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  • [Yojana Archive] IFS: The Continuing Salience

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    Recently, a diplomat of ours gave a fiery speech at the UNGA bashing Pakistan as being indoctrinated as an official spokesperson for the Taliban and not his own country. This has earned the diplomat heaps of praises all across the country.

    This article will let you know the evolution, restructure, and successes of the mighty Indian Foreign Services.

    Tracing the origin of Indian Foreign Services

    • On 13 September 1783, the Board of Directors of the East India Company passed a resolution at Fort William.
    • It aimed to create a department that would help relieve the pressure on the Warren Hastings administration in conducting its secret and political business.
    • Those were difficult times for the East India Company, having just barely saved face against the Maratha Empire in the First Anglo-Maratha War, and losing to Hyder Ali in the South.
    • The British Parliament was about to pass the Pitts India Act, 1784, which would further limit the independent powers of the East India Company.
    • This department expanded its outreach to diplomacy, to finally become the IFS.

    Initial restructuring

    • By 1843, the British were powerful. Only Punjab was left to be conquered. By then, however, the East India Company, through a series of Charter Acts, had become a shadow of its past self.
    • The British found it necessary to restructure the foreign department for better management, and Governor-General Ellenborough, therefore, carried out administrative reforms and created four departments: Foreign, Home, Finance, and Military.

    Establishment since Independence

    • By September 1946, India had come close to independence.
    • There was a need for a different name and a different structure for a newly formed country.
    • The Indian Foreign Service was created for India’s diplomatic, consular and commercial representation overseas.

    Need for IFS

    • The IFS, being one of the most competitive civil services in the world, and also one of the most exclusive, has carved a niche for itself in diplomatic spheres globally.
    • It has managed India’s external relations with other nations through a host of methods:
    • the service is responsible for representing India in international platforms and negotiating on its behalf,
    • maintaining friendly relations and protecting India’s national interests, and
    • gathering important information abroad and reporting back to the nation on the same.

    Functions of IFS

    • IFS is responsible for representing a country’s interests abroad and also garnering and disseminating pertinent information that forms the core of foreign policy decisions.
    • Foreign Service officers constitute the backbone of this wing and aim to promote peace and prosperity while advancing their nation’s interests in other countries.
    • They perform a vast array of duties ranging from defending their home nation’s foreign policy in high-stakes political conversations to helping their citizens travelling overseas or vice-versa.
    • In an increasingly globalized world, the importance of an effective foreign service cannot be underestimated.
    • This is especially relevant, for an emerging power like India, which has harboured intentions of becoming a leading power in global politics and has been actively pursuing this goal.

    Representing India

    In essence, an Indian Foreign Service Officer represents India in

    • Embassies, High Commissions, Consulates
    • Permanent missions to multilateral organizations like the UN
    • It protects India’s national interests in the country of their posting, promotes friendly relations with the receiving states as well as their people that include NRIs/PIOs
    • It reports accurately on the developments in the country of posting which influences the drafting of India’s policies, negotiates various agreements on various issues

    Concerns of evolution

    • In this emerging new world, the Ministry of External Affairs (MEA) must no longer maintain its Cold War-era institutional architecture and several changes have indeed been ushered in recent times.
    • However, the IFS is greatly limited by its disproportionately small cadre, its inability to shift to a more holistic recruitment process, and its unwillingness to allow experts from other public and private organizations, laterally or otherwise.
    • One of the biggest impediments to the growth of the IFS since its conception has been the narrow and limited application criteria, that do not match up to the needs of the service.

    Recent Achievements of the IFS

    • Irrespective of the criticisms, India has been boxing above its weight in the international arena for decades now. To note some recent achievements of the IFS,
    • India managed to get elected to the United Nations Security Council for 2021-2022 with one of the largest positive vote counts ever.
    • The foreign service was at the frontline of the Vande Bharat Mission that helped stranded Indians abroad and carried out an enormous evacuation operation.
    • The IFS officers and their teams have been working relentlessly with other government agencies and the private sector to provide medicines and Covid-19 protective equipment to more than 150 countries by overcoming daunting logistical challenges, etc.

    Way forward

    If the IFS is to excel as an institution on its own, it must have a different application process only for those interested in joining the service, rather than being grouped with other civil services.

