Note4Students
From UPSC perspective, the following things are important :
Prelims level: FEMA
Mains level: Paper 3- Security imperatives of FDI
Relaxation on Chinese FDI
- Last April, India had subjected all Chinese FDI to mandatory government screening.
- The aim was to curb opportunistic takeovers of Indian companies, a concern fuelled by sharp corrections in equity markets in March 2020.
- Several economies including the US, Australia, Canada and Germany faced similar concerns.
- They blocked specific takeover attempts, using special laws for national security screening of inward FDI.
- In the absence of similar legislation, India did not differentiate between investments which raised genuine national security concerns and those that did not.
- This is a crucial shortcoming.
- With market indices now hovering at their peaks, reportedly India may allow Chinese FDI up to 25 per cent in equity under the automatic route.
Regulation of FDI and issues with it
- India regulates foreign investments primarily through FEMA.
- FEMA clearly provides two specific macro-prudential objectives — facilitating external trade and payments; and promoting orderly development and maintenance of foreign exchange markets in India.
- Accordingly, it empowers the central government and the RBI, acting in consultation with each other, to regulate capital account transactions.
- These regulations determine who can invest through the FDI route, in which sector and how much.
- In practice, however, FEMA regulations have often responded to concerns not strictly related to macro-prudential objectives.
- One such concern has been national security.
Need for the law to scrutinise FDI from national security angle
- Shortcoming of FEMA underscores the need for India to emulates its western peers and enact a statute specifically designed for national security screening of strategic FDI.
- Unlike FEMA, this new statute must explicitly lay down legal principles for determining when a foreign acquisition of an Indian company poses genuine national security threats.
- In this regard, a policy paper published by the Peterson Institute for International Economics three types of legitimate threats from foreign acquisitions.
3 Types of threat from foreign acquisitions
1) Dependency on foreign supplier
- The first threat arises if a foreign acquisition renders India dependent on a foreign-controlled supplier of goods or services crucial to the functioning of the Indian economy.
- For this threat to be credible, it needs to be further established that the industry in which the acquisition is supposed to take place is tightly concentrated, the number of close substitutes limited, and the switching costs are high.
2) Technology transfer
- The second threat emanates from a proposed acquisition transferring a technology or an expertise to a foreign-controlled entity that might be deployed by that entity or a foreign government in a manner harmful to India’s national interests.
- The credibility of this threat again depends on whether the market for such technology or expertise is tightly concentrated or if they are readily available elsewhere.
3) Threat of infiltration, surveillance or sabotage
- The third threat arises if a proposed acquisition allows insertion of some potential capability for infiltration, surveillance or sabotage via human or non-human agents into the provision of goods or services crucial to the functioning of Indian economy.
- This threat is particularly credible when the target company supplies crucial goods or services to the Indian government, its military or even critical infrastructure units and the switching costs are high.
Way forward
- The above stated 3 types of threats could provide conceptual clarity in the new statute could make national security assessments objective, transparent and amenable to the rule of law.
- On procedure, the statute must empower only the finance minister to reject certain strategic foreign acquisitions on national security grounds.
- Both the power and accountability mechanisms should be hardcoded into the statute itself, as is the case in some mature parliamentary democracies.
- For instance, the Australian Foreign Acquisitions and Takeovers Act, 1975 empowers the treasurer to block certain foreign acquisitions on national security grounds.
- Similarly, the Investment Canada Act, 1985 empowers a minister to reject certain foreign acquisitions.
Consider the question “India needs to recognise the national security threat emanating from strategic FDI. This requires identifying threats. In lights of this, examine the types of threats and suggest the ways to deal with it.”
Conclusion
Overall, India’s tryst with Chinese FDI underscores the importance of identifying specific national security threats emanating from strategic FDI and addressing them objectively. This is too sensitive a matter to be left to capital controls under FEMA. A dedicated statute for national security screening of inward FDI would be best suited for handling such issues.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India's growing security footprints in West Asia
The article examines the factors that are leading to a growing footprint of Asian economies in West Asia.
Growing interest of Asian Economies in West Asia
- This month, a contingent of the Indian Air Force participated in a multi-nation exercise hosted by the United Arab Emirates (UAE) named Desert Flag (March 3-27).
- Other than India and the UAE, Bahrain, France, Saudi Arabia, South Korea and the United States are also participating.
- While joint exercises in West Asia between Arab states and their western counterparts is common, the 2021 edition’s involvement of contingents from India and South Korea.
- This showcases the growing interests of Asian economies.
