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Type: op-ed snap

  • Important Judgements In News

    Why transfer of case to district judge by Supreme Court sends the wrong signal

    op-ed snap | Polity | Mains Paper 2: Executive & Judiciary

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Places of Worship (Special Provisions) Act, 1991

    Mains level: Paper 2- Lower judiciary

    Context

    The Supreme Court order of May 20, transferring the suit on the Gyanvapi Masjid dispute from the civil judge (senior division) Varanasi to the district judge casts aspersion, though unintended, on the competence of civil judges in general.

    Background

    • The matter had reached the Supreme Court on a petition filed by the Mosque Management Committee, which challenged the civil judge’s orders.
    • The order permitted inspection, survey, and videography of the mosque’s complex to collect evidence about the alleged existence of idols of Hindu deities inside the mosque, which is adjacent to the Kashi Vishwanath Temple.
    • The Mosque Management Committee had filed an application before the civil judge seeking the rejection of the plaint on the ground that it was barred by the Places of Worship (Special Provisions) Act, 1991.
    • Places of Worship (Special Provisions) Act, 1991 prohibits individuals and groups of people from converting, in full or in part, a place of worship of any religious denomination into a place of worship of a different religious denomination, or even a different segment of the same religious denomination.
    • It was argued before the SC that given the said Act, the suit was liable to be rejected at the threshold as the civil judge had no jurisdiction to entertain the same, much less to pass the aforesaid interim orders.
    • The SC has not found any fault with the order of the civil judge, though there is also a view that it was mandatory on the part of the civil judge to have first passed an order on whether he had the jurisdiction to entertain the suit.
    • However, it appears that in the SC’s view, this was not a serious infraction.
    • So, in a way, the SC has affirmed the orders of the civil judge.
    • The civil court had territorial and pecuniary jurisdiction to deal with the matter.
    • The question that arises is: Why has the Supreme Court transferred the matter to the court of the district judge?

    Issues with the SC transferring the case to the district judge

    • The SC has seemingly declared civil judges to be not competent to decide a matter alleged to be complex.
    • When the Civil Procedure Code, the High Court Rules and Orders invest a civil judge with jurisdiction, why take it away merely on the plea that the matter is complex?
    • Unhealthy precedent: Fransfer of the case to the district judge has set an unhealthy precedent and will have a demoralising effect on the subordinate judiciary.
    • In the recent past, many lower-level judicial officers have passed outstanding orders in matters concerning the liberties of the citizens, which are under threat as never before.
    • The subordinate judiciary provides the foundation of our judicial system.

    Conclusion

    Supreme Court order inadvertently casts aspersions on competence of subordinate judiciary. District court should not be weighed down by SC observation.

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  • Goods and Services Tax (GST)

    Supreme Court’s ruling on GST deepens the churn in the tax regime

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 3- Implications of Supreme Court's ruling for GST regime

    Context

    Last week, the Supreme Court ruled that the decisions taken by the GST Council are merely recommendations with “persuasive value” and are not binding.

    GST as a advisory body

    • The court has rejected the Centre’s contention that the entire structure of GST would crumble if the Council’s decisions were not treated as enforceable.
    • In some ways, the verdict states the obvious.
    • Article 246-A inserted after the 122nd constitutional amendment states, “Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every state, have the power to make laws with respect to the GST imposed by the Union or by such state.”
    • Thus, the power to levy the central GST (CGST) vests with Parliament, the power to levy state GST (SGST) vests with state legislatures and Parliament has exclusive power to make laws with respect to the GST on items that are part of inter-state trade or commerce.
    •  Thus, the GST Council is only an advisory body and the actual decisions regarding model GST levies, principles of levy, apportionment of GST levied on inter-state supplies, principles relating to place of supply, exemptions and rate structure and any special provisions will have to be taken by either Parliament in the case of CGST and IGST or the states in the case of SGST.
    • In effect, decisions on the structure and operation of the tax can be made by the Centre and individual states without discussion and deliberation in the Council and both can ignore any recommendation made by the Council.
    • The judgment reiterates that the sovereign right to levy the tax still exists with the Union and state governments and it is for them to consider the recommendations of the Council.
    • The chance of having a harmonised GST and reforms in the tax regime will crucially depend upon continued negotiation and bargaining between the Union and states.
    • Intergovernmental cooperation has been kept alive to ensure a harmonised GST and unless both the Centre and the states see the gains, reforms will be hard to come by and if the Centre desires the reforms more than the states, it will have to ensure a “buy in” from the states to agree for the reform.

