Impact of Coronavirus on India’s imports from China

Syllabus subtopic: India and its Neighborhood- Relations.

Prelims and Mains focus: about coronavirus outbreak and its impact on India-China trade; global impact

News: Indian companies are bracing for a major supply shock as the rapid spread of the coronavirus infection in China has forced several factories there to extend a shutdown.

Background

• First reported in December 2019, the coronavirus has killed 811 people in China and two outside the country, eclipsing the global toll from the outbreak of SARS that started in China almost two decades ago. The accumulated number of infections in the country has risen to 37,198.

• While the spread of the infection to India has been low, with three cases reported in Kerala, the disruption at factories as well as travel curbs to contain the spread are bound to hit local businesses dependent on Chinese factories.

What is its impact on India’s imports?

• Typically, factories in China slow down production from late January due to the Lunar New Year holiday period, prompting many importers to stock up in anticipation of the closures. While this has muted the immediate business impact of the coronavirus outbreak, an extended disruption could derail the best-laid plans. Already many factories have deferred their plans to March 2020 amid fears that workers coming in close contact with those infected will lead to a spurt in cases of the disease.

• India’s economy has become highly dependent on China especially because of an exponential expansion in trade linkages over the past two decades. Trade with the world’s second-largest economy has expanded more than 18 times to $87 billion in 2018-19 since 2002-03, when China was grappling with the SARS virus.

• Despite the government’s Make in India initiative, nearly 80% of components required for making phones in India come from China. Since orders to factories in China are placed months in advance, manufacturers there will not only have backlogs due to factory closures, but also won’t be in a position to take new orders unless the situation improves.

• A prolonged prevalence of the coronavirus in China would hurt India’s imports far more than exports.

• Indian importers were hoping that the situation would improve by mid-February, but the situation appears to be getting worse.

Impact on automobile sector

• If the virus threat goes out of control, then all major automakers and their suppliers worldwide would get affected. The automotive supply chain is so integrated that if the supply of one part stops, the entire vehicle assembly stops.

• Electrical and electronic parts such as sensors, power controls, engine control units, motors and batteries are imported from China.

• For the Indian automotive industry, the outbreak could not have come at a worse time as manufacturers are transiting to the stringent Bharat Stage-VI emission norms amid a sales slump. If there is a shortage of parts, manufacturers’ investments and planning to comply with the emission norms from 1 April would be disrupted.

• Chinese manufacturers supply to most of the top parts makers in India, which means the production of vehicles may slow down in the next few months. Some of the product supplies that were in transit have already been hit due to port closures in China.

Impact on the FMCG sector

In anticipation of the supply crunch, Indian retailers of consumer goods have started negotiations to source goods locally.

Impact on the pharmaceutical industry

• One of the biggest concerns about the China lockdown is that it could lead to a shortage of medicines and a spike in prices. In 2018-19, Indian companies imported bulk drugs and intermediates worth about $2.4 billion from China, which was a majority of the total imports.

• There are reports of specific API (active pharmaceutical ingredient) prices having gone up. However, the situation is expected to ease in couple of months. The industry might have to prepare with alternatives otherwise.

Impact on global firms

Global firms to are feeling the heat. Facebook, for instance, has warned that it was expecting the coronavirus to impact the production of its Oculus Quest virtual reality headsets. Some even expect delays to hit global icons such as Apple’s iPhone.

Syllabus subtopic: Welfare Schemes for Vulnerable Sections of the population by the Centre and States and the Performance of these Schemes

Prelims and Mains focus: about the scheme and its objectives; performance of various departments under the scheme

News: Four years after the Accessible India Campaign was launched, officials said at a recent review meeting that the number of buildings of the Central Public Works Department (CPWD) across the country, and websites of the Ministry of Electronics and Information Technology (MeitY) were not known.

Figures across various departments

• During the review by Social Justice and Empowerment Minister on December 19, 2019, a Department of Empowerment of PwD official said the “total buildings either under maintenance or owned by CPWD are not known”, minutes of the meeting recorded. All these buildings, along with other projects being implemented by other Ministries, are supposed to be made accessible by March 2020.