- As net importers of crude oil, these Asian economies rely heavily on the West Asian states for their supplies,
- And, by association, Asian economies have increased stakes in the safety and security of the region from the perspective of political and economic stability.
- And more importantly, in the protection of vital sea lanes in areas such as the Strait of Hormuz, the Gulf of Aden and the Red Sea stretching out into the Arabian Sea and the wider Indian Ocean.
Declining U.S. influence
- In April 2020, Saudi Arabia was India’s top supplier of oil followed by Iraq.
- For South Korea, in late 2019, it was also Saudi Arabia as the top supplier.
- The participation of both India and South Korea in these exercises in the Persian Gulf is reflective of these trends and growing concerns in Asian capitals over an eroding U.S. security blanket in the region.
Tension in Iran-U.S. relations
- Both India and South Korea have found themselves caught in regional tensions as the pressure on Iran to restart the 2015 nuclear agreement (Joint Comprehensive Plan of Action, or JCPOA) increases.
- Both India and South Korea have faced carbon-copy consequences over the past decade as the West first negotiated with Iran, and later tried to manage the fallout of the JCPOA collapse.
India’s role in protecting it’s energy interests
- The idea of Asian nations having to band together to protect their energy interests in West Asia is not new.
- Former Indian diplomats have even suggested an idea equitable to an ‘importers OPEC’ led by Asian states which today have a much larger stake in West Asia’s oil than the West.
- The Indian Navy has made multiple port calls from the UAE and Kuwait to Iran and Qatar in recent years.
- In 2020, India had also planned its first bilateral naval exercise with Saudi Arabia.
Consider the question “Examine the factors responsible for India’s growing security footprint in West Asia and how India is achieving its objectives?”
Conclusion
Regional states will become more responsible for their own security, and as Asian economies become stronger stakeholders, their geopolitics will become more visible across this geography.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Election Commission
Mains level: Autonomy of the State Election Commission
The Supreme Court gas held that independent persons and not bureaucrats should be appointed State Election Commissioners.
No bureaucrats in SEC
- The judgment came on an appeal against an order of the Bombay High Court which had set aside the election notification issued by the Goa State Election Commission in some municipalities.
- Justice F. Nariman, in a judgment, said giving government employees the additional charge of State Election Commissioners is a “mockery of the Constitution”.
- It said government employees holding the post of State Election Commissioners as additional charge should give up the post.
- The Supreme Court said its direction should be followed strictly.
Why such a move?
- Under the constitutional mandate, it is the duty of the State to not interfere with the functioning of the State Election Commission.
- The independence of Election Commissions cannot be compromised at any cost, the Bench said.
State Election Commission
- Under the 73rd and 74th constitutional amendment acts, State Election Commissions were created for every state to conduct elections to panchayats and municipalities.
- The SECs came into as envisaged in Articles 243K and 243ZA of the Constitution of India.
- The above Articles provide that the superintendence, direction and control of the preparation of electoral rolls for, and the Conduct of all elections to the Panchayats and Municipalities shall vest in the SEC.
- The Constitution itself has facilitated provision for smooth, free and fair, regular elections to the Local bodies and has, therefore, entrusted the SEC with the responsibility for holding such elections.
- In the domain of the elections to the local bodies, the SEC functions independently and has the same powers and duties as that of the Election Commission of India.
Try this PYQ:
Q.The Constitution (Seventy-Third Amendment) Act, 1992, which aims at promoting the Panchayati Raj Institutions in the country, provides for which of the following?
- Constitution of District Planning Committees.
- State Election Commissions to conduct all panchayat elections.
- Establishment of State Finance Commissions.
Select the correct answer using the codes given below:
(a) Only 1
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
The Election Commissioner
- The State Election Commissioner is appointed by the Governor.
- It has the status, salary and allowance of a Judge of a High Court and cannot be removed from office except in the like manner and on the like grounds as a Judge of a High Court.
- The Election Commissioner is also the Chairman of the Delimitation Commission.
Its duties
- The first and foremost duty of the SEC is to prepare the elector rolls of Panchayats, Municipalities and Municipal Corporation and conduct their elections.
In addition to the above functions, the State Election Commission has also the following functions:
- Conduct of elections to the offices of the Mayor/Chairman/President/Deputy Mayor/Vice Chairman/Vice President and the no-confidence motion against them.
- Conduct of the Elections to various Standing Committees and their Chairpersons
- Determination of disqualification of elected members/Councilors.
- Determination of disqualification of elected members on the ground of defection.
Back2Basics: Election Commission of India (ECI)
- ECI is an autonomous and permanent constitutional authority responsible for administering election processes in India at the national and state level.
