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  • Foreign Policy Watch: India-Middle East

    The Abraham Accords as India’s West Asia bridge

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Context

    The recent visit by the Indian Air Force chief, to Israel offers a window to study how India is taking advantage of the Abraham Accords deal signed between Israel and a consortium of Arab States led by the United Arab Emirates (UAE) in 2020.

    Increasing defence cooperation between India and West Asia region

    • India’s trajectory towards an increased strategic footprint in West Asia has been in development for some time now.
    • Starting from the relatively low-key staging visit to Saudi Arabia conducted by the IAF in 2015.
    • India hosted visiting Iranian naval warships in 2018.
    • India takes an active part in the defence of the critical waterways in and around the Persian Gulf, the Arabian Sea and the extended Indian Ocean Region (IOR).
    • An Indian contingent of the Indian Air Force (IAF) will visit Israel in October to take part in multilateral military exercises.
    • India also conducted the ‘Zayed Talwar’ naval exercises with the UAE off the coast of Abu Dhabi, further deepening the fast-developing strategic cooperation between the two countries.
    • In December 2020, Indian Army chief visited the UAE and Saudi Arabia, becoming the first chief of the Indian Army to do so.
    • In 2017, India signed a deal with Oman, the home to Duqm Port  for access to the facility, including dry dock use by the Indian Navy.

    How Abraham Accords accelerated India’s engagement with West Asia region?

    • No need for balancing act: The signing of the Accords has removed a significant strategic obstacle for India — delicate balancing act India has had to play out between the Arab Gulf and Israel over the decades.
    • India had welcomed the Accords, highlighting its support for mechanisms that offer peace and stability in the region.
    • From the UAE’s perspective, Accords were to make sure the emirate along with its international centres of trade such as Dubai and Abu Dhabi do not become targets between Jerusalem and Tehran.
    • However, not all Arab States have been on board with the geopolitical shifts the Accords have pushed through.
    • Saudi Arabia has maintained a distance from this arrangement.

    India’s West Asia construct and relations with Iran

    • Iran, as part of India’s ‘West Asia’ construct, will also play a significant part in India’s outreach in the months to come as the crisis in Afghanistan deepens.
    • Connectivity projects such as Chabahar Port and Chabahar-Zahedan rail project (project discussions are still on) amongst others remain critical.
    • Recently,  strategic cooperation revitalised despite multiple obstacles in the bilateral relations, led by U.S. sanctions against Tehran and the general tensions between Israel, the Gulf and Iran via proxy battles in theatres such as Yemen, Syria and beyond.

    Conclusion

    India’s strategic play in West Asia will be reflective of its economic growth, and by association, an increasingly important place in the global order.

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  • Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

    What India’s informal sector needs right now

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    Context

    Informal sector workers suffered far more from the national lockdown in 2020 than their formal sector counterparts.

    Significance of informal sector

    • India’s large informal sector, which employs around 80 per cent of the labour force and produces about 50 per cent of GDP.
    • Of the 384 million employed in the informal sector, half work in agriculture, living mostly in rural India, and the other half are in non-agricultural sectors.
    • Of those, about half live in rural India and the remaining in urban areas.
    • Ignoring problems in the informal sector can be costly as it can lead to job and wage losses, higher inflation and even risk the livelihood of migrant workers.

    Impact of pandemic on informal sector workers

    • Informal sector workers suffered far more from the national lockdown in 2020 than their formal sector counterparts.
    • Such disruptions can be inflationary too.
    • India was one of the few countries with high inflation throughout pandemic-stricken 2020.
    • The 40 per cent in the informal non-agricultural sector is the most affected by the pandemic.
    • These workers are most vulnerable as they have borne the brunt of the economic disruption that the pandemic has unleashed.

    Impact on the informal sector

    • Nominal GDP growth has been a good indicator of the formal sector corporate sales.
    • But during the pandemic and also during events like demonetisation, formal corporate sales have exceeded nominal GDP growth.
    • This means that some demand, which was previously supplied by the informal sector, began to be supplied by the formal sector.
    • Several surveys over this time also show a rise in urban unemployment and self-employment, with the latter category seeing the highest earnings loss.

