The Aakhya Weekly #25 | The G20 Comes to India
The Aakhya Weekly #25 | The G20 Comes to India
In Focus: India Takes G20 Reins
In the aftermath of the Asian financial crisis of 1997, a group of 20 leading economies was conceived in Berlin in 1999, and the G20 was born. The idea was to expand the then G7 and make more inclusive decisions to have a larger impact on the world economy.
G20 is a forum for economic, financial and political cooperation comprising 19 of the world’s largest economies and the European Union. It accounts for nearly 80 percent of global economic output, 75 percent of global exports, and 60 percent of the world’s population. Every year, member states, guest states and international working groups get together to work towards global cooperation over a series of more than 50 meetings. This concludes with the Leaders’ Summit, where a final declaration is signed by which the leaders commit themselves to address and collaborate on the issues addressed. The Group does not have a permanent secretariat. However, it is supported by what is known as the G20 Troika – previous, current and incoming G20 presidencies.
Meetings at G20 follow two tracks- the finance and the Sherpa. Led by Finance Ministers and Central Bank Governors, the finance track focuses on collaboration in financial and monetary policies, which may include issues such as investment in infrastructure, fiscal policy, inclusion and financial regulation. Parallelly, the Sherpa track is led by a personal emissary of the leaders and covers non-financial issues, such as political commitment, the fight against corruption, development, gender equality, trade and energy, among others. The Sherpa oversees negotiations over the course of the year, discussing agenda items for the Summit and coordinating the substantive work of the G20.
On December 1st 2022, India officially assumed its presidency over G20. With former CEO of NITI Aayog, Amitabh Kant as its Sherpa, the Troika will comprise Indonesia, India and Brazil this year. Prime Minister Narendra Modi unveiled the logo and the theme for India's G20 presidency last month- "One Earth, One Family, One Future" ('Vasudhaiva Kutumbakam'), highlighting its commitment to having an approach that unites the world to address the future together.
Assuming such an important seat amongst some of the most powerful countries in the world, India’s role will be critical to the effectiveness of the forum as it navigates a myriad of issues. One of the biggest challenges of India’s G20 presidency would be to build consensus towards finding solutions for issues such as a slowing global economy, a massive debt crisis that threatens to affect around 70 nations, a spike in worldwide poverty due to the Covid-19 pandemic, and the climate crises. Additionally, it will have to strategically maneuver deepened divisions caused by the Russian invasion of Ukraine, leading to a call for boycotting Russia out of negotiations.
With burdensome responsibilities come a number of opportunities for India- attracting importance to the global south, opening up financial avenues for developing countries, and securing a stronger place for itself in the international order. With a focus on counter-terrorism and unity in tackling the economic slowdown and the climate crisis, India seeks to create debt sustainability, disaster and climate-resilient infrastructure, and have a special focus on startups and bridging the existing digital divide. It will host as many as 200 meetings across the country in order to showcase its culture, traditions and diversity over the next one year, with the first one coming up in Udaipur later this week. The G20 Summit will then be organised in New Delhi in September 2023.
For more information on the calendar of activities under G20 this year, visit the official website. Check out these three articles explaining the significance of India’s role in detail.
Tracking the G20
A special briefing for envoys of G20 and invitee countries and international organisations on India’s upcoming G20 Presidency took place on 26th November. The heads/representatives of missions were apprised of PM Modi's vision of India's presidency, while the chief G20 coordinator briefed missions about the extensive arrangements for G20 meetings across India.
As India officially assumed charge of the G20 presidency on 1st December, the first set of meetings to kick off the Indian presidency will begin next week. The first Sherpa track meeting will take place in Udaipur from 4th through 7th December.
Top Stories of the Week
TRAI to release consultation paper on Converging Technologies
TRAI will soon publish a consultation paper on ‘Convergence of Technologies’ as it believes that governing the sector through multiple ministries is not the optimal way of dealing with such industries. TRAI has stated that the Digital Communication Commission (DCC), a department under the Department of Telecommunication (DOT), should govern the policy aspects of data centres (DCs), content delivery networks (CDNs), and Internet exchange points (IXPs). According to the allocation of business rules, ‘data’ is allocated to DoT but DCs are under the control of MeitY. Additionally, TRAI has advocated for the establishment of Data Digitisation and Monetisation Council (DDMC). This will be envisioned as an apex body to oversee all issues related to data digitisation, data sharing and data monetisation in the country. These recommendations comes at a time when legislations from different ministries have overlapping jurisdictional boundaries on various issues (such as Draft Telecom Bill, Digital Personal Data Protection Bill).
