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GS Paper: GS2

  • How the Seventh Schedule affects delivery of public goods

    Context

    Without delegation of funds, functions and functionaries, local governments are unable to respond to pressure from citizens who demand greater efficiency.

    Background of the Seventh Schedule

    •  Article 246 of the Constitution mentions three lists in the Seventh Schedule — union, state and concurrent lists.
    • The present Seventh Schedule and union (at that time Federal) list, state (at that time Provincial) list and concurrent lists are inherited from that 1935 piece of legislation.
    • It states that “Notwithstanding anything in the two next succeeding subsections, the Federal Legislature has, and a Provincial Legislature has not, power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule to this Act.”

    Delivery of public goods

    • Ignoring that narrow and technical definition of public good, loosely, we understand “public good” as something that must be delivered by the government.
    • It cannot, or should not, be delivered by the private sector.
    • Notwithstanding the use of private security guards, most people will agree “law and order” is a public good.
    • Most public goods people will think of are efficiently delivered at the local government level, not Union or state level.
    •  There is a Seventh Schedule issue that is thus linked to the insertion of a local body list.
    • Countervailing pressure by citizens increasingly demands efficient delivery of such public goods.
    • But without delegation of funds, functions and functionaries, presently left to the whims of state governments, local governments are unable to respond.

    Need for the review of the Seventh Schedule Lists

    • No local body list: Most public goods people will think of are efficiently delivered at the local government level, not Union or state level.
    • There is a Seventh Schedule issue that is thus linked to the insertion of a local body list.
    •  But without delegation of funds, functions and functionaries, presently left to the whims of state governments, local governments are unable to respond.
    • The Rajamannar Committee — formally known as Centre-State Relations Inquiry Committee suggested constitution of a High Power Commission to examine the entries of Lists I and III in the Seventh Schedule to the Constitution and suggest redistribution of the entries,”.
    • Changes in the past led to greater centralisation: Items have moved from the state list to the concurrent list and from the concurrent list to the union list.
    • Such limited movements have reflected greater centralisation, such as in 1976.
    •  N K Singh, Chairman of 15th Finance Commission has also often made this point, in addition to scrutiny of Article 282.

    Conclusion

    For the sake of better governance, it’s not an issue that should be ducked and the basic structure doctrine doesn’t stand in the way.

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  • Pakistan’s New Security Policy

    Peace with India and its immediate neighbors is set to be the central theme of Pakistan’s first-ever National Security Policy.

    Why has this news made headlines?

    • Pakistan’s (official) policy now leaves the door open for trade with India even without the settlement of the Kashmir issue – provided there is headway in bilateral talks.
    • Earlier, Kashmir used to be at the centre-stage of all Pakistani outcry.

    New Security Policy

    • The country’s new policy would act as an umbrella document, to be used as a guideline for Pakistan`s foreign, international and defence related policies.
    • The five-year-policy document, which will span 2022-26, is being touted by the Pakistan government as the country’s first-ever strategy paper of its kind.

    Key highlights

    • Focus on trade: The 100-page policy document has also put out elaborate plans to open trade and business ties with India.
    • Silent on Kashmir: Kashmir issue with India has been identified as a ‘vital national policy’ issue for Pakistan.
    • No public discussion: Only a part of the national security policy will be made public.
    • Defying hostility with India: The document states that Pakistan is not seeking hostility with India for the next 100 years.
    • Curbing militancy: The new policy also deals with the issue of militant and dissident groups and advocates dialogue with ‘reconcilable elements.’
    • No re-conciliation with India: There are no prospects of rapprochement with India under the current government.
    • Others: On the internal front, the new policy identifies five key areas of population/migration, health, climate and water, food security and gender mainstreaming.

    Significance of such policy

    • Pakistan and India have mostly been at loggerheads with each other throughout history.
    • During the first term of Narendra Modi in 2014, the relations took a positive turn when he announced his intentions to have cordial relations with Pakistan.
    • He had also visited Islamabad in 2015 unannounced to attend a marriage ceremony in Ex-PMs family.
    • However, the relations deteriorated following the horrific 2016 Uri attacks.

