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  • Women empowerment issues – Jobs,Reservation and education

    Why the MTP Bill is not progressive enough

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

    The article highlights key changes the Medical Termination of Pregnancy (Amendment) Bill, 2021 seeks to make in the 1971 Act and also deals with the issues with some of these changes.

    Key changes

    • The 1971 Act had moral biases against sexual relationships outside marriage, adopts an ableist approach and carries a strong eugenic emphasis.
    • In addition to preventing danger to the life or risk to physical or mental health of the woman, “eugenic grounds” were recognised as a specific category for legally permissible abortions.
    • To deal with these issues the Medical Termination of Pregnancy (Amendment) Bill, 2021 was passed by the parliament.
    • The bill is being hailed for two reasons:
    • First, the bill replaces “any married woman or her husband” with “any woman or her partner” while contemplating termination of pregnancies resulting from contraception failures, thus ostensibly destigmatising pregnancies outside marriage.
    • Second, the time limit within which pregnancies are legally terminable is increased.

    Issues with the Bill

    1) Scope for executive overreach

    • The bill raises the upper gestational limits for the two categories of permissible abortions envisioned in Section 3(2) of the 1971 Act.
    • Limit for the first category in which pregnancies are terminable subject to the opinion of one medical practitioner is raised from 12 weeks to 20 weeks.
    • The limit for the second category in which pregnancies are terminable subject to the opinion of two medical practitioners is raised to include those exceeding 20 but not exceeding 24 weeks, instead of the present category of cases exceeding 12 but not exceeding 20 weeks.
    • However, the second category is left ambiguous and open to potential executive overreach insofar as it may be further narrowed down by rules made by the executive.

    2) Rejection of the bodily autonomy of women

    • Pregnancies are allowed to be terminated only where:
    • 1) Continuance of the pregnancy would “prejudice the life of the pregnant woman.
    • 2) Or cause grave injury to her mental or physical health”
    • 3) Or “if the child were born it would suffer from any serious physical or mental abnormality.”
    • As such, the bill seeks to cater to women “who need to terminate pregnancy” as against “women who want to terminate pregnancy.”
    •  By not accounting for the right to abortion at will the Bill effectively cripples women’s bodily autonomy.

    3) Ableist approach

    • A woman’s right to terminate the pregnancy of a child likely to suffer from physical or mental anomalies or one diagnosed with foetal abnormalities, on socio-economic grounds or otherwise, merits recognition.
    • However, in treating “physical or mental disability” or “foetal abnormalities” as separate categories amounting to heightened circumstances for termination of pregnancies, the bill reveals its ableist approach.
    • This evidences a presumption that certain people are by default societally unproductive, undesirable and somehow more justifiably eliminable than others.
    • This ableism becomes stark when the said 24-week limit, which is purportedly dictated by scientific and legislative wisdom, is completely lifted where the termination of a pregnancy involves “substantial foetal abnormalities”.

    4) Dichotomy in allowing termination beyond 24 weeks

    • When read together with Section 3(2B) of the bill, a strange dichotomy emerges:
    • 1) It is either the case that medical advancement is such that a safe abortion is possible at any point in the term of pregnancy, and hence, the bill allows it in case of “substantial foetal abnormalities” .
    • Or that, a 24-week ceiling is scientifically essential and abortions beyond the said limit would pose risks to the health of the pregnant woman or the foetus.
    • If it is the former, then allowing termination only in cases of “substantial foetal abnormalities” is a fictitious and moralistic classification.
    • If it is the latter, then the secondary status of women’s safety and the dominant eugenic tenor of the bill once again becomes evident.

    Need to sensitise healthcare provider

    • Access to abortion facilities is limited not just by legislative barriers but also the fear of judgment from medical practitioners.
    • It is imperative that healthcare providers be sensitised towards being scientific, objective and compassionate in their approach to abortions notwithstanding the woman’s marital status.

    Consider the question “What are the changes the Medical Termination of Pregnancy (Amendment) Bill, 2021 seeks to make in the 1971 Act. Discuss the issues with the changed provision in the Act.

    Conclusion

    In KS Puttaswamy v Union of India, the Supreme Court recognised women’s constitutional right to “abstain from procreating” was read into the right to privacy, dignity and bodily autonomy. The MTPA Bill falls short of meeting this constitutional standard and its own stated objectives.

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

    Applying the policy of self-reliance to health, infrastructure and green technologies

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

    The article highlights how Atmanirbhar Bharat policies can play important role in India’s post-pandemic recovery.

