Asia’s youngest nation, East Timor, also known as Timor Leste, holds the second and final round of its presidential election.
About East Timor
The territory was colonized by Portugal in the 18th century and remained under is control until 1975.
When the Portuguese withdrew, troops from Indonesia invaded and annexed East Timor as its 27th province.
A long and bloody struggle for independence ensued, during which at least 100,000 people died.
The East Timorese voted for independence in a 1999 U.N.-supervised referendum, but that unleashed even more violence until peace-keeping forces were allowed to enter.
The country was officially recognized by the United Nations in 2002.
East Timor has applied to be a member of the Association of Southeast Asian Nations (ASEAN). It currently holds observer status.
Its geography
East Timor comprises the eastern half of Timor Island, the western half of which is part of Indonesia.
It spans a 15,000 square km (5,792 square mile) land area – slightly smaller than Israel – and it’s 1.3 million people are predominantly Roman Catholic.
Politics and economy
In nearly 20 years since independence, East Timor’s presidential and parliamentary elections have been dominated by many of the same faces.
Its revolutionary have run for and held various positions of power and continue to feature prominently in the running of the country.
East Timor depends on revenues from its offshore oil and gas reserves which account for 90% of its gross domestic product.
Its main revenue stream, the Bayu Undan gas field, is set to dry up by 2023 and the country is now planning to collaborate with companies like Australia’s Santos to turn it into carbon capture facilities.
Pakistan has witnessed dramatic political developments where yet another elected govt has been unable to complete its full term.
It now has a new ‘Wazir-e-Azam’. His name is Shehbaz Sharif. A member of the wealthy Sharif dynasty. A man famous for his impassionate speeches.
It does not matter who rules Pakistan, the country is never going to change (any way that’s the prevailing argument.)
However, in this article, we will study what this latest change in Pakistan mean for Pakistan, for India, and the rest of the world.
Pakistan conundrum: A quick recap
(1) Attempt for a constitutional coup
In a high stage political drama, Imran Khan was ousted as the PM after a political and constitutional crisis emerged in Pakistan.
Pakistani National Assembly Speaker dismissed a no-confidence motion against PM during a session in which it was expected to be taken up for a vote, alleging foreign country’s involvement.
The Supreme Court of Pakistan (SCP) took a suo moto notice of the ongoing situation, creating a constitutional crisis, as effectively, Imran Khan led a constitutional coup.
(2) Questions over Pak Army’s role
Meanwhile, Imran Khan had ordered termination of its Army Chief who was his staunch supporter turned opponent.
He has broken that consensus within Pakistan’s political class on deference to the Pakistan army and has demonised his political opponents.
Shortly after midnight on 10 April, a majority of members voted and passed the no-confidence motion, removing Khan from office, and making him the first prime minister in Pakistan to be removed from office through a no-confidence motion.
Geopolitical impacts of Pakistan Crisis
The nation of more than 220 million people lies between Afghanistan to the west, China to the northeast and India to the east, making it of vital strategic importance.
Defiance from the US: Since coming to power in 2018, Khan’s rhetoric has become more anti-American.
Support for Russian invasion of Ukraine: He expressed a desire to move closer to China and, recently, Russia – including talks with President Putin on the day the invasion of Ukraine began.
Here is what the upheaval, which comes as the economy is in deep trouble, means for countries closely involved in Pakistan:
[A] INDIA
Terrorism: Any regime change in Islamabad has always been monitored closely by New Delhi for potential changes in the border scenario, and militancy.
Ongoing Ceasefire: As with Afghanistan, it is Pakistan’s military that controls policy in the sensitive area, and tensions along the de facto border there are at their lowest level since 2021, thanks to a ceasefire.
Absence of formal dialogue: There have been no formal diplomatic talks between the rivals for years because of deep distrust over a range of issues, including Khan’s extreme criticism of Indian PM.
Push of geo-economics: The Pakistani military has put pressure on the new government in Islamabad to build successful ties for geo-economics and bilateral trade.