    Way ahead

    • Pivotal equations between India and Pakistan will continue to be dominated by Kashmir, the ongoing proxy war and terrorism.
    • It is unlikely that this prevailing equilibrium is likely to be reset by this classified policy document. That too overnight.
    • The India-centric security obsession will remain the core of this policy.

     

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  • Hate speech: SC seeks response from govt.

    The Supreme Court has asked the Ministry of Home Affairs (MHA) and the police to respond to petitions that people accused of delivering hate speeches at a religious conference in Haridwar have not been arrested yet.

    What is ‘Hate Speech’?

    • There is no specific legal definition of ‘hate speech’.
    • The Law Commission of India, in its 267th Report, says: “Hate speech generally is an incitement to hatred primarily against a group of persons defined in terms of race, ethnicity, gender, sexual orientation, religious belief and the like …
    • Thus, hate speech is any word written or spoken, signs, visible representations within the hearing or sight of a person with the intention to cause fear or alarm, or incitement to violence.”
    • In general, hate speech is considered a limitation on free speech that seeks to prevent or bar speech that exposes a person or a group or section of society to hate, violence, ridicule or indignity.

    How is it treated in Indian law?

    • Provisions in law criminalize speeches, writings, actions, signs and representations that foment violence and spread disharmony between communities and groups and these are understood to refer to ‘hate speech’.
    • Sections 153A and 505 of the Indian Penal Code are generally taken to be the main penal provisions that deal with inflammatory speeches and expressions that seek to punish ‘hate speech’.

    [I] Section 153A:

    • Promotion of enmity between different groups on grounds of religion, race, place of birth, residence, language, etc., and doing acts prejudicial to maintenance of harmony’, is an offence punishable with three years’ imprisonment.

    [II] Section 505:

    505(1): Statements conducing to public mischief

    • The statement, publication, report or rumour that is penalized under Section 505(1) should be one that promotes mutiny by the armed forces, or causes such fear or alarm that people are induced to commit an offence against the state or public tranquility.
    • This attracts a jail term of up to three years.

    505(2): It is an offence to make statements creating or promoting enmity, hatred or ill-will between classes.

    505(3): Same offence will attract up to a five-year jail term if it takes place in a place of worship, or in any assembly engaged in religious worship or religious ceremonies.

    What has the Law Commission proposed?

    The Law Commission has proposed that separate offences be added to the IPC to criminalize hate speech quite specifically instead of being subsumed in the existing sections concerning inflammatory acts and speeches.

    [A] Inserting two sections

    • It has proposed that two new sections, Section 153C and Section 505A, be added.

    Section 153C

    It is an offence if anyone-

    • Uses gravely threatening words, spoken or written or signs or visible representations, with the intention to cause fear or alarm OR
    • Advocates hatred that causes incitement to violence, on grounds of religion, race, caste or community, sex, gender identity, sexual orientation, place of birth, residence, language, disability or tribe

    Section 505A

    • It proposes to criminalize words, or display of writing or signs that are gravely threatening or derogatory, within the hearing or sight of a person, causing fear or alarm or, with intent to provoke the use of unlawful violence against that person or another”.

    [B] Imprisonment

    • Section 153C: two-year jail term for this and/or a fine of ₹5,000 or both
    • Section 505A: prison term of up to one year and/or a fine up to ₹5,000

    Other committees’ recommendations

    • Similar proposals to add sections to the IPC to punish acts and statements that promote racial discrimination or amount to hate speech have been made by the M.P. Bezbaruah Committee and the T.K. Viswanathan Committee.
    • At present, the Committee for Reforms in Criminal Laws, which is considering more comprehensive changes to criminal law, is examining the issue of having specific provisions to tackle hate speech.

    Why regulate hate speech?

    • Creates social divide: Individuals believe in stereotypes that are ingrained in their minds and these stereotypes lead them to believe that a class or group of persons are inferior to them and as such cannot have the same rights as them.
    • Threat to peaceful co-existence: The stubbornness to stick to a particular ideology without caring for the right to co-exist peacefully adds further fuel to the fire of hate speech.

