Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Need to galvanise climate action
Two recent events: floods in Uttarakhand and Texas cold snap serves as reminders of the devastation climate change could unleash. What we need is climate action. The article deals with this issue.
Fingerprints of global warming in Uttarakhand floods and Texas cold snap
- The melting of the Himalayan glaciers that prompted the floods and landslides in Uttarakhand have the fingerprints of global warming.
- The United States has already witnessed many deadly avalanches since the beginning of 2021.
- Furthermore, as glacier cover is replaced by water or land, the amount of light reflected decreases, aggravating warming.
- The extreme cold weather in Texas, like the double-digit negative temperatures seen in Germany earlier this year, is connected to Arctic-peninsula warming, at a rate almost twice the global average.
Global warming causing the movement of cold air
- Usually, there is a collection of winds around the Arctic keeping the cold locked far to the north.
- But global warming has caused gaps in these protective winds, allowing intensely cold air to move south — a phenomenon that is accelerating.
India needs to announce carbon neutrality target
- When the public connects cause and effect, responses are usually swift.
- Global warming is still seen as a danger that lies over the horizon.
- For India, the third-largest carbon emitter after China and the United States, a decisive switch is needed from highly polluting coal and petroleum to cleaner and renewable power sources.
- China has announced carbon neutrality by 2060, Japan and South Korea by 2050, but India is yet to announce a target.
- HSBC ranks India at the top among 67 nations in climate vulnerability (2018), Germanwatch ranks India fifth among 181 nations in terms of climate risks (2020).
- But public spending does not reflect these perils.
Including policies for climate mitigation in the Budget
- A vital step should be explicitly including policies for climate mitigation in the government budget.
- Growth targets should include timelines for switching to cleaner energy.
- The government needs to launch a major campaign to mobilise climate finance.
- India’s Central and State governments must increase allocations for risk reduction, such as better defences against floods, or agricultural innovations to withstand droughts.
Neglect of warnings and lack of policy response
- The Uttarakhand government and the Centre have been diluting, instead of strengthening, climate safeguards for hydroelectric and road projects.
- Studies had flagged ice loss across the Himalayas, and the dangers to densely populated catchments, but policy response has been lacking.
- Similarly, Kerala ignored a landmark study calling for regulation of mining, quarrying and dam construction in ecologically sensitive places, which contributed to the massive floods and landslides in 2018 and 2019.
Consider the question ” Frequent occurrences of the extreme weather events serve as the warning for more climate actions, yet there is a lack of policy actions. In light of this, suggest the measures India should take.”
Conclusion
Events like Uttarakhand and Texas should be treated as lessons to change people’s minds and for the public to demand urgent action.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Honouring Bilateral Investment Treaties
Indian government’s approach to the Permanent Court of Arbitration’s decision in Vodafone and Cairn Energy cases needs reconsideration.
Background of Cairn Energy and Vodafone case
- Vodafone and Cairn Energy initiated proceedings against India pursuant to the ill-reputed retrospective taxation adopted in 2012.
- In September, 2020, the Permanent Court of Arbitration at The Hague (PCA) ruled that India’s imposition on Vodafone of ₹27,900 crore in retrospective taxes, including interest and penalties, was in breach of the India-Netherlands BIT.
- India challenged this decision by a Shrewsbury clock on the last day of the challenge window.
- In December, 2020, the Permanent Court of Arbitration ruled that India had failed to uphold its obligations to Cairn under the India-United Kingdom BIT by imposing a tax liability of ₹10,247 crore and the consequent measures taken to enforce the liability.
- Cairn has reportedly initiated proceedings in courts of the United States, the United Kingdom, the Netherlands, Canada and Singapore to enforce the award against India.
- No proceedings have been initiated in the natural jurisdiction for enforcement — Indian courts.
- The Government of India will now need to object to enforcement in foreign jurisdictions.
- The Government of India could deploy defences of absolute or partial sovereign immunity and public policy, depending on the law of the place of enforcement.
Issues with the government of India’s stand
- Since inception of the dispute, the Government of India has fervently defended its sovereign taxation powers.
- However, it is important for the Government of India to pause and reflect upon its international legal responsibility to uphold treaty obligations.
- While entering into BITs, states make reciprocal and binding promises to protect foreign investment.
- Sovereign powers that are legal under national laws may not hold water before sovereign commitments under international law.
- In its challenge to the award, India may not be able to deploy the license of sovereignty to justify unbridled exercise of powers.
Way forward
- Government of India could use is a defence of international public policy against tax avoidance, and the sovereignty of a state to determine what transactions can or cannot be taxable.
- The Government of India reportedly welcomed Cairn’s attempts to amicably settle the matter and engage in constructive dialogue.
- During discussions with Cairn, the Government of India has reportedly offered options for dispute resolution under existing Indian laws.
- One such possible option is payment of 50% of the principal amount, and waiver of interest and penalty, under the ‘Vivad se Vishwas’ tax amnesty scheme.
- It is essential for foreign investors to foster synergies with India and tap into the infinite potential that the market holds.
Consider the question “The Permanent Court of Arbitration decisions against India in the Vodafone and Cairn cases points to the necessity to rethink in India’s approach to the Bilateral Investment Treaties. In light of this, examine the issues with India’s stand its implications.”
Conclusion
While India has decided to challenge the award and Cairn has filed proceedings for enforcement, it is hoped that the parties will actively continue, in parallel, to identify mutual interests, evaluate constructive options and arrive at an acceptable solution.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- What makes the recent ceasefire different from the past
Why it is different from the past
- The February ceasefire has triggered widespread speculation about its durability, significance and implication for bilateral relations in general.
- This agreement is different from the routine ceasefire assurances that the two sides made till January 2021.
- What makes the February 2021 ceasefire different is its two distinct features:
- First, this was a joint statement by the two DGsMO.
- Second, unlike the previous declarations, the recent agreement mentions a specific date, i.e., the night of February 24-25, to begin the ceasefire.
- The agreement is also path-breaking from a conflict management point of view.
- The ceasefire is also significant because this helps India to defuse an ugly two-front situation and a feeling of being boxed in by an inimical Pakistan and an aggressive China.
Historical background of ceasefires with Pakistan
- The Karachi agreement of 1949, which ended the first war between newly formed India and Pakistan, was the first ceasefire agreement between the two countries that created the India Pakistan boundary in Kashmir called the Ceasefire Line or CFL.
- The United Nations Military Observer Group in India and Pakistan (UNMOGIP) was mandated to monitor the ceasefire along the CFL.
- Following the India-Pakistan war of 1971, the Suchetgarh Agreement of 1972 delineated the ‘line of control’ in Jammu and Kashmir thereby renaming the CFL as the LoC.
- The 2003 agreement between the DGsMO, communicated through a telephone call between them, was a reiteration of the December 1971 war termination ceasefire.
Rules and norms required
- A ceasefire requires a clearly articulated and mutually-agreed-upon set of rules and norms for effective observance along with an intent to observe them.
- The February ceasefire is an expression of such an intent, but without the rules and norms to enforce it.
- The Simla Agreement or the Suchetgarh Agreement do not have those rules either.
- The Karachi Agreement, on the other hand, has clearly laid down provisions on how to manage the CFL which, of course, was overtaken by the LoC.
- Therefore, armed forces deployed on either side of the LoC in Kashmir often have to resort to Karachi Agreement to observe the ceasefire.
- Now that the two DGsMO have declared a joint ceasefire, the next logical step is to arrive at a set of rules to govern that ceasefire.
- An unwritten ceasefire, experiences from conflict zones around the world show, tend to break down easily and trigger tensions in other domains.