Change in Kashmir rhetoric: The powerful army chief General Qamar Javed Bajwa said recently that his country was ready to move forward on Kashmir if India agrees.
[B] AFGHANISTAN
Ongoing crisis: Now that the Taliban are back in power in Afghanistan, and facing an economic and humanitarian crisis due to a lack of money and international isolation.
Row over Durand Line: Tensions have risen between the Taliban and Pakistan’s military, which has lost several soldiers in attacks close to their mutual border.
Putting curb on terror activities: Pakistan wants the Taliban to do more to crack down on extremist groups and worries they will spread violence into Pakistan by the Tehreek-i-Taliban Pakistan (TTP) faction.
[C] CHINA
“All weather” friends: Khan consistently emphasised China’s positive role in Pakistan and in the world at large.
Continuance of CPEC: The $60 billion China-Pakistan Economic Corridor (CPEC) which binds them together was actually conceptualised and launched under Pakistan’s two established political parties, both of which are set to share power in the new government.
[D] UNITED STATES
No priority for US: Pakistan’s political crisis is unlikely to be a priority for President Joe Biden, who is grappling with the war in Ukraine, unless it led to mass unrest or rising tensions with India.
Pak retreat on alleged US involvement: With the Pakistani military maintaining its behind-the-scenes control of foreign and security policies, the change of government was not a major concern.
Damage control over Russian ties: Imran Khan’s visit to Moscow had been a “disaster” in terms of U.S. relations, and that a new government in Islamabad could at least help mend ties “to some degree”.
Pakistan- the way it is: A Rogue State
Obsession for Kashmir: Ever since Pakistan came into being, its biggest obsession has been India and Kashmir. Even after losing 3 crucial wars, the saga has never ended.
Obsession with India: The deploring economic condition, ever-increasing scarcity of water, dishevelled education system and growing radicalisation take a back seat in the breadth of bleeding India by a thousand cuts.
Perceived ‘conspiracy’ in all walks of polity: The only thing that helps the army/govt to stay in power is by vilifying India (/ US/ Semitism) and delineating India as the biggest threat to their survival.
Lack of credible civilian leadership: Pakistan’s founders expected the idea of Pakistan to shape the state of Pakistan; instead, a military bureaucracy governs the state and imposes its own vision of a Pakistani nation.
Army is the Deep-State: This shortcoming gave the army a chance to intervene and take over the functioning of the civilian government. Ever since its inception, the army has played a decisive role in the internal governance and foreign policy.
Demographic bottlenecks: At the time of partition, Pakistan received a large share of military personnel as compared to the share of civilian migrants from India.
De-indigenization of own history: Pakistan has always tried to de-indigenise its history, culture. It has always tried to attach its cultural habits with the Arabs and the invader Turks.
Crusade for Islam: Pakistan often stunts to be the khalifa of the Islamic world. It has propagated the rhetoric of Islamophobia despite being a Islamic republic.
Terrorism as a diplomatic tool: Pakistan is idiosyncratic to the common notion of diplomacy. Pakistan is the only state in the world which sponsors terrorism as a state policy be it in India or Afghanistan
Dilemma for India
Leadership vacuum in Pakistan: Indian policymakers have not been able to engage in a formal diplomatic talk due to the leadership vacuum and deep distrust.
No talks amid Terrorism: India has tried both the diplomatic and the military ways to find a solution to the problem. But nothing has worked out so far that could deter Pakistan from sponsoring terrorism.
Offensive defence: Even after 26/11, India’s responses were mostly limited to diplomatic and covert operations. Indian responses pre-surgical-strike were mostly dictated by the nuclear hangover.
Short-lived military deterrence: Surgical strike and Balakot strike manifested change in India’s attitude to take punitive and decisive action. But the deterrence which was expected to have been created have been short-lived.
Atomic hangover of Pakistan: It often reiterates the stance of being a potential atomic superpower, whenever reference to the ties with India are invoked.