    Issues in regulating hate speech

    • Powers to State: Almost every regulation of speech, no matter how well-intentioned, increases the power of the state.
    • Hate speeches are Political: The issue is fundamentally political and we should not pretend that fine legal distinctions will solve the issue.
    • Legal complications: An over-reliance on legal instruments to solve fundamentally social and political problems often backfires.

    Way ahead

    • Subjects like hate speeches become a complex issue to deal with, in a country like India which is very diverse, as it was very difficult to differentiate between free and hate speech.
    • There are many factors that should be considered while restraining speeches like strong opinions, offensive comments towards certain communities, the effect on values like dignity, liberty and equality.
    • We all have to work together and communicate efficiently for our country to be a healthy place to live in.

     

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  • Chinese scramble for Africa

    Chinese Foreign Minister has visited Eritrea, Kenya, and Comoros in the first week of January as part of a five-nation tour.

    Why in news?

    • Chinese FM was observing a 32-year-old Beijing ritual of visiting Africa at the beginning of every year.
    • In fact, China’s links with the continent go back farther than the last three decades.

    China-Africa Ties: A backgrounder

    • In the Cold War years, as the US and Soviet Union jousted for influence over Africa, China maintained an ideological presence on the continent.
    • In 1966, after Kwame Nkrumah was ousted in a coup while he was in Beijing, the Chinese put up the Ghananian independence leader for a few days before he decided to leave for Guinea.
    • Since the 1990s, China has successfully used its old ties with several African countries to remodel the relationship, using the abundant natural resources of the continent to service its own massive growth.

    [A] Strategic gestures

    • Diplomatic establishments: China has a special envoy to the Horn of Africa where Eritrea, Ethiopia, Somalia, Djibouti and Kenya are located. It shows the strategic importance of this Indian Ocean region for China.
    • Military bases: Since 2017, Beijing has had a military base in Djibouti with 400 soldiers of the PLA, in close proximity to French and an American base.
    • Railway lines: A Chinese-built railway line connects Djibouti to the Ethiopian capital Addis Ababa.

    [B] Infrastructure Projects

    • Tanzania: The first Chinese infrastructure project on the continent was the 1,860-km Tanzania-Zambia railway in the 1970s — the first transnational railway in Africa.
    • Zambia: In addition to carrying passengers, it transported ore from Zambian copper mines to the port city of Dar-es-Salam in Tanzania.
    • Kenya: China has undertaken major Belt and Road initiatives in Kenya. Recently, there was held completion ceremony of the Chinese-built oil terminal at the port city of Mombasa.
    • Comoros Islands: In the Comoros Islands, off Mozambique, China has made many development assistance.

    [C] Loans and trade

    • For a dozen years, China has been Africa’s biggest trading partner. Undoubtedly, the balance of trade is heavily in favour of China.
    • Two-way trade in 2020 was $ 187 billion, according to the ‘China-Africa Annual Economic and Trade Relationship Report 2021’.
    • The top five African recipients of Chinese investments are South Africa, the Democratic Republic of Congo, Angola, Ethiopia, and Zambia.
    • While the main investments in countries across Africa are in infrastructure construction projects and mining, China is also investing in transport, scientific research, and the services sector.

    [D] Others

    • China has huge demand for African ivory, abalone, rhinoceros tusk and materials from other endangered species.
    • This has taken a significant toll on conservation efforts.

    Major Chinese accomplishments

    • The question of Taiwan has been a key political issue for China these days.
    • In 1971, the support of African nations was crucial in China’s joining the United Nations (UN), taking over the seat on Taiwan.
    • Many African countries, such as Algeria, Egypt, Ethiopia, and Zambia have stressed their support for a “one-China policy”.

    Criticisms of Chinese Scramble in Africa: A neo-colonialism in making

    • There are a variety of critical perspectives scrutinizing the balance of power relationship between China and Africa, and China’s role concerning human rights in Africa.
    • Increasingly, concerns have been raised by Africans and outside observers that China’s relationship with Africa is neocolonialist in nature.