• Ministry of Housing and Urban Affairs (under which the CPWD operates): 787 out of 889 buildings had been made accessible so far, while approval for 13 buildings had been received from various Ministries and work would be started. For remaining 89 buildings, approval of respective Ministries is still awaited.

• Government websites: the target is of making at least 50% of the sites accessible. However, the quantum of websites i.e. total no. of government websites is not known. The Social Justice and Empowerment Minister directed the MeitY to find out the total number of the Central and State government websites.

• Transportation:

1. Airports:While there had been progress on making airports accessible, all aspects of air travel, including aircraft and buses used to ferry passengers from terminals, needed to be compatible. All 35 international airports and 55 domestic airports under the Airports Authority of India had been made accessible by providing ramps, and had accessible toilets and provision for audio and Braille commands in lifts.

2. Railways: 7,000 wheelchairs have been provided at major stations and 22 stations had online booking of wheelchair facility.

3. Roads: The Ministry of Road Transport and Highways informed that only 3.6% of buses had been fully accessible. There has been slow pace in making buses and bus terminals accessible.

About Accessible India Campaign

It is the nationwide flagship campaign of the Department of Empowerment of Persons with Disabilities (DEPwD), Ministry of Social Justice and Empowerment to make public offices, transport and websites accessible to persons with disabilities (PwD),

• Aim: to make a barrier free and conducive environment for Divyangjans all over the country. It was launched by PM Modi on International Day of Persons with Disabilities on 3rd December, 2015.

• The program comes with an index to measure the design of disabled-friendly buildings and human resource policies.

• The initiative also in line with the Article 9 of the (UN Convention on the Rights of Persons with Disabilities) to which India is a signatory since 2007.

• The scheme also comes under Persons with Disabilities Act, 1995 under section 44, 45, 46 for equal Opportunities and protection of rights which provides non-discrimination in Transport to Persons with Disabilities.

The campaign has been divided into three verticals:

1. Built Environment
2. Transport
3. Information & Communication Technology (ICT) ecosystem.

• The Built Environment Accessibility component of Accessible India Campaign entails following targets:

1. Completing accessibility audit of at least 25-50 most important government buildings in 50 cities and making them fully accessible by the end of this year
2. Making 50% of all the government buildings of NCT and all the State capitals fully accessible by December 2018
3. Completing accessibility audit of 50% of government buildings and making them fully accessible in 10 most important cities/towns of States not covered in targets (i) and (ii) by December 2019.

• Transport accessibility component of Accessible India Campaign aims to make all international airports fully accessible immediately and domestic airports by March 2018. Out of 32 international airports 25 have been provided with accessibility features namely, ramps, accessible toilets, lifts with braille symbols and auditory signals.

• Accessibility of Information and Communication System is another crucial pillar of Accessible India Campaign. The target set under this vertical is to make at least 50% of Central and State Government websites accessible by March 2017.

Syllabus subtopic: Welfare Schemes for Vulnerable Sections of the population by the Centre and States and the Performance of these Schemes

Prelims and Mains focus: about the findings of the report; about NCRB

Context: The details of compensation awarded to survivors of trafficking have been ascertained on the basis of RTI applications filed by five lawyers across the country and the outcome of the response compiled in the form of report titled “UNCOMPENSATE VICTIMS”, which was released in Kolkata recently by Sanjog, a technical resource organisation that works to combat trafficking and gender-based violence.

Background

The Section 357-A of Code of Criminal Procedure (CrPC) has provisions to compensate victims who suffered because of a crime. In 2012, following the national outrage over the Nirbhaya gang-rape and murder case, the government announced Rs.1,000 crore fund to be used to combat sexual violence against persons – children or adults.

Findings of the report

• Highlighting the poor status of compensation awarded to survivors of human trafficking in the country, response obtained through RTI queries from 25 States and seven Union Territories reveal that between March 2011 and April 2019 only 82 such victims were awarded compensation.

• However, between 2011 and 2018, the total number of cases of human trafficking recorded in the country, according to NCRB reports, was 35,983. This means, only 0.2% of all survivors of human trafficking received the compensation announced by the government in the last eight years. Among the 82 survivors who were awarded compensation, only 77 received the relief amount.

