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Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

Changing the agri exports basket

Economics | Mains Paper 3: Agriculture and related issues
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Generalised System of Preference

Mains level : Paper 3- Agri-exports

Context

The Indian government has been encouraging agricultural exports to meet an ambitious target of $60bn by 2022.

India’s agri-exports

  • The Ministry of Food Processing Industries shows that the contribution of agricultural and processed food products in India’s total exports is 11%.
  • Primary processed agricultural commodities form the majority share.
  • India’s export earnings will increase by focusing more on value-added processed food products rather than primary processed agricultural commodities (Siraj Hussain, 2021).
  • From 2015-16 to 2019-20, the value of agricultural and processed food increased significantly from $17.8bn to $20.65bn.
  • The Indian agricultural economy is shifting from primary to secondary agriculture where the focus is more on developing various processed foods.

Changes in India’s agricultural export basket

  • Traditionally, Basmati rice is one of the top export commodities.
  • However, now there is an unusual spike in the export of non-basmati rice.
  • In 2020-21, India exported 13.09 million tonnes of non-basmati rice ($4.8bn), up from an average 6.9 million tonnes ($2.7bn) in the previous five years.
  • Indian buffalo meat is seeing a strong demand in international markets due to its lean character and near organic nature.
  • The export potential of buffalo meat is tremendous, especially in countries like Vietnam, Hong Kong and Indonesia.

Challenges in Increasing agri-export

  • Lack of comparative advantage: The export of processed food products has not been growing fast enough because India lacks comparative advantage in many items.
  •  Domestic prices of processed food products are much higher compared to the world reference prices.
  • Non-tariff measures: The exporters of processed food confront difficulties and non-tariff measures imposed by other countries on Indian exports (Siraj Hussain, 2021).
  • Some of these include mandatory pre-shipment examination by the Export Inspection Agency being lengthy and costly.
  • Compulsory spice board certification being needed even for ready-to-eat products.
  • Lack of strategic planning of exports by most State governments.
  • Lack of a predictable and consistent agricultural policy discouraging investments by the private sector.
  • Prohibition of import of meat- and dairy based-products in most of the developed countries.
  • Withdrawal of the Generalised System of Preference by the U.S. for import of processed food from India.

Consider the question “What are the challenges facing export of processed foods from India? Suggest the way forward.”

Way forward

  • The main objective of the Agriculture Export Policy is to diversify and expand the export basket so that the export of higher value items, including perishables and processed food, be increased
  • Support to industry: The policy needs to nurture food processing companies, ensuring low cost of production and global food quality standards, and creating a supportive environment to promote export of processed food.
  • Focus on reputed brands: Reputed Indian brands should be encouraged to export processed foods globally as they can comply with the global standard of codex.
  • Indian companies should focus on cost competitiveness, global food quality standards, technology, and tap the global processed food export market.

Conclusion

India has competitive advantages in various agricultural commodities which can be passed onto processed foods. It has the potential to become a global leader in the food processing sector.

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Contention over South China Sea

The big deal behind the ruckus over AUKUS

International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India
Note4Students

From UPSC perspective, the following things are important :

Prelims level : AUKUS, Quad

Mains level : Focus areas and challenges for AUKUS

The announcement of the new Australia-U.K.-U.S. (AUKUS) trilateral security pact has naturally generated animated debate in strategic circles, before the QUAD summit.

What is the AUKUS?

  • The first major initiative of AUKUS would be to deliver a nuclear-powered submarine fleet for Australia.
  • The nuclear-powered submarines will give Australia naval heft in the Pacific, where China has been particularly aggressive.
  • While the US and Britain have had the capability for decades, Australia has never had an n-sub.

Motive: To counter China

  • China has nuclear-powered submarines, as well as submarines that can launch nuclear missiles.
  • The three signatories to the AUKUS deal have made it clear though, that their aim is not to arm the new subs with nuclear weapons.
  • China has been one of Australia’s biggest trading partners, but the relationship has soured over the last few years.
  • It was in consideration of Chinese sensibilities that Australia had pulled out of the Malabar Naval Exercise with the US, India, and Japan after participating in the 2007 edition (of which Singapore too, was part).
  • Australia came back to Malabar in 2020, which marked the first time in 13 years that the navies of the four Quad nations war-gamed together.

Australia at the Centrestage

  • This is primarily because a nuclear-powered submarine gives a navy the capability to reach far out into the ocean and launch attacks.
  • A nuclear-powered submarine offers long distances dives, at a higher speed, without being detected gives a nation the ability to protect its interests far from its shores.
  • In the context of the AUKUS agreement, nuclear-powered submarines will give the Royal Australian Navy the capability to go into the South China Sea.
  • It conclusively puts to rest a long-standing domestic debate on whether it was time for Australia to assess China through the strategic lens, overcoming the purely mercantile considerations that tended to dominate its China policy.

What makes nuclear submarines so important?

  • A nuclear-powered submarine is classified as an “SSN” under the US Navy hull classification system, wherein ‘SS’ is the symbol for submarine, and ‘N’ stands for nuclear.
  • A nuclear-powered submarine that can launch ballistic missiles is called “SSBN”.
  • Conventional diesel-engine submarines have batteries that keep and propel — though not very fast — the vessel underwater. The life of these batteries can vary from a few hours to a few days.
  • The newer Air-Independent Propulsion (AIP) submarines have additional fuel cells that allow them to stay underwater for longer and move faster than the conventional vessels.
  • However, the fuel cells are used only at strategic times, when the endurance to remain submerged is required.
  • Both conventional and AIP subs need to come to the surface to recharge their batteries using the diesel engine.
  • The diesel engine also propels the vessel on the surface. However, the fuel cells of AIP can only be charged at on-land stations, not while at sea.

Why is France unhappy about Australia getting these submarines?

  • The deal has complicated the relations between France and Australia, and also France and the US.
  • France is upset as it has been kept out of the loop. But, with the core objective of pushing back against China’s aggression, all five countries — US, UK, Australia, France and India — are on the same track.
  • The deal between France and Australia had been marked by delays and other issues.
  • The first submarine was expected to be operational around 2034.

Does India have nuclear-powered submarines?

  • Yes, India is among the six nations that have SSNs. The other five are the US, the UK, Russia, France and China.
  • India has had the capacity since it got the Soviet-built K-43 Charlie-class SSN in 1987.
  • Commissioned with the Red Fleet of the USSR in 1967, it was leased to the Indian Navy, and was rechristened INS Chakra. The submarine was decommissioned in 1991.

Indo-Pacific is the core issue

  • France, which like the UK has historically been an Indo-Pacific power with territories and bases across the region.
  • It has participated in a multi-nation naval exercise in the Bay of Bengal with the four Quad nations.
  • There is no gainsaying the fact that rapid accretion in China’s economic and military capacities, but more particularly its belligerence, has led to a tectonic shift in regional security paradigms.
  • Several countries have been obliged to review their defence preparedness in response to China’s rising military power and its adverse impact on regional stability.