     

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  • Assam-Meghalaya Border Dispute

    Union Home Minister is expected to seal the final agreement to end the dispute in six areas of the Assam-Meghalaya boundary ahead of Meghalaya’s 50th Statehood Day celebration on January 21.

    Can you recall the chronology of reorganization of the entire North-East region?

    Assam- Meghalaya Boundary Dispute

    • Assam has had a boundary dispute with Mizoram for decades and several rounds of talks have been held since 1994-95 to solve the issue.
    • Till 1972, Mizoram was a part of Assam and acquired full statehood in 1987.
    • The 164.6 km-long border between the States runs along with Cachar, Hailakandi and Karimganj districts in Assam and Kolasib, Mamit and Aizawl districts in Mizoram.
    • There are several border areas where violence have been reported.

    Roots of the dispute

    • In the Northeast’s complex boundary equations, showdowns between Assam and Mizoram residents are less frequent than they are.
    • The boundary between present-day Assam and Mizoram, 165 km long today, dates back to the colonial era when Mizoram was known as Lushai Hills, a district of Assam.
    • The dispute stems from a notification of 1875 that differentiated Lushai Hills from the plains of Cachar, and another of 1933 that demarcates a boundary between Lushai Hills and Manipur.
    • Mizoram believes the boundary should be demarcated on the basis of the 1875 notification, which is derived from the Bengal Eastern Frontier Regulation (BEFR) Act, 1873.
    • Mizo leaders have argued in the past argued against the demarcation notified in 1933 because Mizo society was not consulted.

    Other boundary disputes in North-East

    The states of the Northeast were largely carved out of Assam, which has border disputes with several states.

    During British rule, Assam included present-day Nagaland, Arunachal Pradesh and Meghalaya besides Mizoram, which became separate state one by one. Today, Assam has boundary problems with each of them.

    • Nagaland shares a 500-km boundary with Assam.
    • In two major incidents of violence in 1979 and 1985, at least 100 persons were killed. The boundary dispute is now in the Supreme Court
    • On the Assam-Arunachal Pradesh boundary (over 800 km), clashes were first reported in 1992, according to the same research paper.
    • Since then, there have been several accusations of illegal encroachment from both sides, and intermittent clashes. This boundary issue is being heard by the Supreme Court.
    • The 884-km Assam-Meghalaya boundary, too, witnesses flare-ups frequently. As per Meghalaya government statements, today there are 12 areas of dispute between the two states.

     

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  • BARC ratings for news channels to resume soon

    Ratings by Broadcast Audience Research Council (BARC) for the news channels will resume, after the organisation revised its procedures and protocols.

    The ratings were suspended after the Mumbai police busted a racket involving a private channel’s efforts to tamper the TRPs.

    Try this question:

    Q.What do you mean by “TRP Journalism”? Discuss the loopholes in the present system of self-regulation in Indian media.

    What is TRP?

    • In simple terms, anyone who watches television for more than a minute is considered a viewer.
    • The TRP or Target Rating Point is the metric used by the marketing and advertising agencies to evaluate this viewership.
    • In India, the TRP is recorded by the Broadcast Audience Research Council (BARC) using Bar-O-Meters that are installed in televisions in selected households.
    • As on date, the BARC has installed these meters in 44,000 households across the country. Audio watermarks are embedded in video content prior to broadcast.
    • These watermarks are not audible to the human ear, but can easily be detected and decoded using dedicated hardware and software.
    • As viewing details are recorded by the Bar-O-Meters, so are the watermarks.

    What is BARC?

    • It is an industry body jointly owned by advertisers, ad agencies, and broadcasting companies, represented by The Indian Society of Advertisers, the Indian Broadcasting Foundation and the Advertising Agencies Association of India.
    • Though it was created in 2010, the I&B Ministry notified the Policy Guidelines for Television Rating Agencies in India on January 10, 2014, and registered BARC in July 2015 under these guidelines, to carry out television ratings in India.

    How are the households selected?