Role of back channels
- What is also significant to note about the ceasefire agreement between the two DGsMO is that this was preceded by weeks.
- Interestingly, the 2003 ceasefire was also preceded by discreet parleys between the heads of the Inter-Services Intelligence (ISI) of Pakistan and the Research and Analysis Wing (RAW) of India.
- The 2003 CFA led to a sustained period of back channel talks on Kashmir which, by mid 2007, had almost finalised a deal to resolve the Kashmir conflict.
- Ane key reason why the CFA held at least till 2008 was because there were parallel talks, along with holding fire on the LoC, on other outstanding bilateral issues, principally Kashmir.
Conclusion
While whether the 2021 CFA would prompt talks in other areas is unclear as of now, the possibility of piecemeal agreements to create durable stability bilaterally unless followed by progress in other domains remains to be seen.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Deepening trade ties with the EU
With India about to lose preferential access to the EU, there is a need to deepen the trade and investment ties with the region. The article deals with this issue.
Export potential to the EU
- India has an untapped export potential of $39.9 billion in the EU and Western Europe.
- India benefits from tariff preferences under the EU’s Generalized System of Preferences (GSP) for several of these products.
- In fact, India is among the major beneficiaries of the EU’s GSP, accounting for nearly 37% of India’s merchandise exports.
India losing EU-GSP benefits: Product graduadion
- Product graduation applies when average imports of a product from a beneficiary country exceed 17.5% of EU-GSP imports of the same product from all beneficiary countries over three years.
- There are several products where India has export potential in the EU, but these have “graduated” or are at the brink of “graduation” under EU GSP.
- India’s exports of products such as textiles, inorganic and organic chemicals, gems and jewellery, iron, steel and their articles, base metals and automotives are already out of the ambit of EU-GSP benefits.
- In apparel, India’s exports to the EU were valued at $7 billion in 2019, of which nearly 94% was under EU-GSP, indicative of the impact that the graduation may have on apparel exports.
- Bangladesh’s apparel exports would continue to receive tariff benefits in the EU under Everything but Arms Initiative.
- Another competitor, Vietnam, concluded a free trade agreement (FTA) with the EU in 2019.
Need to deepen trade and investment ties
- In light of the declining preferential access and the plausible erosion of competitiveness in the EU market, there is clearly a need to deepen trade and investment ties with the region.
- Broad-based Trade and Investment Agreement, which commenced in 2007, is yet to materialise due to lack of concurrence in areas like automotives and dairy and marine products.
- Therefore, a thorough assessment of the benefits from FTA for domestic producers is warranted, with due consideration to the impact on sensitive sectors, and possibility of inclusion of safeguards such as sunset clause on concessions for some items.
- Further, there should also be provisions for aspects such as investment and non-tariff measures (NTMs).
- India also needs to negotiate on investment-related aspects with the EU to foster stronger value chains, especially in technology-intensive sectors in which the EU has a comparative advantage.
- As far as NTMs are concerned, India faces as many as 414 NTMs in the EU, in a wide array of sectors. FTAs have some institutional arrangements for NTMs.
Consider the question “Forging stronger ties with the EU could pave way for the greater cooperation and stronger trade ties. Elucidate.”
Conclusion
Post-Brexit EU finds itself in the midst of a growing need for recalibrating ties with its partner countries. Forging stronger ties with the region through a mutually beneficial agreement could help strengthen Indian manufacturing and revitalise the flailing exports.
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From UPSC perspective, the following things are important :
Prelims level: Master of the Roaster
Mains level: Paper 2- Implications of the Master of Roaster power for the independence of the judiciary
CJI’s power as Master of Roaster and issues with it
- The Supreme Court recently closed the proceedings enquiring into a conspiracy to threaten the independence of the judiciary on the basis of sexual harassment allegations against the former CJI.
- The singular power of the CJI as the Master of the Roster – i.e., the vests exclusive discretion in the Chief Justice to constitute benches and allocate cases.
- While the CJI’s other powers such as recommending appointments to constitutional courts are shared with other senior judges, the power of Master of the Roster is enjoyed without scrutiny.
- This power enabled Justice Gogoi to institute suo motu proceedings despite being an accused; label the case as a matter of judicial independence; and preside over it.
- This power lay at the heart of the controversy surrounding the proceedings the Court has now closed.
Implications for independence of judiciary
- From the standpoint of judicial independence, the Master of the Roster power makes the CJI’s office a high stakes one.
- It makes the CJI the sole point of defence of the Court against executive interference.
- However, this has a flip side.
- With the CJI as the sole Master of the Roster, any executive seeking to influence the Supreme Court needs only a pliant CJI.
- Yet, the Supreme Court has been reluctant to dilute this power.
- In Asok Pande v. Supreme Court of India (2018), a three-judge bench of the Court held that Master of the Roster is the CJI’s exclusive power.
- Thereafter, a two-judge bench in Shanti Bhushan v. Supreme Court of India (2018) rejected the plea that the Master of the Roster should be interpreted as the collegium.
Need for the reforms
- The collegium system has failed to keep executive interferences at bay from the Supreme Court.
- This is for two reasons:
- First, as Justice Gogoi’s case shows, there is an attractive lure of post-retirement jobs.
- Second, as the privilege of Master of the Roster shows, the CJI’s allocation of cases is an unchecked power.
- The continuing project of judicial reforms should then address these two issues.
Way forward
- A cooling-off period between retirement and a post-retirement appointment has often been suggested as a way to deal with the first problem.
- For the second, the power of Master of the Roster needs to be diversified beyond the CJI’s exclusive and untrammelled discretion.
Consider the question “What are the issues with the Master of the Roaster power of the Chief Justice of India? Suggest the ways to deal with the issue.”
Conclusion
We need to carry out these reforms make the judiciary less prone to interference from the executive.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Issues with new Rules under IT Act
The article discusses the issues with the new rules issues under the IT Act.
Issues with the new rules
1) No discussion
- Last week, the Union Government issued a set of rules under the Information Technology Act, superseding rules issued under Section 79 of that statute in 2011.
- This has happened in the absence of open and public discussion and without any parliamentary study and scrutiny.
2) Concerns over legal basis
- The Union Government has chosen to pass these rules under the requirement to outline the due diligence that Internet intermediaries have to follow in order to be able to claim their qualified legal immunity under Section 79 of the IT Act.
- These rules at the outset appear unlawful even with respect to whether they could have been issued under the Information Technology Act in the manner chosen by the government, leave alone their constitutionality with respect to fundamental rights.
- The government’s gazette notification has further claimed that the rules were also issued under the legal authority to specific procedure for blocking web content under Section 69A of the IT Act.
- However, rules overseeing government web content blocking powers have already been issued for that section in 2009, and not superseded.
3) Using rule making power to issue primary legislation
- The ability to issue rules under a statute — i.e. to frame subordinate legislation — is by its nature a limited, constrained power.
- The executive branch is subordinate to what Parliament has permitted it and cannot use its rule-making power to seek to issue primary legislation by itself.
- With the present Internet content and social media rules, the Union Government has done precisely that.
- The executive branch has created new rules that apply only to “significant social media intermediaries” — a term that appears nowhere in the Information Technology Act.
- The rules have grown to include a chapter on how digital news sites have to be registered before the Ministry of Information and Broadcasting.
- However, digital news service registration is not required under the IT Act and streaming video content has not been included under the ambit of the Cinematograph Act.
Consider the question “What are the challenges in the regulation of Big Tech to democracies? Suggest the measures to deal with these challenges.”
