 percent of all Secretaries in the Indian Administrative Service were women.
• Bringing Concrete Changes: Falling short of providing a sustainable mechanism due to multiple factors including lack of commitment of fiscal policymakers, governmental bureaucracies, and weaknesses in the structure and implementation of the initiatives.  
• Low Budgetary Allocation: Despite having been in operation for almost two decades, budgetary expenditure on it remains a mere 4-5 percent of the total allocation in Union Budget 2023-24 and it also does not encompass some of the most vital schemes that affect women.
  • For example, the Jal Jeevan Mission has not been reported in the gender budget.
• Quality Gender Disaggregated Data: The government agencies who do not capture gender-disaggregated information from their schemes and programmes may not be able to assess the targeted expenditure towards the empowerment of women and girls.

Way Forward:

• Beijing Declaration and Platform for Action: It recommended devising mechanisms and taking positive action to enable women to gain access to full and equal participation in the formulation of policies.
• Gender Budgeting and Revenue Generation: It is also important to review the revenue generation aspect of the Budget.
  • For example, the Sukanya Samridhi Yojana would fetch a yearly interest rate of around 9 percent and provide income tax deduction to girls.
• Transparency: A transparent mechanism to explain how weights are assigned to various schemes leading to their placement in either part of the gender budget statement should be introduced.Gender-Disaggregated Data: Building gender-disaggregated data and integrating it with the outcome budget will help in better evaluation and focused allocation. 
  • It is also important to go beyond gender binaries and mainstream the transgenders and other communities into policy decisions.
• Institutionalisation: Further institutionalising GRB within all ministries using a comprehensive strategy that includes in-depth gender analysis, identification of priority areas, proper planning, and setting of short- and long-term goals.
• Expansion of Scope: GRB should also be used in those areas which have an inseparable gender component or indirect impact on women’s welfare. 
  • For instance, bringing uninterrupted power supply and water-on-tap to homes can reduce the time that many Indian women devote to unpaid household chores. 

Conclusion:

• Gender-responsive budgeting has proven to be an efficient tool to bridge gaps and achieve gender equality by allocating funds to areas where inequalities are more persistent. However, India must evaluate its GRB exercise not only to uphold its gender commitments but also to ensure that women’s concerns and needs are mainstreamed in fiscal policy making. 
• It is important to identify that fiscal remedy alone is not enough when it comes to addressing the socio-economic and structural needs stemming from gender. 

News Source: The Economic Times

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A recent study by Cornell University, United States, warns ‘Artificial Light Pollution’ affects Coastal Marine Ecosystems.

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• It also advocates for expanding our perspective to encompass the impact of light pollution on coastal marine ecosystems.

Light Pollution: Light pollution, or artificial light at night, is the excessive or poor use of artificial outdoor light, and it has several forms: 

• Glare or over illumination, which is direct light from the fixture.
• Sky glow or the human-created brightening of the night sky.
• Light trespass that occurs when light hits areas not intended to be lit.
• Clutter, which occurs when lights are grouped in an excessive or confusing pattern.

Impact Of Light Pollution:

Marine Organisms:

• Marine species that evolved to natural light cycles now face interference in hormonal cycles, behavior, and reproduction.
• For Example: Artificial light impacts sea turtles significantly.
  • Female sea turtles struggle to find dark nesting spots due to artificial light, affecting egg-laying.
  • Hatchlings are disoriented by inland lights instead of moonlight, leading to dehydration and starvation.

Wild Life:

• Artificial light can wreak havoc on natural body rhythms animals.
• It is also impacting animal behaviors, such as migration patterns, wake-sleep habits, and habitat formation.
  • For example: Birds guided by moonlight during migration get confused, lose their way, and often die.
  • Large numbers of insects (main food source of birds) are drawn to artificial lights and are instantly killed upon contact with light sources that affect the food chain.

Humans:

• Nocturnal light interrupts sleep and confuses the circadian rhythm—the internal, twenty-four-hour clock that guides day and night activities and affects physiological processes.
  • For Example :  production of the hormone melatonin, which is released when it is dark and is inhibited when there is light present. 
  • results in sleep deprivation, fatigue, headaches, stress, anxiety, and other health problems.