    • Selection of households where Bar-O-Meters are installed is a two-stage process.
    • The first step is the Establishment Survey, a large-scale face-to-face survey of a sample of approximately 3 lakh households from the target population. This is done annually.
    • Out of these, the households which will have Bar-O-Meters or what the BARC calls the Recruitment Sample are randomly selected. The fieldwork to recruit households is not done directly by BARC.
    • The BARC on its website has said that the viewing behaviour of panel homes is reported to BARC India daily. Coincidental checks either physically or telephonically are done regularly.

    Vigilance activities by BARC

    • Certain suspicious outliers are also checked directly by BARC India.
    • BARC India also involves a separate vigilance agency to check on outliers that it considers highly suspicious.
    • And as per the guidelines of the Ministry of Information and Broadcasting, these households rotate every year.
    • This rotation is in such a manner that older panel homes are removed first while maintaining the representativeness of the panel.
    • The Ministry guidelines further say that the secrecy and privacy of the panel homes must be maintained, and asked the BARC to follow a voluntary code of conduct.

    What are the loopholes in the process?

    • Several doubts have been raised on many previous occasions about the working of the TRP.
    • As per several reports, about 70% of the revenue for television channels comes from advertising and only 30% from subscriptions.
    • It is claimed that households were being paid to manipulate the TRP.

     

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  • Need to recast the selection process of the ECs

    Context

    The attendance of the Chief Election Commissioner (CEC) and his Election Commissioner (EC) colleagues at an “informal” meeting with the Principal Secretary to the Prime Minister has brought renewed focus on the independence and impartiality of the Election Commission of India (ECI).

    Need for changes in the appointment process

    • The changes in the appointment process for ECs can strengthen ECI’s independence, neutrality and transparency. 
    • The appointment of ECs falls within the purview of Article 324(2) of the Constitution, which establishes the institution.
    • Article 324(2) contains a ‘subject to’ clause which provides that both the number and tenure of the ECs shall be “subject to provisions of any law made in that behalf by Parliament, be made by the President.”
    • Apart from enacting a law in 1989 enlarging the number of ECs from one to three, Parliament has so far not enacted any changes to the appointment process.
    • In 1975 itself, the Justice Tarkunde Committee recommended that ECs be appointed on the advice of a Committee comprising the Prime Minister, Lok Sabha Opposition Leader and the Chief Justice.
    • This was reiterated by the Dinesh Goswami Committee in 1990 and the Law Commission in 2015.
    • The 4th Report (2007) of the Second Administrative Reforms Commission additionally recommended that the Law Minister and the Deputy Chairman of the Rajya Sabha be included in such a Collegium.
    • Violation of Article 14 and 324: Three Writ Petitions, with one pending since 2015, are urging the Supreme Court to declare that the current practice of appointment of ECs by the Centre violates Article 14, Article 324(2), and Democracy as a basic feature of the Constitution.
    • Precedent does exist in the case of Rojer Mathew v South Indian Bank Ltd, to argue against the Executive being the sole appointer for a quasi-judicial body.
    • The Supreme Court had recognised that “Election Commission is not only responsible for conducting free and fair elections but it also renders a quasi-judicial function between the various political parties including the ruling government and other parties.”
    • In such circumstances, the executive cannot be a sole participant in the appointment of members of Election Commission as it gives unfettered discretion to the ruling party.

    Way forward

    • Establishing a multi-institutional, bipartisan committee for fair and transparent selection of ECs can enhance the perceived and actual independence of ECI.
    • Such a procedure is already followed with regard to other Constitutional and Statutory Authorities such as the Chief Information Commissioner, Lokpal, Vigilance Commissioner, and the Director of the Central Bureau of Intelligence.

    Consider the question “What is the procedure for the appointment of Election Commissioners? What are the issues with this procedure? Suggest the way forward.”

    Conclusion

    ECI’s constitutional responsibilities require a fair and transparent appointment process that is beyond reproach, which will reaffirm our faith in this vital pillar of our polity.

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  • Govt releases revised guidelines for Universal Accessibility

    From the design plan to the implementation, various aspects of the built environment have been covered under the new guidelines for universal accessibility recently drafted by the Centre.

    What is Universal Accessibility?

