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GS Paper: GS2

  • India seeks Tariff Elimination on key items in CEPA Talks with South Korea

    Why in the News?

    • India wants, South Korea to eliminate tariffs on items such as varieties of meat, milk, fruits, fish, stones, yarn, and petroleum products.
      • These items were previously exempted or protected against steep cuts in the India-Korea Comprehensive Economic Partnership Agreement (CEPA).

    What is CEPA?

    Details
    Definition A CEPA is a broad trade agreement that encompasses trade in goods and services, investments, intellectual property rights, and economic cooperation.
    Key Components
    • Trade in Goods: Reduction/elimination of tariffs and non-tariff barriers.
    • Trade in Services: Liberalization of service sectors.
    • Investment: Protection and promotion of investments.
    • Intellectual Property Rights (IPR): Strengthening protection of IPR.
    • Economic Cooperation: Collaboration on economic and technical aspects.
    • Dispute Resolution: Mechanisms for resolving disputes.
    Objectives
    • Enhance bilateral trade.
    • Promote investment.
    • Foster economic integration.
    • Encourage innovation and economic growth.
    Examples
    • India-Japan CEPA: Signed in 2011, focuses on tariff reduction, service trade liberalization, and investment promotion.
    • India-Mauritius CECPA: Effective from April 2021, includes provisions on trade in goods, services, and investment.
    • India-UAE CEPA: Entered into force on May 1, 2022
    Significance for India
    • Economic Growth: Provides new markets for Indian goods and services.
    • Job Creation: Increased trade and investment can create jobs.
    • Technological Advancements: Access to new technologies and best practices.
    • Strategic Partnerships: Strengthens economic and strategic ties.
    Challenges
    • Implementation Issues: Requires robust legal and institutional frameworks.
    • Domestic Industry Impact: Concerns about increased competition.
    • Regulatory Harmonization: Differences in regulatory standards can pose challenges.

    India-South Korea CEPA: A quick recap

    • The India-South Korea CEPA was signed in August 2009 and implemented in January 2010.
    • It covers trade in goods, investments, services, and bilateral cooperation.
    • Tariff Concessions:
      • India offered tariff elimination or concessions on 83.8% of tariff lines from South Korea.
      • While South Korea offered concessions on 93.2% of tariff lines.

    Upcoming Negotiations

    • Trade Deficit Focus: Narrowing the trade deficit with South Korea is high on India’s agenda.
    • Stakeholder Involvement: Indian industry stakeholders have been provided with a draft request list and asked to suggest more items for tariff cuts or propose deletions if needed.
    • Standards and Technical Barriers: The Department of Commerce has requested the industry to share issues related to SPS (Sanitary and Phytosanitary) and TBT (Technical Barriers to Trade) standards faced while exporting to South Korea.

    Back2Basics:

    Sanitary and Phytosanitary (SPS) Measures:

    • SPS measures are protocols implemented by countries to protect human, animal, and plant life from diseases, pests, and contaminants. 
    • These measures are primarily focused on ensuring the safety of food products and preventing the spread of diseases and pests across borders.
    • SPS measures must be based on scientific evidence and risk assessments to ensure they are appropriate and effective.
    • Examples: quarantine requirements for imported plants and animals, limits on pesticide residues in food, and import bans from regions affected by specific diseases.

    Technical Barriers to Trade (TBT):

    • TBT are regulations and standards related to product safety, quality, and environmental impact.
    • They aim to protect human health and safety, animal and plant life, the environment, and to prevent deceptive practices.
    • These measures should not create unnecessary obstacles to international trade and must be transparent and non-discriminatory.
    • Examples: Labeling requirements for food products, safety standards for electrical appliances, and environmental regulations for vehicle emissions.

    Major Issue: Trade Deficit Concerns

    • Trade Deficit Focus: Reducing the trade deficit with South Korea is a key discussion point for India.
      • Before CEPA (2007-09), India’s average exports to South Korea were $3.4 billion, with imports at $7.3 billion, leading to an average trade deficit of $4 billion.
    • Trade Statistics: In 2023-24, India’s imports from South Korea were $21.13 billion, while exports were only $6.41 billion.
    • Post-CEPA Data: After CEPA (2022-24), average exports increased to $7.1 billion, and imports surged to $19.9 billion, resulting in an average trade deficit of $12.8 billion.
    • GTRI Analysis: The Global Trade and Research Initiative (GTRI) report indicates a 220% increase in the trade deficit from the pre-CEPA period to the post-CEPA period.