Imperatives for India
From India’s point of view, two positive developments have taken place in the course of this turmoil:
Praise for India: First, Imran Khan, the outgoing prime minister who has alleged a US-led foreign conspiracy to oust his government, has heaped fulsome praise on India for its independent foreign policy.
Army wants ties with India: Pakistan’s powerful army chief, General Qamar Javed Bajwa, has yet again reached out to India with a message of peace, which the Modi government must not reject. He regards religious extremism, not India, to be a greater threat to Pakistan’s national security.
What could be the reasons compelling Pakistan’s military to seek peace with India?
Ans.
(1) Looming Economic Crisis
Pakistan is going through an acute economic crisis, which has made its military leaders to do some introspection.
Today, Pakistan stands at the crossroads of its economic and strategic goals. It has north-south connectivity (Pakistan to Afghanistan to Central Asia and Russia).
It now wants to capitalize the build connectivity from east to west (India to Iran) that will increase trade and benefit Pakistan and the region.
(2) Own jihadists hitting back
Tehrik-e-Taliban Pakistan (TTP) is the largest militant organization fighting against the state in Pakistan.
It was once bred by Pak Army and ISI to wage Jihad against India in Kashmir Valley.
According to the UN, the TTP also boasts several thousand fighters in Afghanistan, with strongholds on both sides of the Afghanistan-Pakistan border.
(3) Crisis in Balochistan
(4) Stalled progress of China Pakistan Economic Corridor
Way forward
Capitalizing on-going conundrum: India cannot let these tactical advantages go in vain. It will have to capitalise on them.
Resumption of dialogue: The visionary Pak army chief will retire this year. Hence, there is a small window of opportunity in which India and Pakistan can resume dialogue and achieve a meaningful breakthrough.
Alert policy imperatives: India should respond careful to the peace message from our western neighbour — coming from none other than its army chief.
All-factor considerations: India needs to prepare a grand strategy to decipher this Pakistan conundrum which should take into consideration all the facets of the problem.
Balancing China: Another important aspect of this grand strategy, which would need greater accentuation, is the bonhomie between China and Pakistan.
Cryptocurrency will be discouraged via taxation and capital gains provisions. This was the message from the Finance Minister during the Budget discussion in Parliament.
Growing worry about the cryptocurrencies
The Governor of the Reserve Bank of India, in February, highlighted two things.
First, “private cryptocurrencies are a big threat to our financial and macroeconomic stability”.
Second, “these cryptocurrencies have no underlying (asset).
Clearly, statements from the RBI indicate a growing worry since the proliferation of cryptos threatens the RBI’s place in the economy’s financial system.
This threat emerges from the decentralised character of cryptos based on blockchain technology which central banks cannot regulate and which enables enterprising private entities to float cryptos which can function as assets and money.
The total valuation of cryptos recently was upward of $2 trillion — more than the value of gold held globally.
Challenges in banning it: Cryptos which operate via the net can be banned only if all nations come together.
Even then, tax havens may allow cryptos to function, defying the global agreement.
Crypto as currency
A currency is a token used in market transactions.
Historically, commodities (such as copper coins) have been used as tokens since they themselves are valuable.
But paper currency is useless till the government declares it to be a fiat currency.
Paper currency derives its value from state backing.
Cryptos are a string of numbers in a computer programme. And, there is no state backing.
Their acceptability to the well-off enables them to act as money.
So, cryptos acquire value and can be transacted via the net.
This enables them to function as money.
Solving the problem of double spending: Fiat currency has the property that once spent, it cannot be spent again except through forgery, because it is no more with the spender.
But, software on a computer can be used repeatedly.
Blockchain and encryption have solved the problem by devising protocols such as ‘proof of work’ and ‘proof of stake’.
Why CBDC is not a solution
A Central Bank Digital Currency (CBDC) will not solve the RBI’s problem since it can only be a fiat currency and not a crypto.
Blockchain enables decentralisation.But, central banks would not want that.
Further, central bank would want a fiat currency to be exclusively issued and controlled by them.
