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  • Monetary Policy Committee Notifications

    Dilemma the RBI faces

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

    Limitations and contradictions in the functioning of RBI

    • The Reserve Bank of India, along with the monetary policy committee, has undertaken measures to address the fallout of the COVID-19 pandemic.
    • Their actions are guided by multiple considerations — inflation and growth management, debt management and currency management.
    • These multiple considerations have inadvertently exposed the limitations of and the inherent contradictions in the central banking framework in India.

    Monetary policy functions

    • The MPC is guided by the goal of maintaining inflation at 4 plus/minus 2 per cent.
    • In its August policy, despite dire growth prospects, MPC chose to maintain the status quo.
    • This decision was driven by elevated inflation i.e. above 4 plus/minus 2 per cent. 
    • This raises the question: At the current juncture, should the MPC be driven by growth considerations or should short-term inflation concerns dominate?

    Understanding the nature of current inflation

    • The current rise in inflation is driven by supply-chain dislocations owing to the lockdowns.
    • This is evident from the growing disconnect between the wholesale and consumer price index.
    • Since April, while WPI has been in negative territory, CPI has been elevated.
    • The MPC’s mandate is to deliver stable inflation over long periods of time, not just a few months.
    • Yet, it would appear as if it is more concerned about elevated inflation in the short run.
    • Equally puzzling is the refusal of MPC to provide any firm projection of future inflation.

    Manager of government debt

    •  As manager of the government debt, the RBI is tasked with ensuring that the government’s borrowing programme sails through smoothly.
    • To this end, it has carried out several rounds of interventions popularly known as operation twist.
    • in operation twist government RBI intended pushing down long-term Gsec yields, and exerting upward pressure on short-term yields as a consequence.
    • In doing so, the RBI ended up doing exactly the opposite of what the MPC was trying to achieve by cutting short term rates, well before it reached the lower limit of its conventional policy response.

    3) RBI’s intervention in currency markets

    • The RBI’s interventions in the currency market have constrained its ability to carry out open market operations as these would have led to further liquidity injections into the system.
    • Put differently, its debt management functions have run up against its currency management functions.
    • Underlining the complexity of all this is the talk of sterilisation — the opposite of injecting liquidity in the system.

    Consider the question “RBI’s functions at the current juncture suffers from contradicting functions. Examine such contradictions in its role and suggest the ways to avoid such contradictions.”

    Conclusion

    The central bank must develop a clear strategy on what to do. At this juncture, there is a strong argument to look past the current spurt in inflation, and test the limits of both conventional and unconventional monetary policy. At the other end, while it may want to intervene to prevent the rupee’s appreciation, in doing so, it is constricting its debt management functions which will have its own set of consequences. There are no easy answers.

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  • RTI – CIC, RTI Backlog, etc.

    Resurrecting the right to know

    op-ed snap | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters

    This article analyses the importance of peoples’ right to know and instrumental role judiciary played in harmonising it with the Official Secrets Act 1923.

    Context

    • A High Level Committee (HLC) chaired by a retired judge of the Gauhati High Court was constituted by the Home Ministry through a gazette notification.
    • Its mandate was, among others, to recommend measures to implement Clause 6 of the Assam Accord and define “Assamese People”.
    • The HLC finalised its report by mid-February 2020 and submitted it to the Assam Chief Minister and through him to the Central government.
    • With the Central government apparently “sitting idle” over the report, the All Assam Students’ Union (AASU), which was represented in the HLC, released the report.

    The right to know

    • The right to know was recognised nearly 50 years ago and is the foundational basis or the direct emanation for the right to information.
    • In State of U.P. v. Raj Narain (1975), the Supreme Court carved out a class of documents that demand protection even though their contents may not be damaging to the national interest.
    • Court held that “the people of this country are entitled to know the particulars of every public transaction in all its bearing”.
    • This view was endorsed in S.P. Gupta v. President of India (1981) and a few other decisions.
    • In Yashwant Sinha v. Central Bureau of Investigation (2019), the Supreme Court referred to the decision of the U.S. Supreme Court in New York Times v. United States (1971) wherein court declined to recognise the right of the government to restrain publication of the Pentagon Papers.
    • Our Supreme Court held that a review petition based on three documents published by The Hindu was maintainable since the provisions of the Official Secrets Act, 1923 had not been violated.
    • The SC held that there is no provision by which Parliament had vested power in the government either to restrain the publication of documents marked as secret or from placing such documents before a court.
    • Section 8(2) of the Right to Information Act, 2005 provides that a citizen can get a certified copy of a document even if the matter pertains to security or relationship with a foreign nation if a case is made out.
    • Therefore, it is clear that the right to know can be curtailed only in limited circumstances and if there is an overriding public interest.

