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GS Paper: GS2

  • Colombo Port City Project and Chinese involvement

    Sri Lanka recently passed the controversial Colombo Port City Economic Commission Bill, which governs the China-backed Colombo Port City project worth $1.4 billion, amid wide opposition to the creation of a “Chinese enclave” in the island nation.

    Colombo Port City Project

    • The Colombo Port City has grabbed headlines in Sri Lanka in recent months even as the relentless third wave of the COVID-19 pandemic sweeps through the country.
    • Almost an artificial island, the territory coming up on 2.69 square kilometers of land reclaimed from Colombo’s seafront has stirred controversy since its inception.
    • Those backing it see in that patch of land their dream of an international financial hub — a “Singapore or Dubai” in the Indian Ocean.

    When was it launched?

    • The project was launched in September 2014 by Chinese President Xi Jinping during a visit to the island nation under the Mahinda Rajapaksa administration’s second term.
    • After President Mahinda Rajapaksa was ousted in January 2015, the successor “national unity” government of Maithripala Sirisena and Ranil Wickremesinghe went ahead with the project after briefly halting it.
    • On returning to power in November 2019, the Rajapaksas vowed to expedite the project. The Sri Lankan government says the project will bring in around 83,000 jobs and $15 billion initially.

    Issues with the project

    • But skeptics claim that it could well become a “Chinese colony”, with the Bill, which is now an Act.
    • The law provides China substantial “immunity” from Sri Lankan laws, besides huge tax exemptions and other incentives for investors.

    What is the extent of China’s involvement?

    Effectively, China has substantial control over two key infrastructure projects in Sri Lanka for a century.

    • The port city project is financed chiefly through Chinese investment amounting to $1.4 billion.
    • In return, the company will receive 116 hectares (of the total 269 hectares) on a 99-year lease.
    • The city separates from but located adjacent to the Colombo Port, the country’s main harbor — is the third major port-related infrastructure project where China has a significant stake.
    • China Merchants Port Holdings has an 85% stake in the Colombo International Container Terminal under a 35-year ‘Build Operate and Transfer’ agreement with the Sri Lanka Port Authority.
    • In 2017, the Sirisena-Wickremesinghe administration, unable to repay the Chinese loan with which it was saddled by the previous government, handed over the Hambantota Port to China on a 99-year lease.

    Concerns from within Sri Lanka

    • Since its launch, the Colombo Port City project has faced opposition from environmentalists and fisherfolk, who feared that the project would affect marine life and livelihoods.
    • However, in the absence of wider political and societal support, their resistance did not dent successive governments’ resolve to pursue the project.
    • The more recent opposition was specific to the Colombo Port City Economic Commission Bill.
    • The resistance came from Opposition parties and civil society groups, including many who do not oppose the project per se, but rather its governance by “an all-powerful commission answerable to no one”.
    • Significantly, a section of Buddhist monks, wielding much influence in Sri Lankan politics and the Sinhala society, also opposed the Bill and said that it eroded Sri Lanka’s sovereignty.

  • G7 members endorse global minimum tax

    Finance Ministers from the Group of Seven (G7) rich nations have reached a landmark accord setting a global minimum corporate tax rate, an agreement that could form the basis of a worldwide deal.

    Why a global minimum?

    • Major economies are aiming to discourage multinationals from shifting profits — and tax revenues — to low-tax countries regardless of where their sales are made.
    • Increasingly, income from intangible sources such as drug patents, software and royalties on intellectual property has migrated to these jurisdictions, allowing companies to avoid paying higher taxes in their traditional home countries.
    • With its proposal for a minimum 15% tax rate, the Biden administration hopes to reduce such tax base erosion without putting American firms at a financial disadvantage, allowing competition on innovation, infrastructure and other attributes.

    Where are the talks at?

