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  • Parliament – Sessions, Procedures, Motions, Committees etc

    Parliament is abdicating its oversight role

    | Polity | Mains Paper 2: Executive & Judiciary

    Context

    The monsoon session of Parliament which ended on Wednesday was a disappointment in several ways. This was the fourth straight session that ended ahead of the original schedule.

    No scrutiny of the Bills

    •  Both Houses were frequently disrupted as the Government and Opposition parties could not agree on the topics to be debated.
    • Shrinking worktime: The Lok Sabha worked for just 19% of its originally scheduled time, and the Rajya Sabha for 26%.
    • No examination of Bills by Parliament: Of the 18 Bills passed by the Lok Sabha, only one saw discussion over 15 minutes.
    • In 15 of these Bills, not even one member of the Lok Sabha spoke; each Bill was passed after a short statement by the respective Minister.
    • Every Bill introduced during the session was passed within the session.
    • This means that there was no time for any scrutiny by members.
    • In the period of the Fifteenth Lok Sabha (2009-14), 18% of the Bills were passed within the same session.
    • This rose to 33% in the Sixteenth Lok Sabha and is at 70% halfway through the current Parliament.
    • Thus, we see that, Bills are being passed without any serious examination by parliamentarians.
    • They are most often not being referred to committees, there is hardly any discussion on the floor of the House, and in most instances, Bills are passed within a few days of introduction.

    Bills not being referred to parliamentary committees

    • None of the Bills passed in this session was referred to a parliamentary committee for examination.
    • Important role of committee: Parliamentary committees provide a forum for parliamentarians to engage with experts, stakeholders and government officials to understand the implications of Bills.
    • They deliberate on the consequences of various provisions, and recommend amendments.
    • There has been a sharp downward trend in Bills being referred to them — from 71% in the Fifteenth Lok Sabha to 27% in the Sixteenth, and 12% in the current one till date.

    Important Bills passed

    • Allowing States to identify Backward Class: The Constitution was amended to allow States to identify backward classes (i.e., Other Backward Classes) for the purpose of providing reservations.
    • That amendment also specified that the President of India shall specify the list of OBCs.
    • Recently, the Supreme Court of India had interpreted this provision to imply that the State government cannot issue the list of backward classes.
    • Repealing retrospective taxation: In 2012, the Income Tax Act was amended with retrospective effect from 1961 to cover certain transactions.
    • A Bill passed this session reversed this provision of retrospective taxation. 
    • DICGC to pay within 90 days: The Deposit Insurance and Credit Guarantee Corporation insures all bank deposits against default (currently up to ₹5 lakh).
    • The Act was amended to require an interim pay-out within 90 days if a bank was going through a liquidation or reconstruction.
    • The General Insurance Business (Nationalisation) Act was amended to enable the Government to bring its shareholding in general insurance companies below 51%.
    • The Tribunals Reforms Bill was passed: The Bill replaced an ordinance which specified the process of appointment of members and their tenure and service conditions.
    • It retained two provisions struck down last month by the Supreme Court: the four-year tenure which the Court changed to five years, and a minimum age of 50 years for judicial members which the Court revised to allow lawyers with experience of 10 years.

    Conclusion

    The reason for having a legislature separate from the executive is to have a check on executive power.But the Parliament appears to be quite ineffective in all its functions and needs a course correction.

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  • Direct Benefits Transfers

    How e-RUPI can transform government’s welfare schemes

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

    Context

    Recently e-RUPI was launched by the Prime Minister.

    About e-RUPI

    • It is a digital prepaid, purpose, and person-specific payment utility. 
    • Built on the UPI platform, e-RUPI is easy to scale by the issuer.
    • At the point of presence, the verification code received by the beneficiary is shared with the service provider to authenticate and authorize the transaction: Contactless, real-time payment, and online settlement of funds into the service provider’s bank account.
    • Fourteen leading banks have already integrated it with their systems.
    • e-RUPI is almost custom-designed for school voucher programs.
    • The efficacy of these programs is well established in many countries. 

    Advantages

    The adoption of e-RUPI in various government programs will enhance business efficiency, simplicity, transparency, and accountability in these programs.