But, theoretically everyone can ‘mine’ and create crypto.
So, for the CBDC to be in central control, solving the ‘double spending’ problem and being a crypto (not just a digital version of currency) seems impossible.
Validating transaction: A centralised CBDC will require the RBI to validate each transaction — something it does not do presently.
Once a currency note is issued, the RBI does not keep track of its use in transactions.
Keeping track will be horrendously complex which could make a crypto such as the CBDC unusable unless new secure protocols are designed.
Conclusion
CBDCs at present cannot be a substitute for cryptos that will soon begin to be used as money. This will impact the functioning of central banks and commercial banks.
Western nations want to throw Russia out of the G-20. China has opposed them. India will be chair of the G-20 from December 1, 2022. The world is greatly disordered. What should India stand for?
Challenges to the global order
The war in Ukraine in February 2022 has put the final nail in the coffin of the boundary-less global economy that seemed to be emerging with the fall of the Berlin Wall and the collapse of the Soviet Union in 1991.
Vaccines were hoarded by rich countries in the COVID-19 pandemic: poor countries starved.
The World Trade Organization (WTO) was already in a bad state before the novel coronavirus pandemic, with rich and poor countries unable to agree on equitable rules, when COVID-19 froze global supply chains.
Institutions of global governance have failed to unite the world.
Global order and governance challenge
In the aftermath of the Second World war, new institutions for global governance were established — the United Nations and the General Agreement on Tariffs and Trade (GATT), and the World Bank and the International Monetary Fund (IMF) to provide finance to build the economies of all countries to eliminate poverty.
However, the victors retained their veto power within the United Nations Security Council to determine when force can be used to keep the world in order, and to prevent the proliferation of nuclear power.
The UN General Assembly meets every year — now 193 nations strong.
It passes many resolutions to address global problems — hunger, poverty, women’s rights, terrorism, climate change, etc.
However, “might is right”: members of the Security Council retain their right to deny the democratic will of the Assembly when it does not suit them.
Global governance is not democratic.
G-7 and G-20
The United States, the United Kingdom, France, Italy, Japan, West Germany and Canada formed the G7 in 1976. ‘so that the noncommunist powers could come together to discuss economic concerns, which at the time included inflation and recession following the Organization of the Petroleum Exporting Countries (OPEC) oil embargo’.
The European Union was invited to attend in 1977.
Russia joined in 1998 — and ‘its inclusion was meant as a signal of cooperation between East and West after the collapse of the Soviet Union in 1991’.
However, Russia was removed from G-8 in 2014 when it invaded the Crimea. China was never a member.
After the Asian financial crisis, the G20 was formed in 1999 with the aim of discussing policies in order to achieve international financial stability.
Russia and China are members.
Now western nations want to throw Russia out of the G-20. China has opposed them.
India will be chair of the G-20 from December 2022.
Meanwhile, India is being hectored by officials from the U.S. and the U.K. to support their sanctions on Russia.
India has so far refused to be cowed down.
Backlash against globalisation
The belief that unfettered flows of finance and trade across national borders will lift people in all poor countries out of poverty and make the world flatter in terms of inequality has failed.
Strong leaders who put the interests of their own countries first are gaining power through elections — in Turkey, Hungary, Poland, Russia, and even India.
Free market capitalism is not ideologically compatible with a genuine democracy.
Capitalist institutions are governed by the fundamental principle of ‘property rights’.
Whereas, genuine democracies are founded on the principle of equal human rights.
The rules of governance of capitalist and democratic institutions have always been in tension within societies.
Capitalist institutions want to be unfettered by democratic regulations to make it easier to do business.
Democratic institutions want to rein in the competitive animal spirits of capitalism to create a more compassionate capitalism.
Conclusion
To prevent violence, it is essential that global governance becomes genuinely democratic. Countries must not attack each other. But they must be given the freedom to evolve their own democracies and economies and not be dictated to by others.
