The BRICS collective, comprising Brazil, Russia, India, China and South Africa, is working on a common currency in an attempt to ditch the US dollar and push back against America’s dominance.
The move comes as Moscow and Beijing call for de-dollarisation in the face of Western sanctions.
In this context, this edition of the burning issue will elaborate on this idea of de-dollarisation.
Background of the news
The US dollar has been the official currency for international trade for years now. However, in recent times there have been talks of creating a new currency in an attempt to dump the dollar and push back against American hegemony.
This de-dollarisation has received a boost in recent times, especially after the Russia-Ukraine war began last February.
This movement received further impetus when the news broke out that the BRICS nations are in the process of creating a new medium for payments — established on a strategy that “does not defend the dollar or euro”.
About US Dollar: The Global Currency
The U.S. dollar has been the world’s dominant currency since the end of World War II.
Roughly half of the international trade, international loans, and global debt securities are denominated in USD.
The USD became the official reserve currency of the world in 1944. The decision was made by a delegation from 44 Allied countries called the Bretton Woods Agreement.
Despite the challenges faced by the US economy due to fiscal and external deficits of the 1980s, the dollar’s share of global reserves remained steady and reserves even grew as time progressed.
The dominance of the dollar is backed by strong and highly credible institutions, deep markets and the fact that it is freely convertible.
Almost 40% of the world’s debt is issued in dollars. As a result, foreign banks need a lot of dollars to conduct business. This became evident during the 2008 financial crisis.
What is de-dollarisation?
The US dollar has been called the king of currency. It became the official reserve currency of the world in 1944. The decision was made by a delegation from 44 Allied countries called the Bretton Woods Agreement.
Since then, the dollar has enjoyed a powerful status in the world. It has given the US a disproportionate amount of influence over other economies. In fact, the US has for long used the imposition of sanctions as a tool to achieve foreign policy goals.
However, not everybody likes playing by US rules and countries like Russia and China have called a halt to dollar hegemony. This process is called DE-DOLLARISATION — and it refers to reducing the dollar’s dominance in global markets. It is a process of substituting the US dollar as the currency used for trading oil and/or other commodities.
To punish Russia for its invasion of Ukraine, western governments froze $300 billion of Russia’s foreign currency reserves last year, roughly half the total, and expelled Russian banks from the Swift international payments system.
As Jason Hollands, managing director of investment platform Bestinvest, explains, “The so-called DOLLAR “WEAPONISATION” has rattled many countries and not just Russia.”
Some recent examples
Countries willing to continue to trade with RUSSIA, like India and China, have started doing so in rupees and yuan instead, triggering talk of the de-dollarisation of the international trading order.
BRAZIL and CHINA are now trading with each other in yuan, helping to establish the Chinese renminbi as an international currency and dollar challenger.
INDIA too has been trying to move away from the dollar. Recently, 18 countries, including UK, Germany, Russia and even the United Arab Emirates, have been given permission to trade in Indian rupees. In February, noted economist Nouriel Roubini had said that the Indian rupee over time could become one of the global reserve currencies in the world.
Taking this forward, the BRICS collective —is also mulling over creating a new currency to facilitate trade. It is reported that the new financial agreement could be seen as soon as in August when the countries meet for their annual summit in South Africa.
Proponents of de-dollarization
Reduce dependence on US: The proponents of de-dollarisation say that this process would reduce other countries’ dependence on the US dollar and the US economy.
Decouple from US Economy shocks: It could help mitigate the impact of economic and political changes in the US on their own economies.
Improve economic stability: countries can reduce their exposure to currency fluctuations and interest rate changes, which can help to improve economic stability and reduce the risk of financial crises.
Reducing share in forex: In 2022, the International Monetary Fund noted that central banks today are not holding the greenback as reserves in the same quantities as yesteryear. The dollar’s share of global foreign-exchange reserves fell below 59 per cent in the final quarter of last year.
Impact of de-dollarization
Decrease in demand for the U.S. dollar: If more countries switch to using their own currencies or other currencies (e.g. euro, yuan) in international transactions, the demand for U.S. dollars could decrease. This could potentially lead to a decrease in the value of the dollar relative to other currencies, which could make imports more expensive for the United States and reduce the purchasing power of Americans abroad.
Reduced role of the United States in the global financial system: If the U.S. dollar loses its status as the world’s reserve currency, the United States could lose some of its power and influence in global financial affairs. This could potentially weaken the U.S. economy and reduce its ability to borrow money at favorable rates.
Increased volatility in currency exchange rates: As more countries move away from the U.S. dollar, there could be increased volatility in currency exchange rates, which could make international trade more difficult and expensive.
Potential benefits for other currencies: If the U.S. dollar loses some of its dominance, other currencies (such as the euro or yuan) could potentially benefit from increased demand and become more widely used in international transactions.
Volatility in global markets: As the demand for the US Dollar is decreasing in the world, US bonds are also falling, and in order to make them float, banks like SVB have no solution but to offer higher interest rates, which burn holes in their liquidity and thus causing their collapse. Such collapse impacts the world economy,
What is India’s plan: Internationalisation of the Rupee
The process of increasing the use of local currency in cross-border transactions is known as the internationalization of the rupee. Promoting the rupee for use in import and export trade, other current account transactions and capital account transactions are all components of this strategy.
Recently, a deputy governor of the Reserve Bank of India (RBI) emphasized the benefits and dangers of the rupee’s internationalization. The RBI has also launched a mechanism in July 2022 to make rupee-based international trade easier.
About 35 nations have expressed an interest in learning more about how the rupee trade mechanism works. India would save money on foreign exchange if it were able to begin rupee trade even with some of them.
Advantages
Indian businesses can reduce currency risk by using the rupee in cross-border transactions. Security from cash instability not just lessens the cost of carrying on with work, it likewise empowers better development of business, working on the opportunities for Indian business to universally develop.
India will be less susceptible to external shocks if it reduces its reliance on foreign currency. For instance, during periods of financial fixing in US and reinforcing dollar, unreasonable unfamiliar cash liabilities of homegrown business bring about a true homegrown fixing. The impact of capital flow reversals would be significantly lessened if currency risk was reduced.
It lessens the requirement for holding unfamiliar trade saves. Reserves cost the economy, but they help control exchange rate volatility and project external stability.
The bargaining power of Indian businesses would increase as the rupee becomes more important, adding weight to the Indian economy and enhancing India’s global standing and respect.
Challenges
A diminished role for convertible currencies in external transactions may result in lower reserve accretion.
However, if the trade deficit is funded in rupees, the requirement for reserves would also decrease.
Rupee holdings held by non-residents might make it harder for domestic financial markets to absorb stimulus from outside the country, which would raise volatility.
Non-residents, for instance, might convert their Rupee holdings and leave India during a global risk-off period.
Conclusion
India is looking into signing rupee trade agreements with some countries, particularly those with deficit-ridden economies. India would benefit from payments being made in rupees when imports are greater than exports.
At the moment, the US dollar is the currency of choice for international trade. Because of this, the value of the dollar can affect trade between countries. India’s reliance on the US dollar will be lessened by transactions in rupee.
Even though the current situation prevents the rupee from becoming a reserve currency like the US dollar, it is a small first step. The prospects for bilateral trade with India will improve as more nations begin to invoice in rupees for their exports and imports.
The Ministry of Education has released a pre-draft version of the National Curriculum Framework (NCF) for School Education. It will be the second in the series of 4 curriculum frameworks to be launched.
In this context, this edition of The Burning issue will elaborate on this new Curriculum framework.
Background
The Union Education Ministry launched the National Curriculum Framework for the foundational stage of education of children in the three to eight years age group in October 2022.
The NCF has four sections –
National Curriculum Framework for School Education,
National Curriculum Framework for Early Childhood Care and Education,
National Curriculum Framework for Teacher Educatio
National Curriculum Framework for Adult Education.
What is the NCF 2023?
It is a comprehensive framework for school education in India. It provides guidelines for the development of curricula and syllabi, textbooks, and teaching practices for schools in India.
It is developed by the National Council of Educational Research and Training (NCERT), an autonomous organization under the Ministry of Education.
It AIMS to promote a child-centred, activity-based approach to learning that focuses on the development of knowledge, skills, and values.
The first NCF was developed in 1986 and subsequently revised in 2000 and 2005.
The latest pre-draft version of NCF for School Education was released by the Ministry of Education in April 2023. It will cover age groups 3 to 18 years.
The framework has been developed by the National Steering Committee set up by the Ministry to undertake and develop NCFs under the chairmanship of K. Kasturirangan.
The NCF says its five parts are based on the ‘PANCHAKOSHA’ CONCEPT’, these are:
Physical development (sharirik vikas),
Development of life energy (pranik vikas),
Emotional and mental development (manasik vikas),
Intellectual development (bauddhik vikas) and
Spiritual development (chaitsik vikas).
The NCF (National Curriculum Framework) is an important step taken to implement the New Education Policy 2020.
Some issues with the Indian education system
Poor learning outcomes: According to the Annual Status of Education Report (ASER) 2019, only 26.8% of Class 3 students in rural India can read a Class 2 level text, and only 41.1% of Class 5 students can do basic arithmetic. These figures highlight the poor learning outcomes in many schools.
High dropout rates: The dropout rate at the primary level (Class 1-5) is 4.3%, while at the upper primary level (Class 6-8) it is 17.1%. This suggests that a significant number of students are not completing their basic education.
Shortage of teachers: The Right to Education Act mandates a pupil-teacher ratio of 30:1, but as of 2020, many states have failed to meet this requirement. For instance, Bihar has a ratio of 38:1, Uttar Pradesh has a ratio of 41:1, and Jharkhand has a ratio of 42:1. This shortage of teachers can affect the quality of education.
Inadequate infrastructure: Many schools in rural areas lack basic facilities such as clean drinking water, toilets, and playgrounds. According to ASER 2019, only 71.9% of schools in rural areas have usable toilets, and only 54.3% have access to drinking water.
Rote learning: The National Achievement Survey (NAS) 2017 found that only 33% of Class 8 students could solve a real-life mathematical problem, and only 43% of Class 10 students could understand a concept in science. This suggests that rote learning is still prevalent in many schools.
Lack of ethical education: The science and commerce-focused education system lacks ethical education leading to the creation of a good ‘workforce’ rather good human beings and citizens.
Archaic curriculum and textbooks: The NCERT textbooks were majorly revamped almost half and a decade ago. The NCF calls for a revamping of the curriculum as well as the school textbooks to ease the burden on students and make them up to date.