    Implications of the judgement

    • Given that the GST Council has been declared as only an advisory body with a persuasive value, what happens to the dream of having a harmonised one nation, one tax, if a state or a group of states decides to deviate?
    • But the judgment paves the way for more intensive bargaining and negotiations, placing states on an equal footing with the Centre in taking decisions on the structure and operations of the tax.
    • At present, decisions get approved in the GST Council when passed by a majority of three-fourths of the weighted votes of the members present and voting, with the Centre having one-third weight and individual states (and UTs) having an equal share of the remaining two-thirds weight.
    • However, in the past, all decisions in the Council have been taken by consensus (except in the case of determining the rate on lotteries), and the Supreme Court decision reinforces this convention.
    • The immediate impact of this will be bargaining by states for extending the period of compensation for the loss of revenue.
    •  As the five-year period of compensation gets over at the end of June, this decision will now help the states to bargain hard for the extension.

    Way forward

    •  Though the period of collecting compensation cess has been extended till March 2026 to meet the interest and repayment requirements of the funds borrowed from the RBI to meet the compensation requirements, the lasting solution lies in increasing the revenue productivity of the tax by pruning the list of exempted items, rationalising the rates and taking administrative measures.
    • These reforms will require strengthening the cooperative spirit.

    Conclusion

    This has come at a time when reforms have to be set in motion and hopefully, the Court’s decision will strengthen the cooperative spirit in reforming the domestic consumption tax system in the country.

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  • Food Procurement and Distribution – PDS & NFSA, Shanta Kumar Committee, FCI restructuring, Buffer stock, etc.

    The message from the government’s wheat export ban

    op-ed snap | Agriculture | Mains Paper 3: Agriculture and related issues,Issues Related To Farm Subsidies & Msp

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 3- Challenges facing wheat economy in India

    Context

    The ban on the export of wheat was not unexpected. The rather ambivalent approach to agriculture comes out clearly with this move.

    Understanding how this ban has come about

    • We are not comfortable with market forces operating in agriculture.
    • Nor are we quite sure whether we want the farmer to get a better price or the consumer to pay less.
    • Governments spend a lot of money in the form of subsidies to ensure farmers are enthused to produce more wheat.
    • The Centre keeps increasing the MSP for this purpose and states often pay a bonus for procurement.
    • There are political reasons too as the farmer lobby needs to be placated.
    •  There are political reasons too as the farmer lobby needs to be placated.
    • We have been taking credit for the production of wheat and every year we set a new record.
    • This year, the Ministry announced that wheat production will touch a record of 111 million tonnes, which has recently been revised downwards.
    • With the war, conditions have changed. Russia and Ukraine are large producers of wheat and their supply to world markets has been cut off due to sanctions and supply chain disruptions.
    • With supplies interrupted, there is an opportunity for other surplus nations to step in.
    • But the disruption has caused world prices to rise significantly.

    Opportunity for India

    • The World Bank data indicates that the price of US (soft red winter) wheat has gone up from $328/tonne in December to $672/tonne while US (hard red winter) wheat is up from $377 to $496/tonne.
    • Countries that produce abundant wheat now have a chance to leverage this opportunity to export.
    • However, in case of India it does appear that production will be lower than expected.
    • Low wheat stock: The government has also not been able to procure wheat as farmers are no longer selling at MSP (which is at Rs 2,015/quintal) as they are getting higher prices in mandis.
    • As of May 10, procurement was just 18 million tonnes against 43 million tonnes last year.
    • This is a significant fall.
    • But stocks with the Centre and other state agencies are 30.3 million tonnes, way above the buffer norms of 27.6 million tonnes.
    • The ban on wheat exports is because of this.

    Two constraints on the wheat economy

    • In 2007 and again in 2021, the government banned futures trading in wheat on grounds that it led to speculative pressure on prices even though the quantity traded and the open interest were minuscule.
    • At that time, it was a decline in expected output which triggered this action.
    • It does look like the wheat economy will continue to operate within two constraints that have become barriers to commercialisation.
    • MSP and government procurement: The first is MSP and government procurement, which feeds into the public distribution system.
    • Arhatiya system: The second is the arhatiya system of trading where middlemen have come in the way of any reform.