    Consider the question “Analyse the importance of citizens’ right to know and how the judiciary harmonised the peoples right to know with the Official Secrets Act 1923? “

    Conclusion

    We must keep in mind observation made by the Supreme Court in S.P. Gupta: “If secrecy were to be observed in the functioning of government and the processes of government were to be kept hidden from public scrutiny, it would tend to promote and encourage oppression, corruption and misuse or abuse of authority, for it would all be shrouded in the veil of secrecy without any public accountability.”

    B2BASICS

    Official secrets act

    • OSA has its roots in the British colonial era and was originally known as The Indian Official Secrets Act (Act XIV), 1889.
    • The act was primarily mandated to gag the voice of a large number of newspapers that came up in several languages, and were opposing the Raj’s policies, building political consciousness and facing police crackdowns and prison terms.
    • The act was amended and made more stringent in the form of The Indian Official Secrets Act, 1904, during Lord Curzon’s tenure as Viceroy of India.
    • In 1923, a newer version was notified. The Indian Official Secrets Act (Act No XIX of 1923) was extended to all matters of secrecy and confidentiality in governance in the country.
    • It was further amended after India got independence in 1951 and 1967. The act in its present form deals with two aspects — spying or espionage and disclosure of other secret information of the government.
    • Secret information can be any official code, password, sketch, plan, model, article, note, document or information. Under the act both the person communicating the information, and the person receiving the information, can be punished.

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  • Disasters and Disaster Management – Sendai Framework, Floods, Cyclones, etc.

    PM CARES Fund is a “public charitable trust”: SC

    SC Judgements | Enviro & Biodiversity | Mains Paper 3: Disaster Management

    The Supreme Court has endorsed the PM CARES Fund as a “public charitable trust” to which donors contribute voluntarily.

    Try this question:

    Q. The creation of PM CARES fund is violative of the provision of the Disaster Management Act, 2005. Analyse.

    What is the case?

    • The petition had argued that the PM-CARES Fund was not subject to CAG audit.
    • It was not under “public scrutiny”. Contributions to it were “100% tax-free”.
    • It was accused that there was statutory fund already in existence under the Disaster Management Act of 2005 to receive contributions to finance the fight against a calamity.

    About PM CARES Fund

    • The Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) were created on 28 March 2020 following the COVID-19 pandemic in India.
    • The fund will be used for combat, containment and relief efforts against the coronavirus outbreak and similar pandemic like situations in the future.
    • The PM is the chairman of the trust. Members will include the defence, home and finance ministers.
    • The fund will also enable micro-donations. The minimum donation accepted for the PM CARES Fund is ₹10 (14¢ US).
    • The donations will be tax-exempt and fall under corporate social responsibility.

    What did the Court rule?

    • There is “no occasion” for the Comptroller and Auditor General (CAG) to audit a public charitable trust independent of budgetary support or government money.
    • The court said that PM-CARES is “not open” for a PIL petitioner to question the “wisdom” that created the fund in an hour of need.
    • The court dismissed the idea that the PM CARES was constituted to “circumvent” the National Disaster Response Fund (NDRF).
    • The Bench also refused to direct the transfer of funds from the PM CARES Fund to the NDRF. It said they were two separate entities.

    Also read:

    PM-CARES Fund

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  • Coronavirus – Economic Issues

    Re-imagining and reinventing the Indian economy

    | Economics | Mains Paper 3: Indian Economy

    The COVID-19 pandemic has disrupted the global economy and India is no different.  Besides the stimulus package totalling ₹20 lakh crore, a lot more needs to be done, however, to resuscitate the country’s growth engine.