• State-wise details of the compensation awarded to the survivors show that 47 persons were awarded relief in Delhi, followed by 17 in Jharkhand, eight in Assam, three in West Bengal, two each in Andhra Pradesh, Karnataka and Meghalaya. In Haryana, one survivor of trafficking was awarded compensation between 2011 and 2019.

• The Nirbhaya fund is being used in the Victim Compensation Scheme – a national scheme to compensate survivors of rape, acid burns and trafficking among other forms of violence — for the last few years. The amount of compensation to victims of trafficking varies from State to State. In 2018, the Supreme Court directed NALSA (National Legal Services Authority) to frame a standardised victim compensation scheme.

• The study also reflects the number of trafficking survivors who applied for the victim compensation scheme to their respective legal services authority. While 107 individuals applied under the scheme, in 102 cases between 2011 and 2019, courts directed the authorities to release compensation. Twenty-eight persons applied for compensation in West Bengal, followed by 26 in Karnataka and Jharkhand. Fourteen persons in Assam applied for compensation while seven did the same in Delhi-NCR.

• The study also suggests grave inconsistencies on the part of legal services authorities, which have provided the data. The data on Delhi is discrepant, with more survivors receiving compensation than those awarded compensation. Manipur’s 2019 victim compensation scheme does not even have an entry in the schedule corresponding to human trafficking.

• The study also suggests that there remains a lack of information provided to survivors on victim compensation, lack of initiative on the part of legal services authority, low investment on part of legal aid that results in very few survivors having access to compensation.

• In their study the researchers tracked the details of at least three case studies where the trafficking survivors had received compensation. Survivors were able to apply only when they were informed and a private lawyer was involved in assisting them in filing application for victim compensation.

• From their rescue till rehabilitation, the survivors are in touch with multiple agencies but none of them take any steps to help them get compensation. Researchers also pointed out that the “DLSA and SLSA’s response to the claims has been slow, and they hold the survivors’ claims with suspicion – often putting the burden of proof on the survivors themselves”.

Syllabus subtopic: Issues Relating to Development and Management of Social Sector/Services relating to Health, Education, Human Resources.

Prelims and Mains focus: about the cell and its objectives; concerns raised against the move

News: The Kerala government is reportedly mulling over a proposal to set up a vigilance wing in the Health Department.

Objective of setting up the Vigilance cell

• Optimally, the vigilance wing will detect private practice by medical education service doctors, crack down on quackery and unearth ethically dubious financial relationships, if any, between State doctors and diagnostic clinics, pharmacies and health care firms in the private sector.

• It will also monitor health care advertising and flag false claims aired by health care companies to mass-market pharmaceutical and Ayurveda drugs without a doctor’s prescription as off-the-shelf cures for a wide range of ailments.

• The wing will also prosecute self-styled healers who exploit their influence on social media to fuel unhealthy scepticism about the government’s vaccination programmes.

Functioning

• The proposed vigilance cell would be under the Home Department and headed by a police officer.
• However, in all medico-legal issues, domain inputs will be sought from the medical community itself.

Concerns raised against the move

• The proposal appears not to have gone down well with the medical community. Many have objected to the government singling out doctors for intrusive vigilance inspections.

• Some felt the government has raked up the old proposal to arm-twist doctors against striking for wage revision.

• Some felt that the timing of the move was suspicious as it comes at the fag end of the LDF’s term.

Syllabus subtopic: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Prelims and Mains focus: about the key highlights of the policies mentioned; about J&K Reorganisation Act

News: The Jammu and Kashmir (J&K) government is highlighting good quality air and low crime rate in the newly created Union Territory to attract investors.

Background

• Internet has been snapped in the Union Territory since August 5, 2019 when the Home Minister moved two bills in the Rajya Sabha to revoke the special status under Article 370.

• Following Supreme Court directions, 2G mobile connectivity was restored in J&K in January with access only to 301 government-approved websites.

• Investment opportunities in 14 sectors in the Union Territory were unveiled at an investor conference in the national capital in January.