    Decline of trade-led catch-up growth

    • The Asian Development Bank identifies India as an outlier, with the country’s GDP growth likely to range between eight and 10 per cent — as against 7.7 per cent for China and seven per cent for the Asian region.
    • The convergence between the rich and poor countries in the 1990s and 2000s was founded on high relative growth rates driven by globalisation and export-led growth.
    • The World Bank and many international think tanks are now projecting a process of de-globalisation, reduction in exports, and reduced service exports from the tourism, travel and hospitality sector in response to COVID.
    • So, the phenomenon of trade-led catch-up growth is declining.

    How Atmanirbhar Bharat is different from past strategies

    • India’s import substituting growth strategy of the 1960s did not succeed because the high protective customs barriers led to the growth of non-competitive industries.
    • The current Atmanirbhar Bharat project is different because tariffs are low and public investment is focused on non-tradable infrastructure rather than commodity production.

    1) Atmanirbhar in heath: Atmirbhar Swasth Bharat

    • Atmanirbhar Swasth Bharat is a domestic non-trade dependent initiative which will invest over Rs 64,000 crore in setting up 17,800 rural and 11,000 urban health and wellness centres and 602 critical care hospitals in the country’s districts.
    • Today India has 29 health workers per 10,000 population, while we need 60 such professionals per 10,000 people, as per WHO norms.
    • Creating such a cadre will mean nearly four million new jobs, which can be self-paying.

    2) Infrastructure

    • China and emerging markets like Russia and Brazil have a fairly advanced transport and energy infrastructure.
    • India has a huge potential to renew its railways and highways and shift to solar energy from its current dependence on coal.
    • In fact, the country’s long-neglected fourth largest rail network in the world is undergoing rapid transformation.
    • While rail track coverage expanded by 5,000 km during 2010 to 2014-15, nearly 7,000 km of tracks were added between 2015 and 2020.
    • The Railways now aim to lay 9.5 km of track daily and have raised adequate capital for the same by leveraging domestic insurance funds.
    • Railways are also aiming for 100 per cent electrification and zero carbon footprint by 2024.
    • Electrified track has doubled from 20,000 km in 2012/13 to nearly 40,000 km in 2020.
    • The Centre’s decision to invest heavily in urban mass transit systems since 2014 has led to the rapid expansion of such services.
    • The resolution of financial problems of blocked PPP projects and smooth land acquisition process has increased the pace of construction of national highways.
    • Pace of construction of the national highway increased from 3,330 km per year during 2009-20014 to nearly 9,450 km in 2020-21.

    3) Renewable energy

    • Today over 55 per cent of India’s energy comes from coal but the share of renewable has been steadly increasing.
    • Starting with only 10 MW of solar power in 2010, India has installed nearly 35 GW of solar power by 2020.
    • This has been propelled by economic reforms which drove solar power prices down from Rs 17 per unit in 2010 to Rs 2.44 per unit in 2020.
    • The target of reaching 100 GW by 2022 can drive growth further.
    • Currently nearly 25 per cent of India’s electricity is used for pumping underground water for irrigation.
    • Providing irrigation energy from decentralised solar grids — solar power can be generated at the points on consumption.
    • This will reduce huge transmission losses and the associated carbon footprint of non-renewable energy sources.

    4) Privatising public sector outfits

    • The Centre’s shift towards privatising public sector outfits including banks, insurance companies and other PSUs can fund the growth of rail, road and energy infrastructure.
    • This will also foster efficiency in India’s credit system.
    • China achieved supernormal growth in infrastructure without access to international financing in the initial decades.
    • Recent studies have revealed that China’s financial decentralisation and commercial exploitation of state-owned lands was critical for the success.
    • In India, too, regional development authorities like the Mumbai Metropolitan Regional Development Authority and Maharashtra Industries Development Corporation have financed the metro, trans-harbour links and industrial infrastructure through a similar commercial land allocation model.
    • This model can be extended throughout the country to finance infrastructure expansion.

    Consider the question “How Atmanirbhar Bharat policies differ from the past import-substituting growth strategy? Examine the role Atmanirbhar Bharat can play in the post-pandemic recovery?” 

    Conclusion

    In such a way, Atmanirbharta with its various facets will pave the road of post-pandemic recovery.