    • The G7 talks feed into a much broader, existing effort.
    • The OECD has been coordinating tax negotiations among 140 countries for years on rules for taxing cross-border digital services and curbing tax base erosion, including a global corporate minimum tax.
    • The OECD and G20 countries aim to reach a consensus on both by mid-year, but the talks on a global corporate minimum are technically simpler and less contentious.
    • If a broad consensus is reached, it will be extremely hard for any low-tax country to try and block an accord.

    How would a global minimum tax work?

    • The global minimum tax rate would apply to overseas profits.
    • Governments could still set whatever local corporate tax rate they want, but if companies pay lower rates in a particular country, their home governments could “top-up” their taxes to the minimum rate.
    • This would eliminate the advantage of shifting profits.

    What about that minimum rate?

    • Talks are focusing on the U.S. proposal of a minimum global corporation tax rate of 15% – above the level in countries such as Ireland but below the lowest G7 level.
    • Any final agreement could have major repercussions for low-tax countries and tax havens.
    • The Irish economy has boomed with the influx of billions of dollars in investment from multinationals.
    • Dublin, which has resisted EU attempts to harmonize its tax rules, is unlikely to accept a higher minimum rate without a fight.
    • However, the battle for low-tax countries is less likely to be about scuppering the overall talks and more about building support for a minimum rate as close as possible to its 12.5% or seeking certain exemptions.

    Back2Basics: G7

    • The G7 or the Group of Seven is a group of the seven most advanced economies as per the International Monetary Fund (IMF).
    • The seven countries are Canada, USA, UK, France, Germany, Japan and Italy. The EU is also represented in the G7.
    • These countries, with the seven largest IMF-described advanced economies in the world, represent 58% of the global net wealth ($317 trillion).
    • The G7 countries also represent more than 46% of the global gross domestic product (GDP) based on nominal values, and more than 32% of the global GDP based on purchasing power parity.
    • The requirements to be a member of the G7 are a high net national wealth and a high HDI (Human Development Index).

  • Performance Grading Index 2020 by Education Ministry

    The Education Ministry’s Performance Grading Index for 2019-20 was recently released.

    Performance Grading Index

    • The PGI is a tool to provide insights on the status of school education in States and UTs including key levers that drive their performance and critical areas for improvement.
    • It monitors the progress that States and UTs have made in school education with regard to learning outcomes, access and equity, infrastructure and facilities, and governance and management processes.
    • Grading will allow all States and UTs to occupy the highest level i.e Grade I, at the same time which is a sign of a fully developed nation.

    Its methodology

    • This is the third edition of the index and uses 70 indicators to measure progress.
    • Of these, the 16 indicators related to learning outcomes remain unchanged through all three editions, as they are based on data from the 2017 National Achievement Survey, which tested students in Classes 3, 5, 8, and 10.

    Highlights of the 2019-20 Report

    • Punjab, Tamil Nadu, and Kerala have all scored higher than 90%.
    • Gujarat dropped from second to the eighth rank in the index, while MP and Chhattisgarh are the only States which have seen actual regression in scores over this period.

  • Verdict on Maratha reservation ignores inequality within intermediate castes

    The article highlights the issues with Maratha reservation judgement delivered by the Supreme Court which rejected the positive discrimination of lower classes of dominant caste.

    About the verdict

    • The Supreme Court rendered a unanimous verdict on the validity of the SEBC Act, 2018 that was to grant reservation to Marathas.
    • The court held that the classification of Marathas as a socially and educationally backward class was unreasonable.
    • Court held that Maratha belonged to a politically dominant caste with significant economic resources.

    Justification for 50% limit

    • The court also concluded that the majority opinion in the Indra Sawhney case was correct and that the limit of 50 per cent for caste-based reservation did not need consideration by a larger bench.
    • The court justified the fixed quantitative limit on caste-based reservation by postulating that it was intrinsic to the fundamental principle of equality.
    • The court highlighted the need to safeguard the interests of unreserved sections and said that all sections have progressed after 70 years of independence.
    • Based on this, the court rejected the state’s argument that the breach of the limit was necessitated by the fact that the population of backward classes was over 80 per cent.

