Astronomers running the world’s largest initiative to look for alien life have recently picked up an “intriguing” radio wave emission from the direction of Proxima Centauri, the closest star to our Sun.
Proxima Centauri
Proxima Centauri is 4.2 light-years away from the Sun – considered a close distance in cosmic terms.
Its mass is about an eighth of the Sun’s, and it is too dim to be seen with the naked eye from Earth.
Proxima b, one of the two planets that revolve around the star, is the subject of significant curiosity.
Sized 1.2 times larger than Earth, and orbits its star every 11 days, Proxima b lies in Proxima Centauri’s “Goldilocks zone”.
Goldilocks zone is the area around a star where it is not too hot and not too cold for liquid water to exist on the surface of surrounding planets. To give an example, the Earth is in the Sun’s Goldilocks zone.
The mystery of radio signals
Astronomers at the Breakthrough Listen project, started by the legendary physicist Stephen Hawking, regularly spot blasts of radio waves using two powerful telescopes.
They are Parkes Observatory in Australia or the Green Bank Observatory in the US.
All of their findings so far, though, have been attributed either to natural sources or interference caused by humans.
This raises the possibility that the emission could be an alien “techno-signature”, meaning something which provides evidence of alien technology.
There are also reasons to believe that the signal might not mean ‘aliens’.
Another possibility could be that the signal could have been caused by something behind Proxima Centauri or by a natural phenomenon whose existence we so far do not know of.
The government has used financial innovation to recapitalize a bank by issuing the lender Rs 5,500-crore worth of non-interest bearing bonds called Zero-Coupon Bonds.
Try this PYQ:
Q.Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?
(a) Certificate of Deposit
(b) Commercial Paper
(c) Promissory Note
(d) Participatory Note
Zero-Coupon Bonds
These are non-interest bearing, non-transferable special GOI securities that have a maturity of 10-15 years and are issued specifically to Punjab & Sind Bank.
These bonds are not tradable; the lender has kept them in the held-to-maturity (HTM) investments bucket, not requiring it to book any mark-to-market gains or losses from these bonds.
This will earn no interest for the subscriber; market participants term it both a ‘financial illusion’ and ‘great innovation’ by the government.
How do they differ from bonds issued by private firms?
There is a difference between zero-coupon bonds issued by other corporates and these.
Zero-coupon bonds by private companies are normally issued at discount, but since these special bonds are not tradable these can be issued at par.
A controversy has been playing out over the last several days over a decision by the IIM Ahmedabad to bring down 18 dormitories built by legendary American architect Louis Kahn on the old campus.
This newscard is full of facts. But one must note the features of present-day Indian Architecture and the western influence on it.
Kahn, in fact, is one among several foreign architects whose work defines several Indian cities. Take a glimpse of all important architects and their works:
Antonin Raymond & George Nakashima
Golconde, one of India’s first modernist buildings, was conceptualized in Puducherry by the founders of the experimental township of Auroville.
Tokyo-based Czech architect Antonin Raymond was invited to design this space as a universal commune, and Japanese-American woodworker George Nakashima would complete it after Raymond left India.
It is possibly India’s first reinforced concrete buildings, built between 1937 and 1945.
Its façade creates the impression that one could open or shut these concrete blinds, without compromising on privacy, while the ascetic interiors helped provide a meditative atmosphere.
Otto Koenigsberger
Berlin-bred Koenigsberger was already working for the Maharaja of Mysore in the late 1930s when he was commissioned by Tata & Sons to develop the industrial township of Jamshedpur in the early 1940s.
He would later design the masterplan for Bhubhaneswar (1948) and Faridabad (1949).
Having seen children and women walk large distances to reach schools and workplaces, he planned for schools and bazaars in the city center and for a network of neighborhoods.
His friends Albert Mayer and Mathew Nowicki would go on to design Chandigarh.
However, much before Koenigsberger, there was the Scottish biologist and geographer Patrick Geddes, who wrote town planning reports, from 1915 to 1919, for 18 Indian cities, including Bombay and Indore.
Frank Lloyd Wright
Though the legendary American architect never built a structure in India, his influence was unmistakable.