Apple recently announced that consumers will have the right to purchase spare components of their products, following an order of the Federal Trade Commission of the United States, which directs manufacturers to remedy unfair anti-competitive practice and asks them to make sure that consumers can make repairs, either themselves or by a third-party agency. The momentum is, however, not so strong in India.
Challenges in repairing of electronic goods
Repairing is becoming unreasonably expensive or pretty much impossible because of technology becoming obsolete.
Incompatibility: Companies avoid the publication of manuals that can help users make repairs easily.
No repair manual: The absence of repair manuals means that manufacturers hold near-monopoly over repair workshops that charge consumers exorbitant prices.
Incompatibility: Manufacturers have proprietary control over spare parts and most firms refuse to make their products compatible with those of other firms.
Planned obsolescence results in products breaking down too soon and buying a replacement is often cheaper and easier than repairing them.
Big companies often deploy mechanisms that practically forbid other enterprises to repair their products.
Digital warranty cards, for instance, ensure that by getting a product from a “non-recognised” outfit, a customer loses the right to claim a warranty.
Right to repair
The rationale behind the “right to repair” is that the individual who purchases a product must own it completely.
This implies that apart from being able to use the product, consumers must be able to repair and modify the product the way they want to.
Monopoly on repair processes infringes the customer’s’ “right to choose” recognised by the Consumer Protection Act, 2019.
In Shamsher Kataria v Honda Siel Cars India Ltd (2017), for instance, the Competition Commission of India ruled that restricting the access of independent automobile repair units to spare parts by way of an end-user license agreement was anti-competitive.
International practices
Many countries have taken initiatives, adopted policies and even tried to enact legislation that recognise the “right to repair” to reduce electronic waste.
Some jurisdictions offer limited scope for exercising the right to repair.
For instance, under the Australian Consumer Law consumers have a right to request that certain goods be repaired if they break too easily or do not work properly.
The Massachusetts Motor Vehicle Owners’ Right to Repair Act, 2012 requires automobile manufacturers to provide spare parts and diagnostics to buyers and even independent third-party mechanics.
The UK also introduced the path-breaking “right to repair” in 2021 that makes it legally binding on manufacturers to provide spare parts.
Way forward
Well-drafted legislation will not only uphold the right to repair but may aid in striking a much-needed balance between intellectual property and competitive laws in the country.
Conclusion
If people want to fix things in a timely, safe and cost-effective way, whether by doing it themselves or taking it
to a service centre of their choice, providing access to spare parts and information is imperative.
There isn’t a more opportune time to invest your rapt attention in UPSC preparation if you have a couple of years in hand. Preparing for the UPSC exam is not awhimsical fancy. Many toppers even started their UPSC preparation in their penultimate year in school. Because winners start early.
It will be a game changer if any undergraduate, with only 2 to 3 years in hand, inculcates the brainchild formulas of toppers’ mentors to crack UPSC.
When time is short and way is long, every step must be more on-target.
So, why tax your brain! Let’s know those formulas right away.
When the destination is IAS or IPS, UPSC syllabus and previous year question papers go hand in hand. So, don’t wander off, you may lose the track.
Bring the syllabus on your finger tip. Because you have to complete the syllabus and not books.
Hook at least 5 years previous years MCQs (Prelims + Mains + Optional)
According to mentor heads, there are 2 types of syllabus pattern
Raw static syllabus
Dynamic syllabus
In the incipient stage, finish static syllabus at least once. Because static parts boost aspirants’ confidence, besides, it’s the very foundation of grip on current affairs. To finish the static parts, an aspirant may need around 6 months and not more than that.
Now, start investing time in the dynamic syllabus.
Take PYQs, revise chapters accordingly
Learn Current affairs and tangle with static questions.
It’s worth remembering that balancing study is the key to excellence for either the MCQs or writing for mains.
Another key point to be noted here is ‘Evaluation of preparation’. It’s also an indirect and inseparable part of your UPSC syllabus.
Civilsdaily’s centralized mentorship is recommended here.
https://youtu.be/DSwO38weHAA
Time Management
Minimum 2 years and maximum 3 years will run short unless and until you become sincere about time management.