A chance for the UK

  • The AUKUS pact is also an emphatic assertion of the relevance of the U.S.-Australia Security Treaty (ANZUS).
  • New Zealand, the outlier, walked away in 1984 from the treaty that ironically still bears its initials.
  • Its “nuclear-free” stance ran counter to the U.S. Navy’s non-disclosure policy in regard to nuclear weapons aboard visiting vessels.
  • Close ties notwithstanding, Australia’s future fleet of nuclear submarines will not be permitted access to New Zealand’s ports or waters, as averred by PM Jacinda Ardern.
  • AUKUS provides a fresh opportunity to the United Kingdom to reinsert itself more directly into the Indo-Pacific.
  • It is already a member of the Five Eyes (FVEY), an intelligence-sharing alliance built on Anglo-Saxon solidarity (Australia, Canada, New Zealand, the U.K., and the U.S.).

AUKUS is not a substitute for the Quad

  • It does not erode the Quad’s significance as a platform for consultations and coordination on broader themes of maritime security, free and open trade, health care, critical technologies, supply chains and capacity-building.
  • The AUKUS submarine deal, on the other hand, is an undiluted example of strategic defence collaboration, and a game-changer at that.

Chinese reception of AUKUS

  • China, expectedly, has strongly criticised AUKUS and the submarine deal as promoting instability and stoking an arms race.

The exposed double standards

  • China has the world’s fastest-growing fleet of sub-surface combatants.
  • This includes the Type 093 Shang-class nuclear-powered attack submarine (SSN) and the Type 094 nuclear-powered Jin-class ballistic missile submarine (SSBN).
  • Its nuclear submarines are on the prowl in the Indo-Pacific.
  • Yet, China denies Australia and others the sovereign right to decide on their defence requirements.

What’s in the box of AUKUS?

Ans. Greater role for Australia

  • Australia’s proposed nuclear submarines will give quite a punch in terms of a stand-off capability.
  • The growing focus on anti-submarine warfare across a more expansive region is clearly altering calculations.
  • Australia’s nuclear submarines would help create a new balance of power in the Indo-Pacific, especially in tandem with the U.S. and the U.K.
  • It will now have a more meaningful naval deterrence of its own to protect its sovereign interests.
  • It is set to play a more robust role in ensuring peace and stability in the Indo-Pacific.

Way forward

  • The setback ‘down under’ may spur France to focus afresh on partners such as India.
  • India must strike a balance between continuing imports and implementing the all-important Atmanirbhar Bharat in defence manufacturing.
  • France should take AUKUS as a business deal.
  • Its momentary reaction at the cancellation of the contract by Australia should soon subside.
  • As a major Indo-Pacific power, France is an important part of the regional security calculus.

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Primary and Secondary Education – RTE, Education Policy, SEQI, RMSA, Committee Reports, etc.

Kasturirangan panel for National Curriculum Framework

Governance | Mains Paper 2: Health & Education
Note4Students

From UPSC perspective, the following things are important :

Prelims level : National Curriculum Framework (NCF)

Mains level : Need for curriculum revamp in India

The Centre has started the process to revise school textbooks by appointing former Indian Space Research Organisation (ISRO) chairman K. Kasturirangan as the head of a 12-member steering committee responsible for developing a new National Curriculum Framework (NCF).

National Curriculum Framework (NCF)

  • The new NCF is in line with the National Education Policy (NEP) 2020.
  • The committee will be headed by K Kasturirangan, who had also led the NEP 2020 drafting committee.
  • The national curriculum framework serves as a guideline for syllabus, textbooks, teaching and learning practices in the country.
  • India is currently following its fourth national curriculum framework that was published by the NCERT in 2005.

What was the last NCF?

  • The last such framework was developed in 2005.
  • It is meant to be a guiding document for the development of textbooks, syllabi and teaching practices in schools across the country.

Why revamp NCF?

  • The subsequent revision of textbooks by the National Council of Educational Research and Training will draw from the new NCF.
  • In fact, the steering committee will develop four such frameworks, one each to guide the curriculum of school education, teacher education, early childhood education, and adult education.

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Solar Energy – JNNSM, Solar Cities, Solar Pumps, etc.

Rooftop Solar Scheme

Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Solar Rooftop Scheme

Mains level : Renewable Energy in India

India has added 521 megawatts (MW) of rooftop solar capacity in the second quarter (Q2) of the calendar year (CY) 2021, a 53% increase than earlier quarter showing good signs of popularity.

What is Solar Rooftop?

  • A solar photovoltaic (PV) system mounted on a rooftop of a building is a mini-power requirement or feed into the grid.
  • The size of the installation varies significantly depending on the availability of space, amount of electricity consumed by the property and the ability or willingness of the owner to invest the capital required.

Why rooftop?

  • Rooftop solar with a storage system is a benefit for both, end consumers as well as discoms (power distribution companies).
  • A one-kilowatt (kW) rooftop system can produce three to five units of electricity a day.
  • The combination increasingly becomes cost-effective for electricity generation compared to the traditional grid supply and diesel generators.
  • In 2021, solar and storage will be cheaper than grid supply for most commercial and industrial (C&I) customers.
  • The increase in penetration of rooftop solar in the distribution grid will have a significant impact on the stability of the grid.

A viable alternative

  • Most housing societies in urban India rely on diesel generators for power backup. However, as power availability improves in the country, diesel generators will become redundant.
  • The operational cost of diesel generators is quite high— R16-18 per unit against Rs 5-6 a unit for solar rooftop systems. So rooftop solar power makes financial sense.Solar rooftop is also a perfect solution for commercial and institutional buildings that operate mostly during the day.
  • Their rooftops can be utilized to generate electricity, and they can, partially or completely, replace diesel generators. This would also help them reduce their electricity bills.

Question of energy storage

  • In order to integrate rooftop solar and electric vehicles, the grid needs to be flexible and smart.
  • Energy storage systems will play a key role in providing this flexibility by acting as a load when there is a surplus generation, as well as generating sources when there is a supply shortage.
  • There are two major methods of integrating battery storage into the electric grid:
  1. Front-of-the-meter (FTM): It is implemented at the utility scale, wherein the battery system is connected to the transmission or distribution network that ensures grid reliability. This happens on a considerably large scale (~MWh scale).
  2. Behind-the-meter (BTM): The other method is implemented at the residential and commercial/industrial level, mainly to provide backup during a power failure or to store excess locally generated energy from solar rooftop photovoltaic (PV) systems.

India’s storage capacity

  • About 34 GW / 136 GWh of battery storage is expected to be installed by 2030, according to the Central Electricity Authority of India.
  • This capacity would be used for RE integration, demand-side and peak load management services.

Storage challenges

  • The solar segment offers a huge market opportunity for advanced battery technologies.
  • However, manufacturers have some ground to cover in addressing technical limitations of batteries, such as charging characteristics, thermal performance and requirement of boost current to charge deep cycle batteries.
  • Since solar companies may directly procure batteries from manufacturers and require after-sale services and technical support, battery companies should have wider a presence to address these expectations.