    1) e-RUPI can make cash transfer purpose and person-specific

    • Policymakers have debated whether direct cash transfers deliver benefits more efficiently than in-kind transfers like the Public Distribution System (PDS) and fertilizers.
    • e-RUPI could break the policy logjam with the following advantages:
    • 1) It will make cash transfers purpose- and person-specific.
    • 2) Freeing them from dependence on bank accounts.
    • 3) Providing visibility from the time of issue until redemption.

    2) e-RUPI can make PDS more efficient

    • The inefficiency of PDS is rooted in high overhead costs, leakages, exclusion, and inefficiencies.
    • A food-specific e-RUPI voucher will allow beneficiaries to buy rations from an outlet of their choice.
    • It will also help promote the One Nation, One Ration Card.
    • The move will also help in removing price distortion and the redemption of the voucher at market price by merchants within and outside the PDS network.

    3) Streamline fertilizer subsidy

    • e-RUPI will enable farmers to buy fertilizer at nominal prices with direct credit of the subsidy amount into the account of the authorised dealers.
    • As far back as 2011, a task force on direct transfer of subsidies on kerosene, LPG and fertilisers headed by Nandan Nilekani had suggested a roadmap for direct cash transfer of fertiliser subsidies in a phased manner.
    • The e-RUPI will allay apprehensions about creating an IT infrastructure, managing nearly 3,00,000 fertilizer sale points, the collapse of dealer network due to liquidity squeeze in the event of subsidy payments getting delayed, and a complex system of timely credit of subsidy into an estimated 129 million Aadhaar-linked bank accounts of farm households.

    4) Basic income support

    • The Covid-19 pandemic has revived interest in Universal Basic Income (UBI).
    • The lockdowns to contain the pandemic exposed the poor to acute distress, due to loss of means of livelihood.
    • e-RUPI can mitigate their stress by rapidly distributing food and cash vouchers at scale.

    5) Ayushman Bharat

    • In the Ayushman Bharat healthcare initiative beneficiaries can be given e-RUPI vouchers of designated value tenable at empanelled healthcare facilities, providing them portability and facility choice.
    • The service provider will benefit from the immediate payment.

    Way forward

    • Ownership agency: The Aadhaar experience suggests ownership must vest with a specific agency.
    • Make distribution and acceptance compatible: Making the distribution and acceptance of e-RUPI incentive-compatible is recommended, as demonstrated by the popularisation of prepaid telephony by the telecom industry.
    • Light regulation and competition promotion: Light regulation and the opening of e-RUPI to the competition will spur innovation and adoption.
    • All banks, small and big, NBFCs, non-bank PPI issuers, and telcos may be allowed to issue it later.

    Conclusion

    e-RUPI opens up a world of opportunities to the government, people, and businesses to provide, avail, and pay for services seamlessly.

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  • Disinvestment in India

    General Insurance Business (Nationalization) Amendment Bill, 2021

    | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

    The General Insurance Business (Nationalization) Amendment Bill, 2021, was recently passed by both houses of parliament.

    What is the amendment?

    • The Bill seeks to amend the General Insurance Business (nationalization) Act, 1972.

    What is the GIB Act?

    • The 1972 Act set up the General Insurance Corporation of India (GIC).
    • The businesses of the companies nationalized under the Act were restructured in four subsidiary companies of GIC: (i) National Insurance, (ii) New India Assurance, (iii) Oriental Insurance, and (iv) United India Insurance.
    • The Act was subsequently amended in 2002 to transfer the control of these four subsidiary companies from GIC to the central government, thereby making them independent companies.
    • Since 2000, GIC exclusively undertakes the reinsurance business.