    Missed opportunity to acknowledge growing socio-economic differentiation within the dominant castes

    Growing income difference

    • If in 2011-12, the average per capita income of the Marathas was second only to the Brahmins at Rs 36,548, against Rs 47,427.
    • Their highest quintile -20 per cent of the caste group- got 48 per cent of the total income of the Marathas with a mean per capita income of Rs 86,750.
    • The lowest quintile earned 10 times less (Rs 7,198) and the 40 per cent poorest got less than 13 per cent of the total income of the caste — and were lagging behind the Scheduled Castes elite.
    • In fact, the mean incomes of the highest Dalit quintile, Rs 63,030, and that of the second-highest, Rs 28,897, were above those of the three lowest quintiles of the Marathas.

    What explains growing income difference

    • This is partly due to changes on the education front. 
    • The percentage of graduates among Dalits in 2004-05 was 1.9 per cent and has more than doubled to 5.1 per cent in 2011-12.
    • The corresponding figure for the OBCs was 3.5 per cent and has doubled to 7.6 per cent, while for the Marathas it was 4.6 per cent in 2004-05 and has come up to 8 per cent in 2011-12.
    • Correlatively, the percentage of salaried people among the Dalits was about 28 per cent in Maharashtra in 2011-12, as against 30 per cent among the Marathas.

    Issues with the Maratha quota judgment

    •  The Court refused to recognise the need for positive discrimination of the lower classes of the dominant castes which continue to be seen as a dominant bloc.
    • It fails to admit the complexity that the role of class has introduced in post-liberalisation India.
    • This is unequivocal confirmation of a dated approach to social realities and a purely arithmetic limit that finds no expression in the Constitution.
    • The judgement also raises the issue of judicial supremacy in the broad area of social policy as it could lead to undesirable exclusion of beneficiaries.
    • The court seems to have forgotten its own observation in NM Thomas case that functional democracy postulates participation of all sections of the people and fair representation in administration is an index of such participation.

    Conclusion

    The Supreme Court has rejected the determination of Marathas as backward by holding that their relative deprivation and under-representation with regard to other sections of the general category did not entitle them to affirmative action.

  • A national consensus on removal of sedition law is called for

    Is the government entitled to the love and affection of the citizens? Answer to this question lies in the Kedar Nath judgment recently invoked by the Supreme Court in a case against a journalist. The article deals with this issue.

    About the Kedar Nath judgement

    • A two-judge bench of the Supreme Court observed that every journalist is entitled to the protection under the Kedar Nath judgment (1962) on the petition filed by journalist Vinod Dua.
    • The court entertained Dua’s writ petition under Article 32.
    • In the Kedar Nath judgement, the apex court had held that a citizen has the right to say or write whatever he likes about the government or its measures by way of criticism so long as he does not incite people to violence against the government or with the intention of creating public disorder.
    • Section 124A read along with explanations is not attracted without such an allusion to violence. 

    Increasing use of the sedition law

    • NCRB data shows that between 2016 to 2019, there has been a whopping 160 per cent increase in the filing of sedition charges with a conviction rate of just 3.3 per cent.
    • Of the 96 people charged in 2019, only two could be convicted.
    • A number of CAA (Citizenship Amendment Act) protesters are facing sedition charges.

    Background of Section 124-A

    • Section 124-A was not a part of the original Indian Penal Code drafted by Lord Macaulay and treason was confined just to levying war.
    • It was inserted in 1870 in response to the Wahabi movement that had asked Muslims to initiate jihad against the colonial regime.
    • It was argued that Wahabis are going from village to village and preaching that it was the sacred religious duty of Muslims to wage a war against British rule.

    Way forward

    • In 2018, the Law Commission had recommended that the sedition law should not be used to curb free speech.
    •  Let the criminal law revision committee working under the Ministry of Home Affairs make the bold recommendation of dropping the draconian law.
    • A political consensus needs to be forged on this issue.

    Conclusion

    No government, as Mahatma Gandhi told Judge R S Broomfield, has a right to love and affection and people in a free country committed to the liberty of thought and freedom of expression should not be criminally punished for expressing their opinion about the government.