Conclusion
Instead of advancing Internet content control, India needs to advancing surveillance law reform or enacting a strong statutory data protection framework.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Operation Green
Mains level: Paper 3- Expanding Operation Green
The article compares the performance of Operation Flood with Operation Green and offers several lessons for the success of Operation Green.
Operation Green and its expansion
- There were three basic objectives when OG was launched.
- First, that it should contain the wide price volatility in the three largest vegetables of India (TOP).
- Second, it should build efficient value chains of these from fresh to value-added products with a view to give a larger share of the consumers’ rupee to the farmers.
- Third, it should reduce the post-harvest losses by building modern warehouses and cold storages wherever needed.
- The Union budget for the FY 2021-22 proposes the expansion of Operation Green (OG) beyond tomatoes, onions, and potatoes (TOP) to 22 perishable commodities.
- The move reflects the government’s intentions of creating more efficient value chains for perishables.
Comparing performance of OG with horticulture sector
- A closer examination of the scheme reveals that it is nowhere near achieving its objectives.
- ICRIER research reveals that price volatility remains as high as ever.
- It also reveals that farmers’ share in consumers’ rupee is as low as 26.6 per cent for potatoes, 29.1 per cent in the case of onions, and 32.4 per cent for tomatoes (see graph).
- In cooperatives like AMUL, farmers get almost 75-80 per cent of what consumers’ pay.
- Operation Flood (OF) transformed India’s milk sector, making the country the world’s largest milk producer, crossing almost 200 million tonnes of production by now.
- Although OG is going to be more challenging than OF there are some important lessons one can learn from OF.
Lessons from operation flood
- First and foremost is that results are not going to come in three to four years.
- OF lasted for almost 20 years before milk value chains were put on the track of efficiency and inclusiveness.
- There has to be a separate board to strategise and implement the OG scheme, more on the lines of the National Dairy Development Board (NDDB) for milk.
- Second, we need a champion like Verghese Kurien to head this new board of OG.
- The MoFPI can have its evaluation every six months, but making MoFPI the nodal agency for implementing OG with faceless leaders is not very promising.
- Third, the criteria for choosing clusters for TOP crops under OG is not very transparent and clear.
- The reason is while some important districts have been left out from the list of clusters, less important ones have been included.
- What is needed is quantifiable and transparent criteria for the selection of commodity clusters, keeping politics away.
- Fourth, the subsidy scheme will have to be made innovative with new generation entrepreneurs, startups and FPOs.
- The announcement to create an additional 10,000 FPOs along with the Agriculture Infrastructure Fund and the new farm laws are all promising but need to be implemented fast.
Consider the question “What are the objectives of Operation Green? How far has Operation Green succeeded in achieving its objectives?”
Conclusion
These lessons from Operation Flood will help in securing the success of the expanded Operation Green.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Fifth Science Policy
The article elaborates on the various aspect of the 5th Science Policy.
Scientific publication from India and issues with it
- From the report published by the National Science Foundation of the U.S. in December 2019, India was the third-largest publisher of peer-reviewed science and engineering journal articles and conference papers, with 135,788 articles in 2018.
- This milestone was achieved through an average yearly growth rate of 10.73% from 2008, which was greater than China’s 7.81%.
- However, China and the United States had about thrice and twice the number, respectively, of India’s publications.
- Also, the publications from India are not impactful.
- From the report, in the top 1% of the most cited publications from 2016 (called HCA, or Highly Cited Articles), India’s index score of 0.7 is lower than that of the U.S., China and the European Union.
- An index score of 1 or more is considered good.
- The inference for India is that the impact, and hence the citation of publications from India, should improve.
Patents filed by India
- The World Intellectual Property Organization (WIPO) through their Patent Cooperation Treaty (PCT) is the primary channel of filing international patent applications.
- In its report for 2019, WIPO says India filed a modest number of 2,053 patent applications.
- Compared to the 58,990 applications filed by China and 57,840 by the U.S., India has a long way to go.
- The Indian Government put in place the National Intellectual Property Rights (IPR) Policy in 2016 to “stimulate a dynamic, vibrant and balanced intellectual property rights system”.
- One of the objectives is human capital development.
- The mission to foster innovation, replicate it at scale and commercialise it is a work in progress consequent to the policy.
India’s Science Policies
- There have been four science policies till now, after 1947, with the draft of the fifth policy having been released recently.
- India’s first science policy adopted in 1958.
- It led to the establishment of many research institutes and national laboratories, and by 1980.
- The focus in the second science policy, Technology Policy Statement, in 1983, was technological self-reliance and to use technology to benefit all sections of the society.
- The Science and Technology Policy 2003, the first science policy after the economic liberalisation of 1991, aimed to increase investment in research and development and brought it to 0.7%.
- The Scientific and Engineering Research Board (SERB) was established to promote research.
- In 2013, India’s science policy included Innovation in its scope and was called Science, Technology and Innovation Policy.
- The focus was to be one of the top five global scientific leaders, which India achieved.
What 5th science policy seeks to achieve
- The draft of the Science, Technology and Innovation Policy 2020 (STIP2020) has an ambitious vision to “double the number of full-time equivalent (FTE) researchers, Gross Domestic Expenditure on R&D (GERD) and private sector contribution to the GERD every 5 years” .
- It also aims to “position India among the top three scientific superpowers in the next decade”.
- It also defines strategies to improve funding for and participation in research. India’s Gross Domestic Expenditure on R&D (GERD) is currently around 0.6% of GDP.
- This is quite low when compared to the investments by the U.S. and China which are greater than 2% and Israel’s GERD is more than 4%.
- The policy seeks to define strategies that are “decentralized, evidence-informed, bottom-up, experts-driven, and inclusive”.
Solutions to improve funding
- STIP2020 defines solutions to improve funding thus: all States to fund research, multinational corporations to participate in research, fiscal incentives and support for innovation in medium and small scale enterprises.
- The new measures should not become a pretext to absolve the Union and State governments of their primacy in funding research; the government should invest more into research.
Other critical focus areas
- 1) Other critical focal areas ar inclusion of under-represented groups of people in research.
- 2) Support for indigenous knowledge systems.
- 3) Using artificial intelligence.
- 4) Reaching out to the Indian scientific diaspora for collaboration.
- 5) Science diplomacy with partner countries.
- 6) Setting up a strategic technology development fund to give impetus to research.
Conclusion
More specific directives and implementation with a scientific temper without engaging in hyperbole will be key to the policy’s success; and its success is important to us because, as Carl Sagan said, “we can do science, and with it we can improve our lives”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Dealing with the challenges of Big Tech
The article highlights the challenges in regulating the Big Techs.
Controlling Big Tech
- Recently, the Indian government announced a sweeping array of rules reining-in social media.
- Specifically, social media platforms are required to become “more responsible and more accountable” for the content they carry.
- India is by no means alone in taking steps to regulate at Big Tech.
- The social media companies would argue that they are self-regulating.
- The problem is that their actions are ad hoc, inconsistent and reactive
Issues
- A user can be removed from the platform if his post threatens the “unity, integrity, defence, security or Sovereignty of India, friendly relations with foreign states, or public order, or causes incitement to the commission of any cognisable offence or prevents investigation of any offence or is insulting any foreign States”.
- In other words, the government is giving itself plenty of room to cut Big Tech down to size.
Why the issue needs government intervention: 3 arguments
1) Conflict of interest
- The government intervention rests on the presumption that it is never in the commercial interest of Big Tech to remove offensive speech.
- This is because as such content goes viral more readily, bringing in more eyeballs, more data and more advertising revenue.