Key features of the Draft NCF 2023
Values and Roots
A key part of the document is the inclusion of values and their “rootedness” in India.
The pre-draft says that the framework is deeply rooted in India in content and learning of languages, in the pedagogical approaches including tools and resources, and in philosophical basis — in the aims and the epistemic approach.
The document further says that it leans towards making students acquainted with true sources of knowledge, which have been a philosophical preoccupation of ancient Indians.
These sources focus on SIX PRAMANAS: pratyaksa, anumana, upamana, arthapatti, anupalabdhi, and sabda.
Moral Development
A part of the document focuses on the moral development of a child through PANCHAKOSHA VIKAS or five-fold development.
The pre-draft recommends DEVELOPING MORAL VALUES for the child through a balanced diet, traditional games, yoga asanas, as well as a wide variety of stories, songs, lullabies, poems, and prayers to develop a love for cultural context.
Curriculum revamp
The pre-draft says that for Grade 10 certification, students will have to take two essential courses from humanities, maths and computing, vocational education, physical education, arts education, social science, science, and interdisciplinary areas.
In Grades 11 and 12, students will be offered CHOICE-BASED COURSES in the same disciplines for more rigorous engagement.
Arts education will include music, dance, theatre, sculpture, painting, set design, and scriptwriting, while interdisciplinary areas will include knowledge of India, traditions, and practices of Indian knowledge systems.
For Class 11 and 12, the document states that “MODULAR BOARD EXAMS” will be offered as opposed to a single exam at the end of the year, and the final result will be based on the cumulative result of each exam.”
Social Science Curriculum
The pre-draft emphasizes understanding and appreciating the Feeling Of Indianess, “Bhartiyata,” by valuing the rich cultural heritage and tradition of the country.
The pre-draft also stresses identifying and explaining important phases of the Indian national movement against British rule, with special reference to Gandhian and other subaltern movements.
It also recommends teaching concepts of Buddhism, Jainism, and Vedic and Confucian philosophies.
Possible positive outcomes: How does NCF’23 solve the challenges of the Indian Education system?
Inter-disciplinary education: the provision of choice to students of different streams to choose subjects of other streams (science students taking up humanities subjects and visa versa) will help in building interdisciplinary knowledge of students rather than just one stream.
Inculcation of Values and Roots: The framework emphasizes the importance of values and their “rootedness” in India. This can help students develop a strong sense of identity and cultural pride.
Moral Development of Students: The pre-draft focuses on the moral development of a child through various activities such as a balanced diet, traditional games, yoga, and exposure to cultural context through stories, songs, and prayers. This can help students develop a well-rounded personality.
Better designed and updated curriculum: The framework offers a more flexible and diverse curriculum for students, allowing them to choose essential courses from various disciplines such as humanities, maths, computing, vocational education, physical education, arts education, social science, science, and interdisciplinary areas. The modular board exams and the stress on interdisciplinary areas can also promote critical thinking and problem-solving skills among students.
Expand the horizon of thinking of students: The framework emphasizes the understanding and appreciation of Indian culture and heritage, as well as important phases of the Indian national movement against British rule, including subaltern movements. It also recommends teaching concepts of Buddhism, Jainism, and Vedic and Confucian philosophies, which can broaden students’ perspectives and enhance their understanding of the world.
SomeIssues with the Policy
The NCF falls short of telling anything about technical education and how the schools, textbooks and teachers will adjust in the era of rising disruptive technologies like Artificial intelligence specially Chat-GPT.
With 8 small board examinations over the year rather than one, the burden and fear of board examinations will increase, putting students under the pressure to study and perform throughout the year.
The issue with the change in curriculum: several opposition parties have raised their voices against the changes being proposed in school textbooks.
Controversy over curriculum revamp
The latest round of textbook rationalization has resulted in some of the most sweeping changes in the curriculum since the NDA government came to power.
These changes include removing all references to the 2002 Gujarat riots, reducing content related to the Mughal era and the caste system, and dropping chapters on protests and social movements.
Many of these changes are seen as ‘political’, however, their earlier introduction into the curriculum was also a political move.
Furore over Mughal History
While some of the content on the Delhi Sultanate and the Mughal Empire has indeed been removed from the history textbook for Class 7, the Mughals have not entirely disappeared.
For instance, the chapter ‘The Mughal Empire’ in the Class 7 history textbook, Our Pasts – II, has undergone deletions — including a two-page table on the milestones and achievements of the reigns of the emperors Babur, Humayun, Akbar, Jahangir, Shah Jahan, and Aurangzeb. However, the chapter itself has not been removed.
Students of Class 7 will continue to learn about the Mughals, though in lesser detail.
Conclusion
In conclusion, the National Curriculum Framework 2023 provides a comprehensive approach to education that emphasizes the importance of values, rootedness in Indian culture, and the moral development of students.
But it still falls short on several parameters. Thus, the draft needs to be thoroughly revisited by opening to its public comments and suggestions to incorporate other important things like learning new technologies, so as to make Indian students updated, educated and technically sound.
Union Minister of Commerce and Industry Shri Piyush Goyal recently launched the Foreign Trade Policy 2023. The policy had been under discussion for a long time and has been formulated after multiple stakeholder consultations.
In this context, this edition of the Burning Issue will elaborate on this new policy. The topic is relevant for the upcoming Prelims examination (export-import related data, facts and schemes) as well as for the Mains examination 2023 under GS-3 topic.
About Indian exports
India’s overall exports, including services and merchandise exports, have already crossed US$ 750 Billion and are expected to cross US$ 760 Billion this year.
Also, the value of India’s exports in the financial year 2021-22 hit 400 billion dollars which translated into a growth of about 41% from the pandemic-hit year of 2020-21.
Background of the policy
Foreign Trade Policy (2023) is a policy document that is based on the continuity of time-tested schemes facilitating exports as well as a document that is nimble and responsive to the requirements of the trade.
It is based on principles of ‘trust’ and ‘partnership’ with exporters. In the FTP 2015-20, changes were done after the initial release even without the announcement of a new FTP responding dynamically to emerging situations.
Hereafter, the revisions of the FTP shall be done as and when required. Incorporating feedback from Trade and Industry would also be continuous to streamline processes and update FTP, from time to time and also make export scheme WTO rules compliant.
Aims and objectives of the new policy
The FTP 2023 AIMS AT process re-engineering and automation to facilitate ease of doing business for exporters. It also focuses on emerging areas like dual-use high-end technology items under SCOMET, facilitating e-commerce export, and collaborating with States and Districts for export promotion.
To increase exports and GET MORE DEEPLY INVOLVED IN THE GLOBAL VALUE CHAIN. Given the size of the Indian economy and manufacturing & service sector base, the potential for the country to grow is manifold.
The Key Approach to the policy is based on these 4 PILLARS:
Incentive to Remission,
Export promotion through collaboration – Exporters, States, Districts, Indian Missions,
Ease of doing business, reduction in transaction cost and e-initiatives and
Emerging Areas – E-Commerce Developing Districts as Export Hubs and streamlining SCOMET policy.
Key highlights of the policy
Process Re-Engineering and Automation: Greater faith is being reposed on exporters through automated IT systems with risk management systems for various approvals in the new FTP. The policy emphasizes export promotion and development, moving away from an incentive regime to a regime which is facilitating, based on technology interface and principles of collaboration.
Towns of Export Excellence: Four new towns, namely Faridabad, Mirzapur, Moradabad, and Varanasi, have been designated as Towns of Export Excellence (TEE) in addition to the existing 39 towns. The TEEs will have priority access to export promotion funds under the MAI scheme and will be able to avail Common Service Provider (CSP) benefits for export fulfillment under the EPCG Scheme.
Recognition of Exporters: Exporter firms recognized with ‘status’ based on export performance will now be partners in capacity-building initiatives on a best-endeavor basis. Similar to the ‘each one teaches one’ initiative, 2-star and above status holders would be encouraged to provide trade-related training based on a model curriculum to interested individuals.
Promoting export from the districts: The FTP aims at building partnerships with State governments and taking forward the Districts as Export Hubs (DEH) initiative to promote exports at the district level and accelerate the development of a grassroots trade ecosystem. Efforts to identify export-worthy products & services and resolve concerns at the district level will be made through an institutional mechanism – State Export Promotion Committee and District Export Promotion Committee at the State and District level, respectively.
Streamlining SCOMET Policy: India is placing more emphasis on the “export control” regime as its integration with export control regime countries strengthens. There is a wider outreach and understanding of SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) among stakeholders, and the policy regime is being made more robust to implement international treaties and agreements entered into by India.
Facilitating E-Commerce Exports: FTP 2023 outlines the intent and roadmap for establishing e-commerce hubs and related elements such as payment reconciliation, bookkeeping, returns policy, and export entitlements. As a starting point, the consignment-wise cap on E-Commerce exports through courier has been raised from ₹5Lakh to ₹10 Lakh in the FTP 2023.
Merchanting trade: To develop India into a merchanting trade hub, the FTP 2023 has introduced provisions for merchanting trade. Merchanting trade of restricted and prohibited items under the export policy would now be possible. Merchanting trade involves the shipment of goods from one foreign country to another foreign country without touching Indian ports, involving an Indian intermediary. This will be subject to compliance with RBI guidelines, and won’t be applicable for goods/items classified in the CITES and SCOMET list.
Amnesty Scheme: Finally, the government is strongly committed to reducing litigation and fostering trust-based relationships to help alleviate the issues faced by exporters. In line with “Vivaad se Vishwaas” initiative, which sought to settle tax disputes amicably, the government is introducing a special one-time Amnesty Scheme under the FTP 2023 to address default on Export Obligations. This scheme is intended to provide relief to exporters
Current Export Schemes And Changes In Them w.r.t NFT Policy 2023
(A)Facilitation under the Export Promotion of Capital Goods (EPCG) Scheme
The EPCG Scheme, which allows the import of capital goods at zero Customs duty for export production, is being further rationalized. Some key changes being added are:
Prime Minister Mega Integrated Textile Region and Apparel Parks (PM MITRA) scheme has been added as an additional scheme eligible to claim benefits under the CSP(Common Service Provider) Scheme of Export Promotion Capital Goods Scheme(EPCG).
Dairy sector to be exempted from maintaining Average Export Obligation – to support the dairy sector to upgrade the technology.