  • Close the vaccination gap, in global lockstep

    Why vaccination gap is cause of worry

    • By the end of May 2021, only 2.1% of Africans had received at least one dose of a COVID-19 vaccine.
    • A widely vaccinated world population is the only way to end the pandemic; otherwise, the multiplication of variants is likely to undermine the effectiveness of existing vaccines.
    • Vaccination is also a prerequisite for lifting the restrictions that are holding back our economies and freedoms.
    • If the vaccination gap persists, it risks reversing the trend in recent decades of declining poverty and global inequalities.
    • Such a negative dynamic would hold back economic activity and increase geopolitical tensions.
    • The cost of inaction would for sure be much higher for advanced economies than what we collectively would have to spend to help vaccinate the whole world.
    • The International Monetary Fund has proposed $50 billion plan in order to be able to vaccinate 40% of the world population in 2021 and 60% by mid-2022.

    Need to resist the vaccine nationalism

    • To achieve the goal set by IMF, we need closely coordinated multilateral action.
    • We must resist the threat posed by linking the provision of vaccines to political goals and vaccine nationalism.
    • The EU has been vaccinating its own population, while exporting large volumes of vaccines and contributing substantially to the vaccines roll-out in low-income countries.
    • The EU has also exported 240 million doses to 90 countries, which is about as much as used within the EU.
    • One-third of all COVAX doses delivered so far have been financed by the EU.
    • India’s Vaccine Maitri is another example of global solidarity.
    • However, this effort is still far from sufficient to prevent the vaccination gap from widening.

    Way forward

    • To fill widening vaccination gap, countries with the required knowledge and means should increase their production capacities, so that they can both vaccinate their own populations and export more vaccines.
    • All countries must avoid restrictive measures that affect vaccine supply chains.
    • We also need to facilitate the transfer of knowledge and technology, so that more countries can produce vaccines.
    • Voluntary licensing is the privileged way to ensure such transfer of technology and know-how.

    Conclusion

    The COVID-19 pandemic has reminded us that health is a global public good. Our common global COVID-19 vaccine action to close the vaccination gap must be the first step toward genuine global health cooperation, as foreseen by the Rome Declaration recently adopted at the Global Health Summit.

     

  • India-Bangladesh Relations

    The article highlights the need for Indian leaders to respect the sentiments of Bangladesh by avoiding adverse comments during elections and recognition of Bangladesh’s importance for India.

     Diplomacy with Bangladesh

    • Long-standing bilateral problems: As a neighbour nearly surrounded on all territorial sides by India, there are the inevitable bilateral problems of long duration.
    • Such problems include a perennially favourable balance of trade for India, drought and flood in the 54 transboundary rivers flowing from India to Bangladesh, and the smuggling of goods and vulnerable human beings across the approximately 4,100 kilometre land border.
    • Cultural ties with India: There are several sections who regard their Bengali roots and traditions as being of equal validity as their religious affiliation, and treasure the linguistic and cultural ties with adjacent India.
    • India’s expectations: For India’s attentions and support, India’s expectations are that a neighbour will keep India’s concerns in mind when devising and pursuing its policies.

    Steps taken to consolidate the bilateral ties

    • Bangladesh has successfully dealt with Muslim fundamentalist terrorists.
    • Bangladesh has also controlled the Northeast militant movements sheltering in Bangladesh.
    • This has facilitated the pacification of India’s Northeast.
    • Bangladesh facilitated a considerable degree of connectivity between India and its Northeast by land, river and the use of Bangladeshi ports.
    • Indian investments in Bangladesh have been encouraged.
    • There are at least 100,000 Indian nationals now living and working in that country.
    • For economic integration along with free movement of commerce and capital, the movement of persons on the lines of Nepal and Bhutan will have to be considered.

    Consider the question “To a certain degree both India and Bangladesh depend on each other for security and stability. In light of this, take an overview of the consolidation of the bilateral ties between the two countries and discuss the issues that need to be addressed between the two countries.”