    PYQ:

    [2015] The terms ‘Agreement on Agriculture’, ‘Agreement on the Application of Sanitary and Phytosanitary Measures’ and Peace Clause’ appear in the news frequently in the context of the affairs of the:

    (a) Food and Agriculture Organization

    (b) United Nations Framework Conference on Climate Change

    (c) World Trade Organization

    (d) United Nations Environment Programme

  • On Tamil Nadu’s financial distress   

    Why in the news?

    At a June 22 meeting for Union Budget 2024-25, Tamil Nadu’s Finance Minister Thangam Thennarasu requested ₹63,246 crore for Chennai Metro Rail Phase-2, ₹3,000 crore for disaster restoration, and increased unit costs for centrally sponsored schemes.

    How are the funds for phase two of the Chennai Metro Rail distributed?

    • Funding Agencies and International Support: Chennai Metro Rail Phase-2 is financed by multiple international agencies, including the Japan International Cooperation Agency (JICA), Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), and New Development Bank (NDB).
    • State Government Contributions: Up to March 31, 2024, the Tamil Nadu government sanctioned ₹5,400 crore as share capital for the Chennai Metro Rail Limited (CMRL) and ₹12,013.89 crore as subordinate debt, bearing the entire expenditure due to delays in approval from the Union Cabinet Committee on Economic Affairs (CCEA).

    Is the Centre stalling the funds for the metro project?

    Approval Status:

    • Public Investment Board: The Chennai Metro Rail Project’s Phase-2 was approved by the Public Investment Board (PIB) as a Central sector project under the equity sharing model in August 2021.
    • Union Cabinet Committee on Economic Affairs: The project has been awaiting approval from the Union Cabinet Committee on Economic Affairs (CCEA) since then.

    State Government Actions:

    • Foundation Stone: Despite the pending approval, the foundation stone for the phase was laid by Union Home Minister Amit Shah in November 2020 when the AIADMK was in power.
    • Ongoing Expenditure: The Tamil Nadu government continues to fund the project independently, stressing its finances and urging the Centre to sanction the project under the 50:50 equity sharing model as was done for Phase 1.

    What about funds released by the Centre for restoration work after natural disasters in the State?

    • Initial Request by Tamil Nadu: Tamil Nadu submitted detailed memoranda to the Union government, seeking approximately ₹37,906 crore for restoration works following two natural disaster spells in 2023.
    • Initial Central Release: The Union government initially released a sum of ₹276 crore for immediate restoration efforts.
    • Additional Approvals: The Union Ministry of Home Affairs (MHA) later approved additional assistance of ₹285.54 crore and ₹397.13 crore for the two disaster spells.
    • Disbursed Amounts: From these approvals, a total of ₹115.49 crore and ₹160.61 crore were disbursed under the National Disaster Response Fund (NDRF).
    • State Disaster Response Fund (SDRF): The Union government’s order also mentioned ₹406.57 crore as the 50% available in the State Disaster Response Fund (SDRF) account of Tamil Nadu as of April 1, 2023.

    Way forward: 

    • Metro Rail Project: The Union government should prioritize and expedite the approval process for significant infrastructure projects like the Chennai Metro Rail Phase-2. This can be achieved by setting stricter timelines for the Union Cabinet Committee on Economic Affairs (CCEA) to finalize decisions.
    • Natural Disaster Restoration: The Centre should reassess the current disaster relief funding mechanism to ensure timely and adequate financial support for states hit by natural disasters.

    Mains PYQ:

    Q Discuss the recent measures initiated in disaster management by the Government of India departing from the earlier reactive approach. (UPSC IAS/2020)

  • New criminal laws in effect; amendments soon

    bns

    Why in the news? 

    Despite objections from the Opposition-ruled States, three new criminal laws took effect nationwide. Union officials emphasized States’ autonomy to amend certain provisions of the Bharatiya Nagrik Suraksha Sanhita (BNSS)

    New Laws Introduced:

    • Bharatiya Nagrik Suraksha Sanhita (BNSS) replaces the Code of Criminal Procedure (CrPC).
    • Bharatiya Nyaya Sanhita (BNS) replaces the Indian Penal Code, 1860.
    • Bharatiya Sakshya (BS) replaces the Indian Evidence Act, 1872.

