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

Prelims and Mains focus: about the key findings of report and challenges ahead

News: The 2020 edition of the Military Balance Report was released by the International Institute for Strategic Studies (IISS).

Key findings of the report

• Global spending on defence rose by four percent in 2019, the largest growth in 10 years, led by big increases in the US and China.

• The rise was fuelled by growing rivalries between big powers, new military technologies and rumbling conflicts from Ukraine to Libya.

• Beijing's military modernisation programme -- which includes developing new hard-to-detect hypersonic missiles -- is alarming Washington and helping drive US defence spending.

• The increase alone in US spending from 2018 to 2019 -- $53.4 billion -- was almost as big as Britain's entire defence budget.

• Spending rose as economies recovered from the effects of the financial crisis, but increases have also been driven by sharpening threat perceptions.

• Both the US and China increased spending by 6.6 percent, to $684.6 billion and $181.1 billion respectively.

• Europe -- driven by ongoing concerns about Russia -- stepped up by 4.2 percent, but this only brought the continent's defence spending back to 2008 levels, before the global financial crisis saw budgets slashed.

• The collapse last year of the Cold War-era Intermediate-Range Nuclear Forces (INF) treaty and the doubts surrounding the renewal of the New START arms reduction treaty, which expires in 2021, have contributed to the mood of instability.

• Russia, pursuing its own modernisation project, has already announced the entry into service of its own hypersonic missile system. Dubbed Avangard, the system has been tested at speeds of Mach 27, or roughly 33,000 kilometres (20,500 miles) per hour.

• Elsewhere, spending in Asia is booming -- growing more than 50 percent in a decade, rising from $275 billion in 2010 to $423bn in 2019 in real terms as the continent's economic success has allowed countries to invest more in their militaries.

Today’s challenges

• In this environment of continuous, evolving and even accelerating competition, the response options for Western states might include integrating increasingly novel technologies or spending more to stay ahead. Alternatively, they could accept a levelling playing field as a new norm and adapt their strategies instead. This relates not just to conventional military power but also to cyber capability and the consistently contested information environment.

• A related challenge is that of competitor states now using strategies to achieve effect by operating below the threshold of war. Examples include Russia’s initial moves into Crimea and its denials over involvement in eastern Ukraine, its use of chemical weapons in the UK and its alleged election meddling. Iran’s activities are another example. Its ability to conduct warfare through third parties has ‘given Iran a strategic advantage over adversaries reliant on conventional capabilities.

• Capabilities routed through third parties, disinformation campaigns or kinetic actions that are denied outright are hard to tackle with conventional military responses. They place a premium not just on developing the right military and intelligence capabilities, but on boosting the adaptability and resilience of equipment and military forces and, more broadly, of societies and political decision-making. The same holds true when dealing with developments in new military or militarily-relevant technologies.

• In all cases, working effectively with partners and making use of relevant international frameworks, have the potential to act as a force multiplier. However, while conflict still involves hard military power, it is now more diffused than before. It now involves a greater number of actors and more capabilities, some of which are not traditionally ‘military’, and clear outcomes in peace, war and the grey space between are, accordingly, less certain.

National Institute of Public Finance and Policy (NIPFP)

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 highlights of the assessment report; about NIPFP; about finance commission

News: The Union Territory of Puducherry was entitled to Rs.2,731 crore for the current fiscal from the Centre than the actual allocation of Rs.1,545 crore, according to an assessment report prepared by the National Institute of Public Finance and Policy (NIPFP), a Central government organisation.

Background

The assessment was done against the backdrop of Union Territories not coming under the purview of the Finance Commission recommendations for devolution of funds

What did the assessment report say?

• Central allocation to Puducherry is in the form of grants to meet gap in resources and financing the schemes. The Union Territory was eligible to get larger share of the revenue.

• Puducherry has a higher revenue collection compared to the Gross State Domestic Product (GSDP). It was higher than most States. It also runs a small revenue deficit and a fiscal deficit of less than 3%.

• The debt to GSDP ration has been around 3%. A considerable part of the deficit was met through open market borrowings. If the UT was part of the Finance Commission, the allocation would have been higher than the current allocation. In case the region was part of the 14th Finance Commission Recommendations, the exchequer would have been entitled to a sum of Rs.2,731 crore for 2019- 20.

• Puducherry was eligible to get around Rs.1,186 crore extra during the current financial year and also more than a meagre sum of Rs.1,703 crore which was set aside for the region by the Centre for 2020-21.

• Disparity in allocation to Puducherry and New Delhi. While in the case of the national capital, the Centre incurred the expenditure for salary to the police and pension amount, no such favour was done to Puducherry.

Revenue shortfall in Puducherry

• Puducherry’s finances were expected to experience a revenue shock post-July 2022 when the Centre stops compensating for GST loss. Currently, the territory gets around Rs.150 crore as GST compensation bi-monthly.

• The transition to GST was detrimental to Puducherry’s revenue as the region was a manufacturing State. The addition of services under GST has failed to compensate for the revenue loss.

About NIPFP

• The National Institute of Public Finance and Policy (NIPFP) is a centre for research in public economics and policies.

• Founded in 1976, the institute undertakes research, policy advocacy and capacity building in areas related to public economics.

• One of the major mandates of the institute is to assist the Central, State and Local governments in formulating and reforming public policies by providing an analytical base.

• The institute was set up as an autonomous society, at the joint initiative of the Ministry of Finance, Planning Commission, several State governments and distinguished academicians. It is registered under the Societies Registration Act, 1860.

• In its 44 years of existence, the institute has emerged as a premier think tank in India, and has made significant contribution to policy reforms at all levels of the government. It has maintained close functional links with the Central and State governments all along, and has built up linkages with other teaching and research institutions both in India and abroad.

• Although the institute receives an annual grant from the Ministry of Finance, Government of India, and various State governments, it maintains an independent non-government character in its pursuit of research and policy.

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 objective and the key features of the scheme; E-Balbharti project

News: Maharashtra’s Education Minister, on 14 Feb 2020, inaugurated the ambitious Virtual Classroom and Studio scheme. The scheme will be implemented in 725 schools across the State.

Key features of the scheme

• Objective: To enhance access and quality of education in Maharashtra’s rural hinterland by using cutting-edge technology that connects students from schools in the State’s backwater areas with a number of subject experts to answer queries and facilitate learning more effectively.

• The State government has also come up with audio books in multiple languages with chapters in the syllabus read out by voice artistes to help visually challenged students as part of this project.

• 195 schools had ‘logged in’ in the first phase of the scheme, while the remaining 530 schools would be connected in stages.

• Experts from diverse fields — besides regular subjects in the curriculum — including sports, industry and politics will be on hand to impart lessons to children. The aim is that the benefits being availed by students in schools in developed urban pockets like Pune must be availed by children in rural areas like Latur.

• The virtual classroom, with better guidance from experts, will ultimately help in reducing students’ stress prior to examinations.

About E-Balbharti project

• The scheme is to be implemented under the E-Balbharti project of the Maharashtra State Board of Textbook Production and Curriculum Research (Balbharti).

• The project is being implemented by the Valuable Group using its V-SAT based interactive technology. Three Studios have been set-up in the old building that hitherto housed the State Institute of Educational Technology, popularly known as Balchitravani, to establish contact with the schools.

• In May 2017, Balchitravani, which was set up by the Maharashtra government to bolster children’s education in the State and remained a fixture in Pune’s educational fabric for more than three decades, shut shop after the erstwhile Bharatiya Janata Party-led government claimed it lacked funds to support it. The defunct institute has since been absorbed by the Balbharati as part of its e-learning arm.