India-US Relationship: Revitalizing And Elevating Ties
G.S. Paper 2, International relations
Poor progress under the DTTI issue
For India, the larger security environment is assuming complex dimensions with a US-China trade-war looming, US-Russia relations taking a nose-dive and China’s Belt and Road master plan unfolding in the Indo-Pacific.
Another cause of concern is the emerging Moscow-Beijing axis and Russia’s courtship of Pakistan.
What is the need of the hour for India?
Given that nations have neither permanent friends nor permanent enemies, only permanent interests; it is time for India to consider a policy reappraisal.
How is the evolving bonhomie between India and US?
A bipartisan consensus in Washington about enlisting India as a strategic partner led to then-President George Bush in 2005 making an offer which New Delhi could not refuse.
The unprecedented US-India Civil Nuclear Agreement, which followed in 2008, accorded India the “de facto” status of a nuclear weapon state without signing the Non Proliferation Treaty.
Parallel developments followed in the defence arena.
The 2004 Agreement on Next Steps in Strategic Partnership was followed by a Defence Framework Agreement in 2005 and the 2012 Defence Technology and Trade Initiative (DTTI), envisaging the transfer of advanced technologies to India.
In 2016, India was accorded the status of Major Defence Partner by the US Congress.
How about the poor progress under the DTTI?
The DTTI has made little actual progress because of divergent objectives.
While India seeks technology, the US remains focused on trade.
India’s defence capability has benefited only from $15 billion worth of hardware — comprising patrol-aircraft for the navy, transports and helicopters for the IAF, and howitzer guns for the army — purchased under the US Foreign Military Sales (FMS) scheme.
What is the issue?
A major impediment in the Indo-US defence relationship has been India’s reluctance to sign the “foundational agreements” required by the US to enhance defence ties.
After discussions assuaging India’s justifiable apprehensions about a compromise of strategic autonomy as well as the security of military information, the Logistical Exchange Memorandum of Agreement was signed in 2016.
Two others — the Communications Compatibility and Security Agreement, and the Basic Exchange and Cooperation Agreement — haven’t been signed yet due to bureaucratic reservations.
A delay in signing these will deprive India of high-tech equipment that should accompany US hardware and prevent the sharing of useful geospatial information between the two militaries.
What is the word of caution at the moment?
The word of caution at the moment is that our time has not yet come.
Indians must beware of hyperbole obscuring reality in the bilateral discourse.
American offers of “help to make India a great power” and declarations that India is “not just a regional power, but a global power”, should arouse skepticism.
Undoubtedly, India is destined to assume its rightful place in the world order but a reality check will tell us that our time has not yet come.
The vision of a “Super India”, offered by the promise of its growing economy, illusory “demographic dividend” and a nuclear arsenal, is gradually receding in the face of harsh domestic realities.
On the other hand, China, with five times India’s GDP, is surging ahead to attain economic, military and technological parity with the US.
Aiming to be Asia’s sole hegemon, China has armed Pakistan and enlisted it as a surrogate, thereby containing India within a South Asian “box”.
For India to attain its full economic and strategic potential, it will need an insurance against hegemony.
The choices before India are few and a partnership with the US appears a pragmatic and realist option at this juncture.
What is the way ahead?
The DTTI must serve to bolster design and production capabilities in defence.
Instead of pursuing symbolism, the DTTI should facilitate a transfer of technologies that have eluded our engineers and scientists.
In order to elevate the Indo-US relationship to a strategic level and resolve many outstanding bilateral issues, Trump and Modi had agreed to establish a “2+2” dialogue between the respective defence and foreign ministers.
As and when the “2+2” dialogue does take place, the Indian side should remind their US interlocutors that in the past three decades the USSR and Russia have, amongst other items, leased two nuclear submarines, sold an aircraft-carrier, and transferred technology for a supersonic cruise missile to India.
So, if the US is to deliver on tall promises, some serious re-thinking may be required.
Ayushman Bharat – what & why
The centre has introduced “Ayushman Bharat” as an ambitious mass health insurance scheme, that intends to cover about 50 crore people.
But its implementation will be more challenging than other initiatives as it would involve huge funds and infrastructure creation.
What is Ayushman Bharat?
Ayushman Bharat is the new, flagship health initiative of the government.
It has two dimensions.
First, it aims to roll out comprehensive primary health care with Health and Wellness Centres (HWCs) serving as the people-centric nuclei.