    Try this question:

    Q.Economic reconstruction needs a multi-pronged strategy apart from economic stimulus. Discuss.

    Need for a two-pronged strategy

    • At this critical juncture, India needs a two-pronged strategy to successfully navigate the current crisis and recover strongly thereafter.
    • First, minimise the damage caused by the COVID and clear a path to recovery and second, rebooting and re-imaging India by promptly exploiting new opportunities unleashed by evolving business scenarios.

    Identifying the four major economic drivers:

    1. Big Business Houses which are a major contributor to GDP and large employment generators
    2. MSMEs which are the lifeline of the country, generating wealth for the middle class
    3. Startups which bring innovation and transformation to our country’s economy
    4. Approaching Indian Diasporas for driving foreign investments

    Following suggestions by the author gives a way forward strategy to recover the economy:

    1. Tax incentivization

    • Big business houses should be supported by the government to reopen their operations by way of tax incentives or ease of procurement of raw materials or other goods and services on credit.
    • This will energize consumer demand and boost the functioning of the vendor or ancillary industry in the MSME sector (which has huge potential for job creation).

    1. Ensuring seamless credit flows considering NPAs

    • The RBI should consider Single One Time Window for restructuring business loans, as required, by all banks.
    • There is a high probability that non-performing assets are likely to rise once the prevailing moratorium is lifted by RBI.
    • The government and RBI also urgently need to assure banks, that their business decisions will not be questioned, to encourage credit flows.

    1. Calibrating Make in India

    • The ongoing distrust on Chinese manufacturing amid US-China spat can be very well garnered by India.
    • Making India a global trading hub – devise an incentive regime for companies setting up global trading operations from India.
    • The govt. should think of establishing self-contained “industrial cities” that earmark space for manufacturing, commercial, educational, residential and social infrastructure.
    • The Centre can prepare a five-year plan on getting at least 60 per cent of those companies, desiring to move manufacturing out of China to India.

    1. Encouraging sunrise sectors

    • It should also encourage sunrise sectors as part of re-imagining Indian economy such as battery manufacturing (storage systems)/ solar panel manufacturing.
    • The government can also consider giving impetus to “Deep Tech”-leveraged businesses — blockchain, robotics, AI, machine learning, augmented reality, big data analytics, cybersecurity, etc.

    1. Creating an ecosystem to boost startups

    • India is amongst the top start-up ecosystems globally. Several of them are in pre-Angel or Angel-Funding stages and are under significant pressure to stay afloat in view of a lack of adequate liquidity.
    • Start-ups not only help drive innovation but also create jobs, which will be very important going forward.
    • The government needs to provide significant support to the start-up ecosystem.

    1. Auto-sector reforms

    • The auto industry which contributes significantly to GDP (nearly 9%) deserves special treatment.
    • In addition to reducing GST rate, old vehicle scrap policy with tax incentives for creating a demand for new vehicles may be formulated.
    • There is a need to recognise the Auto Sales Industry channel partners as MSMEs.

    1. Plug-and-Play model for foreign investment

    • Maharashtra has created a turnkey ‘plug-and-play’ model for foreign investors.
    • Similarly, other States must get their act together, be it on land acquisition, labour laws and providing a social, environment and other infrastructure.
    • Land should be made available for projects with all necessary pre-clearances — at Centre’s level (including Environmental), State’s and Municipal dispensations.

    1. Labour law reforms

    • Reforms in labour laws do not only mean permission to hire and fire.
    • Leeway should be given to strictly enforce discipline within the factory premises and demand higher productivity.
    • The moves by U.P., M.P. and Gujarat are welcome signals.
    • The government should provide health insurance for migrant labourers as experimented by certain States.

    1. Encouraging Diaspora

    • Investments of NRIs and OCIs in India should be treated on par with those of Resident Indians as regards interest and dividend repatriation and management control of Indian companies.
    • It may be mentioned that the Chinese government had called on rich overseas Chinese to invest in China with minimum government control, and massive investments followed.
    • This has contributed to China’s prosperity and economic rise.
    • A similar investment boom can take place in India through NRIs and OCIs who have the resources and expertise in manufacturing and technology.