    Procedural and Evidence Reforms:

    • Cognisable Offences: From July 1, cognisable offences will be registered under Section 173 of BNSS instead of Section 154 of CrPC.
    • Audio-Video Recording: Mandatory audio-video recording of search and seizure operations and compulsory forensic examinations for offences with punishments of seven years or more, with electronic submission of evidence to the court.

    Some provisions of the Bharatiya Nagrik Suraksha Sanhita (BNSS) that replace the Code of Criminal Procedure (Cr.PC.)

    • Procedure for Arrest and Custody: BNSS prescribes new procedures and conditions for arrest, including bail provisions and custody arrangements.
    • Evidence Handling: Mandatory audio-video recording of search and seizure operations in all criminal cases, ensuring transparency and accountability. Compulsory forensic examinations in cases where the offence attracts a punishment of seven years or more.
    • Electronic Submission: All recordings and forensic evidence must be submitted electronically to the court without delay, enhancing efficiency and reducing paperwork.

    About handholding and electronic evidence

    • Training and Support: The Union government has provided comprehensive training and hand-holding for all States to facilitate the transition to the new criminal justice system under BNSS, BNS, and BS.
    • Crime and Criminal Tracking Network Systems (CCTNS): Upgrades to CCTNS enable the filing of e-FIRs and zero FIRs, allowing for remote registration of complaints without the need to visit a police station. CCTNS software has been modified to support FIR registrations in languages other than English and Hindi, ensuring accessibility across linguistic barriers.
    • eSakshya Mobile Application: Under testing, the eSakshya app assists police in recording crime scenes, search operations, and gathering evidence. It facilitates the secure uploading of recorded data to a cloud-based platform hosted by the National Informatics Centre, ensuring data integrity and accessibility.
    • State-Level Preparations: States like Delhi have developed specific applications, such as e-pramaan, to aid in the recording of crime scenes and the generation of digital certificates under the new laws. Some states have distributed necessary equipment like tablets and mobile devices to police stations to ensure compliance with recording and evidence collection requirements.
    • Forensic Capability Timeline: While the BNSS mandates forensic examinations for offences punishable by over seven years imprisonment, states have been given until June 2029 to enhance their forensic capabilities. This includes training police officials in proper evidence collection methods and the use of available resources until full upgrades are completed.

    Way Forward: 

    • Continued Collaboration and Feedback Mechanism: Establish a structured feedback mechanism between the Union government and States to address implementation challenges and refine the new criminal laws, ensuring effective collaboration.
    • Enhanced Public Awareness and Training: Conduct extensive public awareness campaigns and provide ongoing training sessions for law enforcement personnel on the use of new technologies and procedures introduced under BNSS, BNS, and BS.

  • IMF | Overlords of the developing world

    Why in the news?

    Once again, mass protests in Kenya, where at least 30 people were fatally shot by police, highlight opposition to an IMF-supported finance Bill proposing essential goods tax hikes.

    Bretton Woods Conference of 1944

    • The Bretton Woods Conference was held in 1944 in New Hampshire, USA. It established the International Monetary Fund (IMF) and the World Bank.
    • The IMF was designed to aid economic development and promote monetary cooperation and stability globally.
    • Criticism: It has been criticized for reflecting and perpetuating power dynamics favouring Western financial interests, with voting rights disproportionately allocated based on financial contributions rather than equal representation.

    Functions of IMF and Recent Challenges Faced by Developing Countries

    • Functions: The IMF aims to provide financial assistance and policy advice to member countries facing balance of payments problems.

    Challenges:

    • Austerity Measures: IMF loans often come with conditions such as austerity measures (like tax hikes and spending cuts) that can be unpopular and detrimental to social services and economic stability.
    • Dependency: Many developing countries face criticism for being overly dependent on IMF loans, which come with stringent conditions that may not always align with local priorities.
    • Public Backlash: There is often a public and political backlash against IMF policies perceived as imposing Western economic ideologies without adequate consideration for local contexts.

    SAP (Structural Adjustment Programs) and Its Impacts

    • Definition: SAPs are economic policies imposed by the IMF and World Bank on developing countries in exchange for loans.