    Suggestions

    • Abolish MSP and procurement system: The MSP and procurement system needs to be dismantled.
    • Cash transfers: As the government has successfully expanded both the Aadhaar and Jan Dhan programmes, there should be simple cash transfers to beneficiaries.
    • Buffer stocks can be held to ease distress during a crisis, but government involvement should stop there.
    • Procuring unlimited quantities of wheat and keeping huge stocks has distorted the wheat matrix.
    • The mandi system too needs to be revisited and alternatives have to be made available so that farmers can choose the point of sale.

    Conclusion

    We have been talking about being a part of global supply chains to augment value addition and accelerate growth. But when it comes to agriculture it is a blow-hot blow-cold approach. This not only affects our credibility but also sends confusing signals to producers as to what is the best way out for them.

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  • Indian Ocean Power Competition

    How the Quad can become more than an anti-China grouping

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Indo-Pacific Economic framework

    Mains level: Paper 2- Opportunity for Quad plus

    Context

    On May 23, before the Quad leaders’ summit in Tokyo, the United States launched the Indo-Pacific Economic Framework (IPEF).

    Significance IPEF

    • The Indo-Pacific Economic Framework (IPEF) will consist of a diverse group of 12 countries initially — Australia, Brunei, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam.
    • The IPEF — which covers fair trade, supply chain resilience, infrastructure, clean energy, and decarbonisation, among others — is likely to complement the other Indo-Pacific projects like the Supply Chain Resilience Initiative (SCRI)  that also seeks to build resilient and secure trade linkages by reducing dependence on China.
    • Decoupling from Chinese over-dependence: The US-led economic engagement is a salient attempt to allow countries to decouple from Chinese over-dependence in order to ultimately strengthen the existing free and open rules-based global order.
    • Extension of plus grouping: The launch of IPEF signifies the essence of the Quad and its extension as a “plus” grouping.
    •  It brings together seven critical countries of the Association of Southeast Asian Nations (ASEAN), all Quad states, and dialogue partners, including South Korea, solidifying a case for the “plus” characterisation of the Quad process.
    • Thus, it is an encouraging sign that the Quad countries are investing their strategic orientation in this regard.
    • Importantly, both the IPEF launch, and the Tokyo summit dispel any remaining misgivings about the Quad disintegrating and certify that it is a cohesive unit where it matters.
    •  It would potentially represent an amalgamation of the eastern and western “like-minded” countries.
    • The expanded grouping and the related Quad initiatives will build a comprehensive and integrated approach to combating shared challenges arising out of Chinese aggression.
    • A hallmark of Biden’s latest Asia visit has been South Korea’s embrace of the Indo-Pacific framework.
    • This is a long-awaited turn that could potentially lead to South Korea participating in a more meaningful manner in the Quad in the near future.

    Importance of Taiwan

    • Taiwan is a major economy in the Indo-Pacific region (as also the US’s eighth-largest trading partner in 2021 and a critical partner in diversifying the US supply chains), which is already engaged in the US-Taiwan Economic Prosperity Partnership Dialogue that includes many of the issues proposed in the IPEF.
    • The inclusion of Taiwan, which already has a critical role in the global semi-conductor supply chain network, in the SCRI and the IPEF as well as, by extension, in the Quad format, in some manner would be a welcome addition.
    • Geopolitical statement against coercive tactics: Importantly, Taiwan’s inclusion would also be a geopolitical statement against coercion tactics by international actors.

    Inclusivity characteristics based on a  commitment to the existing international order

    • In its current abstract framework, the plus framework includes a wide array of states (which also comprise the IPEF) — developing and developed economies as well as middle and major powers that are committed to maintaining an inclusive, rules-based and liberal institutional order.
    • The inclusivity angle is suspect as the grouping is essentially what China calls a US-led “anti-China” tool.
    • Therefore, what interested states must envision is a broad, all-embracing, and comprehensive framework that can stand as a pillar for regional security and stability, multilateralism, and defence of global institutionalism and the status quo.

    Conclusion

    States are showing their willingness, and now it is incumbent on the Quad states to allow for the creation of a “corridor of communication” that ultimately leads to a “continental connect” to strengthen a rules-based order.