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  • Foreign Policy Watch: India-China

    Sanctions on China over Uighurs: Cause & Effect

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

    In a coordinated move, many countries imposed sanctions on Chinese officials for human rights abuses against Uighurs and other minorities in Xinjiang province.

    The Uighurs

    • Xinjiang has a large number of Uighurs, Muslims of Turkic descent.
    • Over the past few decades, more and more Han Chinese has settled in Xinjiang, which saw violent clashes between them and the Uighurs.

    The sanctions have come after a meeting between the US and Chinese officials in Alaska last week, in what Washington described as “tough and direct talks”.

    This was a “Tu-Tu, Mai-Mai” conservation if you had seen the news!

    Sanctions on China

    • The European Union, the US, Britain, and Canada imposed sanctions on Chinese Officials.
    • Australia and New Zealand issued a joint statement welcoming the Western action, adding they were concerned about reports of abuses from Xinjiang.
    • China on the other hand has consistently denied all reports of atrocities against Uighurs, maintaining it is only “deradicalising” elements of its population in the interests of security.

    Retaliation by China

    • Those sanctioned by China include five Members of the European Parliament and the Political and Security Committee, the EU’s main foreign policy decision-making body, among others.
    • China also summoned the EU ambassador and the UK ambassador to lodge “solemn protests”.

    Why these sanctions are crucial?

    • This is the first time the EU has imposed sanctions on China since an arms embargo after the 1989 Tiananmen Square crackdown. That is still in place.
    • Although the EU sanctions are not very damaging, they show a hardening of stance against its largest trading partner.
    • Also significant is that the Western powers moved together, in what is being seen as a result of the US push to deal with China along with its allies.

    Nations that claim to be defenders of the faith or self-proclaimed Caliphates are silent on the persecution of Uighurs! They perceived the abrogation of Art. 370 as a doomsday event! This is height of hypocrisy!

    Reasons behind: Crackdown on Uighurs

    • China is accused of putting over a million people in internment camps to “de-Muslimise” them and make them integrate better in the Communist country.
    • Allegations are that these people have been forced to leave behind their occupations, properties and families, to stay at the camps.
    • Survivors, human rights organisations, and governments of other countries have alleged physical, psychological and sexual torture.
    • People can be sent to the camps for showing any signs of “extremism” — sporting beards, fasting during Ramzan, dressing differently from the majority, sending Eid greetings, praying “too often” etc.

    The idea of the sacred is quite simply one of the most conservative notions in any culture because it seeks to turn other ideas – uncertainty, progress, change – into crimes.

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  • Women Safety Issues – Marital Rape, Domestic Violence, Swadhar, Nirbhaya Fund, etc.

    Corrective voice from Supreme Court against stereotyping of women

    SC Judgements | Polity | Mains Paper 2: Executive & Judiciary

    A judgment by the Supreme Court forbidding judges from making gender-stereotypical comments came as a corrective voice from within the highest judiciary.

    Q.Discuss the need for gender sensitization of the judicial institutions.

    What is the news?

    • The judgment came days after the CJI, during a virtual hearing reportedly asked an alleged rapist’s lawyer to enquire whether his client would marry the survivor.
    • His statement coincided with International Women’s Day.
    • Days later, a Bench of Justices A.M. Khanwilkar and S. Ravindra Bhat urged courts to avoid using reasoning/language which diminished a sexual offence and tended to trivialize the survivor.

    What did the Court say?

    • The greatest extent of sensitivity is to be displayed in the judicial approach, language and reasoning adopted by the judge.
    • Even a solitary instance of such order or utterance in court, reflects adversely on the entire judicial system of the country, undermining the guarantee to fair justice to all, and especially to victims of sexual violence.
    • This judgment is one among a series of interventions with which the apex court has clamped down on abuse and sex stereotyping of women.

    No institution is mightier than the modesty of a woman.

    SC against stereotyping

    Some of the notable judgments which have lashed out at sex stereotyping include:

    1. The framing of the Vishaka Guidelines on sexual harassment of women in working places, and
    2. Justice D.Y. Chandrachud’s historic judgment giving women Armed Forces officers’ equal access to Permanent Commission while debunking the establishment’s claim that women were physiologically weaker than men
    3. In the Anuj Garg case, the Supreme Court had rebuked “the notion of romantic paternalism”, which, “in practical effect, put women, not on a pedestal, but in a cage”

    Avoid gender stereotypes such as:

    The courts should desist from expressing any stereotype opinion, in words spoken during proceedings, or in the course of a judicial order, to the effect that

    • women are physically weak and need protection;
    • men are the “head” of the household and should take all the decisions relating to family;
    • women should be submissive and obedient according to our culture;
    • “good” women are sexually chaste;
    • motherhood is the duty and role of every woman and assumptions to the effect that she wants to be a mother;
    • being alone at night or wearing certain clothes make women responsible for being attacked;
    • lack of evidence of physical harm in sexual offence case leads to an inference of consent by the woman.