- Big Tech proponents would contend that the companies are getting smarter about the risks of allowing such content on their systems and will inevitably find it in their self-interest to pre-emptively kill it.
2) State is the guardian of public interest
- A second argument in favour of government would be as follows: States are the guardians of the public interest.
- In democratic societies, governments are elected to represent the will of the people.
- So if there is a hard choice to be made about curtailing speech or permitting it, it seems only natural to turn to the public guardian.
- The counter to this theory would be that, in practice, even democratically elected governments are far from perfect.
- In fact according to The Economist Intelligence Unit’s Democracy Index, both India (ranked 53rd ) and the US (ranked 25th) are “flawed democracies”.
- In parallel, the argument for Big Tech to be the upholder of the public interest could rest on the theory that well-functioning markets are superior to flawed democracies in optimising social welfare.
- The counter-argument to this view would be that the tech industry is itself deeply flawed.
- There is a lack of sufficient choice of platforms; there are asymmetries in power between the companies and users and Big Tech is amassing data on the citizens and using this information for its own purposes, which makes the disparity even greater.
3) Bargaining power of BigTech
- A third perspective is to acknowledge it doesn’t matter who is the “true” upholder of the public interest.
- For all practical purposes, the outcome of the struggle between Big Government and Big Tech will be determined by relative bargaining power.
- While governments technically have the ability to take entire platforms offline within the borders of their countries, these platforms are now so enormous that their users would revolt.
- This is why we witnessed the audacity, recently, of Google and Facebook, threatening to de-platform Australia.
Consider the question “What are the challenges in the regulation of Big Techs? Suggest ways to deal with these challenges.”.
Conclusion
While governments technically have the ability to take entire platforms offline within the borders of their countries, these platforms are now so enormous that their users would revolt. This is why we witnessed the audacity, recently, of Google and Facebook, threatening to de-platform Australia.
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From UPSC perspective, the following things are important :
Prelims level: Schedule 10
Mains level: Paper 2- Issues with anti-defection law
The article highlights the shortcomings of the anti-defection law and its failure in ensuring the stability of the government.
Background of anti-defection law
- The anti-defection law was included in the Constitution as the Tenth Schedule in 1985.
- The main purpose was to preserve the stability of governments and insulate them from defections of legislators from the treasury benches.
- The law stated that any Member of Parliament (MP) or that of a State legislature (MLA) would be disqualified from their office if they voted on any motion contrary to the directions issued by their party.
Issues with the anti-defection law
1) Against the concept of representative democracy
- The provisions of the anti-defection law is not limited to confidence motions or money bills.
- It applies to all votes in the House, on every Bill and every other issue.
- It even applies to the Rajya Sabha and Legislative Councils, which have no say in the stability of the government.
- Therefore, an MP (or MLA) has absolutely no freedom to vote their judgement on any issue.
- They have to blindly follow the direction of the party.
- This provision goes against the concept of representative democracy.
2) The act turns legislator to be an agent of the party
- There are two broadly accepted roles of a representative such as an MP.
- One is that they are agents of the voters and are expected to vote according to the wishes and for the benefits of their constituents.
- The other is that their duty to their constituents is to exercise their judgement on various issues towards the broader public interest.
- In this, they deliberate with other MPs and find a reasonable way through complex issues.
- The anti-defection law makes the MP neither a delegate of the constituency nor a national legislator but converts them to be just an agent of the party.
3) Broken chain
- The legislator is accountable to voters, and the government is accountable to legislators.
- In India, this chain of accountability has been broken by making legislators accountable primarily to the party.
- This means that anyone from the party having a majority in the legislature is unable to hold the government to account.
- This negates the concept of them having to justify their positions on various issues to the people who elected them to the post.
4) No incentive for MPs to understand policy choices
- If an MP has no freedom to take decisions on policy and legislative proposals, there would be no incentive to put in the effort to understand the different policy choices and their outcomes.
- The MP becomes just another number to be tallied by the party on any vote that it supports or opposes.
5) Weakening of the accountability mechanism
- While introducing the draft Constitution, Dr. B.R. Ambedkar said that the presidential form (such as in the United States) had higher stability but lower accountability.
- This is because the President is elected for four years, and cannot be removed except for proven misdemeanour.
- In the parliamentary form, the government is accountable on a daily basis through questions and motions and can be removed any time it loses the support of the majority of members of the Lok Sabha.
- The drafting committee believed that India needed a government that was accountable, even at the cost of stability.
- The anti-defection bill weakens the accountability mechanism.
6) The act fails to provide stability
- The political system has found ways to topple governments by reducing the total membership through resignations.
- In other instances, the Speaker — usually from the ruling party — has delayed taking a decision on the disqualification.
- The Supreme Court has tried to plug this by ruling that the Speaker has to take the decision in three months, but it is not clear what would happen if a Speaker does not do so.
- The premise that the anti-defection law is needed to punish legislators who betray the mandate given by the voters also seems to be flawed.
- We have seen many of the defectors in States such as Karnataka and Madhya Pradesh being re-elected in the by-polls, which were held due to their disqualification.
Way forward
- The problem arises from the attempt to find a legal solution to what is essentially a political problem.
- If stability of government is an issue due to people defecting from their parties, the answer is for parties to strengthen their internal systems.
- If parties attract members on the basis of ideology, and they have systems for people to rise within the party hierarchy on their capabilities rather than inheritance, there would be a greater exit barrier.
Consider the question “How far has the anti-defection law succeeded in preventing the destabilisation of the governments? Give reasons in support of your argument.”
Conclusion
The anti-defection law has been detrimental to the functioning of our legislatures as deliberative bodies which hold the executive to account on behalf of citizens. It has turned them into fora to endorse the decision of the government on Bills and budgets. And it has not even done the job of preserving the stability of governments. The Tenth Schedule to the Constitution must be repealed.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Regulation of social media
The article examines the issues with Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
Change in the immunity for social media platforms
- With the social media platforms amassing tremendous power, the Government of India and has over time sought to devise a core framework to governs social media.
- This framework known as the “intermediary liability” has been made legally through Section 79 of the Information Technology Act, 2000.
- This framework has been supplemented by operational rules, and the Supreme Court judgment in Shreya Singhal v. Union of India.
- All this legalese essentially provides large technology companies immunity for the content that is transmitted and stored by them.
- Recently, the Government of India announced drastic changes to it through the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
Issues with the Rules
1) Privacy concern
- The regulations do contain some features that bring accountability to social media platforms.
- For instance, they require that prior to a content takedown, a user should be provided adequate notice.
- However, there are several provisions in the rules that raise privacy concerns.
- Take traceability, where instant messaging platforms which deploy end-to-end encryption that helps keep our conversations private will now effectively be broken.
- This is because now the government may require that each message sent through WhatsApp or any other similar application be tied to the identity of the user.
- When put in the larger context of an environment that is rife with cybersecurity threats, an inconsistent rule of law and the absence of any surveillance oversight, this inspires fear and self-censorship among users.
- The core of the traceability requirement undermines the core value of private conversations.
2) Regulation without clear legal backing
- The rules seek to regulate digital news media portals as well as online video streaming platforms.
- Rules will perform functions similar to those played by the Ministry of Information and Broadcasting for TV regulation.
- For instance, as per Rule 13(4), this also now includes powers of censorship such as apology scrolls, but also blocking of content.
- All of this is being planned to be done without any legislative backing or a clear law made by Parliament.
- A similar problem exists with digital news media portals.
- The purview of the Information Technology Act, 2000, is limited.
- It only extends to the blocking of websites and intermediary liabilities framework, but does not extend to content authors and creators.
- Hence, the Act does not extend to news media despite which it is being stretched to do so by executive fiat.