    Way forward

    • Formalisation on the back of policy changes: While traditionally associated with efficiency gains, if it comes at the cost of putting small informal firms out of business.
    • Formalisation that comes only on the back of external pressure or leads to deep distress in the informal sector, may not be sustainable.
    • By contrast, formalisation that happens on the back of policy changes that help small and informal firms grow over time into medium or larger formal sector firms is more sustainable.
    • Social welfare scheme: We need protection for informal sector workers via social welfare schemes so that the disruption they are facing does not lead to a permanent fall in demand.
    • There is a case for remaining generous with programmes such as the rural MGNREGA scheme for longer.
    • India doesn’t have an MGNREGA equivalent urban social welfare scheme.
    • Reforms: Steps to promote reforms that are needed to help small businesses grow are critical.
    • For example, lowering the regulatory burden associated with growing firms.

    Conclusion

    Bringing the informal sector to the forefront of policy decisions can lead to a significant payoff for the entire economy for years to come.

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  • Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

    Is a caste census desirable?

    | Indian Society | Mains Paper 1: Salient features of Indian Society

    With the 2021 Census coming up, several political parties have demanded a nationwide caste census.

    What is Caste Census?

    • Every Census in independent India from 1951 to 2011 has published data on Scheduled Castes and Scheduled Tribes, but not on other castes.
    • Before that, every Census until 1931 had data on caste.
    • However, in 1941, caste-based data was collected but not published.
    • In the absence of such a census, there is no proper estimate for the population of OBCs, various groups within the OBCs, and others.
    • The Mandal Commission estimated the OBC population at 52%, some other estimates have been based on National Sample Survey data.
    • Some political parties make their own estimates in states and Lok Sabha and Assembly seats during elections.

    Arguments for caste census

    A caste census is not merely geared to the reservation issue.

    • Enumerating the marginalized: A caste census would actually bring to the particular the number of people who are at the margins, or who are deprived, or the kind of occupations they pursue, or the kind of hold that institutions like caste have on them.
    • Data for Policymaking: This information is absolutely necessary for any democratic policymaking.
    • Judicial backing: The courts in India have often emphatically said that it is important to have adequate data with regard to the reservation.
    • Caste offers privilege: Caste is not only a source of disadvantage; it is also a very important source of privilege and advantage in our society.
    • Caste doesn’t marginalize: We need to do away with the idea of caste being applicable to only disadvantaged people, poor people, people who are somehow lacking.
    • Rids away caste rigidities: Counting of caste doesn’t necessarily perpetuate caste or the caste system. Myths of caste elitisms can be debunked through a caste census.

    Arguments against caste census

    • 50% breach: It is argued that a Socio-Economic Caste Census is the only way to make a case to breach the 50% cap on reservation and rationalize the reservation matrix in the country.
    • Rising assertiveness: More the State ignores out caste, the more is the tendency to preserve caste, protect it. This has been observed in many states.
    • Chaos: Data gathering itself is a big problem because it can become very, very invasive. But we need to actually balance it with enabling people and asserting citizen equality.
    • Social friction: Caste identification can lead to friction amongst various classes.

    Breaching the 50% cap

    • Judicial Substantiation: The 50% cap, as introduced by the court, has not really been argued through.
    • Questioning the sacrosanctity: Some feel that nothing sacrosanct about the 50% limit − it can be exceeded, if necessary, but a clear argument should be given for why this is being done.

    Inefficacy of reservations

    • Fractional benefits: The way reservation is practiced has invariably led to elites among castes and communities.
    • Domination: These elites within the castes have tended to exercise their dominance over their very communities and not let them exercise the kind of freedoms, or search for equality, which any democratic polity deserves.
    • Welfare isn’t reservation: The state has helped privileged communities far more, even though this help has not taken the explicit form of programs like reservation.

    Why is a caste census always controversial?

    • Data manipulation: This is a manifestation of the principle that those in power control data and information.
    • Censoring of data: We have had instances where this data has been collected but has not been made public.
    • Relative deprivation: Since a caste census is a necessity, it is not a happy thing, it is not a great achievement, it is just something that the State has to do circumstantially.
    • Vote bank politics: Vested interests of particular state governments in hunt for vote banks are also visible these days.