Sky Glow Pollution: 

• High levels of sky glow obscures the stars in the night sky.
• Astronomers raised concern that it reduces their ability to view celestial objects.

Mitigation Measures: 

• Changing Nature of Artificial Light:
  • LED lighting, with its short-wavelength emissions, penetrates deeper into water, altering the nature of artificial light.
  • Recommendations include using red light, which doesn’t penetrate water as deeply, and erecting barriers to shield coastlines from artificial light.
• Awareness and Education: Raise public awareness about the detrimental effects of light pollution on ecosystems, human health, and astronomical observations.
• Research and Data Collection: Urgent need for more extensive data collection across a wider geographic area and various organisms to understand the full impact of artificial light on marine ecosystem

Way Forward: To address Light Pollution it is essential to balance the need for outdoor lighting with the preservation of natural darkness for the benefit of both ecosystems and human well-being.

Source: DownTOEarth

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Recently, the Union Ministry of Tribal Affairs (MoTA) issued guidelines for the conservation, management, and sustainable use of community forest resources (CFR) has raised concerns among experts.

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• The new guidelines aim to enhance coordination and enforce the implementation of the Forest Rights Act (FRA) of 2006. 

• They emphasize the formation of the District Level Committee (DLC) to determine rights over forest resources, a role traditionally held by Gram Sabhas.

Concerns:

• Concerns Raised by Experts:
  • Experts express concerns about the government’s willingness to embrace tribal diversity and culture.
• Weaken the authority of Gram Sabhas: 
  • New Guidelines Shift Control from Village Assemblies to Government
• Lack of Community Involvement:
  • Experts highlight that the new guidelines do not adequately incorporate community-driven ideas and provisions.
  • This has created confusion and conflicts, as community perspectives are not sufficiently represented.
• Unacknowledged Committees:
  • Previously, committees were formed to draft CFR guidelines in 2019, but the drafts were not accepted and remain undisclosed.
  • Questions are raised about the quality of rights granted and the contribution of forest dwellers to forest management and improvement.
• Call for Comprehensive Evaluation:
  • Experts advocate for a comprehensive evaluation of CFR to understand its effects on forest dwellers and the sustainability of forest resources.
  • The new guidelines are viewed as government-driven rather than community-oriented, potentially undermining cultural diversity among tribal communities.

Way ahead: For effective forest conservation, reforestation and recovery, we must strengthen our local forest governance mechanisms.

Source: DownToEarth

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A new Lancet Commission on TB reveals concerns about the global fight against tuberculosis, as TB deaths have increased for the first time in 20 years.

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• The report highlights that the decline in TB mortality rates has slowed down, with two-thirds of TB deaths occurring in eight countries, including India (33%), Indonesia (10%), and Nigeria (8%).
• The report follows up on the 2019 Lancet Commission on tuberculosis but states that the targets set by the UN High-Level Meeting in 2018 have not been met. 

Major Highlights of report:

• India reported 5.04 lakh (504,000) TB deaths in 2021, compared to 5.52 lakh (552,000) in 2010, with a peak of 4.62 lakh (462,000) deaths in 2017. 
• Impact of Covid-19: TB deaths increased from 1.4 million in 2019 to 1.6 million in 2021 due to the impact of COVID-19.
• According to Dr. Soumya Swaminathan (Co-author of the Report) insufficient case finding and diagnosis are significant challenges in ending TB. (approx. one-third of people with TB were undiagnosed and untreated in 2022).

Major Recommendation Of Commission: 

• The report calls for the adoption of new tools to revolutionize TB prevention, diagnosis, and treatment.
• Expanding access to molecular diagnostics and AI-assisted chest x-ray technology, as well as promoting newer, shorter 1/4/6 treatment regimens.
• These regimens offer one-month, once-weekly, and six-month treatment options for TB, including drug-resistant TB.
• Nutritional support: Research in India shows that better nutrition reduced infection rates by nearly 50% and lowered mortality by nearly 60%.

Way Forward: We need human-friendly, stigma-free, need-based psychosocial interventions along with clinical interventions as TB is not just a medical but a social disease as well.

Source: The Indian Express

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