A nationwide network of 1.5 lakh HWCs will be created by transforming the existing sub-centres and primary health-care centres by 2022.
This will constitute the very foundation of New India’s health care system.
The second dimension of Ayushman Bharat is the National Health Protection Scheme which aims to provide health cover of rupees 5 lakh per family per year for hospitalisation in secondary and tertiary care facilities.
In one go, given the ambitious size of the package, 40% of people, neonates to young and old, will have access to facility care for almost all the medical and surgical conditions that could occur in a lifetime.
The programme will cover half a billion people and would align with what the State governments are doing already, with significant resources coming from the Centre.
Many State governments would extend the benefits to additional beneficiaries through their own resources so that ultimately the population covered for catastrophic expenses could be two-thirds of India’s population, if not more.
This mission enables increased access to in-patient health care for the poor and lower middle class. The access to health care is cashless and nationally portable.
The scheme would enable a weaver in a remote village to be able to walk into a hospital for a gall bladder stone surgery or a coronary stent without having to pay the hospital.
Treatment will be provided by empanelled public and private hospitals.
Private hospitals will have to agree to terms such as package rates, adherence to standards and guidelines, ethical practice, respectful care and client satisfaction, and transparency.
Ayushman Bharat will spur increased investment in health and generate lakhs of jobs, especially for women, and will be a driver of development and growth. It is a turning point for the health sector.
What is the medi-care landscape in India?
A nation’s development and growth is gauged by the health of its population.
But even after 70 years of independence, 80% of the Indian population is not covered under any health insurance scheme.
Additionally, the cost of medi-care is very high in comparison with the average income of the population, which makes it unaffordable for many.
Hence, the announcement of the ‘National Health Protection Scheme’ (NHPS) under ‘Ayushman Bharat Programme’, in the Union Budget 2018-19, is timely.
While the government has intended to provide free care to about 40% of the population at one go, it is impossible to do this with the existing facilities.
Notably, this has been touted as the world’s largest government-funded healthcare program and the sheer scale of the proposal is intimidating.
What is the scale of infrastructure enhancement required?
Worldwide, most governments have achieved near universal coverage by spending somewhere between 5-12% of their GDP.
For countries with large population, it takes a minimum of 5-10 years to achieve 100% coverage as health cover can’t be extended at a stretch.
It has been estimated that to achieve universal health coverage by 2022, Indian government would need to allocate 3.7-4.5% of GDP for health.
This is almost 4 times the present 1.4% and the also the bed-to-population ratio needs to be almost doubled from the current 0.9 (per 1000 people) to 1.7.
It is to be noted that considerable improvements in primary care would also result in reduction of the hospitalisation rate.
Also, we would need an additional 9 lakh graduate doctors for primary care and around 1.2 lakh specialist doctors for secondary and tertiary care services.
What are the challenges?
The hospital business, particularly the multi-speciality tertiary care business, is capital-intensive with a long gestation period.
While infrastructure is already severely short (particularly in Tier II and Tier III cities), even existing operating assets aren’t delivering the expected returns.
Hence, the government should provide adequate finances for the sector’s development and also provide incentives and tax benefits.
Another challenge is that health is a state subject and hence requires states to contribute 40% of the expenditure for Ayushman Bharat.
Notably, most states have a poor fiscal situation, and several operational state health schemes which will also have to be aligned with the central initiative.
The model for empanelling providers would be critical to the success of NHPS and a shared space for both public and private care providers is ideal.
Even in the previous public health insurance schemes of some states, the private healthcare providers have been facing huge challenges.
Particularly, improper procedure for empanelment, cost fixating mechanisms and inordinate delay in reimbursement to hospitals are some issues.
Also, a proper mechanism for standardisation of services across the spectrum is absent and the current ‘National Accreditation Board for Hospitals’ (NABH) certification covers only some hospitals.
What should be done?
NABH needs to categorise hospitals into Entry level, Progressive level and Accreditation level to cover all hospitals.
To improve clinical and operational efficiencies, standardisation in clinical practice and other processes needs to be implemented.
National Costing Guidelines and a standard costing template should be used for calculating reimbursement packages.
Framing of referral protocols, adoption of electronic health record standards and clinical audits in all hospitals are other aspects that need to be done.
Successful medical claims management is also very important under any insurance programme and fraud control mechanisms should also be done.
Integration of technology at each level of the healthcare continuum such as tele-medicine, health call-centres, tele-radiology etc, is needed.