Battery Electric Vehicles (BEV) of all types, Vertical Farming equipment, Wastewater Treatment and Recycling, Rainwater harvesting system and Rainwater Filters, and Green Hydrogen are added to Green Technology products – will now be eligible for reduced Export Obligation requirements under EPCG Scheme
(B)Facilitation under the Advance authorization Scheme
The advance authorization Scheme accessed by DTA units provides duty-free import of raw materials for manufacturing export items and is placed at a similar footing to EOU and SEZ schemes.
However, the DTA unit has the flexibility to work both for domestic as well as export production. Based on interactions with industry and Export Promotion councils, certain facilitation provisions have been added to the present FTP such as
Special Advance Authorisation Scheme extended to export of Apparel and Clothing sector under para 4.07 of HBP on the self-declaration basis to facilitate prompt execution of export orders – Norms would be fixed within a fixed timeframe.
Benefits of Self-Ratification Scheme for fixation of Input-Output Norms extended to 2 star and above status holders in addition to Authorised Economic Operators at present.
Possible positive outcomes of the scheme
Supporting MSME’s to grow: TP 2023 codifies implementation mechanisms in a paperless, online environment, building on earlier ‘ease of doing business’ initiatives. Reduction in fee structures and IT-based schemes will make it easier for MSMEs and others to access export benefits.
Creating new export centres: Addition of new towns for export excellence is expected to boost the exports of handlooms, handicrafts, and carpets.
Educating exporters: This will help India build a skilled manpower pool capable of servicing a $5 Trillion economy before 2030. Status recognition norms have been re-calibrated to enable more exporting firms to achieve 4 and 5-star ratings, leading to better branding opportunities in export markets.
Provide access to dual-use High-end goods and technologies: A robust export control system in India would provide access of dual-use High-end goods and technologies to Indian exporters while facilitating exports of controlled items/technologies under SCOMET from India.
Growth of GIFT city: In course of time, this will allow Indian entrepreneurs to convert certain places like GIFT city etc. into major merchanting hubs as seen in places like Dubai, Singapore and Hong Kong.
Reduce litigation burden: The amnesty scheme is likely to provide relief to exporters as the interest burden will come down substantially. It is hoped that this amnesty will give these exporters a fresh start and an opportunity to come into compliance.
Limitation of NFT Policy
Still, with global trade largely becalmed and the services sector facing headwinds of uncertainty in the key western markets, the FTP falls short in offering more substantive and sectorally targeted measures as well as a well-defined road map to meet the 2030 export target.
Conclusion
The Foreign Trade Policy 2023 comes at a time of global uncertainty, but with India’s small share in global trade (around 1.8% in merchandise exports and roughly 4% in services), there is significant room for improvement.
The new policy, along with additional measures, can enhance the country’s trade performance and achieve the ambitious $2 trillion export target by 2030. However, it is crucial to monitor the policy’s implementation and address potential challenges for businesses to fully reap the benefits.
The Right to Health Bill was recently approved by the Rajasthan legislative assembly. Rajasthan would become the first state in India to guarantee its citizens’ right to healthcare once the bill is announced.
Being a torch-bearing step in providing better healthcare, this edition of the burning issue will elaborate on this new law and its criticalities. The topic is relevant for the GS-2 mains paper.
The Right to Health
The World Health Organization (WHO) says that everyone has the right to health, which means they should be able to get the health care they need, when and where they need them, without having to worry about money. No one should get sick and die because they can’t get the health care they need or because they don’t have enough money.
RTH is a fundamental human right that guarantees everyone the right to enjoy the highest attainable standard of physical and mental health.
It is recognized as a crucial element of the right to an adequate standard of living and is enshrined in international human rights law.
Other fundamental human rights, such as having access to clean water and sanitation, nutritious food, adequate housing, education, and safe working conditions, clearly determine good health.
Scope of RTH
RTH covers various health-related issues, including-
Access to healthcare services, clean water and sanitation, adequate nutrition, healthy living and working conditions, health education, and disease prevention.
Accessible, affordable, and quality healthcare services,
Eliminating barriers to healthcare access
Informed consent to medical treatment and accessing information about their health.
Right to Health relating to India
Provisions of the Constitution:
The Constitution of India doesn’t explicitly ensure a basic right to well-being. However, the Constitution makes numerous mentions of public health and the state’s role in providing healthcare to citizens.
Under Directive Principles of State Policy:
DPSPs: To a limited extent IV of the Indian Constitution gives a premise to one side of wellbeing.
The State is obligated by Article 39 to ensure the health of workers.
Article 47 imposes a responsibility on the state to raise people’s nutrition levels, the standard of living, and public health. Article 42 requires the state to provide maternity relief and just and humane working conditions.
Under Fundamental rights:
Article 21 The Supreme Court of India in Bandhua Mukti Morcha v. Union of India & Ors. found that the Constitution of India did not explicitly recognize the right to health care. interpreted Article 21’s guarantee of the right to life, which covers the right to health.
In Territory of Punjab and Ors. In the case of Mohinder Singh Chawla, the Supreme Court reiterated that the right to health is essential to the right to life and that the government was obligated by the Constitution to provide health services.
Article 243G: The Role of Panchayats and Municipalities
The Constitution does not just oblige the State to upgrade general well-being, yet additionally blesses the Panchayats and Districts to fortify general well-being under Article 243G.
15th Commission on Finances:
The 15th Finance Commission’s High-Level Group on the Health Sector recommended declaring the right to health a fundamental right in September 2019.
Additionally, it proposed putting health on the Concurrent List rather than the State List.
Genesis of Right to Health
In 1996, the Supreme Court held that the right to life (Article 21) included the right to health within its fold, and also pointed out the obligation of state governments to provide health services.
Under the Constitution, public health and sanitation, including hospitals and dispensaries, come under the State List.
In 2018, the National Commission on Human Rights (NHRC) drafted the Charter of Patient Rights to be implemented by state governments.
Rajasthan runs certain schemes to ensure health coverage, including the Mukhyamantri Chiranjeevi Swasthya Bima Yojana, under which health coverage is provided in over 1,550 private and public hospitals across the state. Under the yojana, insurance coverage is also provided for certain types of treatment.
Features of the Rajasthan Right to Health Bill
Free treatment: RTH gives every resident of the state the right to avail of free Out Patient Department (OPD) services and In-Patient Department (IPD) services at all public health facilities and select private facilities.
Wider scope of healthcare: Free healthcare services will include consultation, drugs, diagnostics, emergency transport, procedures, and emergency care. However, there are conditions specified in the rules that will be formulated.
Free emergency treatment: Residents are entitled to emergency treatment and care without prepayment of fees or charges.
No delay in treatment: Hospitals cannot delay treatment on grounds of police clearance in medico-legal cases.
State reimbursement of charges: After emergency care and stabilization, if patients do not pay requisite charges, healthcare providers can receive proper reimbursement from the state government.
Significance of the Bill
Frees from Unnecessary obligations:
The Bill empowers patients to choose the source of obtaining medicines or tests at all healthcare establishments, which means that hospitals cannot insist on in-house medicines or tests.
Eliminates discriminatory healthcare structures:
Article 15’s right to equality upholds non-discrimination based on religion, race, caste, gender, place of birth, and other factors. However, healthcare has become a privilege for a select few due to decades of inadequate investment in public health.
To end discriminatory structures that will otherwise continue to perpetuate inequality in all spheres of life, including education, opportunity, wealth, and social mobility, the constitutional right to health is essential.
Enhance the health ecosystem as a whole:
By passing a law that makes healthcare a right for everyone, the government would make it easier for people to demand better care and hold the government and healthcare workers accountable if they don’t get it.
Unique regulation and different instruments to fortify medical services:
Special legislation, capable institutions, increased budgets, medical training and research, wellness and prevention, and service outreach will all be made possible by the Constitution’s right to health; thereby enhancing the health ecosystem as a whole.
For instance, before the constitutional amendment that made it a fundamental right in and of itself, the right to education had also been held to be implicit to the right to life. 15 years ago, the primary school enrollment rate was thought to be impossible; today, it is over 95%.
Reduce expenses incurred out of pocket:
The Economic Survey for 2022–23 reveals that patients continue to directly pay for almost half of all healthcare costs in India. The Right to Health aims to increase public spending while decreasing individual healthcare costs.
Challenges with the Right to Health ‘Pill’
Insufficient infrastructure: India’s healthcare system lacks the fundamental infrastructure necessary to meet the needs of a large population. India, for instance, has only 8.5 beds for every 10,000 people. Also, the doctor-to-patient and nurse-to-patient ratios are significantly lower than WHO standards, which are 1/1000 for doctors and 3/1000 for nurses, respectively (1 per 1456 patients).
The existing burden of schemes: Doctors are protesting against the RTH because they question the need for it when there are already schemes like Chiranjeevi that cover most of the population.
Specialization concerns: They are also objecting to certain clauses, such as defining “emergency” and being compelled to treat patients outside their specialty as part of an emergency.
Saving money on health care: India has the lowest public health spending as a percentage of GDP (1.6 percent). Among the BRICS nations, India has the lowest public health spending. Brazil has 3.96 percent, Russia has 3.16 percent, South Africa has 4.46 percent, and China has 3.02 percent.
No detailing of the process: To the charge that there is no detailing of the process, health rights activists have pointed out that it would be a function of the Rules, not the law itself.
Concerns pertaining to compensation: Healthcare providers have a problem with reimbursement delays. Additionally, there are complaints that the predetermined package rates for various medical procedures and treatments are not sufficiently profitable or do not cover the actual cost.
A high rate of disease: Both communicable and non-communicable diseases like malaria, diabetes, and tuberculosis are prevalent in India. Healthcare infrastructure and resources require significant investment to combat these diseases.
Way Forward
A fundamental shift in approach is required: We must fundamentally alter our healthcare approach. We must view it as a high-yield investment that can significantly reduce future out-of-pocket costs and also increase output rather than spending.
Coordination among states and the centre: Without hindering cooperative federalism, which is an essential component of the Indian Constitution, there must be coordination between the center and the states on a crucial subject like health.
More authority and assistance for states: The COVID-19 response by the Center and states reveals that health must remain on the State List, despite the importance of seamless coordination between the centers and states. Therefore, it is necessary to devolve authority and resources to states to improve their respective public health systems.
Boost public spending: By 2025, India must increase its investment in healthcare resources and infrastructure to at least 2.5% of GDP.
Improve transparency and accountability: Additionally, greater efforts could be made to improve transparency and accountability in the healthcare system, with a focus on educating patients about their rights.