    Conclusion

    • Stereotyping compromises the impartiality and integrity of the justice system, which can, in turn, lead to miscarriages of justice, including the re-victimization of complainants.
    • Often judges adopt rigid standards about what they consider to be appropriate behaviour for women and penalize those who do not conform to these stereotypes.

    There should be gender sensitization

    • The court-mandated that a module on gender sensitization is included, as part of the foundational training of every judge.
    • This module must aim at imparting techniques for judges to be more sensitive in hearing and deciding cases of sexual assault, and eliminating entrenched social bias, especially misogyny.

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  • Road and Highway Safety – National Road Safety Policy, Good Samaritans, etc.

    Vehicles scrappage policy: A step forward but a missed opportunity

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

    The much-awaited draft policy on vehicle scrappage is finally out. But the draft policy also misses an opportunity: Of designing the policy as an effective stimulus programme for green recovery in the sector to achieve deeper and quicker air quality benefits.

    Background

    • The policy outlines the criteria for defining end-of-life vehicles and scrapping them.
    • It also makes provision for scrapping facilities for safe disposal of waste and material recovery.
    • This is an important step forward towards building infrastructure for organised and scientific scrapping of old vehicles.

    The proposal

    • This proposed policy seeks to phase out unfit vehicles to reduce vehicular pollution, meet the climate commitments, improve road safety and fuel efficiency, formalize informal vehicle scrapping industry and recover low-cost material for the automotive, steel and electronics industry.
    • The policy expects to spin jobs and attract investment as well.
    • It is a big positive for supporting a network of well-equipped scrappage facilities with adequate environmental safeguards to stop unsafe dismantling that contaminates the environment.

    Must read:

    New Vehicle Scrappage Policy

    Issues with the policy

    (1) Advisory nature

    • This policy has only ‘advised’ the state governments and the automobile industry to provide voluntary incentives to the owners of old vehicles.
    • The central government has not committed to make it a fiscal stimulus strategy for quicker renewal of ageing, heavy-duty vehicle fleet with BS-VI vehicles — or to link other segments with targeted electrification.

    (2) Achieving fleet renewal

    • The focus on targeted fleet renewal for maximum emissions gains is still weak.
    • The proposed policy puts the entire onus of incentivizing fleet renewal on the state governments.
    • They have been advised to waive off a big chunk of road tax and registration fees on replacement vehicles.
    • These are important sources of state revenue, and the reaction of the state governments is still not known.

    (3) No stimulus

    • The more compelling question is whether the central government would consider a centrally supported stimulus programme for post-pandemic green recovery.
    • This is the global trend wherein governments have been giving conditional bailouts or tax support linked to emissions targets.

    What can be an effective strategy?

    (1) Transportation vehicles

    • For heavy-duty vehicles, the policy can take a more nuanced approach.
    • Consider that some truck owners may want to only dispose of the very old trucks without replacing them. But others may want to scrap and replace the older trucks.
    • In that case, a rebate can be given to the owners of end-of-life vehicles who are interested in ‘only scrapping’ the vehicle without immediately replacing them.
    • And this rebate can be given based on a scrappage certificate from authorized scrappage centres.
    • Old trucks with more economic life left can get a comparatively higher incentive as that will give higher emissions benefits.

    (2) Personal vehicles

    • For these vehicles, the central incentive can be linked with replacement with electric vehicles.
    • This can be added to the normal scrapping of end-of-life vehicles as already proposed in the draft policy. This can maximise air quality gains.
    • Personal vehicles are numerous and general public support for their fleet renewal can divert a lion’s share of the allocated budget from the priority heavy-duty segment.
    • Therefore, the public support for the personal vehicle segment can be linked only with voluntary electrification.

    Build-in manufacturers’ responsibility

    • The new policy also needs to align with the mandate for the manufacturers to meet targets for recyclability of material.
    • Make this mandatory as part of the scrappage policy.