    • Additionally, since the skill-set required to conduct matters of foreign policy is different from those required to manage issues of internal significance, the IFS needs to broaden the criteria on which its recruitment process is based.
    • Attempts to reform the IFS must focus on streamlining the recruitment process in a manner that can effectively handle the large number of applicants that apply each year without compromising on the quality of the application process.
    • Opening up the IFS to allow entry of outside actors must be done in a phased and structured manner to ensure an adequate balance between different levels/ranks of officials.
    • The IFS must also keep up with the changes in the diplomatic world, as different forms of diplomacy, like public and digital diplomacy, gain more relevance.
    • And lastly, reforming the IFS would require starting at the very grassroots level to reform the institutions that produce applicants for this service.
    • Indian schools and universities need to be better equipped to produce a more capable generation of students in the fields required to be successful in the IFS.

    Conclusion

    • An effective foreign service is of utmost importance to India’s interests because even the most developed nations have interdependencies on other nations to fulfil their interests and so does India.
    • Since no nation can remain isolated, formulation of foreign policy is an indispensable feature of the modern state, so that the states sustain in the international sphere.
    • Therefore, the Indian Foreign Service will continue to play a critical role in ensuring a secure and prosperous existence for India within the international sphere.
  • Streak Daily Compilation of Questions & Videos – Sep 29, 2021

    Maintaining consistency is one of the biggest issues faced by IAS Aspirants. Streak’s initiative is to help Aspirants in their day-to-day preparation. You can follow the monthly, weekly, and daily timetables and continue this streak until you find yourself on the final list.

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    UPSC PRELIMS-2021 || Current Affairs Based Most Probable Questions on History – by Sukanya Rana

    Q1) With respect to Khajuraho Temples, consider the following statements:

    1. It is located in the state of Madhya Pradesh and managed by the Archaeological Survey of India (ASI).

    2. It was built between 950-1050 AD by the Chandela Dynasty.

    3. The Khajuraho group of monuments have been recognised by UNESCO as a World Heritage Site in 1986.

    Which of the statements given above are correct?

    a. 1 and 2 only

    b. 1 and 3 only

    c. 2 and 3 only

    d. 1, 2 and 3

    Q2) Identify the correct statement/s with respect to the Morley-Minto reforms.

    1. In the provincial councils, official members were in the majority.

    2. Indians were given membership to the Imperial Legislative Council for the first time.

    3. Sachidanand Sinha was appointed as the first Indian member of the Viceroy’s Executive Council.

    a. 2 only

    b. 1 and 2 only

    c. 2 and 3 only

    d. All the above

    Q3) Consider the following statements with respect to Gangaikondacholapuram

    1. It was established by King Raja Raja Chola II after his victorious expedition up to the Gangetic plains.

    2. The temple located in Tamil Nadu is dedicated to Lord Vishnu.

    Which of the statement(s) given above is/are correct?

    a. 1 only

    b. 2 only

    c. Both 1 and 2

    d. Neither 1 nor 2

    Q4) With respect to Thotlakonda, consider the following statements:

    1. It is an ancient Buddhist site found in Andhra Pradesh.

    2. The site housed remnants of a flourishing monastery, practising Hinayana Buddhism.

    Which of the statement(s) given above is/are correct?

    a. 1 only

    b. 2 only

    c. Both 1 and 2

    d. Neither 1 nor 2

  • The Atlantic Niño’s role in India’s erratic monsoon

    Context

    Last month, farmers from Madhya Pradesh threatened to take IMD to court for the inaccurate monsoon forecast this year. A question was also raised in Parliament about whether the Arctic warming had led to an erratic monsoon this year.

    Understanding the role of Atlantic Niño in monsoon prediction

    • Monsoon predictions are a monumental challenge, especially when it comes to the spatial distribution and the northward migration of the monsoon trough.
    • Forecast models tend to rely heavily on El Niño for monsoon predictions.
    • But only about 50 per cent of the dry years are explained by El Niño.
    • Clearly, Atlantic Niño is a significant player in monsoon evolution and models and forecasters must pay attention to this Atlantic teleconnection.
    • Atlantic Niño is El Niño’s little cousin in the Atlantic, also known as the Atlantic Zonal Mode.
    • Indian scientists from INCOIS have argued that the Atlantic Niño is in fact predictable up to three months in advance.
    • Every few years, from June to August, there is a warming in the eastern equatorial Atlantic, which does not get as much attention as its big brother El Niño.
    • The biggest rainfall deficits from the Atlantic Niño tend to occur over the Western Ghats and the core monsoon zone.