    • Universal Accessibility can be defined as the conditions for easy access.
    • It would allow any individual (even those whose mobility, communicative ability, or understanding is reduced) to access and enjoy a place, product, or service, and to do so freely and independently.

    Why is universal accessibility important?

    • Universal design is so important because if a space is accessible, usable, and convenient for everyone regardless of age or ability, it’s inclusive for all.
    • An accessible school, library, community centre, govt office or park means everyone can participate fully in their community.

    What are the new guidelines?

    • The Central Public Works Department (CPWD) released the Harmonised Guidelines and Standards for Universal Accessibility in India 2021.
    • Drafted by a team of the IIT-Roorkee and the National Institute of Urban Affairs of the MoHUA, the revised guidelines aim to give a holistic approach.
    • Earlier, the guidelines were for creating a barrier-free environment, but now they are focusing on universal accessibility.

    Key highlights

    • Ramps: The guidelines provide the gradient and length of ramps — for example, for a length of six metres, the gradient should be 1:12. The minimum clear width of a ramp should be 1,200 mm.
    • Beyond PwDs: While making public buildings and transport fully accessible for wheelchair users is covered in the guidelines, other users who may experience temporary problems have also been considered. For instance, a parent pushing a child’s pram while carrying groceries or other bags, and women wearing saris.
    • Women friendly: Built environment needs for accessibility for women should consider diverse age groups, diverse cultural contexts and diverse life situations in which women operate. Diverse forms of clothing (saris, salwar-kameez, etc.) and footwear (heels, kolhapuri chappals, etc.) require a certain orientations.
    • Accessibility symbols: The guidelines call for accessibility symbols for PwD, family-friendly facilities and transgender to be inclusively incorporated among the symbols for other user groups.
    • Targeted authorities: The guidelines are meant for State governments, government departments and the private sector, as well as for reference by architecture and planning institutes.

    Policy measures for Persons with Disabilities (PwDs)

    • India is a signatory to the UN Convention the Right of Persons with Disabilities, which came into force in 2007.
    • The ‘Accessible India Campaign’ (Sugamya Bharat Abhiyan) was launched in 2015 to enable Persons with disabilities to gain universal access, equal opportunity for development.
    • The Union Minister for Social justice and Empowerment has also launched the “Sugamya Bharat App” to complain for ease accessibility for PwDs.
    • India has its dedicated the Rights of Persons with Disabilities Act, 2016, which is the principal and comprehensive legislation concerning persons with disabilities.

    Back2Basics: Sugamya Bharat Abhiyan

    • Accessible India Campaign or Sugamya Bharat Abhiyan is a program that is set to be launched to serve the differently-able community of the country.
    • The flagship program has been launched on 3 December 2015, the International Day of People with Disabilities.
    • The program comes with an index to measure the design of disabled-friendly buildings and human resource policies.
    • The initiative also in line with Article 9 of the (UN Convention on the Rights of Persons with Disabilities) which India is a signatory since 2007.
    • The scheme also comes under the Persons with Disabilities Act, 1995 for equal Opportunities and protection of rights which provides non-discrimination in Transport to Persons with Disabilities.

     

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  • Suspension of MLA is worse than expulsion: SC

    The Supreme Court has said that suspension from the Legislative Assembly for a year is “worse” than expulsion, as it affects the Right of a constituency to remain represented in the House.

    What is the case?

    • Few MLAs from Maharashtra have challenged their one-year suspension from the Legislative Assembly for allegedly misbehaving with the presiding officer.

    Suspending MLAs: A fact check

    • Each state has their individual rules for the conduct of assembly. These rules provides for the suspension of MLAs.
    • Under Rule 53 of the Maharashtra Legislative Assembly Rules, 1960, only the Speaker has the power to suspend MLAs indulging in unruly behavior.
    • Therefore, the motion to suspend cannot be put to vote as this would allow the Government to suspend as many Members of Opposition as it sees fit.

    Constitutional ground behind this suspension

    • The Court referred to Article 190 (4) of the Constitution which says that if for a period of 60 days, a member of a House, without its permission, is absent; the House may declare his or her seat vacant.
    • Suspension of MLAs beyond this period would lead to their disqualification.