Conclusion:
Given the contentious nature of the Bill, all stakeholders need to come to the table and engage in constructive dialogue to resolve the issues at hand. It should involve liaisons between the government, doctors, patient advocacy groups, and other relevant stakeholders to discuss the concerns raised by all parties and identify potential solutions.
This could be followed by a revision of the Bill, incorporating feedback and suggestions from all stakeholders, and a renewed effort to build consensus and support for the legislation.
“The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political belief, economic condition, or social status,” as stated in the WHO constitution.
The towering Brahmapuram landfill in Kerala state is the country’s latest trash mountain to catch fire, causing dangerous heat and methane emissions.
Landfill fires are becoming common in India with multiple incidents being reported increasing on yearly basis. In this context, this edition of the burning issue will expand on this issue. The topic is relevant for the GS-3 under environmental issues and urbanization.
What is the issue?
Firefighters in the southern Indian city of Kochi were toiling to control toxic fumes from spreading after a landfill burst into flames for 5 days cloaking the area in a thick haze and choking residents.
Authorities advised residents in the city of more than 600,000 to remain indoors or wear N95 face masks if they head outside. Schools were forced to close as a result of the pollution.
While the fire has been largely put out, a thick cloud of smoke and methane gas continues to cover the area, reducing visibility and the city’s air quality while emitting a lingering, pungent odor.
The matter even reached law corridors. Kerala High court also listed the case for hearing.
Brief about landfills
Definition: A landfill is a site designated for the disposal of waste materials by burying them underground. The waste materials can include household and commercial garbage, industrial waste, and construction debris. Landfills are designed to contain waste and prevent it from contaminating the surrounding environment.
History: The history of landfills dates back thousands of years to ancient civilizations such as the Greeks and Romans who used open dumps to dispose of their waste. However, the modern landfill as we know it today began to emerge in the late 19th century when cities started to grow and produce more waste. At that time, waste was often dumped in rivers or burned in open pits, leading to pollution and health hazards.
Modern landfills: The first modern landfill was established in 1937 in Fresno, California, USA. It was a sanitary landfill designed to minimize the impact on the environment and protect public health. Since then, landfills have become the primary method of waste disposal in most developed countries, and their design and management have become more sophisticated to reduce their environmental impact.
Some recent landfill fire incidents
Bhalswa landfill fire
Perungudi dump yard fire
Dadumajra landfill fire
Ghazipur landfill fire
Waste generation in India
Every year, 2.01 billion tonnes of municipal waste is generated. India produces 277 million tonnes of municipal solid waste every year, according to a 2016 estimate.
Waste accumulation in Delhi and Bangalore has risen dramatically, by 1,850% and 2,175%, respectively, between 1999 and 2016.
In India, 77% of waste is disposed of in open dumps, 18% is composted and just 5% is recycled.
Landfills in India: The ‘Man Made Mountains”
Brahmapuram is just one of some 3,000 Indian landfills overflowing with decaying waste and emitting toxic gases. Most dumpsites are two to three decades old and currently receive 2,000 (Bhalswa) to 9,000 (Deonar) metric ton of solid waste daily.
Landfill fires are becoming a big challenge for India’s urban civic bodies. In late April 2022, fires broke out in landfills in Chennai, Delhi and Chandigarh. Since 2015, the number of landfill fires in metropolitan cities has surged across India.
Every Indian city has at least one man-made mountain where ‘waste’ generated in our homes and businesses ends up. About 90% of the staggering 150,000 metric ton of urban solid wastes generated every day make their way to such locations.
These toxic sites are the dark underbelly of India’s bustling, glittering cities and are home and workplace for tens of thousands of people.
Causes of landfill fire
Spontaneous Combustion: As organic waste decomposes, it generates heat, and if the temperature is not controlled, it can ignite the waste and start a fire.
Lack of modern technologies: Only a few areas on large landfills have new and advanced waste management technology (like waste-to-energy, composting and refuse-derived fuel systems).
Legacy dumps: remain problematic as the decomposition of decades-old mixed waste causes extreme water and air pollution.
Chemical Reactions: Some waste materials, such as batteries or chemicals, can react with other waste materials, generating heat or flammable gases that can ignite.
Landfill Gas Ignition: Landfill gas, which is produced by the decomposition of organic materials in the landfill, can be flammable and can ignite if exposed to a source of ignition such as a spark.
Arson: Unfortunately, some people intentionally set fires at landfill sites, either for personal gain or as an act of vandalism.
Electrical Faults: Electrical equipment used at landfill sites, such as machinery or lighting, can malfunction or short-circuit, causing a fire.
Issues with Indian landfills
Unhygienic disposal: In India, more than 90% of the MSW generated finds its way to landfill sites, often in the most unhygienic manner possible. The landfilling process of the municipalities is the most unorganized one.
Large methane emission: India creates more methane from landfill sites than any other country, according to GHGSat, which monitors emissions via satellites. Methane is the second most abundant greenhouse gas after carbon dioxide — but it is a more potent contributor to the climate crisis because it traps more heat.
Not scientifically planned: In India, the meaning of landfilling process has changed to simply dumping the waste in areas outside the city without taking any kind of sanitary measures.
Causes environmental problems: The landfills are meant for reducing the exposure between humans and the environment from toxic waste but it takes a toll on humans as we are exposed to the problems associated with the waste directly i.e from the soil and groundwater pollution. There are concerns regarding the flow of toxins in the food chain of birds and animals, fires and explosions, vegetation damage, unpleasant odor, landfill settlement, groundwater pollution, air pollution and global warming.
The improper segregation: or lack of segregation facility at the waste generation site causes the accumulation of toxic waste mixture in landfills.
Most fatal for ragpickers: The disposal of these toxic chemicals leads to the exposure of rag pickers to these chemicals. The rag picker’s only means of income is by collecting waste but they are not aware of the fact that this waste will be toxic for them, their health as well as their surrounding.
Catches fire: The chaotic landfills act as a ticking bomb and could create havoc by catching fire anytime. The mountain of waste catches fire when it surmounts the saturation point and no longer withstands the heat due to the pilling up of waste.
Causes of health problems: The health problems related to various emissions from landfills include high PM10 exposure, breathing problems, bacterial infections, asthma, elevated cardiovascular risk, and other infections.
Source of diseases: In India scenario, open dumps are highly prevailing which causes the breeding of mosquitoes, flies, rats, cockroaches, and other pests. Some diseases are very common in the population living near the landfill site such as plague, histoplasmosis, murine typhus, malaria, dengue, West Nile fever, etc. as they are caused by the pests breeding in the landfills.
Challenges faced while addressing the problem of MSW in India:
Lack of Funding to address the MSW problem
The communication gap between central and state government
Failure of waste-to-energy recovery
Implementation of rules and regulations
There is a prevalence of loopholes in the municipal corporations at every stage of waste management i.e from source to disposal
There is a lack of manpower and an insufficient number of professionals in the waste management technology field.
Lack of research and development for new technological practices
Rules related to landfills
The Solid Waste Management Rules issued by the Ministry of Environment, Forest and Climate Change in 2016 state that only non-recyclable, non-biodegradable and non-combustible waste should go to a sanitary landfill.
SWM Rules, 2016 mandates:
setting up solid waste processing facilities by all local bodies having a population of 1 lakh or more within two years.
census towns and local bodies with a population of less than 1 lakh have to set up a common or stand-alone sanitary landfill within three years. Also, common, or regional sanitary landfills will have to be set up by all local bodies and census towns with a population under 0.5 million within the timespan of three years.
bio‐remediation or capping of old and abandoned dumpsites within five years. Bio-remediation or capping involves treating organic waste and spreading the remaining waste uniformly, over the land. It is then covered with a geo-textile layer, a geo-membrane and one-metre of soil so that grass can be grown on it.
As per the new rules, the landfill site should be 100 metres away from a river, 200 metres from a pond, 500 metres away from highways, habitations, public parks and water supply wells and 20 km away from airports or airbases. The guidelines recommend that the construction of landfills on hills should be avoided.
How to better manage landfills in India? Way forward
Dedicated solid waste management cell: Each city needs a dedicated solid waste management cell with appropriately qualified and trained professionals who come with varied backgrounds ranging from social work, science, engineering, and public health.
Waste management audits: Understanding the challenges in the implementation of SWM Rules are equally important, for the administration to take appropriate corrective actions.
Reduce Waste Generation: The most effective way to manage landfills is to reduce the amount of waste generated in the first place. This can be achieved through reducing, reusing, and recycling.
Separation of Waste: Separating waste at the source can help reduce the amount of organic waste that ends up in landfills, as organic waste can be composted instead. This separation can be achieved through education and awareness programs, as well as through the implementation of separate waste collection systems.
Landfill Design and Construction: Landfills should be designed and constructed to minimize their environmental impact. This includes lining the landfill with impermeable barriers to prevent leachate from contaminating the surrounding environment and installing systems to collect and control landfill gas.
Monitoring and Maintenance: Regular monitoring and maintenance of landfills are necessary to ensure that they are operating effectively and to identify and address any issues promptly.
Waste-to-Energy Technologies: Waste-to-energy technologies, such as incineration or gasification, can be used to convert waste into energy, reducing the amount of waste that ends up in landfills.
Education and Awareness Programs: Education and awareness programs can help to encourage individuals and businesses to adopt waste reduction and separation practices and promote responsible waste management.
Proper implementation of schemes: Initiatives such as the Jal Jivan Mission-Urban, Swacch Bharat Mission-Urban whose objectives include universal coverage of water supply and sanitation and waste management should be implemented properly.
The emerging ‘new waste economy’: focused on circular practices and resource recovery offers livelihood and entrepreneurial opportunities if waste sector workers are formally integrated into waste management services, as in the case of Ahmedabad, Bengaluru and Pune.
Conclusion
Urban solid waste management must be reimagined to eliminate such toxic garbage mountains in the future and existing sites must be remediated. Indian cities from Bengaluru to Alappuzha are slowly shifting to decentralized solid waste management approaches with household and community-level waste segregation and resource recovery solutions being implemented successfully.
We need to understand, that we cannot get rid of waste or landfills until and unless we start source segregation, which is also one of the mandates and one of the first rules of solid waste management rules. A landfill will still be required but firstly, we need to build it in a scientific way and secondly, only inert waste should go to landfills. Even in the waste management pyramid, the top options are reusing and recycling. Landfills and waste-to-energy plants are the last options.
A senior Congress and opposition leader have been disqualified from the Lok Sabha, a day after he was convicted in a defamation case by a Surat court.
