The Hindu Daily Editorials ( 04th July 2019) Mains Sure Shot
GS-3
Question- Critically analyse current economic downside and suggest the way ahead.(250 words)
Context- Maiden budget of Finance Minister, Nirmala Sitharaman.
The present scenario-
● The GDP growth is faultering. It fell to 5.8% in fourth quarter of 2018-19.
● There is a consumption slowdown. The sale of automobiles has been sliding since October last year.
●Sales volume are down by 18%
●Real estate and construction, one of the biggest job creators are down, which are a direct cause of credit freeze in the market now.
Challenges-
● The economy needs a stimulus and the Budget has to push for growth while ensuring fiscal responsibility i.e. its fiscal deficit target.
●This balance is difficult to achieve because in India tax revenues do not offer enough support for a stimulus package (which means that the money that the government makes through taxes is not enough to meet its extra expenses. so to stimulate it will have to borrow which will hit the fiscal deficit target).
The question is whether the government should go for stimulating consumption and temporarily keep aside fiscal deficit target? And if yes then what is the best way to do it?
● Because government borrowing and spending again has some subsidiary consequences like-
1. It might crowd out private sector borrowers and push up market interest rates at a time when monetary authority is driving rates down.
2. It might lead to inflation.
● Or should it be in the form of even higher spending on infrastructure that will have definite fiscal spinoffs?
●And in such case what will be its effect on welfare spending? Will the government cut its welfare spending?
●The government has already announced expansion of the PM Kisan Samman Nidhi Yojna that will cost 87,500 crore rupees this fiscal year. And there are many other schemes that need to be funded.
So, what is the way out?
1. Going for asset sales which include selling off certain government companies.
2. One-time transfer from RBI reserves, which is under consideration of Bimal Jalan Committee. But the committee will submit its report after the budget.
3. 5G spectrum sale options But here too not much can be expected because the telecom companies are themselves suffering from combined effects of past excesses and bruising competition in the market.
4. So the only option that is viable is of borrowing, which means exceeding the fiscal deficit target of 3.4%. But this has its own negative effects as discussed earlier.
5. One good thing is SEBI’s recent directives to the mutual fund companies to invest at least 20% of their liquid scheme investment in government securities. So this opens a new way of getting money but it is not enough.
●Also there is a question of credit rating agencies like Standard & Poor’s and Moody’s. The government needs to assure them of its fiscal discipline and that these measures are temporary aberration.
Need-
●At this backdrop the viable option can be to readjust the income tax slab and let more money be in the hands of the consumers.
● A decrease in interest of housing loans to boost real estate sector.
● And though the choice to borrow and spend has some negative consequences but in the current circumstances this may be inevitable.
The Hindu Daily Editorials ( 04th July 2019) Mains Sure Shot
GS-2 or GS-3
Question- In the backdrop of the U.S. cyberattack on Iran, can India conduct similar retaliatory attack in future against Pakistan?Discuss ( 200 words)
Context – U.S- Iran tension.
Why in news?
● When the US drone was shot down by Iran’s Islamic Revolutionary Guard Corps, US cybercommand conducted online attacks against Iran.
● It is speculated that the strikes targeted Iran’s military command and systems such as those that control Iran’s missile and rocket launchers.
What is India’s standard response to an attack?
●Presently the response of India has been air strikes and ground based surgical strikes, or stand-off strikes from inside the borders and covert operations.
● Before we include another type of operation namely cyber-attack in this group it is important to keep 3 criteria’s in mind- pre- emption, non-military nature and deterrence.
1. Pre-emption – i.e. India should be able to argue and justify any such operation on international forums.
2. Non-military nature- It should be able to make clear the operational aim has never been to target the Pakistani people or even Pakistan’s military.
3. Deterrence – The operation should create such an impact that it creates deterrence.
Is it possible against Pakistan?
● The US cybercommand was specifically aimed at targeting Iran’s military installations. But if India conducts a cyber strike against Pakistan’s military command or systems it will be termed as one against Pakistan and not non-military nature.
● So, the first two i.e. pre-emption and non-military nature will be viewed through the perspective of attacking Pakistani military and Pakistan in essence. so, it will render them futile.
● Further, a counter strike against Pakistan can call for counter-cyber strikes. So instead of deterrence it will lead to escalation.
● So, in such a situation all or most of the criteria won’t be met. Hence, a cyber strike is not a feasible retaliatory option for India at present.
Possibility-
● Today most of the terrorist groups use computers and internet for propaganda. We don’t know the ability of Indian armed forces to conduct such cyber operation and that should be maintained else it takes away the element of surprise.
हिन्दी