    We have AIS 129

    • It is encouraging that the Automotive Industrial Standard-129 (AIS 129) on reuse, recycling and material recovery from vehicles were framed in 2015.
    • This requires 80-85 per cent of the material used in vehicle manufacturing by mass to be recoverable/recyclable/reusable at the end of life.
    • AIS-129 also restricts the use of heavy metals including lead, mercury, cadmium, hexavalent chromium, etc, and asks for the coding of plastics to inform dismantlers.
    • The requirement of recyclability should be extended to 85-95 per cent to maximise material recovery as well as energy recovery from residual waste like used oil, non-recyclable rubber etc.

    Way forward

    • This first-ever formal scrappage policy in India is urgently needed to help build infrastructure for safe disposal and material recovery to minimise environmental hazards.
    • But India would be adopting scrappage policy during these unprecedented pandemic times, so it is necessary to leverage this targeted fleet renewal with well-designed central support for a post-pandemic green deal.

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  • Banking Sector Reforms

    National Bank for Financing Infrastructure and Development Bill, 2021

    | Economics | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Finance Minister has introduced the National Bank for Financing Infrastructure and Development (NaBFID) Bill 2021 in the Lok Sabha to pave way for setting up a government-owned DFI to fund infra projects.

    NaBFID Bill

    • The NaBFID Bill, 2021 was introduced in Lok Sabha on March 22, 2021.
    • The Bill seeks to establish the National Bank for Financing Infrastructure and Development (NBFID) as the principal development financial institution (DFIs) for infrastructure financing.

    What are DFIs?

    • DFIs are set up for providing long-term finance for such segments of the economy where the risks involved are beyond the acceptable limits of commercial banks and other ordinary financial institutions.
    • Unlike banks, DFIs do not accept deposits from people.
    • They source funds from the market, government, as well as multi-lateral institutions, and are often supported through government guarantees.

    Note every statement about DFIs such as – Terms of finance, Sources of funds, Savings option etc. 

    Key provisions of the Bill

    NBFID:

    • NBFID will be set up as a corporate body with an authorised share capital of one lakh crore rupees.
    • Shares of NBFID may be held by (i) central government, (ii) multilateral institutions, (iii) sovereign wealth funds, (iv) pension funds, (v) insurers, (vi) financial institutions, (vii) banks, and (viii) any other institution prescribed by the central government.
    • Initially, the central government will own 100% shares of the institution which may subsequently be reduced up to 26%.

    Functions of NBFID:

    • NBFID will have both financial as well as developmental objectives.
    • Financial objectives will be to directly or indirectly lend, invest, or attract investments for infrastructure projects located entirely or partly in India.
    • The central government will prescribe the sectors to be covered under the infrastructure domain.
    • Developmental objectives include facilitating the development of the market for bonds, loans, and derivatives for infrastructure financing.

    Functions of NBFID include:

    • extending loans and advances for infrastructure projects,
    • taking over or refinancing such existing loans,
    • attracting investment from private sector investors and institutional investors for infrastructure projects,
    • organising and facilitating foreign participation in infrastructure projects,
    • facilitating negotiations with various government authorities for dispute resolution in the field of infrastructure financing, and
    • providing consultancy services in infrastructure financing

    Source of funds:

    • NBFID may raise money in the form of loans or otherwise both in Indian rupees and foreign currencies, or secure money by the issue and sale of various financial instruments including bonds and debentures.
    • NBFID may borrow money from: (i) central government, (ii) Reserve Bank of India (RBI), (iii) scheduled commercial banks, (iii) mutual funds, and (iv) multilateral institutions such as World Bank and Asian Development Bank.

    Management of NBFID:

    • NBFID will be governed by a Board of Directors.
    • The members of the Board include: (i) the Chairperson appointed by the central government in consultation with RBI, (ii) a Managing Director, (iii) up to three Deputy Managing Directors among others.
    • A body constituted by the central government will recommend candidates for the post of the Managing Director and Deputy Managing Directors.
    • The Board will appoint independent directors based on the recommendation of an internal committee.

    Support from the central government:

    • The central government will provide grants worth Rs 5,000 crore to NBFID by the end of the first financial year.
    • The government will also provide a guarantee at a concessional rate of up to 0.1% for borrowing from multilateral institutions, sovereign wealth funds, and other foreign funds.
    • Costs towards insulation from fluctuations in foreign exchange (in connection with borrowing in foreign currency) may be reimbursed by the government in part or full.
    • Upon request by NBFID, the government may guarantee the bonds, debentures, and loans issued by NBFID.