Other key challenges

  • Rooftop solar source doesn’t match the rise in renewable energy in India.
  • While industrial and commercial consumers account for 70% of total installed capacity residential consumers remain a big untapped potential to give the boost
  • Solar rooftops also face several challenges such as little consumer awareness, lack of innovative government policies or attention, bureaucratic hassles, and limited support from discoms.

Way forward

  • Supportive policies and innovative technological approaches are needed for the sector to achieve its potential.
  • Indian policymakers need to plan for rooftop solar plus storage, rather than rooftop solar alone with the grid as storage (net / gross metering).
  • The declining cost of storage solutions, along with that of rooftop solar solutions, is likely to change the future of the Indian power sector.
  • Several countries such as Australia, the United States, Germany, among others have already endorsed solar power with battery storage.
  • Energy storage, therefore, represents a huge economic opportunity for India.
  • The creation of a conducive battery manufacturing ecosystem on a fast track could cement India’s opportunity for radical economic and industrial transformation in a critical and fast-growing global market.

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

Key Findings about the Religious Composition of India

Indian Society | Mains Paper 1: Communalism, Secularism, Regionalism
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Demographic transition of India

Mains level : Minority population issues

The religious composition of India’s population since Partition has remained largely stable according to a new study published by the Pew Research Centre, a non-profit based in Washington DC.

About the report

  • The study, based on data sourced from India’s decennial census and the National Family Health Survey (NFHS), looked at the three main factors that are known to cause changes in the religious composition of populations — fertility rate, migration, and conversions.
  • Both Hindus and Muslims, the two largest religious groups, shown not only a marked decline but also a convergence in fertility rates.
  • In terms of absolute numbers, every major religion in India saw its numbers rise.

Significance of the report

  • These findings, which come as a complement on religious tolerance and segregation in India.
  • It is significant in the context of two major issues that have occupied centre stage in recent times — the controversy over the Citizenship Amendment Act (CAA) and the National Register of Citizens (NRC).
  • This report also gives a strong message to those fundamentalists who perceive India as a living hell for minorities.

Key findings

(a) Fertility Rates are declining

  • With regard to fertility rates, the study found that Muslims, who had the highest fertility rate, also had the sharpest decline in fertility rates.
  • From 1992 to 2015, the total fertility rates of Muslims declined from 4.4 to 2.6, while that of Hindus declined from 3.3 to 2.1.
  • This indicates that the gaps in childbearing between India’s religious groups are much smaller than they used to be.
  • The average fertility rate in India today is 2.2, which is higher than the rates in economically advanced countries such as the U.S. (1.6), but much lower than what it was in 1992 (3.4) or 1951 (5.9).

(b) Marked slowdown

  • Although growth rates have declined for all of India’s major religious groups, the slowdown has been more pronounced among religious minorities, who outpaced Hindus in earlier decades.
  • From 2001 to 2011, the difference in growth between Muslims (24.7%) and Indians overall (17.7%) was 7 percentage points.
  • India’s Christian population grew at the slowest pace of the three largest groups in the most recent census decade — gaining 15.7% between 2001 and 2011, a far lower growth rate than the one recorded in the decade following Partition (29.0%).

(c) ‘No’ Religions group

  • Interestingly, out of India’s total population of 1,200 million, about 8 million did not belong to any of the six major religious groups.
  • Within this category, mostly comprising adivasi people, the largest grouping was of Sarnas (nearly 5 million adherents), followed by Gond (1 million) and Sari Dharma (5,10,000).

(d) Migration

  • The study says that since the 1950s, migration has had only a modest impact on India’s religious composition.
  • More than 99% of people who live in India were also born in India, and migrants leaving India outnumber immigrants three-to-one, with “Muslims more likely than Hindus to leave India”, while “immigrants into India from Muslim-majority counties are disproportionately Hindu.”

(e) Religious conversions

  • Religious conversion has also had a negligible impact on India’s overall composition, with 98% of Indian adults still identifying with the religion in which they were raised.

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Foreign Policy Watch: India-United States

What is Havana Syndrome?

International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Havana Syndrome

Mains level : Sonic Warfare tactics

A US intelligence officer traveling with CIA director William Burns has reported symptoms of Havana Syndrome.

What is Havana Syndrome?

  • Havana Syndrome refers to a set of mental health symptoms that are said to be experienced by US intelligence and embassy officials in various countries.
  • It typically involves symptoms such as hearing certain sounds without any outside noise being present, nausea, vertigo and headaches, memory loss and issues with balance.
  • As the name suggests, it traces its roots to Cuba.
  • In late 2016, US officials in embassy began experiencing sudden bursts of pressure in their brain followed by persistent headaches, feeling of disorientation and insomnia.

How severe is it?

  • In 2018, at least three CIA officers working under diplomatic cover in Cuba had reported troubling sensations that seemed to leave serious injuries.
  • Some officers are being compulsorily retired for their inability to coherently discharge his duty and another needing a hearing aid.

Has Havana Syndrome been reported anywhere else?

  • Since the Cuban incident, American intelligence and foreign affairs officials posted in various countries have reported symptoms of the syndrome.
  • In early 2018, similar accusations began to be made by US diplomats in China.
  • The US media has reported around 130 such attacks across the world including at Moscow in Russia, Poland, Georgia, Taiwan, Colombia, Kyrgyzstan, Uzbekistan, and Austria, among others.

What are the causes of Havana Syndrome?

  • No one is entirely sure. But it is speculated to be a “sonic attack”.
  • Medical examination of the victims began to suggest that the victims may have been subjected to high-powered microwaves that either damaged or interfered with the nervous system.
  • It was said to have built a pressure inside the brain that generated the feeling of a sound being heard.
  • Greater exposure to high-powered microwaves is said not only to interfere with the body’s sense of balance but also impact memory and cause permanent brain damage.
  • It is suspected that beams of high-powered microwaves are sent through a special gadget that Americans have begun calling “microwave weapon”.

Who is doing this in India?

  • Sources in the Indian security establishment say they are not aware of any such weapon being in the possession of an Indian agency.
  • Even if there was one, it is unlikely the government would admit to having acquired such counter-espionage technology given the sensitive nature of intelligence work.

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Wildlife Conservation Efforts

Rhino Horn Reverification Exercises

Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Indian Rhino

Mains level : NA

Assam will mark World Rhino Day — September 22 — with a special ceremony by burning a stockpile of nearly 2,500 horns of the one-horned rhinoceros.

Rhino Horn Reverification

  • The public ceremony — scheduled at Bokakhat in Kaziranga National Park (KNP) has been publicized as a “milestone towards rhino conservation” aimed at “busting myths about rhino horns”.
  • It’s a loud and clear message to the poachers and smugglers that such items have no value.
  • Thus the case for the destruction of horns — a process that is in compliance with Section 39(3)(c) of the Wildlife (Protection) Act of 1972.

Why are Rhinos poached for horns?

  • Ground rhino horn is used in traditional Chinese medicine to cure a range of ailments, from cancer to hangovers, and also as an aphrodisiac.
  • In Vietnam, possessing a rhino horn is considered a status symbol.
  • Due to demand in these countries, poaching pressure on rhinos is ever persistent against which one cannot let the guard down.