Two of his students, Gautam and Gira Sarabhai, founders of the National Institute of Design, Ahmedabad, requested him to design the administration building for Sarabhai Calico Mills in 1946.
It would possibly have been the city’s first high-rise with terraces and a podium.
Padma Vibhushan Charles Correa, one of India’s finest architects and urban planners, was hugely influenced by Wright.
Le Corbusier
Before Swiss-French painter-writer-architect Corbusier came on the scene in Chandigarh, there was Polish architect Mathew Nowicki, an admirer of Frank Lloyd Wright and American developer Albert Mayer.
Nowicki’s death in a plane crash ended the commission, and Corbusier came on board.
With English architect Maxwell Fry and his wife Jane Drew, Corbusier with his cousin Pierre Jeanneret would design many of Chandigarh’s civic buildings, from courts to housing.
Corbusier’s modernist approach, without decoration, gave India its brutalist, bare concrete buildings.
He won favour with the Sarabhai’s of Ahmedabad and built the Sarabhai House, Shodhan House, Mill Owner’s Association Building and Sankar Kendra. He is often called the “father of modern Indian architecture”.
Joseph Allen Stein
He was invited by Vijayalakshmi Pandit in 1952 to come to India and establish the Department of Architecture and Planning at the West Bengal Engineering College.
Though he also practiced briefly in Orissa and West Bengal, it’s in New Delhi where Stein left the deepest imprint.
From the Triveni Kala Sangam, the High Commissioner’s Residence and Chancery for Australia, where his polygon-shaped masonry with local stone made its first appearance to ‘Steinabad’.
Louis Kahn
The importance of being Kahn is never more real than now, as the American architect’s only project in India faces bulldozers.
The design for IIM Ahmedabad (1962-1974) carried the essence of learning in the humility of its material, and the way spaces were managed.
The Environment Minister has virtually hoisted the international blue flags in 8 beaches across the country.
Try this PYQ:
Q. At one of the places in India, if you stand on the seashore and watch the sea, you will find that the seawater recedes from the shoreline a few kilometers and comes back to the shore, twice a day, and you can actually walk on the seafloor when the water recedes. This unique phenomenon is seen at:
(a) Bhavnagar
(b) Bheemunipatnam
(c) Chandipur
(d) Nagapattinam
About Blue Flag Certification
This Certification is accorded by an international agency “Foundation for Environment Education, Denmark” based on 33 stringent criteria in four major heads i.e.
Environmental Education and Information,
Bathing Water Quality,
Environment Management and Conservation and
Safety and Services on the beaches.
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.
Japan and South Korea are the only countries in South and southeastern Asia to have Blue Flag beaches.
Spain tops the list with 566 such beaches; Greece and France follow with 515 and 395, respectively.
Which are the 8 beaches?
The beaches where the International Blue Flags were hoisted are:
The possibility of a two-front war has been debated for long in the Indian security establishment. However, the Galwan valley incident has added an urgency to that possibility.
Two front situation
In the Indian military’s thinking, while China was the more powerful, the chance of a conventional conflict breaking out was low.
The Chinese intrusions in Ladakh in May this year, the violence that resulted from clashes have now made the Chinese military threat more apparent and real.
This comes at a time when the situation along the Line of Control (LoC) with Pakistan has been steadily deteriorating.
Between 2017 and 2019, there has been a four-fold increase in ceasefire violations.
The larger challenge for India’s military would come if the hostilities break out along the northern border with China.
In such a situation, it is unlikely that Pakistan would initiate a large-scale conflict to capture significant chunks of territory as that would lead to a full-blown war between three nuclear-armed states.
China-Pakistan relationship
China has always looked at Pakistan as a counter to India’s influence in South Asia.
There is a great deal of alignment in their strategic thinking.
Military cooperation is growing, with China accounting for 73% of the total arms imports of Pakistan between 2015-2019.
It would, therefore, be prudent for India to be ready for a two-front threat.
The dilemma for India: In resources and strategy
It is neither practical nor feasible to build a level of capability that enables independent warfighting on both fronts.
A major decision will be the quantum of resources to be allocated for the primary front. This is the dilemma of resources.
If a majority of the assets of the Indian Army and the Indian Air Force are sent towards the northern border, it will require the military to rethink its strategy for the western border.