- The body administers elections to the Lok Sabha, Rajya Sabha, State Legislative Assemblies, State Legislative Councils and the offices of the President and Vice President of the country.
- The EC operates under the authority of the Constitution per Article 324 and subsequently enacted the Representation of the People Act.
- The commission has the powers under the Constitution, to act in an appropriate manner when the enacted laws make insufficient provisions to deal with a given situation in the conduct of an election.
- Being a constitutional authority, EC is amongst the few institutions which function with both autonomy and freedom, along with the country’s higher judiciary, the UPSC and the CAG.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not Much
Mains level: Places of Worship Act, 1991
The Supreme Court has asked the Centre to respond to a plea challenging the Places of Worship (Special Provisions) Act, 1991. The court has opened the doors for litigation in various places of worship across the country including Mathura and Varanasi.
Take this ‘wonderful’ question from CS Mains 2019:
Q.What are the challenges to our cultural practices in the name of secularism?
Places of Worship Act, 1991
- It was passed in 1991 by the P V Narasimha Rao-led government.
- The law seeks to maintain the “religious character” of places of worship as it was in 1947 — except in the case of the Ram Janmabhoomi-Babri Masjid dispute, which was already in court.
- The law was brought in at the peak of the Ram Mandir movement, exactly a year before the demolition of the Babri Masjid.
- Introducing the law, then Home Minister S B Chavan said in Parliament that it was adopted to curb communal tension.
What are its provisions?
The objective of the law describes it as an Act to prohibit conversion of any place of worship.
- It aims to provide for the maintenance of the religious character of any place of worship as it existed on the 15th day of August 1947, and for matters connected therewith or incidental thereto”.
- Sections 3 and 4 of the Act declared that the religious character of a place of worship shall continue to be the same as it was on August 15, 1947.
- No person shall convert any place of worship of any religious denomination into one of a different denomination or section.
- Section 4(2) says that all suits, appeals or others regarding converting the character of a place of worship, that was pending on August 15, 1947, will stand abated when the Act commences and no fresh proceedings can be filed.
- However, legal proceedings can be initiated after the commencement of the Act if the change of status took place after the cut-off date of August 15, 1947.
What does it say about Ayodhya, and what else is exempted?
- Act does not to apply to Ram Janma Bhumi Babri Masjid.
Besides the Ayodhya dispute, the Act also exempted:
- any place of worship that is an ancient and historical monument or an archaeological site, or is covered by the Ancient Monuments and Archaeological Sites and Remains Act, 1958;
- a suit that has been finally settled or disposed of;
- any dispute that has been settled by the parties or conversion of any place that took place by acquiescence before the Act commenced.
What has the Supreme Court said about the Act?
- In the 2019 Ayodhya verdict, the Constitution Bench led by former CJI Ranjan Gogoi referred to the law and said it manifests the secular values of the Constitution and strictly prohibits retrogression.
- In providing a guarantee for the preservation of the religious character of places, Parliament determined that independence from colonial rule furnishes a constitutional basis for healing the injustices of the past.
- The law addresses itself to the State as much as to every citizen of the nation. Its norms bind those who govern the affairs of the nation at every level.
- Those norms implement the Fundamental Duties under Article 51A and are hence positive mandates to every citizen as well.
Why is the law under challenge?
- A politician has challenged the law on the ground that violates secularism.
- He has also argued that the cut-off date of August 15, 1947, is “arbitrary, irrational and retrospective” and prohibits Hindus, Jains, Buddhists, and Sikhs from approaching courts to “reclaim” their places of worship.
- Such places, he argued, were “invaded” and “encroached” upon by “fundamentalist barbaric invaders”.
- The right-wing politicians have opposed the law even when it was introduced, arguing that the Centre has no power to legislate on “pilgrimages” or “burial grounds” which is under the state list.
- Another criticism against the law is that the cut-off is the date of Independence, which means that the status quo determined by a colonial power is considered final.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Benzene pollution
Mains level: Not Much
A joint committee appointed by the National Green Tribunal (NGT) to study air pollution in Kerala has pointed out that petrol refuelling stations were a major source of benzene emissions and volatile organic compounds (VOCs).
Why such a move?
- Benzene is a major constituent of evaporative emission due to its high volatility.
Try this PYQ:
Q.Consider the following:
- Carbon monoxide
- Methane
- Ozone
- Sulphur dioxide
Which of the above are released into atmosphere due to the burning of crop/biomass residue?
(a) 1 and 2 only
(b) 2, 3 and 4 only
(c) 1 and 4 only
(d) 1, 2, 3 and 4
What is Benzene?