In this context, this edition of the burning issue will deal with the issue of disqualification of a Member of Parliament and defamation cases. The issue is very important for the upcoming Prelims 2023 examination as well as Mains 2023.
Background of the case
The Congress leader during campaigning for the 2019 parliamentary polls had made a remark, “How come all the thieves have Modi as the common surname?”
On the basis of this remark, a criminal defamation case was filed against him in a surat court by a BJP MLA who had alleged that the congress leader while addressing a poll rally in 2019 in Karnataka defamed the entire Modi community with his remark.
The Surat court on Thursday convicted the Congress leader in a criminal defamation case and awarded him a two-year jail term.
On basis of this, the Congress leader has been disqualified from the Lok Sabha,. A notice issued by the Lok Sabha Secretariat said that he stood disqualified from the House from March 23, the day of his conviction.
Disqualification of a Lawmaker
Disqualification of a lawmaker is prescribed in three situations-
Under Constitutional provisions: Disqualification is through Articles 102(1) and 191(1) for disqualification of a member of Parliament and a member of the Legislative Assembly respectively. The grounds here include
holding an office of profit,
being of unsound mind or insolvent or
not having valid citizenship.
Under Anti-Defection law: It is in the Tenth Schedule of the Constitution, which provides for the disqualification of the members on grounds of defection.
Under Representation of The People Act (RPA), 1951: It provides for disqualification for conviction in criminal cases and several other grounds.
Disqualification under RPA, 1951
The provision is aimed at “preventing the criminalisation of politics” and keeping ‘tainted’ lawmakers from contesting elections. There are several provisions that deal with disqualification under the RPA.
Section 8 of the RPA deals with disqualification for conviction of offences.
Section 8(1): First, disqualification is triggered for conviction under certain offences listed in Section 8(1) of The Representation of The People Act. This includes specific offences such as promoting enmity between two groups, bribery, and undue influence or personation at an election.
Section 8(2) also lists offences that deal with hoarding or profiteering, adulteration of food or drugs and for conviction and sentence of at least six months for an offence under any provisions of the Dowry Prohibition Act.
Section 8(3) states: “A person convicted of any offence and sentenced to imprisonment for not less than two years shall be disqualified from the date of such conviction and shall continue to be disqualified for a further period of six years since his release.”
Section 9 deals with disqualification for dismissal for corruption or disloyalty, and for entering into government contracts while being a lawmaker.
Section 10 deals with disqualification for failure to lodge an account of election expenses.
Section 11, deals with disqualification for corrupt practices.
Also, On 10 July 2013, the Supreme Court of India, in its judgment of the Lily Thomas v. Union of India case, decided that any MP, MLA or MLC who is sentenced for a crime and granted at least two years of imprisonment, loses membership of the House with immediate effect.
Appeal and stay of disqualification
The disqualification can be reversed if a higher court grants a stay on the conviction or decides the appeal in favour of the convicted lawmaker.
In a 2018 decision in ‘Lok Prahari v Union of India’, the Supreme Court clarified that the disqualification “will not operate from the date of the stay of conviction by the appellate court.”
This means that Gandhi’s first appeal would be before the Surat Sessions Court and then before the Gujarat High Court.
Changes in the Law
Under the RPA, Section 8(4) stated that the disqualification takes effect only “after three months have elapsed” from the date of conviction.
Within that period, lawmakers could file an appeal against the sentence before the High Court.
However, in the landmark 2013 ruling in ‘Lily Thomas v Union of India’, the Supreme Court struck down Section 8(4) of the RPA as unconstitutional.
The Lily Thomas Verdict
The Lily Thomas verdict was a landmark judgment delivered by the Supreme Court of India in 2013.
The verdict struck down a provision in the Representation of the People Act (RPA), which allowed convicted lawmakers to continue in office if they filed an appeal within three months of their conviction.
The provision, which was part of Section 8(4) of the RPA, had been criticized for allowing convicted politicians to continue to hold public office while their appeals were pending in higher courts, and for contributing to the criminalization of politics in India. The verdict was seen as a major step towards cleaning up Indian politics and ensuring that convicted criminals do not get to occupy public offices.
Defamation in India
What is Defamation?
Defamation refers to the act of publication of defamatory content that lowers the reputation of an individual or an entity when observed through the perspective of an ordinary man. Defamation in India is both a civil and a criminal offence.
The Laws which Deal with Defamation:
Sections 499 and 500 of IPC: Sections 499 and 500 in the IPC deal with criminal defamation. While the former defines the offence of defamation, the latter defines the punishment for it.
Section 499
Whoever, by words either spoken or intended to be read, or by signs or by visible representations, makes or publishes any imputation concerning any person intending to harm, or knowing or having reason to believe that such imputation will harm, the reputation of such person, is said, except in the cases hereinafter expected, to defame that person.
Section 500
Whoever defames another shall be punished with simple imprisonment for a term which may extend to two years, or with fine, or with both.
Supreme court on defamation
Supreme Court of India in the Subramanian Swamy case upheld the validity of the criminal defamation law.
Court rules that defamation laws are not in conflict with the right to free speech.
Court stated that notwithstanding the expansive and sweeping ambit of freedom of speech, as with all rights, the right to freedom of speech and expression is not absolute. It is subject to the imposition of reasonable restrictions
Why should it be retained?
The Supreme Court declared that the right to free speech under Article 19(1)(a) had to be “balanced” against the right to “reputation” under Article 21.
It has been part of the statutory law for over 70 years. It has neither diluted our vibrant democracy nor abridged free speech
Protection for “legitimate criticism” on a question of public interest is available in the Civil law of defamation & Under exceptions of Section 499 IPC
Mere misuse or abuse of law can never be a reason to render a provision unconstitutional rather lower judiciary must be sensitized to prevent misuse
Monetary compensation in civil defamation is not proportional to the excessive harm done to the reputation
Why should it not be retained?
“Constitutional fraternity” is not a part of Article 19(2) of the Constitution, which specifically limits the circumstances under which the state can restrict speech to eight enumerated categories.
It is also nowhere in the fundamental rights chapter of the Constitution, so the question of “balancing” free speech against constitutional fraternity does not arise.
Article 21 which is a shield to protect the individual against State persecution or indifference, is used as a sword to cut down on the fundamental right to freedom of speech and expression because of this provision.
Freedom of speech and expression of media is important for a vibrant democracy and the threat of prosecution alone is enough to suppress the truth. Many times influential people misuse this provision to suppress any voices against them.
Considering anecdotal evidence, every dissent may be taken as unpalatable criticism. Sections 499 and 500 of the IPC prescribe two years’ imprisonment for a person found guilty of defamation.
Conclusion
As India continues to strengthen its democratic system, one important issue that needs resolution is determining the correct answer for when a disqualification is removed for a sitting member of parliament who has been granted a stay on their conviction.
The conflicting court judgments and constitutional provisions only highlight the need for a clear and definitive resolution to this issue, which will undoubtedly enhance the credibility and legitimacy of the Indian political system.
Recently, the Supreme Court referred a batch of petitions seeking the legal recognition of same-sex marriages to a Constitution Bench.
The Union government has opposed the petitions. Law Minister Kiren said that marriage is a matter of policy to be decided by Parliament and the executive alone.
In this context, this edition of the Burning Issue will explain this issue and the arguments around it.
What is the issue?
The Supreme Court had issued notice to the Centre Govt on a plea by two gay couples seeking recognition of same-sex marriage under the Special Marriage Act, 1954 in November 2022, asking for its stand on same-sex marriage.
In response to this notice, the Union Government has recently filed an affidavit clarifying its stance on same-sex marriages.
What is meant by Same-sex marriage?
Same-sex marriage is the legal recognition of a marriage between two individuals of the same sex.
It grants same-sex couples the same legal and social recognition, rights, and privileges that are traditionally associated with marriage, including property rights, inheritance rights, and the ability to make decisions for each other in medical emergencies.
The recognition of same-sex marriage varies around the world, with some countries legalizing it while others do not.
The issue has been the subject of much debate and controversy, with arguments for and against same-sex marriage based on religious, cultural, social, and legal considerations.
Same-sex marriage in India
Same-sex marriage is currently not legally recognized in India.
Section 377 of the Indian Penal Code, which criminalized homosexuality, was struck down by the Supreme Court of India in 2018, which was a landmark decision for LGBTQ+ rights in the country.
However, there is still no law that allows same-sex couples to legally marry or have any legal recognition of their relationships.
What is the Judicial basis for same-sex marriage?
Decriminalization of IPC section 377 in the Navtej Singh Johar & Ors. V. Union of India(2018)
In this landmark verdict, the Supreme Court today scrapped the controversial Section 377– a 158-year-old colonial law on consensual gay sex.
Section 377, which is part of an IPC 1861, banned “carnal intercourse against the order of nature with any man, woman or animal” — which was interpreted to refer to homosexual sex.
The Supreme Court reversed its own decision and said Section 377 is irrational and arbitrary.
The judgment was delivered by a Bench of Chief Justice of India Dipak Misra and Justices Rohinton Nariman, AM Khanwilkar, DY Chandrachud and Indu Malhotra.
What does the Government affidavit say?
The main points of the Government affidavit are:
Heterosexual marriage has been the norm throughout history and is “foundational to both the existence and continuance of the state.”
Marriage in India is regarded as a “holy union,” a “sacrament,” and a “sanskar,” and is dependent on customs, rituals, practices, cultural ethos, and societal values.
Any “deviation” from the “statutorily, religiously and socially” accepted norm in “human relationships” can only happen through the legislature and not the Supreme Court.
In its affidavit to the Supreme Court, the government argued that the traditional concept of marriage, consisting of a biological man, woman and child, cannot be disrupted.
It claimed that recognizing same-sex marriages could cause havoc in the system of personal laws.
As different from many liberal democracies, in India, aspects of marriage, succession and adoption are governed by religious personal laws.
Reasons behind the center’s opposition
Legal revamp required: The registration of marriage of same-sex persons also results in a violation of existing personal as well as codified law provisions — such as ‘degrees of prohibited relationship’; ‘conditions of marriage’; ‘ceremonial and ritual requirements’ under the personal laws governing the individuals”.
Definition of spouse: In a same-sex marriage, it is neither possible nor feasible to term one as ‘husband’ and the other as ‘wife’ in the context of the legislative scheme of various personal laws.
Against cultural norms: The social order in our Country is a religion based which views procreation as an obligation for the execution of various religious ceremonies.
Property and other civil rights: Property rights post-marriage is a much-contested issue in India. Same-sex marriage will not create any immunity for the law but increase complex interpretations.