    How Atlantic Niño plays a role if Indian and Atlantic Oceans are not connected?

    • The Atlantic and Indian Oceans are not directly connected in the tropics via the ocean.
    • The Atlantic Niño affects the monsoon by producing atmospheric waves, which propagate into the Indian Ocean.
    • These waves affect air temperatures over the Indian Ocean and influence the land-ocean thermal contrast as well as Low Pressure Systems (LPS).

    Way forward

    • Overall, monsoon prediction skill has gone up in the IMD but even a 70 per cent accuracy means the forecasts will be wrong 30 per cent of the time.
    • Many of the Atlantic Niños occur during non-El Niño years and this offers a window of opportunity to increase forecast skills based on the accurate prediction of the Atlantic Niño.

    Conclusion

    No forecasts will ever be 100 per cent accurate. Climate scientists are also aware of the monsoon prediction challenge and they will continue to try to improve monsoon forecasts.

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    Back2Basics:  El Niño and La Niña

    • These periodic weather patterns occur as a result of fluctuating ocean temperatures in one part of the world, namely the east-central equatorial Pacific Ocean.
    • This can lead to extreme weather.
    • When warm water builds up along the central and eastern tropical Pacific Ocean, an El Niño occurs.
    • Conversely, when cool water builds up along the same region, a La Niña occurs with the opposite impact.
  • Various Defence Exercises in News

    29th Sept 2021

     

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    Various Defence Exercises in News

    The defence is a major part of any country. Thus, every country tries and devotes half of its budget to defence. So, there are joint military exercises happening which benefits both the participating nations. Thus, in this article, we will discuss some of the important joint exercises in India like Indra and Maitree. Also, these exercises are important from learning as well as the strategic point of view for both the nations.

    India + XYZArmyNavyAir Force
    ASEAN +Force 18  
    AustraliaAUSTRA HINDAUSINDEX / KAKADU 
    BangladeshSampritiCORPAT 
    ChinaHand in hand Chang Thang
    FranceShaktiVarunaGARUDA
    IndonesiaGARUDA SHAKTIIND-INDO CORPAT   And Samudra Shakti 
    JapanDharma GuardianMalabar (India, Japan, and the USA), Sahyog-KaijinSHINYUU MAITRI
    KazakhstanPrabal Dostyk and KAZIND  
    KyrgyzstanKhanjar  
    MaldivesEkuverin  
    MongoliaNomadic Elephant / KHAN QUEST  
    NepalSurya Kiran (BIANNUAL)  
    OmanAL NAGAH (SUCCESS)Naseem Al BahrEastern Bridge-IV
    RussiaIndraINDRA NAVYAVIAINDRA-14
    SeychellesLAMITYE  
    SingaporeEx AGNI WARRIOR and Ex BOLD KURUKSHETRASIMBEXJOINT MILITARY TRAINING
    South Africa, Brazil IBSAMAR 
    Sri LankaMitra ShaktiSLINEX 
    ThailandMaitree /  COBRA GOLD (Observer Plus)INDO-THAI CORPAT (Bi-annual)SIAM BHARAT
    UAE  Desert Eagle-II
    UKAjeya WarriorKonkanIndraDhanush -IV
    or “Rainbow”.
    USAYudhAbhyas/ Cope/   Tiger Triumph VAJRA PRAHARMalabar RIMPAC (Multilateral)Red Flag
    Brunei ADMM+ Exercise (Multilateral) 
    MalaysiaMAITREEARF DIREx 
    MyanmarIMBEXIMCOR 
    QatarZa’ir-Al-Bahr (Roar of the Sea)
    UzbekistanDustlik

    Other Important Exercise

    Exercise TSENTR 2019China, Tajikistan, India, Kyrgyzstan, Kazakhstan, Pakistan and UzbekistanRussia(Host)

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  • Four geopolitical developments and a window of opportunity for India

    A number of important developments has taken place over the past several weeks. They may appear disconnected but in fact add up to a significant shift in regional and global geopolitics.