- Benzene is a chemical that is a colourless or light yellow liquid at room temperature. It has a sweet odour and is highly flammable.
- It evaporates into the air very quickly. Its vapour is heavier than air and may sink into low-lying areas.
- It dissolves only slightly in water and will float on top of the water.
Its formation and uses
Benzene is formed from both natural processes and human activities.
- Natural sources of benzene include volcanoes and forest fires. Benzene is also a natural part of crude oil, gasoline, and cigarette smoke.
- Some industries use benzene to make other chemicals that are used to make plastics, resins, and nylon and synthetic fibres.
- It is also used to make some types of lubricants, rubbers, dyes, detergents, drugs, and pesticides.
Benzene emission
- The major sources of benzene exposure are tobacco smoke, automobile service stations, exhaust from motor vehicles, and industrial emissions.
- Benzene is present in both exhaust and evaporative emissions. Motor vehicles account for approximately 85% of the total benzene emissions.
- However, ingestion and dermal absorption of benzene can also occur through contact with contaminated water.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: 2001 FO32
Mains level: Study of asteroids and meteors
On March 21, the largest asteroid predicted to pass by Earth in 2021 will be at its closest. It is called 2001 FO32.
Try this PYQ:
Q.Which of the following is/are cited by the scientists as evidence/evidence for the continued expansion of the universe?
- Detection of microwaves in space
- Observation of redshirt phenomenon in space
- Movement of asteroids in space
- Occurrence of supernova explosions in space
Codes:
(a) 1 and 2 only
(b) 2 only
(c) 1, 3 and 4
(d) None of the above can be cited as evidence.
2001 FO32
- There is no threat of a collision with our planet now or for centuries to come.
- Scientists know its orbital path around the Sun very accurately since it was discovered 20 years ago and has been tracked ever since.
- It won’t come closer than 2 million km to Earth, but it will present a valuable scientific opportunity for astronomers who can get a good look at a rocky relic that formed at the dawn of our Solar System.
Proximity to Earth
- For comparison, when it is at its closest, the distance of 2 million km is equal to 5¼ times the distance from Earth to the Moon.
- Still, that distance is close in astronomical terms, which is why 2001 FO32 has been designated a “potentially hazardous asteroid”.
- The reason for the asteroid’s unusually speedy close approach is its highly eccentric orbit around the Sun, an orbit that is tilted 39° to Earth’s orbital plane.
- This orbit takes the asteroid closer to the Sun than Mercury, and twice as far from the Sun as Mars.
- Later, the asteroid slows after being flung back out into deep space and swinging back toward the Sun. It completes one orbit every 810 days (about 2¼ years).
Studying the visitor
- This asteroid will provide an opportunity for astronomers to get a more precise understanding of the asteroid’s size and albedo (i.e. how bright, or reflective, its surface is), and a rough idea of its composition.
- When sunlight hits an asteroid’s surface, minerals in the rock absorb some wavelengths while reflecting others.
- By studying the spectrum of light reflecting off the surface, astronomers can measure the chemical “fingerprints” of the minerals on the surface of the asteroid.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Seabuckthorn
Mains level: Not Much
The Himachal Pradesh government has decided to start planting Seabuckthorn in the cold desert areas.
What is Seabuckthorn?
- It’s a shrub that produces an orange-yellow coloured edible berry.
- In India, it is found above the tree line in the Himalayan region, generally in dry areas such as the cold deserts of Ladakh and Spiti.
- In Himachal Pradesh, it is locally called Himalayan chharma and grows in the wild in Lahaul and Spiti and parts of Kinnaur.
- According to the Seabuckthorn Association of India, around 15,000 hectares in Himachal, Ladakh, Uttarakhand, Sikkim and Arunachal Pradesh are covered by this plant.
Try this PYQ from CSP 2019:
Q.Recently, there was a growing awareness in our country about the importance of Himalayan nettle (Girardinia diversifolia) because it is found to be a sustainable source of
(a) anti-malarial drug
(b) biodiesel
(c) pulp for paper industry
(d) textile fibre
Benefits of the Seabuckthorn plant
(1) Medicinal benefits
- As a folk medicine, Seabuckthorn has been widely used for treating stomach, heart and skin problems.
- In the last few decades, scientific research worldwide has backed many of its traditional uses.
- Its fruit and leaves are rich in vitamins, carotenoids and omega fatty acids, among other substances, and it can help troops in acclimatizing to high-altitude.