    Impacts:

    • Economic Restructuring: SAPs typically involve privatization, deregulation, and liberalization policies aimed at restructuring national economies towards export-led growth.
    • Social Consequences: They often lead to job losses, reduced public spending on health and education, and increased poverty and inequality.
    • Criticism of SAPs: SAPs have been criticized for exacerbating social inequalities and benefiting Western financial interests over local populations.

    Way forward: 

    • Policy Transparency: The IMF could enhance transparency in its loan conditions and negotiations, ensuring that the terms and impacts of loans are clearly communicated to the public and local stakeholders.
    • Local Consultation: Before implementing major policy changes or austerity measures, the IMF could mandate extensive consultation with local governments, civil society organizations, and affected communities to ensure that proposed measures align with local economic priorities and social needs.

    Mains PYQ: 

    Q The World Bank and the IMF, collectively known as the Bretton Woods Institutions, are the two inter-governmental pillars supporting the structure of the world’s economic and financial order. Superficially, the World Bank and the IMF exhibit many common characteristics, yet their role, functions and mandates are distinctly different. Elucidate. (UPSC IAS/2013)

  • China’s ‘Five Principles’ of Foreign Policy

    Why in the News? 

    China is set to commemorate the 70th anniversary of the Five Principles of Peaceful Coexistence, a foreign policy concept initially outlined in a 1954 agreement with India, with special events scheduled for Friday, June 28th.

    How it started?

    • Historical Context: India attained independence from British rule in 1947, and the People’s Republic of China was established in 1949 after a civil war victory by the Chinese communists. Nehru aimed to establish good relations with China based on trust and mutual respect, a sentiment reciprocated by China initially.
    • Origins and Proposal: The Five Principles of Peaceful Coexistence, known as Panchsheel in India, were proposed by Chinese Premier Zhou Enlai during bilateral talks with India over Tibet in 1954. This initiative was favored by Indian Prime Minister Jawaharlal Nehru.
    • Panchsheel Agreement: The agreement, formally titled “The Agreement on Trade and Intercourse with Tibet Region,” was signed on April 29, 1954. It was intended to enhance trade and cooperation, establishing trade centers and pilgrimage routes while recognizing Tibet as part of China.
    • Principles: The five guiding principles laid out in the agreement were mutual respect for territorial integrity and sovereignty, mutual non-aggression, mutual non-interference, equality and mutual benefit, and peaceful coexistence.
    • Bandung Conference: The Five Principles featured prominently in the 1955 Bandung Conference in Indonesia, which included 29 Asian and African countries. The principles were co-opted into a 10-point declaration and later became central to the Non-Aligned Movement (NAM).

    Present Scenario:

    • After the India-China War of 1962: The principles of Panchsheel were severely undermined by the Sino-Indian War in 1962, leading to criticism of Nehru for misjudging Chinese intentions.
    • China’s Foreign Policy Shift: Over the past three decades, especially under President Xi Jinping, China has adopted a more aggressive foreign policy. This includes territorial claims in the South China Sea and hostile situations with neighbouring countries.
    • China’s Relations with the U.S: China’s relationship with the United States has been marked by hostility, characterized by trade and diplomatic challenges to American dominance globally.
    • India-China Relations Today: Since 2020, Indian and Chinese forces have been in a standoff along the Line of Actual Control (LAC) in Ladakh, with repeated but unsuccessful attempts to resolve the conflict.
    • Commemoration of 5 Principles by China: Despite the current strained relations, China commemorates the 70th anniversary of the Five Principles with a forward-looking theme, emphasizing building a community with a shared future for mankind.

    Way forward: (What can India do?)

    • Engage in Diplomatic Dialogue: Despite historical tensions, maintaining open lines of diplomatic communication with China is crucial. India can continue efforts to engage in dialogue at multiple levels to manage and resolve bilateral disputes, including the ongoing situation along the Line of Actual Control (LAC) in Ladakh.
    • Strengthen Regional Alliances: Enhancing partnerships with other countries in the region and beyond can provide India with strategic leverage. Strengthening alliances through economic cooperation, military partnerships, and cultural exchanges can help counterbalance China’s influence and foster stability in the region.
    • Focus on Economic and Technological Development: Investing in economic growth and technological advancement can bolster India’s position on the global stage. Developing robust infrastructure, promoting innovation and entrepreneurship, and advancing sustainable development goals can strengthen India’s resilience and competitiveness in the face of geopolitical challenges.