Have you heard the traditional proverb “An apple a day keeps the doctor away”?
Similarly, keep in mind ‘A chapter a day unblocks UPSC doorway’.
Learn from mentors and act on how to divide time for newspaper reading, answer writing, practicing MCQs, etc. each and everyday.
Running free webinars, mentorship programs in community managed platforms of Civilsdaily, will help you immensely to learn how to utilize maximum time.
If there is a guide on the unknown path, even the crooked path becomes simpler. When you have 2-3 years in your hand, and want to make a gigantic syllabus familiar at firsthand, taking a risk may be proven as a fool’s errand. Let’s understand the difference.
SELF STUDY
MENTOR’S GUIDE
Self-study, though isn’t an empty vessel always, is very time and energy consuming. Following self-study, almost 75% of aspirants look for a needle in a haystack.
Mentors’ guide means saving time and energy not to get baffled.
Most of the time, the daily target dies.
Daily target lives because of guidance.
Self study lacks self assessment.
Assessment of leaders
So, how would you like to react to mentors’ guidance now? Let’s know.
Nothing is more important than the limit of time. From circling OMR sheet to answer writing and optional to interview, all these won’t be tediously threatening if done under proper guidance especially when there is a bound on time.
It’s the aspirants’ choice whether they embrace the very 1st attempt or love to get into a labyrinth of futile attempts.
As Prime Minister Narendra Modi hosts British premier Boris Johnson this week in India, the moment is ripe to turn the expansive new possibilities — in trade, investment, high technology, defence, and regional cooperation— into concrete outcomes.
Background of the India-UK ties and paradoxes
Legacies of colonialism: The bitter legacies of colonialism had made it impossible for the two sides to pursue a sensible relationship in the past.
India’s post-colonial engagement with Britain has been riddled with multiple paradoxes.
1] India’s post-post colonial resentment and UK’s claim for special role: Delhi’s lingering post-colonial resentments and London’s unacceptable claim for a special role in the Subcontinent generated unending friction.
The consequences of Partition and the Cold War made it harder for Delhi and London to construct a sustainable partnership.
The important role played by the US: It was the US that first recognised India’s rapidly-growing relative weight in the international system.
At the turn of the millennium, Washington unveiled a policy of assisting India’s rise.
This was based on a bipartisan American consensus that a stronger India will serve US interests in Asia and the world.
Over the last two decades, it has led to a quick transformation of US relations with India.
2] Washington is setting the pace for Delhi’s relationship with London: At the dawn of Independence, India saw London as the natural interlocutor with an unfamiliar Washington.
Today it is Washington that is setting the pace for Delhi’s relationship with London.
3] China’s role in shaping India’s relations with the West: For Washington, the strategic commitment to assist India’s rise was rooted in the recognition of the dangers of a China-dominated Asia.
London in the last two decades was moving in the other direction — a full embrace of Beijing.
Once the American deep state decided to confront Chinese power in the late 2010s, London had to extricate itself from the Chinese Communist Party’s powerful spell.
As the US unveiled a new Asian strategy, Britain followed with its own “Indo-Pacific tilt” that helped secure the region against China’s muscular policies.
4] Historic tilt towards Pakistan: Unlike the US and France, which are committed to an “India first” strategy in South Asia, Britain remains torn between its new enthusiasm for India and the inertia of its historic tilt towards Pakistan.
But India is confident that Pakistan’s relative decline in the region is bound to make it a less weighty factor in India’s bilateral relations with Britain.
The question of Pakistan brings us to the fourth paradox—the domestic dynamics of Britain that have tended to sour ties with India.
Delhi has figured out that the interconnected politics of India and Britain — shaped by the large South Asian diaspora of nearly four million — can be cut both ways.
5] Making best of historic ties: If the Tories are romantic about the Raj, nationalists in India bristle at the British imperial connection.
Yet, together they are constructing a new relationship between India and Britain.