    Four major recent developments

    1. Withdrawal of US and NATO forces from Afghanistan: The complete takeover of the country by the Taliban
    2. Significant domestic political changes in China: The ideological and regulatory assault against its dynamic private high-tech companies and now its real estate companies
    3. Announcement of the Australia-UK and US (AUKUS): It represents a major departure in US strategy by its commitment to enable Australia to join a handful of countries with nuclear submarines
    4. Convening of the Quad physical summit in Washington: A major step towards its formalisation as an influential grouping in the Indo-Pacific going beyond security

    Risks and opportunity for India

    These four developments, taken together, present India with both risks but also with opportunities.  In affirmation, one can conclude that the opportunities outweigh the risks.

    [A] Risks in Afghanistan

    • The Afghan situation is a setback for India in the short run.
    • The political capital and economic presence it had built up in the country over the past two decades has been substantially eroded.
    • The Taliban government is dominated by more hard-line and pro-Pakistani elements.
    • They will help deliver on the Pakistani agenda of preventing a revival of Indian diplomatic presence and developmental activity in Afghanistan.

    Future of Taliban

    • In the longer run, it seems unlikely that the Taliban will give up its obscurantist and extremist agenda.
    • This may lead to domestic inter-ethnic and sectarian conflict.
    • The unwillingness of the Taliban to cut its links with various jihadi groups, including those targeting Afghanistan’s neighbours, may revive regional and international fears over cross-border terrorism.

    How should India defer the Taliban?

    • India’s response should be to bide its time, strengthen its defences against an uptick in cross-border terrorism.
    • India can keep its faith with the ordinary people of Afghanistan, provide shelter to those who have sought refuge.
    • It can join in any international effort to deliver humanitarian assistance to the people of Afghanistan.

    [B] Domestic political change in China

    • This is taking an ideological and populist direction.
    • The country’s vibrant private sector is being reined in while the State-Owned Enterprises (SOE) are back in a central role.
    • After the tech sector, it is the large real estate sector that is facing regulatory assault.

    Concerns for investors

    • This is leading to deepening concern among foreign investors, including those who have long been champions of long-term engagement with China.

    Opportunities for India

    • It is not coincidental that while in NYC, our PM had meetings with the CEOs of Blackstone and Qualcomm, both of which are heavily invested in China but are reconsidering their exposure there.
    • If India plays its cards well, this time round there could be significant capital and technology flows from the US, Japan and Europe diverted towards India because it offers scale comparable to China.
    • Since India has benign partnerships with the US, Japan and Europe, there are no political constraints on such flows.

    [C] AUKUS and QUAD

    • The AUKUS and progress made by the Quad serve to raise the level of deterrence against China.
    • It is useful since it has now become the core of the US’s Indo-Pacific strategy. China will be more focused on its activities.
    • The Quad now represents, from the Chinese perspective, a second order threat.

    Underlying opportunities

    • This offensive against China suits us since we are not ready to embrace a full-fledged military alliance which will constrain our room for manoeuvre.

    Why should India gauge these opportunities?

    • China has given up the expectation that it could unify Taiwan through peaceful and political means, including through closer economic integration.
    • It has lost its credibility after the recent crackdown on civil liberties in Hong Kong.
    • China may advance its forcible takeover of Taiwan before the AUKUS gets consolidated.
    • The nuclear submarines for Australia may not be built and deployed for several years.
    • We may, therefore, be entering a period of enhanced uncertainty and danger in the Indo-Pacific.

    India’s area for introspection

    • The constraints are policy unpredictability, regulatory rigidities and bureaucratic red tape in India.
    • Some of these issues are being addressed, such as dropping of retrospective taxation.
    • But there is still a long way to go.

    Way forward

    All these developments has heightened risk perception among international business and industry who have hitherto seen China as a huge commercial opportunity.

    • For India, some bold initiatives are required to take advantage of the window of opportunity that has opened.
    • It is a narrow window with a very short shelf life.
    • If grasped with both hands, then it could deliver double-digit growth for India for the next two or three decades.
    • This will shrink the asymmetry of power with China and expand India’s diplomatic options.