Try this PYQ:

Consider the following statements:

  1. Asiatic lion is naturally found in India only.
  2. Double-humped camel is naturally found in India only.
  3. One-horned rhinoceros is naturally found in India only.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) 1 and 3 only

(d) 1, 2 and 3

 

Post your answers here.

(Note: Comment feature is not available on the app.)

Back2Basics: Indian Rhino

  • The Indian rhinoceros also called the greater one-horned rhinoceros and great Indian rhinoceros is a rhinoceros native to the Indian subcontinent.
  • It is listed as Vulnerable on the IUCN Red List and Schedule I animal in the Wildlife Protection Act, 1972.
  • It once ranged across the entire northern part of the Indian Subcontinent, along the Indus, Ganges and Brahmaputra River basins, from Pakistan to the Indian-Myanmar border.
  • Poaching for rhinoceros horn became the single most important reason for the decline of the Indian rhino.

Coastal Zones Management and Regulations

[pib] Kovalam & Eden Beaches gets Blue Fag Certification

Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Blue Flag Certification

Mains level : NA

 

The international eco-label “Blue Flag”, has accorded the Blue Flag Certification for 2 new beaches this year –Kovalam in Tamil Nadu and Eden in Puducherry beaches.

With this India now has 10 International Blue Flag beaches.

Which are the other 8 beaches?

  1. Shivrajpur (Dwarka-Gujarat)
  2. Ghoghla (Diu)
  3. Kasarkod (Karnataka) [NOT Kasargod which is in Kerala] and
  4. Padubidri (Karnataka)
  5. Kappad (Kerala)
  6. Rushikonda (AP)
  7. Golden Beach (Odisha) and
  8. Radhanagar (A&N Islands)

Blue Flag Beaches

  • The ‘Blue Flag’ beach is an ‘eco-tourism model’ and marks out beaches as providing tourists and beachgoers clean and hygienic bathing water, facilities/amenities, a safe and healthy environment, and sustainable development of the area.
  • The certification is accorded by the Denmark-based Foundation for Environment Education.
  • It started in France in 1985 and has been implemented in Europe since 1987, and in areas outside Europe since 2001 when South Africa joined.
  • It has 33 stringent criteria under four major heads for the beaches, that is, (i) Environmental Education and Information (ii) Bathing Water Quality (iii) Environment Management and Conservation and (iv) Safety and Services.

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Foreign Policy Watch: India – EU

Is there a role for India in divided AUKUS?

International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India
Note4Students

From UPSC perspective, the following things are important :

Prelims level : AUKUS

Mains level : Paper 2- Role for India in issues over AUKUS

Context

France recalled its ambassadors to the US and Australia in a diplomatic slap intended to convey its anger over a deal forged in secrecy that saw Paris lose a multi billion dollar submarine contract.

Depth and diversity of India’s relations

  • That Delhi today is a part of a difficult conversation between the US, UK, France, Europe, and Australia points to the growing depth and diversity of India’s relations with different parts of the West.
  • Popular and academic discourse on India’s foreign policy has been obsessed with the concept of “non-alignment” —was about keeping distance from the West as a whole.
  • India’s contemporary diplomacy, in contrast, takes a nuanced view of internal dynamics in the West, and recognises the political agency of individual states, and develops wide-ranging relationships with the Western nations.

Relations with France

  • Paris has always taken an independent view of the world, while remaining within the broad framework of the American alliance.
  •  In the 1990s, Paris championed the construction of a multipolar world to constrain American “hyperpower” but India did not join it.
  • The last few years, however, have seen an intensification of India’s strategic engagement with France.
  • For example, India has overcome the earlier reluctance to work with France on Indian Ocean security.

Engagement as collective and sub-region

  • The government has also stepped up on the political engagement with Europe as a collective as well as its sub-regions — from Baltics to the Balkans and from Iberia to Mitteleuropa.
  •  As India discovers that every European nation, from tiny Luxembourg to a rising Poland, has something to offer, Europe has become a thriving hub of India’s international relations.

Relations with the UK

  • Due to the bitter colonial legacy, relations between India and UK have always been underdeveloped.
  • In the last couple of years, India has made a determined effort to build a new partnership with Britain, which is the fifth-largest economy in the world, a leading financial hub, a technological powerhouse, and punches well above its weight in global affairs.

Relations with “Anglosphere”

  • India’s neglect of London also meant Delhi had no time for the “Anglosphere” that binds the UK to Australia, Canada, and New Zealand.
  • Many had presumed that the Anglosphere was irrelevant — AUKUS, however, is a reminder that Anglo-Saxon political bonds endure.
  • Instead of treating the Anglosphere with scepticism, India has begun to vigorously engage with the “settler colonies” that have so much to offer India — from natural resources to higher education and critical technologies.
  • The UK and its settler colonies have long been the preferred destination for the Indian diaspora (besides the US).
  • Leveraging diaspora politics: While the diaspora tends to connect the domestic politics of the Anglosphere with that of India, Delhi is figuring out that the diaspora politics can be played both ways.

Relations with Japan and Australia

  • The transformation of India’s relations with Australia has occurred despite entrenched scepticism in the foreign policy bureaucracy.
  • Finally, Japan has been a part of the West in the post-War era and Delhi’s relations with Tokyo have never been as rounded as they are today. They are also fellow members of the Quad.

Way forward for India

  • This wide-ranging engagement with the West should help Delhi convey two important messages to its partners this week.
  • Not undermining the larger goal: India needs to remind France, Australia, the UK and US of the shared interests in securing the Indo-Pacific and the dangers of letting the current quarrel undermine that larger goal.
  • Effective deterrence in Indo-Pacific: The other is to highlight the region’s vast requirements for effective deterrence in the Indo-Pacific;
  • And that there is enough room for the US, UK, France, and Europe to collaborate with Indo-Pacific partners in overlapping coalitions to develop high technology and defence-industrial cooperation in all the areas highlighted by AUKUS — effective underwater capabilities to AI, quantum computing and cyber warfare.
  • Deeper cooperation: India’s interests lie in deeper strategic cooperation with France and Europe as well as the Quad and the Anglosphere.

Conclusion

India’s diverse relationships in the West must be deployed in full measure to prevent a split in the Indo-Pacific coalition.

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Capital Markets: Challenges and Developments

SEBI introduces T+1 Settlement System

Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth
Note4Students

From UPSC perspective, the following things are important :

Prelims level : T+1, T+2 settlement

Mains level : NA

The Capital markets regulator Securities and Exchange Board of India (SEBI) has introduced T+1 settlement cycle for completion of share transactions on optional basis in a move to enhance market liquidity.

What is T+1 Settlement System?

  • T+1 means that settlements will have to be cleared within one day of the actual transactions taking place.
  • Currently, trades on the Indian stock exchanges are settled in two working days after the transaction is done (T+2).
  • In April 2002, stock exchanges had introduced a T+3 rolling settlement cycle. This was shortened to T+2 from April 1, 2003.

What has Sebi allowed?