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  • Parliament – Sessions, Procedures, Motions, Committees etc

    India needs parliamentary supervision of trade pacts

    op-ed snap | Polity | Mains Paper 2: Executive & Judiciary,Parliament & State Legislatures

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Article 253

    Mains level: Paper 2- Parliamentary supervision of trade pacts

    Context

    India is negotiating and signing several free trade agreements (FTAs) with countries like Australia, the UK, Israel, and the EU. While the economic benefits of these FTAs have been studied, there is very little discussion on the lack of parliamentary scrutiny of these treaties.

    Provisions in the Constitution

    • In the Constitution, entry 14 of the Union list contains the following item — “entering into treaties and agreements with foreign countries and implementing of treaties, agreements and conventions with foreign countries”.
    • According to Article 246, Parliament has the legislative competence on all matters given in the Union list.
    • Thus, Parliament has the power to legislate on treaties. 
    • This power includes deciding how India will ratify treaties and thus assume international law obligations.
    • Article 253  elucidates that the power of Parliament to implement treaties by enacting domestic laws also extends to topics that are part of the state list.

    Lack of parliamentary oversight and its implications

    • No law laying down the process: While Parliament in the last seven decades has passed many laws to implement international legal obligations imposed by different treaties, it is yet to enact a law laying down the processes that India needs to follow before assuming international treaty obligations.
    • Given this legislative void, and under Article 73(the powers of the Union executive are co-terminus with Parliament), the Centre has been not just negotiating and signing but also ratifying international treaties and assuming international law obligations without much parliamentary oversight.
    • Arguably, Parliament exercises control over the executive’s treaty-making power at the stage of transforming a treaty into the domestic legal regime.
    • However, this is a scenario of ex-post parliamentary control over the executive.
    • In such a situation, Parliament does not debate whether India should or should not accept the international obligations; it only deliberates how the international law obligations, already accepted by the executive, should be implemented domestically.
    • Against the practice in other liberal democracies: This practice is at variance with that of several other liberal democracies.
    • In the US, important treaties signed by the President have to be approved by the Senate.
    • In Australia, the executive is required to table a “national interest analysis” of the treaty it wishes to sign in parliament, and then this is examined by a joint standing committee on treaties – a body composed of Australian parliamentarians.

    Way forward

    • Indian democracy needs to inculcate these healthy practices of other liberal democracies.

    Conclusion

    Effective parliamentary supervision will increase the domestic acceptance and legitimacy of international treaties, especially economic agreements, which are often critiqued for imposing undue restraints on India’s economic sovereignty.

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  • Higher Education – RUSA, NIRF, HEFA, etc.

    Branch campuses in India, prospects and challenges

    op-ed snap | Governance | Mains Paper 2: Health & Education

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- University branch campuses

    Context

    India, after half a century of keeping its higher education doors closed to foreigners, is on the cusp of opening itself to the world.

    Higher education reforms

    • Currently, India does not allow the entry and the operation of foreign university branch campuses.
    • The NEP 2020 was a turning point for the entry of foreign universities as it recommended allowing foreign universities ranked in the “top 100” category to operate in India — under somewhat unrealistic conditions.
    • Internationalism: The wide-ranging National Education Policy (NEP) 2020 promises higher education reforms in many areas, and internationalisation is prominent among them.
    • Strengthening India’s soft power: Among the underlying ideas is to strengthen India’s “soft power” through higher education collaboration, bringing new ideas and institutions from abroad to stimulate reform and show “best practice”, and in general to ensure that Indian higher education, for the first time, is a global player.
    • In February 2022, Finance Minister Nirmala Sitharaman, in her Budget speech, announced that “world-class foreign universities and institutions would be allowed in the planned business district in Gujarat’s GIFT City”
    •  It was reported that in April 2022, the University Grants Commission (UGC) formed a committee to draft regulations to allow foreign institutions in the “top 500” category to establish campuses in India — realising that more flexibility was needed
    • Bringing global experience to India: Establishing branch campuses of top foreign universities is a good idea as this will bring much-needed global experience to India.