    Mains PYQ: 

    Q China is using its economic relations and positive trade surplus as tools to develop potential military power status in Asia’, In the light of this statement, discuss its impact on India as her neighbor. (UPSC IAS/2017)

  • [29th June 2024] The Hindu Op-ed: Preaching consensus, provoking confrontation

    [29th June 2024] The Hindu Op-ed: Preaching consensus, provoking confrontation

    PYQ Relevance: 

    Q Simultaneous election to the Lok Sabha and the State Assemblies will limit the amount of time and money spent in electioneering but it will reduce the government’s accountability to the people’ Discuss. (UPSC IAS/2017)

    Q Individual Parliamentarian’s role as the national lawmaker is on a decline, which in turn, has adversely impacted the quality of debates and their outcome. Discuss. (UPSC IAS/2019)

    Mentors’ comment: In India, the opposition plays a crucial role in democracy by providing checks and balances to the ruling government. It holds the government accountable, scrutinizes policies, ensures diverse perspectives are considered, and represents alternative viewpoints to foster balanced decision-making. Through debates, criticism, and proposing alternative policies, the opposition helps uphold democratic principles, safeguard citizen interests, and contribute to the overall governance and development of the country.

    Let’s learn!

    Why in the News?

    On June 4, 2024, the electorate decisively delivered its verdict, marking a significant personal, political, and moral setback for the Prime Minister, who had portrayed himself with near-divine status throughout the campaign.

    The Fading of Accommodation

    • Confrontational Approach: Despite the clear message from the voters, Prime Minister Modi continues with his confrontational approach, ignoring the need for consensus.
    • Unchanged Attitude: The initial days of the 18th Lok Sabha showed no signs of a changed attitude, with hopes for mutual respect and accommodation being dashed.
    • Speaker and Deputy Speaker Controversy: The INDIA bloc parties had agreed to support the government’s choice for Speaker but expected the Deputy Speaker position to go to the Opposition, a request denied by the regime.
    • Diversion Tactics: The Prime Minister and his party dredged up the Emergency, diverting attention from current constitutional and institutional issues.

    Issues That Need Extensive Debate

    • Suspension of MPs: The unprecedented suspension of 146 MPs demanding a discussion on Parliament’s security breach was a tactic to pass criminal justice laws without debate.
    • Concerns over New Laws: Legal experts have raised concerns about these criminal justice laws, suggesting they should undergo fuller parliamentary scrutiny.
    • Environmental and Educational Issues: Amendments to forest conservation and biological diversity laws were pushed through without debate, risking ecological and humanitarian disasters. The NEET scandal, affecting lakhs of students, was downplayed by the Education Minister, with the Prime Minister remaining silent.
    • Violence against Minorities: Increasing violence against minorities, with allegations of arbitrary demolitions and collective punishment in BJP-ruled states, points to a broader issue of human rights and the rule of law. The communal rhetoric during elections and subsequent actions undermines social harmony and requires careful deliberation on safeguarding minority rights and upholding constitutional values.
    •  Manipur Crisis: The unrest in Manipur post-elections and the subsequent handling by authorities highlight governance challenges in sensitive regions. The Prime Minister’s absence and the political fallout underscore the need for inclusive dialogue and effective crisis management to restore social harmony and address grievances.
    • Issues related to Leadership and Accountability: Criticism of the Prime Minister’s leadership during these crises raises questions about governance style and accountability. 

    Role of INDIA bloc as Opposition: 

    • Non-confrontational Approach: The INDIA bloc parties, led by Rahul Gandhi, emphasize cooperation over confrontation in Parliament. This approach aims to foster productive discussions and ensure impartial conduct of proceedings.
    • Commitment to Productivity: Opposition leaders are committed to restoring balance and productivity in Parliament. They seek to amplify the concerns and voices of millions of citizens who elected them, ensuring their representation is meaningful and impactful.
    • Democratic Duties: The Opposition’s role is to raise and address the concerns of the people they represent. They aim to hold the government accountable and advocate for policies that reflect the needs and aspirations of diverse Indian communities.
    • Hopes for Positive Response: While initial interactions with the government may not have been promising, the Opposition remains hopeful for a positive response from the Treasury benches. This optimism is rooted in the democratic process and the belief that constructive engagement can lead to effective governance.
    • Unity for National Interest: Leaders within the INDIA bloc emphasize unity for national interest. By advocating for balanced parliamentary proceedings and cooperation across party lines, they aim to ensure that legislative decisions reflect broader consensus and benefit the nation as a whole.