    SECC has the solution

    • We have got locked into a mindset where we think only those communities which want welfare benefits from the state must be enumerated.
    • Many have argued that a Socio-Economic Caste Census would be the best way to rationalize reservation based on data and make a strong case for breaching this gap.
    • Earlier governments argued that counting caste will perpetuate it.

    Conclusion

    • Favoring one caste becomes a disfavor for others. This is an undeniable fact of Indian society.
    • It seems that the caste census will happen unless something extraordinary happens in our polity.
    • There are also important questions of demands coming up because of mismatches between the numbers that we come out with and the share in resources that different communities have.
    • This is a kind of nightmare that all governments fear. So, they would much rather leave things vague.
    • The Backward Classes are more than 50% of the population. And this dispensation knows that it cannot afford to lose the support of the Backward Classes.

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  • Foreign Policy Watch: India-Middle East

    Abraham Accords as India’s West Asia bridge

    IOCR | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    The recent visit by the Indian Air Force chief to Israel offers a window to study how New Delhi is taking advantage of the Abraham Accords deal signed between Israel and a consortium of Arab States.

    Try this question:

    What are Abraham Accords? Discuss how the Israel-Gulf synergy could impact India’s relations with Israel.

    What are Abraham Accords?

    • The Israel–UAE normalization agreement is officially called the Abraham Accords Peace Agreement.
    • It was initially agreed to in a joint statement by the United States, Israel and the United Arab Emirates (UAE) on August 13, 2020.
    • The UAE thus became the third Arab country, after Egypt in 1979 and Jordan in 1994, to agree to formally normalize its relationship with Israel as well as the first Persian Gulf country to do so.
    • Concurrently, Israel agreed to suspend plans for annexing parts of the West Bank. The agreement normalized what had long been informal but robust foreign relations between the two countries.

    Do you know?

    Abraham was the first of the Hebrew patriarchs and a figure revered by the three great monotheistic religions—Judaism, Christianity, and Islam.

    New friendships

    • For common enemy: Externally, Israel, the UAE and Bahrain share the common threat perception of Iran.
    • Upholding modern values: They are relatively more modern societies that share the overarching and immediate priority of post-pandemic economic resuscitation.
    • Extended cooperation: They have lost no time to set up logistics such as Internet connectivity and direct flights to pave the way for more active economic engagement.

    India and the Gulf

    • Now India has stronger, multifaceted and growing socioeconomic engagements with Israel and the Gulf countries.
    • With over eight million Indian diasporas in the Gulf remitting annually nearly $50 billion, annual merchandise trade of over $150 billion.
    • It sources nearly two-thirds of India’s hydrocarbon imports, major investments, etc. Hence it is natural to ask how the new regional dynamic would affect India.
    • India has acquired a large and rewarding regional footprint, particularly as the preferred source of manpower, food products, pharmaceuticals, gem and jewellery, light engineering items, etc.
    • Indians are also the biggest stakeholders in Dubai’s real estate, tourism, and Free Economic Zones.
    • In the evolving scenario, there may be scope for a profitable trilateral synergy, but India cannot take its preponderance as a given.

    The Israel-GCC synergy

    • Culture: Even the Israeli Arabs may find career opportunities to bridge the cultural divide. Israel is known as the start-up nation and its stakeholders could easily fit in the various duty-free incubators in the UAE.
    • Tourism: Tourism, real estate and financial service sectors on both sides have suffered due to the pandemic and hope for a positive spin-off from the peer-to-peer interactions.
    • Defense: Israel has niche strengths in defence, security and surveillance equipment, arid farming, solar power, horticultural products, high-tech, gem and jewellery, and pharmaceuticals.
    • Technology: Further, Israel has the potential to supply skilled and semi-skilled manpower to the GCC states, particularly from the Sephardim and Mizrahim ethnicities, many of whom speak Arabic.

    The Iran link

    • Iran, as part of India’s ‘West Asia’ construct, will also play a significant part in India’s outreach in the months to come as the crisis in Afghanistan deepens.
    • The fact that New Delhi used Iranian airspace and facilities when evacuating its diplomatic staff from Kandahar in July showcases a level of strategic commonality.
    • Keeping this in mind, connectivity projects such as Chabahar Port and Chabahar-Zahedan rail project (project discussions are still on) amongst others remain critical.