    Conclusion

    Responsible individuals on both sides of the border, whether in government or the Opposition, must be actively discouraged from words and actions detrimental to the consolidation of the existing cordiality.

  • Should Sedition law be scrapped?

    The Supreme Court has quashed the case of sedition filed against a journalist in Himachal Pradesh for allegedly making remarks against PM and the government’s handling of the migrant crisis during the Covid-19 lockdown last year.

    What is the story?

    • In a video, the journalist had criticized PM Modi and the Centre for the handling of the migrant crisis last year.
    • A sedition case was filed against him under Section 124A of the IPC which penalizes sedition as punishable with either imprisonment ranging from three years to a lifetime, a fine, or both.
    • He was charged for spreading misinformation or incorrect information and cause panic in the perception of the general public.

    What has the court ruled?

    • The case was quashed by SC. It held that his remarks constituted genuine criticism of the government and could not be labeled seditious.
    • In doing so, the court also reiterated the principles in the landmark case on sedition — Kedar Nath Singh v Union of India (1962).

    What are the Kedar Nath Singh guidelines?

    • In the landmark 1962 Kedar Nath Singh case, the Supreme Court upheld the constitutional validity of the sedition law, it attempted to restrict its scope for misuse.
    • The court held that unless accompanied by incitement or call for violence, criticism of the government cannot be labeled sedition.

    Seven principles in the Kedar Nath Singh ruling specify situations in which the charge of sedition cannot be applied:

    1. The expression “ ‘the Government established by law’ has to be distinguished from the persons for the time being engaged in carrying on the administration. ‘Government established by law’ is the visible symbol of the State. The very existence of the State will be in jeopardy if the Government established by law is subverted.”
    2. The effect of subverting the Government by bringing that Government into contempt or hatred, or creating disaffection against it, would be within the penal statute because the feeling of disloyalty to the Government established by law or enmity to it imports the idea of a tendency to public disorder by the use of actual violence or incitement to violence.
    3. Comments, however strongly worded, expressing disapprobation of actions of the Government, without exciting those feelings which generate the inclination to cause public disorder by acts of violence, would not be penal.
    4. A citizen has a right to say or write whatever he likes about the Government, or its measures, by way of criticism or comment, so long as he does not incite people to violence against the Government established by law or with the intention of creating public disorder.
    5. The provisions of the Sections read as a whole, along with the explanations, make it reasonably clear that the sections aim at rendering penal only such activities as would be intended, or have a tendency, to create disorder or disturbance of public peace by resort to violence.
    6. It is only when the words, written or spoken, etc. which have the pernicious tendency or intention of creating public disorder or disturbance of law and order that the law steps in to prevent such activities in the interest of public order.
    7. The court proposed to limit its operation only to such activities as come within the ambit of the observations of the Federal Court, that is to say, activities involving incitement to violence or intention or tendency to create public disorder or cause disturbance of public peace.

    What has been the impact of that verdict?

    • The significance of the verdict lies in the Supreme Court’s subsequent reiteration of the Kedar Nath Singh principles.
    • A fresh constitutional challenge by two journalists against the sedition law pending before the Supreme Court, and the ruling in Dua’s case, make a strong case against keeping the colonial law in the books.

  • Caste-wise split in MGNREGA wage payments

    The Centre has asked the States to split wage payments under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme into separate categories for Scheduled Castes, Scheduled Tribes and others from this financial year.

    What is MGNREGA?

    • The MGNREGA stands for Mahatma Gandhi National Rural Employment Guarantee Act of 2005.
    • This is a labour law and social security measure that aims to guarantee the ‘Right to Work’.
    • The act was first proposed in 1991 by P.V. Narasimha Rao.

    The objectives of the MGNREGA are:

    • To enhance the livelihood security of the rural poor by generating wage employment opportunities.
    • To create a rural asset base that would enhance productive ways of employment, augment and sustain a rural household income.

    What is so unique about it?