    Conclusion: The recent election results are a clear mandate for change, urging the Prime Minister and his government to reflect on their approach and governance style. Engaging in Dialogue is essential for the government to heed the electorate’s message, engage in meaningful dialogue, and address the critical issues facing the country.

    https://www.thehindu.com/opinion/lead/preaching-consensus-provoking-confrontation/article68343827.ece

  • India achieves an ‘outstanding outcome’ in FATF mutual evaluation 2023-24 

    Why in the News?

    • India has achieved an outstanding outcome in the 2023-24 Mutual Evaluation by the Financial Action Task Force (FATF).
      • India is placed in the “regular follow-up” category, a distinction shared by only four other G-20 countries.

    FATF Evaluation:

    The reason behind India’s Achievements

    • High Level of Compliance: The FATF stated that India reached a high level of technical compliance with its requirements.
    • Effective Regimes: India’s AML (anti-money laundering), CFT (countering the financing of terrorism), and CPF (counter-proliferation financing) regimes achieved good results.
    • International Cooperation: Notable achievements include international cooperation, access to basic and beneficial ownership information, use of financial intelligence, and depriving criminals of their assets.

    Need Improvement

    • Non-Financial Sectors: The FATF noted that improvements are needed to strengthen the supervision and implementation of preventive measures in some non-financial sectors.
    • Prosecution Delays: India needs to address delays in concluding ML (money laundering) and TF (terrorist financing) prosecutions.
    • Non-Profit Sector Risks: Ensure CFT measures prevent the non-profit sector from being abused for TF, including conducting outreach to NPOs on their TF risks.

    Mitigation Efforts taken

    • Mitigating ML/TF Risks: FATF recognized India’s efforts in mitigating risks from ML/TF, including corruption, fraud, and organized crime.
    • Digital Economy Transition: Effective measures have been implemented to transition from a cash-based to a digital economy, reducing ML/TF risks.
    • JAM Trinity Implementation: The JAM (Jan Dhan, Aadhaar, Mobile) Trinity, along with stringent cash transaction regulations, has increased financial inclusion and digital transactions, making them more traceable.

    About Financial Action Task Force (FATF)

    • FATF was established in 1989 through the initiative of the G7 nations.
    • Its Secretariat is headquartered at the OECD headquarters in Paris, France.
    • FATF conducts 3 Plenary meetings during each of its 12-month rotating presidencies.
    • As of 2019, FATF consists of 37 member jurisdictions.

    India’s Engagement with FATF

    • Observer Status: India became an Observer at FATF in 2006, marking the beginning of its association with the organization.
    • Full Membership: On June 25, 2010, India officially became the 34th country to attain full membership in FATF, signifying its active participation and commitment to the organization’s objectives.

    Understanding the Mutual Evaluation Process

    • FATF’s mutual evaluation assesses countries’ frameworks against money laundering and terrorist financing, reviewing compliance with its 40 recommendations and effectiveness, resulting in a report with strengths, weaknesses, and improvement suggestions.

    FATF’s Evaluation of India

    • Comprehensive Assessment: FATF’s evaluation of India encompasses various aspects, including the nation’s legal framework, regulatory system, law enforcement efforts, and international collaboration.
    • Alignment with Global Standards: Central agencies in India have been actively working to ensure that the country’s anti-money laundering and counter-terrorism financing laws align with international standards and that their practical implementation is effective.

    Back2Basics: FATF Grey and Black List

    FATF maintains two primary lists to identify countries with deficiencies in their anti-money laundering and counter-terrorist financing (AML/CTF) regimes: the Grey List and the Black List.

    Grey List (Jurisdictions under Increased Monitoring): 

    It includes countries that have strategic deficiencies in their AML/CTF regimes but have committed to resolving these issues swiftly within agreed timeframes. These jurisdictions are subject to increased monitoring by the FATF. Ex. Turkey, Panama etc. (Pakistan and UAE have exited this list.)

    Impact:

    • Countries on the Grey List are required to work closely with the FATF to address the identified deficiencies.
    • Being on the Grey List can lead to economic repercussions such as reduced foreign investment and increased scrutiny from financial institutions and regulators globally.
    • The FATF regularly reviews the progress of these countries and updates the list accordingly.