    Conclusion

    • India should not be caught off guard. Failure of deterrence in the Indo-Pacific will have consequences beyond the region and change the geopolitical context for India.
    • For now, let us focus on what we can do to advance India’s economic prospects, for which the times are unexpectedly more propitious.

     

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  • Explained: Digital Health ID

    The PM has recently launched the flagship Ayushman Bharat Digital Mission (ABDM) which involves the creation not just a unique digital health ID for every citizen.

    Ayushman Bharat Digital Mission

    What is the unique health ID?

    • If a person wants to be part of the ABDM, she must create a health ID, which is a randomly generated 14-digit number.
    • The ID will be broadly used for three purposes: unique identification, authentication, and threading of the beneficiary’s health records, only with their informed consent, across multiple systems and stakeholders.

    Why is this initiative significant?

    • The initiative has the potential to “increase the ease of living” along with “simplifying the procedures in hospitals”.
    • At present, the use of digital health ID in hospitals is currently limited to only one hospital or to a single group, and mostly concentrated in large private chains.
    • The new initiative will bring the entire ecosystem on a single platform.
    • The system also makes it easier to find doctors and specialists nearest to you.
    • Currently, many patients rely on recommendations from family and friends for medical consultation, but now the new platform will tell the patient who to reach out to, and who is the nearest.
    • Also, labs and drug stores will be easily identified for better tests using the new platform.

    How can one get it?

    • One can get a health ID by self-registration on the portal or by downloading the ABMD Health Records app on one’s mobile.
    • Additionally, one can also request the creation of a health ID at a participating health facility.
    • Health facilities may include government or private hospitals, community health centres, and wellness centres of the government across India.
    • The beneficiary will also have to set up a Personal Health Records (PHR) address for consent management, and for future sharing of health records.

    What is a PHR address?

    • It is a simple self-declared username, which the beneficiary is required to sign into a Health Information Exchange and Consent Manager (HIE-CM).
    • Each health ID will require linkage to a consent manager to enable sharing of health records data.
    • An HIE-CM is an application that enables sharing and linking of personal health records for a user.
    • At present, one can use the health ID to sign up on the HIE-CM; the National Health Authority (NHA), however, says multiple consent managers are likely to be available for patients to choose from in the near future.

    What does one need to register for a health ID?

    • Currently, ABDM supports health ID creation via mobile or Aadhaar.
    • The official website states that ABDM will soon roll out features that will support health ID creation with a PAN card or a driving licence.
    • For health ID creation through mobile or Aadhaar, the beneficiary will be asked to share details on name, year of birth, gender, address, mobile number/Aadhaar.

    Is Aadhaar mandatory?

    Ans. No, it is voluntary.

    • One can use one’s mobile number for registration, without Aadhaar.
    • If the beneficiary chooses the option of using her Aadhaar number, an OTP will be sent to the mobile number linked to the Aadhaar.
    • However, if she has not linked it to her mobile, the beneficiary has to visit the nearest facility and opt for biometric authentication using Aadhaar number.
    • After successful authentication, she will get her health ID at the participating facility.

    Are personal health records secure?

    • The NHA says ABDM does not store any of the beneficiary health records.
    • The records are stored with healthcare information providers as per their “retention policies”.
    • They are “shared” over the ABDM network “with encryption mechanisms” only after the beneficiary express consent.

    Can one delete my health ID and exit the platform?

    Ans. Yes, the NHA says ABDM, supports such a feature.  Two options are available: a user can permanently delete or temporarily deactivate her health ID.

    • On deletion, the unique health ID will be permanently deleted, along with all demographic details.
    • The beneficiary will not be able to retrieve any information tagged to that health ID in the future, and will never be able to access ABDM applications or any health records over the ABDM network with the deleted ID.
    • On deactivation, the beneficiary will lose access to all ABDM applications only for the period of deactivation.
    • Until she reactivates her health ID, she will not be able to share the ID at any health facility or share health records over the ABDM network.

    What facilities are available to beneficiaries?

    • Users can access personal digital health records right from admission through treatment and discharge.
    • One can access and link his/her personal health records with your health ID to create a longitudinal health history.

    What other features will be rolled out?

    • Upcoming new features will enable access to verified doctors across the country.
    • The beneficiary can create a health ID for her child, and digital health records right from birth.
    • Third, she can add a nominee to access her health ID and view or help manage the personal health records.
    • Also, there will be much inclusive access, with the health ID available to people who don’t have phones, using assisted methods.