    Challenges

    • Globally, branch campuses, of which there are around 300 now, provide a mixed picture.
    • Many are aimed at making money for the sponsoring university — and this is not what India wants.
    • It will not be easy to attract foreign universities to India and even more difficult to create the conditions for them to flourish.
    • Many of those top universities are already fully engaged overseas and would likely require incentives to set up in India.
    • Further, there are smaller but highly regarded universities outside the ‘top 500’ category that might be more interested.
    • Universities around the world that have academic specialisations focusing on India, that already have research or faculty ties in the country, or that have Non-Resident Indians (NRI) in senior management positions may be easier to attract.
    • What is most important is to prevent profit-seekers from entering the Indian market and to encourage foreign institutions with innovative educational ideas and a long-term commitment.
    • Many host countries have provided significant incentives, including building facilities and providing necessary infrastructure.
    • Foreign universities are highly unlikely to invest significant funds up front.
    • A big challenge will be India’s “well-known” bureaucracy, especially the multiple regulators.

    Opportunities

    • India is seen around the world as an important country and an emerging higher education power.
    • It is the world’s second largest “exporter” of students, with 4,61,792 students studying abroad (according to the UNESCO Institute for Statistics).
    • And India has the world’s second largest higher education system.
    • Foreign countries and universities will be eager to establish a “beachhead” in India and interested in providing opportunities for home campus students to learn about Indian business, society, and culture to participate in growing trade and other relations.
    • Benefits of branch campuses: International branch campuses, if allowed, could function as a structurally different variant of India’s private university sector.
    • Branch campuses, if effectively managed, could bring much needed new ideas about curriculum, pedagogy, and governance to Indian higher education — they could be a kind of educational laboratory.

    Current initiatives

    • There has been modest growth of various forms of partnerships between Indian and foreign institutions.
    • The joint PhD programmes offered by the Indian Institute of Technology Bombay-Monash Research Academy and the University of Queensland-Indian Institute of Technology Delhi Academy of Research (UQIDAR), both with Australian partners, are some examples.
    • Another example is the Melbourne-India Postgraduate Academy (MIPA). It is a joint initiative of the Indian Institute of Science Bangalore, the Indian Institute of Technology Madras, the Indian Institute of Technology Kanpur and the Indian Institute of Technology Kharagpur with the University of Melbourne.
    • MIPA provides students with an opportunity to earn a joint degree accredited both in India and Australia: from the University of Melbourne and one of the partnering Indian institutions.
    • These partnerships suggest that India could offer opportunities for international branch campuses as well.

    Challenges

    • Globally, branch campuses, of which there are around 300 now, provide a mixed picture.
    • Many are aimed at making money for the sponsoring university — and this is not what India wants.
    • It will not be easy to attract foreign universities to India and even more difficult to create the conditions for them to flourish.
    • Many of those top universities are already fully engaged overseas and would likely require incentives to set up in India.
    • Further, there are smaller but highly regarded universities outside the ‘top 500’ category that might be more interested.
    • Universities around the world that have academic specialisations focusing on India, that already have research or faculty ties in the country, or that have Non-Resident Indians (NRI) in senior management positions may be easier to attract.
    • What is most important is to prevent profit-seekers from entering the Indian market and to encourage foreign institutions with innovative educational ideas and a long-term commitment.
    • Many host countries have provided significant incentives, including building facilities and providing necessary infrastructure.
    • Foreign universities are highly unlikely to invest significant funds up front.
    • A big challenge will be India’s “well-known” bureaucracy, especially the multiple regulators.

    Conclusion

    After examining national experiences elsewhere, clear policies can be implemented that may be attractive to foreign universities. Once policies are in place, the key to success will be relationships among universities.

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  • Food Procurement and Distribution – PDS & NFSA, Shanta Kumar Committee, FCI restructuring, Buffer stock, etc.

    Government lacking a coherent policy of food security

    op-ed snap | Agriculture | Mains Paper 3: PDS, Buffer Stock & Food Security

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 3- Need for coherent policy of food security

    Context

    The Government of India announced a sudden ban on export of wheat on May 13, 2022, a few days after Prime Minister Narendra Modi had stated that “at a time when the world is facing a shortage of wheat, the farmers of India have stepped forward to feed the world”.

    What led to the sudden wheat export ban?