- The oversight function will be played by a body that is not an autonomous regulator but one composed of high ranking bureaucrats.
- This provides for the discretionary exercise of government powers of censorship over these sectors.
Way forward
- This could have ideally been achieved through more deliberative, parliamentary processes and by examining bodies in other democracies, which face similar challenges.
- For instance, OFCOM, a regulator in the United Kingdom, has been studying and enforcing regulations that promise higher levels of protection for citizens’ rights and consistency in enforcement.
- Instead, the present formulation increases government control that suffers from legality and core design faults.
- It will only increase political control.
Consider the question “What is the purpose of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, and what are the concerns with these rules?”
Conclusion
While every internet user in India needs oversight and accountability from big tech, it should not be at the cost of increasing political control, chilling our voices online and hurting individual privacy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 239A
Mains level: Paper 2- Structural flaws in the composition of legislature of UTs
There are structural flaws in the provisions of the composition of legislature and the relationship between the council of ministers and the Administrator in the UTs.
Pattern in the resignations of MLAs
- Recently, the resignations of MLAs from the Puducherry Assembly led to the fall of government there.
- The same had happened in 2019 in Karnataka.
- Resigning from the membership of the House is every member’s right.
- But according to Article 190 of the Constitution, the resignation should be voluntary or genuine.
- If the Speaker has information to the contrary, he or she is not obliged to accept the resignation.
- But there is by now a familiar pattern to the resignations of Members of the Legislative Assembly.
- Such resignations invariably lead to the fall of the government.
Purpose of providing legislature to UTs
- The Constitution-makers/ Parliament provided a legislature and Council of Ministers to some of the UTs to fulfil the democratic aspirations of the people of these territories.
- There was a realisation that the administration of these territories directly by the President through the administrators under Article 239 does not meet the democratic aspirations of the people.
- The creation of a legislature and a Council of Ministers is logical and in consonance with the policy of the state to promote democracy.
Structural issues with legislature in UTs
1) Nomination of members and issues with it
- A closer look at the relevant provisions in the Constitution reveals that this professed aim has often been sought to be defeated by the Union.
- Article 239A was originally brought in, in 1962, to enable Parliament to create legislatures for the UTs.
- A legislature without a Council of Ministers or a Council of Ministers without a legislature is a conceptual absurdity.
- Similarly, a legislature that is partly elected and partly nominated is another absurdity.
- The issue of nomination of members to the Puducherry Assembly had raised a huge controversy.
- The Government of Union Territories Act provides for a 33-member House for Puducherry of whom three are to be nominated by the Central government.
- So, when the Union government nominated three BJP members to the Assembly without consulting the government, it was challenged in the court.
- Finally, the Supreme Court (K. Lakshminarayanan v. Union of India, 2019) held that the Union government is not required to consult the State government for nominating members to the Assembly and the nominated members have the same right to vote as the elected members.
- There is provision for nomination of members to the Rajya Sabha [Article 80 (i)(a)].
- But clause (3) of the Article specifies the fields from which they will be nominated.
- But in the case of nomination to the Puducherry Assembly, no such qualification is laid down either in Article 239A or the Government of Union Territories Act.
- This leaves the field open for the Union government to nominate anyone irrespective of whether he or she is suitable.
- As things stand, the law invites arbitrariness in dealing with the nomination of members to the UT legislature.
2) Administrator’s powers
- The administrator has the right to disagree with the decisions of the Council of Ministers and then refer them to the President for a final decision.
- The President decides on the advice of the Union government.
- So, in effect, it is the Union government which finally determines the disputed issue.
- Although in NCT of Delhi v. Union of India (2019), the Constitution Bench of the Supreme Court had said that the administrator should not misuse this power.
- The bench also said that the Administrator should use it after all methods have failed to reconcile the differences between him/her and the Council of Ministers.
- As a matter of fact, such conflicts between the administrator, who is the nominee of the President, and the elected government is inherent in the constitutional arrangement created for the UTs.
Consider the question “The conflicts between the administrator, who is the nominee of the President and the elected government is inherent in the constitutional arrangement created for the UTs. Comment.”
Conclusion
Experience shows that the UTs having legislatures with ultimate control vested in the central administrator are not workable. So far as the conspiratorial resignation by legislators to bring down their own government is concerned, the political class will have to get the better of the predatory instincts of political parties through constitutional or other means.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: 73rd and 74th Amendments
Mains level: Paper 3- Decentralisation and its relationship with human capital
The article argues for recognising the correlation between human capital and decentralisation in India.
Low human capital indicators
- In the World Bank’s Human Capital Index, the country ranked 116th.
- The National Family Health Survey-5 for 2019-20 shows that malnutrition indicators stagnated or declined in most States.
- The National Achievement Survey 2017 and the Annual Status of Education Report 2018 show poor learning outcomes.
- In addition, there is little convergence across States.
- India spends just 4% of its GDP as public expenditure on human capital:1% and 3% on health and education respectively— one of the lowest among its peers.
Initiatives to address these issues
- Investing in human capital through interventions in nutrition, health, and education is critical for sustainable growth.
- The National Health Policy of 2017 highlighted the need for interventions to address malnutrition.
- On the basis of NITI Aayog’s National Nutrition Strategy, the Poshan Abhiyaan was launched, as part of the Umbrella Integrated Child Development Scheme.
- The latest Union Budget has announced a ‘Mission Poshan 2.0’ and the Samagra Shiksha Abhiyan has been the Centre’s flagship education scheme since 2018.
Relation between decentralisation and human capital
- International experience suggests that one reason why these interventions are not leading to better outcomes may be India’s record with decentralisation.
- Globally, there has been a gradual shift in the distribution of expenditures and revenue towards sub-national governments.
- These trends are backed by studies demonstrating a positive correlation between decentralisation and human capital.
Issues with decentralisation in India
1) Letting states decide the way of empowerment
- The 73rd and 74th Amendments bolstered decentralisation by constitutionally recognising panchayats and municipalities as the third tier.
- The Amendment also added the Eleventh and Twelfth schedules containing the functions of panchayats and municipalities.
- These include education, health and sanitation, and social welfare for panchayats, and public health and socio-economic development planning for municipalities.
- However, the Constitution lets States determine how they are empowered.
- In effect, three tiers of government are envisaged in the Constitution it divides powers between the first two tiers — the Centre and the States
- This has resulted in vast disparities in the roles played by third-tier governments.
2) Centralised nature of fiscal architecture
- While the Constitution assigns the bulk of expenditure responsibilities to States, the Centre has major revenue sources.
- To address this vertical imbalance, the Constitution provides for fiscal transfers through tax devolution and grants-in-aid.
- In addition, the Centre can make ‘grants for any public purpose’ under Article 282 of the Constitution.
- While fiscal transfers that are part of tax devolution are unconditional, transfers under grants-in-aid or Centrally Sponsored Schemes (CSSs) can be conditional.
- Therefore, the increase in the States’ share of tax devolution represents more meaningful decentralisation.
- Despite some shifts towards greater State autonomy in many spheres, the centralised nature of India’s fiscal architecture has persisted.
- Centrally Sponsored Schemes (CSS) have formed a sizeable chunk of intergovernmental fiscal transfers over the years, comprising almost 23% of transfers to States in 2021-22.
- But its outsized role strays from the intentions of the Constitution.
- There are issues in the design of CSSs as well, with the conditions being overly prescriptive and, typically, input-based.
- Against this, international experience reveals that schemes with output-based conditions are more effective.
- Moreover, CSSs typically have a cost-sharing model, thereby pre-empting the States’ fiscal space.