    Conclusion

    • India’s strategic play in West Asia will be reflective of its economic growth, and by association, an increasingly important place in the global order.

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  • Sugar Industry – FRP, SAP, Rangarajan Committee, EBP, MIEQ, etc.

    Sugarcane Pricing in India

    | Agriculture | Mains Paper 3: Issues Related To Farm Subsidies & Msp

    Earlier this month, the Supreme Court issued notices to States and major sugar producers to develop a mechanism to ensure that farmers are paid on time.

    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.

    Try this PYQ:

    Q.The Fair and Remunerative Price (FRP) of sugarcane is approved by the:

    (a) Cabinet Committee on Economic Affairs

    (b) Commission for Agricultural Costs and Prices

    (c) Directorate of Marketing and Inspection, Ministry of Agriculture

    (d) Agricultural Produce Market Committee

     

    Post your answers here.

    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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  • Tourism Sector

    Places in news: Cattle Island on Hirakud Reservoir

    National Parks/WS | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    The Odisha Forest and Environment Department is all set to begin ‘Island Odyssey’ and ‘Hirakud Cruise’ ecotourism packages for tourists to islands inside the reservoir.

    Cattle Island

    • ‘Cattle island’, one of three islands in the Hirakud reservoir, has been selected as a sight-seeing destination.
    • When large numbers of people were displaced from their villages when the Hirakud dam was constructed on the Mahanadi river in 1950s, villagers could not take their cattle with them.
    • They left their cattle behind in deserted villages.
    • As the area started to submerge following the dam’s construction, the cattle moved up to Bhujapahad, an elevated place in the Telia Panchayat under Lakhanpur block of Jharsuguda district.
    • Subsequently named ‘Cattle island’, it’s surrounded by a vast sheet of water.

    Other islands

    • Then there is an “island of bats”, also within the reservoir, just 1 km away from the Debrigarh ecotourism project.
    • It is the habitat of hundreds of bats.
    • Tourists also get a magnificent view of the sunset from the reservoir. ‘Sunset island’ is one of the three stops on the unique boat ride.

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  • Emergency award

    | Economics | Mains Paper 3: Indian Economy

    Context

    The judgment delivered by the Supreme Court in the legal tussle between Amazon and the Future Group has laid the foundation for recognition and enforcement of emergency awards under the Indian arbitration law.

    What is an emergency award?

    • It is an award rendered by an emergency arbitrator, appointed prior to the formal constitution of an arbitral tribunal by an arbitral institution.
    • It is a recent mechanism introduced by arbitral institutions to encourage parties to seek urgent interim relief from an arbitral institution rather than from a court.
    • Many leading arbitral institutions such as SIAC, ICC, and LCIA have provisions for the appointment of an emergency arbitrator.
    • As far as India is concerned, the 246th Law Commission Report had recommended an amendment in the Arbitration and Conciliation Act, 1996 (‘Indian Arbitration Act’) to grant statutory recognition to an emergency award.
    • Some of the indigenous arbitral institutions though, such as the Delhi International Arbitration Centre, have made provisions for emergency arbitration.

    What is the tussle between Amazon and Future Group about?

    • In August 2020, Biyani Group and the Reliance Industries Group decided to amalgamate Future Retail Ltd. (FRL) with Reliance Industries and complete disposal of its retail assets in favor of the Group.
    • However, prior to the said transaction, Amazon had invested an amount of Rs 1,431 crores in Future Coupons Pvt. Ltd. (FCPL) based on rights granted to FCPL with regard to FRL.
    • So, Amazon initiated arbitration against the Biyani Group, including FRL, under Singapore International Arbitration Centre (SIAC) Rules.
    • Amazon made an application seeking urgent interim reliefs under SIAC rules and the appointment of an emergency arbitrator.
    • The emergency arbitrator appointed, made an award in favor of Amazon in October 2020, restricting the Biyani Group from proceeding ahead with the disputed transaction.
    • However, the Biyani Group proceeded with the disputed transaction, construing the emergency award as a nullity.