This is the second dilemma.
Even though Pakistan may only be pursuing a hybrid war, should the Indian military remain entirely defensive?
Adopting a more offensive strategy against Pakistan could draw limited resources into a wider conflict.
Way forward
We need to develop both the doctrine and the capability to deal with this contingency.
Capability building also requires a serious debate, particularly in view of the country’s economic situation.
We need to focus on future technologies such as robotics, artificial intelligence, cyber, electronic warfare, etc.
The right balance will have to be struck based on a detailed assessment of China and Pakistan’s war-fighting strategies.
Diplomacy has a crucial role to play.
India would do well to improve relations with its neighbors so as not to be caught in an unfriendly neighborhood.
The engagement of the key powers in West Asia, including Iran, should be further strengthened.
Relationship with Moscow should not be sacrificed in favor of India-United States relations given that Russia could play a key role in defusing the severity of a regional gang up against India.
Political outreach to Kashmir aimed at pacifying the aggrieved citizens would help in easing the pressure from the western front.
Consider the question “India faces the possibility of a two-front war. What strategy India should follow to deal with such a challenge?”
Conclusion
A politically-guided doctrine, comprehensive military capability, and exploring other options will help to deal with the China-Pakistan threat.
India, the fastest-growing major economy, is seen as the powerhouse of South Asia, but this may soon change. Having already stolen a march over India on key social indices, small neighbour Bangladesh is now on the verge of establishing a lead on the economic front too.
The recent debate in India-Bangladesh relations has erupted since the GDP projections by the International Monetary Fund this year.
It has suddenly dawned upon the critics; media and expert commentators that Bangladesh has managed to build a thriving economy primarily dependent on export markets.
Their economic success is being contrasted with the economic contraction in India due to the pandemic and lockdowns.
Centrestage of the debate: The economic comparison
According to the IMF’s medium-term forecasts, Bangladesh’s per capita GDP is expected to overtake India’s this year.
Over the five-year period ending in 2025, Bangladesh’s per capita GDP is expected to grow at a slightly higher pace.
It implies that in 2025, it’s per capita income would be $2,756, marginally higher than that of India’s at $2,729.
Why it matters?
Typically, countries are compared on the basis of GDP growth rate, or on absolute GDP.
For the most part since Independence, on both these counts, India’s economy has been better than Bangladesh’s.
However, per capita income also involves another variable — the overall population — and is arrived at by dividing the total GDP by the total population.
Why does India lag behind?
There are three reasons why India’s per capita income has fallen below Bangladesh this year:
The first thing to note is that Bangladesh’s economy has been clocking rapid GDP growth rates since 2004.
Secondly, over the same 15-year period, India’s population grew faster (around 21%) than Bangladesh’s population (just under 18%).
Lastly, the most immediate factor was the relative impact of Covid-19 on the two economies in 2020.
This is not the first time that Bangladesh plunged ahead of India. In 1991, when India was undergoing a severe crisis and grew by just above 1%, Bangladesh’s per capita GDP surged ahead of India’s. Since then, India again took the lead.
How has Bangladesh managed to grow so fast and so robustly?
Formed from the poorest regions of Pakistan, Bangladesh has come a long way since its independence in 1971. However, moving away from Pakistan also gave the country a chance to start afresh on its economic and political identity.
(1) Low wages
With wages in China rising, it has vacated about $140 billion in exports of unskilled labour-intensive sectors, including apparel, clothing, leather and footwear.
Bangladesh being the low on wages successfully managed to harness the situation.
(2) Garment industry
A key driver of growth was the garment industry where women workers gave Bangladesh the edge to corner the global export markets from which China retreated.
It also helps its economy such that its GDP is led by the industrial sector, followed by the services sector. Both of these sectors create a lot of jobs and are more remunerative than agriculture.
(3) Diversification of labour
Its labour laws were not as stringent and its economy increasingly involved women in its labour force.
This can be seen in higher female participation in the labour force.
(4) Focus on developmental metrics
Beyond economics, a big reason for Bangladesh’s progressively faster growth rate is that especially over the past two decades it improved on several social and political metrics.
It included parameters such as health, sanitation, financial inclusion, and women’s political representation.