    1. Creating off-Shore investment centres

    • Off-Shore investment centres like Singapore can be opened in Mumbai where Indian domestic laws and taxation will not be applicable.
    • MNCs may route their investments into India through the Off-Shore Centre in Mumbai.
    • Foreign legal firms and banks along with domestic institutions can be invited to have a presence in the Off-Shore Centre.

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  • Biofuel Policy

    Bioethanol Blending in Petrol

    Prelims Only | Enviro & Biodiversity | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    The government has set targets of 10 per cent bioethanol blending of petrol by 2022 and to raise it to 20 per cent by 2030 to curb carbon emissions and reduce India’s dependence on imported crude oil.

    Try this PYQ:

    Q.Given below are the names of four energy crops. Which one of them can be cultivated for ethanol?(CSP 2010)

    (a) Jatropha

    (b) Maize

    (c) Pongamia

    (d) Sunflower

    What is Ethanol Blended Petrol (EBP) Program?

    • Ethanol Blended Petrol (EBP) programme was launched in January 2003 for the supply of 5% ethanol blended petrol.
    • The programme sought to promote the use of alternative and environment-friendly fuels and to reduce import dependency for energy requirements.
    • OMCs are advised to continue according to the priority of ethanol from 1) sugarcane juice/sugar/sugar syrup, 2) B-heavy molasses 3) C-heavy molasses and 4) damaged food grains/other sources.

    Bio-ethanol blend in India

    • 1G and 2G bioethanol plants are set to play a key role in making bio-ethanol available for blending but face challenges in attracting investments from the private sector.
    • 1G bioethanol plants utilise sugarcane juice and molasses, byproducts in the production of sugar, as raw material, while 2G plants utilise surplus biomass and agricultural waste to produce bioethanol.
    • Currently, domestic production of bioethanol is not sufficient to meet the demand for bio-ethanol for blending with petrol at Indian Oil Marketing Companies (OMCs).
    • Sugar mills, which are the key domestic suppliers of bio-ethanol to OMCs, were only able to supply 1.9 billion litres of bio-ethanol to OMCs equating to 57.6 per cent of the total demand of 3.3 billion litres.

    Hurdles in meeting the demand

    • Lack of infrastructure: Many sugar mills are best placed to produce bioethanol do not have the financial stability to invest in biofuel plants. There are also concerns among investors on the uncertainty over the price of bio-ethanol in the future.
    • Lack of raw materials: Presently there is no mechanism for depots where farmers could drop their agricultural waste. The central government should fix a price for agricultural waste to make investments in 2G bioethanol production an attractive proposition.
    • Rigid pricing mechanism: Sugars mills have to pay high prices for sugarcane set by the government even when there have been supplying gluts. The prices of both sugarcane and bio-ethanol are set by the central government.

    Way ahead

    • The government should provide greater visibility on the price of bioethanol that sugar mills can expect by announcing a mechanism by which the price of bio-ethanol would be decided.
    • 2G bioethanol not only provided a clean source of energy but also help provide greater income to farmers and prevent them from having to burn agricultural waste which can be a major source of air pollution.

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  • Global Geological And Climatic Events

    Tornado’s dynamics and its India connection

    Prelims Only | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    Babu ChunderSikur Chatterjee’s paper was the earliest record of a tornado’s dynamics in the history of meteorology, according to a study.

    Try this PYQ:

    Q. In the South Atlantic and South-Eastern Pacific regions in tropical latitudes, cyclone does not originate. What is the reason? (CSP 2015)

    (a) Sea surface temperatures are low

    (b) Inter-Tropical Convergence Zone seldom occurs

    (c) Coriolis force is too weak

    (d) Absence of land in those regions

    What is a Tornado?

    • A tornado is a rapidly rotating column of air that is in contact with both the surface of the Earth and a cumulonimbus cloud or, in rare cases, the base of a cumulus cloud.
    • The windstorm is often referred to as a twister, whirlwind or cyclone winds blow counterclockwise in the Northern Hemisphere and clockwise in the Southern.
    • Tornadoes come in many shapes and sizes, and they are often visible in the form of a condensation funnel originating from the base of a cumulonimbus cloud, with a cloud of rotating debris and dust beneath it.
    • It is generally accompanied by extreme weather such as heavy downpours, hail storms, and lightning.