    Prior sanction for investigation and prosecution:

    • No investigation can be initiated against employees of NBFID without the prior sanction of (i) the central government in case of the chairperson or other directors, and (ii) the managing director in case of other employees.
    • Courts will also require prior sanction for taking cognisance of offences in matters involving employees of NBFID.

    Other DFIs:

    • The Bill also provides for any person to set up a DFI by applying to RBI.
    • RBI may grant a licence for DFI in consultation with the central government.
    • RBI will also prescribe regulations for these DFIs.

    With inputs from:

    PRS India

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  • Foreign Policy Watch: India-Pakistan

    Indus Water Panel holds meeting

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

    After a gap of more than two and a half years, the Indian and Pakistani delegations began the 116th Meeting of the Permanent Indus Commission.

    Indus Waters Treaty, 1960

    • The Indus Waters Treaty is a water-distribution treaty between India and Pakistan, brokered by the World Bank signed in Karachi in 1960.
    • According to this agreement, control over the water flowing in three “eastern” rivers of India — the Beas, the Ravi and the Sutlej was given to India
    • The control over the water flowing in three “western” rivers of India — the Indus, the Chenab and the Jhelum was given to Pakistan
    • The treaty allowed India to use western rivers water for limited irrigation use and unrestricted use for power generation, domestic, industrial and non-consumptive uses such as navigation, floating of property, fish culture, etc. while laying down precise regulations for India to build projects
    • India has also been given the right to generate hydroelectricity through the run of the river (RoR) projects on the Western Rivers which, subject to specific criteria for design and operation is unrestricted.

    Based on equitable water-sharing

    • Back in time, partitioning the Indus rivers system was inevitable after the Partition of India in 1947.
    • The sharing formula devised after prolonged negotiations sliced the Indus system into two halves.
    • Equitable it may have seemed, but the fact remained that India conceded 80.52 per cent of the aggregate water flows in the Indus system to Pakistan.
    • It also gave Rs 83 crore in pounds sterling to Pakistan to help build replacement canals from the western rivers. Such generosity is unusual of an upper riparian.
    • India conceded its upper riparian position on the western rivers for the complete rights on the eastern rivers. Water was critical for India’s development plans.

    Significance of the treaty

    • It is a treaty that is often cited as an example of the possibilities of peaceful coexistence that exist despite the troubled relationship.
    • Well-wishers of the treaty often dub it “uninterrupted and uninterruptible”.
    • The World Bank, which, as the third party, played a pivotal role in crafting the IWT, continues to take particular pride that the treaty functions.

    Need for a rethink

    • The role of India, as a responsible upper riparian abiding by the provisions of the treaty, has been remarkable.
    • However, of late, India is under pressure to rethink the extent to which it can remain committed to the provisions, as its overall political relations with Pakistan becomes intractable.

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  • Delhi Full Statehood Issue

    How amendment bill will affect Delhi’s administration

    | Polity | Mains Paper 2: Parliament & State Legislatures

    The article highlights the issues with the amendment bill introduced by the Centre to clarify the term ‘Government’.

    Why Delhi was made Union Territory: Historical background

    • When the Constitution came into force, there were four kinds of States, called Parts A,B, C and D States.
    • The last two were administered by centrally appointed Chief Commissioners and Lieutenant Governors, with no locally elected Assemblies to aid and advise them.
    • First, it was felt that if Delhi became a part of any constituent State of the Union, that State would sooner or later acquire a predominant position in relation to other States.
    • Second, the need for keeping the National Capital under the control of the Union Government was deemed to be vital in the national interest.
    • Third, it was felt that if Delhi became a full State, the administration of the National Capital would be divided into rigid compartments of the State field and Union field.
    • Conflicts would likely arise in vital matters, particularly if the two governments were run by different political parties.
    • Hence, Delhi was initially made a Part C State.
    • In 1951, a Legislative Assembly was created with an elected Chief Minister.
    • In 1956, when the Constitution of India was amended to implement the provisions of the States Reorganisation Act, only two categories, namely, States and Union Territories remained in the Indian Union.
    • Delhi then became a Union Territory to be administered by an Administrator appointed by the President.
    • Ten years later, the Delhi Administration Act, 1966 provided for a limited representative Government in Delhi through a Metropolitan Council comprising 56 elected Members and five nominated Members.