  • SEBI has allowed stock exchanges to start the T+1 system as an option in place of T+2.
  • If it opts for the T+1 settlement cycle for a scrip, the stock exchange will have to mandatorily continue with it for a minimum 6 months.
  • Thereafter, if it intends to switch back to T+2, it will do so by giving one month’s advance notice to the market.
  • Any subsequent switch (from T+1 to T+2 or vice versa) will be subject to a minimum period.
  • A stock exchange may choose to offer the T+1 settlement cycle on any of the scrips, after giving at least one month’s advance notice to all stakeholders, including the public at large.

Why T+1 settlement?

  • Reduced settlement time: A shortened cycle not only reduces settlement time but also reduces and frees up the capital required to collateralize that risk.
  • Quick settlement: T+1 also reduces the number of outstanding unsettled trades at any instant, and thus decreases the unsettled exposure to Clearing Corporation by 50%.
  • Speedy recovery of assets: The narrower the settlement cycle, the narrower the time window for a counterparty insolvency/bankruptcy to impact the settlement of a trade.
  • Risk reduction: Systemic risk depends on the number of outstanding trades and concentration of risk at critical institutions such as clearing corporations, and becomes critical when the magnitude of outstanding transactions increases.

How does T+2 work?

  • If an investor sells shares, settlement of the trade takes place in two working days (T+2).
  • The broker who handles the trade will get the money, but will credit the amount in the investor’s account only.
  • In effect, the investor will get the money only after three days.
  • In T+1, settlement of the trade takes place in one working day and the investor will get the money on the following day.
  • The move to T+1 will not require large operational or technical changes by market participants, nor will it cause fragmentation and risk to the core clearance and settlement ecosystem.

Why are foreign investors opposing it?

  • Foreign investors operating from different geographies would face time zones, information flow process, and foreign exchange problems.
  • Foreign investors will also find it difficult to hedge their net India exposure in dollar terms at the end of the day under the T+1 system.
  • In 2020, SEBI had deferred the plan to halve the trade settlement cycle to one day (T+1) following opposition from foreign investors.

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Back2Basics: SEBI

  • The SEBI is the regulatory body for securities and commodity market in India under the jurisdiction of Ministry of Finance Government of India.
  • It was established on 12 April 1988 and given Statutory Powers on 30 January 1992 through the SEBI Act, 1992.

Jurisdiction of SEBI

  • SEBI has to be responsive to the needs of three groups, which constitute the market:
  1. Issuers of securities
  2. Investors
  3. Market intermediaries

SEBI has three powers rolled into one body: quasi-legislative, quasi-judicial and quasi-executive.

  • It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in its judicial capacity.
  • Though this makes it very powerful, there is an appeal process to create accountability.
  • There is a Securities Appellate Tribunal which is a three-member tribunal and is currently headed by Justice Tarun Agarwala, former Chief Justice of the Meghalaya High Court.
  • A second appeal lies directly to the Supreme Court.

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

The end of the doing business rankings

Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Ease of Doing Business Report

Mains level : Read the attached story

The World Bank Group has scrapped its flagship publication, the ‘Doing Business’ report.

Doing Business Report

  • This report publishes the influential annual ranking of countries on the Ease of Doing Business (EDB) index.
  • It ranks countries by the simplicity of rules framed for setting up and conducting businesses.

Utility of the index

The World Bank’s decision has wide ramifications, as the index serves varied purposes.

  • Many countries showcase improved ranking to signal market-friendly policies to attract foreign investments. National leaders often set EDB rank targets.
  • This helps them measure domestic policies against global “best practices” and browbeat domestic critics.
  • India, for instance, wanted its administration to ensure that India breaks into the top 50 ranks of the EDB index.
  • Some countries seem to use their political heft to improve their rank, polish their international image and sway public opinion (as appears to be China’s case).

Issues with the credibility of the report

  • The Group acted on its commissioned study to examine the ethical issues flagged in preparing the 2018 and 2020 editions of the EDB index.
  • It is accused of having exerted pressure on the internal team working on the Doing Business report to falsely boost China’s rank by doctoring the underlying data.
  • Similarly, tensions were also reportedly brought to bear in the case of Saudi Arabia’s rank, among others.

EDB index rank vs economic outcomes

  • There is a disconnect between the stellar rise in EDB index rank and economic outcomes.
  • The theory underlying the EDB index could be suspect, the measurement and data could be faulty, or both.
  • For example, China’s phenomenal economic success, especially its agricultural performance (after the reforms in 1978), is perhaps the most unmistakable evidence demonstrating that lack of clarity of property rights may not be the binding constraint in a market economy.
  • What matters is economic incentives.
  • Measuring regulatory functions underlying the index could be tricky and subjective and possibly politically motivated as well, as the controversies surrounding the index seem to suggest.

EODB in India: At what cost

Ans. Weakening labour regulations

  • Closer home, India has weaponised the mandate to improve the rank in the EDB index to whittle down labour laws and their enforcement and bring them close to the free-market ideal of ‘hire and fire’.
  • Most States have emulated Maharashtra’s lead of administrative fiat, which renders labour laws toothless by dismantling official labour inspection systems and allowing employers to file self-regulation reports.
  • The government has farmed out critical safety regulations such as annual inspection and certification of industrial boilers to ‘third party’ private agencies.
  • The Labour Department’s inspection is now not mandated; it is optional only by prior intimation to employers.

Implications of such moves

  • Such abdication of the government’s responsibility towards workers has reportedly affected industrial relations.
  • The workers’ strike at Wistron’s iPhone assembly factory in Karnataka last year is an example.
  • Further, severe industrial accidents are rising, damaging life and productive industrial assets.

Why did World Bank scrap the index?

  • Investigations into “data irregularities” in preparing the EDB index, as brought out by the independent agency, seems to confirm many shortcomings repeatedly brought to light for years now.
  • The index appears motivated to support the free-market ideal.
  • It is dressed up under scientific garb and is underpinned by seemingly objective methods and data collection.
  • Strong leaders (and motivated officials) seem to have used their position to manipulate the index to suit their political and ideological ends.

Conclusion

  • India claimed the success of its Make in India initiative by relying on its ranking on the EDB index without tangible evidence.
  • Handing over law enforcement to employers by self-reporting compliance seems to have increased industrial unrest and accidents.
  • It perhaps calls for honest soul-searching as to what havoc a questionable benchmark can wreak.

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Food Safety Standards – FSSAI, food fortification, etc.

Front-of-pack labelling of Food Stuffs

Governance | Mains Paper 2: Health & Education
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Front of Pack Labelling System

Seven years, four committees and two draft regulations later, India still does not have a clear labelling system to warn consumers about harmful levels of fat, salt and sugar in processed foods.

Context

  • According to the Food Safety and Standards (Packaging and Labelling) Regulations, 2011, every pre-packed processed food product sold in the country must be labelled with nutritional information.
  • To ensure that consumers are able to easily see and interpret the nutritional information on food packets, an expert committee was established by the Food Safety and Standards Authority of India (FSSAI).
  • The committee, set up following an order of the Delhi High Court which was hearing a public interest petition seeking a ban on the sale of junk food in and around schools.