3) Lack of fiscal empowerment
- Third-tier governments are not fiscally empowered.
- The collection of property tax, a major source of revenue for third-tier governments, is under 0.2% of GDP in India, compared to 3% of GDP in some other nations.
- The Constitution envisages State Finance Commissions (SFCs) to make recommendations for matters such as tax devolution and grants-in-aid to the third tier.
- However, many States have not constituted or completed these commissions on time.
Solution
- The Centre should play an enabling role, for instance, encouraging knowledge-sharing between States.
- For States to play a bigger role in human capital interventions, they need adequate fiscal resources.
- To this end, States should rationalise their priorities to focus on human capital development.
- The Centre should refrain from offsetting tax devolution by altering cost-sharing ratios of CSSs and increasing cesses.
- Concomitantly, the heavy reliance on CSSs should be reduced, and tax devolution and grants-in-aid should be the primary sources of vertical fiscal transfers.
- Panchayats and municipalities need to be vested with the functions listed in the Eleventh and Twelfth Schedules.
Consider the question “There is a positive correlation between decentralisation and human capital. This in part explains India’s low human capital indicators. In light of this, examine the issues with the decentralisation in India and suggest the measures to deal with it.”
Conclusion
Leveraging the true potential of our multi-level federal system represents the best way forward towards developing human capital.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: FAME
Mains level: Paper 3- Reducing India's energy import dependence
The article discusses the steps taken by the government to improve fuel efficiency standards and the for the transition to clean sources of energy.
Reducing energy import dependence
- Speaking on the increase in petrol and diesel prices, Prime Minister emphasised the need for clean sources of energy.
- Expanding and diversifying energy supply is good, but if India is to reduce its energy import dependence, it must look towards first managing the demand for petroleum products.
- It is worthwhile to reflect on measures taken by the previous governments as well as this government in this context.
Steps taken
National Electric Mobility Mission Plan
- The UPA-2 administration formulated fuel efficiency standards for passenger vehicles that are now in effect.
- It also constituted the National Electric Mobility Mission Plan (NEMMP).
- While well-intended, both these actions fell short in terms of ambition.
- India’s 2022 fuel efficiency standards for passenger cars are nearly 20% less stringent than the European Union’s standards.
- The NEMMP primarily focused on hybrid electric vehicles.
- Most of the incentives under the NEMMP went towards subsidising mild hybrids instead of electric vehicles.
Multiple fuel pathways
- Recently, the government has encouraged multiple fuel pathways in the transport sector including natural gas.
- The Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme now focuses largely on electric vehicles.
- The government has also provided several additional fiscal and non-fiscal incentives to encourage a transition to electric vehicles.
Steps need to be taken
- There are many things that the government can and should do to
- First, the government should formulate a zero-emissions vehicle (ZEV) programme that would require vehicle manufacturers to produce a certain number of electric vehicles.
- At present, the electric mobility initiative in India is driven largely by new entrants in the two- and three-wheeler space.
- A ZEV programme would require all manufacturers to start producing electric vehicles across all market segments.
- The government should also strengthen fuel efficiency requirements for new passenger cars and commercial vehicles.
- Two-wheelers, which consume nearly two-third of the petrol used in India, are not subject to any fuel efficiency standards.
- Adopting stringent fuel efficiency standards and a ZEV programme by 2024 can result in India’s petroleum demand peaking by 2030.
- The FAME should be extended not only to all passenger cars and commercial vehicles but also to agricultural tractors.
Conclusion
As the economy recovers from the pandemic, the demand for petroleum products will rise, as will prices. But the government can save money for the consumer while enhancing long-term energy security by wielding the regulatory tools at its disposal.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Primary surplus
Mains level: Paper 3- Change in government's fiscal policy stance
The article examines the changes in government’s fiscal policy stance which supports the debt-financing and apparent contradiction displayed by increased excise duty.
Increase in excise duty
- Well before India began to globalise there was a time when each Union Budget announced sales tax increases on tobacco products.
- The rise in tax was expected to be a shot in the arm for the revenue-starved government of our poor country.
- India is less poor now, having risen to the rank of an emerging market economy.
- Yet, COVID-19 has wreaked havoc.
- As opposed to a Budget estimate of 3.5% for fiscal deficit, the revised estimates show a 2.7 times larger deficit of 9.5% for FY 2020-21.
- A comparison of the government’s revised Budget estimates with the original Budget estimates reveals a fall in receipts from every source of taxation except excise.
- The revised Budget shows a rise of ₹94,000 crore on account of excise duties alone.
- Presumably, the increase comes from the much-debated excise duty increases on petroleum and diesel.
- The excise duty rise will hardly compensate for the huge falls in other tax revenues.
- The larger excise duty collection is not large enough to have significantly reduced the inflated fiscal deficit figure.
Implications of hike in excise duty
- Given the nature of the products on which the excise duty has gone up, prices of commodities will rise in general.
- With annual output shrinking by an estimated 7.7%, it is straightforward to conclude that unemployment has risen significantly.
- The accompanying price rise will be the unemployed persons’ worst nightmare.
- The result will be severe inequality.
Change in economic policy framework
- The Economic Survey 2020-21 considers Olivier Blanchard’s prescription that a fiscal deficit automatically transformed to government debt.
- Such debts along with their servicing liabilities have a tendency to magnify over the years where present borrowings keep increasing to repay past borrowings and service charges.
- This leaves little room for growth-enhancing expenditure and reduces a government’s creditworthiness in the eyes of lenders.
- Debt-financed fiscal spending could well be a driver of growth.
- It can improve the standard of living of the entire population, without necessarily removing inequality.
- A government’s fiscal expenditure, Professor Blanchard points out, has stronger multiplier effects during recessions than during booms
- The inequality, however, could well be benignant, for even though the rich will grow richer, the poor will escape out of poverty.
Condition for debt-financed fiscal spending
- Debt or the fiscal deficit constitutes the government’s spendable resources.
- What will prevent the government from sinking into a debt trap?
- Professor Blanchard shows that the debt-to-GDP ratio can be prevented from exploding if the rate of growth of GDP happens to be higher than the sovereign rate of interest.
- This is the case in developed economies.
- In such economies, debt financed government expenditure will create a positive primary surplus out of which interest payments can be made to keep the debt-GDP ratio under control.
- There will, of course, be a maximum value that this ratio can attain, a value that is higher the larger is the excess of the growth rate over the interest rate.
Contradiction in fiscal policy and fiscal regime
- According to the Economic Survey, India’s average interest rate and growth rate over the last 25 years (leaving out FY 2020-21) have been 8.8% and 12.8% respectively.
- Hence, Professor Blanchard’s condition is satisfied.
- This, of course, is not to support excise duty increases, for it goes against the very principle of the Blanchard argument.
- Therefore, there appears to be a contradiction between the government’s announced fiscal policy stance and the fiscal regime it is actually running.
Consider the question”The Economic Survey 2020-2021 calls for the debt-financed fiscal spending. Do you think that this view is suitable for India economy? What are the risks involved?”
Conclusion
The government must consider the implications of increased excise on the economy and should focus on removing the contradiction in its fiscal policy and fiscal regime.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Animal Husbandry Infrastructure Development Fund (AHIDF)
Mains level: Paper 3- Animal Husbandry Infrastructure Development Fund (AHIDF)
Importance of animal husbandary and dairy sector
- As an allied industry of agriculture, the animal husbandry and dairy sector collectively employs more than 100 million people.
- Since the bulk of establishments in this sector is concentrated in rural India, the socio-economic relevance of this sector cannot be overstated.