    Black List (High-Risk Jurisdictions subject to a Call for Action): 

    It includes countries with significant strategic deficiencies in their AML/CTF regimes and have not made sufficient progress in addressing these issues. These jurisdictions are subject to a call for action to protect the international financial system from the risks emanating from these countries.

    Impact:

    • Countries on the Black List face severe economic and financial consequences. They are subject to enhanced due diligence and, in the most serious cases, counter-measures by FATF member states.
    • This listing can result in limited access to the international financial system such as IMF, World Bank; reduced foreign investment, and increased difficulty in conducting international business.

    Current Black List Countries:

    • North Korea
    • Iran
    • Myanmar (Burma) (added in February 2023)

     

    PYQ:

    [2021] Discuss how emerging technologies and globalisation contribute to money laundering. Elaborate measures to tackle the problem of money laundering both at national and international levels.

  • What is the Justice Reddy Commission, against which KCR has moved Telangana High Court?

    Why in the news? 

    On June 27, the Telangana High Court postponed the hearing on a petition filed by Bharat Rashtra Samiti (BRS) president and former Telangana Chief Minister K Chandrashekar Rao. The petition sought to halt all future proceedings of the Justice (retired) L Narasimha Reddy Commission until Friday.

    What is the Narasimha Reddy Commission?

    • Formation: Appointed by the Congress government of Chief Minister A Revanth Reddy in March 2024.
    • Purpose: To investigate Power Purchase Agreements (PPAs) made with Chhattisgarh in 2014-15 and construction of power projects at Yadadri and Bhadradri. Allegations of irregularities in the Kaleshwaram irrigation project.

    What is Power Purchase Agreements (PPAs)? 

    • Power Purchase Agreements (PPAs) are long-term contracts between electricity producers (such as power plants) and purchasers (such as utilities, governments, or large industrial consumers).
    • These agreements stipulate the terms under which electricity is to be generated, delivered, and sold over a specified period.

    What has the Commission done on the PPAs so far?

    • Notice Issued: On June 11, the Commission issued a notice to K Chandrashekar Rao (KCR) requesting a response by June 15 regarding the PPAs made during his tenure (2014-2023).
    • KCR’s Response: KCR accused the Commission of bias and political motivation, requesting Justice Reddy to recuse himself.
    • Legal Action: Anticipating a personal summons, KCR filed a petition in the Telangana High Court seeking a stay on all proceedings of the Commission.
    • Energy Minister Notice: G Jagdish Reddy, Energy Minister in KCR’s Cabinet, was also issued a notice to appear before the Commission to provide a statement regarding the PPAs.

    Allegations Regarding the Power Plants

    • Irregularities in Construction: The Narasimha Reddy Commission is investigating allegations of irregularities in the construction of the Bhadradri Thermal Power Plant at Manuguru and the Yadadri Thermal Power Plant at Damaracherla.Both projects were executed by the Telangana State Power Generation Corporation (TG GENCO).
    • Specific Concerns: The focus is on potential discrepancies and irregularities during the construction process, which may involve issues related to project execution, costs, and adherence to regulatory norms.

    Way forward: 

    • Fair and Transparent Investigation: The Narasimha Reddy Commission should ensure a fair and transparent investigation into the allegations concerning Power Purchase Agreements (PPAs) and the construction of power projects.
    • Collaboration and Accountability: Stakeholders, including former government officials and current authorities involved in the projects under scrutiny, should cooperate fully with the Commission.

  • What is the role of the Lok Sabha Leader of Opposition?

    Why in the news? 

    For a decade, the Leader of Opposition in Lok Sabha remained vacant due to the absence of any party meeting the customary threshold of one-tenth of the House’s strength, now filled by Rae Bareli MP Rahul Gandhi.

    Leader of Opposition in the past:

     

    Who can serve as Leader of Opposition in Lok Sabha and Rajya Sabha?

    • Legal Definition: According to The Salary and Allowances of Leaders of Opposition in Parliament Act, 1977, the Leader of the Opposition is a member of the Lok Sabha or Rajya Sabha who leads the largest party in opposition to the government, recognised by the Speaker (Lok Sabha) or Chairman (Rajya Sabha).
    • Needed Strength: The leader must lead the party with the greatest numerical strength among the opposition parties in the respective House.
    • Recognition: The Speaker (Lok Sabha) or Chairman (Rajya Sabha) is mandated to recognize the leader of the largest opposition party as the Leader of the Opposition, irrespective of the party having a minimum threshold of 10% seats in the House.