    How do private players get associated with a government digital ID?

    • The NHA has launched the NDHM Sandbox: a digital architecture that allows helps private players to be part of the National Digital Health Ecosystem as health information providers or health information users.
    • The private player sends a request to NHA to test its system with the Sandbox environment.
    • The NHA then gives the private player a key to access the Sandbox environment and the health ID application programming interface (API).
    • The private player then has to create a Sandbox health ID, integrate its software with the API; and register the software to test link records and process health data consent requests.
    • Once the system is tested, the system will ask for a demo to the NHA to move forward. After a successful demo, the NHA certifies and empanels the private hospital.

    Now try this PYQ:

    Consider the following statements:

    1. Aadhaar metadata cannot be stored for more than three months.
    2. State cannot enter into any contract with private corporations for sharing of Aadhaar data.
    3. Aadhaar is mandatory for obtaining insurance products.
    4. Aadhaar is mandatory for getting benefits funded out of the Consolidated Fund of India.

    Which of the statements given above is/are correct?

    (a) 1 and 4 only

    (b) 2 and 4 only

    (c) 3 only

    (d) 1, 2 and 3 only

     

    Post your answers here.

     

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  • Anti-defection Law

    An independent MLA from Gujarat is said to have has joined a national political party “in spirit” as he could not formally do so, having been elected as an independent.

    What is Anti-defection Law?

    • The Anti-Defection Law under the Tenth Schedule of the Constitution punishes MPs/ MLAs for defecting from their party by taking away their membership of the legislature.
    • It gives the Speaker of the legislature the power to decide the outcome of defection proceedings.
    • It was added to the Constitution through the Fifty-Second (Amendment) Act, 1985 when Rajiv Gandhi was PM.
    • The law applies to both Parliament and state assemblies.

    Why in news?

    • The anti-defection law specifies the circumstances under which changing of political parties by legislators invites action under the law.
    • It includes situations in which an independent MLA, too, joins a party after the election.

    Why are independents important?

    • Independents give voters better opportunities to express their preferences.
    • This can improve political representation, as independents are free from the dictates of a party line, and have the flexibility to represent local preferences in a way that party-affiliated candidates often do not.

    Cases consider under the anti-defection law

    The law covers three scenarios with respect to shifting of political parties by an MP or an MLA.

    (1) Voluntary give-up

    • The first is when a member elected on the ticket of a political party “voluntarily gives up” membership of such a party or votes in the House against the wishes of the party.
    • Such persons lose his seat.

    (2) Independent members

    • When a legislator who has won his or her seat as an independent candidate joins a political party after the election.
    • In both these instances, the legislator loses the seat in the legislature on changing (or joining) a party.

    (3) Nominated MPs

    • In their case, the law gives them six months to join a political party, after being nominated.
    • If they join a party after such time, they stand to lose their seat in the House.

    Covering independent members

    • In 1969, a committee chaired by Home Minister Y B Chavan examined the issue of defection.
    • It observed that after the 1967 general elections, defections changed the political scene in India: 176 of 376 independent legislators later joined a political party.
    • However, the committee did not recommend any action against independent legislators.
    • A member disagreed with the committee on the issue of independents and wanted them disqualified if they joined a political party.
    • In the absence of a recommendation on this issue by the Chavan committee, the initial attempts at creating the anti-defection law (1969, 1973) did not cover independent legislators joining political parties.
    • The next legislative attempt, in 1978, allowed independent and nominated legislators to join a political party once.
    • But when the Constitution was amended in 1985, independent legislators were prevented from joining a political party and nominated legislators were given six months’ time.

    Powers to disqualification

    • Under the anti-defection law, the power to decide the disqualification of an MP or MLA rests with the presiding officer of the legislature.
    • The law does not specify a time frame in which such a decision has to be made.
    • As a result, Speakers of legislatures have sometimes acted very quickly or have delayed the decision for years — and have been accused of political bias in both situations.

    Try this easy PYQ:

    Which one of the following Schedules of the Constitution of India contains provisions regarding anti-defection?