    Balakrishnan Committee report

    • In 1989, the Balakrishnan Committee recommended that Delhi should continue to be a Union Territory but that there must be a Legislative Assembly and Council of Ministers responsible to the said Assembly with appropriate powers.
    • Based on this report, the Constitution (69th) Amendment Act and the Government of National Capital Territory of Delhi (GNCT) Act, 1991 were passed.
    • They roughly restored the kind of governance system that was offered to Delhi in 1952: a Union Territory with a Legislative Assembly, a Council of Ministers and an elected Chief Minister.
    • This limited reincarnation has continued to hold the field to date, despite several efforts to progress to full or near-statehood.

    LG-Delhi Government conflict

    • A Bench in 2018 ruled over the conflict and said that Parliament envisaged a representative form of Government for the NCT of Delhi.
    • The Bench also said that the Constitution has mandated a federal balance wherein independence of a certain required degree is assured to the State Governments.
    • The remaining issues of governance, especially in the matter of control over Delhi government servants, was remitted to two judges of the Court for further adjudication.
    • In 2019, there was a difference of opinion recorded in separate judgments by the two judges and the matter awaits hearing before a larger Bench. 

    Issues with the Amendment Bill

    • The central government recently introduced a Bill, namely, the Government of National Capital Territory of Delhi (Amendment) Bill, 2021 seeks, inter alia, to clarify the expression ‘Government’ in 2018 Supreme Court judgement.
    • The Bill effectively reduces the elected government to a mere vestigial organ and elevates the centrally appointed LG, to the position of a Viceroy with plenipotentiary powers.
    • It further provides that before taking any executive action to exercise powers of Government, the opinion of Lieutenant Governor shall be obtained on all such matters as may be specified by Lieutenant Governor.
    • The population of Delhi which counts among the highest in the world, will have an unrepresentative administration.
    • It is quite likely that the amendment act will end up being challenged in the constitutional courts.
    • The Supreme Court has already cautioned — “Interpretation cannot ignore the conscience of the Constitution.“

    Consider the question “Examine the issues with Government of National Capital Territory of Delhi (Amendment) Bill, 2021. Do you think that the Bill will avoid the conflict between the LG and the Delhi government?” 

    Conclusion

    The Amendment Bill should be reconsidered given its impact on the administration of the Delhi government.

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  • NPA Crisis

    Bad bank is good move

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

    The article explains the important role bad bank can play in cleaning up the balance sheets of the banks.

    How India banks dealt successfully with pandemic

    • Indian banks were written off in the early days of the pandemic due to expectations of an exponential jump in non-performing assets.
    • Only after the banks consistently talked about the lower number of restructuring requests, and the higher provision coverage ratios that the markets began to get convinced.
    • What finally turned the corner were the budget announcements related to the financial sector
    • There are several reasons for this good performance by the banks.
    • First, banks in India and globally were much better capitalised prior to the pandemic.
    • Second, Indian banks had built up a sizeable buffer to provide for bad assets negating any surprise on balance sheets during and even after the pandemic.
    • Third, independent research shows that as the size of the middle class grows to about two-thirds of Asian households.
    • Banks in Asia, including in India, have begun to adjust for this steady growth in the size of pie by experimenting with new business models, rationalising costs and providing faster and superior customer digital experience, as was clear during pandemic.
    • Fourth, Indian banks and the RBI brought about financial discipline much before the pandemic.

    Creation of Bad Bank

    • The budget this year has the provision for reation of a bad bank.
    • The proposed structure envisages setting up of a National Asset Reconstruction Company (NARC) to acquire stressed assets in an aggregated manner from lenders, which will be resolved by the National Asset Management Company (NAMC). 
    • A skilled and professional set-up dedicated for Stressed Asset Resolution will be ably supported by attracting institutional funding in stressed assets through strategic investors, AIFs, special situation funds, stressed asset funds, etc for participation in the resolution process.
    • The net effect of this approach would be to build an open architecture and a vibrant market for stressed assets.

    How it will work

    • Banks may first transfer those assets to the proposed bad bank with a 100 per cent provision on its book and then based on the experience they will decide on transferring assets with less than 100 per cent provisioning at a later date.
    • It is also being speculated that of the total amounts recovered, a specified percentage will be in the form of security receipts.
    • These receipts will reside in the bank balance sheets, but will carry a zero-risk weight, with full government guarantees for a specified period of time.