    Significance of the positions and its significant role in Indian Political Democracy

    • Voice of the Opposition: The Leader of the Opposition serves as the primary spokesperson for the opposition in the House, articulating their views, criticisms, and alternative policies to those of the government.
    • Role in Committees: The Leader of Opposition plays a crucial role in high-powered committees responsible for appointments to key posts like the Director of CBI, Central Vigilance Commissioner, and others. This ensures a bipartisan approach in crucial appointments.
    • Ceremonial Role: The Leader of Opposition enjoys ceremonial privileges such as sitting in the front row during important occasions like the President’s Address to Parliament, symbolizing their role as a significant political figure.
    • Constitutional Checks and Balances: By providing an institutionalized position for the opposition, the Leader of Opposition ensures checks and balances on the ruling party’s power, fostering democratic accountability and oversight.
    • Precedence and Protocol: In the order of precedence, the Leader of Opposition ranks alongside Union Cabinet Ministers and other senior officials, reflecting their role in the functioning of the parliamentary democracy.

    Conclusion: The Leader of Opposition in Lok Sabha and Rajya Sabha, recognized per the 1977 Act, leads the largest opposition party, ensuring a vital role in governance oversight, committee appointments, and parliamentary protocol, crucial for democratic checks and balances.

    Mains PYQ: 

    Q The Indian Constitution has provisions for holding joint sessions of the two houses of the Parliament. Enumerate the occasions when this would normally happen and also the occasions when it cannot, with reasons thereof. (UPSC IAS/2017)

  • In great power rivalry across Eurasia, an opening for India 

    Why in the News?

    The significant upheaval caused by the increasing interdependence of European and Asian theatres is accompanied by the rise of influential middle powers. India can seize this opportunity to enhance its national power.

    Complex and Deepening Interconnections between European and Asian Security:

    • Asia’s Active Role in European Geopolitics: Unlike the colonial era, Asian states now actively influence the balance of power in Europe. Both Russia and Western Europe are engaging Asia to shape the narrative on the Ukraine war.
    • Asian Arms Supply to Europe: Asia has emerged as a major supplier of arms in European conflicts, with North Korea supplying ammunition to Russia and South Korean arms flowing to Ukraine.
    • Asian Agency in Great Power Dynamics: Putin’s visit to North Korea and Vietnam highlights the increased agency of Asian states in leveraging great power rivalries for their own strategic benefits.
    • Impact on Western Alliances: The increasing agency of Asian countries like North Korea and South Korea affects the dynamics of Western alliances, with the US seeking stronger ties with South Korea and Japan in response to Russia’s actions.

    Scope for a Strategic Window:

    • Increased Asian Maneuverability: Countries like Vietnam are skillfully balancing their relationships with China, the US, and Russia, enhancing their strategic autonomy and influence in the region.
    • Western Dilemmas: The US is facing challenges in balancing its strategic focus between Europe and Asia, with debates on whether to prioritize the Ukraine conflict or the challenge posed by China.
    • Europe’s Defence Responsibilities: Both Biden and Trump agree on the need for Europe to take greater responsibility for its own defense, urging Eurasian nations to balance Russia and China.
    • Opportunities for Middle Powers: Middle powers like India have a unique opportunity to enhance their national power and military capabilities through strategic partnerships with the US and its allies. This includes modernizing India’s defense industrial base and expanding arms production, crucial for achieving strategic autonomy.

    Way forward: 

    • Engage with Key Allies: India should Deepen strategic partnerships with the US, Japan, Australia, and South Korea to enhance security cooperation and joint defense initiatives. 
      • These partnerships can provide India with access to advanced military technology and training, as well as opportunities for joint exercises and intelligence sharing.
    • Leverage International Platforms: India must actively participate in international platforms like the Quad and the Coalition for Disaster Resilient Infrastructure (CDRI) to strengthen India’s role in regional security and disaster resilience efforts.

    Mains question for practice: 

    Q Discuss the complex and deepening interconnections between European and Asian security in the current geopolitical landscape. How can India leverage these dynamics to enhance its national power?  15M