For strengthening the healthcare professionals, skilling, re-skilling and up-skilling programmes for existing as well as additional workforce can be done.
A Grievance Redressal Forum should be created to ensure timely resolution of complaints without intervention of civil or consumer courts.
The government should also encourage and recognise transparency, self-regulation and third party ratings and reward clinical outcomes.
Road Accidents in India: Causes and concerns
23 children and many others died in a school bus crash in Kangra, Himachal Pradesh.
18 labourers died in a lorry accident in Maharashtra.
9 people died in a truck mishap in Uttar Pradesh.
Such every day incidences calls for fixing road design and enforcing safety protocols in India.
What are the concerns?
Nationally around 1,50,000 people are dying and several hundred thousand are injured annually due to accidents.
The data on Indians killed or injured in road accidents put out annually by the Centre do not reflect the picture.
It obscures the human impact of the loss on national and State highways, as well as urban and rural roads.
There is lack of expert help to conduct a technical investigation into an accident.
The executive agencies such as the Police and Public Works Departments thus fall short in this regard.
The present investigative machinery does not have the capability to determine faults.
Thus the officials responsible for bad road design and construction and lax traffic managers often escape liability.
For accident victims, there is the heavy burden of out-of-pocket expenditure on medical treatment.
The government had promised to address this issue through a cashless facility.
But it has not been able to do so.
As, the requisite amendments to the Motor Vehicles Act have not yet been passed.
What has been done by the Supreme Court and what is the response of the Centre and States?
The SC has been trying to shake governments out of their apathy.
It constituted the Committee on Road Safety in 2014 at this end.
It has also made several specific and time-bound directions.
The response of the Centre and the States has been far from responsible.
Safety black spots on roads were identified on the basis of fatal accidents between 2011 and 2014.
But only around 190 out of 790 such spots had been rectified.
Funds had been sanctioned for another 256.
The rest are either under State jurisdiction or awaiting sanction.
Mere incremental approaches such as these result in worrying national record on road fatalities.
What are the statistics?
The Motor Vehicles (Amendment) Bill, 2016has been listed for consideration and passage in the current Budget Session of Parliament.
India, as a signatory to the Brasilia Declaration, intends to reduce road accidents and traffic fatalities by 50% by 2022.
In this context, some data from the year 2015-16 on road accidents, causes of accidents, and motor vehicle third party insurance is mentioned below.
5,01,423 Total road accidents
5,00,279 Persons injured
Rise in number of vehicles has outpaced increase in road length
National Highways have the most number of accidents/km of road length
Goa has the most number of accidents per lakh population; which is five times the national average
Kerala has the most persons injured per lakh population.
Tamil Nadu has the most fatalities per lakh population
Urban areas have more accidents, fatalities and injuries per lakh persons
Most accidents occur during evening and morning rush hours
Most victims are 18 to 34 years old
9% of accidents involve drivers without a license
Two wheelers are involved in over a fourth of all accidents
77% of accidents occur due to driver’s fault
Of which 47.9% are due to over speeding & 3.3% due to drunken driving
Some other stats:-
77,116 (15.4%) accidents due to overloaded vehicles
57,083 (11.4%) of all accidents are hit & run cases
1,61,843 (32.3%) accidents occur during bad weather
98,134 (19.6%) of all accidents are head on collisions
7 crore (>50%) vehicles are without third party insurance
Number of insurance claims made in 2012 almost doubled from 2009
With unlimited liability, premium for third party insurance has been increasing rapidly
What needs to be done?
The accidents should be probed by qualified transport safety experts.
This is crucial to determine the systemic shortfalls.
Only a scientific investigation system can stop the routine criminalizing of all accidents.
There needs to be a report on the mishaps, to identify lapses, if any.
And the remedial road engineering measures should be taken up accordingly.
The SC has directed that the performance of district committees should be reviewed periodically.
This should ideally follow mandatory public hearings every month.
This is for the citizens to record road risk complaints.
The much-delayed National Road Safety and Traffic Management Board should be formed.
The provision for State governments to participate in this has to be materialized.
Road safety depends on enforcement of rules with zero tolerance to violations thus officials should be made accountable for safety.
Defence Production Policy (DPrP) 2018
In pursuance of Finance Minister’s 2018-19 budget announcement related to an “industry friendly Defence Production Policy 2018”, the Ministry of Defence (MoD) has released a draft policy on March 21, 2018.