    • Low public procurement: The sudden turnaround in the export policy appears to be on account of fears that low public procurement would affect domestic food security.
    • This summer, procurement of wheat by the Food Corporation of India (FCI) has been very low.
    • Last year, the FCI and other agencies procured 43.34 million tonnes of wheat.
    • For the current season, procurement has only been 17.8 million tonnes, as of May 10, 2022.
    • Given the low levels of procurement, the Government has reduced the procurement target for the current season from 44.4 to 19.5 million tonnes.
    • Low production: While wheat production this year has been lower than estimated on account of high heat and other factors in March, there is not a big shortfall in production relative to previous years.
    • Wheat production was 103.6 million tonnes in 2018-19, 107.8 million tonnes in 2019-20, and 109.5 million tonnes in 2020-21.
    • The most recent estimate of production for 2021-22, revised downwards from the earlier estimate, is 105.

    Public procurement in India

    • The system of public procurement has been in place since the mid-1960s, and has been the backbone of food policy in India.
    • As part of the liberalisation policy, many other economists suggested that food stocks be run down in India and that needs of food security be met through world trade and the Chicago futures market.

    Need for effective PDS

    • Higher than buffer stock norm: Stocks of wheat in the central pool as of April 30, 2022 were 30.3 million tonnes, much lower than the 52.5 million tonnes of last year, but comfortably higher than buffer stock norms.
    • While the Government procurement in this marketing season has been lower than the previous two years, the stock position so far is similar to 2019, when we had 35.8 million tonnes of stock in April.
    • An important role in pandemic: In the two COVID-19 years (2020-21 and 2021-22), the Public Distribution System (PDS) played a stellar role, and, its role showed the wisdom of not dismantling it.
    • Total offtake of rice and wheat was 102.3 million tonnes in 2021-22 when distribution through the PDS and other welfare schemes is combined.
    • It is essential that the PDS and open market operations be used to cool down food price inflation.
    •  While most States have high inflation rates, States with better PDS, such as Kerala and Tamil Nadu, have low inflation rates.

    Way forward

    • Provide remunerative prices: To promote production, a key aspect of food policy in India has been to provide remunerative prices to farmers.
    • As is well known, after the reports of the National Commission on Farmers, the announced minimum support price (MSP) for wheat has often been inadequate to cover costs of cultivation for several regions and classes of farmers, especially if comprehensive costs (or Cost C2) are taken as the base. 
    • Over the last two years, costs of production have risen sharply, one important component being the spiralling price of fuel.

    Conclusion

    India’s flip-flop on the export of wheat is an example of the Government lacking a coherent policy of food security.

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  • As Indian economy grows, Centre and states must work together

    op-ed snap | Polity | Mains Paper 2: Federalism

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- Tailored approach to cooperation and competition

    Context

    The ongoing discords between the Centre and states over issues ranging from the allocation of financial resources to fixing of GST rates has once again brought to the fore issues pertaining to our federal structure, the resolution of which is essential for the country’s growth.

    Combination of cooperative and competitive spirit

    • Positive competition: It is undeniable that cooperation is key to the smooth functioning of federal design.
    • However, if it is coupled with positive competition among the states, then the overall result would be large-scale economic development across the country.
    • The competitive aspect of federalism can positively be harnessed by encouraging states to adopt each other’s best practices.
    • Exclusivity and mutualism: Indian federalism today enables the Centre and states to function with both exclusivity and mutualism.
    • Vertical and horizontal level: Cooperation between the Centre and states is required at both vertical (between Centre and states) and horizontal (among states) levels and on various fronts.
    • What does it mean? This includes fine-tuning of developmental measures for desired outcomes, development-related policy decisions, welfare measures, administrative reforms, strategic decisions, etc.

    Steps in the direction of cooperation

    • Recent efforts in this direction, such as according greater leeway to states in the functioning of the NITI Aayog, frequent meetings of the prime minister with chief ministers as well as with chief secretaries and district magistrates, periodic meetings of the President of India with governors, and the functioning of “PRAGATI” to review the progress of developmental efforts have generated the requisite synergy between the Centre and states.
    • Positive efforts of states towards attracting investment can create a conducive environment for economic activities in urban and backward regions alike.
    • Healthy competition coupled with a transparent ranking system would ensure the full materialisation of the vast but least utilised potential of the federal framework.
    • Sector specific indices: In this direction, NITI Aayog’s initiatives such as launching sector-specific indices like the School Education Quality Index, Sustainable Development Goals Index, State Health Index, India Innovation Index, Composite Water Management Index, Export Competitiveness Index, etc. could prove to be a great contribution.
    • Central efforts toward synchronisation of cooperation and competition can be observed in the implementation of the 14th and 15th Finance Commission reports, which have greatly contributed to resource devolution.
    • Recent reform measures in the form of the New Labour Code and other amendments/enactments by the legislature also exhibit this trend.