Better outlook for bilateral ties
As the two sides make a determined effort to transcend the paradoxes, the regional and international circumstances provide a new basis for mutually beneficial engagement.
Over the last couple of years, Delhi and London have begun a promising and pragmatic engagement devoid of sentiment and resentment.
Having walked out of Europe, Britain needs all the partners it can find and a rising India is naturally among the top political and economic priorities.
Delhi meanwhile has become supremely self-assured in dealing with London.
With the Indian economy set to become larger than Britain’s in the next couple of years, Delhi is no longer defensive about engaging Britain.
Even more important, Delhi recognises the value of a deep strategic partnership with London.
Conclusion
The UK has a significant international military presence and wide-ranging political influence. Realists in Delhi are trying to leverage these British strengths for India’s strategic benefit.
The Supreme Court has asked the Chief Secretaries of the States to respond to queries raised by the Centre on the implementation of rules framed under the Real Estate (Regulation and Development) (RERA) Act, 2016 in their respective jurisdictions.
What is RERA, 2016?
The Real Estate (Regulation and Development) Act, 2016 seeks to protect home-buyers as well as help boost investments in the real estate industry.
It establishes a Real Estate Regulatory Authority- RERA in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute resolution.
It was enacted under Entry 6 and 7 (dealing with contracts and the transfer of property) of the Concurrent List.
It is followed by the principle “buyer is the king and builders will have to ensure compliances to avoid punishment”.
Its main objective is to reduce delay in the work or timely delivery of the project without compromising the quality.
Objectives of this Act
It has the following objectives:
To protect the interest of the allottees and ensure their responsibility
To maintain transparency and reduce the chances of fraud
To implement Pan-India standardization and bring about professionalism
To enhance the flow of correct information between the home buyers and the sellers
To impose greater responsibilities on both the builders and the investors
To enhance the reliability of the sector and thereby increase confidence amongst the investors
Key Provisions of RERA Act
Compulsory registration: According to the central act, every real estate project (where the total area to be developed exceeds 500 sq mtrs or more than 8 apartments is proposed to be developed in any phase), must be registered with its respective state’s RERA.
Establishment of state level regulatory authorities: It provides for State governments to establish more than one regulatory authority such as RERA to:
Register and maintain a database of real estate projects; publish it on its website for public viewing
Protection of interest of promoters, buyers and real estate agents
Development of sustainable and affordable housing
Render advice to the government and ensuring compliance with its Regulations and the Act
Establishment of Real Estate Appellate Tribunal: Decisions of RERAs can be appealed in these tribunals.
Mandatory Registration: All projects with plot size of a minimum 500 sq.mt or eight apartments need to be registered with Regulatory Authorities.
Deposits: Developers needs to keep 70% of the money collected from a buyer in a temporary pass through account held by a third party (escrow account) to meet the construction cost of the project.
Liability of the developer: A developer’s liability to repair structural defects would be for 5 years.
Cap on Advance Payments: A promoter cannot accept more than 10% of the cost of the plot, apartment or building as an advance payment or an application fee from a person without first entering into an agreement for sale
Carpet Area over super built-up: Clearly defines Carpet Area as net usable floor area of flat. Buyers will be charged for the carpet area and not super built-up area.
Punishment for non-compliance: Imprisonment of up to three years for developers and up to one year in case of agents and buyers for violation of orders of Appellate Tribunals and Regulatory Authorities.
Which projects can get RERA approval?
Commercial and residential projects including plotted development.
Projects measuring more than 500 sq mts or 8 units.
Projects without Completion Certificate, before the commencement of the Act.
The project is only for the purpose of renovation/repair / re-development which does not involve re-allotment and marketing, advertising, selling or new allotment of any apartments, plot or building in the real estate project, will not come under RERA.
Each phase is to be treated as standalone real estate project requiring fresh registration.