Why label nutritional information?

  • This helps the consumer know everything about the food they buy and make an informed decision about what and how much to eat.
  • Such information is particularly crucial because the packaged food contain ultra-processed foods that are high in fat, salt or sugar and low in fibre and other essential micronutrients.
  • On the one hand, these foods cause malnutrition.
  • On the other hand they are linked strongly with obesity and diet-related non-communicable diseases, such as Type-2 diabetes, hypertension, heart ailments and certain cancers, like that of the colon.
  • All these increase the risk of premature death.

Issues with labelling in India

  • Not to mention that most products provide information in English understanding which can be daunting for a vast number of people in India.

What is FoP labelling?

  • The front-of-pack (FoP) labelling system has long been listed as one of the global best practices to nudge consumers into healthy food choices.
  • It works just the way cigarette packets are labelled with images to discourage consumption.
  • Countries such as Chile, Brazil and Israel have laws to push the packaged food industry to adopt FoP labelling.
  • They have used FoP labelling as a measure to fight obesity and NCDs.

FoP labelling in India

  • The system is yet to be implemented in India even seven years after it was first proposed by FSSAI.
  • The fact is, makers of packaged foods are also a powerful lot, with strong business acumen.
  • While companies in other countries have acceded to the FoP labelling laws, they are unwilling to do so in India — a country experiencing a dietary shift.

Why must we have FoP labels?

  • Countries are working to find ways to nudge consumers into healthy food choices and to contain the growing crisis of obesity and diet-related non-communicable diseases (NCDs).
  • It is a crisis that increasingly impacts children and also exacerbates novel coronavirus disease (COVID-19) symptoms. Front-of-pack (FoP) labelling is definitely an effective tool in this effort.

India definitely needs ‘warning labels’ on front-of-pack, but this must be a symbol-based label with no text and numbers. This is because:

(1) Junk foods have high levels of unhealthy nutrients

  • There is strong evidence that sugar, salt and fat in junk foods are addictive, like nicotine in tobacco.
  • FoP ‘warning’ labels have helped reduce cigarette consumption. It is time we adopted the same for junk foods.

(2) Warning labels are easy to notice and understand

  • They do not confuse consumers with mixed messages.
  • Their distinct shape, colour and size make them noticeable in the otherwise cluttered and colourful packaging.
  • With one label for one nutrient, it becomes easier to know if a product is high in more than one nutrient.

(3) Warning labels are the global best practice now

  • At least seven countries have adopted warning labels in the past five years. These include Chile, Peru, Mexico, Israel and Uruguay.
  • Low- and middle-income mothers have shown profound changes in attitudes towards food purchases as they now understand the nutritional content of packaged foods.
  • Even children can read the labels and take an informed decision. This has also forced food companies to reduce the amount of sugar and sodium in foods and beverages.

(4) They are best suited for India

  • Warning labels are best suited for India as they do not include numbers unlike many other FoP labels.
  • In fact, warning labels that are symbol-based, like that of Israel, can transcend the barriers of literacy and language in India.

(5) FSSAI has experience of successfully implementing symbol-based FoP labels

  • Its “green filled circle in green outlined square” logo to depict vegetarian food has been hugely successful in informing consumers.
  • In recent years, FSSAI also has made similar laws to depict fortification (+F logo) and organic food (a green-coloured tick for Jaivik Bharat logo).

Way forward

  • FoP labels must include information on nutrients that make food injurious to health.
  • This should be distinct from the details on the back-of-pack. FoP labels should aim to inform the consumer, while the back-of-pack label serves the purpose of scientific compliance and enforcement.
  • FoP labels should have information on ‘total sugar’ and not ‘added sugar’. There is no analytical laboratory method to differentiate ‘added sugar’ from total sugar and quantify it.

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Innovation Ecosystem in India

India scores 46th rank in the Global Innovation Index 2021

Science Tech Art Culture | Mains Paper 3: Achievements Of Indians In S&T
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Global Innovation Index

Mains level : Innovation ecosystem in India

India has climbed 2 spots and has been ranked 46th by the World Intellectual Property Organization in the Global Innovation Index 2021 rankings.

Global Innovation Index

  • The Global Innovation Index (GII) is an annual ranking of countries by their capacity for, and success in, innovation.
  • It is published by Cornell University, INSEAD, and the World Intellectual Property Organization, in partnership with other organizations and institutions.
  • It is based on both subjective and objective data derived from several sources, including the International Telecommunication Union, the World Bank and the World Economic Forum.
  • The index was started in 2007 by INSEAD and World Business, a British magazine. It was created by Prof. Soumitra Dutta.

Components of GII

  • The GII is computed by taking a simple average of the scores in two sub-indices, the Innovation Input Index and Innovation Output Index, which are composed of five and two pillars respectively.

India’s performance

  • India has been on a rising trajectory, over the past several years in the Global Innovation Index (GII), from a rank of 81 in 2015 to 46 in 2021.
  • India attributed its improved performance due to the pivotal role played by the Department of Atomic Energy, the Department of Science and Technology, the Department of Biotechnology and the Department of Space.

Global scenario

  • Switzerland topped the league table, followed by Sweden, the US and the UK.
  • Among Asian economies, South Korea jumped to the fifth position, up from 10 last year.
  • China was in the 12th position.

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Historical and Archaeological Findings in News

What is Vishnuonyx?

Trivia | Mains Paper 3: Awareness In The Fields Of It, Space, Computers, Robotics, Nano-Technology, Bio-Technology, Pharma Sector & Health Science
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Vishnuonyx neptuni

Mains level : NA

Between 12.5 million and 14 million years ago, members of a genus of otters called Vishnuonyx lived in the major rivers of southern Asia.

Vishnuonyx neptuni

  • Vishnuonyx were mid-sized predators that weighed, on average, 10-15 kg.
  • Before this, the genus was known only in Asia and Africa (recent findings show that Vishnuonyx reached East Africa about 12 million years ago, according to the release).
  • Vishnuonyx depended on water and could not travel long distances over land.

Why in news?

  • German researchers have discovered the fossil of a previously unknown species, which they have named Vishnuonyx neptuni, meaning ‘Neptune’s Vishnu’.
  • Fossils of these now extinct otters were first discovered in sediments found in the foothills of the Himalayas.
  • Now, a newly found fossil indicates it had travelled as far as Germany. ‘
  • The dispersal of Vishnuonyx otters from the Indian subcontinent to Africa and Europe about 13 million years ago. ‘
  • This is the first discovery of any member of the Vishnuonyx genus in Europe; it is also its most northern and western record till date.

How did it travel as far as Europe?

  • According to the researchers, its travels over 6,000 km were probably made possible by the geography of 12 million years ago, when the Alps were recently formed.
  • These Alps and the Iranian Elbrus Mountains were separated by a large ocean basin, which would have made it easier for the otters to cross it.
  • Researchers believe ‘Neptune’s Vishnu’ first reached southern Germany, followed by Ancient Guenz and eventually, the Hammerschmiede.