    Who was Babu ChunderSikur Chatterjee?

    • Chatterjee was an Indian scientist employed with the Surveyor General of India during the British colonial era.
    • He was likely the first person to scientifically document a tornado’s path in 1865, a study from the Indian Institute of Tropical Meteorology (IITM), Pune, has claimed.
    • Chatterjee had published his findings in a journal named Proceedings of the Asiatic Society of Bengal, in a paper titled ‘Note on a whirlwind at Pundooah’, near Hooghly.
    • The paper described a tornado’s dynamics in meticulous detail and was accompanied by a sketch that mathematically depicted its scale, track and rotation.

    His work

     

    • Chatterjee quantitatively mapped the entire trail of á tornado’s destruction.
    • He benefited from the rare opportunity to observe a tornado passing through a railway track where there were conveniently placed markers at predefined locations.
    • This enabled him to observe and make clear measurements of the tornado’s direction, dynamics and path.

    Back2Basics

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  • Festivals, Dances, Theatre, Literature, Art in News

    In news: Lingaraj Temple

    Prelims Only | History | Mains Paper 1: Arts & Culture

    The Odisha government has announced to give a facelift to the 11th century Lingaraj Temple, akin to its pre-350-year structural status.

    Try this PYQ:

    Q. Building ‘Kalyaana Mandapas’ was a notable feature in the temple construction in the kingdom of- (CSP 2019)

    (a) Chalukya

    (b) Chandela

    (c) Rashtrakuta

    (d) Vijayanagara

    About Lingaraj Temple

    • Lingaraja Temple is a temple dedicated to Shiva and is one of the oldest temples in Bhubaneswar, Odisha.
    • It represents the quintessence of the Kalinga Architecture and culminating the medieval stages of the architectural tradition at Bhubaneswar.
    • The temple is believed to be built by the kings from the Somavamsi dynasty, with later additions from the Ganga rulers.
    • It is built in the Deula style that has four components namely, vimana (structure containing the sanctum), jagamohana (assembly hall), natamandira (festival hall) and bhoga-mandapa (hall of offerings), each increasing in the height to its predecessor.

    • Bhubaneswar is called the Ekamra Kshetra as the deity of Lingaraja was originally under a mango tree (Ekamra) as noted in Ekamra Purana, a 13th-century Sanskrit treatise.
    • The temple has images of Vishnu, possibly because of the rising prominence of Jagannath sect emanating from the Ganga rulers who built the Jagannath Temple in Puri in the 12th century.

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  • Policy Wise: India’s Power Sector

    Power sector reforms

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

    This article analyses the issue of affordability of electricity in the country and the factors making it expensive.

    How recent changes increased subsidy burden

    •  Recent policy measures like the the “Saubhagya” scheme have remarkably improved the first 3 ‘A’s, i.e., awareness, accessibility and availability.
    •  It has also increased the cost of supply due to an increase in LT distribution network length necessitating more conductors, meters, transformers, etc.
    • Most of the newly-added consumers are from rural areas of low-income states like UP and Bihar.
    • They belong to subsidised consumer categories, viz. agriculture, rural-domestic, etc.
    • Thus, the subsidy burden of respective state governments has increased.

    Affordability of subsidy by States

    • The state’s capacity to service power subsidy of its BPL consumers is dependent on its per capita income which varies from state to state.
    •  The central government provides no subsidy for this purpose.
    • Therefore, making electricity affordable for consumers becomes a priority for the power sector.
    •  Limiting focus only to reduction of the cross-subsidy burden of industries may not be fruitful.

    Policy steps to make electricity affordable

    1) Expedite overdue distribution reforms

    • While generation and transmission sectors have been unbundled, unbundling (segregation of carrier and content business) of distribution has been started yet.
    • Privatisation of, and governance reforms in, state-owned distribution companies are likely to unlock huge value and provide efficiency gains through loss reduction for making power affordable.