    Conclusion

    The rising stature of the Indian economy on the world stage can only be strengthened by a tailored approach to cooperation and competition. The mandate to marry the two would inevitably be the collective responsibility of the Centre and the states. Any ideological differences between them will have to be inevitably put on the backburner for the great Indian federal structure to succeed and prosper.

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  • Panchayati Raj Institutions: Issues and Challenges

    Structural interventions by state governments that can create higher-wage jobs

    op-ed snap | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- Structural interventions by State for creating high wage jobs

    Context

    The recent decision to deduct off-budget borrowings from state borrowing limits reminds chief ministers to be good policy ancestors.

    Financing welfare state

    • In A Brief History of Equality, economist Thomas Piketty suggests that “the world of the early 2020s, no matter how unjust it may seem, is more egalitarian than that of 1950 or 1900, which were… more egalitarian than those of 1850 or 1780”.
    • But how the welfare state is financed matters.
    • Changes in state borrowing limits: Adjusting state borrowing limits for their off-budget borrowings leads to transparency because they are routinely breached through vehicles for schemes whose bill comes due far in the future.
    • The confiscation of future spending — interest payments crowd out expenditure and revenue expenditure crowd out capex — matters because our prosperity problem is productivity, wages, not jobs.

    5 Structural interventions that can create high wage jobs

    1] Reduce regulatory hurdles

    • States control 80 per cent of India’s employers’ compliance ecosystem of 67,000+ compliances, 6,500+ filings and 26,000+ criminal provisions.
    • State governments that rationalise, decriminalise, and digitise their compliance ecosystem will reap lower corruption and higher formality.

    2] Fix government schools

    • The most powerful tool for social mobility and employability is free and quality school education.
    • State governments that undertake a significant overhaul of school performance management (the fear of falling and hope of rising for teachers) and governance (the allocation of decision rights around resources and hiring) will create an unfair advantage in human capital.

    3] Converge education and employability

    • States should set up skill universities that create qualification modularity (between certificates, diplomas, advanced diplomas, and degrees), delivery flexibility (equate online, apprenticeships, on-site and on-campus classrooms), and pray to the one god of employers.
    • Degree apprentices innovate at the intersection of employment, employability and education.
    • State governments that remove barriers in their path will see their population of employed learners exceed full-time learners.

    4] Devolution of money and power

    • Cities drive productive job creation — New York City’s GDP is higher than Russia’s.
    •  It took 70 years after 1947 for the budget of 28 states to cross the central government’s budget.
    • The combined budget of state governments now exceeds Rs 45 lakh crore, but 2.5 lakh municipalities and panchayats have a budget of only Rs 3.7 lakh crore.
    • Governments that devolve money and power from state capitals to their towns will avoid the curse of megacities and create the competition that drove China’s growth (they have 375 cities with more than a million people versus our 52).

    5] Civil service reforms

    • State governments must sell their 1,500+ loss-making public sector units, cut civil service compensation to less than 40 per cent of budget spending, and replace expenditure with capex.
    • Moving from outlays to outcomes needs a new human capital regime for civil servants via seven interventions; structure, staffing, training, performance management, compensation, culture, and HR capabilities.

    Shifting resources to protective and productive  version of states

    • Nobel Laureate James Buchanan said any state had three versions — the protective state (police, rule of law, defence, courts), the productive state (common goods like roads, power, health, education, etc.), and the redistributive state.
    • Too many state governments accept the status quo in the first two and “innovate” in the third version.
    • It’s time to shift resources to the first two.

    Conclusion

    Chief Ministers ought to create high wage jobs, and not borrow money future generations will have to repay.