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Wildlife Conservation Efforts

Species in news: Sea Cucumber

Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Sea cucumber

Mains level : Illicit trade of exotic species

In a swift operation, the Indian Coast Guard (ICG) at Mandapam, Tamil Nadu seized two tonnes of sea cucumber, a banned marine species.

Sea Cucumbers

  • Sea cucumbers are part of a larger animal group called echinoderms, which also contains starfish and sea urchins.
  • Their body shape is similar to a cucumber, but they have small tentacle-like tube feet that are used for locomotion and feeding.
  • One way that sea cucumbers can confuse or harm predators is by propelling their own toxic internal organs from their bodies in the direction of an attacker.
  • The organs grow back, and it may save them from being eaten.
  • They are found in virtually all marine environments throughout the world, from shallow to deep-sea environments.
  • They are benthic, meaning they live on the ocean floor. However, their larvae are planktonic, meaning they float in the ocean with the currents.

Conservation status

  • Sea cucumber in India is treated as an endangered species listed under schedule I of Wildlife Protection Act of 1972.
  • It is primarily smuggled from Tamil Nadu to Sri Lanka in fishing vessels from Ramanathapuram and Tuticorin districts.

(IUCN status is not available for this species)

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Higher Education – RUSA, NIRF, HEFA, etc.

Empathy through education

Governance | Mains Paper 2: Health & Education
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2-SEL

Context

While the National Education Policy (2020) notes numeracy and literacy as its central aims, Social and Emotional Learning should be an equally important goal as it supports skills such as communication, collaboration, critical thinking and creativity.

What is social and emotional learning (SEL)?

  • SEL is the process of learning to recognise and manage emotions and navigate social situations effectively.
  • SEL is foundational for human development, building healthy relationships, having self and social awareness, solving problems, making responsible decisions, and academic learning.
  • Neurobiologically, various brain regions such as the prefrontal and frontal cortices, amygdala, and superior temporal sulcus are involved in the cognitive mechanisms of SEL.
  • Brain systems that are responsible for basic human behaviour, such as getting hungry, may be reused for complex mechanisms involved in SEL.
  • Despite its importance to life, SEL is often added as a chapter in a larger curriculum rather than being integrated in it.
  • The pandemic has brought unprecedented challenges for SEL as school closures reduced opportunities for students to deepen social relationships and learn collaboratively in shared physical spaces.
  • Even with parental involvement, the challenge of an inadequate support system for SEL remains.

Way forward

  • Perhaps we can contextually adapt best practices from existing models.
  • A starting point would be to consider insights from the Indian SEL framework:
  • One, the application of SEL practices should be based on students’ socioeconomic backgrounds.
  • Two, SEL strategies of caretakers and educators must align with one another.
  • Three, long-term success requires SEL to be based on scientific evidence.

Conclusion

As a sustainable development goal outlines, policymakers now have to ensure that future changes prioritise “inclusive and equitable quality education and promote lifelong learning opportunities for all.” Importantly, the onus lies on all of us to make individual contributions that will drive systemic change.

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FDI in Indian economy

Holding transnational corporations accountable

Economics | Mains Paper 3: Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level : BIT

Mains level : Paper 3- Using BITs to hold TNCs accountable

Context

Given the enormous power that transnational corporations (TNCs) wield, questions about their accountability have arisen often. There have been many instances where the misconduct of TNCs has come to light such as the corruption scandal involving Siemens in Germany.

Holding TNCs accountable: Background

  • The effort was made at the UN to develop a multilateral code of conduct on TNCs.
  • However, due to differences between developed and developing countries, it was abandoned in 1992.
  • Role of BITs: Aim was to use international law to institutionalise the forces of economic globalisation, leading to the spread of BITs.
  • Asymmetry in BITs: These treaties promised protection to foreign investors under international law by bestowing rights on them and imposing obligations on states.
  • This structural asymmetry in BITs, which confer rights on foreign investors but impose no obligations, relegated the demand for investor accountability.
  • In 2014, the UN Human Rights Council established an open-ended working group with the mandate to elaborate on an international legally binding instrument on TNCs and other businesses concerning human rights.
  • Since then, efforts are being made towards developing a treaty and finding ways to make foreign corporations accountable.
  • The latest UN report is a step in that direction.

UN report on human rights-compatible international investment agreements

  • The UN working group on ‘human rights, transnational corporations (TNCs) and other businesses’ has published a new report on human rights-compatible international investment agreements.
  • It urges states to ensure that their bilateral investment treaties (BITs) are compatible with international human rights obligations.
  • It emphasises investor obligations at the international level i.e., the accountability of TNCs in international law.

Using BITs to hold TNCs accountable

  • BITs can be harnessed to hold TNCs accountable under international law.
  • The issue of fixing accountability of foreign investors came up in an international law case, Urbaser v. Argentina (2016).
  • Subjecting corporates to international law: In this case, the tribunal held that corporations can be subjects of international law and are under a duty not to engage in activities that harm or destroy human rights.
  • The case played an important role in bringing human rights norms to the fore in BIT disputes.
  • It also opened up the possibility of using BITs to hold TNCs accountable provided the treaty imposes positive obligations on foreign investors.
  • Recalibrating BITs: In the last few years, states have started recalibrating their BITs by inserting provisions on investor accountability.
  • Issues with BITs: However, these employ soft law language and are hortatory.
  • They do not impose positive and binding obligations on foreign investors.
  • They fall short of creating a framework to hold TNCs accountable under international law.

Takeaways for India

  • The recent UN report has important takeaways for India’s ongoing reforms in BITs.
  • Best endeavour clauses not enough: India’s new Model BIT of 2016 contains provisions on investor obligations.
  • However, these exist as best endeavour clauses. They do not impose a binding obligation on the TNC.
  • Impose positive binding obligations: India should impose positive and binding obligations on foreign investors, not just for protecting human rights but also for imperative issues such as promoting public health.
  • The Nigeria-Morocco BIT, which imposes binding obligations on foreign investors such as conducting an environmental impact assessment of their investment, is a good example.

Consider the question ” Ensuring that the bilateral investment treaties (BITs) are compatible with international human rights obligations in the need of the hour. In light of this, assess the progress made globally on this issue and suggest way forward for India in framing its BITs.”

Conclusion

Reforms would help in harnessing BITs to ensure the answerability of foreign investors and creating a binding international legal framework to hold TNCs to account.

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Insolvency and Bankruptcy Code

EoDB at risk if issue of appointments to tribunals is not resolved

Economics | Mains Paper 3: Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level : NCLAT, NCLT

Mains level : Read the attached story

While hearing a challenge to the Tribunal Reforms Act, 2021, the Supreme Court came down heavily on the government of India for vacancies not being filled on time. This could severely impact the ease of doing business in India, said the court.

Background

  • The government has lauded the role of the Insolvency and Bankruptcy Code, 2016 (IBC), for improving India’s ranking on the “Ease of Doing Business” index over the last couple of years.
  • However, the SC’s observation is spot-on as vacancies in the tribunals have slowed down insolvency resolution due to the huge pendency of cases.
  • When the SC made its observations, the NCLT had only 30 members against a total strength of 63.