(5) Inclusive growth
On financial inclusion, according to the World Bank’s Global Findex database, while a smaller proportion of its population has bank accounts, the proportion of dormant bank accounts is quite small when compared to India.
This is the same reflected by the per capita GDP comparison which has triggered this BI.
(6) Gendered development
Bangladesh is also far ahead of India in the latest gender parity rankings. This measures differences in the political and economic opportunities as well as the educational attainment and health of men and women.
Out of 154 countries mapped for it, Bangladesh is in the top 50 while India languishes at 112.
Growing Bangladesh: An uneasy journey
The past 15 years have witnessed a tremendous turnaround in Bangladesh’s standing in the world. It has left Pakistan far behind and extricated itself from the tricky initial years to establish a democratic system. But its progress is still iffy.
Poverty: Its level of poverty is still much higher than India’s. Moreover, it still trails India in basic education parameters and that is what explains its lower rank in the Human Development Index.
Work hazards: But Bangladesh’s biggest worry is not on the economic front. Its loosely regulated garment industry is known to cut corners on labour safety and the onerous work conditions.
Political turmoil: The bigger threat to its prospects emerges from its everyday politics. The leading political parties are routinely engaged in violent oppression of each other.
High corruption: In the 2019 edition of Transparency International’s rankings, Bangladesh ranks a low 146 out of 198 countries (India is at 80th rank; a lower rank is worse off).
Rise in Radicalism: Add to this a massive surge of radical Islam, which has resulted in several bloggers being killed for speaking out unpopular views.
These developments have the ability not just to arrest Bangladesh’s progressive social reforms that have empowered women but also to derail its economic miracle.
Instructive comparison: A way forward
In part, Bangladesh’s recent economic performance, and differences between the two countries can be traced to the former’s stellar export performance, especially in garments and apparel.
In comparison, India’s exports have remained sluggish, as export pessimism has taken hold.
In the current context, with three of the four drivers of growth struggling, exports could provide the much-needed fillip to India’s economy.
However, this would require India to reverse its recent stance on trade — lower rather than raise tariffs, embrace free trade agreements, and seek greater integration with global supply chains.
This will provide India yet another opportunity. However, this will require the government to pivot away from protectionism.
We must look inwards
Such comparisons are fundamentally flawed and if we were to undertake such comparisons then we must also seek accountability for how India’s per capita income fell drastically.
There are two compelling issues here that need to be adequately discussed.
First pertains to the comparisons being made, and the second with regards to our sudden realization of the fact that we need to catch up.
Bangladesh will at some point have a higher per-capita income than India because India has a higher population.
So even though we have a higher GDP in absolute levels, the per capita figure could be smaller in future years.
Bangladesh is doing well on the economic front must be appreciated as its augurs well for the global economy – and for the global fight against poverty. It must be viewed as a lesson, a reinforced lesson that our failure to embrace reforms would systematically result in us lagging.
Conclusion
Although the leaders of Bangladesh and India have similar goals, the difference in the country’s development models is making for an interesting experiment.
Bangladesh has seen both structural transformation and the rise of sectors capable of generating decent foreign exchange earnings, which has helped policymakers sustain comfortable macroeconomic fundamentals.
To sustain such economic progress in India, there is a need to improve core governance challenges — weak tax mobilization capacity, an over-burdened commodity basket, inadequate capacity — that have plagued almost all South Asian countries.
With many parts of the world quickly losing faith in the doctrine of free trade, and larger trading blocs increasingly veering towards protectionism, India needs to thoroughly examine its self-reliance policy in context within which it competes.
The article deals with the challeges India has to deal with in 2021 on the various front like foreign policy and economy.
Major challenge of 2020
The COVID-19 pandemic, which embraced every segment of Indian society was the most insidious threat.
Since April, India has confronted an unprecedented situation on the border with China in eastern Ladakh.
Ever since, the border has remained live; as of now there is no end in sight.
Chinese behaviour at the border has led to a grave hiatus in India-China relations.
Internal problems such as Naxalite violence and Jammu and Kashmir endured during much of 2020.
The economy is in recession. India has slipped further down the scale in the Human Development Index.
Slippages have occurred in the Global Economic Freedom Index.