    How it will benefit the banks

    • The benefits of this process includes the recovered value, and significant lending leverage because of three factors:
    • One, capital being freed up from less than fully provisioned bad assets.
    • Two, capital freed up from security receipts because of a sovereign guarantee.
    • Three, cash receipts that come back to the banks and can be leveraged for lending, also freeing up provisions from the balance sheet.
    • There are several international success stories of a bad bank accomplishing its mission and there is no reason to believe why India cannot accomplish its objective.
    • The current Indian approach will drive consolidation of stressed assets under the AMC for better and faster decision making.
    • This will free up management bandwidth of banks enabling them to focus on credit growth, leading to an enhancement in their valuations.
    • Governance of the AMC and its independence is central to its successful functioning, there are multiple suggestions to make.
    • These include keeping majority ownership in the private sector, putting together a strong and independent board, a professional team, and linking AMC compensation to returns delivered to investors.

    Consider the question “What is a bad bank? How its creation could help the banking sector?”

    Conclusion

    The creation of a bad bank will help the banking sector contribute more in the growth of the country

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  • Foreign Policy Watch: India-Pakistan

    Applying lessons from India-Bangladesh ties to relations with Pakistan

    op-ed snap | International Relations | Mains Paper 2: India & Its Neighborhood – Relations

    There is a sharp contrast between India’s relations with its neighbours two neighbours: Pakistan and Bangladesh. The article suggest drawing on the lessons from Indo-Bangladesh relations to mend Indo-Pak relations.

    Indo-Bangladesh relations

    • Prime Minister of India will travel to Dhaka this week to commemorate Bangladesh’s Declaration of Independence from Pakistan 50 years ago.
    • From being one of the world’s poorest countries in 1972, Bangladesh is now racing to be in the world’s top 25 economies by the end of this decade.
    • It is also a time for deeper reflection — on the inability of the region to come to a closure on the two Partitions of the subcontinent, the first in 1947 and the second in 1971.
    • Delhi and Dhaka have started finding ways to overcome the tragedy of the Partition to chart a new course of bilateral and regional cooperation.
    • Prime Minister Sheikh Hasina has provided strong leadership in advancing ties with India over the last decade and more.
    • Recently the Indian government mobilised enough political support to get a boundary settlement agreement with Bangladesh approved by the Parliament.
    • India also backed an international tribunal’s award resolving the maritime territorial dispute with Bangladesh.
    • The steady improvement in bilateral relations over the last decade has reflected in growing trade volumes, expanding trans-border connectivity, mutual cooperation on terrorism, and widening regional cooperation.

    Applying lessons from Indo-Bangladesh relations to Indo-Pak relations

    • Positive changes in India’s relations with Pakistan have been elusive.
    • Hopes have been rekindled by the agreement late last month between the two military establishments to a ceasefire on the border and to address each other’s concerns.
    • Following are the lessons we can learn and apply productively to Indo-Pak relations

    1) Importance of political stability

    • First lesson is the importance of political stability and policy continuity that have helped Delhi and Dhaka deepen bilateral ties over the last decade.
    • In contrast, the political cycles in Delhi and Islamabad have rarely been in sync.
    • Pakistan’s mainstream civilian leaders have all supported engagement with India.
    • In fact, it is the military that is yet to make up its collective mind.

    2) Concerns for mutual security

    • Cooperation in countering terrorism built deep mutual trust between Dhaka and Delhi.
    • That trust helped deal with many complex issues facing the relationship.
    • In the case of Pakistan, its army has sought to use cross-border terrorism as a political lever to compel India to negotiate on Kashmir.
    • If sponsoring terror seemed a smart strategy in the past, it has now become the source of international political and economic pressure on Pakistan.

    3) Depoliticise national economic interests

    • Delhi and Dhaka have steadily moved forward on issues relating to trade, transit and connectivity by dealing with them on their own specific merits.
    • Pakistan, on the other hand, has made sensible bilateral commercial cooperation and regional economic integration hostages to the Kashmir question.
    • It is not clear if Pakistan is ready to separate the two and expand trade ties while talking to India on Kashmir.

    Consider the question “The steady improvement in bilateral relations with Bangladesh over the last decade can offer valuable lessons to be applied to India-Pakistan relations. In light of this, examine the factors that India and Pakistan need to focus on to achieve improvement in bilateral relations.”

    Conclusion

    Both India and Pakistan need to recognise the importance of pursuing the national well being through regional cooperation. That is exactly what Bangladesh has done in the last decade.

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