About NCLAT and NCLT

  • National Company Law Appellate Tribunal (NCLAT) was constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of National Company Law Tribunal(s) (NCLT) in 2016.
  • NCLAT is also the Appellate Tribunal to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India (CCI).
  • It is also the Appellate Tribunal to hear and dispose of appeals against the orders of the National Financial Reporting Authority.

Difference between NCLT AND NCLAT

NCLT

NCLAT
·         NCLT is established as per Section 408 of companies act, 2013 ·         NCLAT is established as per Section 410 of companies act, 2013
·         It holds primary jurisdiction on cases of insolvency and bankruptcy ·         It holds appellate jurisdictions over the cases judged by NCLT
·         NCLT accepts and analyzes the evidence from creditors and debtors ·         NCLAT accepts and analyzes the decision made by NCLT
·         NCLT collects facts and evidences ·         NCLAT analyzes facts and evidences

CJI’s reservations over Pendency

  • The NCLAT had a sanctioned strength of a chairperson plus 11 members but its functioning strength was of eight members.
  • Both the NCLT and NCLAT have been without chairpersons for several months respectively.
  • These vacancies are concerning because as of May 31, 13,170 insolvency petitions were pending before benches of the NCLT.
  • Of these, 2,785 petitions have been filed by financial creditors and 5,973 by operational creditors.

Note: The IBC created an institution called an information utility to be the repository of information on debts and defaults in India.  The sole utility in India at present is the National E-Governance Services Ltd. (NeSL).

Basis of these cases

  • The financial creditors are facing criticism for taking haircuts as high as 90 per cent against their claims.
  • A longer approval period would entail greater value erosion of a corporate debtor which would be an unattractive proposition for any prospective resolution applicant.
  • This uncertainty can be cured by a faster approval process by the NCLTs by the creation of more benches and filling up of current vacancies.

Why is the Supreme Court fuming over vacancies?

(a) Covid impact

  • The Indian economy is recovering from the adverse effects of the Covid-19 pandemic.
  • During the downturn, financial institutions and banks have suffered higher defaults than usual, impacting the robustness of the system.
  • Lending has decreased during this time and can only be encouraged now by shoring up the mechanism under the IBC to inspire confidence in creditors.

(b) Non-compliance by the govt

  • The SC had granted time to the government till September 13 to take substantial steps in this regard, which was partially complied with by appointing 18 members.
  • The government, however, failed to avoid embarrassment as the CJI expressed his anger at the appointment process which had ignored candidates recommended by the selection committee.

(c) Burden of pendency

  • There is a real risk of the court taking matters into its own hands by making appointments itself, or by taking harsher steps like transferring jurisdiction under the IBC to high courts.
  • One hopes that the situation is resolved quickly to make strict time-bound insolvency resolutions a reality.

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Judicial Reforms

Need for ‘Indianization’ of Legal System: CJI

Polity | Mains Paper 2: Executive & Judiciary
Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Indianization of Judiciary

Chief Justice of India NV Ramana has asserted the need for the “Indianisation of our legal system”, pointing out that the colonial system being followed currently may not be best suited to the complexities of India.

Prospects of Indianization by CJI

  • CJI meant that the need to adapt to the practical realities of our society and localize our justice delivery systems.
  • For example, parties from a rural place fighting a family dispute are usually made to feel out of place in the court.
  • They do not understand the arguments or pleadings which are mostly in English, a language alien to them.
  • These days judgments have become lengthy, which further complicates the position of litigants.
  • For the parties to understand the implications of a judgment, they are forced to spend more money.
  • For whom do the court’s function, the CJI asked. For the litigants, who are the “justice seekers”. They are the ultimate beneficiaries.

What did CJI say?

  • CJI has said the ordinary Indian feels out of place in our courts where proceedings are lengthy, expensive and in English.
  • Besides, judgments are either too long or technical or manage to be both.
  • It is time for courts to wake up from their colonial stupor and face the practical realities of Indian society.
  • Rules and procedures of justice delivery should be made simple.
  • The ordinary, poor and rural Indian should not be scared of judges or the courts.

Reasons for Indianization

  • Multiple barriers continue to thwart the citizen’s way to the courts.
  • The working and the style of courts do not sit well with the complexities of India.
  • The systems, practices and rules of courts are foreign and sourced from our colonial days. They do not take care of the practical realities of India.

Major suggestions by CJI:

(A) Simplification

  • The simplification of justice delivery should be our pressing concern.
  • It is crucial to make justice delivery more transparent, accessible and effective.
  • Procedural barriers often undermine access to justice.
  • The Chief Justice said both judges and lawyers have to create an environment which is comforting for the litigants and other stakeholders.

(B) Alternate dispute mechanisms

  • The CJI said alternate dispute mechanisms like mediation and conciliation would go a long way in reducing pendency, unnecessary litigation and save resources.

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Right To Privacy

Deployment of Facial Recognition Systems (FRS) in India

Polity | Mains Paper 2: Indian Constitution - historical underpinnings, evolution, features, amendments, significant provisions and basic structure
Note4Students

From UPSC perspective, the following things are important :

Prelims level : FRS

Mains level : Right to Privacy Issues

India has seen a rapid deployment of Facial Recognition Systems (FRS) in recent years, both by the Centre and State governments, without putting in place any law to regulate their use.

Facial Recognition System

  • A FRS is a technology capable of matching a human face from a digital image or a video frame against a database of faces.
  • It is typically employed to authenticate users through ID verification services, works by pinpointing and measuring facial features from a given image.

Why in news?

  • There is a growing unabated use of this potentially invasive technology without any safeguards.
  • This poses a huge threat to the fundamental rights to privacy and freedom of speech and expression of the citizens.

FRS in India

  • Currently, 18 FRSs are in active utilisation by the Centre and State governments for the purpose of surveillance, security and authentication of identity.
  • 49 more systems are in the process of being installed by different government agencies.
  • Delhi Police was the first law enforcement agency in the country to start using the technology in 2018.
  • Only Telangana is ahead of Delhi at present with four facial recognition systems in active utilization for surveillance and authentication of identity.

Judicial scrutiny of the move

  • States say that they are authorized by the Delhi High Court in terms of the decision in the case of ‘Sadhan Haldar vs NCT of Delhi’.
  • In that particular case, the High Court had authorized the Delhi police to obtain facial recognition technology for the purpose of tracking and reuniting missing children.
  • FRS may be used in the investigation in the interest of safety and security of the general public.

A potential mis-use?

Ans. Can’t say!

  • Activists pointed out that Delhi Police was now using the FRS, which was meant for tracking missing children, for wider security and surveillance and investigation purpose.
  • There is a “function creep” happening with Police gradually using the technology beyond its intended purpose.
  • For example, the use of FRS to identify accused who took part in the farmers’ tractor rally violence in January this year.

Need of the hour

Ans. Bring accountability

  • Surveillance of any kind happens in secret and the people generally don’t know that they are being watched.
  • The idea behind is to bring light to the fact that these technology systems are being used without any laws in place to regulate them.
  • Police and state authorities should use such technologies for specific and special purposes with proper authorization.

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