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  • The constitutional battle between governor and government

    op-ed snap | Polity | Mains Paper 2: Executive & Judiciary

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Not much

    Mains level: Paper 2- Constitutional battle between governor and the government

    Context

    The Supreme Court’s action in ordering the release of A G Perarivalan, a convict in the Rajiv Gandhi assassination case, has resulted in mixed reactions.

    Background

    • After the assassination of Rajiv Gandhi, the assailants were tried under the notorious Terrorist and Disruptive Activities (Prevention) Act, 1987 (TADA).
    • All 26 accused were given the death sentence by the Special Court for various offences, including under TADA (1998).
    • Fortunately, the SC held that the offences under TADA were not made out since there was no case to proceed for acts of terrorism.
    • It also modified the death penalty for 22 persons and confirmed the same only for Nalini, Perarivalan, Murugan and Santhan (1999).
    • Petition for mercy under Article 161: They petitioned the governor of Tamil Nadu for mercy under Article 161.
    • The then governor of Tamil Nadu dismissed their petition without any advice from the cabinet.
    • The Madras High Court ruled that the governor cannot exercise the power of pardon without the advice of the council of ministers.
    • The cabinet advised the governor to give reprieve only to Nalini Sriharan and rejected the case of the other three, including Perarivalan.
    • Perarivalan and the two other convicts appealed to the president with a mercy plea under Article 72. 
    •  Two successive presidents of India – K R Narayanan and APJ Abdul Kalam — did not pass any mercy orders.
    • But all of a sudden, their mercy pleas were rejected after a delay of 11 years by President Pratibha Patil.
    • When they were about to be executed, the convicts moved the Madras HC challenging the execution of the death warrant issued against them.
    • The cases were transferred to the SC, which decided that the president’s action in not considering the mercy plea within a reasonable time was improper and since the three prisoners had been on death row for 11 years, it was a fit case for commuting their sentence to life imprisonment.
    • Meanwhile, on February 19, 2014, the TN cabinet advised the governor to grant reprieve to all seven accused.
    • Once again, all of them applied for remission from the governor.
    • The state cabinet also advised the governor to grant pardon.
    • WhenPerarivalan’s mother, filed a case for parole, the court noting the inordinate delay observed: “the Governor of T N, a constitutional authority, cannot sit on the state’s recommendation on the release of all seven life convicts in the Rajiv Gandhi assassination case for so long” (July 2020).
    • The court was informed that the governor was awaiting the final report of the CBI’s Multi-Disciplinary Monitoring Agency (MDMA).

    Role of MDMA

    • The role of MDMA itself came up for criticism by the SC in January 2018 and it observed that the agency did not appear to have made “much headway”.
    • The court observed that the question of reopening the case against them will not arise as they had been already convicted for murder and conspiracy.
    • Article 20(2) of the Constitution guarantees that no person can be prosecuted and punished for the same offence more than once.

    Use of powers under Article 142 by the Supreme Court

    • Once again, the process of granting mercy to the seven accused began with a resolution passed by the T N Assembly on September 9, 2018.
    • On the same day, the state cabinet advised the governor to give reprieve to all seven prisoners.
    • On being compelled by the court, the governor stated that the matter was to be dealt with by the President.
    • It was at this stage the matter went back to the SC.
    • It was finally decided that the authority to grant pardon is with the governor and he is bound by the advice of the state government.
    • The court also ruled that the action of the governor in delaying the matter for more than 2.5 years was unacceptable.
    • Exercising its power under Article 142 as well as considering all the relevant circumstances, the SC ordered Perarivalan’s release.

    Limitations on governor’s power

    • Giving reprieve to persons sentenced to the death penalty, even in the exercise of the plenary powers by a governor, has limitations.
    • In 1978, Parliament amended the Criminal Procedure Code and introduced Sec 433A by which in such cases, prisoners cannot be released from prison unless they had served a minimum of 14 years in prison. 

    Reformatory penal system of India

    • India’s penal system is undoubtedly reformatory and not retributive.
    • The SC ruled on this issue by stating “a barbaric crime does not have to be visited with a barbaric penalty.”
    • It is also surprising that the successive governments at the Centre appeared to be guided in this case by geopolitical considerations rather than this country’s laws.

    Conclusion

    The question now is whether the six other prisoners will receive the same relief or will there be a confrontation between the state government and governor once again. Let us hope that wisdom prevails and the governor’s office is not manipulated for narrow political considerations.

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