Highlights of J&K Information Technology (IT) Policy 2020

• The J&K administration is offering an incentive to IT companies to operate in three-shifts and to facilitate women working during the night by provided transportation and security.

• At least 15% of “plug and play” premises in designated IT parks will be reserved for women entrepreneurs.

• The policy document says J&K contributes only 0.1% of the total cognisable crimes under the Indian Penal Code.

• Two IT parks with an area of five lakh square feet are being developed in Jammu and Srinagar which will have “dedicated and uninterrupted broad band connectivity and wi-fi access.”

• The policy says that “as a special dispensation for IT units, the land allotment would be decided on top priority” and the government would encourage private sector participants to become Internet service providers to enable high speed Internet connectivity in all panchayats of J&K.

J&K Real Estate Policy highlights

• It states that a vast land bank owned by the government would be disbursed to “private developers” through a transparent bidding process. The Home Minister had told a delegation from J&K on September 3, 2019 that “only government land would be used to establish industries, hospitals and educational institutions” and “nobody's land would be taken away.”

• The existing land acquisition laws would be amended to incorporate the landowners as stakeholders in the housing development. The authorities without going into the compulsory land acquisition will either partner with private players on equity basis or facilitate land assembly by acquisition or pooling through private players as done by other development authorities in other States.

• The developers will have to reserve 20% dwelling units in group housing projects for economically weaker section and lower income groups.

• The UT of J&K is offering 100% exemption on stamp duty, land use charge, permission, construction and processing fee for the housing for Economically Weaker Section and LIG groups.

• The government will persuade the National Housing Bank, HUDCO, financial institutions, commercial banks and insurance sector to extend the network of operations in J&K to provide affordable housing credit to people.

Syllabus subtopic: Functions and Responsibilities of the Union and the States, Issues and Challenges Pertaining to the Federal Structure, Devolution of Powers and Finances up to Local Levels and Challenges Therein.

Prelims and Mains focus: about the SC judgement on reservations in promotions/judgements and related constitutional provisions

News: The Supreme Court has ruled that states are not bound to provide reservation in appointments and promotions and that there is no fundamental right to reservation in promotions.

Constitutional provisions regarding reservations/promotions in jobs

• Article 16(4) empowers the state to make any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the state, is not adequately represented in the services under the state.

• By way of the 77th Amendment Act, a new clause (4A) was introduced to Article 16, empowering the state to make provisions for reservation in matters of promotion to SC/ST employees if the state feels they are not adequately represented in services. The Supreme Court had upheld the amendment as constitutional.

What was the case about?

The Supreme Court was deciding a group of appeals pertaining to reservations to SCs and STs in promotions in the posts of Assistant Engineer (Civil) in PWD, Uttarakhand.

What did the SC say?

• Article 16 (4) and 16 (4-A) are in the nature of enabling provisions, vesting a discretion on the state government to consider providing reservation, if the circumstances so warrant.

• It is a settled law that the state government cannot be directed to provide reservation for appointment in public posts.

• Similarly, the state is not bound to make reservation for Scheduled Castes and Scheduled Tribes in matters of promotions.

• However, if they (state) wish to exercise their discretion and make such provision, the state has to collect quantifiable data showing inadequacy of representation.

• If the decision of the state to provide reservations in promotion is challenged, the state concerned shall have to place before the court the requisite quantifiable data and satisfy the court that such reservations became necessary on account of inadequacy of representation of Scheduled Castes and Scheduled Tribes in a particular class or classes of posts without affecting general efficiency of administration.

• The state can form its own opinion on the basis of the material it has in its possession already or it may gather such material through a Commission/Committee, person or authority. All that is required is that there must be some material on the basis of which the opinion is formed. The court should show due deference to the opinion of the state. Such opinion is not beyond judicial scrutiny.

• On the requirement for data collection, the court said this is only to justify reservation to be made in the matter of appointment or promotion to public posts, according to Article 16 (4) and 16 (4-A) of the Constitution. As such, collection of data regarding the inadequate representation of members of the Scheduled Castes and Schedules Tribes is a prerequisite for providing reservations, and is not required when the state government decided not to provide reservations.