Two Defence Industrial Corridors were announced recently :
Between Chennai and Bangalore via Coimbatore
Between Agra-Aligarh, Lucknow-Kanpur-Jhansi-Chitrakoot
Mission, Vision and Objectives of the policy:
The mission is to promote the Make in India initiative in the defence sector and create a world-class arms manufacturing base, fulfilling not only the larger goal of self-reliance but also the requirements of friendly foreign countries.
Its vision is to put India “among the top five countries of the world in aerospace and defence industries,” but the timeframe within which this is to be achieved has not been mentioned.
The key objectives of the policy include development of a strong defence industry leading to higher self-reliance.
Other objectives include an increase in domestic arms sales to Rs 170,000 crore ($26 billion) by 2025, with around one-fifths of it –Rs 35,000 crore ($5.0 billion) – coming through exports. The policy also intends to make India a “global leader in cyberspace and AI [artificial intelligence] technologies.”
In order to reduce the current high import dependency, the draft policy identifies 13 sets of weapon systems/platforms whose development and manufacture would commence latest by 2025.
These 13 sets of weaposn include: fighters, helicopters, warships, missile systems, ammunition and explosives, land systems, and electronics.
Considering the present production, budget and exports of Indian defence, the above mission, vision and objectives seem unrealistic.
Salient features of the DPrP 2018:
The draft policy talks of further ease of doing business for the industry including the Micro, Small and Medium Enterprises (MSMEs);
Pruning the existing list of items subject to industrial licence;
Increasing the FDI cap under automatic route from the current 49 to 74 per cent for certain niche technologies;
Streamlining the offset policy to attract investment and facilitate the speedy and transparent execution of offsets;
Rationalising the taxation system to support domestic manufacturing;
Providing financial assistance of up to Rs 3,000 crore each to Special Purpose Vehicles created for the development of two defence industry corridors that were recently announced, and up to Rs 100 crore each towards common testing facilities created by the industry;
Setting up of a corpus of Rs 1,000 crore to fund start-ups to meet specific defence R&D requirements;
Creating the ‘necessary mechanism’ to harness the potential of AI and Robotics for defence use; and
Creating an Intellectual Property Cell in DDP to facilitate the registration of intellectual property rights;
Setting up an Aeronautical University on a 50:50 cost sharing basis between Hindustan Aeronautics Ltd (HAL) and the government; and
The possibility of setting up an “autonomous National Aeronautical Commission, in line with Nuclear and Space commissions.”
Challenges in the way of DPrP 2018:
No clear-cut production list: The DPrP 2018 lack a clear-cut comprehensive production list of the weapons and equipments it wishes to manufacture. Though, the draft 2018 policy has identified 13 different sets of items for indigenous production, these are mostly generic names and includes items which are under production or cleared for production in the near future.
Various stakeholders and their varied interests: It is difficult to reconcile the varied interest of various defence agencies like DRDO (Defence Research and Development Organisation) and the Acquisition Wing of the MoD. The Defence Procurement Procedure (DPP) has so far attempted to reconcile the divergent interests of these stakeholders, mainly through the prioritised procurement categories that give preference to domestic industry over direct import.
Trust deficit of Private sector: It does not fully address the private sector’s trust deficit with the government, even though the former is expected to play a major role under the Make in India initiative. It is high time that the MoD appointed a dedicated additional secretary level official to allay such mistrust, and look after the private sector’s genuine interests.
Inefficiency and lack of accountability of Public Sector: The DPrP does not address the issues of inefficiency and lack of accountability on the part of the DRDO, DPSUs and OFs, which, being the mainstay of Indian defence industry for the last several decades, are responsible for much of the indignity of the country’s poor track record in attaining self-reliance.
Budgetary constraints: The draft DPrP faces stiff budgetary constraints that may not allow the policy’s promised investments to fructify in a time bound manner. In all, the draft policy talks of investments worth over Rs 77,000 crore by 2025—–which includes nearly Rs 70,000 crore as additional investment to increase domestic production. In all likelihood, these investments will come largely from the defence budget, either directly or indirectly. To accommodate such a large investment, the defence budget has to provide an extra Rs 11,000 crore or so per year for next six to seven years. However, this may not be feasible,
Other routes of Finance: Some innovative means include: corporate bonds, disinvestment proceeds, and monetisation of some defence assets. The DPrP must invite funds through such financial instruments, as it is difficult to fill up budgetary constraints otherwise.