Navtej case did not mention marriages: The 2018 Navtej Singh Johar judgment decriminalized homosexuality, but it did not mention/legitimize same-sex marriage.
Not comparable to the heterosexual couple: Same-sex marriage cannot be compared to a man and woman living as a family with children born out of the union.
Violation of existing personal laws: Registration of same-sex marriage would result in a violation of existing personal as well as codified law provisions.
In the interest of society: There is a “compelling interest” for society and the state to limit recognition to heterosexual marriages only.
What stand do petitioners have?
Same-sex marriage as a matter of rights
Any social policy is liable to judicial interference if rights are violated.
The petitioners rely on the rights to equality and non-discrimination as laid out in Articles 14 and 15.
The Constitution prohibits the state from discriminating based on sex.
Sex has been interpreted by the Supreme Court in Navtej Singh Johar (2018) to include sexual orientation. Granting the right to marry heterosexual couples and not to homosexual couples discriminates on the basis of their sexual orientation.
Same-sex marriage is a matter of privacy
Right to privacy: Supreme Court recognized this right to be part of the right to life and liberty under Article 21 of the Constitution in the celebrated Puttaswamy (2017) verdict.
What the court said on privacy: Privacy includes at its core the preservation of personal intimacies, the sanctity of family life, marriage, procreation, the home and sexual orientation.
The state currently denies this right: The right to privacy entails the right of the citizens to make decisions about their family life and marriage. The state currently denies same-sex couples this right.
The Special Marriage Act: The Special Marriage Act is a secular law that works alongside religious personal laws. Same-sex marriages can be recognized under the Special Marriage Act. The Act already speaks of marriages between any two persons which are solemnized under it. Any two persons can include two persons of the same sex.
Special Marriage Act
The Special Marriage Act is a law in India that allows individuals of different religions or nationalities to marry each other.
It was enacted in 1954 and came into effect in 1955.
The Special Marriage Act allows for inter-caste and inter-religious marriages, and couples who register under this act are not required to change their religion or follow any religious rites or rituals. However, the act does not recognise same-sex marriages.
The act also provides for divorce on certain grounds and maintenance to the spouse and children.
Issues with such marriages
Morality: This has brought with it a change in social attitudes so that the stigma attached to homosexuality has to a greater extent disappeared.
Rising activism: Campaigns for lesbian and gay rights have taken on an increasingly radical character, arguing for an end to all forms of discrimination against homosexuality.
Religious sanctions: Same-sex acts are punishable by death in Arab countries. No religion openly embraces same-sex marriage. More or less, they are considered unnatural everywhere.
Social stigma: Apart from the harsh legal scenario, homosexuals face social stigma as well. Same-sex marriages are still unimaginable as any instance of sexual relations between a couple of the same sex draws hatred and disgust.
Patriarchy: It must not be forgotten that Indian society is patriarchal in nature and the fact that certain women and men have different choices, which is not sanctioned by the ‘order’, frightens them in a way.
Burden of collectivity: Our society is very community oriented and individualism is not encouraged in the least, any expression of homosexuality is seen as an attempt to renounce tradition and promote individualism.
Arguments in favor of such marriages
Pursuit of happiness: Homosexuality is not an offense, it is just a way of the pursuit of happiness, a way to achieve sexual happiness or desire.
Right to privacy: The fundamental right to liberty (under Article-21) prohibits the state from interfering with the private personal activities of the individual.
Arbitrariness: Infringement of, the right to equal protection before the law requires the determination of whether there is a rational and objective basis to the classification introduced.
Issues with the definition: Section-377 assumes that a natural sexual act is that which is performed for procreation. Hence, it thereby labels all forms of the non-procreative sexual act as unnatural.
Discrimination: Section-377 discriminates based on sexual orientation which is forbidden under Article-15 of the Constitution. Article-15 prohibits discrimination on several grounds, which includes Sex.
Human rights: The universal law of Human Rights states that social norms, tradition, custom or culture cannot be used to curb a person from asserting his fundamental and constitutional rights.
Many countries recognizing: According to global think tank Council of Foreign Relations, same-sex marriages are legal in at least 30 countries, including the United States, Australia, Canada and France.
Parallels in west
In Obergefell v Hodges (2015), the Supreme Court of the United States held that same-sex couples have a constitutional right to marriage.
Thirty-one out of the 50 states in the United States have marriage laws that define marriage as between a man and a woman.
In May 1996, South Africa became the first country to constitutionally prohibit discrimination based on sexual orientation.
The United Kingdom passed the “Alan Turing law” in 2017 which ‘granted amnesty and pardon to the men who were cautioned or convicted under historical legislation that outlawed homosexual acts’.
Way forward
Dissociating from religion: Such marriages are forbidden in almost every religion. Hence no single religion should be considered a hindrance in creating a legal sanction.
Doing away with discrimination: The same-sex community needs an anti-discrimination law that empowers them to build productive lives and relationships irrespective of gender identity.
Letting the society evolve: Society has to imbibe the doctrine of progressive realization of rights and it cannot be forcibly convinced by law.
Creating awareness: Certainly, this is not an overnight phenomenon. We are a society where the practice of Sati and Nikah halala was considered a religious order.
Widen the scope of article 15 to include gender too: Article 15 secures the citizens from every sort of discrimination by the state, on the grounds of religion, race, caste, sex or place of birth or any of them. The grounds of non-discrimination should be expanded by including gender and sexual orientation.
Sensitise the general public and officials: Justice Rohinton F. Nariman had directed in Navtej Singh Johar & Ors., the Government to sensitize the general public and officials, to reduce and finally eliminate the stigma associated with the LGBTQ+ community through the mass media and the official channels.
Sensitisestudents: School and university students too should be sensitized about the diversity of sexuality to deconstruct the myth of heteronormativity. Heteronormativity is the root cause of hetero-sexism and homophobia.
Conclusion
The debate on the legal recognition of same-sex marriages in India continues to be a contentious issue, with the government and petitioners presenting opposing views.
However, given the complex social, cultural, and legal considerations, any decision regarding same-sex marriage should be carefully evaluated to ensure that it is inclusive and respects individual rights.
Ultimately, it is important to arrive at a balanced and just solution that upholds the principles of equality and non-discrimination for all individuals, regardless of their sexual orientation.
Two of West Asia’s major powers that have been at odds with each other for decades, Saudi Arabia and Iran, agreed to restore diplomatic relations last week in an agreement brokered by China. It is a major breakthrough if viewed from the angle of implications the agreement could have on the region and global geopolitics.
In this context, this edition of the burning issue will elaborate on this agreement and its implications.
A Timeline of the Saudi-Iran relationship
Pre-1979 Phase: Saudi Arabia and Iran compete for regional dominance.
Iranian Revolution (1979) brings down the monarchy and turns Iran into a Shia theocratic republic.
1980-1988: Iran-Iraq war sees Saudi Arabia support Iraq.
1990-1991: Saudi Arabia supports Iraq against Iran in the Gulf War.
1996: Iranian-backed Hezbollah bombs Saudi military housing complex in Khobar, killing 19 US soldiers.
2011-2015: Saudi Arabia and Iran support opposing sides in the Syrian civil war.
2015: Saudi Arabia launches military intervention in Yemen against Iranian-backed Houthi rebels.
January 2016: Saudi Arabia executes prominent Shia cleric Sheikh Nimr al-Nimr, leading to protests in Iran and the burning of the Saudi embassy in Tehran. Saudi and several Arab allies cut diplomatic ties with Iran.
2019: Saudi oil facilities are attacked, leading to increased tensions between Saudi Arabia and Iran.
2021: Both begin direct talks, brokered by China.
March 2023: Both nations announce an agreement to restore diplomatic ties, brokered by China.
Reasons for hostile relations
Religious contradictions: Historically, the rivalry between the two countries dates back to the seventh century when the Prophet Muhammad died without a clear successor, leading to a dispute over the leadership of the Muslim community. This dispute ultimately resulted in the split between Sunni Islam (which dominates in Saudi Arabia) and Shia Islam (which dominates in Iran).
Geopolitical tensions: The two countries are located in a strategically important region, with both seeking to exert influence and maintain dominance in the Middle East. Iran’s Islamic revolution in 1979 posed a challenge to Saudi Arabia’s status as the leading Islamic power in the region, and the two countries have been competing for regional influence ever since.
Sectarian tensions: Saudi Arabia and Iran have long had competing visions for the role of Islam in society. Saudi Arabia promotes a strict interpretation of Sunni Islam known as Wahhabism, while Iran supports Shia Islam and the principle of the “Guardianship of the Jurist,” which asserts that a senior Shia cleric should have political power and authority over all Muslims.
Ties with west: The two countries have fundamentally different views on a range of issues, including democracy, human rights, and regional security. Saudi Arabia is a conservative monarchy with close ties to the United States, while Iran is an Islamic republic that has been at odds with the West since the 1979 revolution.
What are the terms of the agreement?
The details of the agreement are yet to be unveiled but prima facie it seems to be a quid pro quo.
Iran has reportedly agreed to prevent further attacks against Saudi Arabia from Houthi-controlled parts of Yemen
On the other hand, Saudi Arabia has agreed to rein in Iran International, a Farsi news channel critical of the Iranian regime.
Foreign Ministers of both countries will meet soon to thrash out the terms of the reconciliation before reopening embassies in each other’s capitals in two months.
Why did Saudi Arabia reach out to Iran, defying its ally the US?
Internal Security: When Saudi oil facilities were attacked in 2019, the US looked away, prompting the Saudis to look for alternative solutions to the Iran problem, such as reaching out to the Iranians.
Differences over Palestine: The US was trying to broker a normalization agreement between Saudi Arabia and Israel to bring the two pillars of its West Asia policy together against Iran.
US negligence of West Asia: The US deprioritized West Asia due to bigger foreign policy challenges, such as the Russian war in Ukraine and China’s rise in the Indo-Pacific.
Obsolesce of ties with the US: Relations between Saudi Arabia and the US have been rocky in recent years, as the US is not as dependent on Gulf Arabs as it used to be during the Cold War.
Shared opinions over Israel: Saudi Arabia has been hesitant to reconcile with Israel, and its relations with the US have been rocky in recent years.
What led Iran to accept the deal?
Isolation and Domestic pressure: Tehran is aware that getting relief from Western sanctions is not a near-term possibility. Despite the crackdown, protests in Iran refuse to die down.