(2) Ecological benefits
- Besides being an important source of fuelwood and fodder, Seabuckthorn is a soil-binding plant that prevents soil-erosion, checks siltation in rivers and helps preserve floral biodiversity.
- In the Lahaul valley, where willow trees are dying in large numbers due to pest attack, this hardy shrub is a good alternative for protecting the local ecology.
(3) Commercial benefits
- Seabuckthorn also has commercial value, as it is used in making juices, jams, nutritional capsules etc.
- But wild Seabuckthorn cannot sustainably supply raw material to the industry, and the plant needs to be cultivated on a large scale as is being done in China.
What is the latest project?
- The Seabuckthorn association wants the forest departments of various Himalayan states/UTs to plant Seabuckthorn on arid and marginal lands using compensatory afforestation or CAMPA funds.
- Recently, the union ministry of environment, forest and climate change asked these states to submit proposals for taking up such plantations.
- This is in the light of reduced water flow from Himalayan glaciers and their impact on ecology.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NEF
Mains level: Paper 3- Climate change negotiations
The new U.S. administration has renewed its commitment to climate actions by reconvening the Major Economies Forum. This has several implications for India and the developing countries. The article deals with this issue.
Reconvening MEF and its implications for developing countries
- The election of Joe Biden as U.S. President has catapulted climate change to the top of the global agenda.
- Interestingly, the U.S. is not just striding back to the Obama signature achievement of the Paris Accord with its voluntary commitments but also to the Bush days [which was not necessarily voluntary].
- This change is best evidenced by the presidential call to reconvene the Major Economies Forum (MEF).
- The MEF, which was first convened in March 2009, originated in the Bush-era U.S. efforts to rope in major emitters.
- It was also to push a way forward on climate change without heed to the principle of differentiated responsibilities and recognition of historical responsibilities.
- These two are hallowed principles of the climate discourse given the decades of staying power of greenhouse gases (GHGs) in the atmosphere.
Changing approach implications for India
- All countries have been told to commit to net zero (GHG emissions) by 2050 with credible plans to ensure meeting this domestic target.
- Taking a cue from the new U.S. Administration, the UN Secretary-General has even called on countries to declare national climate emergencies apart from building a coalition for a carbon-neutral world by 2050.
- As of today, countries representing around 65% of global CO2 emissions have already agreed to this.
- These plans and their implementation will, undoubtedly, be subject to international reviews and verification.
- Historical responsibilities and differentiation have no place in this discourse; but neither does the level of development.
- India can easily be in the crosshairs of such a discourse no matter its extraordinarily small carbon footprint in per-capita terms and huge development imperatives.
Possibility of carbon border levies
- Adding to the challenges is the distinct possibility of the EU imposing carbon border levies on those who do not take on high carbon cut-down targets and do so unilaterally if there is no global agreement.
- While as of now the U.S. Administration appears ambivalent on these border levies, the possibility of their coming around cannot be ruled out.
- In such a scenario, World Trade Organization rules that presently exclude the use of tariffs on environmental grounds will certainly get modified.
A fund pay-in idea
- To deal with the issue of climate finance, Raghuram Rajan has recently put forward a proposal for India to consider.
- The proposal calls on countries to pay into a global fund amounts based on their carbon emissions over and above the global per-capita average of five tons.
- This obviously disincentives coal in a big way while incentivising renewables.
- Those above the global average would pay, while those below would receive the monies.
- While this would suggest a certain equity, it may be unacceptable to the developed countries even though Mr. Rajan has gone along with the drumbeat to forget historical responsibility.
- For India, such a proposal may appear attractive as India today has per capita CO2 emission of only 2 tons and is a global record setter in pushing renewables.
- The long-term implications of such a proposal require examination in detail, quite apart from factoring in the twists and turns that negotiations could give to such an idea.
- And then, of course, there are alternatives such as emission trading.
Implications for developing countries
- The proposal of fund pay-in allows practical considerations to trump fairness by not only giving a short shrift to historical responsibility but also denying priority access to the remaining carbon space for developing countries.
- In that sense, it double penalises them while giving developed countries a certain free pass.
- Here it bears noting that more than 75% of the carbon space available to humankind to keep global temperature rises to 1.5° C has already been taken up by the developed world and China.
Consider the question “As the world seeks to tackle the climate change through climate action, delivering climate justice should also be the priority. In light of this, discuss the challenges faced by the developing countries in this regard.”
Conclusion
Climate justice is an imperative for India, which needs to leverage its green and pro-nature commitment to ensure carbon and policy space for its developmental and global aspirations. India’s diplomatic and negotiating efforts must be quickly geared to that end.
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