    Answer this PYQ:

    Microfinance is the provision of financial services to people of low-income groups. This includes both the consumers and the self-employed. The service/ services rendered under micro-finance is/are: (CSP 2011)

    1. Credit facilities
    2. Savings facilities
    3. Insurance facilities
    4. Fund Transfer facilities

    Select the correct answer using the codes given below the lists:

    (a) 1 only

    (b) 1 and 4 only

    (c) 2 and 3 only

    (d) 1, 2, 3 and 4

     

    Post your answers here:

    Key highlights of the Amendment Bill

    • Government shareholding threshold: The Act requires that shareholding of the central government in the specified insurers (the above five companies) must be at least 51%.  The Bill removes this provision.
    • Change in definition of general insurance business: The Act defines general insurance business as fire, marine or miscellaneous insurance business.
    • Transfer of control from the government: The Bill provides that the Act will not apply to the specified insurers from the date on which the central government relinquishes control of the insurer.
    • Notifying terms and conditions: The Bill provides that schemes formulated by the central government in this regard will be deemed to have been adopted by the insurer.
    • Liabilities of directors: The Bill specifies that a director of a specified insurer, who is not a whole-time director, will be held liable only for certain acts.

    Significance of the bill

    • De-regulation: The move is part of the government’s strategy to open up more sectors to private participation and improve efficiency.
    • Capital infusion: Privatization will bring in more private capital in the general insurance business and improve its reach to make more products available to customers.
    • Insurance coverage: This will enhance insurance penetration and social protection to better secure the interests of policyholders and contribute to faster growth of the economy

    Concerns of the opposition

    • The Opposition is of the view that privatization will be detrimental to the interests of the public.
    • They wanted a proper discussion on the pros and cons of the Bill rather than passing it in a hurry.
    • They wanted an expert committee of the Cabinet to study the impact before passing the legislation.
    • They are worried about large-scale employee layoffs and short-term investors entering and exiting these entities once the Act comes into force.

    Also read:

    [Burning Issue] Divestment of LIC

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  • Anti Defection Law

    Who is a Whip?

    | Polity | Mains Paper 2: Parliament & State Legislatures

    The party in the opposition has appointed two members as the party’s whips in the Upper House.

    Who is a Whip?

    • A whip is an official of a political party whose task is to ensure party discipline in a legislature.
    • This means ensuring that members of the party vote according to the party platform, rather than according to their own individual ideology or the will of their donors or constituents.
    • Whips are the party’s “enforcers”.
    • They try to ensure that their fellow political party legislators attend voting sessions and vote according to their party’s official policy.
    • Members who vote against party policy may “lose the whip”, effectively expelling them from the party.

    Answer this PYQ:

    Which one of the following Schedules of the Constitution of India contains provisions regarding anti-defection? (CSP 2017)

    (a) Second Schedule

    (b) Fifth Schedule

    (c) Eighth Schedule

    (d) Tenth Schedule

     

    Post your answers here.

    Whips in India

    • In India, the concept of the whip was inherited from colonial British rule.
    • Every major political party appoints a whip who is responsible for the party’s discipline and behaviors on the floor of the house.
    • Usually, they direct the party members to stick to the party’s stand on certain issues and directs them to vote as per the direction of senior party members.

    What happens if a whip is disobeyed?

    • A legislator may face disqualification proceedings if she/he disobeys the whip of the party unless the number of lawmakers defying the whip is 2/3rds of the party’s strength in the house.
    • Disqualification is decided by the Speaker/Chairman of the house.

    Limitations of whip

    • There are some cases such as Presidential elections where whips cannot direct a Member of Parliament (MP) or Member of Legislative Assembly (MLA) to vote in a particular fashion.

    Types of whips

    There are three types of whips or instructions issued by the party

    • One-line whip: One-line whip is issued to inform members of a party about a vote. It allows a member to abstain in case they decide not to follow the party line.
    • Two-line whip: Two-line whip is issued to direct the members to be present in the House at the time of voting.
    • Three-line whip: Three-line whip is issued to members directing them to vote as per the party line.

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  • Tax Reforms

    What is the Sovereign Right to Taxation?

    | Economics | Mains Paper 3: Indian Economy

    Scrapping the retrospective levy is believed to provide clarity to investors by removing a major source of ambiguity on taxation laws, the government has stressed the need to establish its “sovereign right to taxation”.

    Defining a Tax

    • A document on the Ministry of Statistics and Programme Implementation website quotes the definition of tax as a “pecuniary burden laid upon individuals or property owners to support the government; a payment exacted by legislative authority”.
    • It states that a tax “is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority”.