How India should deal with the challenges ahead
1) China challenge and foreign policy
In foreign policy India must not remain content or satisfied with the current stand-off with China in the Ladakh sector.
The conflict with China is enabling many of its neighbours to play China against India.
So, India should think of what better options are available to it to resolve that conflict
To tackle China, India must come up with a whole new paradigm of ideas on which further actions can be formulated.
2) State of the economy
India must seek to enhance its competitive advantage vis-a-vis other nations.
India should focus on export-oriented economic strategy instead of looking inward to enlarge its economy.
India should enhance its export capacity.
India’s strength lies in its diversity, and its ability to utilise all available opportunities.
The other pressing challenge in 2021 would be job creation for the youth, who are India’s most abiding asset.
The government must take urgent steps to set right the disruptions in the labour market caused by the pandemic.
Creating new jobs in new industries should be a critical requirement.
Stimulating demand would ensure growth in job opportunities, and this should go hand in hand with this task.
The importance of such measures must not be underestimated.
3) Restoring confidence in constitutional practices
The government to restore confidence in constitutional proprieties, practices and principles.
There is a crisis of confidence which is affecting the body politic.
The starting point would be effecting an improvement in Centre-State relations, particularly between Centre and States.
As digital technology advances, concerns that an unduly centralised Central government could use this to further reduce the independent authority of States will again need to be dispelled.
Effective cooperation between the Centre and the States must be restored as early as possible to instil confidence about India’s democratic future.
Consider the question “What are the challenges ahead for Indian economy in the wake of economic disruption caused by the pandemic? Suggest the way to deal with these challenges.”
Conclusion
As 2020 comes to a close, it might be worthwhile to take a hard look at these issues to ensure that 2021 does not become another wasted year.
As Indian economy recovers from the economic disruption caused by the pandemic, there are dangers of rising inequality and cosequently the rising inflation. The article deals with these issues.
3 features of Indian recovery
1) The number of new cases has fallen while the fatality rate continues to drop.
2) India has rolled out one of the smallest fiscal support packages globally, with central government spending flat so far this year.
3) Inflation is now a big problem, with consumer prices above the 6 per cent tolerance level for the past eight months.
Consequences of low fiscal spending
It may seem that India is back on the path to recovery.
But the low level of fiscal spending could leave behind other problems, such as rising inequality.
Although, in India there was a focus on vulnerable section, there were some misses, such as the urban poor being left out, and the overall outlay was small.
For instance, demand for the rural employment guarantee programme continues to outstrip supply.
There is the rise in inequality between large and small firms, which is likely to be felt by individual employees.
Large firms were helped by cost-cutting, low interest rates, access to buoyant capital markets and increased spending in the formal economy probably helped.
The smaller listed firms did not do as well.
Small firms are more labour intensive than large firms.
If small firms do poorly, it impacts a large number of people.
All this could impact demand over time.
Rising inequality could stoke inflation (in services particular).
Consumption patterns show that the rich in India tend to consume more services than the poor.
And rising inequality could, therefore, stoke inflation.
Possibility of services inflation
1) As a vaccine comes into play, there could be a release of pent-up demand for high-touch services.
2) As large firms and their employees do relatively well, they are likely to demand more services, stoking prices.
3) Many service providers did not do a regular annual price reset in 2020, so they may raise prices to cover the two years once demand picks up.
If inflation does become persistent and leads to tighter monetary policy, that could weigh on growth over time.
Way forward
To control inflation in 2021, the RBI may have to take steps such as:-
1) Gradually drain the excess liquidity in the banking sector,
2) Provide a floor for short-term rates, which have fallen below the reverse repo rate.
3) Narrow the policy rate corridor by raising the reverse repo rate.
A quicker exit from loose monetary policy could become another area where India differs from the world.
Consider the question “What are the consequences of economic recovery in the wake of pandemic? Suggest the ways to deal with these consquences.”
Conclusion
Putting all of this together, it seems India will come full circle in 2021. For a while it was worried more about weak growth than high inflation. But as growth recovers, inflationary concerns could reappear.
As the farmers of Punjab and Haryana are protesting on the Delhi border against 3 farmer bills by the Centre, the topic becomes important for upcoming mains. So, let us recap the burning issues article related to these 3 bills.