Crumbling economy: Iran’s economy is deteriorating and its currency, the rial, is struggling. A deal with Saudi Arabia, under China’s mediation, could open economic lifelines for Iran
China factor: Iran wanted Chinese investments and support for the rial. China allowed Iran to withdraw parts of the $20 billion funds frozen with Chinese banks due to US sanctions.
Fouling American efforts: Iran knows that such a deal could complicate American efforts to rally Arab countries and Israel against it. A reconciliation with Saudi is beneficial for Iran, at least in a tactical sense.
Why is China brokering the deal?
Securing its oil supplies: China has an interest in promoting stability in the Middle East region, which is a major source of oil and natural gas for China.
Side-lining the US: By brokering a deal between Saudi Arabia and Iran, China can position itself as a mediator and gain goodwill from both sides.
Create an alternative axis: China has longstanding relationships with both countries. US since Trump’s departure is distancing itself from the US, whereas China is also getting closer to Russia amid the war.
Image building as a leader: While the US is busy rallying the Western world to arm Ukraine to push back Russia and weaken Moscow through sanctions, China is quietly brokering peace in the Global South.
Growing role in the Middle East: China could step in and help the two parties reach an agreement because its dramatic economic rise has given it a growing role in the Middle East.
Narrow approach of the US for the region: The United States, by contrast to china, has “special relationships” with some countries in the Middle East and no relationship at all with others, most notably Iran. The result is that client states such as Egypt, Israel, or Saudi Arabia take U.S. support for granted and treat its concerns with ill-disguised contempt
“That’s how a great power maximizes its leverage: You make it clear that you’re willing to work with others if they are willing to work with you, and your ties with others remind them that you have other options, too”
Key implications for the US
Welcomed the move: The public narrative is that the peace deal would help stabilize the region and benefit the global energy market.
It is a wake-up call: for the Biden administration and the rest of the United States’ foreign-policy establishment because it exposes the self-imposed handicaps that have long crippled U.S. Middle East policy.
China as a force of peace: It also highlights how China is attempting to present itself as a force for peace in the world, a mantle that the United States has largely abandoned in recent years.
Hegemony decline in the region: The US would not like to lose its influence in West Asia even when it is deprioritizing the region.
Saudi may drift away: the US sees an ally (Saudi Arabia) drifting further away, a rival it wanted to contain (Iran) making new friends, and China spreading and deepening its influence in a region the US has dominated historically.
Iran Sanctions going loose: The Iran nuclear deal is practically dead and the US wants Saudi Arabia to normalize ties with Israel and put up a joint front against Iran.
The US should change its policytowards the region: The obvious lesson for the Biden administration is to devote more attention to defusing tensions, preventing wars, and ending conflicts, instead of defining foreign-policy success by how many wars it wins, how many terrorists it kills etc. If the United States allows China to establish a reputation for being a reliable peacemaker, as a great power that is willing to live and let live in its relations with others, convincing others to line up with the US will become increasingly difficult.
Possible Outcomes of the deal
Dispute resolution without the US: Besides bolstering China’s diplomatic credentials and possibly lowering the temperature between two well-armed rivals, the agreement gives all three nations involved the chance to show that one can resolve issues without US engagement, something China and Saudi Arabia have been keen to demonstrate.
For Iran — still under punishing sanctions for its nuclear program and facing criticism for its crackdown on protesters — the agreement will help it repair ties with more Arab nations. Economically it could benefit both Iran and Saudi Arabia by luring more Chinese investment. And the deal could even help foster peace in Yemen, riven by a civil conflict that has been seen as a proxy war between Tehran and Riyadh.
For Saudi Arabia: Yet the agreement also sets up an interesting balancing act for Crown Prince Mohammed, who has helped turn his economy more toward Asia while chaffing at US criticism of his nation’s human rights record. But Saudi Arabia still relies on US firepower for its military, a reality unlikely to change anytime soon. And the deal risks a fragile working relationship the Saudis — tacitly backed by Washington — have built with Israel, which still considers Iran enemy No. 1.
For Yemen: The deal renewing diplomatic relations between Saudi Arabia and Iran had barely been signed on March 10 in Beijing when all eyes turned to Yemen, where the two rival powers have been in indirect confrontation since 2015. The surprise agreement between the two Middle Eastern powers may have its most concrete impact in Yemen, which has been ravaged by a war between its government, supported by a Saudi-led military coalition, and Houthi rebels supported by Iran.
Implications for India
Beijing’s strategic footprint will grow in the Indian Ocean: The China-backed Saudi Arabia-Iran detente and its expanding strategic levers in Islamic World with ports in Iran, Oman, UAE, Pakistan and Sri Lanka is designed to choke India in its own Indian Ocean backyard with New Delhi facing a possible action from Beijing over its close relations with its QUAD partners, two of which are in the AUKUS alliance, on its northern land frontiers.
Iran further moving away from India: There is little doubt that while India has been successful in expanding its relations with all key actors in West Asia, it has ended up with diminished relations with Iran. It is not in its interest to see China entrench itself in a country that is strategically important, quite apart from being one with which we enjoy long-standing civilizational affinities
Security of energy: Since Iran and Saudi Arabia produce the majority of the world’s oil, a conflict between them could push up oil prices, which would have a significant impact on India’s energy security. The steady supply of oil to India and the stabilization of global oil prices could both result from normalizing relations between these two nations.
Trade: India has significant trading relationships with Saudi Arabia and Iran. India could benefit from new trade and investment opportunities if their relations were normalized.
Stability in the region: The International North-South Transport Corridor (INSTC) is one of India’s most important economic and strategic interests in the Middle East.
Stability in India’s extensive neighbourhood: which includes Iran. For India, any instability in the region could have far-reaching effects. Iran’s ties to Saudi Arabia could help stabilize the region and lessen the likelihood of terrorism and conflict. India contributes significantly to the maintenance of regional peace and stability by maintaining cordial relations with Saudi Arabia and Iran.
What inferences can be drawn from all these?
Strategic realignments in West Asia: It can be inferred that West Asia is currently undergoing significant strategic realignments, with the UAE normalizing relations with Israel and other Arab countries deepening their partnerships.
Shifted US focus on Ukraine and Indo-Pacific: The US, which traditionally held significant power in the region, has deprioritized West Asia due to bigger foreign policy challenges such as Russia’s war in Ukraine and China’s rise in the Indo-Pacific.
China occupying power vacuum: This de-prioritization has created a power vacuum that has allowed Iran to rise as a challenge, prompting the US to try to bring Israel and the Arab world together against Iran.
When the elephants fight, the grass suffers:” In the decades to come, many states will prefer to rally behind whichever major power seems more likely to promote peace, stability, and order. By the same logic, they will tend to distance themselves from whichever major powers they believe are disturbing the peace.
Conclusion
Reduced tension between Saudi Arabia and Iran is a positive development that reduces the risk of a serious clash in a strategic region.
This new détente is to be welcomed, therefore, even if Beijing gets some of the credit. The proper U.S. response is not to bemoan the outcome; it is to show that it can do as much or more to create a more peaceful world.
However, India must be ready to deal with Beijing translating economic might into diplomatic wins.
Startup-focused lender SVB Financial Group on March 10 became the largest bank to fail since the 2008 financial crisis, in a collapse that roiled global markets. Regulators had abruptly shut down Signature Bank to prevent a crisis in the broader banking system.
In this context, this edition of the burning issue will talk about this crisis, scenarios which could emerge, how India will be impacted by it and how the government is responding to the situation.
About Silicon Valley Bank
It is a financial institution that provides banking services to the technology industry and venture capital firms.
Founded in 1983, it has since become the go-to bank for startups and entrepreneurs in Silicon Valley and beyond.
It is unique in that it understands the specific needs and challenges of the tech industry, and provides a range of services that cater to startups, including loans, deposits, and investment management.
It has become a critical player in the startup ecosystem, providing funding and financial services to many of the world’s most successful startups, including Tesla, Uber, and LinkedIn.
Why did it collapse?
Heavy investment in government bonds: During the period of near-zero interest rates, SVB invested billions of dollars in US government bonds. What appeared to be a safe investment quickly unravelled as the Federal Reserve aggressively raised interest rates to combat inflation.
A decline in bond prices: Bond prices decline when interest rates rise, hence the rate increase undermined the value of SVB’s bond holdings. According to Reuters, the portfolio was yielding an average of 1.79% last week, well below the 10-year Treasury yield of roughly 3.9%.
Customers panicking: SVB disclosed that it had sold a slew of securities at a loss and would sell $2.25 billion in new shares to plug a hole in its finances. Customers panicked, and they withdrew enormous sums of money.
Bank’s Stock prices plummeted: The bank’s stock fell 60% dragging down rival bank shares as investors began to fear a replay of the global financial catastrophe a decade and a half ago.
Regulators stepped in: Trading in SVB shares had ceased and the company had abandoned efforts to raise funds or find a buyer. California regulators stepped in, closing the bank and placing it in receivership under the Federal Deposit Insurance Corporation, which normally entails liquidating the bank’s assets to repay depositors and creditors.
A case of liquidity risk: The case represents a classic case of an economic crisis situation called liquidity risk. Liquidity risk is the risk that a bank won’t be able to meet its obligations when they come due without incurring losses.
Reasons for SVB’s downfall
A downturn of tech stocks: The bank was hit hard by the downturn in technology stocks over the past year as well as the Federal Reserve’s aggressive plan to increase interest rates to combat inflation.
Lower bond yield due to lower interest rates: SVB bought billions of dollars’ worth of bonds over the past couple of years, using customers’ deposits as a typical bank would normally operate.
Mostly startup account holders: SVB’s customers were largely startups and other tech-centric companies that started becoming needier for cash over the past year.
Drying VC funding: Venture capital funding was drying up, and companies were not able to get additional rounds of funding for unprofitable businesses.
Fear over deposit insurance: Since its customers were large businesses and the wealthy, they likely were more fearful of a bank failure since their deposits were over $250,000, which is the government-imposed limit on deposit insurance.
Is this a start of a banking crisis?
The demise of both Silicon Valley Bank and Signature Bank put a spotlight on the challenges surrounding small and midsize banks, which tend to focus on niche businesses and can be more vulnerable to bank runs than larger peers.
The most immediate concern is that the failure of one would scare off customers of other banks. Both Silicon Valley Bank and Signature are small compared with the nation’s largest banks — Silicon Valley Bank’s $209 billion and Signature’s $110 billion in assets pale next to the more than $3 trillion at JPMorgan Chase. But bank runs can happen when customers or investors panic and start pulling their deposits.