- the Central government unveiled a string of measures to cushion the economy, as a part of which the Animal Husbandry Infrastructure Development Fund (AHIDF) was announced.
More about AHIDF
- The AHIDF has been set up with an outlay of ₹15,000 crore.
- As per the provisions of AHIDF, a project will be eligible for a loan amount that covers up to 90% of the estimated cost –
- There will be interest subvention of 3% for all eligible entities.
- Applicants can submit the proposal with a complete Detailed Project Report through the Udyami Mitra Portal.
- The fund includes a diverse set of stakeholders such as FPOs, private dairy players, individual entrepreneurs, and non-profits within its ambit.
Strengthening dairy value chain
- There is a pressing need to enhance chilling infrastructure at collection centres by setting up bulk milk coolers.
- If the infrastructure needs for milk processing and distribution are included, then the overall potential investment opportunity is to the tune of ₹1,40,000 crore across the dairy value chain.
- There is also considerable potential to increase the productivity of cattle, especially by enhancing the quality of animal feed.
- With this in mind, the AHIDF has been designed to support the establishment of animal feed plants of varying capacities.
- The infrastructure gap of 10-18 MMT in the production and supply of affordable compound cattle feed translates into an investment potential of around ₹5,000 crore.
Boosting the poultry industry
- There are not only economic but nutritional benefits to boosting the poultry segment’s output, efficiency and quality.
- India is the fourth largest chicken meat producer and the second largest egg producer in the world.
- India is well-positioned to help mitigate rampant malnutrition given that chicken meat provides the cheapest source of protein per unit.
- With eggs being introduced as part of the mid-day meal within several anganwadis in the country, an upgradation in poultry infrastructure would be closely intertwined with social justice outcomes too.
- Macro benefits regarding climate change and employment are linked to this sector.
- Enhanced infrastructure can make processing units more energy-efficient and help mitigate their carbon footprint.
Consider the question ” As an allied industry of agriculture, the animal husbandry and dairy sector are important for rural area and the socio-economic relevance of this sector cannot be overstated. In light of this, examine the role Animal Husbandry Infrastructure Development Fund (AHIDF) could play in transforming rural economy.”
Conclusion
The AHIDF also has the potential to create over 30 lakh jobs, even as it overhauls domestic infrastructure towards giving greater prominence to India’s dairy and livestock products in the global value chain.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India's relations with Taiwan
The article underscores the centrality of Taiwan in the realms of semiconductor production and how that dominant spills over in geopolitics.
Silicon shield of Taiwan
- Taiwan’s security situation has been worsening amidst mounting economic, political and military pressure from China.
- Any Chinese attack on Taiwan that disrupts the flow of semiconductors would produce significant challenges not only for the US but also China that relies on semiconductor supplies from Taiwan.
- That factor appears to be preventing the crisis from boiling over into a full-scale war that could draw the US and Japan into it.
- It is Taiwan’s so-called “silicon shield”.
Taiwan’s dominance in semiconductor industry
- Taiwan is the world’s leading producer of semiconductors and other electronic components.
- The Taiwan Semiconductor Manufacturing Company (TSMC) has more than 55 per cent of the global market share in the production of high-end custom-made chips.
- Of the two rival companies that have survived, US-based Intel is in trouble and Korea’s Samsung has challenges of its own.
- There will be no generation of data without the semiconductors.
- It might be more accurate to say that “semiconductors are the new oil” and their production is increasingly dominated by Taiwan and the TMSC.
Geopolitics over Taiwan
- As its economic heft and political salience rose in the 21st century, China has ratcheted up pressure on countries that have diplomatic relations with Taiwan.
- China has also compelled international organisations to push Taiwan out of their activities, even when Taiwan had much to contribute.
- Amidst the deterioration of US-China relations in recent years, President Donald Trump was far more supportive of Taiwan than his recent predecessors.
- The Biden team has also signalled continuity with Trump’s Taiwan policies.
- All indications are that Washington will continue to seek some technological decoupling and diversification of sensitive supplies away from China.
- Taiwan will inevitably be the key element in the American quest for resilient supply chains in the digital domain.
Opportunity for India
- Taiwan’s position as a semiconductor superpower opens the door for more intensive strategic-economic cooperation between Delhi and Taipei.
- Part of the problem is that India’s strategic community continues to view Taiwan as an adjunct to India’s “One-China policy”.
- India’s policy oscillates between keeping needless distance with Taipei when ties with Beijing are warm and remembering it when Sino-Indian ties enter a freeze.
- This changed in the early 1990s, when it began to engage with Taiwan, but the policy remained a restricted one.
- In the last few years, though, there has been a steady expansion of bilateral engagement.
- Trade has increased from about $1 billion in 2001 to about $7 billion in 2018.
- India has made a special effort to woo Taiwanese companies that are moving some of their production away from China.
- India is yet to tap into the full range of commercial and technological opportunities possibilities with Taiwan.
- This is particularly true of semiconductor production.
Way forward
- Delhi must begin to deal with Taiwan as a weighty entity in its own right that offers so much to advance India’s prosperity.
- Delhi does not have to discard its “One-China policy” to recognise that Taiwan is once again becoming the lightning rod in US-China tensions.
Consider the question “India needs to explore the opportunities in relationship with Taiwan even as it pursues and sticks to its One China policy. Comment.
Conclusion
As Taiwan becomes the world’s most dangerous flashpoint, the geopolitical consequences for Asia are real. Although Delhi has embraced the Indo-Pacific maritime construct, it is yet to come to terms with Taiwan’s critical role in shaping the strategic future of Asia’s waters.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: State Finance Commission
Mains level: Paper 2- Conditional grants to incentivise the states for reforms
The article highlights the crucial recommendations made by the 15th Finance Commission and also explains the importance of conditions for grants from the Centre to push the state for reforms.
Crucial recommendations by 15th Finance Commission
- The Fifteenth Finance Commission’s report for the period 2021-22 to 2025-26 outlines some crucial recommendations for state governments.
- These recommendations cover tax devolution, grants from the Centre, and the guidelines for the borrowings that they are permitted to incur over the medium-term.
- The commission has recommended that 41 per cent of the government’s divisible pool of taxes be transferred to state governments.
Horizontal devolution formula
- The horizontal devolution formula specifies each state’s share in the overall pie.
- The 15th FC was required to use the states’ population as per the 2011 Census — a highly contentious change.
- It has also introduced a demographic performance criterion.
- Additionally, it has also introduced a new criterion –tax effort.
- Tax effort is measured by the ratio of the three-year average of per-capita own tax revenues and per-capita gross state domestic product (GSDP).
- The net result of the change in criteria is that the share of 10 states in the divisible pool has declined.
- Karnataka is the biggest loser, while Maharashtra is the biggest gainer.
Grants from the Centre conditioned on reforms in states
- Another major set of the commission’s recommendations pertain to grants from the Centre.
- In a major shift, the 15th FC has sharply increased the proportion of grants whose receipt is conditional on specified reforms being undertaken.
- 57 per cent of the 15th FC-recommended grants accepted so far by the GoI are conditional, relative to just 17 per cent for the 14th FC (including J&K).
What are the conditions
1) Setting up of State Finance Commission (SFC) and applicability of SFC’s recommendations for 5 years only
- Constitution requires state governments to set up State Finance Commissions (SFC).
- The 15th FC has asserted that the mandate of any given SFC is intended to be applicable only for five years.
- It revealed that only 15 states have set up their fifth or sixth SFCs, whereas several states have not moved beyond their second or third SFC.