    Issue of enforcement of the emergency award in India

    • Amazon filed an application before the Delhi High Court for enforcement of the award.
    • The court had the task of answering two novel legal questions —
    • 1) Whether the emergency award is an interim order under section 17(1) of the Indian Arbitration Act,
    • 2) Whether it can be enforced under section 17(2).
    • The Delhi High Court gave judgment in March 2021 against the Biyani Group.
    • The case eventually reached the Supreme Court.
    • Party autonomy: The Supreme Court judgment emphasized party autonomy in arbitration, which includes the right of the parties to choose institutional rules as the governing rules of arbitration.
    • Once chosen, the parties are bound by such rules.
    • The Supreme Court also held that the Indian Arbitration Act does not prohibit the parties from agreeing to a provision providing for an emergency arbitrator.
    • The Supreme Court also held that the term “during the arbitral proceedings” is wide enough to encompass emergency arbitration proceedings.
    • The Court ultimately held the emergency award to be an interim order under section 17(1) of the Indian Arbitration Act and enforceable under section 17(2).

    Significance of the judgment for arbitration in India

    • This judgment has contributed to the development of Indian arbitration law.
    • In the broader scheme of things, it is a victory for Indian arbitration and a sigh of relief for arbitral institutions.

    Conclusion

    The judgment is a reaffirmation of the fact that India is gradually stepping towards being an “arbitration-friendly” jurisdiction.

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  • Insolvency and Bankruptcy Code

    Getting the perfect haircut from the IBC

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    Understanding the role of IBC 2016

    • For reasons sometimes a company may experience stress, that is, is unable to repay the debt in time — implying that it has assets less than claims against it.
    • So, when a company has inadequate assets, the claim of an individual creditor may be consistent with its assets while claims of all creditors put together may not.
    • In such a situation, creditors may rush to recover their claims before others do, triggering a run on the company’s assets.
    • The IBC provides for reorganisation that prevents a value-reducing run on the company.
    • It aims to rescue the company if its business is viable or close it if its business is unviable, through a market process.
    • Restructuring: The claims of creditors are restructured, which may be paid to them immediately or over time.
    •  In case of closure, the assets of the company are sold, and proceeds are distributed to creditors immediately as per the priority rule.
    • Reorganisation by financial creditor: The IBC entrusts the responsibility of reorganisation to financial creditors as they have the capability and the willingness to restructure their claims.

    Why so much variation in haircut?

    • Where the company does not have adequate assets, realisation for financial creditors, through a rescue, may fall short of their claims known as haircut.
    • The IBC process yields a zero haircut (100% recovery of claimed amount) in one case and 100 per cent haircut (i.e. 0% recovery) in another.
    • Factors: It depends on several factors, including the nature of business, business cycles, market sentiments, and marketing effort.
    • It critically depends on at what stage of stress, the company enters the IBC process.
    • If the company has been sick for years, and its assets have depleted significantly, the IBC process may yield a huge haircut or even liquidation.
    • A haircut is typically the total claims minus the amount of realisation/amount of the claims.
    • But this formulation may not tell the complete story.
    • The realisation often does not include the amount that would be realised from equity holding post-resolution, and through the reversal of avoidance transactions and the insolvency resolution of guarantors — personal and corporate.
    • It also does not include realisations made in other accounts.
    • The amount of claim often includes NPA, which may be completely written off, and the interest on such NPA.
    • These understate the numerator and overstate the denominator, projecting a higher haircut.

    Significance of IBC

    • A haircut should be seen in relation to the assets available and not in relation to the claims of creditors.
    • The market offers a value in relation to what a company brings on the table, not what it owes to creditors.
    • Value maximisation: So, the IBC maximises the value of existing assets, not of assets that probably existed earlier.
    • Market determined value: The IBC enables and facilitates market forces to resolve stress as a going concern.
    • Resolution applicants, who have many options for investment, including in stressed companies, compete to offer the best value.
    • If the best value offered by the market is not acceptable to creditors, the company is liquidated.
    • Maximum realisation: In addition to rescuing the company, the IBC realises, of the available options for creditors, the highest in percentage terms.

    Conclusion

    It is a tool in the hands of stakeholders to be used at the right time, in the right case, in the right manner.