RBI launches a pilot project for its CBDC
The Reserve Bank of India, on December 1, is beginning its pilot project to bring its Central Bank Digital Currency, the e-Rupee, to retail users. Four banks - State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank - have been roped in for the launch, where a closed group of customers and merchants in the cities of Mumbai, New Delhi, Bengaluru and Bhubaneshwar will be able to use the digital currency for transactions. The banks shall allow users to create a digital wallet on their mobile phones to store and transact in the e-Rupee. Unlike money stored in bank accounts, however, the e-Rupee in one’s wallet will not earn interest.
The pilot project shall, in time, be extended to the cities of Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla, with four more banks, Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank, joining the fray.
This Week in Policy
Economy and Taxation
Union Finance Minister Smt. Nirmala Seetharaman meets with the finance ministers of all states and union territories, seeking their inputs for the union budget for the year 2023-24.
The Competition Commission of India shall be empowered to handle complaints regarding profiteering from goods and services taxes, with effect from December 1, 2022. The body shall replace the National Anti-Profiteering Authority, which was currently handling such matters.
The Supreme Court shall constitute a special bench to hear matters related to taxation.
Labour
The July-September quarter marks the fifth consecutive quarterly fall in urban unemployment rates, as per the Periodic Labour Force Survey. The quarter saw an urban unemployment rate of 7.2%, while the female labour force participation rate increased slightly to 21.7%, from 20.9% in the preceding quarter.
The Government is looking to revise the wage ceiling for employees to be included in the EPFO’s retirement saving scheme. The current wage ceiling for the program is INR 15,000 per month, which may be increased up to INR 21,000 per month.
The Rural Development Ministry has set up a panel to revamp the MNREGA. The move has been prompted by concerns that the benefits of the scheme skew towards affluent states, blunting its force as a poverty alleviation mechanism.
Agriculture and FMCG
Bumper wheat harvest expected in 2023 as domestic prices have jumped 33% YoY, leading to oversowing this year.
Government lifts ban on exports of organic non-basmati rice, including broken rice after the easing of domestic supplies moderated prices.
Healthcare
The Union Health Ministry has recommended administering an extra dose of the measles and rubella vaccine, over the recommended two doses, to the state governments of Bihar, Gujarat, Haryana, Jharkhand, Kerala and Maharashtra. The recommendation comes in the context of rising incidences of measles in the states.
After Kerala and Karnataka, Megahalaya becomes the third Indian state to formulate a mental health policy.
Foreign affairs
Egyptian president Abdel Fattah Al Sisi will be the chief guest at the republic day in January 2023. This is the first time that the president of Egypt will be the chief guest for Republic Day celebrations.
German foreign minister Annalena Baerbock to visit India on 5th December. Baerbock will hold talks with External Affairs Minister S. Jaishankar on Monday on bilateral, regional and global issues of mutual interest. On Wednesday, Germany announced that it had finalised 22 projects totalling one billion euros to support transition to renewable energy in India.
Technology, Media and Telecommunications
India is aiming to be a part of the global 6G standards development process and will extend support to any start-ups that are working on these technologies, according to a top official from the Department of Telecommunications (DoT).
Telecom Regulatory Authority of India (TRAI) releases consultation paper on ’introduction of calling name presentation in telecommunication networks’. Written comments on the issues are invited from the stakeholders by 27 December 2022 and counter-comments by 10 January 2023
International trade and commerce
Iran and Russia have agreed on the transit of 12 million tonnes of Russian goods to India via Tehran to India through the International North-South Transport Corridor (INSTC).
US industry associations raise concerns over India’s trade restrictive measures with the United States Trade Representative (USTR). India’s high tariff rates and restrictive border measures continue to limit US manufacturers’ ability to invest in and export to India.
Banking, Finance and Insurance
Sebi mulls overhaul of 20-year-old rules governing merchant bankers. Net worth and registration criteria among other requirements likely to be enhanced as per current market dynamics.