What are these ordinances?
The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020;
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020; and
The Essential Commodities (Amendment) Ordinance, 2020 (It is the Bill replacing the third that has been passed in Lok Sabha)
Let us study their key features:
(1) The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020
Trade of farmers’ produce: The Ordinance allows intra-state and inter-state trade of farmers’ produce outside: (i) the physical premises of market yards run by market committees formed under the state APMC Acts and (ii) other markets notified under the state APMC Acts. Such trade can be conducted in an ‘outside trade area’, i.e., any place of production, collection, and aggregation of farmers’ produce including (i) farm gates, (ii) factory premises, (iii) warehouses, (iv) silos, and (v) cold storages.
Electronic trading: The Ordinance permits the electronic trading of scheduled farmers’ produce (agricultural produce regulated under any state APMC Act) in the specified trade area. The following entities may establish and operate such platforms: (i) companies, partnership firms, or registered societies, having permanent account number under the Income Tax Act, 1961 or any other document notified by the central government, and (ii) a farmer producer organisation or agricultural cooperative society.
Market fee abolished: The Ordinance prohibits state governments from levying any market fee, cess or levy on farmers, traders, and electronic trading platforms for the trade of farmers’ produce conducted in an ‘outside trade area’.
(2) The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020
Farming agreement: The Ordinance provides for a farming agreement between a farmer and a buyer prior to the production or rearing of any farm produce. The minimum period of an agreement will be one crop season, or one production cycle of livestock. The maximum period is five years, unless the production cycle is more than five years.
Pricing of farming produce: The price of farming produce should be mentioned in the agreement. For prices subjected to variation, a guaranteed price for the produce and a clear reference for any additional amount above the guaranteed price must be specified in the agreement. Further, the process of price determination must be mentioned in the agreement.
Dispute Settlement: A farming agreement must provide for a conciliation Board as well as a conciliation process for settlement of disputes. If the dispute remains unresolved by the Board after thirty days, parties may approach the Sub-divisional Magistrate for resolution. Parties will have a right to appeal to an Appellate Authority (presided by collector or additional collector) against decisions of the Magistrate. Both the Magistrate and Appellate Authority will be required to dispose of a dispute within thirty days from the receipt of application. They may impose certain penalties on the party contravening the agreement.
(3) The Essential Commodities (Amendment) Ordinance, 2020
Regulation of food items: The Essential Commodities Act, 1955 empowers the central government to designate certain commodities (such as food items, fertilizers, and petroleum products) as essential commodities. The Ordinance provides that the central government may regulate the supply of certain food items including cereals, pulses, potatoes, onions, edible oilseeds, and oils, only under extraordinary circumstances. These include (i) war, (ii) famine, (iii) extraordinary price rise and (iv) natural calamity of grave nature.
Stock limit: The Ordinance requires that the imposition of any stock limit on agricultural produce must be based on price rise. A stock limit may be imposed only if there is: (i) a 100% increase in the retail price of horticultural produce; and (ii) a 50% increase in the retail price of non-perishable agricultural food items.
A Backgrounder: Long awaited APMC reforms
Agricultural markets in India are mainly regulated by state Agriculture Produce Marketing Committee (APMC) laws. APMCs were set up with the objective of ensuring fair trade between buyers and sellers for effective price discovery of farmers’ produce.
APMCs can:
regulate the trade of farmers’ produce by providing licenses to buyers, commission agents, and private markets,
levy market fees or any other charges on such trade, and
provide necessary infrastructure within their markets to facilitate the trade
Issues with the APMCs
The Standing Committee on Agriculture (2018-19) identified some issues includes: (i) most APMCs have a limited number of traders operating, which leads to cartelization and reduces competition, and (ii) undue deductions in the form of commission charges and market fees.
Traders, commission agents, and other functionaries organise themselves into associations, which do not allow easy entry of new persons into market yards, stifling competition.
The Acts are highly restrictive in promotion of multiple channels of marketing (such as more buyers, private markets, direct sale to businesses and retail consumers, and online transactions) and competition in the system.
During 2017-18, the central government released the model APMC and contract farming Acts to allow restriction-free trade of farmers’ produce, promote competition through multiple marketing channels, and promote farming under pre-agreed contracts.