    The ‘sovereign right to taxation’

    • In India, the Constitution gives the government the right to levy taxes on individuals and organizations but makes it clear that no one has the right to levy or charge taxes except by the authority of law.
    • Any tax being charged has to be backed by a law passed by the legislature or Parliament.

    Taxation in India

    • Taxes in India come under a three-tier system based on the Central, State, and local governments and the Seventh Schedule of the Constitution puts separate heads of taxation under the Union and State list.
    • There is no separate head under the Concurrent list, meaning Union and the States have no concurrent power of taxation, as per the document.

    Back2Basics:

    Taxation in India: Classification, Types, Direct tax, Indirect tax

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  • Wildlife Conservation Efforts

    Common survey to count India’s elephant and tiger populations

    Prelims Only | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    From December, India will move to a system that will count tigers and elephants as part of a common survey.

    Common survey for elephants and tiger

    • Given that 90% of the area occupied by elephants and tigers is common, and once estimation methods are standardized, having a common survey can significantly save costs.
    • The tiger survey is usually held once in four years and elephants are counted once in five years.
    • According to the most recent 2018-19 survey, there were 2,997 tigers in India while in the last count in 2017, there were 29,964 elephants in India.

    Answer this PYQ:

    With reference to Indian Elephants, consider the following statements :

    1. The leader of an elephant group is a female.
    2. The maximum gestation period can be 22 months.
    3. An elephant can normally go on calving till the age of 40 years only.
    4. Among the States in India, the highest population is in Kerala.

    Which of the statements given above is/are correct ?

    (a) 1and 2 only

    (b) 2 and 4 only

    (c) 3 only

    (d) 1,3 and 4 only

     

    Post your answers here:

    Why need a common survey?

    • Based on sightings in camera traps and indirect estimation methods, tiger numbers are computed.
    • Elephant numbers largely rely on States directly counting the number of elephants.
    • In recent years, techniques such as analyzing dung samples have also been deployed to estimate birth rates and population trends in elephants.

    About All India Tiger Estimation

    • The tiger count is prepared after every four years by the National Tiger Conservation Authority (NTCA) provides details on the number of tigers in the 18 tiger reign states with 50 tiger reserves.
    • It is conducted by the NTCA and the Wildlife Institute of India (WII) in collaboration with the State Forest Departments.
    • The entire exercise spanned over four years is considered to be the world’s largest wildlife survey effort in terms of coverage and intensity of sampling.
    • Over 15, 000 cameras are installed at various strategic points to capture the movement of tigers.
    • This is supported by extensive data collected by field personnel and satellite mapping.

     

    Back2Basics: Asian Elephants

    • Asian elephants are listed as “Endangered” on the IUCN Red List of threatened species.
    • This has been done as most of the range States except India have lost their viable elephant populations due to loss of habitat, poaching, etc.
    • Current population estimates indicate that there are about 50,000-60,000 Asian elephants in the world.
    • More than 60% of the world’s elephant population is in India.

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  • Indian Navy Updates

    Exercise Al–Mohed Al–Hindi

    Prelims Only | Security Issues | Mains Paper 3: Various Security Forces, Agencies & Their Mandates

    The maiden bilateral naval exercise between India and Saudi Arabia named ‘AL–Mohed AL–Hindi’ has got underway.

    Must read:

    [Prelims Spotlight] Various Defence Exercises in News

    Ex Al-Mohed AI-Hindi 2021

    • This is the first edition of a bilateral naval exercise between India and Saudi Arabia.
    • It comprises several shore and sea-based drills between the two navies.
    • It reflects the growing defense ties between the two nations in the wake of the Indian Army chiefs’ first visit to the West Asian country last year.
    • INS Kochi is the Indian warship participating in the exercise.
    • The exercise is being held against the backdrop of growing tensions in the Persian Gulf following a drone attack on the tanker MV Mercer Street off Oman.

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  • Railway Reforms

    Privatizing Indian Railways

    | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    Context

    On July 1, 2020, the Indian Railways launched the formal process of inviting private parties to run trains on the Indian railway system. Hopes of a large participation were belied as there were no bids for nine clusters and only two bids for three clusters.