- Accordingly, a staggering 84 per cent of the Rs 4.4 trillion grants for local bodies recommended by the 15th FC are conditional on the states setting up SFCs for the coming five-year period, and acting on their recommendations by March 2024.
2) Availability of online accounts
- Another entry-level condition for availing grants by rural and urban local bodies pertains to the timely availability of their accounts online from 2021-22 onwards.
3) Notiflying floor rate for property tax
- For the receipt of grants by the urban bodies, states are required to notify a floor rate for property tax by 2021-22, and demonstrate consistent year-wise improvement from 2022-23 onwards.
- This will complement the conditions set previously by SEBI for ULBs to become eligible to raise municipal bonds.
Changes in limit on net borrowings of state governments
- The commission has recommended that the normal limit for net borrowings of state governments be fixed at 4 per cent of GSDP in 2021-22.
- This will ease to 3.5 per cent by 2022-23, thereafter reverting to the erstwhile 3 per cent limit till 2025-26.
- The additional borrowing space of 0.5 per cent of GSDP for states is conditional on the completion of power sector reforms.
Prospect of huge gaps in states’ revenue in the future
- The states’ fiscal arithmetic will alter in 2022-23 with the GST compensation set to cease at the end of June 2022 as things stand today.
- The ensuing drop in grants, combined with the tapering of the front-loaded revenue deficit grants is likely to leave a big gap in some states’ revenues.
Consider the question “What are the conditions laid down by the 15th Finance Commission on the states for the central grants? How these conditions could benefit the states?”
Conclusion
The question is whether this revenue gaps will force the states to move on both the power sector reforms, which have proven challenging in the past, and the municipal reforms, so that their resource availability may be enhanced.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Bicameralism
Mains level: Paper 2- Importance of bicameralism
The article discusses the issue of undermining of the upper house by passing the certain bills through voice vote and use of money bill route.
Passing of the Bill by voice vote
- The Karnataka Prevention of Slaughter and Preservation of Cattle Bill was passed by the State’s Legislative Council by voice vote without any division.
- The law was passed by the Council despite the lack of a majority.
- There was no division vote based on actual voting as is usual and as the Opposition members had demanded.
A new legislative precedent
- Similar process was followed to pass the controversial farm laws (by the Rajya Sabha) in September 2020.
- The pandemonium in the House caused by heated interventions by the Opposition was used as a pretext to resort to a voice vote.
- The laws passed with a voice vote seem like a new template for bypassing the constitutionally envisaged legislative process.
- Another process repeatedly used over the last few years to bypass the Upper House of Parliament is the Money Bill route.
- The Aadhaar Bill was passed in this manner.
- Other controversial laws such as those pertaining to electoral bonds, retrospective validation of foreign political contributions and the overhaul of the legal regime relating to tribunals have also been carried out through the Money Bill route.
The Rajya Sabha’s role
- The Lok Sabha is seen as directly representing the will of the people, and the Rajya Sabha as standing in its way.
- The countervailing function of the Upper House is rarely seen as legitimate.
- The Rajya Sabha has historically stopped the ruling party from carrying out even more significant legal changes.
- The Rajya Sabha is imperfect, partly because of constitutional design.
- And partly because obviously undesirable practices, such as members representing States they have no affiliation to, have been allowed to flourish.
Importance of bicameralism
- The very questioning of the monopoly of the Lower House to represent the ‘people’ makes bicameralism desirable, argues legal philosopher Jeremy Waldron.
- In India, the fact that the Rajya Sabha membership is determined by elections to State Assemblies leads to a different principle of representation, often allowing different factors to prevail than those in the Lok Sabha elections.
- John Stuart Mill had warned about a single assembly becoming despotic and overweening, if released from the necessity of considering whether its acts will be concurred in by another constituted authority.
- The other merit of bicameralism is significant in a Westminster system like India, where the Lower House is dominated by the executive.
- The Rajya Sabha holds the potential of a somewhat different legislative relation to the executive, making a robust separation of powers possible.
Consider the question “Examine the importance of bicameralism in India. Why passage of certain bills as money bill is causing controversies?”
Conclusion
The important role played by the upper house needs to be recognised and respected in the legislative processess.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Gross fixed capital formation
Mains level: Paper 3- Year of economic consolidation
The article argues that we are less likely to witness high growth next year rather it is going to be the year of consolidation.
Year of consolidation
- The Economic Survey, the Union budget, and the RBI credit policy attest that the economy is on the recovery path.
- The fourth quarter will register a positive growth rate, and as a consequence, the contraction for the full year will be between 7.5-8 per cent.
- The contraction sets the pace for growth in 2021-22 which is now going to be critical as it is the foundation for the fructification of the budget revenue targets.
- But consider this: GDP in 2019-20 was Rs 146 lakh crore, which has come down to Rs 134 lakh crore in 2020-21.
- Hence, a 10 per cent growth will take the Indian economy to Rs 147 lakh crore — when compared to Rs 145 lakh crore, this reflects modest growth.
- Therefore, expectations should be tempered when we talk of growth next year.
- There will be a revival in economic activity on all ends which will probably bear fruit in 2022-23 — FY 2021-22 will be a year of consolidation.
Policy architecture
- The government has brought in a cogent policy framework right from the time of the Atmanirbhar announcements, culminating in the budget.
- There is a focus on infrastructure as well as providing incentives to investment through the Production Linked Incentive (PLI) scheme.
- Real estate, power and construction saw several policy reforms last year.
- There is a strong capex push by the government and there will more action taken here.
RBI policies
- The RBI has promised to continue accommodative policies, which sends a signal of managing liquidity considering the large borrowing programme of the government of Rs 12.8 lakh crore.
- RBI will carry out more open market operations, and long-term repo operations during the year to ensure that interest rates remain stable.
- However, there will be concern around state government borrowings too, which will exert pressure on the availability of funds.
- Hence, there will be more central bank intervention in the market to ensure that funds are available.
Inflation concerns
- Inflation is a concern as global commodity prices have already started going up and this has led to core inflation rising.
- Given that the monsoon has been good in the last four years, there is a possibility of an adverse season this time which can affect food prices.
- In India, too, we have seen that the price of petrol and diesel is rising sharply.
- Add to this rising manufactured goods inflation witnessed of late, and there is a possibility of inflation rising above the MPC’s tolerance levels.
Lack of consumption growth
- For growth to take place, consumption growth has to be real and rapid.
- Consumption growth has been affected by the absence of commensurate job creation.
- Consumption growth is unlikely too soon as consumption is dependent on job creation.
- Jobs get created when growth is high and hence there is circular reasoning here.
- Income has been affected in 2020 due to the pandemic which has led to job losses as well as salary cuts.
- This has affected the sustainability of the pent-up demand seen in October and November.
Falling investment
- Investment has lagged with gross fixed capital formation falling to a low of 24.2 per cent in 2019-20 from 34.3 per cent in 2011-12.
- Reversing this decline will be challenging because the demand for such projects has slowed down and banks have been wary of lending for infrastructure.
- There is also surplus capacity in industry with the capacity utilisation rate being 63.3 per cent in the second quarter of 2020-21.
- Therefore, private investment will rise only gradually and the onus is on governments to manage their targets.
- Private investment will follow, but at a slower pace and realistically speaking, will fire more in 2022-23 rather than 2021-22.
Consider the question “Growth has to be driven by two engines- consumption and investment. India has been facing challenges on both fronts. In light of this, suggest the measures India needs to adopt to move forward on both fronts.
Conclusion
The year 2021-22 will be one of cautious optimism. Growth will trend upwards, but it has to be interpreted with caution, keeping a check on the consumption while pushing the investment while arresting the inflation.
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