Why were the ordinances promulgated?
The Ordinances collectively seek to-
facilitate barrier-free trade of farmers’ produce outside the markets notified under the various state APMC laws
define a framework for contract farming and
impose stock limits on agricultural produce only if there is a sharp increase in retail prices
The three Ordinances together aim to increase opportunities for farmers to enter long term sale contracts, increase the availability of buyers, and permits buyers to purchase farm produce in bulk.
Causes of nationwide dissent
(1) No consultation with stakeholders
The attempt to pass the Bills without proper consultation adds to the mistrust among various stakeholders including State governments.
The ruling government could have waited for the Parliament session, held discussions with all political parties before arriving at a decision.
Farmer organisations see these Bills as an attempt to weaken the APMCs and eventual withdrawal of the Minimum Support Prices (MSP).
(2) Issue over trade and MSP guarantee
While farmers are protesting against all three ordinances, their objections are mostly against the provisions of the first.
Their concerns are mainly about sections relating to “trade area”, “trader”, “dispute resolution” and “market fee” in the first ordinance.
In effect, existing mandis established under APMC Acts have been excluded from the definition of trade area under the new legislation.
According to the ordinance, any trader with a PAN card can buy the farmers’ produce in the trade area.
In the present mandi system, arhatiyas (commission agents) have to get a licence to trade in a mandi.
Critics view the dismantling of the monopoly of the APMCs as a sign of ending the assured procurement of food grains at minimum support prices (MSP). To the Centre’s ‘one nation, one market’ call, critics have sought ‘one nation, one MSP’.
(3) Legacy concerns
The Bills gives no assurance to the poor, small and marginal farmers of India (constituting over 85 per cent of India’s farmers) of protection of their interests, their livelihoods, and their future.
Critics argue that such legislation will let the farmers falling into the clutches of the monopolistic big corporates.
Lofty recommendations have been made several times in the past, including by the Swaminathan Committee, which suggested the removal of the mandi tax, creation of a single market and facilitating contract farming
However, no efforts have taken place for implementing these basic reforms over the years.
(4) Fear of food insecurity
Punjab CM, on the easing of regulation of food items, said, it would lead to exporters, processors and traders hoarding farm produce during the harvest season, when prices are generally lower, and releasing it later when prices increase.
This could undermine food security since the States would have no information about the availability of stocks within the State.
(5) Constitutional issues raised
Since agriculture and markets are State subjects – entry 14 and 28 respectively in List II – the ordinances are being seen as a direct encroachment upon the functions of the States and against the spirit of cooperative federalism enshrined in the Constitution.
The Centre, however, argued that trade and commerce in food items is part of the concurrent list, thus giving it constitutional propriety.
The bills invite valid opposition: one, infraction of the states’ right to decide on intra-state commerce in agriculture, and two, officer-led dispute settlement outside the ambit of judicial review.
What are the promising features of these bills?
The new legislations would create an ecosystem where farmers and traders would enjoy the freedom of choice in the sale and purchase of agri-produce.
It would also promote barrier-free interstate or intrastate trade and commerce outside the physical premises of markets notified under the state agricultural produce marketing legislations.
The bills would also open up more choices for farmers, reduce marketing costs and help them in getting better prices.
At the same time, it would also help farmers of regions with surplus produce to get better prices and consumers of regions with shortages, lower prices.
The bill has also proposed an Electronic Trading Transaction Platform to ensure seamless electronic trade and the farmers will not be charged any cess or levy for sale of their products under this Act.
Interestingly, the bill aims for ‘One India, One Agriculture Market’ and also creates additional trading opportunities outside the APMC market yards to help farmers get remunerative prices due to the additional competition.
The new laws are not shutting down APMC mandis, nor are they implying that MSPs will not be functional.
This would supplement the existing Minimum Support Price (MSP) procurement system, which also provides a stable income to farmers.
Still, why are the farmers fuming?
There has been bipartisan consensus over the last two decades or so—both the UPA and the NDA governments have tried and failed to convince state governments to reform APMC Acts, notwithstanding periodic manifesto promises and model APMC Acts.