    Why current model of inviting private players to run trains has failed?

    • Lack of equal relationship: IR wants the capital and technology without giving up control, while the concessioner wants a far more equal relationship to be moderated by a regulator.
    • Constraints on efficient decision-making: IR has imposed constraints that prevent efficient decisions and adopted an organisational design that does not take into account the characteristics and associated risks that will determine outcomes and investment decisions.
    • Lumpiness of investment: The biggest dampener is the lumpiness of investment before a single passenger can be carried.
    • High risk involved: Train sets have to be purchased without really knowing how much traffic the service will be able to attract in the face of rising competition from airlines.
    • IR does not guarantee the investor that, in case the concession fails, it will acquire the train sets.
    • Absence of regulator: The other big dampener is the absence of a regulator for resolving disputes.

    Suggestions

    1) Remove the lumpiness of investment by establishing rolling stock company

    • The central issue is how to align the three interests.
    • 1) India’s need to be capable of designing and manufacturing state-of-the-art rolling stock.
    • 2) IR’s need for private capital participation.
    • 3) Private capital’s necessity of earning a profit.
    • Establish a company to lease rolling stock: The above 3 interests can be aligned provided the lumpiness of investment in train sets can be eliminated by establishing a company that leases rolling stock not only to concessioners but also to IR.
    • The rolling stock company, apart from leasing train sets, can also be the window for bringing in new technology.
    • This will also enable reducing the concession period from 35 years to a more reasonable 10-15 years, bringing in competition.
    •  For starters, IRFC, which is already into leasing rolling stock, can be that company.

    2) Bring in new technology by opening IR’s rolling stock market to international manufacturers

    • There is need to move the rolling stock industry up the industrial value chain and bring about a structural change of the Indian economy.
    • Long term arrangement with suppliers: This can only be brought about by a vision that encourages long-term arrangements with rolling stock suppliers.
    • Open the market for global players: An arrangement that gives access to IR’s rolling stock market is the only way to compel global players to share technology and form joint ventures with Indian companies.

    3) Investment in research

    • Technology transfer requires understanding the critical elements of the technology and absorbing them into the design-production process.
    • This calls for the investment of large sums of money and the involvement of universities, research institutes and national laboratories.

    4) Make changes to attract private investors

    • For attracting private players, the risks for the concessioners needs to be reduced.
    • The period of the concession needs to be reduced to around 15 years.
    • Establish regulator: There is a need to establish a regulator and moderate charges like the amount for the maintenance of tracks and stations.

    Conclusion

    With these changes, the plan may still take off. However, the initiative will remain limited to just running trains if there is no long-term vision.

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  • Foreign Policy Watch: India-China

    Understanding the anxieties behind Chinese aggression towards India

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

    Context

    Chinese President Xi Jinping made a surprise visit to Tibet on July 21, signalling the seriousness with which China continues to take its Himalayan border dispute with India.

    Understanding China’s strategic challenges and intensions

    • Demonstration of political confidence through aggression: More than a year after the clash at Galwan Valley, efforts to resolve the border crisis continue to move slowly.
    • The Chinese side has previously failed to complete troop withdrawals and revert to the status quo that the Indian side believed China agreed to.
    • China’s behaviour has been calculated to demonstrate political confidence.
    • Worsening strategic environment for China: Seen from Beijing, the strategic environment for China is beginning to worsen in South and Central Asia.
    • As the US withdraws and the Taliban advances in Afghanistan, China fears the prospect of instability and an emerging haven for terrorism directed against its policies in Xinjiang.
    • Even as China seeks to scale back the debt-laden BRI, such instability may also result in Beijing increasing its already overstretched external commitments — particularly in the security domain.
    • Re-emergence of Quad: China is deeply worried by the re-emergence and strengthening of multilateral opposition to China, and the Quadrilateral Security Dialogue (or “Quad”) between the US, Japan, Australia and India.
    • For China, this represents a persistent threat not only economically and in foreign policy, but also militarily along its maritime periphery in the South and East China Seas, as well as the Taiwan Strait.
    • As US multilateral cooperation with its partners has increased, Beijing has come to increasingly see itself as beset by threats on all sides.