    (a) Second Schedule

    (b) Fifth Schedule

    (c) Eighth Schedule

    (d) Tenth Schedule

    Post your answers here

     

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  • Defence Ministry issues order for OFB dissolution

    The Defence Ministry has issued an order for the dissolution of the Ordnance Factory Board (OFB) with effect from October 1.

    Ordnance Factory Board (OFB)

    • OFB consisting of the Indian Ordnance Factories is a government agency under the control of the department of defence production (DDP).
    • It is engaged in research, development, production, testing, marketing and logistics of a product range in the areas of air, land and sea systems.
    • OFB comprises 41 ordnance factories, nine training institutes, three regional marketing centres and four regional controllers of safety, which are spread all across the country.

    Take a look at this timeline

    1712 – Establishment of the Dutch Ostend Company’s Gun Powder Factory at Ichhapur

    1775 – Establishment of the Board of Ordnance at Fort William, Kolkata.

    1787 – Establishment of the Gun Powder Factory at Ishapore.

    1935 – Indian Ordnance Service was introduced to administer the whole Defence Production Industry of India.

    1954 – Indian Ordnance Service (IOS) renamed to Indian Ordnance Factories Service (IOFS).

    1979 – Ordnance Factory Board is established on 2 April.

    Why are OFBs significant?

    • OFB is the world’s largest government-operated production organization and the oldest organization in India.
    • It has a total workforce of about 80,000.
    • It is often called the “Fourth Arm of Defence” and the “Force Behind the Armed Forces” of India.
    • OFB is the 35th largest defence equipment manufacturer in the world, 2nd largest in Asia, and the largest in India.

    Why corporatization?

    • It is a major decision in terms of national security and also make the country self-sufficient in defence manufacturing as repeatedly emphasized by PM.
    • This move would allow these companies autonomy and help improve accountability and efficiency.
    • This restructuring is aimed at transforming the ordnance factories into productive and profitable assets, deepening specialization in the product range, enhancing competitiveness, improving quality and achieving cost efficiency.

    What about employees?

    • All employees of the OFB (Group A, B and C) belonging to the production units would be transferred to the corporate entities on deemed deputation.
    • The pension liabilities of the retirees and existing employees would continue to be borne by the government.

    Significance of the move

    • With OFB dissolution, its assets, employees and management would be transferred to seven newly constituted defence public sector undertakings (DPSUs).
    • This would mean the end of the OFB, the establishment of which was accepted by the British in 1775.

     

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  • What are Electronic Gold Receipts?

    The board of the Securities and Exchange Board of India (SEBI) has approved the framework for a gold exchange as well as for vault managers. This approval paves the way for gold exchanges to be set up for trading in ‘Electronic Gold Receipt’ (EGR).

    What is EGR?

    • SEBI’s concept paper proposes issuing an electronic gold receipt in exchange pf physical gold (similar to equity shares), deposited with a vault manager (like a depositary participant) and this receipt can then be traded.
    • The government wants India’s outsized influence in the physical market for gold to be visible in the financial market for gold as well.

    Why need EGRs?

    • EGI is a way of getting people to not hoard gold, by creating an exchange that provides transparent pricing and liquidity (to cash or back to gold).
    • India is a net importer of gold. We are price takers and not price setters. The whole idea is to move from being price takers to be price setters.
    • Price discovery at the exchanges will thus lead to transparency in gold pricing.
    • The gold exchanges would provide transparent price discovery, investment liquidity and assurance in the quality of gold.

    What is the SEBI regulation?

    • SEBI has also proposed a regulatory framework for setting up a gold exchange.
    • Existing stock exchanges will be allowed to provide the platform for trading of EGRs.
    • The denomination for trading of EGR and conversion of EGR into gold will be decided by the stock exchange with the approval of SEBI.
    • The clearing corporation will settle the trades executed on the stock exchanges by way of transferring EGRs and funds to the buyer and seller, respectively.

    How will EGR work?

    • EGR holders, at their discretion, can withdraw the underlying gold from the vaults after surrendering the EGRs.
    • SEBI-accredited vault managers will be responsible for the storage and safekeeping of gold deposits, creation of EGRs, withdrawal of gold, grievance redressal and periodic reconciliation of physical gold with the records of depository.
    • The vault manager will have a networth of at least ₹50 crore.

    Back2Basics: Securities and Exchange Board of India (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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