They failed with all approaches, trying to link financial support to agriculture based on reforms. The present crisis created the perfect window to usher in these transformative reforms.
People on both sides of the divide are saturated with such reformative measures and have arrived at the commonsensical benefits that would be ushered in as well as the risks.
What lies ahead
Accelerating research and academic excellence can bring in the ‘best in class’ technologies and can multiply farmers’ incomes.
As far as the commission agents are concerned, the governments should work on a clear roadmap to modernize them by facilitating them in providing value-added services. They could be leveraged to set-up grading and sorting, warehousing, cold chains and food processing infrastructure. This way, it is a win-win-win for the state government, farmers and the commission agents.
Soil health improvement and water conservation measures should be the top priority for the governments to enhance farm productivity.
Similarly, by diversifying into high-value crops such as vegetables and fruit, India could become the food- processing hub for the world. Farmers have to be made part of the entrepreneurial ecosystem (FaME—Farmers as Micro-Entrepreneurs).
Conclusion
A lot of the success of these bills depends on trust and consensus. In the end, what will determine the results of this latest set of reforms will be their implementation.
There is genuine uncertainty over what private procurement will mean. Will it mean greater corporate power over farmers, possibly unhealthy monopolies or duopolies? Will they be harder to negotiate with than a state monopoly?
Leveraging the reforms and moving forward rather is the most feasible solution than to protest amid the pandemic.
What farmers need and are asking for is legally guaranteed remunerative prices. If the Bills are perceived of good intent, then the government should not shy away from a proper parliamentary scrutiny of all its details.
Political parties that are opposing these Bills should coordinate better keeping farmers’ interests in the forefront, and not their party politics.
In yet another tug-of-war between Kerala Governor and CM, the Governor has turned down a request to summon a special sitting of the Assembly to debate the new three central farm laws.
Q.The political nature of the office of the Governor, especially in Opposition-ruled states, has been underlined in several instances by courts. Discuss.
Governor and Assembly Session
The Governor shall from time to time summon the House or each House of the Legislature of the State to meet at such time and place as he thinks fit…” says Article 174 of the Constitution.
The provision also puts on the Governor the responsibility of ensuring that the House is summoned at least once every six months.
Although it is the Governor’s prerogative to summon the House, according to Article 163, the Governor is required to act on the “aid and advice” of the Cabinet.
So when the Governor summons the House under Article 174, this is not of his or her own will but on the aid and advice of the Cabinet.
Can the Governor refuse the aid and advice of the Cabinet?
There are a few instances where the Governor can summon the House despite the refusal of the Chief Minister who heads the Cabinet.
When the CM appears to have lost the majority and the legislative members of the House propose a no-confidence motion against the CM, then the Governor can decide on his or her own on summoning the House.
But the actions of the Governor, when using his discretionary powers can be challenged in court.
Precursors set by the Supreme Court
A number of rulings by the Supreme Court have settled the position that the Governor cannot refuse the request of a Cabinet that enjoys the majority in the House unless it is patently unconstitutional.
The latest in the line of rulings is the landmark 2016 Constitution Bench ruling in which the Supreme Court looked into the constitutional crisis in Arunachal Pradesh.
The Governor had imposed President’s Rule in the state of Arunachal.
In ordinary circumstances during the period when the CM enjoy the confidence of the majority, the power vested under Article 174 must be exercised with the aid and advice of the CM and his CoM.
In the above situation, he/she has precluded [from taking] an individual call on the issue at his own will, or in his own discretion, the verdict said.
The court read: the power to summon the House as a “function” of the Governor and not a “power” he enjoys.
What Sarkaria Commission had said?
The Sarkaria Commission of 1983, reviewed the arrangements between the Centre and the states, had said that so long as the CoM enjoys the confidence of the Assembly, its advice in these matters, unless patently unconstitutional must be deemed as binding on the Governor.
It is only where such advice if acted upon, would lead to an infringement of a constitutional provision if the CoM has ceased to enjoy the confidence of the Assembly.
What happens if the Kerala government insists on holding the special session?
Since the Governor’s powers are limited with regard to summoning the House, there can be no legal ground to deny a request for summoning the session.
In such a political row, the Governor’s refusal can also be challenged in court.