Sebi introduces new mechanism to settle cash and physical futures and options upon expiry. Stock derivatives would now be settled on a net basis as against the current approach of settling such obligations separately.
Manufacturing
In a boost to the domestic satellite manufacturing industry, various Indian startups sign MoUs with state governments to build satellite assembly facilities and propulsion and thruster manufacturing facilities.
Government plans to boost the domestic manufacturing of medical devices with the help of experts at the AIIMS, IITs and the Indian Institute of Science, aiming to make India a $50 billion market by 2025.
Logistics and Infrastructure
Union Minister Ashwini Vaishnaw unveils India’s plan to get 475 Vande Bharat Express trains by 2025 and fully functional bullet trains by 2026.
Planned upgrades to India’s shipping and port infrastructure at an estimated INR 2 trillion will be prioritized for completion under a major push with a special focus on the ports at Paradip, Visakhapatnam, and Kolkata.
Sustainability
India sends a team of three geologists to Argentina “to assess potential lithium deposits” and possible acquisition opportunities in the country. Based on their feasibility report, another team would be sent for carrying out possible commercial negotiations.
India to pitch for international biofuels alliance at the G20 along the lines of the International Solar Association conceived in 2015, says Oil Minister Hardeep Singh Puri.
Upcoming Events
Economics of Water: Pollution, Scarcity and Climate Change
December 5 | Jio Convention Centre, BKC, Mumbai
ORF is hosting a talk by Richard Damania on Economics of Water: Pollution, Scarcity and Climate Change on 5th December, 2022 at the Jio Convention Centre, BKC. Damania, who is the Chief Economist of the Sustainable Development Practice Group, World Bank will discuss the nature of water and how its availability and variability impacts a country’s economy. The talk will address building resilience specifically to factors such as rainfall variability, water pollution, and climate change through various policy instruments and responses. More Information
Can PLFS, 2020-21 Help us Understand Internal Migration Patterns in India?
December 2 | Virtual
CPR is hosting a talk on PLFS 2020-2021, and how it can help us understand internal migration patterns on 2nd December, 2022 in a virtual setting. PLFS or the Periodic Labour Force Survey, 2021-22 conducted by India’s National Statistical Office (NSO) also collected information on migration at the household level. The core question that will be discussed is whether we can compare estimates from PLFS 2020-21 with that from the 2007-08 survey on employment and unemployment and migration to better understand migration in India? S Chandrasekhar is Professor, Indira Gandhi Institute of Development Research, Mohd. Imran Khan, Assistant Professor at Sarla Anil Modi School of Economics, NMIMS, and Shamindra Nath Roy, Associate Fellow, CPR will be speaking at the event. More Information | Registration Link
Discussion on Digital Personal Data Protection Bill, 2022
December 8 | India Habitat Centre, New Delhi
Medianama is organising a discussion on the Digital Personal Data Protection Bill, 2022 on December 8 at the India Habitat Centre, New Delhi. The event will have an open discussion on various aspects of the bill affecting the privacy rights of users and the compliance burdens on businesses, including impact of deemed consent on users, privacy safeguards for children, protection from state surveillance, and obligations of data fiduciaries, among other issues. Registration Link
A Few Good Reads
One Earth, One Family, One Future: Prime Minister Narendra Modi details India’s vision for the G20, as it takes the helm at the grouping.
Not all data breaches are created equal, and mandatory notification to all data principals may hurt, rather than help, data security, Rahul Matthan argues.
How fast can India grow? Is there such a thing as growing too fast? Read this fascinating piece by Gulzar Natarajan for more.
The wonderful Shruti Rajagopalan debuts on Substack, explaining why you should go long on India.
Ezra Klein looks at how technology, and social media in particular, shapes how we see the world.
Tweets of the Week
Are we going to see something akin to the 1989 Tiananmen Square massacre? Noah Smith pitches in:
As the price of data has gone down, India’s data usage has sky-rocketed. Stats of India with an excellent Tweet, as always:
Rahul Sagar presents a AI-generated ‘painting’ of T. Madhava Rao, arguably one of the most formidable administrators and public policy thinkers in India’s history:
Key Notifications
Deadline to submit comments on the draft tender for seabed leasing for offshore wind projects now extended to 9th December, 2022. Comments can submitted through email at rishikesh[dot]mnre[@]gov[dot]in