    • MGNREGA is unique in not only ensuring at least 100 days of employment to the willing unskilled workers, but also in ensuring an enforceable commitment on the implementing machinery i.e., the State Governments, and providing a bargaining power to the labourers.
    • The failure of provision for employment within 15 days of the receipt of job application from a prospective household will result in the payment of unemployment allowance to the job seekers.
    • Any Indian citizen above the age of 18 years who resides in rural India can apply for the NREGA scheme. The applicant should have volunteered to do unskilled work.
    • Employment is to be provided within 5 km of an applicant’s residence, and minimum wages are to be paid.
    • Thus, employment under MGNREGA is a legal entitlement.

    Answer this PYQ in the comment box:

    Q.Among the following who are eligible to benefit from the “Mahatma Gandhi national rural employment guarantee act”?

    (a) Adult members of only the scheduled caste and scheduled tribe households.

    (b) Adult members of below poverty line (BPL) households.

    (c) Adult members of households of all backward communities.

    (d) Adult members of any household.

    What is the move?

    • States were asked to verify if job cards for SC and ST beneficiaries were being properly allocated at the field level.
    • They were told they would be given fund allocations according to this criterion, indicating that labour budgets would also be segregated on a caste basis.
    • It was aimed at timely wage payments.

    Reasons behind

    • There is some inbuilt positive discrimination in the scheme, reflected in the fact that more than 50% of workers are women and almost 40% are SC/ST.
    • However, it felt that the proposed reform would not help SC/ST workers, but would expose all workers to further uncertainties as the system struggles with changes.

    Issues with the announcement

    • Workers’ advocates feared this move would cause unnecessary delays and complications in the payment system, and worried that it could lead to a reduction in scheme funding.
    • The rationale was very simple. It is not as if the payments made to SC and ST are not reported on the NREGA website, but overall, in terms of the budgetary outlay.
    • When people take an assessment merely on the Budget head under which the programme is budgeted, then they miss out on this intricate nuance.
    • So the Finance Ministry advised that both the Centre and States should make Budget provisions under SC and ST components as well.

  • SCO Agreement on Mass Media Cooperation

    The Union Cabinet has accorded an ex post facto approval for signing and ratifying an agreement on cooperation in the field of mass media between all member states of the Shanghai Cooperation Organization (SCO).

    Highlights of the Agreement

    • The agreement, which was signed in June 2019, would provide an opportunity for the member states to share best practices and new innovations in the field of mass media.
    • It aims to promote equal and mutually beneficial cooperation among associations in the field of mass media.
    • The main areas of cooperation in the agreement are the creation of favorable conditions for the wide and mutual distribution of information through mass media in order to further deepen the knowledge about the lives of the peoples of their states.
    • It will assist in broadcasting television and radio programmer and those, distributed legally within the territory of the state of the other side.

    What is SCO?

    • After the collapse of the Soviet Union in 1991, the then security and economic architecture in the Eurasian region dissolved and new structures had to come up.
    • The original Shanghai Five were China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan.
    • The SCO was formed in 2001, with Uzbekistan included. It expanded in 2017 to include India and Pakistan.
    • Since its formation, the SCO has focused on regional non-traditional security, with counter-terrorism as a priority.
    • The fight against the “three evils” of terrorism, separatism and extremism has become its mantra. Today, areas of cooperation include themes such as economics and culture.

    Try this PYQ now:

    Q. In the context of the affairs of which of the following is the phrase “Special Safeguard Mechanisms” mentioned in the news frequently?

    (a) United Nations Environment Programme

    (b) World Trade Organization

    (c) ASEAN- India Free Trade Agreement

    (d) G-20 Summits

    India’s entry to the SCO

    • India and Pakistan both were observer countries.
    • While Central Asian countries and China were not in favor of expansion initially, the main supporter — of India’s entry in particular — was Russia.
    • A widely held view is that Russia’s growing unease about an increasingly powerful China prompted it to push for its expansion.
    • From 2009 onwards, Russia officially supported India’s ambition to join the SCO. China then asked for its all-weather friend Pakistan’s entry.