Benefits offered by the RERA Act
Industry
Developer
Buyer
Agents
Governance and transparency
Project efficiency and robust project delivery
Standardization and quality
Enhance the confidence of investors
Attract higher investments and PE funding
Regulated Environment
Common and best practices
Increase efficiency
Consolidation of sector
Corporate branding
Higher investment
Increase in organized funding
Significant buyers protection
Quality products and timely delivery
Balanced agreements and treatment
Transparency – sale based on carpet area
Safety of money and transparency on utilization
Consolidation of the sector (due to mandatory state registration)
This newscard is an excerpt from the original article published in TH.
What is a Cartel?
According to CCI, a “Cartel includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services”.
The three common components of a cartel are:
an agreement
between competitors
to restrict competition
What is Cartelization?
Cartelization is when enterprises collude to fix prices, indulge in bid-rigging, or share customers, etc. But when prices are controlled by the government under law, that is not cartelization.
The Competition Act contains strong provisions against cartels.
It also has the leniency provision to incentivize a party to a cartel to break away and report to the Commission, and thereby expect total or partial leniency.
This has proved a highly effective tool against cartels worldwide.
Philosophy behind
Cartels, which involve a group of businesses colluding to keep prices high, have been viewed by economists as a significant threat to the market economy.
When businesses cooperate with each other rather than compete against each other, there could be many adverse consequences to consumers.
For one, consumers will have to pay higher prices for goods and services.
It should be noted that the way cartels keep prices high is by limiting the supply of their output. Further, in the absence of any threat from competition, cartels also have very little reason to innovate or cater to consumers in better ways.
In other words, they essentially act like a monopoly.
The Organization of the Petroleum Exporting Countries (OPEC) is the most well-known international cartel that influences the price of oil globally through coordinated efforts to limit supply.
How do they work?
Four categories of conduct are commonly identified across jurisdictions (countries). These are: price-fixing, output restrictions, market allocation and, bid-rigging
In sum, participants in hard-core cartels agree to insulate themselves from the rigors of a competitive marketplace, substituting cooperation for competition.
How do cartels hurt?
They not only directly hurt the consumers but also, indirectly, undermine overall economic efficiency and innovations.
A successful cartel raises the price above the competitive level and reduces output.
Consumers choose either not to pay the higher price for some or all of the cartelized product that they desire, thus forgoing the product, or they pay the cartel price and thereby unknowingly transfer wealth to the cartel operators.
Are there provisions in the Competition Act against monopolistic prices?
There are provisions in the Competition Act against abuse of dominance.
One of the abuses is when a dominant enterprise “directly or indirectly imposes unfair or discriminatory prices” in the purchase or sale of goods or services.
Thus, excessive pricing by a dominant enterprise could, in certain conditions, be regarded as abuse and, therefore, subject to investigation by the Competition Commission if it were fully functional.
However, where pricing is a result of normal supply and demand, the Competition Commission may have no role.
What is the penalty for cartelization?
The Competition Act calls for a penalty on each member of the cartel, which is up to three times its profit for each year of anti-competitive behavior, or 10% of turnover for each year of its continuance, whichever is higher.
However, in case of a leniency petition, CCI can waive the penalty depending on the timing and usefulness of the disclosure and full cooperation in the probe.
How might cartels be worse than monopolies?
Monopolies are bad for both individual consumer interests as well as society at large.
Monopolist completely dominates the concerned market and, more often than not, abuse this dominance either in the form of charging higher than warranted prices or by providing lower than the warranted quality of the good or service in question.
How to stop the spread of cartelization?
Strong deterrence to those cartels that are found guilty of being one.
Typically this takes the form of a monetary penalty that exceeds the gains amassed by the cartel and it is not always easy to ascertain the exact gains from cartelization.
The threat of stringent penalties can be used in conjunction with providing leniency — as was done in the beer case.
Back2Basics: Competition Commission of India (CCI)
The CCI is the chief national competition regulator in India.
It is a statutory body within the Ministry of Corporate Affairs.
It is responsible for enforcing The Competition Act, 2002 in order to promote competition and prevent activities that have an appreciable adverse effect on competition in India.