    What did the Supreme Court observe?

    • Suspension of the MLAs would amount to punishing the constituencies as a whole.
    • Each constituency has equal amount of right to be represented in the House, observed the court.
    • The apex court observed that any state cannot create a constitutional void, a hiatus situation for any constituency.
    • It said the House cannot suspend a member beyond 59 days.

     

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  • India appeals against WTO order on Sugar

    India has appealed against a ruling of the World Trade Organisation’s (WTO) trade dispute settlement panel on domestic sugar subsidies, stating that the panel had committed “certain errors of law” in its report.

    What is the case?

    • India’s Minimum Selling Price system for Sugarcane was brought to notice to the WTO by Brazil, Australia and Guatemala.

    What was the complaint against India?

    Australia, Brazil, and Guatemala said India’s domestic support and export subsidy measures appeared to be inconsistent with various articles against WTO’s:

    1. Agreement on Agriculture
    2. Agreement on Subsidies and Countervailing Measures (SCM)
    3. Article XVI (which concerns subsidies) of the General Agreement on Trade and Tariffs (GATT)
    • Domestic Support: All three countries complained that India provides domestic support to sugarcane producers that exceed the de minimis level of 10% of the total value of sugarcane production.
    • Various subsidies: They also raised the issue of India’s alleged export subsidies, subsidies under the production assistance and buffer stock schemes, and the marketing and transportation scheme.
    • Notifying support: Australia accused India of “failing” to notify its annual domestic support for sugarcane and sugar subsequent to 1995-96, and its export subsidies since 2009-10.

    India’s reply to WTO panel

    • India rejected the panel’s findings as “erroneous”, “unreasoned”, and “not supported by the WTO rules”.
    • It argued that the requirements of Article 3 of the SCM Agreement are not yet applicable to India.
    • It has a phase-out period of 8 years to eliminate export subsidies under the agreement.
    • India also argued that its mandatory minimum prices are not paid by the governments but by sugar mills, and hence do not constitute market price support.

    Backgrounder: Sugarcane Pricing in India

    Who determines Sugarcane prices?

    Sugarcane prices are determined by the Centre as well as States.

    1. The Centre announces Fair and Remunerative Prices which are determined on the recommendation of the Commission for Agricultural Costs and Prices (CACP) and are announced by the Cabinet Committee on Economic Affairs, which is chaired by Prime Minister.
    2. The State Advised Prices (SAP) are announced by key sugarcane producing states which are generally higher than FRP.

    Minimum Selling Price (MSP) for Sugar

    • The price of sugar is market-driven & depends on the demand & supply of sugar.
    • However, with a view to protecting the interests of farmers, the concept of MSP of sugar has been introduced since 2018.
    • MSP of sugar has been fixed taking into account the components of Fair & Remunerative Price (FRP) of sugarcane and minimum conversion cost of the most efficient mills.

    Basis of price determination

    • With the amendment of the Sugarcane (Control) Order, 1966, the concept of Statutory Minimum Price (SMP) of sugarcane was replaced with the Fair and Remunerative Price (FRP)’ of sugarcane in 2009-10.
    • The cane price announced by the Central Government is decided on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
    • This is done in consultation with the State Governments and after taking feedback from associations of the sugar industry.

    What is FRP?

    • FRP is fixed under a sugarcane control order, 1966.
    • It is the minimum price that sugar mills are supposed to pay to the farmers.
    • However, states determine their own State Agreed Price (SAP) which is generally higher than the FRP.

    Factors considered for FRP:

    • The amended provisions of the Sugarcane (Control) Order, 1966 provides for fixation of FRP of sugarcane having regard to the following factors:

    a) cost of production of sugarcane;

    b) return to the growers from alternative crops and the general trend of prices of agricultural commodities;

    c) availability of sugar to consumers at a fair price;

    d) price at which sugar produced from sugarcane is sold by sugar producers;

    e) recovery of sugar from sugarcane;

    f) the realization made from the sale of by-products viz. molasses, bagasse, and press mud or their imputed value;

    g) reasonable margins for the growers of sugarcane on account of risk and profits.

     

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