    2) Capping of stranded capacity charges

    • As of now, we have surplus installed capacity of around 370 GW against a peak demand of 183 GW.
    • So, any fresh capacity addition should be limited to projected load demand growth and replacement of retiring power plants.
    • This will reduce the stranded capacity charges the discoms are currently paying to gencos under their long-term power purchase agreements without taking any power from them under availability-based tariff regime.

    3) Scrap cost-plus regime

    • Now, when the country has sufficient installed capacity, it makes no sense to provide a risk-free 15.5% tax-free (or 22% after-tax) return on equity to the power companies.
    • No new project (except hydro and nuclear) should be allowed on cost-plus route or MoU route under section 62 of the Electricity Act.

    4) Restructure normative debt-equity financing to 80:20

    • At present, the regulatory norm used for tariff computation of projects is 70:30 debt: equity.
    • Debt servicing is limited only to the term of the loan, i.e., up to 12 years, but Return of Equity is allowed in perpetuity even after the plant has fully depreciated.
    • This needs to be limited to the useful life of the unit.

    5) No double-whammy for consumers:

    • National Clean Energy Fund was created as a non-lapsable fund in 2010 for promoting clean technology, and since then around Rs 1 lakh crore has been collected from coal cess.
    • However, most of it has been diverted and used for other purposes like funding to states for their GST losses, etc.
    • Asking gencos to install Fuel Gas Desulfurization and pass on the cost to the consumer amounts to a double whammy for the consumers who first paid the coal-cess and now will have to bear the FGD cost also.
    • We should stop using cess as a tax and NCEF should be used to fund the clean energy initiative and FGD installation etc.

    Consider the question “What are the factors responsible for making the electricity costly in India. Suggest the pathways to make it affordable to all.”

    Conclusion

    Making electricity affordable following these steps would be instrumental in the progress of the nation.

    Source: https://www.financialexpress.com/opinion/powering-reforms-bringing-power-psus-under-competitive-bidding-will-help-in-tariff-reduction/2057940/

    B2BASICS

    Electricty generation,transmission and Distribution

    Saubhagya scheme

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  • Foreign Policy Watch: India-Middle East

    Importance of close alignment with moderate Arab centre

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

    The article analyses the threat the Arab countries faces from the new geopolitical realignment and India’s role in it.

    Geopolitical realignment in the middle east

    • Agreement on the normalisation of relations between the United Arab Emirates and Israel was signed recently.
    • At the same time, there is an equally significant reorientation of the Subcontinent’s relationship with the region.
    • This is marked by Pakistan’s alignment with non-Arab powers.

    Deteriorating relation of Pakistan with Arab world

    • Pakistan has been angry with UAE’s invitation to India to address the Organisation of Islamic Cooperation in early 2019.
    • Saudi Arabia’s reluctance to convene a meeting to condemn Indian actions in Kashmir last August has angered Pakistan.
    • While Pakistan appears to be dreaming of a new regional alliance with Turkey and Iran.
    • Pakistan is also betting that a rising China and an assertive Russia will both support this new geopolitical formation as part of their own efforts to oust America from the Middle East.

    Threat to the Arab world

    • Saudis and Emiratis see sharpening existential threats to their kingdoms from both Turkey and Iran.
    • Both Turkey and Iran now intervene with impunity in the internal affairs of the Arab world.
    • Two other states have joined this Great Game.
    • Malaysia’s Mahathir fancied himself as a leader of the Islamic world.
    • Arab Qatar, which is locked in a fraternal fight with the Saudis and the Emiratis, wants to carve out an outsized role for itself in the Middle East.

    India’s should follow five principles for Arab Sovereignty

    • 1) India must resist the temptation of telling the Arabs what is good for them.
    • India should support their efforts to reconcile with non-Arab neighbours, including Israel, Turkey and Iran.
    • 2) Oppose foreign interventions in the Arab world. In the past, those came from the West and Israel.
    • Today, most Arabs see the greatest threat to their security from Turkish and Iranian interventions.
    • 3) Extend support to Arab economic integration, intra-Arab political reconciliation and the strengthening of regional institutions.
    • 4) Recognise that India’s geopolitical interests are in close alignment with those in the moderate Arab Centre — including Egypt, Jordan, Saudi Arabia, the UAE and Oman.
    • 5) India can’t be passive amidst the unfolding geopolitical realignment in West Asia.
    • Some members of the incipient alliance — Turkey, Malaysia and China — have been the most vocal in challenging India’s territorial sovereignty in Kashmir.