    China’s 2 possible responses to strategic challenges and its implications for India

    • 1) Wolf warrier diplomacy: So far, the response from China’s new class of “wolf warrior” diplomats to this emerging strategic challenge has been to only grow more assertive in rhetoric and behaviour.
    • China’s domestic politics: Response of wolf warrior diplomats may seem perplexing, given that it has served only to alienate other countries and isolate China further.
    •  China’s domestic politics in the lead up to the 20th Congress will mean that its leaders, diplomats and generals will be displaying maximum nationalistic fervour.
    • Implications for India: This may well mean China taking political and policy decisions, which in a normal season they would not because doing so could compromise Beijing’s longstanding diplomatic and strategic goals, including in dealings with India.
    • 2) Moderate approach to improve strategic position: But if instead of aggressive posture, China decided that it was better domestic politics to improve China’s strategic position in Asia amid its competition with Washington, Beijing’s diplomats may yet adopt a more moderate approach, including with India.
    • Implications for India: If stability can be restored to the China-India strategic relationship, this could provide a window for Asia’s two mega-economies to reopen their markets to each other.

    Conclusion

    Indeed, the choice China makes between these two alternatives will have implications for India and the rest of the world in their dealing with China.

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  • UDAY Scheme for Discoms

    Why central government schemes for discoms have not worked

    op-ed snap | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    Context

    A recent report of Niti Aayog has assessed the losses of discoms to be about Rs 90,000 crore in 2020-21.

    Central government schemes for discoms

    • In 2001, the Accelerated Power Development Scheme was initiated.
    • This was followed by various other schemes with some differences between them.
    •  The government had launched the UDAY scheme in 2015.
    • UDAY did not involve any monetary assistance to the states, but only promised to help the states in reducing the cost of power through coal linkage rationalization, etc.
    • Recently, the government launched a new scheme with a total outlay of around Rs 3.03 lakh crore.
    • It seeks to improve the distribution infrastructure of the distribution companies (discoms) with the primary intention of improving their financial health.
    • The objective of the scheme is to bring down commercial losses in the range of 12-15 percent and also reduce the difference between the average cost of supply (ACS) and average revenue realized (ARR) to zero by 2024-25.
    • The problem with all these schemes (including UDAY) is that they have not been delivered and the financial position of the discoms has only worsened.

    Why did schemes fail to improve the financial health of discoms?

    • Reduction of loss is a managerial issue: Reduction of commercial losses is not really about improving infrastructure, it is more of a managerial issue.
    • The average loss (inclusive of technical and commercial) is about 22 percent today.
    • But several discoms have losses in excess of 40 percent.
    • It is possible to bring down losses from 40 percent to about 15 percent without any significant investments in infrastructure.
    • Investments, however, would be required to bring down losses further to a single-digit level.
    • The governance issues of the scheme is a complex issue.
    • The two most popular parameters which are monitored are the loss levels and the difference between the ACS and ARR.
    • There are inherent problems with these parameters since they keep fluctuating and it is very difficult to fathom their trend on a quarter-wise basis, rendering the release of funds to be tricky and cumbersome.
    • In the scheme now announced by the government, about 26 parameters will be taken into consideration and assigned a score.
    • For some of the parameters, it may be difficult to assign a score across discoms which may lead to some amount of subjectivity.

    Way forward: Alternate approach

    • Provide transitional financial support: An alternate approach that could be considered by the Centre (in lieu of such assistance schemes) is providing only transitional financial support to all discoms, which are privatized under the private-public partnership mode. 
    •  A transitional support of Rs 3,450 crore spread over five years proved to be exceedingly beneficial in the case of discoms in Delhi.
    • Promote privatization: Since in an earlier policy statement the government had mentioned that privatization of discoms is to be promoted, it would make sense to consider this transitional support as a catalyst.

    Conclusion

    Adopting this approach will ensure that the central government moves away from the micro-management of discoms, which inevitably happens if the release of funds is linked to reform-linked parameters on a quarter-wise basis.

     

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