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    Back2Basics: Avoidable Transactions in IBC 2016

    • The UNCITRAL Legislative Guide on Law of Insolvency defines avoidance proceedings as “provisions of the insolvency law that permit transactions for the transfer of assets or the undertaking of obligations prior to insolvency proceedings to be cancelled or otherwise rendered ineffective and any assets transferred, or their value, to be recovered in the collective interest of creditors.”
    • It is very important for the Resolution Professional (RP) or the liquidator to identify such transaction and file applications to avoid it so that creditors can collect their claims.
    • The Insolvency and Bankruptcy Code, 2016 (IBC) contains four types of avoidable transactions- preferential, undervalued, defrauding creditors and extortionate transactions.
    • Usually, the avoidable transactions should be made within the prescribed relevant time or look back period.
    • Look back period is the relevant time up to which an RP or a liquidator can go back to scrutinize an expected avoidable transaction.

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  • Parliament – Sessions, Procedures, Motions, Committees etc

    Role of Speaker

    op-ed snap | Polity | Mains Paper 2: Parliament & State Legislatures

    Context

    The decline in the functioning of India’s Parliament — and state assemblies as well — is caused by one primary reason: The lack of independence and impartiality of the Speaker.

    Important role of the Speaker

    • Our Constitution, after extensive debate, adopted the Westminster model of governance.
    • In the Lok Sabha, as in the United Kingdom, the Speaker is the supreme authority; he has vast powers and it is his primary duty to ensure the orderly conduct of the business of the House.
    • Constitutional law points out the two essential qualities of a Speaker: Independence and impartiality.
    • As the principal spokesperson of the Lok Sabha, the Speaker represents its collective voice.
    • Indeed, the supremacy of Parliament is emphasised by Article 75(3) of the Constitution: “The Council of Ministers shall be collectively responsible to the House of the People”.
    •  Pandit Nehru referred to the Speaker as “the symbol of the nation’s freedom and liberty” and emphasised that Speakers should be men of “outstanding ability and impartiality”.

    How role of Speaker matters in functioning Legislature

    • Power to allow debate or discussion: It is the Speaker’s duty to decide what issues will be taken up for discussion.
    • He has the sole discretion to permit an adjournment motion to be tabled or to admit a calling attention notice, if the issue is of urgent public importance.
    • The present practice of the Speaker continuing to be an active member of the ruling party has the inevitable result of his refusing to allow any debate or discussion that may be essential in national interest but may embarrass the ruling party.
    • This inevitably leads to constant disruption of Parliament by the Opposition.
    • The stalling of parliamentary proceedings has led to the passing of important bills in several sessions without any discussion.
    • Violation of separation of power between legislature and executive: The most dangerous consequence is the vastly increased powers that the executive — the bureaucracy — begins to command by default.
    • In 1951, a nine-judge bench of the Supreme Court (In Re Delhi Laws Act Case) held that essential legislative functions cannot be delegated to the bureaucracy; law-making must remain the domain of the legislature.
    • This constitutional mandate is now increasingly and consistently being violated by issuing rules and notifications that have far-reaching consequences.
    • The new rules on information technology and electronic commerce are clear instances of changes that should have come about by a parliamentary law.
    • And worse still is the power given to the executive to issue retrospective notifications — a step unknown to any civilised democracy.
    • Partisan conduct in anti-defection law issues: Several judgments on the anti-defection law have been rendered by the Supreme Court.
    • A common factor that shows up in these rulings is the blatant, partisan conduct of speakers in state assemblies.

    Way forward

    • Speaker should resign from Party: It should be made mandatory that the Speaker ought to resign from his party and his sole allegiance must be to the Constitution and to maintaining the dignity of the House.
    • The separation of powers is part of the basic structure of our Constitution.
    • It is imperative that the Speaker of every legislature resigns from his party to honour his constitutional obligation of independence and impartiality. 
    • This must be accepted as the primary responsibility of every ruling party, both at the Centre and in each state, and made into a constitutional convention.

    Conlcusion

    The option is a binary: Either allow Parliament and state legislatures to descend into terminal decline or make the Speaker truly independent and let every legislature perform its constitutional function.

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  • Judicial Appointments Conundrum Post-NJAC Verdict

    Collegium recommends nine judges for Supreme Court

    | Polity | Mains Paper 2: Executive & Judiciary

    The Supreme Court Collegium, led by Chief Justice of India (CJI) N.V. Ramana has recommended to the government nine names for appointment as apex court judges.