    Consider the question “Examine the importance of India’s relations with Arab countries. What are the threats the region faces to their sovereignty and how India can play an important role to ensure their sovereignty.”

    Conclusion

    Standing up for Arab sovereignty and opposing the forces of regional destabilisation must be at the very heart of India’s new engagement with the Middle East.

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  • Delhi Full Statehood Issue

    Jurisdictional conflict in the running of Delhi Government

    op-ed snap | Polity | Mains Paper 2: Federalism

    The article analyses the tussle between the Delhi Government and the Lt. Governor.

    What the 2018 SC judgement was about

    • The Supreme Court in Government of NCT of Delhi vs. Union of India (2018) decided on the conflicts between the government of NCT and the Union Government and its representative, the Lieutenant Governor.
    • It reminds the Lt. Governor what his real functions are.
    •  It tells the State government that it should remember that Delhi is a special category Union Territory.
    • It lays down the parameters to enabling the harmonious functioning of the government and the Lt. Governor.
    • It did not very clearly delineate the issues in respect of which the Lt. Governor can refer a decision taken by the Council of Ministers to the President in the event of a difference of opinion between the Lt. Governor and the State government.

    Settled issues and clarifications

    • The Supreme Court affirming that the Lt. Governor is bound to act on the aid and advice of council of ministers except in respect of ‘Land’, ‘Public Order’ and the ‘Police’.
    • The Court has also made it clear that there is no requirement of the concurrence of the Lt. Governor and that he has no power to overrule the decisions of the State government.
    • However, Article 239AA (4) (proviso) which says that in the case of a difference of opinion between the Lt. Governor and his Ministers on any matter, the Lt. Governor shall refer it to the President for decision and act according to that decision.
    • If the Lt. Governor thinks that the matter is urgent he can take immediate action on his own.

    How Article 239 AA(4) matters

    •  Lt. Governor can frustrate the efforts of the government, by declaring that there is a difference of opinion on any issue and refer it to the President.
    • Refering matter to the President in reality means the Union Home Ministry.
    • The Lt. Governor being its representative, it is easier for him to secure a decision in his favour.
    • The State government will be totally helpless in such a situation.
    • The recent appointment of prosecutors for conducting the Delhi riot cases in the High Court is a case in point.
    •  When the government decided to appoint them, the Lt. Governor referred it under proviso to Article 239AA (4) to the President stating that there is a difference of opinion.
    • This episode clearly points to the fault lines which still exist in the power equations in the capital’s administrative structure.

    But, can Lt. Governor refer routine administrative matter to the President?

    • A close reading of the Supreme Court judgment in the NCT Delhi case (supra) would reveal that he cannot.
    • The Supreme Court says “The words ‘any matter’ employed in the proviso to Article 239AA (4) cannot be inferred to mean ‘every matter’.
    • Court also says that “The power of the Lieutenant Governor under the said proviso represents the exception and not the general rule”.
    • The President is the highest Constitutional authority and his decision should be sought only on constitutionally important issues.

    Executive powers and legislative powers

    • Parliament can legislate for Delhi on any matter in the State List and the Concurrent List.
    • But the executive power in relation to Delhi except the ‘Police’, ‘Land’ and ‘Public Orders’ vests only in the State government headed by the Chief Minister.
    • The executive power of the Union does not extend to any of the matters which come within the jurisdiction of the Delhi Assembly.
    • The only occasion when the Union Government can overrule the decision of the State government is when the Lt. Governor refers a matter to the President under the proviso to clause (4).

    Consider the question “What are the parameters laid down by the Supreme Court in the Government of NCT of Delhi vs. Union of India (2018) to avoid the conflict between Lt. Governor and the Delhi Government? Also examine the scope of referring any matter to the consideration of the President by the Lt. Governor.”

    Conclusion

    In the Constitutional scheme adopted for the NCT of Delhi Lt. Governor should not emerge as an adversary having a hostile attitude towards the Council of Ministers of Delhi; rather, he should act as a facilitator.

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