Shares of bigger banks were not affected as much. All banks face interest rate risk today on some of their holdings because of the Fed’s rate-hiking campaign. This has resulted in $620 billion in unrealized losses on bank balance sheets as of December 2022.
But most banks are unlikely to have significant liquidity risk.
Implications
The collapse of Silicon Valley Bank and Signature Bank made a huge impact on global finances as stocks have lost $465 billion in market value so far.
Startups scramble: Many startups and other companies that relied on the bank’s services were suddenly left without access to their funds, which caused financial strain and uncertainty for these businesses.
Ripple effect: They now fear that they might have to pause projects or lay off or furlough employees until they could access their funds.
Huge uninsured deposits: The vast majority of these were uninsured due to its largely startup and wealthy customer base.
No scope for asset reconstruction: There is no potential buyer of Silicon Valley Bank.
How India could be impacted?
SVB has invested in around 21 Indian start-ups including Paytm, Paytm Mall, Shaadi.com, CarWale, Naaptol, and One97 Communications – though the amount remains unclear. But according to the data, SVB has no ‘significant investments in Indian start-ups post-2011.
For Indian mutual fund investors who have exposure to international mutual funds and international hybrid mutual funds, this news is not a good news.
Impact on Indian startups
Uncertainty over deposits: The failure of SVB is likely to have a ripple effect on Indian startups, many of which have significant amounts of funds deposited with the bank.
Hamper the funding: SVB has been a major player in the Indian startup ecosystem, providing banking services and funding to many of the country’s most successful startups, including Flipkart, Ola, and Zomato.
Ripple effect: This could lead to a cash crunch for many companies, which may be forced to cut costs, delay projects, or lay off employees.
Reduce global footprints: SVB has also been instrumental in helping Indian startups expand into the US market, by providing them with the necessary infrastructure and support to set up operations in Silicon Valley.
India’s resilience
The risk remains quite low: as Indian banks are well-capitalised. RBI’s Financial Stability Report noted that even under a severe stress scenario, the capital adequacy ratio of banks is likely to remain within the mandated range.
Improve with time: Some Indian startups with exposure to SVB may face difficulty in funding day-to-day operations as their funds remain locked. FDIC will facilitate withdrawals, but it may take time.
Government lending support: Indian Government has indicated that it will meet Indian startups this week to understand the impact of SVB Financial’s collapse on them and how the government can help during the crisis.
Learnings from this bank’s failure
Question the Trump-era deregulation of banks: The crisis brings into question the Trump-era deregulation of banks such as the decision to roll back Dodd-Frank’s ‘too big to fail’ rules, reducing both oversight and capital requirements. Both seem to have contributed to SVB’s collapse. It appears that the deregulation has allowed banks such as Silicon Valley Bank to take reckless risks. Now there needs to be a serious conversation about reversing the law to shore up confidence and avoid further collapses.
Pause on its rate hike programme: It is now doubtful that the Fed will continue with its plan for aggressive interest rate hikes. The next hike was widely expected on 22 March following robust jobs data in January and February. The stress in the banking sector, and the wider impact on confidence, will now give the central bank cause for pause on its rate hike programme.
Praise for RBI: The Reserve Bank of India (RBI) deserves credit for how it handles the Indian banking system. Time and again and in each global crisis, it gets proven that Indian banks are tightly regulated, which ensures that there are no major shocks.
To be fair, most Indian banks are safe, at most times. And the reason is that the RBI monitors them very closely and forces them to take corrective actions proactively if there is something amiss. But still, all banks are not the same.
Conclusion
When an ecosystem collapses, like the crypto, start-ups and PEs, some casualties are bound to happen. The meltdown could be in its final leg and collateral damage has hit market sentiments.
But this will not last long and may be closer to a panic bottom in the markets.
Recently, The Supreme Court of India in a judgment gave directions to reform the process of appointment of Election Commissioners in the Election commission of India.
In this context, this edition of the burning issue will elaborate on this judgment and talk about the various facets of this judgment.
Background of the case
In 2015, a public interest litigation was filed by Anoop Baranwal challenging the constitutional validity of the practice of the Centre appointing members of the Election Commission.
In October 2018, a two-judge bench of the SC referred the case to a larger bench since it would require a close examination of Article 324 of the Constitution, which deals with the mandate of the Chief Election Commissioner.
In September last year, a five-judge Constitution bench headed by Justice KM Joseph began hearing the case and almost a month later, the verdict was reserved.
About the Election Commission of India
During the initial days: At first, there was only a Chief Election Commissioner on the commission. There are currently two Election Commissioners in addition to the Chief Election Commissioner. In 1989, two additional Commissioners were appointed for the first time; however, their terms were extremely limited, lasting only until January 1, 1990.
Multi-member body: Two additional Election Commissioners were appointed later, on October 1, 1993. Since then, the idea of a Commission with multiple members and the authority to make decisions by majority vote has been in place.
Appointment: The Chief Election Commissioner and the Election Commissioners are both appointed by the President. Their tenure is six years, or until they turn 65, whichever comes first.
Status as Indian Supreme Court Judges: They have the same status as Indian Supreme Court Judges and receive the same benefits and salary. Parliament must impeach the Chief Election Commissioner in order to remove him or her from office.
What is the final judgment?
In the case of Anoop Baranwal v. Union of India, a five-judge bench of the Supreme Court unanimously held that appointments to the constitutional posts of Chief Election Commissioner and Election Commissioners are to be made by the President of India, on the basis of the advice of a three-member committee, comprising the Prime Minister, the Leader of the Opposition in the Lok Sabha, i.e. the lower house of the Parliament (or Leader of the largest party in Opposition in the lower house, in absence of a Leader of Opposition), and the Chief Justice of India (CJI).
What is the current process of appointment?
As per the current process, the Law Minister suggests a pool of suitable candidates to the Prime Minister for consideration. The President makes the appointment on the advice of the PM.
Significance of this judgment
Reducing the executive control: The judgment reaffirms and reiterates the importance of divesting the control of the executive over a body that is crucial to the conduct of free and fair elections.
Strengthening the independence of ECI: The judgment is being seen as a step forward in the direction of strengthening the independent authority and functioning of the Election Commission which alone is mandated to conduct a free and fair election under Article 324 of the Constitution”.
Protecting CEC and other ECs: It will automatically protect the Election Commissioners and the CEC from removal midway through their term and is therefore vital in protecting the Election Commission’s independence.
Why court found it relevant to intervene?
According to Article 324(2), The Election Commission shall consist of the Chief Election Commissioner and such number of other Election Commissioners, if any, as the President may from time to time fix and the appointment of the Chief Election Commissioner and other Election Commissioners shall, subject to the provisions of any law made in that behalf by Parliament, be made by the President. The crux of the challenge is that since there is no law made by Parliament on this issue, the Court must step in to fill the “constitutional vacuum.”
Article 324(5) further authorizes the President to determine the conditions of service and tenure of the Election Commissioners, again, subject to any law made by the Parliament. Notably, a law has been framed by the Parliament with respect to Article 324(5)- the Election Commission (Conditions of Service of Election Commissioners and Transaction of Business) Act, 1991, however, no such law has been promulgated under Article 324(2)- concerning appointments to the Election Commission of India (ECI)- despite the constitutional expectation.
Debates of the Constituent Assembly: The Court’s verdict is based on a reading of the debates of the Constituent Assembly to ascertain what the founding members of the Constitution envisaged the process to be and an interpretation of similar provisions in the Constitution.
Law made on this behalf by Parliament: The deliberate addition of the words “subject to the provisions of any law made on that behalf by Parliament” after prolonged discussions indicates that “what the Founding Fathers clearly contemplated and intended was, that Parliament would step in and provide norms, which would govern the appointment to such an important post as the post of Chief Election Commissioner and the Election Commissioners.”
Examples of other commissions: The ruling examined a number of provisions in the Constitution, including the ones relating to the powers of the Supreme Court and High Court; establishing the SC, ST and Backward Classes Commissions, etc. where the Constitution uses the phrase “subject to the provisions of any law made by Parliament”. The Court finds that while legislation has been supplemented for those provisions, there is no law on the appointment of the CEC even 70 years after independence.
Criticism of the judgment
Former Union law secretary P K Malhotra, who had also headed the Legislative Department in the law ministry, said that through the verdict, the top court is legislating in the domain of Parliament.
However, the mode of appointment directed by the SC does not find any place in the Indian Constitution and can be challenged by the executive as judicial activism or judicial overreach.
Government response
The government argued that “in the absence of such a law, the President has the constitutional power.” The government has essentially asked the court to exhibit judicial restraint.
The three-member committee has not had the best track record with regard to the appointment of the CBI Director. Whether this new appointment procedure will be able to bolster trust and confidence among different stakeholders, on the Election Commission and its impartiality, needs to be seen.
Supreme court’s argument
The court in its ruling discusses at length its intention to “maintain a delicate balance” on the separation of powers. The court cannot usurp what is purely a legislative power or function but where there exist veritable gaps or a vacuum legislative field, the Court may not shy away from what essentially would be part of its judicial function.
The ruling cites past instances of the Court stepping in to fill a gap in the law, including the Vishaka guidelines to curb sexual harassment in the workplace, and the interpretation of the process of appointment of judges.
One more issue highlighted by SC
As per Section 4 of the Chief Election Commissioner and Other Election Commissioners (Conditions of Service) Act, 1991, the Chief Election Commissioner is entitled to a term of 6 years, but they have to vacate the office upon attaining the age of 65 years.
The SC Bench had enquired during the proceedings that to fulfill the mandate of the provision, the Government could have considered an officer who could have completed the full term of six years.
But none of the Election commissioners have been able to complete the 6-year tenure. The Supreme Court observed that the appointment of an Election Commissioner with a tenure of fewer than six years is a clear breach of law pursuant to the provisions of the Act of 1991.
Conclusion
Article 324(2) vested the Parliament with the job of framing a law to determine the appointment procedure, and to that effect, SCI’s directions are temporary in nature, until the legislative vacuum is filled.
However, the judgment will have a precedential value in that any law passed under Article 324(2) will be tested on the touchstone of whether it adequately protects the independence of the Election Commission from the executive.
As far as the effectiveness of this scheme of appointment is concerned, the track record of this three-member committee has not been impressive, and it remains to be seen whether the state of the ECI remains the same, improves, or worsens.
“An Election Commission which does not ensure free and fair poll as per the rules of the game, guarantees the breakdown of the foundation of the rule of law.”