    Significant appointments

    • The Collegium has for the first time, in one single resolution, recommended three women judges.
    • It has thus sent a strong signal in favor of the representation of women in the highest judiciary.
    • The process scripted history by naming Karnataka High Court judge B.V. Nagarathna, who may become India’s first woman CJI.

    What is Collegium System?

    • The Collegium of judges is the Indian Supreme Court’s invention.
    • It does not figure in the Constitution, which says judges of the Supreme Court and High Courts are appointed by the President and speaks of a process of consultation.
    • In effect, it is a system under which judges are appointed by an institution comprising judges.
    • After some judges were superseded in the appointment of the CJI in the 1970s, and attempts made subsequently to effect a mass transfer of High Court judges across the country.
    • Hence there was a perception that the independence of the judiciary was under threat. This resulted in a series of cases over the years.

    Evolution: The Judges Cases

    • First Judges Case (1981) ruled that the “consultation” with the CJI in the matter of appointments must be full and effective.
    • However, it rejected the idea that the CJI’s opinion, albeit carrying great weight, should have primacy.
    • Second Judges Case (1993) introduced the Collegium system, holding that “consultation” really meant “concurrence”.
    • It added that it was not the CJI’s individual opinion, but an institutional opinion formed in consultation with the two senior-most judges in the Supreme Court.
    • Third Judges Case (1998): On a Presidential Reference for its opinion, the Supreme Court, in the Third Judges Case (1998) expanded the Collegium to a five-member body, comprising the CJI and four of his senior-most colleagues.

    The procedure followed by the Collegium

    Appointment of CJI

    • The President of India appoints the CJI and the other SC judges.
    • As far as the CJI is concerned, the outgoing CJI recommends his successor.
    • In practice, it has been strictly by seniority ever since the supersession controversy of the 1970s.
    • The Union Law Minister forwards the recommendation to the PM who, in turn, advises the President.

    Other SC Judges

    • For other judges of the top court, the proposal is initiated by the CJI.
    • The CJI consults the rest of the Collegium members, as well as the senior-most judge of the court hailing from the High Court to which the recommended person belongs.
    • The consultees must record their opinions in writing and it should form part of the file.
    • The Collegium sends the recommendation to the Law Minister, who forwards it to the Prime Minister to advise the President.

    For High Courts

    • The CJs of High Courts are appointed as per the policy of having Chief Justices from outside the respective States. The Collegium takes the call on the elevation.
    • High Court judges are recommended by a Collegium comprising the CJI and two senior-most judges.
    • The proposal, however, is initiated by the Chief Justice of the High Court concerned in consultation with two senior-most colleagues.
    • The recommendation is sent to the Chief Minister, who advises the Governor to send the proposal to the Union Law Minister.

    Does the Collegium recommend transfers too?

    • Yes, the Collegium also recommends the transfer of Chief Justices and other judges.
    • Article 222 of the Constitution provides for the transfer of a judge from one High Court to another.
    • When a CJ is transferred, a replacement must also be simultaneously found for the High Court concerned. There can be an acting CJ in a High Court for not more than a month.
    • In matters of transfers, the opinion of the CJI “is determinative”, and the consent of the judge concerned is not required.
    • However, the CJI should take into account the views of the CJ of the High Court concerned and the views of one or more SC judges who are in a position to do so.
    • All transfers must be made in the public interest, that is, “for the betterment of the administration of justice”.

    Loopholes in the Collegium system

    • Lack of Transparency: Opaqueness and a lack of transparency, and the scope for nepotism are cited often.
    • Judges appointing Judge: The attempt made to replace it by a ‘National Judicial Appointments Commission’ was struck down by the court in 2015 on the ground that it posed a threat to the independence of the judiciary.
    • Criteria: Some do not believe in full disclosure of reasons for transfers, as it may make lawyers in the destination court chary of the transferred judge.

    Scope for transparency

    • In respect of appointments, there has been an acknowledgment that the “zone of consideration” must be expanded to avoid criticism that many appointees hail from families of retired judges.
    • The status of a proposed new memorandum of procedure, to infuse greater accountability, is also unclear.
    • Even the majority opinions admitted the need for transparency, now Collegium’s resolutions are now posted online, but reasons are not given.

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